- Annual Report (10-K)

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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED MARCH 31, 2011

OR

[ ] TRANSITION UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

INTERNET INFINITY, INC.

(Exact name of registrant as specified in its charter)

 

Nevada	0-27633	95-4679342
(state of	(Commission File Number)	(IRS Employer
incorporation)		I.D. Number)

413 Avenue G, #1

Redondo Beach, CA 90277

[phone]

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(Address and telephone number of registrant's principal

executive offices and principal place of business)

 

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value

Check whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [ ] No [X]

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to 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: $9,300

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 $0.010 average bid and asked price of such common equity, as of July 12, 2011: $42,210.

 

 

 

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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 [ ]

As of June 29, 2011, 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 [ ] No [X]

 

 

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TABLE OF CONTENTS

 

PART I		1
ITEM 1	Description of Business	2
ITEM 2	Properties	3
ITEM 3	Legal Proceedings	3
ITEM 4	Submission of Matters to a Vote of Security Holders	3
PART II		3
ITEM 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3
ITEM 6	Sales of Unregistered Securities	4
ITEM 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
ITEM 8	Financial Statements	6
ITEM 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	20
ITEM 9A(T)	Controls and Procedures	20
ITEM 9B	Other Information	21
PART III		21
ITEM 10	Directors, Executive Officers and Corporate Governance	21
ITEM 11	Executive Compensation	23
ITEM 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	24
ITEM 13	Certain Relationships and Related Transactions, and Director Independence	25
ITEM 14	Principal Accounting Fees and Services	26
PART IV
ITEM 15	Exhibits	27

 

 

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PART I

Forward Looking Statements

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. The Company’s future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

The matters discussed in this section and in certain other sections of this Form 10-K contain forward-looking statements within the meaning of Section 21D of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and Section 27A of the Securities Act of 1933, as amended ("Securities Act"), that involve risks and uncertainties. All statements other than statements of historical information provided herein may be deemed to be forward-looking statements. Without limiting the foregoing, the words "may", "will", "could", "should", "intends", "thinks", "believes", "anticipates", "estimates", "plans", "expects", or the negative of such terms and similar expressions are intended to identify assumptions and uncertainties which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this Report.

The following cautionary statements identify important factors that could cause Internet Infinity, Inc. ("The Company," "we" or "Company’s") actual results to different materially from those projected in the forward-looking statements made in this Report. Among the key factors that have a direct bearing on The Company’s results of operations include:

§

General economic and business conditions; the existence or absence of adverse publicity; changes in, or failure to comply with, government regulations; changes in marketing and technology; changes in political, social and economic conditions;

§

Success of operating initiatives; changes in business strategy or development plans; management of growth; The Company

	§	Availability, terms and deployment of capital;
	§	Legal, administrative and accounting expenses;

§

Dependence on senior management; business abilities and judgment of personnel; availability of qualified personnel; labor and employee benefit costs;

§

Development risks; risks relating to the availability of financing, and

§

Other factors, including risk factors, referenced in this Report.

Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by the Company, you should not place undue reliance on any such forward-looking statements. Other factors may be described from time to time in Company's other filings with the Securities and Exchange Commission ("SEC"), news releases and other communications. Further, any forward-looking statement speaks only as of the date on which it is made and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for The Company to predict which will arise. In addition, The Company cannot assess the impact of each factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

 

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ITEM 1.

DESCRIPTION OF BUSINESS.

Business Development .

Our mission is to help our clients develop and grow their Ecommerce business through our human, capital and technical resources.

Internet Infinity, Inc. (the "Company") or (“ITNF”) 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 and beyond, our software sales were slipping toward zero and Internet Infinity had to find an alternative revenue opportunity to survive.

Later, 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 production of duplication masters and packaging design and printing.

Today, Internet Infinity is seeking profitable, “positive cash flow” company acquisition targets in the eCommerce business. We had no revenue in FY 2011, and only $9,300 no revenue in FY 2010 due to a near fatal auto accident that took our chairman and president, George Morris, out of everyday management for over one year. However, even though Dr. Morris has returned in good health, there is no assurance that any acquisition or project or a merger can or will be successful at any time.  However, we remain optimistic with our business model and seek management and avisors to grow the  company.

Our plan is to reach out to the management of companies with high potential eCommerce operations to help them grow further or plan a profitable exit. Our Company believes that we can succeed synergistically with the partnering of other private or public eCommerce companies. The public stock company management experience of our Board of Directors and personal contacts in the investment banking community along with a background in merger and acquisition could allow for a profitable business combination with ITNF.

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 services. 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 our Internet business services.

Employees

We employ no persons full or part time and have only limited part-time independent contractors.

 

 

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New Products & Services

New products or services are planned as opportunities arise and can be funded for development.

ITEM 2.

PROPERTIES.

Our offices require 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 and public storage.

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 2011 through the solicitation of proxies or otherwise.

PART II

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 2011	1 st Qtr.	0.005				0.0005
	2 nd Qtr.	0.15				0.15
	3 rd Qtr.	0.06				0.00
	4 th Qtr.	0.04				0.00
FY 2010	1 st Qtr.	0.01				0.00
	2 nd Qtr.	0.02				0.00
	3 rd Qtr.	0.01				0.003
	4 th Qtr.	0.01				0.00

 

FY 2011	1 st Qtr.			0.01				0.00
	2 nd Qtr.			0.02				0.00
	3 rd Qtr.			0.01				0.003
	4 th Qtr.			0.01				0.00

On July 12, 2011 there were 28,718,780 shares of common stock outstanding. No shares are subject to securities convertible into such shares of stock.

Holders . On July 12, 2011 there were approximately 230 holders of record of our common stock. Some 2,309,984 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.

 

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ITEM 6.

