[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
[_]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Nevada
|
88-0379462
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
11204
Davenport Street, Suite 100, Omaha, Nebraska
|
68154
|
(Address
of principal executive offices)
|
(Zip
Code)
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|||||||
|
|||||||
|
(Unaudited)
|
||||||
|
(Restated)
|
(Restated)
|
|
||||
|
September
30, 2002
|
December
31, 2001
|
|||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
24,405
|
$
|
7,140
|
|||
Accounts
receivable, trade
|
306,690
|
460,170
|
|||||
Inventory
|
533,357
|
646,246
|
|||||
Other
current assets
|
34,657
|
21,468
|
|||||
Total
current assets
|
899,109
|
1,135,024
|
|||||
Property
and equipment, net
|
102,100
|
92,185
|
|||||
Software
license, net
|
3,398,674
|
3,776,306
|
|||||
Other
assets
|
20,298
|
12,558
|
|||||
Total
assets
|
$
|
4,420,181
|
$
|
5,016,073
|
|||
|
|||||||
Liabilities
and stockholders’ equity
|
|||||||
Current
liabilities:
|
|||||||
Notes
payable
|
$
|
749,999
|
$
|
749,000
|
|||
License
fees payable
|
---
|
1,051,785
|
|||||
Accrued
royalties
|
2,091,422
|
2,082,694
|
|||||
Accounts
payable, trade
|
1,034,541
|
1,422,573
|
|||||
Current
maturities of long-term notes payable
|
55,877
|
---
|
|||||
Other
current liabilities
|
1,248,542
|
1,490,462
|
|||||
Total
current liabilities
|
5,180,381
|
6,796,514
|
|||||
Long-term
note payable
|
63,726
|
71,322
|
|||||
Non-current
deferred taxes
|
994,469
|
1,147,043
|
|||||
Commitments
and contingencies
|
|||||||
Stockholders’
equity:
|
|||||||
Preferred
stock
|
51
|
51
|
|||||
Common
stock
|
19,575
|
11,231
|
|||||
Paid-in
capital
|
7,016,308
|
6,893,720
|
|||||
Retained
(deficit)
|
(8,854,329
|
)
|
(9,903,808
|
)
|
|||
Total
stockholders’ equity
|
(1,818,395
|
)
|
(2,998,806
|
)
|
|||
Total
liabilities and stockholders’ equity
|
$
|
4,420,181
|
$
|
5,016,073
|
|||
|
|||||||
See
accompanying notes.
|
Findex.com,
Inc.
|
|||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||
(Unaudited)
|
|||||||||||||
Three
and Nine Months Ended September 30
|
|||||||||||||
|
|||||||||||||
|
Three
Months
|
Nine
Months
|
|||||||||||
2002
|
2001
|
2002
|
2001
|
||||||||||
|
(Restated)
|
(Restated)
|
|
(Restated)
|
|
(Restated)
|
|
||||||
Revenues,
net of reserves and allowances
|
$
|
873,813
|
$
|
465,713
|
$
|
2,931,792
|
$
|
1,980,466
|
|||||
Cost
of sales
|
245,656
|
164,879
|
584,497
|
804,608
|
|||||||||
Gross
profit
|
628,157
|
300,834
|
2,347,295
|
1,175,858
|
|||||||||
Operating
expenses:
|
|||||||||||||
Sales
and marketing
|
202,383
|
159,374
|
620,994
|
486,630
|
|||||||||
General
and administrative
|
436,868
|
516,514
|
1,383,640
|
2,066,058
|
|||||||||
Bad
debt expense
|
---
|
---
|
---
|
2,391,000
|
|||||||||
Depreciation
and amortization
|
139,951
|
133,346
|
408,353
|
401,404
|
|||||||||
Total
operating expenses
|
779,202
|
809,234
|
2,412,987
|
5,345,092
|
|||||||||
Earnings
(loss) from operations
|
(151,045
|
)
|
(508,400
|
)
|
(65,692
|
)
|
(4,169,234
|
)
|
|||||
Other
income
|
191
|
150
|
1,051,976
|
2,791
|
|||||||||
Other
expenses, net
|
(25,276
|
)
|
(27,467
|
)
|
(89,379
|
)
|
(48,166
|
)
|
|||||
Income
(loss) before income taxes
|
(176,130
|
)
|
(535,717
|
)
|
896,905
|
(4,214,609
|
)
|
||||||
Provision
for income taxes
|
50,858
|
102,027
|
152,574
|
851,479
|
|||||||||
Net
income (loss)
|
$
|
(125,272
|
)
|
$
|
(433,690
|
)
|
1,049,479
|
(3,363,130
