Delaware | 52-1490422 | |
(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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PAGE
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PART I – FINANCIAL INFORMATION
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Item 1. Financial Statements
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3 | ||
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4 | ||
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5 | ||
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6
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10 | ||
15 | ||
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15 | ||
PART II – OTHER INFORMATION
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16 | |
16 | ||
Item 6. Exhibits
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16 | |
SIGNATURES
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17 |
INFINITE GROUP, INC.
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Balance Sheets
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September 30,
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December 31,
2014
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|||||||
2015
(Unaudited)
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ASSETS
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Current assets:
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Cash
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$ | 19,356 | $ | 7,768 | ||||
Accounts receivable, net of allowances of $70,000
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212,477 | 359,599 | ||||||
Prepaid expenses and deferred charges, net
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30,803 | 43,654 | ||||||
Total current assets
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262,636 | 411,021 | ||||||
Property and equipment, net
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45,498 | 60,039 | ||||||
Software, net
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162,000 | 0 | ||||||
Investment
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0 | 109,000 | ||||||
Deposits and deferred charges, net
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23,967 | 36,956 | ||||||
Total assets
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$ | 494,101 | $ | 617,016 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
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Current liabilities:
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Accounts payable
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$ | 484,161 | $ | 341,977 | ||||
Accrued payroll
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317,037 | 148,918 | ||||||
Accrued interest payable
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566,490 | 503,014 | ||||||
Accrued retirement
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214,765 | 208,449 | ||||||
Accrued expenses - other
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23,909 | 58,888 | ||||||
Current maturities of long-term obligations - banks and other
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12,000 | 14,388 | ||||||
Current maturities of long-term obligations - related parties
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14,950 | 8,172 | ||||||
Notes payable
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245,000 | 30,000 | ||||||
Notes payable-related parties
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545,518 | 129,000 | ||||||
Total current liabilities
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2,423,830 | 1,442,806 | ||||||
Long-term obligations:
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Notes payable:
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Banks and other
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1,349,999 | 1,509,018 | ||||||
Related parties
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365,354 | 664,828 | ||||||
Total liabilities
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4,139,183 | 3,616,652 | ||||||
Commitments and contingencies
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Stockholders’ deficiency:
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Common stock, $.001 par value, 60,000,000 shares authorized;
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||||||||
26,561 | 26,561 | |||||||
30,465,085 | 30,422,242 | |||||||
(34,136,728 | ) | (33,448,439 | ) | |||||
(3,645,082 | ) | (2,999,636 | ) | |||||
$ | 494,101 | $ | 617,016 |
INFINITE GROUP, INC.
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Statements of Operations (Unaudited)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2015
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2014
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2015
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2014
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Sales
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$ | 1,919,065 | $ | 2,313,235 | $ | 6,159,770 | 6,455,223 | |||||||||
Cost of sales
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1,423,547 | 1,611,279 | 4,703,093 | 4,744,935 | ||||||||||||
Gross profit
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495,518 | 701,956 | 1,456,677 | 1,710,288 | ||||||||||||
Costs and expenses:
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General and administrative
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438,501 | 294,155 | 1,178,511 | 932,057 | ||||||||||||
Selling
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238,126 | 225,324 | 672,187 | 705,193 | ||||||||||||
Total costs and expenses
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676,627 | 519,479 | 1,850,698 | 1,637,250 | ||||||||||||
Operating (loss) income
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(181,109 | ) | 182,477 | (394,021 | ) | 73,038 | ||||||||||
Loss on equity investment
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(96,000 | ) | (17,000 | ) | (109,000 | ) | (53,000 | ) | ||||||||
Interest expense:
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Related parties
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(20,355 | ) | (11,773 | ) | (58,406 | ) | (34,936 | ) | ||||||||
Other
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(40,290 | ) | (47,834 | ) | (126,862 | ) | (183,068 | ) | ||||||||
Total interest expense
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(60,645 | ) | (59,607 | ) | (185,268 | ) | (218,004 | ) | ||||||||
Net (loss) income
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$ | (337,754 | ) | $ | 105,870 | $ | (688,289 | ) | $ | (197,966 | ) | |||||
$ | (.01 | ) | $ | .00 | $ | (.03 | ) | $ | (.01 | ) | ||||||
Weighted average shares outstanding: | ||||||||||||||||
26,561,883 | 25,961,883 | 26,561,883 | 25,961,883 | |||||||||||||
26,561,883 | 25,972,994 | 26,561,883 | 25,961,883 |
INFINITE GROUP, INC.
