[X]
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
[_]
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|
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)
|
Page
Number
|
|
F-1
|
|
1
|
|
12
|
|
|
|
|
|
|
|
12
|
|
12
|
|
12
|
|
12
|
|
13
|
|
13
|
Findex.com,
Inc.
|
||||
CONDENSED
CONSOLIDATED BALANCE SHEET
|
||||
(Unaudited)
|
||||
|
||||
|
(Restated)
|
|||
|
June
30, 2005
|
|||
Assets
|
||||
Current
assets:
|
||||
Cash
and cash equivalents
|
$
|
95,941
|
||
Accounts
receivable, trade
|
617,692
|
|||
Inventory
|
225,887
|
|||
Other
current assets
|
359,461
|
|||
Total
current assets
|
1,298,981
|
|||
Property
and equipment, net
|
134,350
|
|||
Software
license, net
|
2,014,030
|
|||
Capitalized
software development costs, net
|
931,103
|
|||
Other
assets
|
532,072
|
|||
Total
assets
|
$
|
4,910,536
|
||
|
||||
Liabilities
and stockholders’ equity
|
||||
Current
liabilities:
|
||||
Accounts
payable, trade
|
$
|
650,984
|
||
Accrued
royalties
|
304,752
|
|||
Derivative
liabilities
|
2,515,621
|
|||
Other
current liabilities
|
495,573
|
|||
Total
current liabilities
|
3,966,930
|
|||
Long-term
obligations
|
179,317
|
|||
Commitments
and contingencies
|
||||
Stockholders’
equity:
|
||||
Common
stock
|
48,620
|
|||
Paid-in
capital
|
7,521,339
|
|||
Retained
(deficit)
|
(6,805,670
|
)
|
||
Total
stockholders’ equity
|
764,289
|
|||
Total
liabilities and stockholders’ equity
|
$
|
4,910,536
|
||
|
||||
See
accompanying
notes.
|
Findex.com,
Inc.
|
|||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||
(Unaudited)
|
|||||||||||||
|
|||||||||||||
|
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||
|
2005
|
2004
|
2005
|
2004
|
|||||||||
|
(Restated)
|
(Restated)
|
|
(Restated)
|
|
(Restated)
|
|
||||||
Revenues,
net of reserves and allowances
|
$
|
1,276,996
|
$
|
1,020,885
|
$
|
2,954,410
|
$
|
2,653,853
|
|||||
Cost
of sales
|
450,993
|
271,410
|
959,778
|
740,069
|
|||||||||
Gross
profit
|
826,003
|
749,475
|
1,994,632
|
1,913,784
|
|||||||||
Operating
expenses:
|
|||||||||||||
Sales
and marketing
|
307,521
|
267,902
|
734,968
|
510,501
|
|||||||||
General
and administrative
|
690,078
|
615,895
|
1,325,796
|
1,171,574
|
|||||||||
Bad
debt expense
|
22,016
|
---
|
22,669
|
2,500
|
|||||||||
Depreciation
and amortization
|
145,780
|
139,187
|
291,548
|
274,639
|
|||||||||
Total
operating expenses
|
1,165,395
|
1,022,984
|
2,374,981
|
1,959,214
|
|||||||||
Loss
from operations
|
(339,392
|
)
|
(273,509
|
)
|
(380,349
|
)
|
(45,430
|
)
|
|||||
Loss
on fair value adjustment of derivatives
|
(328,123
|
)
|
---
|
(546,871
|
)
|
---
|
|||||||
Other
expenses, net
|
(2,920
|
)
|
(16,188
|
)
|
(6,775
|
)
|
(30,518
|
)
|
|||||
Loss
before income taxes
|
(670,435
|
)
|
(289,697
|
)
|
(933,995
|
)
|
(75,948
|
)
|
|||||
Provision
for income taxes
|
149,669
|
(31,011
|
)
|
299,158
|
(61,322
|
)
|
|||||||
Net
loss
|
$
|
(520,766
|
)
|
$
|
(320,708
|
)
|
(634,837
|
)
|
(137,270
|
)
|
|||
Retained
deficit at beginning of year
|
(6,170,833
|
)
|
(7,130,761
|
)
|
|||||||||
Retained
deficit at end of period
|
$
|
(6,805,670
|
)
|
$
|
(7,268,031
|
)
|
|||||||
|
|||||||||||||
Net
earnings (loss) per share:
|
|||||||||||||
Basic
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
|
Diluted
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
|
|
|||||||||||||
Weighted
average shares outstanding:
|
|||||||||||||
Basic
|
48,619,855
|
23,276,312
|
48,619,855
|
22,143,875
|
|||||||||
Diluted
|
48,619,855
|
23,276,312
|
48,619,855
|
22,143,875
|
|||||||||
|
|||||||||||||
See
accompanying notes.
|
Findex.com,
Inc.
|
|||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
(Unaudited)
|
|||||||
|
|||||||
Six
Months Ended June 30
|
2005
|
2004
|
|||||
|
(Restated)
|
(Restated)
|
|
||||
Cash
flows from operating activities:
|
|||||||
Cash
received from customers
|
$
|
2,887,090
|
$
|
2,639,964
|
|||
Cash
paid to suppliers and employees
|
(2,531,135
|
)
|
(2,409,585
|
)
|
|||
Other
operating activities, net
|
1,323
|
(28,166
|
)
|
||||
Net
cash provided by operating activities
|
357,278
|
202,213
|
|||||
Cash
flows from investing activities:
|
|||||||
Software
development costs
|
(594,161
|
)
|
(178,049
|
)
|
|||
Other
investing activities, net
|
20,000
|
(50,933
|
)
|
||||
Net
cash (used) by investing activities
|
(574,161
|
)
|
(228,982
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Payments
on line of credit, net
|
---
|
(2,999
|
)
|
||||
Cash
overdraft
|
---
|
38,990
|
|||||
Payments
made on long-term notes payable
|
(28,535
|
)
|
(50,890
|
)
|
|||
Net
cash (used) by financing activities
|
(28,535
|
)
|
(14,899
|
)
|
|||
Net
(decrease) in cash and cash equivalents
|
(245,418
|
)
|
(41,668
|
)
|
|||
Cash
and cash equivalents, beginning of year
|
341,359
|
41,668
|
|||||
Cash
and cash equivalents, end of period
|
$
|
95,941
|
$
|
---
|
|||
|
|||||||
Reconciliation
of net loss to cash flows from operating activities:
|
|||||||
Net
loss
|
$
|
(634,837
|
)
|
$
|
(137,270
|
)
|
|
Adjustments
to reconcile net loss to net cash
|
|||||||
provided
by operating activities:
|
|||||||
Software
development costs amortized
|
364,347
|
258,258
|
|||||
Stock
and warrants issued for services
|
---
|
44,186
|
|||||
Loss
on fair value adjustment of derivatives
|
546,871
|
---
|
|||||
Rebate
reserve adjustment
|
---
|
(142,039
|
)
|
||||
Provision
for bad debts
|
22,669
|
2,500
|
|||||
Depreciation
& amortization
|
291,548
|
274,639
|
|||||
Loss
on disposal of property, plant and equipment
|
1,869
|
---
|
|||||
Change
in assets and liabilities:
|
|||||||
(Increase)
decrease in accounts receivable
|
(73,542
|
)
|
180,062
|
||||
Decrease
in inventories
|
8,113
|
110,697
|
|||||
Decrease
in refundable taxes
|
7,164
|
---
|
|||||
(Increase)
decrease in prepaid expenses
|
30,177
|
(75,406
|
)
|
||||
Increase
(decrease) in accrued royalties
|
17,238
|
(204,937
|
)
|
||||
Increase
(decrease) in accounts payable
|
29,180
|
(174,711
|
)
|
||||
Increase
in income taxes payable
|
180
|
700
|
|||||
Increase
(decrease) in deferred taxes
|
(299,338
|
)
|
60,625
|
||||
Increase
in other liabilities
|
45,639
|
4,909
|
|||||
Net
cash provided by operating activities
|
$
|
357,278
|
$
|
202,213
|
|||
|
|||||||
See
accompanying
notes.