|
)
|
||||
Retained
earnings (deficit) at beginning of year
|
(9,903,808
|
)
|
(2,299,256
|
)
|
|||||||||
Preferred
series A common stock dividend
|
---
|
(4,200
|
)
|
||||||||||
Retained
earnings (deficit) at end of period
|
$
|
(8,854,329
|
)
|
$
|
(5,666,586
|
)
|
|||||||
|
|||||||||||||
Net
earnings (loss) per share:
|
|||||||||||||
Basic
|
$
|
(0.01
|
)
|
$
|
(0.04
|
)
|
$
|
0.06
|
$
|
(0.32
|
)
|
||
Diluted
|
$
|
(0.01
|
)
|
$
|
(0.04
|
)
|
$
|
0.06
|
$
|
(0.32
|
)
|
||
|
|||||||||||||
Weighted
average shares outstanding:
|
|||||||||||||
Basic
|
19,430,789
|
10,656,341
|
16,891,916
|
10,585,742
|
|||||||||
Diluted
|
19,430,789
|
10,656,341
|
19,160,539
|
10,585,742
|
|||||||||
|
|||||||||||||
See
accompanying notes.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
(Unaudited)
|
|||||||
|
|||||||
Nine
Months Ended September 30
|
2002
|
2001
|
|||||
|
(Restated)
|
(Restated)
|
|
||||
Cash
flows from operating activities:
|
|||||||
Cash
received from customers
|
$
|
2,928,098
|
$
|
2,769,535
|
|||
Cash
paid to suppliers and employees
|
(2,755,439
|
)
|
(2,786,032
|
)
|
|||
Other
operating activities, net
|
(42,606
|
)
|
(45,378
|
)
|
|||
Net
cash provided (used) by operating activities
|
130,053
|
(61,875
|
)
|
||||
Cash
flows from investing activities:
|
|||||||
Acquisition
of property and equipment
|
(43,581
|
)
|
(14,243
|
)
|
|||
Other
investing activities, net
|
(4,660
|
)
|
(15,600
|
)
|
|||
Net
cash (used) by investing activities
|
(48,241
|
)
|
(29,843
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Proceeds
from (payments on) line of credit, net
|
(4,682
|
)
|
32,708
|
||||
Payments
made on long-term notes payable
|
(34,865
|
)
|
---
|
||||
Refund
on stock subscription
|
(25,000
|
)
|
---
|
||||
Proceeds
from issuance of stock
|
---
|
15,000
|
|||||
Addition
to license agreements
|
---
|
25,073
|
|||||
Net
cash provided (used) by financing activities
|
(64,547
|
)
|
72,781
|
||||
Net
increase (decrease) in cash and cash equivalents
|
17,265
|
(18,937
|
)
|
||||
Cash
and cash equivalents, beginning of year
|
7,140
|
21,768
|
|||||
Cash
and cash equivalents, end of period
|
$
|
24,405
|
$
|
2,831
|
|||
Reconciliation
of net income (loss) to cash flows from operating
activities:
|
|||||||
Net
income (loss)
|
$
|
1,049,479
|
$
|
(3,363,130
|
)
|
||
Adjustments
to reconcile net income (loss) to net cash
|
|||||||
provided
(used) by operating activities:
|
|||||||
Stock
and warrants issued for services
|
155,932
|
302,183
|
|||||
Provision
for bad debts
|
---
|
2,391,000
|
|||||
Depreciation
& amortization
|
408,353
|
401,404
|
|||||
Gain
on disposal of property and equipment
|
(137
|
)
|
---
|
||||
Debt
forgiveness
|
(1,051,785
|
)
|
---
|
||||
Change
in assets and liabilities:
|
|||||||
Decrease
in accounts receivable
|
153,480
|
822,299
|
|||||
Decrease
in inventories
|
112,889
|
114,902
|
|||||
(Increase)
in refundable income taxes
|
---
|
(1,548
|
)
|
||||
(Increase)
in prepaid expenses
|
(16,461
|
)
|
(25,282
|
)
|
|||
Increase
in accrued royalties
|
8,728
|
258,600
|
|||||
Increase
(decrease) in accounts payable
|
(304,885
|
)
|
383,736
|
||||
(Decrease)
in income taxes payable
|
---
|
(42,556
|
)
|
||||
(Decrease)
in deferred taxes
|
(152,574
|
)
|
(843,000
|
)
|
|||
(Decrease)
in other liabilities
|
(232,966
|
)
|
(460,483
|
)
|
|||
Net
cash provided (used) by operating activities
|
$
|
130,053
|
$
|
(61,875
|
)
|
||
|
|||||||
See
accompanying notes.