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 on the internet 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 100 F Street, NE, 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, 2010 and March 31, 2011.

 

		Years Ended 3-31
		2011				2010
Sales			100.0	%			100.0	%
Cost of sales			00.0				80.0
Gross margin			00..0				20.0
Selling, general and
Administrative
Expenses			(100.0	)			(324.3	)
Interest income (expense)			(00.0	)			(578.4	)
Net income (loss) before I ncome taxes			(100.0	)			(822.7	)

 

Sales

Sales decreased from $9,300 in the fiscal year ended March 31, 2010 to $0 in the fiscal year ended March 31, 2011. The decrease in sales was attributable primarily to an interim lack of management.

Gross Margin

Gross margin decreased from $7,440in fiscal year ended March 31, 2010 to $0 in fiscal year 2011. The decrease in gross margin was attributable to zero orders.

 

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Selling, General and Administrative Expense

Selling, general and administrative expenses decreased by $14,052 from $30,156, in fiscal year 2010, to $16,664 in fiscal year 2011. A breakdown of the changes is:

 

·	Consulting fees to related party increased to $1,100 in fiscal year 2011 from $900 in 2010

·	Professional fees decreased to $14,249 in fiscal year 2011 from $18,567 in 2010

·	Other expenses decreased to $1,315 in fiscal year 2011 from $10,689 in 2010.

·	Salaries and related expense remained at $0 for 2011 and $0 in 2010.

Net Profit (Loss)

We had a net loss from operations, with no provision for income taxes in Nevada, in the fiscal year ended March 31, 2011 of $61,575, or $0.00 a share of our common stock. In the fiscal year ended March 31, 2010 we had a net loss, after a provision for income taxes, of $76,508, or $0.00 a share of common stock. The loss decreased primarily due to a reduction in sales.

Balance Sheet Items

The net loss of $61,575 for the fiscal year ended March 31, 2011 increased the retained earnings deficit from $2,,111,502 on March 31, 2010 to $2,173,077 on March 31, 2011. Our cash position increased to $432 for the fiscal year ended March 31, 2011 from $0 for the fiscal year ended March 31, 2010. Accounts receivable net of allowance for doubtful accounts from non-affiliates remains unchanged at $0 at the end of fiscal year 2010 and 2011, while inventory remained unchanged at zero for the fiscal year ended March 31, 2010 and 2011.

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, 2011. 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 is no longer relevant.

 

 

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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.

ITEM 8.

FINANCIAL STATEMENTS.

	Page
Report of Independent Registered Public Accounting Firm dated July 11, 2011	7
Report of Independent Registered Public Accounting Firm dated July 9, 2010	8
Balance Sheet at March 31, 2011 and 2010	9
Statement of Operations for the Years Ended March 31, 2011 and 2010	10
Statement of Stockholders’ Deficit for the Years Ended March 31, 2011 and 2010	11
Statement of Cash Flows for the Years Ended March 31, 2011 and 2010	12
Notes to Financial Statements	13

 

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To:  The Board of Directors and Stockholders

Internet Infinity Inc.

Irvine, California

I have audited the accompanying balance sheet of Internet Infinity Inc. as of March 31, 2011 and the related statements of operations, shareholders’ deficit and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management.  My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audit provides a reasonable basis for my opinion.

In my opinion the financial statements referred to above present fairly, in all material respects, the financial position of Internet Infinity Inc. as of March 31, 2011 and the results of its operations and its cash flows for the years then ended in conformity with United States generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  As discussed in Note 3 to the financial statements, the Company has incurred significant losses and has limited revenue.  This raises substantive doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has determined that it is not required to have, nor was I engaged to perform, an audit of the effectiveness of its documented internal controls over financial reporting.

/ s / John Kinross-Kennedy           

John Kinross-Kennedy

Certified Public Accountant

Irvine, California

July 11, 2011

 

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To:  The Board of Directors and Stockholders

Internet Infinity Inc.

Irvine, California

I have audited the accompanying balance sheet of Internet Infinity Inc. as of March 31, 2010 and 2009 and the related statements of operations, shareholders’ deficit and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management.  My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audit provides a reasonable basis for my opinion.

In my opinion the financial statements referred to above present fairly, in all material respects, the financial position of Internet Infinity Inc. as of March 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended in conformity with United States generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  As discussed in Note 3 to the financial statements, the Company has incurred significant losses and has limited revenue.  This raises substantive doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company has determined that it is not required to have, nor was I engaged to perform, an audit of the effectiveness of its documented internal controls over financial reporting.

/ s / John Kinross-Kennedy           

John Kinross-Kennedy

Certified Public Accountant

Irvine, California

July 9, 2010

 

 

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INTERNET INFINITY INC.
Balance Sheet
as at March 31,
		2011				2010
ASSETS
Current Assets
Cash and Cash Equvalents			432				-
Total Assets		$	432			$	-
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Liabilities
Current Liabilities
Accounts Payable and Accrued Expenses		$	226,402			$	256,892
Note Payable			-				27,000
Note Payable - Related Parties			404,333				411,400
Due to Officer			345,706				305,239
Due to related party			7,209				7,209
Total Liabilities			983,650				1,007,740
Stockholders' Equity (Deficit)
Preferred Stock, $0.001 par value, 30,000,000 shares authorized,
none issued and outstanding at March 31, 2010 and 2009
Common Stock, $0.001 par value, 100,000,000 shares authorized,
28,718,780 shares issued and outstanding as at March 31, 2010 and 2009			28,719				28,719
Additional Paid-in Capital			1,161,140				1,075,043
Accumulated Deficit			(2,173,077	)			(2,111,502	)
Total Stockholders' Equity (Deficit)			(983,218	)			(1,007,740	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)		$	432			$	-

 

 