|
§
|
planning
the Website,
|
|
§
|
developing
the applications and infrastructure until technological feasibility
is
established,
|
|
§
|
developing
graphics such as borders, background and text colors, fonts, frames,
and
buttons, and
|
|
§
|
operating
the site such as training, administration and
maintenance.
|
§
|
obtain
and register an Internet domain name,
|
|
§
|
develop
or acquire software tools necessary for the development
work,
|
|
§
|
develop
or acquire software necessary for general Website
operations,
|
|
§
|
develop
or acquire code for web applications,
|
|
§
|
develop
or acquire (and customize) database software and software to integrate
applications such as corporate databases and accounting systems into
web
applications,
|
|
§
|
develop
HTML web pages or templates,
|
|
§
|
install
developed applications on the web server,
|
|
§
|
create
initial hypertext links to other Websites or other locations within
the
Website, and
|
|
§
|
test
the Website applications.
|
Raw
materials
|
$
|
138,587
|
||
Finished
goods
|
87,300
|
|||
Inventories
|
$
|
225,887
|
|
Warrant
A
|
Warrant
B
|
||||||
Expected
term - years
|
4.05
|
4.05
|
||||||
Stock
price on June 30, 2005
|
$
|
0.115
|
$
|
0.115
|
||||
Exercise
price
|
$
|
0.18
|
$
|
0.60
|
||||
Expected
dividend yield
|
0
|
%
|
0
|
%
|
||||
Expected
stock price volatility
|
490
|
%
|
490
|
%
|
||||
Risk-free
interest rate
|
3.80
|
%
|
3.80
|
%
|
|
Warrant
A
|
Warrant
B
|
||||||
Expected
term - years
|
5
|
5
|
||||||
Stock
price on date of commitment (July 19, 2004)
|
$
|
0.20
|
$
|
0.20
|
||||
Exercise
price
|
$
|
0.18
|
$
|
0.60
|
||||
Expected
dividend yield
|
0
|
%
|
0
|
%
|
||||
Expected
stock price volatility
|
490
|
%
|
490
|
%
|
||||
Risk-free
interest rate
|
3.80
|
%
|
3.80
|
%
|
Fair
value of warrants on commitment date (July 19, 2004)
|
$
|
4,375,000
|
|||||
Less:
Net proceeds received
|
|||||||
Gross
proceeds received for stock and warrants
|
$
|
1,750,000
|
|||||
Par
value of common stock issued
|
(21,875
|
)
|
|||||
Stock
offering costs
|
(51,047
|
)
|
$
|
1,677,078
|
|||
Loss
on fair value adjustment of derivatives
|
$
|
2,697,922
|
Three
months ended June 30
|
Six
months ended June 30
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Current:
|
|||||||||||||
Federal
|
$
|
---
|
$
|
---
|
$
|
---
|
$
|
---
|
|||||
State
|
---
|
700
|
180
|
700
|
|||||||||
|
---
|
700
|
180
|
700
|
|||||||||
Deferred:
|
|||||||||||||
Federal
|
(141,093
|
)
|
25,001
|
(282,186
|
)
|
50,002
|
|||||||
State
|
(8,576
|
)
|
5,310
|
(17,152
|
)
|
10,620
|
|||||||
(149,669
|
)
|
30,311
|
(299,338
|
)
|
60,622
|
||||||||
Total
tax provision (benefit)
|
($149,669
|
)
|
$
|
31,011
|
($299,158
|
)
|
$
|
61,322
|
For
the Three Months Ended June 30
|
2005
|
2004
|
|||||
(Restated)
|
(Restated)
|
||||||
Net
loss
|
$ |
(520,766
|
)
|
$ |
(320,708
|
)
|
|
Preferred
stock dividends
|
---
|
---
|
|||||
Net
loss available to common shareholders
|
$ |
(520,766
|
)
|
$ |
(320,708
|
)
|
|
Basic
weighted average shares outstanding
|
48,619,855
|
23,276,312
|
|||||
Dilutive
effect of:
|
|||||||
Stock
options
|
---
|
---
|
|||||
Convertible
notes payable
|
---
|
---
|
|||||
Convertible
Preferred Series A
|
---
|
---
|
|||||
Convertible
Preferred Series B
|
---
|
---
|
|||||
Warrants
|
---
|
---
|
|||||
Diluted
weighted average shares outstanding
|
48,619,855
|
23,276,312
|
For
the Six Months Ended June 30
|
2005
|
2004
|
|||||
(Restated)
|
(Restated)
|
||||||
Net
loss
|
$ |
(634,837
|
)
|
$ |
(137,270
|
)
|
|
Preferred
stock dividends
|
---
|
---
|
|||||
Net
loss available to common shareholders
|
$ |
(634,837
|
)
|
$ |
(137,270
|
)
|
|
Basic
weighted average shares outstanding
|
48,619,855
|
22,143,875
|
|||||
Dilutive
effect of:
|
|||||||
Stock
options
|
---
|
---
|
|||||
Convertible
notes payable
|
---
|
---
|
|||||
Convertible
Preferred Series A
|
---
|
---
|
|||||
Convertible
Preferred Series B
|
---
|
---
|
|||||
Warrants
|
---
|
---
|
|||||
Diluted
weighted average shares outstanding
|
48,619,855
|
22,143,875
|
§ |
In
June 1999 we entered into a certain software license agreement
with
Parsons Technology, Inc. to manufacture, distribute and sell a
variety of
software titles, including QuickVerse®and
Membership Plus®,
by far our two largest selling titles. During the three month period
ended
June 30, 2002
we
reached a tentative settlement agreement in an arbitration arising
out of
the 1999 license with TLC, the licensor-assignee at the time. The
tentative settlement agreement forgave the final, unpaid installment
of
$1,051,785,
which we offset against the carrying amount of the 1999 license.
