[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
|
|
16
|
|
|
|
|
|
|
|
17
|
|
17
|
|
17
|
|
17
|
|
17
|
|
18
|
Findex.com,
Inc.
|
|||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|||||||
|
|||||||
|
(Unaudited)
|
||||||
|
September
30, 2006
|
December
31, 2005
|
|||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
992
|
$
|
119,560
|
|||
Accounts
receivable, trade, net
|
270,209
|
405,380
|
|||||
Inventory
|
151,013
|
214,604
|
|||||
Other
current assets
|
235,887
|
128,206
|
|||||
Total
current assets
|
658,101
|
867,750
|
|||||
Property
and equipment, net
|
79,985
|
114,191
|
|||||
Software
license, net
|
1,384,645
|
1,762,276
|
|||||
Capitalized
software development costs, net
|
518,216
|
707,067
|
|||||
Other
assets
|
276,568
|
253,001
|
|||||
Total
assets
|
$
|
2,917,515
|
$
|
3,704,285
|
|||
|
|||||||
Liabilities
and stockholders’ equity
|
|||||||
Current
liabilities:
|
|||||||
Note
payable
|
$
|
75,000
|
$
|
---
|
|||
Accounts
payable, trade
|
712,411
|
556,042
|
|||||
Accrued
royalties
|
574,129
|
472,548
|
|||||
Derivative
liabilities
|
952,914
|
2,062,462
|
|||||
Other
current liabilities
|
551,991
|
802,395
|
|||||
Total
current liabilities
|
2,866,445
|
3,893,447
|
|||||
Long-term
obligations
|
156,961
|
52,891
|
|||||
Commitments
and contingencies (Note 8)
|
|||||||
Stockholders’
equity:
|
|||||||
Common
stock
|
49,558
|
48,620
|
|||||
Paid-in
capital
|
7,595,437
|
7,461,424
|
|||||
Retained
(deficit)
|
(7,750,886
|
)
|
(7,752,097
|
)
|
|||
Total
stockholders’ equity
|
(105,891
|
)
|
(242,053
|
)
|
|||
Total
liabilities and stockholders’ equity
|
$
|
2,917,515
|
$
|
3,704,285
|
|||
|
|||||||
See
accompanying notes.
|
Findex.com,
Inc.
|
|||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||
(Unaudited)
|
|||||||||||||
|
|||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||
|
September
30,
|
September
30,
|
|||||||||||
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Revenues,
net of reserves and allowances
|
$
|
826,127
|
$
|
1,023,609
|
$
|
2,586,197
|
$
|
3,978,019
|
|||||
Cost
of sales
|
391,771
|
450,413
|
1,361,157
|
1,410,191
|
|||||||||
Gross
profit
|
434,356
|
573,196
|
1,225,040
|
2,567,828
|
|||||||||
Operating
expenses:
|
|||||||||||||
Sales
and marketing
|
193,223
|
562,868
|
580,684
|
1,297,836
|
|||||||||
General
and administrative
|
385,658
|
212,261
|
1,310,340
|
1,419,057
|
|||||||||
Other
operating expenses
|
133,146
|
152,336
|
424,567
|
466,553
|
|||||||||
Total
operating expenses
|
712,027
|
927,465
|
2,315,591
|
3,183,446
|
|||||||||
Loss
from operations
|
(277,671
|
)
|
(354,269
|
)
|
(1,090,551
|
)
|
(615,618
|
)
|
|||||
Other
expenses, net
|
(47,898
|
)
|
(5,234
|
)
|
(57,929
|
)
|
(12,009
|
)
|
|||||
Registration
rights penalties
|
---
|
(158,792
|
)
|
(49,314
|
)
|
(277,792
|
)