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Statements of Cash Flows (Unaudited)
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Nine Months Ended
September 30,
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2015
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2014
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Operating activities:
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Net loss
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$ | (688,289 | ) | $ | (197,966 | ) | ||
Adjustments to reconcile net loss to net cash
provided by operating activities:
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Stock based compensation
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42,843 | 86,226 | ||||||
Depreciation and amortization
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49,342 | 19,408 | ||||||
Bad debt expense on note receivable
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110,000 | 0 | ||||||
Loss on investment
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109,000 | 53,000 | ||||||
Decrease in assets:
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Accounts receivable
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37,122 | 62,500 | ||||||
Other assets
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12,850 | 6,191 | ||||||
Increase (decrease) in liabilities:
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Accounts payable
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142,185 | 59,317 | ||||||
Accrued expenses
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196,616 | (41,251 | ) | |||||
Accrued retirement
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6,316 | 6,069 | ||||||
Net cash provided by operating activities
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17,985 | 53,494 | ||||||
Investing activities:
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Purchase of software
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(100,000 | ) | 0 | |||||
Purchases of property and equipment
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(3,812 | ) | (28,921 | ) | ||||
Investment in equity securities
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0 | (10,000 | ) | |||||
Net cash used by investing activities
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(103,812 | ) | (38,921 | ) | ||||
Financing activities:
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Proceeds from notes payable - related parties
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185,000 | 0 | ||||||
Repayments of notes payable - banks and other
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(26,407 | ) | (15,813 | ) | ||||
Repayment of note payable - related parties
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(61,178 | ) | 0 | |||||
Net cash provided (used) by financing activities
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97,415 | (15,813 | ) | |||||
Net increase (decrease) in cash
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11,588 | (1,240 | ) | |||||
Cash - beginning of period
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7,768 | 16,947 | ||||||
Cash - end of period
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$ | 19,356 | $ | 15,707 | ||||
$ | 110,841 | $ | 182,950 | |||||
$ | 0 | $ | 0 |
2015
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2014
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Risk-free interest rate
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1.49% - 1.78 | % | .77% -1.98 | % | ||||
Expected dividend yield
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0 | % | 0 | % | ||||
Expected stock price volatility
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100 | % | 100 | % | ||||
Expected life of options
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5.75 years
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3.25 - 5.75 years
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Number
of
Options
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Weighted
Average
Exercise
Price
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Weighted-Average Remaining Contractual
Term
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Aggregate
Intrinsic Value
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Outstanding at December 31, 2014
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10,899,500 | $ | .16 | ||||||||||
Options granted
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150,000 | $ | .05 | ||||||||||
Options expired
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(1,773,333 | ) | $ | .16 | |||||||||
Options forfeited
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(651,667 | ) | $ | .13 | |||||||||
Outstanding at September 30, 2015
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8,624,500 | $ | .16 |
4.9 years
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$ | 88,200 | |||||||
Vested or expected to vest at
September 30, 2015
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6,874,500 | $ | .17 |
5.5 years
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$ | 88,200 | |||||||
Exercisable at September 30, 2015
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6,251,167 | $ | .18 |
5.3 years
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$ | 66,800 |
●
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Third party software licenses for our SMB partners; and
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●
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Project management.
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Three Months Ended September 30,
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2015 vs. 2014
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As a % of
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As a % of
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Amount of
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% Increase
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2015
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Sales
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2014
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Sales
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Change
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(Decrease)
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Sales
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$ | 1,919,065 | 100.0 | % | $ | 2,313,235 | 100.0 | % | $ | (394,170 | ) | (17.0 | ) % | |||||||||||
Cost of sales
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1,423,547 | 74.2 | 1,611,279 | 69.7 | (187,732 | ) | (11.7 | ) | ||||||||||||||||
Gross profit
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495,518 | 25.8 | 701,956 | 30.3 | (206,438 | ) | (29.4 | ) | ||||||||||||||||
General and administrative
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438,501 | 22.8 | 294,155 | 12.7 | 144,346 | 49.1 | ||||||||||||||||||
Selling
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238,126 | 12.4 | 225,324 | 9.7 | 12,802 | 5.7 | ||||||||||||||||||
Total costs and expenses
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676,627 | 35.3 | 519,479 | 22.5 | 157,148 | 30.3 | ||||||||||||||||||
Operating (loss) income
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(181,109 | ) | (9.4 | ) | 182,477 | 7.9 | (363,586 | ) | (199.3 | ) | ||||||||||||||
Loss on investment