Although
paragraph 6 of Statement of Financial Accounting Standards (“SFAS”) No.
141, Business
Combinations,
which guides the recognition and measurement of intangible assets,
provides that the measurement of an asset in which the consideration
given
is cash is measured by the amount of cash paid, management has
concluded
that too much time had elapsed between the date of the 1999 license
and
the date of the tentative settlement agreement for such an offset
to be
appropriate. Therefore, we have recognized the extinguishment of
the
liability owed to TLC as income, in the amount of $1,051,785, in
our 2002
statement of operations. We have restated the retained deficit
as of
December 31, 2003 and there was no net effect on our consolidated
statements of operations and consolidated statements of cash flows
for the
three and six months then ended as a result of this correction.
|
§ |
Also
during the three month period ended June 30, 2002, we extended
the
estimated life of the 1999 license from 10 years to 50 years in
accordance
with the terms of the tentative settlement agreement with TLC.
Although
the 1999 license provides for the unlimited and exclusive use of
the
trademarks related to the software programs, and our management
has
assessed the useful life of the 1999 license as indefinite, though
limited
by the contractual provisions to 50 years, based on the estimated
future
direct or indirect cash flows from the 1999 license, as provided
by
paragraphs 11 and 53 of SFAS No. 142, Goodwill
and Other Intangible Assets,
our management has concluded that a 10 year life is appropriate
on the
basis of our going concern opinions for 2002 and 2003. We have
restated
our condensed consolidated statements of operations ($251,753)
and
consolidated statements of cash flows for the three and six months
ended
June 30, 2004.
|
§ |
During
the three months ended June 30, 2004, we erroneously included rebates,
and
adjustments to rebates, in sales and marketing expenses. The more
appropriate presentation should have been, and is now, as an adjustment
to
revenue, in accordance with EITF 01-09, Accounting
for Consideration Given by a Vendor to a Customer (Including a
Reseller of
the Vendor’s Products).
During the three months ended June 30, 2004, we originally recorded
an
adjustment to the rebates reserve in the amount of $266,301 and
an
adjustment to rebates payable in the amount of $12,599. Upon reassessment
of the adequacy of our reserve at December 31, 2003, we have allocated
$124,262 of the total adjustment to fiscal year 2003 and $142,039
to
fiscal year 2004 with $66,575 allocated to the three months ended
March
31, 2004 and $75,464 allocated to the three months ended June 30,
2004.
These adjustments resulted from a change in our internal control
over
financial reporting. Previously, when making our assessment of
the
adequacy of our reserve for rebates, we did not take into consideration
the amount and number of outstanding checks, issued checks that
were
returned as undeliverable, or our ability to meet our recorded
financial
obligation. We have changed our internal control procedures to
include
review of each of these factors in our assessment of the adequacy
of our
reserve for rebates.
|
§ |
During
the three months ended March 31, 2004, and as a direct result of
the
settlement with Zondervan and TLC, we wrote-off obsolete inventory
with a
carried cost totaling $32,396. We originally recorded this as a
non-recurring item in the other income (expense) section of the
consolidated statement of operations. Our revised condensed consolidated
statement of operations for the three and six months ended June
30, 2004
reflects this inventory adjustment in cost of sales. There was
no net
effect on net income (loss) from this reclassification for the
three and
six months ended June 30, 2004.
|
§ |
Rebates
payable to a third-party processor were overstated ($98,946) on
our
consolidated financial statements for the year ended December 31,
2000. We
discovered the error during the preparation of our condensed consolidated
financial statements for the three months ended March 31, 2004.
We
originally recorded the error correction as an adjustment to the
beginning
retained earnings of the year ended December 31, 2003 on the 2004
quarterly and annual filings. Our revised consolidated statements
of
operations for the year ended December 31, 2000 reflects an adjustment
to
revenue and reported the correction on Form 10-KSB/A for the year
then
ended. This revision had no net effect on the net loss for the
three and
six months ended June 30, 2004 or retained deficit at June 30,
2004 or
December 31, 2003.
|
§ |
We
erroneously treated the warrants issued to a New York based
private
investment partnership in connection with a private placement
as equity.
The correct presentation is as a liability adjusted for changes
in fair
value, at each balance sheet date, through the consolidated
statements of
operations, as provided by EITF 00-19, Accounting
for Derivative Financial Instruments Indexed to, and Potentially
Settled
in, a Company’s Own Stock.
We
reclassified the initial fair value of the warrants ($4,375,000
at July
19, 2004) as a current liability ($2,515,621 at June 30, 2005)
and have
included the net change in fair value through June 30, 2005
($546,871) in
other expenses on the consolidated statements of
operations.
|
§ |
We
have also reclassified various other expense items in our condensed
consolidated statements of operations for the three and six months
ended
June 30, 2004 to conform to the presentation in the statements
of
operations for the year ended December 31, 2004. There was no
net effect
on net income (loss) from these reclassifications for the three
and six
months ended June 30, 2005 and
2004.
|
Findex.com,
Inc.
|
||||||||||||||||
CONDENSED
CONSOLIDATED BALANCE SHEET
|
||||||||||||||||
June
30, 2005
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
||||||||||||||||
|
As
Previously Reported
|
As
Restated
|
Change
|
|||||||||||||
Assets
|
||||||||||||||||
Current
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$
|
95,941
|
$
|
95,941
|
$
|
---
|
||||||||||
Accounts
receivable, trade
|
617,692
|
617,692
|
---
|
|||||||||||||
Inventory
|
225,887
|
225,887
|
---
|
|||||||||||||
Other
current assets
|
359,461
|
359,461
|
---
|
|||||||||||||
Total
current assets
|
1,298,981
|
1,298,981
|
---
|
|||||||||||||
Property
and equipment, net
|
134,350
|
134,350
|
---
|
|||||||||||||
Software
license, net
|
2,014,030
|
2,014,030
|
---
|
|||||||||||||
Capitalized
software development costs, net
|
931,103
|
931,103
|
---
|
|||||||||||||
Other
assets
|
532,072
|
532,072
|
---
|
|||||||||||||
Total
assets
|
$
|
4,910,536
|
$
|
4,910,536
|
$
|
---
|
||||||||||
|
||||||||||||||||
Liabilities
and stockholders’ equity
|
||||||||||||||||
Current
liabilities:
|
||||||||||||||||
Accounts
payable, trade
|
$
|
650,984
|
$
|
650,984
|
$
|
---
|
||||||||||
Accrued
royalties
|
304,752
|
304,752
|
---
|
|||||||||||||
Derivative
liabilities
|
---
|
2,515,621
|
2,515,621
|
(a)
|
||||||||||||
Other
current liabilities
|
495,573
|
495,573
|
---
|
|||||||||||||
Total
current liabilities
|
1,451,309
|
3,966,930
|
2,515,621
|
|||||||||||||
Long-term
obligations
|
179,317
|
179,317
|
---
|
|||||||||||||
Commitments
and contingencies
|
||||||||||||||||
Stockholders’
equity:
|
||||||||||||||||
Common
stock
|
48,620
|
48,620
|
---
|
|||||||||||||
Paid-in
capital
|
9,198,417
|
7,521,339
|
(1,677,078
|
)
|
(b)
|
|||||||||||
Retained
(deficit)
|
(5,967,127
|
)
|
(6,805,670
|
)
|
(838,543
|
)
|
||||||||||
Total
stockholders’ equity
|
3,279,910
|
764,289
|
(2,515,621
|
)
|
||||||||||||
Total
liabilities and stockholders’ equity
|
$
|
4,910,536
|
$
|
4,910,536
|
$
|
---
|
||||||||||
|
||||||||||||||||
(a)
Fair
value of common stock warrants reclassified as derivatives
under EITF
00-19.
