ITNF Internet Infinity Inc (PK)

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1    ORGANIZATION

Internet Infinity, Inc. (III or “the Company”) was incorporated in the State of Delaware on October 27, 1995.  III was in the business of distribution of electronic media duplication services and electronic blank media.  The Company was re-incorporated in Nevada on December 17, 2004.   The Company is currently in the development stage.

NOTE 2    BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Condensed Financial Statements

The accompanying unaudited interim condensed financial statements have been prepared by the Company, pursuant to the rules and regulations of the Securities Exchange commission (the “SEC”) as applicable to smaller reporting companies, and generally accepted accounting principles for interim financial reporting. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to such rules and regulations. These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K. The results of the three month period ended June 30, 2013 are not necessarily indicative of the results to be expected for the full year ending March 31, 2014.

Certain comparative amounts on the condensed balance sheet have been reclassified to conform to the current year’s presentation.

Summary of Significant Accounting Policies

Cash and cash equivalents

The Company considers all liquid investments with an original maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. The Company does not have cash equivalents as of June 30, 2013.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Accounts Receivable

Accounts receivable are presented at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as needed. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and uses the allowance method to account for uncollectible accounts receivable balances. Under the allowance method, if needed, an estimate of uncollectible customer balances is made based upon specific account balances that are considered uncollectible. Factors used to establish an allowance include the age of the balance, credit quality, payment history, current credit-worthiness of the customer and current economic trends. There is no allowance for doubtful accounts recorded as of June 30, 2013 as the balance of the Company’s receivables was considered collectible based on analysis of individual accounts.

  Recognition of revenue

The Company’s revenue recognition policies are in compliance with ASC 605-13 (Staff Accounting Bulletin (SAB 104). Sales revenue is recognized at the date of completion of services to customers when a formal arrangement exists, the price is fixed or determinable, the delivery of services is completed, no other significant obligations of the Company exist and collectability is reasonably assured.

Fair Value of Financial Instruments

The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10, “Fair Value Measurements and Disclosures” for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:

The Company had no assets or liabilities to be recorded at fair value on a recurring basis at June 30, 2013.

Income taxes

The Company utilizes FASB ACS 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

Basic and Diluted Loss Per Share

Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

The Company has no potentially dilutive securities outstanding as of June 30, 2013.

Recent Accounting Pronouncements

In April 2013, the FASB issued ASU No. 2013-07, “Presentation of Financial Statements” (Topic 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard are effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. We are evaluating the effect, if any, adoption of ASU No. 2013-07 will have on our financial statements.  

Going Concern

The Company’s condensed interim financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  However, the Company has not generated a sustainable source of revenue to meet its obligations and has an accumulated deficit of $2, 244, 260 at June 30, 2013.

In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying condensed balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to raise additional capital, obtain financing and to succeed in its future operations.  The condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern.  There is however, no assurance that the steps taken by management will meet all our needs or that we will continue as a going concern. The Company is actively pursuing the new business development company activities and additional funding from strategic partners, which would enhance stockholders’ investment. Management believes that the above actions will allow the Company to continue operations through the next fiscal year.

Development Stage Company

The Company re-entered the development stage at the beginning of the fiscal year as a result of planning new operations and not yet developing significant revenue. Operating results and cash flows reported in the accompanying condensed financial statements from April 1, 2012 (inception) through June 30, 2013 are considered to be those related to development stage activities. They represent the cumulative from inception amounts from development stage activities required to be reported pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 915, Development Stage Entities.

NOTE 3    RELATED PARTY TRANSACTIONS

Company President

George Morris is President, Chief Financial Officer, Vice President, the Chairman of the Board of Directors of the Company and the controlling shareholder of the Company and its related parties through his beneficial ownership expressed as a percentages of the outstanding voting shares of the following related parties:

NOTE 4    INCOME TAXES

No provision was made for federal income taxes for the three and six months ended June 30, 2013, since the Company had net losses. The net operating loss carry-forward may be used to reduce taxable income through the year 2032. The availability of the Company’s net operating loss carry-forwards are subject to limitation if there is a 50% or more change in the ownership of the Company’s stock. The Company has not recorded a deferred tax asset for its net operating loss carry forwards due to the uncertainty of realization prior to their expiration.

NOTE 5    STOCK OPTIONS

The Company’s 1996 stock option plan provides that incentive stock options and nonqualified stock options to purchase common stock may be granted to directors, officers, key employees, consultants, and subsidiaries with an exercise price of up to 110% of market price at the date of grant.  Generally, options are exercisable one or two years from the date of grant and expire three to ten years from the date of grant.

For the three months ended June 30, 2013, and 2012, the Company granted no options. As of June 30, 2013 there were no options outstanding.

NOTE 6    CAPITAL

As of June 30, 2013 the Company has authorized 30,000,000 preferred shares par value $0.001, of which no shares were issued and outstanding. The Company has authorized 100,000,000 shares of common stock of par value $0.001, of which 33,718,780 shares were issued and outstanding as of June 30, 2013 (unaudited) and March 31, 2013.