|
Demand
note payable to a corporation, with interest at 9%.
Unsecured.
|
$
|
650,000
|
||
Note
payable to a corporation, due May 31, 2003, with interest compounded
monthly at 1.5%. Unsecured. Convertible at the option of the holder
into
666,667 restricted common shares.
|
33,333
|
|||
Note
payable to a corporation, due May 31, 2003, with interest compounded
monthly at 1.5%. Unsecured. Convertible at the option of the holder
into
666,667 restricted common shares.
|
33,333
|
|||
Note
payable to a corporation, due May 31, 2003, with interest compounded
monthly at 1.5%. Unsecured. Convertible at the option of the holder
into
666,667 restricted common shares.
|
33,333
|
|||
$
|
749,999
|
September
30
|
||||
2003
|
$
|
55,877
|
||
2004
|
63,726
|
|||
$
|
119,603
|
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||
|
(Restated)
|
(Restated)
|
|
||||||||||
2002
|
2001
|
2002
|
2001
|
||||||||||
Current:
|
|||||||||||||
Federal
|
$
|
---
|
$
|
---
|
$
|
---
|
$
|
---
|
|||||
State
|
---
|
(5,973
|
)
|
---
|
8,479
|
||||||||
|
---
|
(5,973
|
)
|
---
|
8,479
|
||||||||
Deferred:
|
|||||||||||||
Federal
|
40,699
|
81,250
|
122,097
|
632,250
|
|||||||||
State
|
10,159
|
26,750
|
30,477
|
210,750
|
|||||||||
50,858
|
108,000
|
152,574
|
843,000
|
||||||||||
Total
tax benefit
|
$
|
50,858
|
$
|
102,027
|
$
|
152,574
|
$
|
851,479
|
For
the Three Months Ended September 30, 2001
|
Income
(Loss) (Numerator)
|
|
Shares
(Denominator)
|
|
Per-share
Amount
|
|||||
Net
Loss
|
$
|
(433,690
|
)
|
|||||||
Less
preferred stock dividends
|
(4,200
|
)
|
||||||||
Loss
available to common stockholders-basic earnings per share
|
(437,890
|
)
|
10,656,341
|
$
|
(0.04
|
)
|
||||
Effect
of Dilutive Securities
|
||||||||||
Options
|
---
|
---
|
||||||||
Convertible
notes payable
|
---
|
---
|
||||||||
Convertible
Preferred Series A
|
---
|
---
|
||||||||
Convertible
Preferred Series B
|
---
|
---
|
||||||||
Warrants
|
---
|
---
|
||||||||
Loss
available to common stockholders-diluted earnings per
share
|
$
|
(437,890
|
)
|
10,656,341
|
$
|
(0.04
|
)
|
|||
For
the Three Months Ended September 30, 2002
|
Income
(Loss) (Numerator)
|
|
Shares
(Denominator)
|
|
Per-share
Amount
|
|||||
Net
Loss (restated)
|
$
|
(125,272
|
)
|
|||||||
Less
preferred stock dividends
|
---
|
|||||||||
Loss
available to common stockholders-basic earnings per share
|
(125,272
|
)
|
19,430,789
|
$
|
(0.01
|
)
|
||||
Effect
of Dilutive Securities
|
||||||||||
Options
|
---
|
---
|
||||||||
Convertible
notes payable
|
---
|
---
|
||||||||
Convertible
Preferred Series A
|
---
|
---
|
||||||||
Convertible
Preferred Series B
|
---
|
---
|
||||||||
Warrants
|
---
|
---
|
||||||||
Loss
available to common stockholders-diluted earnings per
share
|
$
|
(125,272
|
)
|
19,430,789
|
$
|
(0.01
|
)
|
|||
For
the Nine Months Ended September 30, 2001
|
Income
(Loss) (Numerator)
|
|
Shares
(Denominator)
|
|
Per-share
Amount
|
|||||
Net