|
||||||||||||||||
(b)
Net
proceeds allocated to common stock warrants reclassified as
derivative
liability.
|
Findex.com,
Inc.
|
||||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||
Six
Months Ended June 30, 2005
|
||||||||||||||
(Unaudited)
|
||||||||||||||
|
||||||||||||||
|
As
Originally Reported
|
As
Restated
|
Change
|
|||||||||||
Revenues,
net of reserves and allowances
|
$
|
2,954,410
|
$
|
2,954,410
|
$
|
---
|
||||||||
Cost
of sales
|
959,778
|
959,778
|
---
|
|||||||||||
Gross
profit
|
1,994,632
|
1,994,632
|
---
|
|||||||||||
Operating
expenses:
|
||||||||||||||
Sales
and marketing
|
734,968
|
734,968
|
---
|
|||||||||||
General
and administrative
|
1,325,796
|
1,325,796
|
---
|
|||||||||||
Bad
debt provision
|
22,669
|
22,669
|
---
|
|||||||||||
Depreciation
and amortization
|
291,548
|
291,548
|
---
|
|||||||||||
Total
operating expenses
|
2,374,981
|
2,374,981
|
---
|
|||||||||||
Loss
from operations
|
(380,349
|
)
|
(380,349
|
)
|
---
|
|||||||||
Loss
on fair value adjustment of derivatives
|
---
|
(546,871
|
)
|
(546,871
|
)
|
(a)
|
||||||||
Other
expenses, net
|
(6,775
|
)
|
(6,775
|
)
|
---
|
|||||||||
Loss
before income taxes
|
(387,124
|
)
|
(933,995
|
)
|
(546,871
|
)
|
||||||||
Provision
for income taxes
|
299,158
|
299,158
|
---
|
|||||||||||
Net
loss
|
$
|
(87,966
|
)
|
$
|
(634,837
|
)
|
$
|
(546,871
|
)
|
|||||
|
||||||||||||||
Net
loss per share:
|
||||||||||||||
Basic
|
$
|
---
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||||||
Diluted
|
$
|
---
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||||||
|
||||||||||||||
Weighted
average shares outstanding:
|
||||||||||||||
Basic
|
48,619,855
|
48,619,855
|
---
|
|||||||||||
Diluted
|
48,619,855
|
48,619,855
|
---
|
|||||||||||
|
||||||||||||||
(a)
Fair
value adjustment on common stock warrants treated as derivatives
under
EITF 00-19.
|
Findex.com,
Inc.
|
||||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||
Three
Months Ended June 30, 2005
|
||||||||||||||
(Unaudited)
|
||||||||||||||
|
||||||||||||||
|
As
Originally Reported
|
As
Restated
|
Change
|
|||||||||||
Revenues,
net of reserves and allowances
|
$
|
1,276,996
|
$
|
1,276,996
|
$
|
---
|
||||||||
Cost
of sales
|
450,993
|
450,993
|
---
|
|||||||||||
Gross
profit
|
826,003
|
826,003
|
---
|
|||||||||||
Operating
expenses:
|
||||||||||||||
Sales
and marketing
|
307,521
|
307,521
|
---
|
|||||||||||
General
and administrative
|
690,078
|
690,078
|
---
|
|||||||||||
Bad
debt provision
|
22,016
|
22,016
|
---
|
|||||||||||
Depreciation
and amortization
|
145,780
|
145,780
|
---
|
|||||||||||
Total
operating expenses
|
1,165,395
|
1,165,395
|
---
|
|||||||||||
Loss
from operations
|
(339,392
|
)
|
(339,392
|
)
|
---
|
|||||||||
Loss
on fair value adjustment of derivatives
|
---
|
(328,123
|
)
|
(328,123
|
)
|
(a)
|
||||||||
Other
expenses, net
|
(2,920
|
)
|
(2,920
|
)
|
---
|
|||||||||
Loss
before income taxes
|
(342,312
|
)
|
(670,435
|
)
|
(328,123
|
)
|
||||||||
Provision
for income taxes
|
149,669
|
149,669
|
---
|
|||||||||||
Net
loss
|
$
|
(192,643
|
)
|
$
|
(520,766
|
)
|
$
|
(328,123
|
)
|
|||||
|
||||||||||||||
Net
loss per share:
|
||||||||||||||
Basic
|
$
|
---
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||||||
Diluted
|
$
|
---
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||||||
|
||||||||||||||
Weighted
average shares outstanding:
|
||||||||||||||
Basic
|
48,619,855
|
48,619,855
|
---
|
|||||||||||
Diluted
|
48,619,855
|
48,619,855
|
---
|
|||||||||||
|
||||||||||||||
(a)
Fair
value adjustment on common stock warrants treated as derivatives
under
EITF 00-19.
|
Findex.com,
Inc.
