iGenii, Inc. - FORM 10-Q - August 22, 2011

Attached files

file filename
EX-32.2 - EXHIBIT 32.2 - iGenii, Inc.ex32-2.htm
EX-32.1 - EXHIBIT 32.1 - iGenii, Inc.ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - iGenii, Inc.ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - iGenii, Inc.ex31-1.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
x           QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarter ended June 30, 2011
 
o           TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the transition period from _____ to _____
 
Commission File Number: 333-152775
 
 
iGENII, INC.
  
(Exact name of small business issuer as specified in its charter)
 
Delaware
 
  
26-2046163
 
(State of incorporation)
(IRS Employer ID Number)
 
40 Exchange Place,
Suite 401
New York, New York 10005
(Address of principal executive offices)
 
 
(212) 932- 7483
 
(Issuer’s telephone number)
 
 
(Former name, former address and former fiscal year, if changed since last report)
 
 
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 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 o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer
o
  
Accelerated filer
o
Non-accelerated filer
o
  
Smaller reporting company
x
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o   No x
 
As of August 15, 2011, 9,312,000 shares of common stock, par value $0.001 per share, were outstanding.
 
 
 
 
 
TABLE OF CONTENTS
 
 
2
 
 
FINANCIAL INFORMATION
 
 
iGENII, INC.
FINANCIAL STATEMENTS
(UNAUDITED)
June 30, 2011
 
 
3
 
 
TABLE OF CONTENTS
 
 
4
 
 
iGENII, INC.
             
   
June 30, 2011
    
Dec. 31, 2010
  
   
(Unaudited)
    
(Audited)
  
ASSETS
            
Current Assets
            
             
Cash and cash equivalents
   $ 6,437     $ 21,796  
Total Current Assets
     6,437       21,796  
                 
Equipment, net
     8,777       9,710  
Intangibles, net
     110       1,103  
Infinite life intangibles
     22,000       22,000  
Security deposit
     5,600       2,000  
Total Assets
   $ 42,924     $  56,608  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
                 
Current Liabilities
                
Accounts payable and accrued expenses
   $ 35,151     $ 21,389  
Total Current Liabilities
     35,151       21,389  
                 
Stockholders’ Equity
                
                 
Common stock, $.001 par value, 95,000,000 shares authorized, 9,312,000and 9,295,200 issued and outstanding, respectively
     9,312       9,295  
Preferred stock, 5,000,000 shares authorized
     -       -  
Additional paid in capital
     342,439       235,656  
Accumulated deficit
     (343,978 )     (209,732 )
Total Stockholders’ Equity
     7,773       35,219  
Total Liabilities and Stockholders’ Equity
   $ 42,924     $ 56,608  
 
The accompanying notes are an integral part of these financial statements.
 
 
5
 
 
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30
 
   
2011
    
2010
  
Sales
   $ 344,622     $ 241,551  
                 
Selling, General and administrative expenses
     478,869       242,252  
Income (loss) from operations
     (134,247 )     (701 )
                 
Net income (loss)
   $ (134,247 )   $ (701 )
                 
Net income per common share
                
Basic and diluted
   $ (.01 )     .00  
Weighted average common shares outstanding
                
Basic and diluted
     9,303,600       9,272,900  
 
iGENII, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED JUNE 30
 
   
2011
    
2010
  
Sales
   $ 180,019     $ 120,680  
                 
Selling, General and administrative expenses
     195,414       126,153  
Income (loss) from operations
     (15,395 )     (5,473 )
                 
Net income (loss)
   $ (15,395 )   $ (5,473 )
                 
Net income per common share
                
Basic and diluted
   $ .00       .00  
Weighted average common shares outstanding
                
Basic and diluted
     9,312,000       9,272,900  
 
The accompanying notes are an integral part of these financial statements.
 
