Item 405 of
Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of the registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x
State
issuer’s revenues for its most recent fiscal year: $3,805
State
the
aggregate market value of the 4,221,084 voting and non-voting common equity
held
by non-affiliates computed by reference to the $0.025 average bid and asked
price of such common equity, as of July 11, 2008: $1,056,771.
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
Smaller
reporting company x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes x No
o
As
of
July 11, 2008, there were 28,718,780 shares of the Registrant's Common Stock,
par value $0.001 per share, outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
If
the
following documents are incorporated by reference, briefly describe them and
identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which
the
document is incorporated: (1) any annual report to security holders; (2) any
proxy or information statement; and (3) any prospectus filed pursuant to Rule
424(b) or (c) of the Securities Act of 1933 (“Securities Act”). The listed
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).
None
Transitional
Small Business Disclosure Format (check one): Yes o No x
ii
TABLE
OF CONTENTS
|
PART
I
|
||
|
ITEM
1
|
Business
|
|
|
ITEM
2
|
Properties
|
|
|
ITEM
3
|
Legal
Proceedings
|
|
|
ITEM
4
|
Submission
of Matters to a Vote of Security Holders
|
|
|
PART
II
|
||
|
ITEM
5
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
|
|
ITEM
7
|
Management’s
Discussion and Analysis of Financial Condition and
|
|
|
Results
of Operations
|
|
|
|
ITEM
8
|
Financial
Statements and Supplementary Data
|
|
|
ITEM
9
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
|
|
ITEM 9A(T)
|
Controls
and Procedures
|
|
|
ITEM
9B
|
Other
Information
|
|
|
PART
III
|
||
|
ITEM
10
|
Directors,
Executive Officers and Corporate Governance
|
|
|
ITEM
11
|
Executive
Compensation
|
|
|
ITEM
12
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
|
|
ITEM
13
|
Certain
Relationships and Related Transactions, and Director Independence
|
|
|
ITEM
14
|
Principal
Accounting Fees and Services
|
|
|
PART
IV
|
||
|
ITEM
15
|
Exhibits,
Financial Statement Schedules
|
|
iii
PART
I
ITEM
1. DESCRIPTION
OF BUSINESS.
Business
Development.
Internet
Infinity, Inc. (the "Company") was incorporated on October 27, 1995 in the
State
of Delaware. We now conduct our business from our sales headquarters office
in
Redondo Beach, California. We first had revenues from operations in
1996.
Our
initial focus was on selling Internet software. By early 1997 our software
sales
were slipping toward zero and Internet Infinity had to find an alternative
revenue opportunity to survive.
We
turned
our attention and efforts to selling electronic media duplication and packaging
services offered by an unaffiliated company, Video Magnetics, LLC. We did this
through our wholly-owned subsidiary, Electronic Media Central Corporation.
However, as the result of distributing all the shares of Electronic Media
Central Corporation on September 25, 2001 to the shareholders of record on
September 18, 2002, Internet Infinity ceased being in the media duplication
business, but remained in the creation
of duplication masters and packaging design and printing.
Today,
a
company merger partner is being sought as another potential avenue for revenue
growth. However, there is no assurance that the singles project or a merger
can
or will be successful at any time.
Our
Business.
We
have
one principal product:
|
·
|
Author
and create masters of electronic media products for replication and
duplication.
|
Suppliers
and Sub-Contractors
We
receive orders by telephone. We bill for the shipment at a cost negotiated
for
the order by our one salesperson.
The
functional relationship between Internet Infinity and Apple Realty, Inc.
dba/Morris Group consultants, a company owned by George Morris, the controlling
shareholder and officer and director of Internet Infinity is one of independent
contractors. Apple Realty, Inc dba/ Morris Group with its business broker real
estate license is helping our company develop and implement a strategy for
possible merger and acquisition activity by Internet Infinity.
Distribution
Methods
We
distribute our products through an independent contractor sales representative
working from his home with the telephone, fax, mail and the Internet. Shipments
are made throughout the United States.
Our
sales
representative is paid on an incentive bonus based on the gross profit generated
each month. The sales representative is responsible for managing his account
orders and customer service. We have shifted to a performance compensation
method and will attempt to recruit more sales persons under the direction of
a
performance compensated manager.
Competition
The
electronic media master business is highly competitive. Numerous small regional
competitors such as our company serve the smaller regional business and
nonprofit organization markets. We compete with both price and customer
services. In addition, we monitor offers from competitors on the Internet,
through direct mail and through comparison-shopping, to remain competitive.
Advertising
and Promotion
Our
advertising and promotion is primarily electronic-media focused. We engage
in
telephone and fax campaigns to prospect for media business.