Loss
|
$
|
(3,363,130
|
)
|
|||||||
Less
preferred stock dividends
|
(4,200
|
)
|
||||||||
Loss
available to common stockholders-basic earnings per share
|
(3,367,330
|
)
|
10,585,742
|
$
|
(0.32
|
)
|
||||
Effect
of Dilutive Securities
|
||||||||||
Options
|
---
|
---
|
||||||||
Convertible
notes payable
|
---
|
---
|
||||||||
Convertible
Preferred Series A
|
---
|
---
|
||||||||
Convertible
Preferred Series B
|
---
|
---
|
||||||||
Warrants
|
---
|
---
|
||||||||
Income
available to common stockholders-diluted earnings per
share
|
$
|
(3,367,330
|
)
|
10,585,742
|
$
|
(0.32
|
)
|
For
the Nine Months Ended September 30, 2002
|
Income
(Loss) (Numerator)
|
|
Shares
(Denominator)
|
|
Per-share
Amount
|
|||||
Net
Income (restated)
|
$
|
1,049,479
|
||||||||
Less
preferred stock dividends
|
---
|
|||||||||
Income
available to common stockholders-basic earnings per share
|
1,049,479
|
16,891,916
|
$
|
0.06
|
||||||
Effect
of Dilutive Securities
|
||||||||||
Options
|
---
|
---
|
||||||||
Convertible
notes payable
|
16,584
|
2,000,000
|
||||||||
Convertible
Preferred Series A
|
---
|
114,000
|
||||||||
Convertible
Preferred Series B
|
---
|
40,000
|
||||||||
Warrants
(restated)
|
---
|
114,623
|
||||||||
Income
available to common stockholders-diluted earnings per
share
|
$
|
1,066,063
|
19,160,539
|
$
|
0.06
|
2002
|
2001
|
||||||
Common
stock and warrants issued for services
|
$
|
155,932
|
$
|
302,183
|
|||
Common
stock dividend
|
---
|
4,200
|
|||||
Conversion
of preferred stock to common stock
|
---
|
32
|
Findex.com,
Inc.
|
||||||||||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||||||||
September
30, 2002
|
||||||||||||||
|
||||||||||||||
|
As
Previously
Reported
|
As
Restated
|
Change
|
|||||||||||
Assets
|
||||||||||||||
Current
assets:
|
||||||||||||||
Cash
and cash equivalents
|
$
|
24,405
|
$
|
24,405
|
$
|
---
|
||||||||
Accounts
receivable, trade
|
306,690
|
306,690
|
---
|
|||||||||||
Inventories
|
533,357
|
533,357
|
---
|
|||||||||||
Other
current assets
|
34,657
|
34,657
|
---
|
|||||||||||
Total
current assets
|
899,109
|
899,109
|
---
|
|||||||||||
Property
and equipment, net
|
102,100
|
102,100
|
---
|
|||||||||||
Software
license, net
|
2,571,145
|
3,398,674
|
827,529
|
(a)
|
||||||||||
Other
assets
|
20,298
|
20,298
|
---
|
|||||||||||
Total
assets
|
$
|
3,592,652
|
$
|
4,420,181
|
$
|
827,529
|
||||||||
|
||||||||||||||
Liabilities
and stockholders’ equity
|
||||||||||||||
Current
liabilities:
|
||||||||||||||
Accounts
payable, trade
|
$
|
1,133,489
|
$
|
1,034,541
|
$
|
(98,948
|
)
|
(b)
|
||||||
Notes
payable
|
749,999
|
749,999
|
---
|
|||||||||||
Accrued
royalties
|
2,091,422
|
2,091,422
|
---
|
|||||||||||
Accrued
expenses
|
2,341,585
|
1,248,542
|
(1,093,043
|
)
|
(c)
|
|||||||||
Current
maturities of long-term debt
|
55,877
|
55,877
|
---
|
|||||||||||
Total
current liabilities
|
6,372,372
|
5,180,381
|
(1,191,991
|
)
|
||||||||||