 
6
 
 
iGENII, INC.
FOR THE SIX MONTHS ENDING JUNE 30, 2011 AND JUNE 30, 2010
 
   
   
2011
    
2010
  
CASH FLOWS FROM OPERATING ACTIVITIES
            
Net income (loss)
   $ (134,247 )   $ (701 )
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
     3,125       2,937  
Stock Based Compensation
     106,400          
Increase / (decrease) in current liabilities:
                
Accounts payable
     13,763       (2,602 )
Security deposit
     (3,600 )     2,200  
Total Adjustments
     119,688       2,535  
                 
Net cash provided/(used) by operating activities
     (14,559 )     1,834  
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
Purchase of computers
     (1,200 )        
Net cash used by investing activities
     (1,200 )        
                 
CASH FLOWS FROM FINANCING ACTIVITIES
                
Proceeds from sales of common stock
     400          
Net cash  used by financing activities
     400          
                 
Net change in cash and cash equivalents
     (15,359 )     1,834  
Cash and cash equivalents, beginning balance
     21,796       923  
Cash and cash equivalents, ending balance
   $ 6,437     $ 2,757  
                 
SUPPLEMENTAL DISCLOSURES:
                
Cash paid during the year for:
                
Income tax payments
   $       $ 542  
Interest payments
   $ -     $ -  
 
The accompanying notes are an integral part of these financial statements.
 
 
7
 
 
iGENII, INC.
JUNE 30, 2011
 
Note 1 - ORGANIZATION
 
iGenii, Inc. was incorporated on February 22, 2008 under the laws of the State of Delaware.  The Company is now engaged in Internet consulting business. The Company exists to provide fast, reliable technical assistance to any business entity in order to achieve meaningful internet presence. The nature of company’s business allows company to deal with clients all over US and worldwide. Presently majority of our clients are US based entities.
 
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
 
The accompanying financial statements have been prepared in conformity with accounting principle generally accepted in the United States of America.
 
Interim Condensed Financial Statements
 
The condensed financial statements as of June 30, 2011 and for the six  months ended June 30, 2011 are unaudited.   In the opinion of management, such condensed financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair representation of the financial position and the results of operations.   The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.  The interim condensed financial statements should be read in conjunction with the audited financial statements for the year end December 31, 2010 appearing in Form 10K filed on April 12, 2011.
 
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.
 
Risks and Uncertainties
 
The Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, limited operating history and the volatility of public markets.
 
 
8
 
 
iGENII, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
 
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
Contingencies
 
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.
 
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed.
 
Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.
 
Long-Lived Assets
 
Since inception, the Company adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,” and the accounting and reporting provisions of APB Opinion No. 30, “Reporting the Results of Operations for a Disposal of a Segment of a Business.”  The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144.  SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets.  Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.  Based on its review, the Company believes that, as of June 30, 2011, there were no significant impairments of its long-lived assets.
 
 
9
 
 
iGENII, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
 
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
Fair Value of Financial Instruments
 
Statement of Financial Accounting Standard No. 107, “Disclosures about Fair Value of Financial Instruments,” requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.
 
Revenue Recognition
 
The Company’s revenue recognition policies are in compliance with Staff Accounting Bulletin (SAB) 104. Revenue is recognized at the date the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.
 
Advertising
 
Advertising expenses consist primarily of costs of promotion for corporate image and product marketing and costs of direct advertising.  The Company expenses all advertising costs as incurred.
 
 Income Taxes
 
The Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
 
Concentration of Credit Risk
 
Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities.  The Company places its cash in what it believes to be credit-worthy financial institutions.  The Company controls credit risk related to accounts receivable through credit approvals, credit limits and monitoring procedures.  The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.
 
Recent Accounting Pronouncements
 
No new accounting pronouncements issued or effective during the fiscal year has had or is expected to have a material impact on the financial statements.
 
 
10
 
 
iGENII, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
 
Note 3 – INCOME TAXES
The Company, through its operations in the United States had incurred net accumulated operating losses of approximately $344,000 as of June 30, 2011 for income tax purposes. However, a valuation allowance has been created to the extent of the amount of the deferred tax asset of approximately $138,000 due to uncertainty of its realization.
 
Note 4 – COMMON STOCK
From January 1 to June 30, 2011 Company sold 400 shares of common stock for $400
 
On February 22, 2011, the board of directors of the Company adopted stock incentive plan as well as stock option plan under which eligible key employees, officers, directors, consultants and agents of the Company may acquire shares of common stock of the Company Accordingly, the Company reserves 5,000,000 shares of common stock for issuance under Stock Incentive Plan and a maximum of 5,000,000 shares of common stock for issuance under Stock Option Plan.
 