Dependence
on Major Customers
With
only
one large customer at $3,805 sales for fiscal 2008, our company will most likely
discontinue all sales operations with the loss of this customer. Revenue for
Internet Infinity may go to zero if no merger or alternative business is
found.
Patents,
Trademarks and Licenses
We
have
no proprietary patents, trademarks or licenses.
Government
Approval and Regulations
We
need
no governmental approval for the design and marketing of our electronic media.
We are not aware of any proposed governmental regulations that would affect
our
operations.
Research
and Development
We
have
no budget for research and development.
Cost
of Compliance with Environmental Laws
There
are
no environmental laws that impact any of our operations of marketing and
distributing electronic duplication media, pre-recorded video programs or
Internet services.
Seasonality
Our
sales
are almost evenly distributed at this time across the year. There are slight
variations with the fall and winter exceeding the spring and summers seasons
for
a variety of factors including vacation, school and holiday cycles.
Employees
We
employ
one part-time person.
New
Products & Services
No
new
products or services are planned.
ITEM
2. PROPERTIES.
Our
one
part-time person requires less than 100 square feet of office space provided
by
our Chairman George Morris with utilities for the operation. Storage of our
records and accounting documents are provided by George Morris, public storage
and Roger Casas, our sales person. .
ITEM
3. LEGAL
PROCEEDINGS.
We
are
not, and none of our property is, a party to any pending legal proceedings,
and
no such proceedings are known to be contemplated.
ITEM
4. SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There
were no matters submitted to a vote of the stockholders of our company during
FY
2008 through the solicitation of proxies or otherwise.
PART
III
| ITEM 5. |
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF
EQUITY SECURITIES.
|
Market
Information.
Internet Infinity’s common stock is quoted on the Electronic OTC Bulletin Board.
Its symbol is “ITNF.”
During
the last two fiscal years, the range of high and low bid information for our
common stock is set forth below. The source of this information is the OTC
Bulletin Board.
The
quotations reflect the inter-dealer prices without markup, markdown or
commissions and may not represent actual transactions.
|
High
|
Low
|
|||||||||
|
FY
2007
|
1st
Qtr.
|
0.026
|
0.025
|
|||||||
|
|
2nd
Qtr.
|
0.025
|
0.025
|
|||||||
|
|
3rd
Qtr.
|
0.025
|
0.02
|
|||||||
|
|
4th
Qtr.
|
0.04
|
0.02
|
|||||||
|
|
||||||||||
|
FY
2008
|
1st
Qtr.
|
0.03
|
0.03
|
|||||||
|
|
2nd
Qtr.
|
0.03
|
0.02
|
|||||||
|
|
3rd
Qtr.
|
0.02
|
0.01
|
|||||||
|
|
4th
Qtr.
|
0.01
|
0.01
|
|||||||
On
June
12, 2008 there were 28,718,780 shares of common stock outstanding. No shares
are
subject to securities convertible into such shares of stock.
Holders.
On June
12, 2008 there were approximately 230 holders of record of our common stock.
Some 2,308,564 shares of common stock are held in brokerage accounts under
the
record name of “Cede & Co.”
Dividends.
No cash
dividends have been declared on the common stock. There are no restrictions
that
limit the ability of the company to pay dividends on the common stock or that
are likely to do so in the future.
Recent
Sales of Unregistered Securities.
During
the past three fiscal years, there was one unregistered sale of our common
stock
by the company. On December 29, 2006, we sold 10 million shares of our common
stock in exchange for $28,000 cash and the extinguishment of $222,000 debt
owed
to the purchaser of the shares – L&M Media, Inc. which is under the control
of George Morris, chairman of the board of directors, chief financial officer,
and controlling shareholder of the company.
Reports
to Security Holders.
We
file
reports with the Securities and Exchange Commission. These reports are annual
10-K, quarterly 10-Q and periodic 8-K reports. We will furnish stockholders
with
annual reports containing financial statements audited by independent certified
public accountants and such other periodic reports as we may deem appropriate
or
as required by law. The public may read and copy any materials we file with
the
SEC at the Public Reference Room of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The public may obtain information on the operation
of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. Internet
Infinity is an electronic filer, and the SEC maintains an Internet Web site
that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC. The address of such
site is http://www.sec.gov.
ITEM
7. MANAGEMENT’S
DISCUSSION AND ANALYSIS.
The
following discussion and analysis should be read in conjunction with the
financial statements and the accompanying notes thereto and is qualified in
its
entirety by the foregoing and by more detailed financial information appearing
elsewhere. See "Financial Statements."