|
||||||
Gain
(loss) on valuation adjustment of derivatives
|
237,009
|
(328,121
|
)
|
1,109,548
|
(874,992
|
)
|
|||||||
Loss
before income taxes
|
(88,560
|
)
|
(846,416
|
)
|
(88,246
|
)
|
(1,780,411
|
)
|
|||||
Income
tax (provision) benefit
|
114,909
|
(111,976
|
)
|
89,457
|
187,182
|
||||||||
Net
income (loss)
|
$
|
26,349
|
$
|
(958,392
|
)
|
1,211
|
(1,593,229
|
)
|
|||||
Retained
deficit at beginning of year
|
(7,752,097
|
)
|
(6,170,830
|
)
|
|||||||||
Retained
deficit at end of period
|
$
|
(7,750,886
|
)
|
$
|
(7,764,059
|
)
|
|||||||
|
|||||||||||||
Net
income (loss) per share:
|
|||||||||||||
Basic
|
$
|
0.00
|
$
|
(0.02
|
)
|
$
|
0.00
|
$
|
(0.03
|
)
|
|||
Diluted
|
$
|
0.00
|
$
|
(0.02
|
)
|
$
|
0.00
|
$
|
(0.03
|
)
|
|||
|
|||||||||||||
Weighted
average shares outstanding:
|
|||||||||||||
Basic
|
49,558,317
|
48,619,855
|
49,294,214
|
48,619,855
|
|||||||||
Diluted
|
51,167,410
|
48,619,855
|
51,660,240
|
48,619,855
|
|||||||||
|
|||||||||||||
See
accompanying notes.
|
Findex.com,
Inc.
|
|||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
(Unaudited)
|
|||||||
|
|||||||
Nine
Months Ended September 30
|
2006
|
2005
|
|||||
Cash
flows from operating activities:
|
|||||||
Cash
received from customers
|
$
|
2,683,215
|
$
|
4,049,153
|
|||
Cash
paid to suppliers and employees
|
(2,375,960
|
)
|
(3,565,309
|
)
|
|||
Other
operating activities, net
|
(16,204
|
)
|
(3,910
|
)
|
|||
Net
cash provided by operating activities
|
291,051
|
479,934
|
|||||
Cash
flows from investing activities:
|
|||||||
Software
development costs
|
(412,108
|
)
|
(766,151
|
)
|
|||
Other
investing activities, net
|
(12,955
|
)
|
15,300
|
||||
Net
cash (used) by investing activities
|
(425,063
|
)
|
(750,851
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Proceeds
from note payable, net
|
75,000
|
---
|
|||||
Payments
made on long-term notes payable
|
(59,556
|
)
|
(30,604
|
)
|
|||
Net
cash provided (used) by financing activities
|
15,444
|
(30,604
|
)
|
||||
Net
(decrease) in cash and cash equivalents
|
(118,568
|
)
|
(301,521
|
)
|
|||
Cash
and cash equivalents, beginning of year
|
119,560
|
341,359
|
|||||
Cash
and cash equivalents, end of period
|
$
|
992
|
$
|
39,838
|
|||
|
|||||||
Reconciliation
of net income (loss) to cash flows from operating
activities:
|
|||||||
Net
income (loss)
|
$
|
1,211
|
$
|
(1,593,229
|
)
|
||
Adjustments
to reconcile net income (loss) to net cash
|
|||||||
provided
by operating activities:
|
|||||||
Software
development costs amortized
|
600,959
|
524,989
|
|||||
(Gain)
loss on fair value adjustment of derivatives
|
(1,109,548
|
)
|
874,992
|
||||
Bad
debts (benefit) provision
|
(11,216
|
)
|
29,650
|
||||
Depreciation
& amortization
|
435,783
|
436,903
|
|||||
Noncash
operating expenses
|
69,997
|
---
|
|||||
Loss