Long-term
note payable
|
63,726
|
63,726
|
---
|
|||||||||||
Deferred
income taxes, net
|
---
|
994,469
|
994,469
|
(d)
|
||||||||||
Stockholders’
equity:
|
||||||||||||||
Preferred
stock, $.001 par value
|
51
|
51
|
---
|
|||||||||||
Common
stock, $.001 par value
|
19,575
|
19,575
|
---
|
|||||||||||
Paid-in
capital
|
7,016,308
|
7,016,308
|
---
|
|||||||||||
Retained
(deficit)
|
(9,879,380
|
)
|
(8,854,329
|
)
|
1,025,051
|
|||||||||
Total
stockholders’ equity
|
(2,843,446
|
)
|
(1,818,395
|
)
|
1,025,051
|
|||||||||
Total
liabilities and stockholders’ equity
|
$
|
3,592,652
|
$
|
4,420,181
|
$
|
827,529
|
||||||||
|
||||||||||||||
(a)
Increased
by $1,051,785 reclassification of forgiven final installment
payment and
decreased by $224,256
additional amortization from reducing the estimated useful life
from 50
years to 10 years.
|
||||||||||||||
(b)
Decreased
by $98,948 from 2000 overstatement of trade payable to third-party
rebate
processor.
|
||||||||||||||
(c)
Decreased
by $1,093,043 for reclassification of deferred income taxes as
non-current.
|
||||||||||||||
(d)
Increased
by $994,469 for recalculation of deferred income taxes resulting
from
reclassification of forgiven
final installment payment and additional amortization from reducing
the
estimated useful life
of the software
license.
|
Findex.com,
Inc.
|
||||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||||
For
the Nine Months Ended September 30, 2002
|
||||||||||||||
|
||||||||||||||
|
As
Previously Reported
|
As
Restated
|
Change
|
|||||||||||
Revenues,
net of reserves and allowances
|
$
|
2,932,466
|
$
|
2,931,792
|
$
|
(674
|
)
|
(a)
|
||||||
Cost
of sales
|
572,201
|
584,497
|
12,296
|
(b)
|
||||||||||
Gross
profit
|
2,360,265
|
2,347,295
|
(12,970
|
)
|
||||||||||
Operating
expenses:
|
||||||||||||||
Sales
and marketing
|
633,964
|
620,994
|
(12,970
|
)
|
||||||||||
General
and administrative
|
1,383,640
|
1,383,640
|
---
|
|||||||||||
Depreciation
and amortization
|
184,098
|
408,353
|
224,255
|
(c)
|
||||||||||
Total
operating expenses
|
2,201,702
|
2,412,987
|
211,285
|
|||||||||||
Earnings
from operations
|
158,563
|
(65,692
|
)
|
(224,255
|
)
|
|||||||||
Other
income
|
191
|
1,051,976
|
1,051,785
|
(d)
|
||||||||||
Other
expenses, net
|
(89,379
|
)
|
(89,379
|
)
|
---
|
|||||||||
Income
before income taxes
|
69,375
|
896,905
|
827,530
|
|||||||||||
Provision
for income taxes
|
54,000
|
152,574
|
98,574
|
(e)
|
||||||||||
Net
income
|
$
|
123,375
|
$
|
1,049,479
|
$
|
926,104
|
||||||||
|
||||||||||||||
Net
earnings per share:
|
||||||||||||||
Basic
|
$
|
0.01
|
$
|
0.06
|
$
|
0.05
|
||||||||
Diluted
|
$
|
0.01
|
$
|
0.06
|
$
|
0.05
|
||||||||
Weighted
average shares outstanding:
|
||||||||||||||
Basic
|
16,891,916
|
16,891,916
|
---
|
|||||||||||
Diluted
|
19,025,916
|
19,160,539
|
134,623
|
|||||||||||
|
||||||||||||||
(a)
Decrease
from reclassification of rebates from sales and
marketing.