The accompanying notes are an integral part of the financial statements

 

 

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INTERNET INFINITY INC.
Statement of Operations
for the year ended March 31, 2011 and 2010
		2011				2010
Revenue		$	-			$	9,300
Cost of Revenue			-				1,860
Gross Profit			-				7,440
Operating Expenses:
Professional Fees			14,249				18,567
Consulting			1,100				900
Salaries and related expenses							-
Other			1,315				10,689
Total Operating Expenses			16,664				30,156
Loss from operations			(16,664	)			(22,716	)
Non-operating income (expense)
Interest expense		$	(44,911	)			(53,792	)
Total other expense			(44,911	)			(53,792	)
Loss before income taxes			(61,575	)			(76,508	)
Provision for income taxes		$	-				-
Net Loss			(61,575	)			(76,508	)
		$	-
Basic and diluted net loss per common share		$	(0.00	)		$	(0.00	)
Basic and diluted weighted average number of
common shares outstanding			28,718,780				28,718,780

 

 

The accompanying notes are an integral part of the financial statements

 

 

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INTERNET INFINITY INC.
Statement of Stockholders' Equity (Deficit)
For the years ended March 31, 2007 to March 31, 2010
		Common Stock								Additional				Accum-				Total
		Number of								Paid-In				ulated				Stockholders'
		Shares				Amount				Capital				Deficit				Deficit
Balances as of April 1, 2006			18,718,780			$	18,719			$	825,877			$	(1,677,595	)		$	(832,999	)
Shares issued part for debt
settlement, part for cash			10,000,000				10,000				240,000								250,000
Net loss for the year															(130,344	)			(130,344	)
Balances, March 31, 2007			28,718,780			$	28,719			$	1,065,877			$	(1,807,939	)		$	(713,343	)
Capital contribution											3,667								3,667
Net loss for the year															(119,527	)			(119,527	)
Balances, March 31, 2008			28,718,780			$	28,719			$	1,069,544			$	(1,927,466	)		$	(829,203	)
Capital contribution											5,499								5,499
Net loss for the year															(107,528	)			(107,528	)
Balances, March 31, 2009			28,718,780			$	28,719			$	1,075,043			$	(2,034,994	)		$	(931,232	)
Net loss for the year															(76,508	)			(76,508	)
Balances, March 31, 2010			28,718,780			$	28,719			$	1,075,043			$	(2,111,502	)		$	(1,007,740	)
Officer contributed assumption
of payables											35,537								35,537
Officer contributed assumption
of investor notes and interest											50,560								50,560
Net loss for the year															(61,575	)			(61,575	)
Balance, march 31, 2011			28,718,780				28,719				1,161,140				(2,173,077	)		$	(983,218	)

 

 

The accompanying notes are an integral part of the financial statements

 

 

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INERNET INFINITY INC.
Statement of Cash Flows
for the years ended March 31, 2011 and 2010
		2011				2010
Cash flows from operating activities:
Net loss		$	(61,575	)		$	(76,508	)
Adjustments to reconcile net loss to net cash used by operating activities:
Change in operating assets and liabilities:
Accounts payable			(30,490	)			25,529
Net cash (used by) operating activities			(92,065	)			(50,979	)
Cash flows from investing activities
Net cash (used by) investing activities			-				-
Cash flows from financing activities:
Increase (decrease) in investors' notes			(27,000	)
Increase (decrease) in note payable - related party			(7,067	)
Increase (decrease) in due to officer			40,467				47,201
Increase (decrease) in due to related party			-				3,778
Officer contributed assumption of payables			35,537				-
Officer contributed assumption of investors' notes and accrued interest			50,560
Net cash provided by financing activities			92,497				50,979
Net increase (decrease) in cash							-
Cash, beginning of the period			-				-
Cash, end of the period		$	432			$	-
Supplemental cash flow disclosure:
Interest paid during the year						$	-
Taxes paid during the year		$	-			$	-

 

 

The accompanying notes are an integral part of the financial statements

 

 

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INTERNET INFINITY, INC.

NOTES TO FINANCIAL STATEMENTS

For the Year Ended 

MARCH 31, 2011

 

NOTE 1                      ORGANIZATION

Internet Infinity, Inc. (III or “the Company”) was incorporated in the State of Delaware on October 27, 1995.  III was in the business of distribution of electronic media duplication services and electronic blank media.  The Company was re-incorporated in Nevada on December 17, 2004.  The Company is currently seeking an acquisition or merger to redirect the structure and management to new profitable activities.

NOTE 2                      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

Property & Equipment

Capital assets are stated at cost. Equipment consisting of computers is carried at cost. Depreciation of equipment is provided using the straight-line method over the estimated useful lives of the assets. Expenditures for maintenance and repairs are charged to expense as incurred. The Company did not have any property & equipment at March 31, 2011.

Impairment of Long-lived assets

The Company periodically analyzes long-lived assets for potential impairment, assessing the appropriateness of lives and recoverability of unamortized balances through measurement of undiscounted operation cash flows in accordance with Financial Accounting Standards Board ASC (Accounting Standards Codification) No. 144, Property, Plant and Equipment . If impairment is deemed to exist, it will be written down to its fair value. Fair Value is generally determined using a discounted cash flow analysis. As at March 31, 2011, the Company does not believe any adjustment for impairment is required.

 

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.

 

Income taxes

The Company records deferred taxes in accordance with Financial Accounting Standards Board (FASB) ASC (Accounting Standards Codification) No. 740, Income Taxes.   Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry-forwards and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized .

 

 

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Fair Value of Financial Instruments

The FASB  ASC 820-10, “Fair Value Measurements and Disclosures" for financial assets and liabilities. FASB ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements.  FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.  FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available.