on disposal of property and equipment
|
1,746
|
1,869
|
|||||
Change
in assets and liabilities:
|
|||||||
Decrease
in accounts receivable
|
146,387
|
71,786
|
|||||
Decrease
in inventories
|
63,591
|
22,231
|
|||||
Decrease
in refundable taxes
|
5,764
|
7,164
|
|||||
(Increase)
decrease in prepaid expenses
|
(7,603
|
)
|
55,509
|
||||
Increase
in accrued royalties
|
101,581
|
40,831
|
|||||
Increase
in accounts payable
|
164,327
|
65,858
|
|||||
Increase
in income taxes payable
|
---
|
180
|
|||||
(Decrease)
in deferred taxes
|
(89,457
|
)
|
(187,362
|
)
|
|||
(Decrease)
increase in other liabilities
|
(82,471
|
)
|
128,563
|
||||
Net
cash provided by operating activities
|
$
|
291,051
|
$
|
479,934
|
|||
|
|||||||
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
|
$
|
95,366
|
||
Finished
goods
|
55,647
|
|||
Inventories
|
$
|
151,013
|
Warrant
A
|
$
|
12,544
|
||
Warrant
B
|
488,717
|
|||
Warrant
C
|
451,653
|
|||
Derivatives
|
$
|
952,914
|
|
Warrant
A
|
Warrant
B
|
Warrant
C
|
|||||||
Expected
term - years
|
.58
|
3.11
|
3.11
|
|||||||
Stock
price at September 30, 2006
|
$
|
0.05
|
$
|
0.05
|
$
|
0.05
|
||||
Expected
dividend yield
|
0
|
%
|
0
|
%
|
0
|
%
|
||||
Expected
stock price volatility
|
235
|
%
|
212
|
%
|
212
|
%
|
||||
Risk-free
interest rate
|
4.83
|
%
|
4.50
|
%
|
4.50
|
%
|
|
Three
months ended September 30
|
Nine
months ended September 30
|
|||||||||||
2006
|
|
|
2005
|
|
|
2006
|
|
|
2005
|
||||
Current:
|
|||||||||||||
Federal
|
$
|
---
|
$
|
---
|
$
|
---
|
$
|
---
|
|||||
State
|
---
|
---
|
---
|
180
|
|||||||||
|
--- |
---
|
---
|
180
|
|||||||||
Deferred:
|
|||||||||||||
Federal
|
(112,543
|
)
|
116,472
|
(84,655
|
)
|
(165,714
|
)
|
||||||
State
|
(2,366
|
)
|
(4,496
|
)
|
(4,802
|
)
|
(21,648
|
)
|
|||||
(114,909
|
)
|
111,976
|
(89,457
|
)
|
(187,362
|
)
|
|||||||
Total
tax provision (benefit)
|
$ |
(114,909
|
)
|
$
|
111,976
|
$ |
(89,457
|
)
|
$ |
(187,182
|
)
|
For
the Three Months Ended September 30
|
2006
|
2005
|
|||||
Net
income (loss)
|
$
|
26,349
|
$ |
(958,392
|
)
|
||
Preferred
stock dividends
|
---
|
---
|
|||||
Net
income (loss) available to common shareholders
|
$
|
26,349
|
$ |
(958,392
|
)
|
||
Basic
weighted average shares outstanding
|
49,558,317
|
48,619,855
|
|||||
Dilutive
effect of:
|
|||||||
Convertible
debt
|
1,535,714
|
---
|
|||||
Stock
options
|
---
|
---
|
|||||
Warrants
|
73,379
|
---
|
|||||
Diluted
weighted average shares outstanding
|
51,167,410
|
48,619,855
|
For
the Nine Months Ended September 30
|
2006
|
2005
|
|||||
Net
loss
|
$
|
1,211
|
$ |
(1,593,229
|
)
|
||
Preferred
stock dividends
|
---
|
---
|
|||||
Net
loss available to common shareholders
|
$
|
1,211
|
$ |
(1,593,229
|
)
|
||
Basic
weighted average shares outstanding
|
49,294,214
|
48,619,855
|
|||||
Dilutive
effect of:
|
|||||||
Convertible
debt
|
1,535,714
|
---
|
|||||
Stock
options
|
676,043
|
---
|
|||||
Warrants
|
154,269
|
---
|
|||||
Diluted
weighted average shares outstanding
|
51,660,240
|
48,619,855
|
Statement
of Operations for Nine Months Ended September 30
|
2006
|
|
|
2005
|
|
|
Change
|
|
%
|
||||
Net
revenues
|
$
|
2,586,197
|
$
|
3,978,019
|
$
|
(1,391,822
|
)
|
35
|
%
|
||||
Cost
of sales
|
1,361,157
|
1,410,191
|
(49,034
|
)
|
3
|
%
|
|||||||
Gross
profit
|
$
|
1,225,040
|
$
|
2,567,828
|
$
|
(1,342,788
|
)
|
52
|
%
|
||||
Total
operating expenses
|
(2,315,591
|
)
|
(3,183,446
|
)
|
867,855
|
27
|
%
|
||||||
Loss
from operations
|
$
|
(1,090,551
|
)
|
$
|
(615,618
|
)
|
$
|
(474,933
|
)
|
77
|
%
|
||
Registration
rights penalties
|
(49,314
|
)
|
(277,792
|
)
|
228,478
|
82
|
%
|
||||||
Gain
(loss) on fair value adjustment of derivatives
|
1,109,548
|
(874,992
|
)
|
1,984,540
|
227
|
%
|
|||||||
Other
expenses, net
|
(57,929
|
)
|
(12,009
|
)
|
(45,920
|
)
|
382
|
%
|
|||||
Loss
before income taxes
|
$
|
(88,246
|
)
|
$
|
(1,780,411
|
)
|
$
|
1,692,165
|
95
|
%
|
|||
Income
tax benefit
|
89,457
|
187,182
|
(97,725
|
)
|
52
|
%
|
|||||||
Net
income (loss)
|
$
|
1,211
|
$
|
(1,593,229
|
)
|
$
|
1,594,440
|
100
|
%
|
▪
|
our
gross revenues decreased approximately $1,951,000 to approximately
$
2,794,000 for the nine months ended September 30, 2006 from approximately
$4,745,000 for the nine months ended September 30, 2005. This decrease
is
primarily attributable to the following:
|
||
▪
|
an
overall net decrease in unit sales of our QuickVerse®
product line due to a reduction in the perceived value on the part
of
customers of certain upgrades based on the relative frequency
thereof;
|
||
▪
|
the
lack of product releases during the nine months ended September 30,
2006
as compared to the nine months ended September 30, 2005, including
our
annual release of Membership Plus®;
and
|
||
|
|||
▪
|
the
decreased suggested retail price in those products that were released
during the nine months ended September 30, 2006 compared to those
released
during the nine months ended September 30, 2005;
|
||
▪
|
our
cost of sales remained relatively high, only decreasing approximately
$49,000 from approximately $1,410,000 for the nine months ended September
30, 2005 to approximately $1,361,000 for the nine months ended September
30, 2006 due to the increased amortization of software development
costs;
|
||
▪
|
we
incurred liquidated damage penalties of approximately $49,000 in
connection with our failure to meet certain contractual registration
obligations; and
|
||
|
|||
▪
|
our
interest expense increased approximately $45,000 for the nine months
ended
September 30, 2006 due to a loan agreement that was entered into
in order
to fund our working capital
deficit.