|
||||||||||||||
(b)
Increase
from reclassification of fulfillment expenses from sales and
marketing.
|
||||||||||||||
(c)
Increase
from reducing the estimated useful life of the software license
from 50
years to 10 years.
|
||||||||||||||
(d)
Increased
by $1,051,785 reclassification of forgiven final installment
payment.
|
||||||||||||||
(e)
Increased
from recalculation of deferred income taxes resulting from
reclassification of forgiveness of final
installment of the software license and reduction of the estimated
useful
life from 50 years to 10 years.
|
Findex.com,
Inc.
|
||||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||||
For
the Three Months Ended September 30, 2002
|
||||||||||||||
|
||||||||||||||
|
As
Previously Reported
|
As
Restated
|
Change
|
|||||||||||
Revenues,
net of reserves and allowances
|
$
|
873,705
|
$
|
873,813
|
$
|
108
|
(a)
|
|||||||
Cost
of sales
|
233,360
|
245,656
|
12,296
|
(b)
|
||||||||||
Gross
profit
|
640,345
|
628,157
|
(12,188
|
)
|
||||||||||
Operating
expenses:
|
||||||||||||||
Sales
and marketing
|
214,571
|
202,383
|
(12,188
|
)
|
||||||||||
General
and administrative
|
436,868
|
436,868
|
---
|
|||||||||||
Depreciation
and amortization
|
27,518
|
139,951
|
112,433
|
(c)
|
||||||||||
Total
operating expenses
|
678,957
|
779,202
|
100,245
|
|||||||||||
Earnings
(loss) from operations
|
(38,612
|
)
|
(151,045
|
)
|
(112,433
|
)
|
||||||||
Other
income
|
191
|
191
|
---
|
|||||||||||
Other
expenses, net
|
(25,276
|
)
|
(25,276
|
)
|
---
|
|||||||||
Loss
before income taxes
|
(63,697
|
)
|
(176,130
|
)
|
(112,433
|
)
|
||||||||
Provision
for income taxes
|
18,000
|
50,858
|
32,858
|
(d)
|
||||||||||
Net
loss
|
$
|
(45,697
|
)
|
$
|
(125,272
|
)
|
$
|
(79,575
|
)
|
|||||
|
||||||||||||||
Net
earnings (loss) per share:
|
||||||||||||||
Basic
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
|||||
Diluted
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
|||||
Weighted
average shares outstanding:
|
||||||||||||||
Basic
|
19,430,789
|
19,430,789
|
---
|
|||||||||||
Diluted
|
19,430,789
|
19,430,789
|
---
|
|||||||||||
|
||||||||||||||
(a)
Increase
from reclassification of rebate adjustment from sales and
marketing.
|
||||||||||||||
(b)
Increase
from reclassification of fulfillment expenses from sales and
marketing.
|
||||||||||||||
(c) Increase
from reducing the estimated useful life of the software license
from 50
years to 10 years.
|
||||||||||||||
(d)
Increased
from recalculation of deferred income taxes resulting from
reclassification of forgiveness of final
installment of the software license and reduction of the estimated
useful
life from 50 years to 10 years.
|
Findex.com,
Inc.