On February 22, 2011, the board of directors of the Company granted 90,000 options were issued to three officers of the Company. Options vested on March 1, 2011. In addition the board of directors of the Company issued 16,400 restricted shares of the Company’s common stock to 17 employees and contractors as compensation.
 
Note 5 – RELATED PARTY TRANSACTIONS
 
For the first six months of 2011 the Company paid $17,898 commissions to its officers.
 
Note 6 – SUBSEQUENT EVENTS
For the six months ended June 30, 2011, the Company has evaluated subsequent events for potential recognition and disclosure through August 22, 2011, the date of the financial statement issuance.
 
 
11
 
 
iGENII, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
 
Note 7 - STOCK BASED COMPENSATION
 
Equity Incentive Plans
 
On February 22, 2011 the stockholders approved the adoption of The Company’s 2011 Employee Stock Option Plan. Under the Plan, options may be granted which are intended to qualify as Incentive Stock Options (“ISOs”) under Section 422 of the Internal Revenue Code of 1986 (the “Code”) or which are not (“Non-ISOs”) intended to qualify as Incentive Stock Options thereunder. The maximum number of options made available for issuance under the Plan are five million (5,000,000) options. The options may be granted to officers, directors, employees or consultants of the Company and its subsidiaries at not less than 100% of the fair market value of the date on which options are granted. The term of each Option granted under the Plan shall be contained in a stock option agreement between the Optionee and the Company.
 
 The Board of Directors or a committee thereof, administers all of the equity incentive plans and determines the terms of options granted, including the exercise price, the number of shares subject to individual option awards and the vesting period of options, within the limits set forth in the plans. Options have a maximum term of 10 years and vest as determined by the Board of Directors.
 
In February 2011 the board approved the issuance of 90,000 options of the Company’s common stock to various officers and directors of the company at an exercise price of $1.00 which vest immediately. The Company recorded stock base compensation expense of $90,000 for the six months ended June 30, 2011.
 
The weighted-average fair value per share of the options granted during first quarter of 2011 was estimated on the date of grant using the Black-Scholes-Merton option pricing model; the following assumptions were used to estimate the fair value of the options at grant date based on the following:
 
  
  
Six months ended June 30,
  
   
2011
    
2010
  
Risk-Free interest rate
    
3.37
%
    
-
  
Expected dividend yield
    
-
      
-
  
Expected stock price volatility
    
298
%
        
Expected life
  
10 years
        
Weighted average fair value of options granted
  
$
1.00
    
$
-
  
 
 
12
 
 
iGENII, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2011
 
   
Number
of Options
Available
    
Number
of Options
Outstanding
    
Weighted
average
remaining
contractual
Term
    
Weighted
Average
Exercise
Price
  
Balance February 22, 2011
    
5,000,000
      
0
          
$
    
                               
Options granted under plan
    
90,000
      
90,000
    
10 years
      
1.00
  
Options expired under plan
    
-
      
-
    
-
      
-
  
                               
Balance June 30, 2011
    
4,910,000
      
90,000
    
9. 5 years
    
$
1.00
  
 
Information pertaining to options outstanding at June 30, 2011 is as follows:
               
     
Options Outstanding
    
Options Exercisable
  
Range of
Exercise
Price
    
Number
Outstanding
    
Weighted
Average
Remaining
Contractual
Life
    
Weighted
Average
Exercise
Price
    
Number
Exercisable
    
Weighted
Average
Exercise
Price
  
$ 1.00     90,000    
9.5 years
     $ 1.00     90,000     $1.00  
 
 
13
 
 
 
As used in this Form 10-Q, references to the “iGenii,” Company,” “we,” “our” or “us” refer to iGenii, Inc. Unless the context otherwise indicates.
 
Forward-Looking Statements
 
The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
 
For a description of such risks and uncertainties refer to our Registration Statement on Form S-1, filed with the Securities and Exchange Commission on August 5, 2008 and declared effective on August 28, 2008. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
 
Business Overview
 
We were incorporated under the laws of the State of Delaware on February 22, 2008.  We are an early stage company that is focused on becoming an interactive-services and media company. Our primary activities involve designing, creating and marketing the following core services: interactive web site planning, design and development, as well as Internet marketing and advertising consulting services.
 