|
Revenues
for Three Months Ended September 30
|
2006
|
|
|
%
to Sales
|
|
|
2005
|
|
|
%
to Sales
|
|
|
Change
|
|
|
%
|
|||||
Gross
revenues
|
$
|
910,896
|
100
|
%
|
$
|
1,233,389
|
100
|
%
|
$
|
(322,493
|
)
|
26
|
%
|
||||||||
Add
rebate adjustment
|
---
|
0
|
%
|
4,910
|
0
|
%
|
(4,910
|
)
|
100
|
%
|
|||||||||||
Less
reserve for sales returns and allowances
|
(84,769
|
)
|
-9
|
%
|
(214,690
|
)
|
-17
|
%
|
129,921
|
61
|
%
|
||||||||||
Net
revenues
|
$
|
826,127
|
91
|
%
|
$
|
1,023,609
|
83
|
%
|
$
|
(197,482
|
)
|
19
|
%
|
Revenues
for Nine Months Ended September 30
|
2006
|
|
|
%
to Sales
|
|
|
|
2005
|
|
|
%
to Sales
|
|
|
|
Change
|
|
|
%
|
|||
Gross
revenues
|
$
|
2,793,594
|
100
|
%
|
$
|
4,744,759
|
100
|
%
|
$
|
(1,951,165
|
)
|
41
|
%
|
||||||||
Add
rebate adjustment
|
---
|
0
|
%
|
14,730
|
0
|
%
|
(14,730
|
)
|
100
|
%
|
|||||||||||
Less
reserve for sales returns and allowances
|
(207,397
|
)
|
-7
|
%
|
(781,470
|
)
|
-16
|
%
|
574,073
|
73
|
%
|
||||||||||
Net
revenues
|
$
|
2,586,197
|
93
|
%
|
$
|
3,978,019
|
84
|
%
|
$
|
(1,391,822
|
)
|
214
|
%
|
▪
|
an
enhanced version of our top financial and data management product,
Membership Plus®,
including Membership Plus®
Standard Edition, with a suggested retail price of $149.95, and Membership
Plus®
Deluxe Edition, with a suggested retail price of
$349.95;
|
|
▪
|
an
enhanced version of QuickVerse®
2005 Essentials, with a suggested retail price of $49.95; and
|
|
▪
|
QuickVerse®
2005 Platinum Edition, with a suggested retail price of
$799.95.
|
▪
|
QuickVerse®
2006 Macintosh, including QuickVerse®
2006 Macintosh Black Box Edition, with a suggested retail price of
$99.95,
and QuickVerse®
2006 Macintosh White Box Edition, with a suggested retail price of
$49.95;
and
|
|
▪
|
an
enhanced version of Bible
Illustrator®
3.0
entitled Sermon Builder®
4.0,
with a suggested retail price of
$69.95.
|
▪
|
an
enhanced version of our flagship product, QuickVerse®,
including QuickVerse®
2006 Essentials with a suggested retail price of $49.95,
QuickVerse®
2006 Standard with a suggested retail price of $99.95,
QuickVerse®
2006 Expanded with a suggested retail price of $199.95,
QuickVerse®
2006 Deluxe with a suggested retail price of $299.95 and
QuickVerse®
2006 Platinum with a suggested retail price of
$799.95.
|
▪
|
QuickVerse®
2006 Parable Edition, with a suggested retail price of $49.95;
and
|
|
▪
|
QuickVerse®
2006 Bible Suite, with a suggested retail price of
$29.95.
|
▪
|
QuickVerse®
2006 Macintosh Gold Box Edition, with a suggested retail price of
$349.95;
and
|
|
▪
|
Holman
Christian Standard Bible®,
with a suggested retail price of
$29.95.
|
▪
|
an
enhanced version of our flagship product, QuickVerse®,
including QuickVerse®
2007 Bible Suite with a suggested retail price of $39.95,
QuickVerse®
2007 Essentials with a suggested retail price of $59.95,
QuickVerse®
2007 Standard with a suggested retail price of $129.95,
QuickVerse®
2007 Expanded with a suggested retail price of $249.95,
QuickVerse®
2007 Deluxe with a suggested retail price of $349.95 and
QuickVerse®
2007 Platinum with a suggested retail price of $799.95.
|
▪
|
price
protections afforded to consumers and retailers who had purchased
prior
versions of Membership Plus®
and
QuickVerse®
within
one year or less of our release of upgraded versions of each of Membership
Plus®,
in February 2005, and QuickVerse®,
in September 2005. Historically, our product upgrades have extended
over
two to three years and therefore, price protections were not issued;
|
|
▪
|
increased
price points associated with products introduced; and
|
|
▪
|
higher
actual returns on the Membership Plus®
2005 product line due to some then unresolved maintenance issues
and the
loss of our primary developer of Membership Plus®.