 

Basic and Diluted Earnings Per Share

Earnings per share is calculated in accordance with FASB ASC Topic 260, “Earnings per share”. Net loss per share for all periods presented has been restated to reflect the adoption of SFAS No. 128. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

 

Revenue Recognition

The Company's revenue recognition policies are in compliance with Staff accounting bulletin (SAB) 104. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured.

 

Recent Accounting Pronouncements

In April 2010, the FASB codified the consensus reached in Emerging Issues Task Force Issue No. 08-09, “Milestone Method of Revenue Recognition.” FASB ASU No. 2010-29 “Revenue Recognition – Milestone Method (Topic 605)” provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research and development transactions. FASB ASU No. 2010 – 17 is effective for fiscal years beginning on or after June 15, 2010, and is effective on a prospective basis for milestones achieved after the adoption date. The Company does not expect this ASU has a material impact on its financial position or results of operations at this time.

 

On December 1, 2010, we adopted guidance issued by the FASB ASU 2010-15 on the consolidation of variable interest entities.  The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests.  Adoption of the new guidance did not have a material impact on our financial statements.

 

 

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The Company has reviewed issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any other pronouncements to have an impact on its results of operations or financial position.

Accounts payable & accrued expenses

Accounts payable and accrued expenses consist of the following at March 31, 2011 and 2010, respectively.

		2011				2010
Accounts Payable		$	9,066			$	36,122
Accrued taxes			0				550
Accrued accounting			0				8,000
Accrued interest			217,336				212,220
		$	226,402			$	256,892

NOTE 3         UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

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  ($2,173,077) and ($2,111,502) at March 31, 2011 and 2010 respectively.  The Company incurred net losses of ($61,575) and ($76,508) for the years ended March 31, 2011 and 2010, respectively.

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 to redirect the structure and management to new profitable activities. The Company is also seeking 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                      NOTES PAYABLE

 

		March 31, 2011				March 31, 2010
Five notes payable with various unrelated individuals.  The notes are due upon 90 days written notice from the individuals.  The notes are unsecured, with interest ranging from 6% to 12% payable quarterly.  The notes have been outstanding since 1990.  Interest expense for the years ended March 31, 2011 and 2010 was $zero and $2,640 On March 31, 2011, the President of the Company assumed the notes.  A capital contribution of $27,000 was recorded.		$	0			$	27,000

 

 

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NOTE 5                      RELATED ENTITIES TRANSACTIONS

George Morris is chief financial officer, vice president, the chairman of the Board of directors of the Company and the controlling shareholder of the Company and its related parties through his beneficial ownership of the following percentages of the outstanding voting shares of the related parties:

Internet Infinity, Inc. (The Company)			90.59	%
Morris & Associates, Inc.			71.30	%
Electronic Media Central, Corp.			82.87	%
Apple Realty, Inc.			100.00	%
L&M Media, Inc.			100.00	%

The Company has notes payable to related parties on March 31, 2010 and March 31, 2009 as follows:

		March 31, 2011				March 31, 2010
Anna Moras (mother of George Morris), with interest at 6% per annum, unsecured and due upon 90 days written notice.  Interest expense for the years ended March 31, 2011 and 2010 on this note was $2,172 and $2,172, respectively.		$	14,652			$	14,652
Apple Realty, Inc. (related through a common controlling shareholder), secured by assets of the Company, past due and payable upon demand.  Interest accrues at 6% per annum. This note is in connection with consulting fees and office expenses owed.  Interest expense on this note for the years ended March 31, 2011 and 2010 was $21,612 and $21,612, respectively.		$	360,215			$	360,215
L&M Media, Inc. (related through a common controlling shareholder) – Accounts payable for purchases, converted into a note during the three month period ended September 30, 2004. The note is due on demand, unsecured and interest accrues at 6% per annum. Interest expense on this note for the years ended March 31, 2011 and 2010 was $1,768 and $2,192, respectively.
Total notes payable – related parties		$	404,333			$	411,400

 

				2011				2010
The Company has a payable to officer as follows: Unsecured miscellaneous payable upon demand to George Morris, with interest at 6% per annum, with monthly installments of $3,000 beginning June 30, 2000 and paid as available. George Morris is the chairman of the Company. The Company has not made any principal payments to George Morris and is in default of this note.	Current		$	196,286			$	185,406
Note payable – Officer Note Payable – G. Morris Unsecured notes payable upon demand to George Morris, with interest at 6% per annum. The Company has not made any principal payments to George Morris and is in default of these notes                          Note payable - Officer	Current			62,063				63,433
Note Payable – G. Morris	Current			14,821				0
Interest payable – Officer	Current			72,536				56,400
			$	345,706			$	305,239

 

 

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The Company has a payable to Morris Business Development Company and Morris & Associates, Inc., two parties related through a common controlling shareholder, amounting to $7,209 as of March 31, 2011 and March 31, 2010, respectively.  The amount is interest free, unsecured and due on demand.

 

The Company utilizes office space, telephone and utilities provided by Apple Realty, Inc. at estimated fair market values, as follows:

 

		Monthly				Annually
Rent		$	100			$	1,200
Telephone			100				1,200
Utilities			100				1,200
Office Expense			100				1,200
		$	400			$	4,800

The Company has a month-to-month agreements with Apple Realty, Inc. for a total monthly fee of $400 for the above expenses.

On March 31, 2011 the President, George Morris, assumed certain accounts payable totaling $35,537. A capital contribution of  $35,537 was recorded.

On March 31, 2011 the President, George Morris, assumed investors’ notes payable totaling $27,000, and associated accrued interest of $23,560.  A capital contribution of $50,560 was recorded.