Our marketing services are also expected to include, without limitation, search engine marketing, banner advertising, news group postings, statistical counters, web site tracking logs, as well as traditional marketing methods. At this stage of our development, all services will be provided by our officers and directors and the persons employed in our sales department.
 
 
14
 
 
Target Markets and Marketing Strategy
Our operational activities since our incorporation on February 22, 2008 consist primarily of direct telephone sales of our products mainly to small businesses and individuals.  We mainly sell inexpensive web sites, hosting and search engine optimization. During the next 12 months, we will continue our marketing efforts toward executing our strategy in low end internet market. We also hope to target larger private and government   end-users, via RFP’s Our other marketing initiatives will include the following: placement of print advertisements in small business, entrepreneurial, and special interest magazines; placement of advertisements and links to our website in industry focused websites; promoting our products at industry tradeshows and cable TV advertisements. We believe that these marketing initiatives will optimize our access.  We hope to execute our marketing strategy with the assistance of sales representatives we intend to hire or by engaging an outside marketing firm. In addition, with our website now operational we intend to execute an internet specific marketing campaign. Such marketing would include “pay-per-click” keyword campaigns on major search engines such as Google and Yahoo and Search Engine Optimization (“SEO”). SEO is the process of improving the volume and quality of traffic to a web site from search engines via “natural” (“organic” or “algorithmic”) search results for targeted keywords. Usually, the higher a site “ranks”, the more searchers will visit that site. SEO means ensuring that web sites are accessible to search engines and are focused in ways that help improve the chances they will be found. An organic search is a process by which internet users find web sites having unpaid search engine listings, as opposed to using the pay per click (PPC) advertisement listings displayed among the search results. Our marketing initiatives will create brand awareness and should help drive traffic to our website. We estimate that the marketing expenses for the next 12 months will be approximately $10,000,000 in order to reach our targeted audience; our management thinks that we have the window of opportunity to reach former Yellow Pages clientele, that naturally needs iGenii’s SEO service.
 
Growth Strategy
 
Our objective is to become a leading provider of web development and search engine optimization products. We believe there are significant opportunities to increase our revenues through the further implementation of our operating strategy and by growing our customer base, both organically and through strategic acquisitions. Key elements of our growth strategy for the next 12 months will focus on the most efficient methods to acquire new customers and increase sales with existing customers. We intend to implement our growth strategy through the following methods:
 
o
selectively expand our web development and SEO product lines;
 
o
target new categories of customers such as large private firms, not-for-profits and governmental entities;
     
o
tailor our marketing, advertising and promotions to attract new customers and increase sales with existing customers;
 
o 
actively seek to evaluate opportunities to develop or acquire businesses within web development and SEO categories or with a similar customer base;
 
o
attend tradeshows in order to create awareness of our company and products;
     
o
hire an independent sales reps; and
    
o
enhance relationships with clients by providing high quality customer service which will include low prices, efficient and timely product fulfillment, and providing excellent communication channels between our company and our customers.
 
Competition
The web development and SEO market is highly fragmented and competitive. We compete directly or indirectly with the following categories of companies: web.com and verizone.net. Many of our competitors have a substantially greater market presence, name recognition and financial, distribution, marketing and other resources than we have. In addition, if our competitors reduce their prices, we may have to reduce our prices in order to compete. As a result of this competition, we may need to spend significant sums on advertising and promotion. If these competitors were to begin offering a broader array of competing products, or if any of the other factors listed above occurred, our revenues could be reduced or our costs could be increased, resulting in reduced profitability.
 
 
15
 
 
Significant Customers
Company has no major customers that represent any substantial percentage of sales.
 
Employees
We have 13 employees.
 
Results of Operations
 
During the fiscal quarter ended June 30, 2011, the Company’s net sales amounted to $180,019 and showed 49.17% increase from net sales of $120,680 in the fiscal quarter ended June 30, 2010 due to the increase in sales force and higher prices charged for the services. The cost of sales amounted to $195,414 during 2nd quarter of 2011 and to $126,158 during 2nd quarter of 2010, which is equal to $69,256 or 54.90% increase. The increase in the cost of sales was attributed to higher payroll, office lease and advertisement payments.  Net loss for 2nd quarter of 2011was $15,395 and showed an increase of $9,922 or 181.29% from the corresponding quarter in 2010. The Company had an accumulated loss from operation of $343,978, a significant portion of which is attributed to sales and development expenses, stock option expenses as well as, the result of professional services in connection with the filing of our Registration Statement, which was filed with the Securities and Exchange Commission on July 18, 2008.
 