|
Cost
of Sales for Nine Months Ended September 30
|
2006
|
|
|
%
to Sales
|
|
|
|
2005
|
|
|
%
to Sales
|
|
|
|
Change
|
|
|
%
|
|
||
Direct
costs
|
$
|
372,033
|
13
|
%
|
$
|
485,674
|
10
|
%
|
$
|
(113,641
|
)
|
23
|
%
|
||||||||
Less
reserve for sales returns and allowances
|
(30,810
|
)
|
-1
|
%
|
(116,940
|
)
|
-2
|
%
|
86,130
|
74
|
%
|
||||||||||
Amortization
of software development costs
|
600,959
|
22
|
%
|
524,989
|
11
|
%
|
75,970
|
14
|
%
|
||||||||||||
Royalties
|
256,737
|
9
|
%
|
300,000
|
6
|
%
|
(43,263
|
)
|
14
|
%
|
|||||||||||
Freight-out
|
76,218
|
3
|
%
|
111,188
|
2
|
%
|
(34,970
|
)
|
31
|
%
|
|||||||||||
Fulfillment
|
86,020
|
3
|
%
|
105,280
|
2
|
%
|
(19,260
|
)
|
18
|
%
|
|||||||||||
Cost
of sales
|
$
|
1,361,157
|
49
|
%
|
$
|
1,410,191
|
30
|
%
|
$
|
(49,034
|
)
|
3
|
%
|
▪
|
sales
of QuickVerse®
2005 editions to a liquidator in the first and third quarters of
2006 and
no sales to a liquidator in the first and third quarters of
2005;
|
|
▪
|
our
increased sales focus on the QuickVerse®
product line which have associated royalty fees;
|
|
▪
|
an
increase in retail sales for the QuickVerse®
2007 product line during the month of September 2006 compared to
only
upgrade sales for the QuickVerse®
2006 product line during the same time frame in 2005; and
|
|
▪
|
our
decreased sales focus on the Membership Plus®
product line, which has no associated royalty fees. We have experienced
a
delay in our annual upgrade release of Membership Plus®
2007 and, during the first quarter of 2005, we released an upgrade
to
Membership Plus®
in
February 2005.
|
Software
Development Costs for
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||
2006
|
|
|
2005
|
|
|
2006
|
|
|
2005
|
||||
Beginning
balance
|
$
|
487,849
|
$
|
931,103
|
$
|
707,067
|
$
|
701,289
|
|||||
Capitalized
|
173,728
|
171,990
|
412,108
|
766,151
|
|||||||||
Amortized
(Cost of sales)
|
143,361
|
160,642
|
600,959
|
524,989
|
|||||||||
Ending
Balance
|
$
|
518,216
|
$
|
942,451
|
$
|
518,216
|
$
|
942,451
|
|||||
Research
and development expense (General and administrative)
|
$
|
47,393
|
$
|
63,164
|
$
|
131,013
|
$
|
130,407
|
Sales,
General and Administrative Costs for Nine Months Ended September
30
|
2006
|
|
|
%
to Sales
|
|
|
2005
|
|
|
%
to Sales
|
|
|
Change
|
|
|
%
|
|||||
Selected
expenses:
|
|||||||||||||||||||||
Commissions
|
$
|
151,499
|
5
|
%
|
$
|
611,653
|
13
|
%
|
$
|
(460,154
|
)
|
75
|
%
|
||||||||
Advertising
and direct marketing
|
156,537
|
6
|
%
|
419,217
|
9
|
%
|
(262,680
|
)
|
63
|
%
|
|||||||||||
Sales
and marketing wages, reclassified
|
272,648
|
10
|
%
|
266,966
|
6
|
%
|
5,682
|
2
|
%
|
||||||||||||
Total
sales and marketing
|
$
|
580,684
|
21
|
%
|
$
|
1,297,836
|
27
|
%
|
$
|
(717,152
|
)
|
55
|
%
|
||||||||
Research
and development