|
||||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||||
For
the Nine Months Ended September 30, 2001
|
||||||||||||||
|
||||||||||||||
|
As
Previously Reported
|
As
Restated
|
Change
|
|||||||||||
Revenues,
net of reserves and allowances
|
$
|
2,172,211
|
$
|
1,980,466
|
$
|
(191,745
|
)
|
(a)
|
||||||
Cost
of sales
|
804,608
|
804,608
|
---
|
|||||||||||
Gross
profit
|
1,367,603
|
1,175,858
|
(191,745
|
)
|
||||||||||
Operating
expenses:
|
||||||||||||||
Sales
and marketing
|
678,375
|
486,630
|
(191,745
|
)
|
(a)
|
|||||||||
General
and administrative
|
2,066,058
|
2,066,058
|
---
|
|||||||||||
Bad
debt expense
|
2,391,000
|
2,391,000
|
---
|
|||||||||||
Depreciation
and amortization
|
401,404
|
401,404
|
---
|
|||||||||||
Total
operating expenses
|
5,536,837
|
5,345,092
|
(191,745
|
)
|
||||||||||
Earnings
(loss) from operations
|
(4,169,234
|
)
|
(4,169,234
|
)
|
---
|
|||||||||
Other
income
|
2,791
|
2,791
|
---
|
|||||||||||
Other
expenses, net
|
(48,166
|
)
|
(48,166
|
)
|
---
|
|||||||||
Loss
before income taxes
|
(4,214,609
|
)
|
(4,214,609
|
)
|
---
|
|||||||||
Provision
for income taxes
|
851,479
|
851,479
|
---
|
|||||||||||
Net
loss
|
$
|
(3,363,130
|
)
|
$
|
(3,363,130
|
)
|
$
|
---
|
||||||
|
||||||||||||||
Net
earnings(loss) per share:
|
||||||||||||||
Basic
|
$
|
(0.32
|
)
|
$
|
(0.32
|
)
|
$
|
---
|
||||||
Diluted
|
$
|
(0.32
|
)
|
$
|
(0.32
|
)
|
$
|
---
|
||||||
Weighted
average shares outstanding:
|
||||||||||||||
Basic
|
10,585,742
|
10,585,742
|
---
|
|||||||||||
Diluted
|
10,585,742
|
10,585,742
|
---
|
|||||||||||
|
||||||||||||||
(a)Decrease
from reclassification of rebates from sales and
marketing.
|
Findex.com,
Inc.
|
||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||
For
the Three Months Ended September 30, 2001
|
||||||||||
|
||||||||||
|
As
Previously Reported
|
As
Restated
|
Change
|
|||||||
Revenues,
net of reserves and allowances
|
$
|
465,713
|
$
|
465,713
|
$
|
---
|
||||
Cost
of sales
|
164,879
|
164,879
|
---
|
|||||||
Gross
profit
|
300,834
|
300,834
|
---
|
|||||||
Operating
expenses:
|
||||||||||
Sales
and marketing
|
159,374
|
159,374
|
---
|
|||||||
General
and administrative
|
516,514
|
516,514
|
---
|
|||||||
Depreciation
and amortization
|
133,346
|
133,346
|
---
|
|||||||
Total
operating expenses
|
809,234
|
809,234
|
---
|
|||||||
Earnings
(loss) from operations
|
(508,400
|
)
|
(508,400
|
)
|
---
|
|||||
Other
income
|
150
|
150
|
---
|
|||||||
Other
expenses, net
|
(27,467
|
)
|
(27,467
|
)
|
---
|
|||||
Loss
before income taxes
|
(535,717
|
)
|
(535,717
|
)
|
---
|
|||||
Provision
for income taxes
|
102,027
|
102,027
|
---
|
|||||||
Net
loss
|
$
|
(433,690
|
)
|
$
|
(433,690
|
)
|
$
|
---
|
||
|
||||||||||
Net
earnings (loss) per share:
|
||||||||||
Basic
|
$
|
(0.04
|
)
|
$
|
(0.04
|
)
|
$
|
---
|
||
Diluted
|
$
|
(0.04
|
)
|
$
|
(0.04
|
)
|
$
|
---
|
||
Weighted
average shares outstanding:
|
||||||||||
Basic
|
10,656,341
|
10,656,341
|
---
|
|||||||
Diluted
|
10,656,341
|
10,656,341
|
---
|
Findex.com,
Inc.