Liquidity and Capital Resources
 
Our balance sheet as of June 30, 2011 reflects cash balance of $6,437. Cash on hands may be sufficient to provide the capital necessary to operate nevertheless an additional fundraising may be needed. Company conducts multiple activities in order to increase its capital resources for the next twelve months.
 
Net cash used by operations for the six months ended June 30, 2011 was $14,559 as compared to the net cash provided by operations of $1,834 for the same period ended June 30, 2010.  Net cash used in investing activities in the six months ended June 30, 2011 was $1,200 compared to $0 for the same prior year period. Purchases of computer equipment of $1,200 were made in the six months ended June 30, 2011 primarily large sales force in new location. No new computer equipment was purchased during the first six months of 2010.   Net cash provided by financing activities during the six months ended June 30, 2011 was $400 as compared to zero net cash provided by for financing activities for the same prior year period ended. All proceeds came from the sale of common stock.
 
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements.
 
 
Smaller reporting companies are not required to provide the information required by this item.
 
 
16
 
 
 
Disclosure Controls and Procedures
 
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this  Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud if any, within a company have been detected.
 
Management has determined that, as of June 30, 2011, there were material weaknesses in our internal controls as of June 30, 2011.   This material weakness may affect management’s ability to effectively review and analyze elements of the financial statement closing process and prepare financial statements in accordance with U.S. GAAP.  In making this assessment, our management used the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  As a result of the material weaknesses described above, our management concluded that as of June 30, 2011, we did not maintain effective internal control over financial reporting based on the criteria established in Internal Control — Integrated Framework issued by the COSO.
 
Changes in internal control
 
Our management, with the participation our Chief Executive Officer and Chief Financial Officer, performed an evaluation as to whether any change in our internal controls over financial reporting occurred during the 2011 Quarter ended June 30, 2011. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that no change occurred in the Company’s internal controls over financial reporting during the 2011 Quarter ended June 30, 2011 that has materially affected, or is reasonably likely to materially affect, the Company’s internal  controls over financial reporting
 
 
17
 
 
Internal Controls Over Financial Reporting
 
During the quarter ended June 30, 2011, there was no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
 
OTHER INFORMATION
 
 
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
 
Item 1A.
 
Smaller reporting companies are not required to provide the information required by this item.
 
 
Unregistered Sales of Equity Securities
 
None.
 
Purchases of equity securities by the issuer and affiliated purchasers
 
None.
 
Use of Proceeds
 
None
 
 
None
 
 
There was no matter submitted to a vote of security holders during the fiscal quarter ended September 30, 2008.
 
 
None
 
 
18
 
 
Item 6.
 
Exhibit
No.
  
Description
     
31.1
  
Rule 13a-14(a)/15d-14(a) Certifications of Ross Lavnikevich, the President, Chief Executive Officer and Director (attached hereto)
     
31.1
  
Rule 13a-14(a)/15d-14(a) Certifications of Rafael Abdurachmanov, the Chief Financial Officer and Director (attached hereto)
     
32.1
  
Section 1350 Certifications of Ross Lavnikevich, the President, Chief Executive Officer, and Director (attached hereto)
     
32.1
  
Section 1350 Certifications of Rafael Abdurachmanov, the Chief Financial Officer and Director (attached hereto)
 
 
19
 
 
SIGNATURES
 
In accordance with to requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
iGENII, INC.
 
Dated: August 15, 2011
       
 
By:
/s/ Ross Lavnikevich
  
 
Name:
Ross Lavnikevich
  
 
Title:
President, Chief Executive Officer,
and Director (Principal Executive Officer)
 
 
By:
/s/ Rafael Abdurachmanov
  
 
Name:
Rafael Abdurachmanov
  
 
Title:
Chief Financial Officer, Treasurer
and Director (Principal Financial and Accounting Officer)
 
 
20

iGenii, Inc. Reports