|
131,013
|
5
|
%
|
130,407
|
3
|
%
|
606
|
0
|
%
|
||||||||||||
Personnel
costs
|
564,825
|
20
|
%
|
572,688
|
12
|
%
|
(7,863
|
)
|
1
|
%
|
|||||||||||
Legal
|
83,539
|
3
|
%
|
157,970
|
3
|
%
|
(74,431
|
)
|
47
|
%
|
|||||||||||
Accounting
|
48,505
|
2
|
%
|
22,031
|
0
|
%
|
26,474
|
120
|
%
|
||||||||||||
Rent
|
74,260
|
3
|
%
|
57,387
|
1
|
%
|
16,873
|
29
|
%
|
||||||||||||
Telecommunications
|
28,967
|
1
|
%
|
42,605
|
1
|
%
|
(13,638
|
)
|
32
|
%
|
|||||||||||
Corporate
services
|
54,000
|
2
|
%
|
73,972
|
2
|
%
|
(19,972
|
)
|
27
|
%
|
|||||||||||
Investor
services
|
55,000
|
2
|
%
|
---
|
0
|
%
|
55,000
|
0
|
%
|
||||||||||||
Other
general and administrative costs
|
270,231
|
10
|
%
|
361,997
|
8
|
%
|
(91,766
|
)
|
25
|
%
|
|||||||||||
Total
general and administrative
|
$
|
1,310,340
|
47
|
%
|
$
|
1,419,057
|
30
|
%
|
$
|
(108,717
|
)
|
8
|
%
|
Working
Capital at September 30
|
2006
|
|||
Current
assets
|
$
|
658,101
|
||
Current
liabilities
|
$
|
2,866,445
|
||
Retained
deficit
|
$
|
(7,750,886
|
)
|
Cash
Flows for Nine Months Ended September 30
|
2006
|
|
|
2005
|
|
|
Change
|
|
|
%
|
|||
Cash
flows provided by operating activities
|
$
|
291,051
|
$
|
479,934
|
$
|
(188,883
|
)
|
39
|
%
|
||||
Cash
flows (used) by investing activities
|
$
|
(425,063
|
)
|
$
|
(750,851
|
)
|
$
|
325,788
|
43
|
%
|
|||
Cash
flows provided (used) by financing activities
|
$
|
15,444
|
$
|
(30,604
|
)
|
$
|
46,048
|
150
|
%
|
2006
|
$
|
20,333
|
||
2007
|
31,248
|
|||
Total
future minimum rental payments
|
$
|
51,581
|
2006
|
$
|
3,432
|
||
2007
|
13,726
|
|||
2008
|
13,726
|
|||
2009
|
12,582
|
|||
2010
|
---
|
|||
Total
minimum lease payments
|
43,466
|
|||
Less:
Amount representing interest
|
7,282
|
|||
Total
obligations under capital lease
|
36,184
|
|||
Less:
Current installments of obligations under capital lease
|
10,023
|
|||
Long-term
obligation under capital lease
|
$
|
26,161
|
▪
|
the
fact that disclosure controls and procedures have been reviewed as
of the
end of the period covered by a given report;
|
|
▪
|
any
concerns regarding weaknesses in disclosure controls and
procedures;
|
|
▪
|
any
concerns relating to events that may require
disclosure;
|
|
▪
|
any
concerns relating to internal fraud/defalcation;
|
|
▪
|
potential
material losses;
|
|
▪
|
new
off-balance sheet arrangements; and
|
|
▪
|
material
amounts not reflected on the general
ledger.
|
Date
Securities Issued
|
Securities
Title
|
|
|
Issued
to
|
|
|
Number
of Securities Issued
|
|
|
Consideration
*
|
|||
Common
Stock Issuances
|
|||||||||||||
10/26/2006
|
Common
Stock
|
Independent
Board of Director
|
480,000
|
$
|
12,000
|
||||||||
Common
Stock Warrant Issuances
|
|||||||||||||
Promissory
Notes Convertible into Common Stock
|
|||||||||||||
7/20/2006
|
Common
Stock
|
W.