|
||||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||
Six
Months Ended June 30, 2004
|
||||||||||||||
(Unaudited)
|
||||||||||||||
|
||||||||||||||
|
As
Originally Reported
|
As
Restated
|
Change
|
|||||||||||
Revenues,
net of reserves and allowances
|
$
|
2,499,215
|
$
|
2,653,853
|
$
|
154,638
|
(a)
|
|||||||
Cost
of sales
|
630,791
|
740,069
|
109,278
|
(b)
|
||||||||||
Gross
profit
|
1,868,424
|
1,913,784
|
45,360
|
|||||||||||
Operating
expenses:
|
||||||||||||||
Sales
and marketing
|
497,049
|
510,501
|
13,452
|
(c)
|
||||||||||
General
and administrative
|
1,249,306
|
1,171,574
|
(77,732
|
)
|
(d)
|
|||||||||
Inventory
write down
|
32,396
|
---
|
(32,396
|
)
|
(e)
|
|||||||||
Rebate
reserve adjustment
|
(266,301
|
)
|
---
|
266,301
|
(f)
|
|||||||||
Bad
debt provision
|
2,500
|
2,500
|
---
|
|||||||||||
Depreciation
and amortization
|
22,886
|
274,639
|
251,753
|
(g)
|
||||||||||
Total
operating expenses
|
1,537,836
|
1,959,214
|
421,378
|
|||||||||||
Earnings
(loss) from operations
|
330,588
|
(45,430
|
)
|
(376,018
|
)
|
|||||||||
Other
expenses, net
|
(30,518
|
)
|
(30,518
|
)
|
---
|
|||||||||
Income
(loss) before income taxes
|
300,070
|
(75,948
|
)
|
(376,018
|
)
|
|||||||||
Provision
for income taxes
|
(2,305
|
)
|
(61,322
|
)
|
(59,017
|
)
|
(h)
|
|||||||
Net
income (loss)
|
$
|
297,765
|
$
|
(137,270
|
)
|
$
|
(435,035
|
)
|
||||||
|
||||||||||||||
Net
earnings (loss) per share:
|
||||||||||||||
Basic
|
$
|
0.01
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
||||||
Diluted
|
$
|
0.01
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
||||||
|
||||||||||||||
Weighted
average shares outstanding:
|
||||||||||||||
Basic
|
22,143,875
|
22,143,875
|
---
|
|||||||||||
Diluted
|
23,821,007
|
22,143,875
|
(1,677,132
|
)
|
(i)
|
|||||||||
|
||||||||||||||
(a)
Increase
from reclassification of rebate reserve adjustment from Sales
and
marketing expenses.
|
||||||||||||||
(b)
Increase
from reclassification of non-capitalized technical support
wages from
General and administrative
expenses, reclassification of fulfillment costs from Sales
and marketing
expenses, and reclassification
of Inventory write down expense from operating
expenses.
|
||||||||||||||
(c)
Increase
from reclassification of rebate reserve adjustment to Revenues
and
reclassification of fulfillment
costs to Cost of sales.
|
||||||||||||||
(d)
Decrease
from reclassification of non-capitalized technical support
wages to Cost
of sales.
|
||||||||||||||
(e)
Decrease
from reclassification to Cost of sales.
|
||||||||||||||
(f)
Increase
from reclassification as an adjustment to revenue and allocation
between
2003 and 2004.
|
||||||||||||||
(g)
Increase
from effects of additional amortization of the software license
agreement.
|
||||||||||||||
(h)
Income
tax effects of additional software license
amortization.
|
||||||||||||||
(i)
Decrease
due to change from net income to net
loss.
|
Findex.com,
Inc.
|
||||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||
Three
Months Ended June 30, 2004
|
||||||||||||||
(Unaudited)
|
||||||||||||||
|
||||||||||||||
|
As
Originally Reported
|
As
Restated
|
Change
|
|||||||||||
Revenues,
net of reserves and allowances
|
$
|
961,951
|
$
|
1,020,885
|
$
|
58,934
|
(a)
|
|||||||
Cost
of sales
|
233,102
|
271,410
|
38,308
|
(b)
|
||||||||||
Gross
profit
|
728,849
|
749,475
|
20,626
|
|||||||||||
Operating
expenses:
|
||||||||||||||
Sales
and marketing
|
280,033
|
267,902
|
(12,131
|
)
|
(c)
|
|||||||||
General
and administrative
|
658,603
|
615,895
|
(42,708
|
)
|
(d)
|
|||||||||
Rebate
reserve adjustment
|
(266,301
|
)
|
---
|
266,301
|
(e)
|
|||||||||
Depreciation
and amortization
|
13,311
|
139,187
|
125,876
|
(f)
|
||||||||||
Total
operating expenses
|
685,646
|
1,022,984
|
337,338
|
|||||||||||
Earnings
(loss) from operations
|
43,203
|
(273,509
|
)
|
(316,712
|
)
|
|||||||||
Other
expenses, net
|
(16,188
|
)
|
(16,188
|
)
|
---
|
|||||||||
Income
(loss) before income taxes
|
27,015
|
(289,697
|
)
|
(316,712
|
)
|
|||||||||
Provision
for income taxes
|
(1,505
|
)
|
(31,011
|
)
|
(29,506
|
)
|
(g)
|
|||||||
Net
income (loss)
|
$
|
25,510
|
$
|
(320,708
|
)
|
$
|
(346,218
|
)
|
||||||
|
||||||||||||||
Net
earnings (loss) per share:
|
||||||||||||||
Basic
|
$
|
---
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||||||
Diluted
|
$
|
---
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||||||
|
||||||||||||||
Weighted
average shares outstanding:
|
||||||||||||||
Basic
|
23,276,312
|
23,276,312
|
---
|
|||||||||||
Diluted
|
24,953,444
|
23,276,312
|
(1,677,132
|
)
|
(h)
|
|||||||||
|
||||||||||||||
(a)
Reclassification
of rebate reserve adjustment from Sales and marketing
expenses.
|
||||||||||||||
(b)
Increase
from reclassification of non-capitalized technical support
wages from
General and administrative
expenses, and reclassification of fulfillment costs from
Sales and
marketing expenses.
|
||||||||||||||
(c)
Decrease
from reclassification of fulfillment costs to Cost of
sales.
|
||||||||||||||
(d)
Decrease
from reclassification of non-capitalized technical support
wages to Cost
of sales.
|
||||||||||||||
(e)
Increase
from reclassification as an adjustment to revenue and allocation
between
2003 and 2004.
|
||||||||||||||
(f)
Increase
from effects of additional amortization of the software
license
agreement.
|
||||||||||||||
(g)
Income
tax effects of additional software license
amortization.
|
||||||||||||||
(h)
Decrease
due to change from net income to net
loss.
|
Findex.com,
Inc.