NOTE 6                      INCOME TAXES

No provision was made for federal income tax for the year ended March 31, 2011 and 2010, since the Company had significant net operating loss. The net operating loss carryforwards may be used to reduce taxable income through the year 2028. The availability of the Company’s net operating loss carryforwards are subject to limitation if there is a 50% or more positive change in the ownership of the Company’s stock. The provision for income taxes consists of the state minimum tax imposed on corporations.

 

 

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The net operating loss carryforward for federal and state income tax purposes of approximately $1,494,468 and $1,432,893 as of March 31, 2011 and 2010 respectively. The net operating losses will begin to expire 20 years after the latest loss in 2011, unless utilized beforehand.

The Company has recorded a 100% valuation allowance for the deferred tax asset since it is “more-likely- than-not” that the deferred tax assets will not be realized.

The components of the net deferred tax asset are summarized below:

		03/31/2011				03/31/2010
Deferred tax asset – net operating loss		$	597,787			$	573,130
Less valuation allowance			(597,787	)			(573,130	)
Net deferred tax asset		$	0			$		0

 

 

The following is a reconciliation of the provision for income taxes at the U.S. federal income tax rate to the income taxes reflected in the Statement of Operations:

		March 31, 2011				March 31, 2010
Tax expense (credit) at statutory rate-federal			(34	)%			(34	)%
State tax expense net of federal tax			(6	)%			(6	)%
Changes in valuation allowance			40	%			40	%
Tax expense at actual rate			-				-

Income tax expense consisted of the following:

		2011				2010
Current tax expense:
Federal		$	-			$	-
State			800				800
Total current		$	800			$	800
Deferred tax credit:
Federal		$	21,543			$	23,905
State			3,801				4,218
Total deferred		$	25,344			$	28,123
Less: valuation allowance			(25,344	)			(28,123	)
Net deferred tax credit			-				-
Tax expense		$	800			$	800

NOTE 7                      STOCK OPTIONS

The Company’s 1996 stock option plan provides that incentive stock options and nonqualified stock options to purchase common stock may be granted to directors, officers, key employees, consultants, and subsidiaries with an exercise price of up to 110% of market price at the date of grant.  Generally, options are exercisable one or two years from the date of grant and expire three to ten years from the date of grant.

 

 

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For the years ended March 31, 2011, and 2010, the Company granted no options.  As at March 31, 2011 there are no options outstanding.

 

NOTE 8                       CAPITAL

During the years ended March 31, 2011 and 2010, the company did not issue any shares.

As of March 31, 2011 and 2010 the Company had authorized 30,000,000 preferred shares of par value $0.001, of which none were issued and outstanding.   As of March 31, 2011 and 2010 the Company had authorized 100,000,000 shares of common stock of par value $0.001,  of which 28,718,780 shares were issued and outstanding.

 

NOTE 9                       SUBSEQUENT EVENTS

 

Events subsequent to March 31, 2011 have been evaluated through June 29, 2011, the date these statements were available to be issued, to determine whether they should be disclosed to keep the  financial statements from being misleading.  Management found no subsequent events to be disclosed

 

 

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ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On June 28, 2011,   the Company”), through and with the recommendation of its Audit Committee and approval of its Board of Directors, engaged John Kinross-Kennedy, CPA of Irvine, California (“Kennedy”) as its independent registered public accounting firm as reported in Form 8-K June 28, 2011 filed on July 6, 2011.

 

Concurrent with the engagement of John Kinross-Kennedy, the Company dismissed the engagement of Kabani & Company, Inc. (“Kabani”) from its position as the Company’s independent registered public accounting firm. Kabani served as the Company’s independent registered public account firm since March 31, 2000. No report on the Company’s financial statements prepared by Kabani during the fiscal years ended March 31, 2011 and March 31, 2010 and the subsequent interim period through December 31, 2010 contained an adverse opinion or a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles. Further, during the fiscal years ended March 31, 2008 and March 31, 2010 and the subsequent interim period through December 31, 2011, there were no disagreements between the Company and Kabani on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the satisfaction of Kabani, would have caused it to make reference to the subject matter of the disagreement in connection with a report. The Company’s Audit Committee recommended the dismissal of Kabani, and such recommendation was adopted by the Company’s Board of Directors.

 

In accordance with Item 304(a)(3) of Regulation S-K, the Company provided Kabani a copy of the disclosures it made in the Current Report on Form 8-K prior to filing with the SEC and requested that Kabani furnish the Company with a letter addressed to the SEC stating whether or not Kabani agreed with the above statements.

 

During the fiscal years ended March 31, 2008 and March 31, 2010 and the subsequent interim period through December 31, 2011, neither the Company nor anyone on its behalf has consulted with Kabani regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, (ii) the type of audit opinion that might be rendered on the Company’s financial statements, (iii) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K or (iv) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.

ITEM 9 (T).

CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures . The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective and are designed to provide reasonable assurances that the information the Company is required to disclose in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period required by the Commission's rules and forms. Further, the Company’s officers concluded that its disclosure controls and procedures are also effective to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is accumulated and communicated to its management, including its chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure. There were no significant changes in the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

Internal control over financial reporting.

Management’s annual report on internal control over financial reporting . The registrant’s management recognizes its responsibility for establishing and maintaining adequate internal control over financial reporting for the registrant. Currently, the registrant is operating as a caretaker entity, keeping the corporation alive and in good standing with the Commission. All debit and credit transactions with the company’s bank accounts are reviewed by the officers as well as all communications with the company’s creditors. The directors meet frequently – as often as weekly – to discuss and review the financial status of the company and all developments regarding its search for a reverse merger partner. All filings of reports with the Commission are reviewed before filing by all directors.

 

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Management assesses the company’s control over financial reporting at the end of its most recent fiscal year to be effective. It detects no material weaknesses in the company’s internal control over financial reporting.

This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.

There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Commission rules that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION.

