NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Internet
Infinity, Inc. (III or “the Company”) was incorporated in the State of Delaware
on October 27, 1995. III is in the business of distribution of electronic
media
replication services and the creation of replication masters. The Company
was
re-incorporated in Nevada on December 17, 2004.
|
NOTE
2
|
BASIS
OF PRESENTATION AND
BUSINESS
|
The
accompanying financial statements have been prepared by Internet Infinity
Inc.
(the Company), without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such
rules and regulations, although the Company believes that the disclosures
included herein are adequate to make the information presented not misleading.
The unaudited financial statements reflect all adjustments, consisting only
of
normal recurring adjustments, which are, in the opinion of management, necessary
to fairly state the financial position as of December 31, 2007, and the results
of operations and cash flows for the related interim periods ended December
31,
2007 and 2006. The results of operations for the for the nine month periods
ended December 31, 2007, are not necessarily indicative of the results that
may
be expected for the year ended March 31, 2008, or any other period.
The
accounting policies followed by the Company and other information are contained
in the notes to the Company’s financial statements filed on July 3, 2007, as
part of the Company’s annual report on Form 10-KSB for the year ended March 31,
2007. This quarterly report should be read in conjunction with such annual
report.
Use
of estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Reclassifications
Certain
comparative amounts have been reclassified to conform to the current period's
presentation.
INTERNET
INFINITY, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
Recent
Pronouncements
In
September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures
about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board
having
previously concluded in those accounting pronouncements that fair value is
the
relevant measurement attribute. Accordingly, this Statement does not require
any
new fair value measurements. However, for some entities, the application
of this
Statement will change current practice. This Statement is effective for
financial statements issued for fiscal years beginning after November 15,
2007,
and interim periods within those fiscal years. The management is currently
evaluating the effect of this pronouncement on financial
statements.
In
September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87,
88, 106, and 132(R)’ This Statement improves financial reporting by requiring an
employer to recognize the overfunded or underfunded status of a defined benefit
postretirement plan (other than a multiemployer plan) as an asset or liability
in its statement of financial position and to recognize changes in that funded
status in the year in which the changes occur through comprehensive income
of a
business entity or changes in unrestricted net assets of a not-for-profit
organization. This Statement also improves financial reporting by requiring
an
employer to measure the funded status of a plan as of the date of its year-end
statement of financial position, with limited exceptions. An employer with
publicly traded equity securities is required to initially recognize the
funded
status of a defined benefit postretirement plan and to provide the required
disclosures as of the end of the fiscal year ending after December 15, 2006.
An
employer without publicly traded equity securities is required to recognize
the
funded status of a defined benefit postretirement plan and to provide the
required disclosures as of the end of the fiscal year ending after June 15,
2007. However, an employer without publicly traded equity securities is required
to disclose the following information in the notes to financial statements
for a
fiscal year ending after December 15, 2006, but before June 16, 2007, unless
it
has applied the recognition provisions of this Statement in preparing those
financial statements:
|
a.
|
A
brief description of the provisions of this Statement
|
|
b.
|
The
date that adoption is required
|
|
c.
|
The
date the employer plans to adopt the recognition provisions of
this
Statement, if earlier.
|
The
requirement to measure plan assets and benefit obligations as of the date
of the
employer’s fiscal year-end statement of financial position is effective for
fiscal years ending after December 15, 2008. The management is currently
evaluating the effect of this pronouncement on financial
statements.
INTERNET
INFINITY, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
In
February 2007, FASB issued FASB Statement No. 159, The Fair Value Option
for
Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal
years beginning after November 15, 2007. Early adoption is permitted subject
to
specific requirements outlined in the new Statement. Therefore, calendar-year
companies may be able to adopt FAS 159 for their first quarter 2007 financial
statements.
The
new
Statement allows entities to choose, at specified election dates, to measure
eligible financial assets and liabilities at fair value that are not otherwise
required to be measured at fair value. If a company elects the fair value
option
for an eligible item, changes in that item's fair value in subsequent reporting
periods must be recognized in current earnings. FAS 159 also establishes
presentation and disclosure requirements designed to draw comparison between
entities that elect different measurement attributes for similar assets and
liabilities. The management is currently evaluating the effect of this
pronouncement on financial statements.
In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business
Combinations”. The objective of this statement will significantly change the
accounting for business combinations. Under Statement 141R, an acquiring
entity
will be required to recognize all the assets acquired and liabilities assumed
in
a transaction at the acquisition -date fair value will limited exceptions.
Statement 141 applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. The Company does not expect
the
adoption of SFAS No. 141R to have a material impact on the consolidated
financial statements.
In
December 2007, FASB issued FASB Statement No. 160, Noncontrolling Interests
in
Consolidated Financial Statements—an amendment of ARB No. 51. This Statement
applies to all entities that prepare consolidated financial statements, except
not-for-profit organizations, but will affect only those entities that have
an
outstanding non-controlling interest in one or more subsidiaries or that
deconsolidate a subsidiary. Not-for-profit organizations should continue
to
apply the guidance in Accounting Research Bulletin No. 51, Consolidated
Financial Statements, before the amendments made by this Statement, and any
other applicable standards, until the Board issues interpretative guidance.
This
Statement is effective for fiscal years, and interim periods within those
fiscal
years, beginning on or after December 15, 2008 (that is, January 1, 2009,
for
entities with calendar year-ends). Earlier adoption is prohibited. The effective
date of this Statement is the same as that of the related Statement 141(R).
This
Statement shall be applied prospectively as of the beginning of the fiscal
year
in which this Statement is initially applied, except for the presentation
and
disclosure requirements. The presentation and disclosure requirements shall
be
applied retrospectively for all periods presented. This is statement has
no
effect on the financial statements as the Company does not have any outstanding
non-controlling interest.
INTERNET
INFINITY, INC.
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
The
Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course
of
business. However, the Company has incurred significant losses and has an
accumulated deficit of $1,800,680 at December 31, 2007. The Company has a
net
loss of $83,169 for the nine month period ended December 31, 2007.
In
view
of the matters described above, recoverability of a major portion of the
recorded asset amounts shown in the accompanying balance sheets is dependent
upon continued operations of the Company, which in turn is dependent upon
the
Company’s ability to raise additional capital, obtain financing and to succeed
in its future operations. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded
asset
amounts or amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
Management
has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with
the
ability to continue as a going concern. The Company is actively pursuing
additional funding and potential merger or acquisition candidates and strategic
partners, which would enhance stockholders’ investment. Management believes that
the above actions will allow the Company to continue operations through the
next
fiscal year.
|
NOTE
4
|
ACCOUNT
PAYABLE & ACCRUED
EXPENSES
|
Accrued
expenses consist of the following at December 31, 2007:
|
Accrued
taxes
|
|
$
|
4,000
|
|
|
Accrued
interest
|
|
|
122,671
|
|
|
Accrued
legal and accounting
|
|
|
3,500
|
|
|
Accounts
payable
|
|
|
42,692
|
|
|
|
|
$
|
172,863
|
|
Notes
payable related to various unrelated parties total amounting to $27,000.
The
notes are due upon 90 days written notice from the note holders. The notes
are
unsecured, with interest ranging from 6% to 12% payable quarterly. The notes
have been outstanding since 1990. Interest expense for the three month periods
ended December 31, 2007 and 2006 was $660 and $660. Interest expense for
the
nine month periods ended December 31, 2007 and 2006 was $1,980 and $1,980.
The
Company has not paid interest on the notes during the nine month period ended
December 31, 2007.