|
||||||||||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||||||||||
For
the Six Months Ended June 30, 2005
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
|
||||||||||||||||
|
As
Originally Reported
|
As
Restated
|
Change
|
|||||||||||||
Cash
flows from operating activities:
|
||||||||||||||||
Cash
received from customers
|
$
|
2,887,090
|
$
|
2,887,090
|
$
|
---
|
||||||||||
Cash
paid to suppliers and employees
|
(2,531,135
|
)
|
(2,531,135
|
)
|
---
|
|||||||||||
Other
operating activities, net
|
1,323
|
1,323
|
---
|
|||||||||||||
Net
cash provided by operating activities
|
357,278
|
357,278
|
---
|
|||||||||||||
Cash
flows from investing activities:
|
||||||||||||||||
Software
development costs
|
(594,161
|
)
|
(594,161
|
)
|
---
|
|||||||||||
Other
investing activities, net
|
20,000
|
20,000
|
---
|
|||||||||||||
Net
cash (used) by investing activities
|
(574,161
|
)
|
(574,161
|
)
|
---
|
|||||||||||
Cash
flows from financing activities:
|
||||||||||||||||
Payments
made on long-term notes payable
|
(28,535
|
)
|
(28,535
|
)
|
---
|
|||||||||||
Net
cash (used) by financing activities
|
(28,535
|
)
|
(28,535
|
)
|
---
|
|||||||||||
Net
(decrease) in cash and cash equivalents
|
(245,418
|
)
|
(245,418
|
)
|
---
|
|||||||||||
Cash
and cash equivalents, beginning of year
|
341,359
|
341,359
|
---
|
|||||||||||||
Cash
and cash equivalents, end of period
|
$
|
95,941
|
$
|
95,941
|
$
|
---
|
||||||||||
|
||||||||||||||||
Reconciliation
of net loss to cash flows from operating activities:
|
||||||||||||||||
Net
loss
|
$
|
(87,966
|
)
|
$
|
(634,837
|
)
|
$
|
(546,871
|
)
|
|||||||
Adjustments
to reconcile net loss to net cash
|
||||||||||||||||
provided
by operating activities:
|
||||||||||||||||
Software
development costs amortized
|
364,347
|
364,347
|
---
|
|||||||||||||
Loss
on fair value adjustment of derivatives
|
---
|
546,871
|
546,871
|
(a)
|
||||||||||||
Provision
for bad debts
|
22,669
|
22,669
|
---
|
|||||||||||||
Depreciation
and amortization
|
291,548
|
291,548
|
---
|
|||||||||||||
Loss
on sale of property and equipment
|
1,869
|
1,869
|
---
|
|||||||||||||
Change
in assets and liabilities:
|
||||||||||||||||
(Increase)
in accounts receivable
|
(73,542
|
)
|
(73,542
|
)
|
---
|
|||||||||||
Decrease
in inventories
|
8,113
|
8,113
|
---
|
|||||||||||||
Decrease
in refundable taxes
|
7,164
|
7,164
|
--- | |||||||||||||
Decrease
in prepaid expenses
|
30,177
|
30,177
|
---
|
|||||||||||||
Increase
in accrued royalties
|
17,238
|
17,238
|
---
|
|||||||||||||
Increase
in accounts payable
|
29,180
|
29,180
|
---
|
|||||||||||||
Increase
in income taxes payable
|
180
|
180
|
---
|
|||||||||||||
(Decrease)
in deferred taxes
|
(299,338
|
)
|
(299,338
|
)
|
---
|
|||||||||||
Increase
in other liabilities
|
45,639
|
45,639
|
---
|
|||||||||||||
Net
cash provided by operating activities
|
$
|
357,278
|
$
|
357,278
|
$
|
---
|
||||||||||
|
||||||||||||||||
(a)
Fair
value adjustment on common stock warrants treated as derivatives
under
EITF 00-19.
|
Findex.com,
Inc.
|
||||||||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||||||||
For
the Six Months Ended June 30, 2004
|
||||||||||||||
(Unaudited)
|
||||||||||||||
|
||||||||||||||
|
As
Originally Reported
|
As
Restated
|
Change
|
|||||||||||
Cash
flows from operating activities:
|
||||||||||||||
Cash
received from customers
|
$
|
2,687,874
|
$
|
2,639,964
|
$
|
(47,910
|
)
|
(a)
|
||||||
Cash
paid to suppliers and employees
|
(2,691,400
|
)
|
(2,409,585
|
)
|
281,815
|
(b)
|
||||||||
Other
operating activities, net
|
205,739
|
(28,166
|
)
|
(233,905
|
)
|
(c)
|
||||||||
Net
cash provided by operating activities
|
202,213
|
202,213
|
---
|
|||||||||||
Cash
flows from investing activities:
|
||||||||||||||
Acquisition
of property and equipment
|
(18,612
|
)
|
(18,612
|
)
|
---
|
|||||||||
Software
development costs
|
(178,049
|
)
|
(178,049
|
)
|
---
|
|||||||||
Website
development costs
|
(31,836
|
)
|
(31,836
|
)
|
---
|
|||||||||
Deposits
made
|
(485
|
)
|
(485
|
)
|
---
|
|||||||||
Net
cash (used) by investing activities
|
(228,982
|
)
|
(228,982
|
)
|
---
|
|||||||||
Cash
flows from financing activities:
|
||||||||||||||
Payments
made on line of credit, net
|
(2,999
|
)
|
(2,999
|
)
|
---
|
|||||||||
Cash
overdraft
|
---
|
38,990
|
38,990
|
(h)
|
||||||||||
Payments
made on long-term notes payable
|
(50,890
|
)
|
(50,890
|
)
|
---
|
|||||||||
Net
cash (used) by financing activities
|
(53,889
|
)
|
(14,899
|
)
|
38,990
|
|||||||||
Net
(decrease) in cash and cash equivalents
|
(80,658
|
)
|
(41,668
|
)
|
38,990
|
|
||||||||
Cash
and cash equivalents, beginning of year
|
142,022
|
41,668
|
(100,354
|
)
|
(d)
|
|||||||||
Cash
and cash equivalents, end of period
|
$
|
61,364
|
$
|
---
|
$
|
(61,364
|
)
|
|||||||
|
||||||||||||||
Reconciliation
of net income (loss) to cash flows from operating
activities:
|
||||||||||||||
Net
income (loss)
|
$
|
297,765
|
$
|
(137,270
|
)
|
$
|
(435,035
|
)
|
||||||
Adjustments
to reconcile net income (loss) to net cash
|
||||||||||||||
provided
by operating activities:
|
||||||||||||||
Software
development costs amortized
|
258,258
|
258,258
|
---
|
|||||||||||
Provision
for bad debts
|
2,500
|
2,500
|
---
|
|||||||||||
Stock
and warrants issued for services
|
44,186
|
44,186
|
---
|
|||||||||||
Rebate
reserve adjustment
|
(266,301
|
)
|
(142,039
|
)
|
124,262
|
(e)
|
||||||||
Depreciation
and amortization
|
22,886
|
274,639
|
251,753
|
(f)
|
||||||||||
Change
in assets and liabilities:
|
||||||||||||||
Decrease
in accounts receivable
|
180,062
|
180,062
|
---
|
|||||||||||
Decrease
in inventories
|
110,697
|
110,697
|
---
|
|||||||||||
(Increase)
in prepaid expenses
|
(75,406
|
)
|
(75,406
|
)
|
---
|
|||||||||
(Decrease)
in accrued royalties
|
(204,937
|
)
|
(204,937
|
)
|
---
|
|||||||||
(Decrease)
in accounts payable
|
(174,711
|
)
|
(174,711
|
)
|
---
|
|||||||||
Increase
in income taxes payable
|
700
|
700
|
---
|
|||||||||||
Increase
in deferred taxes
|
1,605
|
60,625
|
59,020
|
(g)
|
||||||||||
Increase
in other liabilities
|
4,909
|
4,909
|
---
|
|||||||||||
Net
cash provided by operating activities
|
$
|
202,213
|
$
|
202,213
|
$
|
---
|
||||||||
|
||||||||||||||
(a)
Decrease
from reclassification of estimated cost of sales returns against
cash
paid.