There is no information that was required to be disclosed on Form 8-K during the fourth quarter of FY 2011 that was not reported.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Internet Infinity's directors, officers and significant employees occupying executive officer positions, their ages as of March 31, 2011, the directors' terms of office and the period each director has served are set forth in the following table:

 

Person		Positions and Officers		Since		Expires
George Morris, 71		Chairman of the Board of Directors – President, Chief Executive Officer and Chief Financial Officer		1996		2011
Charles Yesson, 73		Director		2011		2011

GEORGE MORRIS, Ph.D . Dr. Morris has been the Chairman of the Board of Directors, principal shareholder, Vice President and Secretary of Internet Infinity since Internet Infinity went public in 1996. George Morris has also been the Chairman and Vice President of Apple Realty, Inc. doing business as Hollywood Riviera Studios since 1974 and the Chairman of the Board of Directors of L&M Media, Inc. since 1990. Dr. Morris is also the Founder and has been the President, Chairman of the Board of Directors and principal of Morris Financial, Inc., a NASD member broker-dealer firm, since its inception in 1987. He has been active in designing, negotiation and acquiring all equipment, facilities and systems for manufacturing, accounting and operations of Internet Infinity and its affiliates. Morris has produced over 20 computer training programs in video and interactive hypertext multimedia CD-ROM versions, as well as negotiating Internet Infinity's and its affiliate distribution and licensing agreements. Dr. Morris earned a Bachelor of Business Administration and Masters of Business Administration from the University of Toledo, and a Ph.D. (Doctorate) in Marketing and Finance and Educational Psychology from the University of Texas. Prior to founding Internet Infinity and its Affiliates, Dr. Morris had 20 years of academic experience as a professor of Management, Marketing, Finance and Real Estate at the University of Southern California (1969- 1971) and the California State University (1971- 1999). During this period Dr. Morris served a Department Chairman for the Management and Marketing Departments. Morris has since retired from full time teaching at the University. Dr. Morris was the West Coast Regional Director of the American Society for Training and Development, a Director of the South Bay Business Roundtable and a speaker on a number of topics relating to business, training and education. Morris has created or been directly involved in the design, writing and development of numerous Internet web sites for Internet Infinity, blank video, Greg Norman, Northwestern University, etc. He most recently taught University courses about Internet Marketing for domestic and foreign markets and Sales Force Management.

 

 

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CHARLES YESSON. Mr. Yesson, a resident of Newport Beach, California has over 35 years of experience in the Financial Services Industry. His experience includes 25 years of managing public corporations and 10 years as a consultant to emerging companies. He has worked extensively in the areas of reorganization, growth development and capitalization. His experience includes serving as CEO of several Life Insurance Companies. He also held positions as a Senior Business Consultant of the Principal Life Insurance Company and for GEICO in Washington, DC. He has served as CEO of U.S. Life Savings Loan Association, and VP of Midwestern Financial/First S&L Shares, and Sr. VP of First Western Financial Corp (NYSE). Mr. Yesson is currently licensed as a FINRA Series 7, 24 and 66 and held positions as Managing Director of Antaeus Capital a Principal of J. Alexander Securities and Marketing Director and Securities Analyst of Hayden.Stone,Inc. He holds a Masters Degree from New York University, New York where he has done PhD-level study, attended George Washington Law School and holds certificates in Bank Marketing from Northwestern University. Mr. Yesson is licensed in Insurance and Real Estate in the State of California and is certified as a Property Damage Mediator for the California Insurance Department. In addition, Mr. Yesson’s experience as a public stock company board member should help guide the development of our Company.

Conflicts of Interest

The officers and directors of the company will not devote more than a portion of their time to the affairs of the company. There will be occasions when the time requirements of the company's business conflict with the demands of their other business and investment activities. Such conflicts may require that the company attempt to employ additional personnel. There is no assurance that the services of such persons will be available or that they can be obtained upon terms favorable to the company.

 

The officers and directors of the company may be directors or principal shareholders of other companies and, therefore, could face conflicts of interest with respect to potential acquisitions. In addition, officers and directors of the company may in the future participate in business ventures, which could be deemed to compete directly with the company. Additional conflicts of interest and non-arms length transactions may also arise in the future in the event the company's officers or directors are involved in the management of any firm with which the company transacts business. The company's board of directors has adopted a policy that the Company will not seek a merger with, or acquisition of, any entity in which management serve as officers or directors, or in which they or their family members own or hold a controlling ownership interest. Although the board of directors could elect to change this policy, the board of directors has no present intention to do so. In addition, if the company and other companies with which the company's officers and directors are affiliated both desire to take advantage of a potential business opportunity, then the board of directors has agreed that said opportunity should be available to each such company in the order in which such companies registered or became current in the filing of annual reports under the '34 Act.

The company's officers and directors may actively negotiate or otherwise consent to the purchase of a portion of their common stock as a condition to, or in connection with, a proposed merger or acquisition transaction. It is anticipated that a substantial premium over the initial cost of such shares may be paid by the purchaser in conjunction with any sale of shares by the company's officers and directors which is made as a condition to, or in connection with, a proposed merger or acquisition transaction. The fact that a substantial premium may be paid to the company's officers and directors to acquire their shares creates a potential conflict of interest for them in satisfying their fiduciary duties to the company and its other shareholders. Even though such a sale could result in a substantial profit to them, they would be legally required to make the decision based upon the best interests of the company and the company's other shareholders, rather than their own personal pecuniary benefit.

 

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Code of Ethics . We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the Code of Ethics is filed as an exhibit to Form 10-KSB Annual Report for the year ended March 31, 2004 (Exhibit 14 incorporated herein by reference). We undertake to provide to any person without charge, upon request, a copy of such code of ethics. Such a request may be made by writing to the company at its address at 413 Avenue G, #1, Redondo Beach, CA 90277.