|
||||||||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||||||||
For
the Nine Months Ended September 30, 2002
|
||||||||||||||
|
||||||||||||||
|
As
Previously Reported
|
As
Restated
|
Change
|
|||||||||||
Cash
flows from operating activities:
|
||||||||||||||
Cash
received from customers
|
$
|
2,928,098
|
$
|
2,928,098
|
$
|
---
|
||||||||
Cash
paid to suppliers and employees
|
(2,755,439
|
)
|
(2,755,439
|
)
|
---
|
|||||||||
Interest
paid
|
(42,660
|
)
|
(42,660
|
)
|
---
|
|||||||||
Interest
received
|
54
|
54
|
---
|
|||||||||||
Net
cash provided by operating activities
|
130,053
|
130,053
|
---
|
|||||||||||
Cash
flows from investing activities:
|
||||||||||||||
Acquisition
of property and equipment
|
(43,581
|
)
|
(43,581
|
)
|
---
|
|||||||||
Proceeds
from sale of property and equipment
|
4,000
|
4,000
|
---
|
|||||||||||
Deposits
made
|
(6,208
|
)
|
(6,208
|
)
|
---
|
|||||||||
Website
development costs
|
(2,452
|
)
|
(2,452
|
)
|
---
|
|||||||||
Net
cash (used) by investing activities
|
(48,241
|
)
|
(48,241
|
)
|
---
|
|||||||||
Cash
flows from financing activities:
|
||||||||||||||
Proceeds
from (payments on) line of credit, net
|
(4,682
|
)
|
(4,682
|
)
|
---
|
|||||||||
Payments
made on long-term notes payable
|
(34,865
|
)
|
(34,865
|
)
|
---
|
|||||||||
Refund
on stock subscription
|
(25,000
|
)
|
(25,000
|
)
|
---
|
|||||||||
Net
cash (used) by financing activities
|
(64,547
|
)
|
(64,547
|
)
|
---
|
|||||||||
Net
increase in cash and cash equivalents
|
17,265
|
17,265
|
---
|
|||||||||||
Cash
and cash equivalents, beginning of year
|
7,140
|
7,140
|
---
|
|||||||||||
Cash
and cash equivalents, end of year
|
$
|
24,405
|
$
|
24,405
|
$
|
---
|
||||||||
|
||||||||||||||
Reconciliation
of net income to cash flows from operating activities:
|
||||||||||||||
Net
income
|
$
|
123,375
|
$
|
1,049,479
|
$
|
926,104
|
||||||||
Adjustments
to reconcile net income to net cash
|
||||||||||||||
provided
by operating activities:
|
||||||||||||||
Stock
and warrants issued for services
|
155,932
|
155,932
|
---
|
|||||||||||
Depreciation
& amortization
|
184,098
|
408,353
|
224,255
|
(a)
|
||||||||||
Gain
on disposal of property and equipment
|
(137
|
)
|
(137
|
)
|
---
|
|||||||||
Debt
forgiveness
|
---
|
(1,051,785
|
)
|
(1,051,785
|
)
|
(b)
|
||||||||
Change
in assets and liabilities:
|
||||||||||||||
Decrease
in accounts receivable
|
153,480
|
153,480
|
---
|
|||||||||||
Decrease
in inventories
|
112,889
|
112,889
|
---
|
|||||||||||
Increase
in prepaid expenses
|
(16,461
|
)
|
(16,461
|
)
|
---
|
|||||||||
Increase
in accrued royalties
|
8,728
|
8,728
|
---
|
|||||||||||
(Decrease)
in accounts payable
|
(304,885
|
)
|
(304,885
|
)
|
---
|
|||||||||
(Decrease)
in deferred taxes
|
(54,000
|
)
|
(152,574
|
)
|
(98,574
|
)
|
(c)
|
|||||||
(Decrease)
in other liabilities
|
(232,966
|
)
|
(232,966
|
)
|
---
|
|||||||||
Net
cash provided by operating activities
|
$
|
130,053
|
$
|
130,053
|
$
|
---
|
||||||||
|
||||||||||||||
(a)
Increase
from reducing the estimated useful life of the software license
from 50
years to 10 years.
|
||||||||||||||
(b)
Increased
by $1,051,785 reclassification of forgiven final installment
payment.
|
||||||||||||||
(c)
Increased
from recalculation of deferred income taxes resulting from
reclassification of forgiveness of final
installment of the software license and reduction of the estimated
useful
life from 50 years to 10 years.
|
FINDEX.COM,
INC.
|
|||
Date:
September 29, 2005
|
By
|
/s/
Steven Malone
|
|
Steven
Malone
|
|||
President
and Chief Executive Officer
|
Date:
September 29, 2005
|
By
|
/s/
Kirk R. Rowland
|
|
Kirk
R. Rowland, CPA
|
|||
Chief
Financial Officer
|