|
||||||||||||||
(b)
Increase
from reclassification of reserve for rebate adjustment from
other
operating activities, reclassification
of inventory write-down from other operating activities, and
estimated
cost of sales
returns from cash received.
|
||||||||||||||
(c)
Decrease
from reclassification of reserve for rebate adjustment and
inventory
write-down to cash
paid.
|
||||||||||||||
(d)
Decrease
from reclassification of restricted cash as other
asset.
|
||||||||||||||
(e)
Allocation
of rebate reserve adjustment to 2003 and 2004.
|
||||||||||||||
(f)
Additional
software license amortization.
|
||||||||||||||
(g)
Net
income tax effects of additional software amortization.
|
||||||||||||||
(h)
Reclassify
cash overdraft as financing
activity.
|
Statement
of Operations for Six Months Ended June 30
|
2005
|
2004
|
Change
|
|
%
|
||||||||
Net
revenues
|
$
|
2,954,410
|
$
|
2,653,853
|
$
|
300,557
|
11
|
%
|
|||||
Cost
of sales
|
$
|
959,778
|
$
|
740,069
|
$
|
219,709
|
30
|
%
|
|||||
Gross
profit
|
$
|
1,994,632
|
$
|
1,913,784
|
$
|
80,848
|
4
|
%
|
|||||
Total
operating expenses
|
$
|
(2,374,981
|
)
|
$
|
(1,959,214
|
)
|
$
|
(415,767
|
)
|
21
|
%
|
||
Loss
on fair value adjustment of derivatives
|
$
|
(546,871
|
)
|
$
|
---
|
$
|
(546,871
|
)
|
0
|
%
|
|||
Other
expenses
|
$
|
(6,775
|
)
|
$
|
(30,518
|
)
|
$
|
23,743
|
-78
|
%
|
|||
Income
(loss) before income taxes
|
$
|
(933,995
|
)
|
$
|
(75,948
|
)
|
$
|
(858,047
|
)
|
1130
|
%
|
||
Provision
for income taxes
|
$
|
299,158
|
$
|
(61,322
|
)
|
$
|
360,480
|
-588
|
%
|
||||
Net
loss
|
$
|
(634,837
|
)
|
$
|
(137,270
|
)
|
$
|
(497,567
|
)
|
362
|
%
|
Revenues
for Three Months Ended June 30
|
2005
|
%
to Sales
|
2004
|
%
to Sales
|
Change
|
|
%
|
||||||||||||||
Gross
sales
|
$
|
1,527,334
|
100
|
%
|
$
|
1,057,504
|
100
|
%
|
$
|
469,830
|
44
|
%
|
|||||||||
Add
rebate adjustment
|
4,910
|
0
|
%
|
75,464
|
7
|
%
|
(70,554
|
)
|
-93
|
%
|
|||||||||||
Less
reserve for sales returns and allowances
|
(255,248
|
)
|
-17
|
%
|
(112,083
|
)
|
-11
|
%
|
(143,165
|
)
|
128
|
%
|
|||||||||
Net
sales
|
$
|
1,276,996
|
83
|
%
|
$
|
1,020,885
|
96
|
%
|
$
|
256,111
|
25
|
%
|
Revenues
for Six Months Ended June 30
|
2005
|
%
to Sales
|
2004
|
%
to Sales
|
Change
|
|
%
|
||||||||||||||
Gross
sales
|
$
|
3,511,370
|
100
|
%
|
$
|
2,772,975
|
100
|
%
|
$
|
738,395
|
27
|
%
|
|||||||||
Add
rebate adjustment
|
9,820
|
0
|
%
|
202,548
|
7
|
%
|
(192,728
|
)
|
-95
|
%
|
|||||||||||
Less
reserve for sales returns and allowances
|
(566,780
|
)
|
-16
|
%
|
(321,670
|
)
|
-12
|
%
|
(245,110
|
)
|
76
|
%
|
|||||||||
Net
sales
|
$
|
2,954,410
|
84
|
%
|
$
|
2,653,853
|
95
|
%
|
$
|
300,557
|
8
|
%
|
|
Three
Months Ended June
30,
|
Six
Months Ended June
30,
|
|||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Beginning
balance
|
$
|
783,250
|
$
|
506,121
|
$
|
701,289
|
$
|
584,706
|
|||||
Capitalized
|
329,512
|
104,421
|
594,161
|
178,049
|
|||||||||
Amortized
(Cost of sales)
|
181,659
|
106,045
|
364,347
|
258,258
|
|||||||||
Ending
Balance
|
$ |
931,103
|
$
|
504,497
|
$
|
931,103
|
$
|
504,497
|
|||||
Research
and development expense (General and administrative)
|
$
|
30,164
|
$
|
27,522
|
$
|
67,243
|
$
|
43,696
|
Sales,
General and Administrative Costs for Six Months Ended June
30
|
2005
|
%
to Sales
|
2004
|
%
to Sales
|
Change
|
|
%
|
||||||||||||||
Selected
expenses:
|
|||||||||||||||||||||
Commissions
|
$
|
478,168
|
14
|
%
|
$
|
345,461
|
12
|
%
|
$
|
132,707
|
38
|
%
|
|||||||||
Advertising
and direct marketing
|
256,800
|
7
|
%
|
165,040
|
6
|
%
|
91,760
|
56
|
%
|
||||||||||||
Total
sales and marketing
|
$
|
734,968
|
21
|
%
|
$
|
510,501
|
18
|
%
|
$
|
224,467
|
44
|
%
|
|||||||||
Research
and development
|
$
|
67,243
|
2
|
%
|
$
|
43,696
|
2
|
%
|
$
|
23,547
|
54
|
%
|
|||||||||
Personnel
costs
|
693,586
|
20
|
%
|
751,967
|
27
|
%
|
(58,381
|
)
|
-8
|
%
|
|||||||||||
Legal
|
123,280
|
4
|
%
|
34,031
|
1
|
%
|
89,249
|
262
|
%
|
||||||||||||
Telecommunications
|
32,152
|
1
|
%
|
76,811
|
3
|
%
|
(44,659
|
)
|
-58
|
%
|
|||||||||||
Corporate
services
|
55,972
|
2
|
%
|
28,486
|
1
|
%
|
27,486
|
96
|
%
|
||||||||||||
Administration
|
10,749
|
0
|
%
|
53,388
|
2
|
%
|
(42,639
|
)
|
-80
|
%
|
|||||||||||
Other
general and administrative costs
|
342,814
|
10
|
%
|
183,195
|
7
|
%
|
159,619
|
87
|
%
|
||||||||||||
Total
general and administrative
|
$
|
1,325,796
|
38
|
%
|
$
|
1,171,574
|
42
|
%
|
$
|
154,222
|
13
|
%
|
Working
Capital at June 30
|
2005
|
2004
|
Change
|
|
%
|
||||||||||
Current
assets
|
$
|
1,298,981
|
$
|
442,470
|
$
|
856,511
|
194
|
%
|
|||||||
Current
liabilities
|
$
|
3,966,930
|
$
|
2,896,175
|
$
|
1,070,755
|
37
|
%
|
|||||||
Retained
deficit
|
$
|
(6,805,670
|
)
|
$
|
(7,268,031
|
)
|
$
|
462,361
|
-6
|
%
|
Cash
Flows for Six Months Ended June 30
|
2005
|
2004
|
Change
|
|
%
|
||||||||||
Cash
flows provided by operating activities
|
$
|
357,278
|
$
|
202,213
|
$
|
155,065
|
77
|
%
|
|||||||
Cash
flows used by investing activities
|
$
|
(574,161
|
)
|
$
|
(228,982
|
)
|
$
|
(345,179
|
)
|
151
|
%
|
||||
Cash
flows used by financing activities
|
$
|
(28,535
|
)
|
$
|
(14,899
|
)
|
$
|
(13,636
|
)
|
92
|
%
|
2005
|
$
|
40,665 | |
2006
|
69,451
|
||
2007
|
27,288
|
||
Total
future minimum rental payments
|
$
|
137,404
|
2005
|
$
|
6,863
|
|
2006
|
13,726
|
||
2007
|
13,726
|
||
2008
|
13,726
|
||
2009
|
12,582
|
||
Total
minimum lease payments
|
60,623
|
||
Less:
Amount representing interest
|
13,444
|
||
Total
obligations under capital lease
|
47,179
|
||
Less:
Current installments of obligations under capital lease
|
8,667
|
||
Long-term
obligation under capital lease
|
$
|
38,512
|
No.