Corporate Governance .

Security holder recommendations of candidates for the board of directors . Any shareholder may recommend candidates for the board of directors by writing to the president of our company the name or names of candidates, their home and business addresses and telephone numbers, their ages, and their business experience during at least the last five years. The recommendation must be received by the company by March 9 of any year or, alternatively, at least 60 days before any announced shareholder annual meeting.

Audit committee . We have no standing audit committee. Our directors perform the functions of an audit committee. Our limited operations make unnecessary a standing audit committee, particularly in view of the fact that we have only three directors at present. None of our directors is an audit committee financial expert, but the directors have access to consultants that can provide such expertise when such is needed.

 

Compliance with Section 16(a) of the Securities Exchange Act .

Based solely upon a review of Forms 3 and 4 furnished to the company under Rule 16a-3(e) of the Securities Exchange Act during its most recent fiscal year and Forms 5 furnished to the company with respect to its most recent fiscal year and any written representations received by the company from persons required to file such forms, the following persons – either officers, directors or beneficial owners of more than ten percent of any class of equity of the company registered pursuant to Section 12 of the Securities Exchange Act – failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act during the most recent fiscal year or prior fiscal years:

 

Name		No. of Late Reports		No. of Transactions Not Timely Reported		No. of Failures to File a Required Report
None		0		0		0

 

ITEM 11.

EXECUTIVE COMPENSATION.

The following information concerns the compensation of the named executive officers for each of the last two completed fiscal years:

SUMMARY COMPENSATION TABLE

Name and Principal Position		Year		Salary				Bonus				Common Stock Awards				Total
George Morris, Chairman, CEO and CFO		FY 2010			$0				$0				0				$0
		FY 2011			$0				$0				0				$0
Charles Yesson, Director		FY 2011			$0				$0				0				$0

 

 

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

 

The following information concerns unexercised stock options, stock that has not vested, and equity incentive plan awards for each named officer outstanding at the end of the last fiscal year:

Name		Number of Securities Underlying Unexercised Options (#) Exercisable
Morris		0			0			0			0			0			0			0			0			0
Yesson		0			0			0			0			0			0			0			0			0

Compensation of Directors

The directors of Internet Infinity received the following compensation in FY 2011 for their services as directors.

DIRECTOR COMPENSATION

Name		Fees Earned or Paid in Cash ($)			Stock Awards ($)			Option Awards ($)			Non-Equity Incentive Plan Compensa- tion ($)			Nonqualified Deferred Compensation Earnings ($)			All Other Compensa- tion ($)			Total ($)
George Morris		0			0			0			0			0			0			0
Charles Yesson		0			0			0			0			0			0			0

Directors of the company receive no compensation for their services as directors. However, Charles Yesson shall receive $250 per month commencing in June 2011.

Stock Options .

During the last two fiscal years, the officers and directors of Internet Infinity have received no Stock Options and no stock options are outstanding.

Equity Compensation Plans .

We have no equity compensation plans.

STOCK OPTIONS

The Company’s 1996 stock option plan provides that incentive stock options and nonqualified stock options to purchase common stock may be granted to directors, officers, key employees, consultants, and subsidiaries with an exercise price of up to 110% of market price at the date of grant. Generally, options are exercisable one or two years from the date of grant and expire three to ten years from the date of grant.

For the years ended March 31, 2011, and 2010, the Company granted no options. As at March 31, 2011 there are no options outstanding.

CAPITAL

During the years ended March 31, 2011 and 2010, the company did not issue any shares.

As of March 31, 2011 and 2010 the Company had authorized 30,000,000 preferred shares of par value $0.001, of which none were issued and outstanding. As of March 13, 2011 and 2010 the Company had authorized 100,000,000 shares of common stock of par value $0.001, of which 28,718,780 shares were issued and outstanding.

SUBSEQUENT EVENTS

Events subsequent to March 31, 2011 have been evaluated through July 11, 2011, the date these statements were available to be issued, to determine whether they should be disclosed to keep the financial statements from being misleading. Management found no subsequent events to be disclosed.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The table below sets forth, as of July 12, 2011 the number of shares of common stock of Internet Infinity beneficially owned by each officer and director of Internet Infinity individually and as a group, and by each owner of more than five percent of the common stock.

 

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Name and Address		Number of Shares				Percent of Outstanding Shares
Apple Realty, Inc. and
Hollywood Riviera Studios (1)			3,034,482				10.6
413 Avenue G, #1
Redondo Beach, CA 90277
George Morris, Chairman/CFO			24,429,196	(2)			85.1
413 Avenue G, #1
Redondo Beach, CA 90277
L&M Media, Inc. (1)			14,535,714				50.6
413 Ave G #1
Redondo Beach, CA 90277
Officers and Directors
as a group (1 person)			24,429,196				85.1

 

(1)	The shares owned of record by Apple Realty, Inc., Hollywood Riviera Studios and L&M Media, Inc. are under the control of George Morris and are attributed to him.

(2)	Mr. Morris owns 6,859,000 shares of record and is attributed the shares owned by Apple Realty, Inc., Hollywood Riviera Studios and L&M Media, Inc., which companies are under Mr. Morris’ control.

(3)	Less than 1 percent.

Changes in Control

There are no arrangements which may result in a change in control of the company.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Our company is under the control of George Morris, who controls and is thereby the beneficial owner of 85.1 percent in total of all outstanding stock of Internet Infinity, Inc. He has an economic interest in 85.1 percent of all outstanding stock of Internet Infinity, Inc. The basis of his control and of his economic interest are set forth in the following table:

George Morris

a.	He owns 100 percent of Apple Realty, Inc., Hollywood Riviera Studios and L&M Media, Inc. that collectively own 61.2% of Internet Infinity, Inc.
b.	He owns 23.9 percent of Internet Infinity, Inc.