Sam Chandoha
|
100,000
|
$
|
4,997
|
||||||||
Common
Stock Option Issuances
|
|||||||||||||
10/26/2006
|
Common
Stock
|
Non-Executive
Employees
|
850,000
|
$
|
21,250
|
||||||||
*
Consideration is calculated to be the value of the security at the
date of
issuance.
|
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)
|
Restated
Articles of Incorporation of Findex.com, Inc. dated June 1999 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 10,
2004
incorporated by reference to Exhibit 3.1(ii) on Form 10-QSB filed
November
10, 2004.
|
3(ii)
|
Restated
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 Stock Purchase Agreement between Findex.com, Inc. and Barron
Partners, LP 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.
|
10.14
|
Settlement
Agreement between Findex.com, Inc., The Zondervan Corporation, Mattel,
Inc., TLC Multimedia, Inc., and Riverdeep, Inc. dated October 20,
2003,
incorporated by reference to Exhibit 10.14 on Form 10-KSB/A filed
December
14, 2005.
|
10.15
|
Employment
Agreement Extension between Findex.com, Inc and Steven Malone dated
March
31, 2006, incorporated by reference to Exhibit 10.1 on Form 8-K filed
April 6, 2006.
|
10.16
|
Employment
Agreement Extension between Findex.com, Inc and William Terrill dated
March 31, 2006, incorporated by reference to Exhibit 10.2 on Form
8-K
filed April 6, 2006.
|
10.17
|
Employment
Agreement Extension between Findex.com, Inc and Kirk R. Rowland dated
March 31, 2006, incorporated by reference to Exhibit 10.3 on Form
8-K
filed April 6, 2006.
|
10.18
|
Promissory
Note to Barron Partners, LP dated April 7, 2006, incorporated by
reference
to Exhibit 10.1 on Form 8-K filed April 13, 2006.
|
10.19
|
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.
|
10.20
|
Convertible
Secured Promissory Note between FindEx.com, Inc. and W. Sam Chandoha,
dated July 20, 2006, incorporated by reference to Exhibit 10.1 on
Form 8-K
filed July 26, 2006.
|
10.21
|
Security
Agreement between FindEx.com, Inc. and W. Sam Chandoha, dated July
20,
2006, incorporated by reference to Exhibit 10.2 on Form 8-K filed
July 26,
2006.
|
10.22
|
Common
Stock Purchase Warrant between FindEx.com, Inc. and W. Sam Chandoha,
dated
July 20, 2006, incorporated by reference to Exhibit 10.3 on Form
8-K filed
July 26, 2006.
|
10.23
|
Modification
and Extension Agreement Between FindEx.com, Inc. and W. Sam Chandoha,
dated September 20, 2006, incorporated by reference to Exhibit 10.1
on
Form 8-K filed September 25,2006.
|
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 November 20, 2006. 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 November 20, 2006. 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 November
20,
2006. 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 November
20,
2006. FILED HEREWITH.
|
FINDEX.COM,
INC.
|
|||
Date:
November 20, 2006
|
By
|
/s/
Steven Malone
|
|
Steven
Malone
|
|||
President
and Chief Executive Officer
|
Date:
November 20, 2006
|
By
|
/s/
Kirk R. Rowland
|
|
Kirk
R. Rowland, CPA
|
|||
Chief
Financial Officer
|