Results
of Operations
The
following table presents, as a percentage of sales, certain selected financial
data for the two fiscal years ended March 31, 2008 and March 31,
2007.
|
Years
Ended 3-31
|
|||||||
|
|
|
||||||
|
Sales
|
100.0
|
%
|
100.0
|
%
|
|||
|
Cost
of sales
|
80.0
|
80.0
|
|||||
|
Gross
margin
|
20.0
|
20.0
|
|||||
|
Selling,
general and administrative expenses
|
(1,685.0
|
)
|
(2164.0
|
)
|
|||
|
Interest
income (expense)
|
(827.0
|
)
|
(997.5
|
)
|
|||
|
Net
income (loss) before income taxes
|
(2,394.0
|
)
|
(3141.0
|
)
|
|||
Sales
Sales
decreased by $1,606 from $5,411 in the fiscal year ended March 31, 2007 to
$3,805 in the fiscal year ended March 31, 2008, a decrease of 30.0 percent.
The
decrease in sales was attributable primarily to a lack of orders from our main
customer due to competition.
Gross
Margin
Gross
margin decreased by 30 percent in fiscal year 2008 to $761 from fiscal year
2007. The decrease in gross margin was attributable to lack of
orders.
Selling,
General and Administrative Expense
Selling,
general and administrative expenses decreased by $8,817 from $91,151, in fiscal
year 2007, to $82,334 in fiscal year 2008. A breakdown of the changes
is:
| · |
Consulting
fees to related party increased very little to $9,867 in fiscal year
2008
from $6,200 in 2007
|
| · |
Professional
fees decreased little to $33,761 in fiscal year 2008 from $34,059
in
2007
|
| · |
Other
expenses decreased to $16,750 in fiscal year 2008 from $20,440
in 2007 due
to lower sales.
|
|
·
|
Salaries
and related expense decreased from $30,651 for 2007 to 21,956 for
2008.
|
Net
Profit (Loss)
We
had a
net loss from operations, after a provision for income taxes, in the fiscal
year
ended March 31, 2008 of $119,527, or $0.004 a share of our common stock. In
the fiscal year ended March 31, 2007 we had a net loss, after a provision
for income taxes, of $130,344, or $0.01 a share of common stock. The loss
increased primarily due to a reduction in sales.
Balance
Sheet Items
The
net
loss of $119,527 for the fiscal year ended March 31, 2008 increased the
retained earnings deficit from $1,717,513 on March 31, 2007 to $1,927,465 on
March 31, 2008. Our cash position decreased from $1,263 for the fiscal year
ended March 31, 2007 to $990 for the fiscal year ended March 31, 2008. Accounts
receivable net of allowance for doubtful accounts from non-affiliates remains
unchanged at $0 at the end of fiscal year 2008 and 2007, while inventory
remained unchanged at zero for the fiscal year ended March 31, 2008 and
2007.
Outlook
The
statements made in this Outlook are based on current plans and expectations.
These statements are forward-looking, and actual results may vary considerably
from those that are planned.
We
have
been able to stay in operation only (1) from the cash flow generated from the
sale of authoring and mastering electronic media products, and (2) because
George Morris personally advanced funds to our Company when needed.
Internet
Infinity, Inc. management believes that it will not generate sufficient cash
flow to support operations during the twelve months ended March 31, 2009.
Although sales and expenses could continue to decline and even if our company
can generate a net profit and positive cash flow from operations, additional
funds will be necessary for continued operation of the company.
Our
auditors have issued a going concern statement in Note 3 of the attached
financial statements.
In
addition to cash provided from operations, loans from George Morris can provide
additional cash to Internet Infinity.
The
payment record of our existing customers has been good with low bad-debt losses
for over two years from authoring and mastering service customers. Accordingly,
management believes the risk of non-payment in the future is manageable if
the
company extends credit to our existing customers.
Off-Balance
Sheet Arrangements
Our
company has not entered into any transaction, agreement or other contractual
arrangement with an entity unconsolidated with us under which we have
| · |
an
obligation under a guarantee
contract,
|
| · |
a
retained or contingent interest in assets transferred to the
unconsolidated entity or similar arrangement that serves as credit,
liquidity or market risk support to such entity for such
assets,
|
|
·
|
an
obligation, including a contingent obligation, under a contract
that would
be accounted for as a derivative instrument,
or
|
|
·
|
an
obligation, including a contingent obligation, arising out of
a variable
interest in an unconsolidated entity that is held by, and material
to, us
where such entity provides financing, liquidity, market risk
or credit
risk support to, or engages in leasing, hedging, or research
and
development services with,
us.
|
Our
Company has signed a non-binding Letter of Intent “LOI” to merge with Toshiba
Display Systems.
ITEM
8.