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(96,000 | ) | (5.0 | ) | (17,000 | ) | (.7 | ) | 79,000 | 464.7 | ||||||||||||||
Interest expense
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(60,645 | ) | (3.2 | ) | (59,607 | ) | (2.6 | ) | 1,038 | 1.7 | ||||||||||||||
Net (loss) income
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$ | (337,754 | ) | (17.6 | ) % | $ | 105,870 | 4.6 | % | $ | (443,624 | ) | (419.0 | ) % | ||||||||||
Net (loss) income per share - basic and diluted
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$ | (.01 | ) | $ | .00 | $ | (.01 | ) |
Nine Months Ended September 30,
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2015 vs. 2014
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As a % of
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As a % of
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Amount of
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% Increase
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2015
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Sales
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2014
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Sales
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Change
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(Decrease)
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Sales
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$ | 6,159,770 | 100.0 | % | $ | 6,455,223 | 100.0 | % | $ | (295,453 | ) | (4.6 | ) % | |||||||||||
Cost of sales
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4,703,093 | 76.4 | 4,744,935 | 73.5 | (41,842 | ) | (.9 | ) | ||||||||||||||||
Gross profit
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1,456,677 | 23.6 | 1,710,288 | 26.5 | (253,611 | ) | (14.8 | ) | ||||||||||||||||
General and administrative
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1,178,511 | 19.1 | 932,057 | 14.4 | 246,454 | 26.4 | ||||||||||||||||||
Selling
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672,187 | 10.9 | 705,193 | 10.9 | (33,006 | ) | (4.7 | ) | ||||||||||||||||
Total costs and expenses
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1,850,698 | 30.0 | 1,637,250 | 25.4 | 213,448 | 13.0 | ||||||||||||||||||
Operating (loss) income
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(394,021 | ) | (6.4 | ) | 73,038 | 1.1 | (467,059 | ) | (639.5 | ) | ||||||||||||||
Loss on investment
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(109,000 | ) | (1.8 | ) | (53,000 | ) | (.8 | ) | 56,000 | 105.7 | ||||||||||||||
Interest expense
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(185,268 | ) | (3.0 | ) | (218,004 | ) | (3.4 | ) | (32,736 | ) | (15.0 | ) | ||||||||||||
Net loss
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$ | (688,289 | ) | (11.2 | ) % | $ | (197,966 | ) | (3.1 | ) % | $ | (490,323 | ) | 247.7 | % | |||||||||
Net loss per share - basic and diluted
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$ | (.03 | ) | $ | (.01 | ) | $ | (.02 | ) |
Nine Months Ended
September 30,
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2015
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2014
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Net cash provided by operating activities
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$ | 17,985 | $ | 53,494 | ||||
Net cash used by investing activities
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(103,812 | ) | (38,921 | ) | ||||
Net cash provided (used) by financing activities
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97,415 | (15,813 | ) | |||||
Net increase (decrease) in cash
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$ | 11,588 | $ | (1,240 | ) |
Infinite Group, Inc.
(Registrant)
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Date November 13, 2015
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/s/ James Villa
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James Villa
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Chief Executive Officer
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(Principal Executive Officer)
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Date November 13, 2015
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/s/ James Witzel
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James Witzel
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Chief Financial Officer
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Exhibit No. | Description |
10.1 |
Amendment to Promissory Note between the Company and Dan Cappa dated August 24, 2015.*
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Amendment to Promissory Note between the Company and UberScan, LLC dated October 6, 2015.*
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Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.*
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Chief Financial Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002.*
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Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.*
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Chief Financial Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002.*
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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1)
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The Promissory Note is modified to provide that the Original Lender hereby assigns all of his rights in the Promissory Note to Beacon Estates.
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2)
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The Promissory Note is modified to provide to the time at which the entire principal balance and accrued and unpaid interest shall be due and payable is August 31, 2018.
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3)
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Except as modified by this and prior modification agreements, all of the terms, covenants and conditions of the Promissory Note shall remain the same.
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1)
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The Note is modified to provide that the time at which the entire principal balance and accrued and unpaid interest shall be due and payable is December 31, 2015 with right to automatically extend the maturity date for 2 consecutive 90 day terms upon written notification by the Maker to the Payee providing that principal is reduced during any extension period.
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2)
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Except as modified by this Agreement, all of the terms, covenants and conditions of the Notes shall remain the same.
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1.
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I have reviewed this quarterly report on Form 10-Q of Infinite Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 13, 2015 | |||
By:
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/s/ James Villa | ||
James Villa | |||
Chief Executive Officer
(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Infinite Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 13, 2015 | |||
|
By:
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/s/ James Witzel | |
James Witzel | |||
Chief Financial Officer
(Principal Financial Officer)
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|||
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(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|