|
Description
of Exhibit
|
2.1
|
Share
Exchange Agreement between Findex.com, Inc. and the stockholders
of Reagan
Holdings, Inc. dated March 7, 2000, incorporated by reference
to Exhibit
2.1 on Form 8-K filed March 15, 2000.
|
3(i)(1)
|
Articles
of Incorporation of Findex.com, Inc., incorporated by reference
to Exhibit
3.1 on Form 8-K filed March 15, 2000.
|
3(i)(2)
|
Amendment
to Articles of Incorporation of Findex.com, Inc. dated November
12, 2004
incorporated by reference to Exhibit 3.1(ii) on Form 10-QSB
filed November
12, 2004.
|
3(ii)
|
By-Laws
of Findex.com, Inc., incorporated by reference to Exhibit 3.3
on Form 8-K
filed March 15, 2000.
|
10.1
|
Stock
Incentive Plan of Findex.com, Inc. dated May 7, 1999, incorporated
by
reference to Exhibit 10.1 on Form 10-KSB/A filed May 13,
2004.
|
10.2
|
Share
Exchange Agreement between Findex.com, Inc. and the stockholders
of Reagan
Holdings Inc., dated March 7, 2000, incorporated by reference
to Exhibit
2.1 on Form 8-K filed March 15, 2000.
|
10.3
|
License
Agreement between Findex.com, Inc. and Parsons Technology,
Inc. dated June
30, 1999, incorporated by reference to Exhibit 10.3 on Form
10-KSB/A filed
May 13, 2004.
|
10.4
|
Employment
Agreement between Findex.com, Inc. and Steven Malone dated
July 25, 2003,
incorporated by reference to Exhibit 10.4 on Form 10-KSB/A
filed May 13,
2004.
|
10.5
|
Employment
Agreement between Findex.com, Inc. and Kirk Rowland dated July
25, 2003,
incorporated by reference to Exhibit 10.5 on Form 10-KSB/A
filed May 13,
2004.
|
10.6
|
Employment
Agreement between Findex.com, Inc. and William Terrill dated
June 7, 2002,
incorporated by reference to Exhibit 10.6 on Form 10-KSB/A
filed May 13,
2004.
|
10.7
|
Restricted
Stock Compensation Agreement between Findex.com, Inc. and John
A. Kuehne
dated July 25, 2003, incorporated by reference to Exhibit 10.7
on Form
10-KSB/A filed May 13, 2004.
|
10.8
|
Restricted
Stock Compensation Agreement between Findex.com, Inc. and Henry
M.
Washington dated July 25, 2003, incorporated by reference to
Exhibit 10.8
on Form 10-KSB/A filed May 13, 2004.
|
10.9
|
Restricted
Stock Compensation Agreement between Findex.com, Inc. and William
Terrill
dated July 25, 2003, incorporated by reference to Exhibit 10.9
on Form
10-KSB/A filed May 13, 2004.
|
10.10
|
Stock
Purchase Agreement, including the form of warrant agreement,
between
Findex.com, Inc. and Barron Partners, LP dated July 19, 2004,
incorporated
by reference to Exhibit 10.1 on Form 8-K filed July 28,
2004.
|
10.11
|
Amendment
No. 1 to Barron Partners, LP Stock Purchase Agreement dated
September 30,
2004, incorporated by reference to Exhibit 10.3 on Form 8-K
filed October
6, 2004.
|
10.12
|
Registration
Rights Agreement between Findex.com, Inc. and Barron Partners,
LP dated
July 26, 2004, incorporated by reference to Exhibit 10.2
on Form 8-K filed
July 28, 2004.
|
10.13
|
Waiver
certificate between Findex.com, Inc. and Barron Partners,
LP dated
September 16, 2004, incorporated by reference to Exhibit
10.4 on Form 8-K
filed October 6, 2004.
|
31.1
|
Certification
of Findex.com, Inc. Chief Executive Officer, Steven Malone,
required by
Rule 13a-14(a) or Rule 15d-14(a), and dated December 21, 2005. FILED
HEREWITH.
|
31.2
|
Certification
of Findex.com, Inc. Chief Financial Officer, Kirk R. Rowland,
required by
Rule 13a-14(a) or Rule 15d-14(a), and dated December 21, 2005. FILED
HEREWITH.
|
32.1
|
Certification
of Findex.com, Inc. Chief Executive Officer, Steven Malone,
required by
Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter
63 of Title
18 of the United States Code (18 U.S.C. 1350), and dated December 21,
2005. FILED HEREWITH.
|
32.2
|
Certification
of Findex.com, Inc. Chief Financial Officer, Kirk R. Rowland,
required by
Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter
63 of Title
18 of the United States Code (18 U.S.C. 1350), and dated December 21,
2005. FILED HEREWITH.
|
FINDEX.COM,
INC.
|
|||
Date: December
21, 2005
|
By
|
/s/
Steven Malone
|
|
Steven
Malone
|
|||
President
and Chief Executive Officer
|
Date: December
21, 2005
|
By
|
/s/
Kirk R. Rowland
|
|
Kirk
R. Rowland, CPA
|
|||
Chief
Financial Officer
|