 

 

25

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Summary of George Morris’ Interest
Economic Interest			Beneficial Interest
1.00 x .612	= .612			.612
1.00 x .239	= .239			.239
	.851			.851

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees . Our principal independent accountant billed us, for each of the last two fiscal years, the following aggregate fees for its professional services rendered for the audit of our annual financial statements and review of financial statements included in our Form 10-Q reports or other services normally provided in connection with statutory and regulatory filings or engagements for those two fiscal years:

Fiscal Year ended March 31, 2010

$15,500

Fiscal Year ended March 31, 2011

$

Audit-Related Fees. Our principal independent accountant billed us, for each of the last two fiscal years, the following aggregate fees for assurance and related services reasonably related to the performance of the audit or review of our financial statements and not reported above under “Audit Fees”:

Fiscal Year ended March 31, 2010

$-0-

Fiscal Year ended March 31, 2011

$-0-

Tax Fees . Our principal independent accountant billed us, for each of the last two fiscal years, the following aggregate fees for professional services rendered for tax compliance, tax advice and tax planning:

Fiscal Year ended March 31, 2010

$-0-

Fiscal Year ended March 31, 2011

$-0-

All Other Fees . Our principal independent accountant billed us, for each of the last two fiscal years, the following aggregate fees for products and services provided by it, other than the services reported in the above three categories:

Fiscal Year ended March 31, 2010

$700-

Fiscal Year ended March 31, 2011

$700-

Pre-Approval of Audit and Non-Audit Services. The Audit Committee charter requires that the committee or the directors if there be no committee, pre-approve all audit, review and attest services and non-audit services before such services are engaged.

 

 

26

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PART IV

 

ITEM 15.

EXHIBITS.

The following exhibits are filed, by incorporation by reference, as part of this Form 10-K:

Exhibit Number		Description of Exhibit
2	-	Certificate of Ownership and Merger of Morris & Associates, Inc., a California corporation, into Internet Infinity, Inc., a Delaware corporation*

3

-

Articles of Incorporation of Internet Infinity, Inc.*

3.1	-	Amended Certificate of Incorporation of Internet Infinity, Inc.*
3.2	-	Bylaws of Internet Infinity, Inc.*
3.4	-	Certificate of Amendment to Articles of Incorporation of Internet Infinity, Inc., a Nevada corporation++

10.1

-

Master License and non-exclusive Distribution Agreement between Internet Infinity, Inc. and Lord & Morris Productions, Inc.*

10.2

-

Master License and Exclusive Distribution Agreement between L&M Media, Inc. and Internet Infinity, Inc.*

10.3

-

Master License and Exclusive Distribution Agreement between Hollywood Riviera Studios and Internet Infinity, Inc.*

10.4	-	Fulfillment Supply Agreement between Internet Infinity, Inc. and Ingram Book Company**
14	-	Code of Ethics for CEO and Senior Financial Officers+
31.1	-	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	-	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	-	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

-

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

	*Previously filed with Form 10-SB 10-13-99; Commission File No. 0-27633incorporated herein.
	**Previously filed with Amendment No. 2 to Form 10-SB 02-08-00; Commission File No. 0-27633 incorporated herein.
	+Previously filed with Form 10-KSB; Commission File No. 0-27633 incorporated herein.

++Previously filed with Form 8-K; Commission File No. 0-27633 incorporated herein.

 

 

27

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	INTERNET INFINITY, INC.
July 14, 2011	By:	/s/ George Morris
		George Morris
		Chief Executive Officer

In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

July 14, 2011	By:	/s/ George Morris
		George Morris
		Chief Executive Officer
July 14, 2011	By:	/s/ George Morris
		George Morris
		Chief Financial Officer, President and Director

July 14, 2011	By:	/s/ Charles Yesson
		Charles Yesson
		Director

 

 

28

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INTERNET INFINITY, INC.

COMMISSION FILE NO. 0-27633

INDEX TO EXHIBITS

FORM 10-K

FOR THE YEAR ENDED MARCH 31, 2011

 

The following exhibits are filed, by incorporation by reference, as part of this Form 10-K:

 

Exhibit Number

Description of Exhibit

 

2

-

Certificate of Ownership and Merger of Morris & Associates, Inc., a California corporation, into Internet Infinity, Inc., a Delaware corporation*

3

-

Articles of Incorporation of Internet Infinity, Inc.*

3.1	-	Amended Certificate of Incorporation of Internet Infinity, Inc.*
3.2	-	Bylaws of Internet Infinity, Inc.*

3.4	-	Certificate of Amendment to Articles of Incorporation of Internet Infinity, Inc., a Nevada corporation++
10.1	-	Master License and non-exclusive Distribution Agreement between Internet Infinity, Inc. and Lord & Morris Productions, Inc.*

 

10.2

-

Master License and Exclusive Distribution Agreement between L&M Media, Inc. and Internet Infinity, Inc.*

10.3

-

Master License and Exclusive Distribution Agreement between Hollywood Riviera Studios and Internet Infinity, Inc.*

10.4

-

Fulfillment Supply Agreement between Internet Infinity, Inc. and Ingram Book Company**

14

-

Code of Ethics for CEO and Senior Financial Officers+

 

31.1

-

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

-

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

-

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

32.2

-

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Previously filed with Form 10-SB 10-13-99; Commission File No. 0-27633 incorporated herein.

**Previously filed with Amendment No. 2 to Form 10-SB 02-08-00; Commission File No. 0-27633 incorporated herein.

+Previously filed with Form 10-KSB; Commission File No. 0-27633 incorporated herein.

++Previously filed with Form 8-K; Commission File No. 0-27633 incorporated herein.