UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ . QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended May 31, 2015

 

☐. TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

 

Commission File Number: 000-53446

 

INFINITY AUGMENTED REALITY, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		71-1013330
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
228 Park Ave. S #61130, New-York. NY		10003-1502
(Address of principal executive offices)		(Zip Code)

 

(917) 677-2084

(Registrant's telephone number, including area code)

 

 

(Former name or former address, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 ☒ . No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ . No ☐

 

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 the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐. (Do not check if a smaller reporting company)	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 ☐. No ☒

 

State the number of shares outstanding of each of the registrant's classes of common equity, as of the latest practicable date. 110,390,005 shares of common stock as of July 2, 2015.

 

 

 

INFINITY AUGMENTED REALITY, INC.

Quarterly Report On Form 10-Q

For The Quarterly Period Ended

May 31, 2015

 

INDEX

			Page
PART I - FINANCIAL INFORMATION
	Item 1.	Financial Statements	3
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
	Item 4.	Controls and Procedures	27
PART II - OTHER INFORMATION
	Item 1.	Legal Proceedings	28
	Item 1A.	Risk Factors	28
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
	Item 3.	Defaults Upon Senior Securities	28
	Item 4.	Mine Safety Disclosures	28
	Item 5.	Other Information	28
	Item 6.	Exhibits	29

 

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The following unaudited interim financial statements of Infinity Augmented Reality, Inc. and its Subsidiary (sometimes referred to as "we", "us", "our", "the Company" or "our Company") are included in this quarterly report on Form 10-Q:

 

	Page
Condensed Consolidated Balance Sheets at May 31, 2015 (unaudited) and August 31, 2014	4
Condensed Consolidated Statements of Operations and Comprehensive loss for the three months and nine months ended May 31, 2015 and May 31, 2014 (unaudited)	5
Condensed Consolidated Statements of Cash Flows for the nine months ended May 31, 2015 and May 31, 2014 (unaudited)	6
Notes to Condensed Consolidated Financial Statements	7

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		May 31, 2015 (unaudited)				August 31, 2014
ASSETS
Current Assets
Cash and cash equivalents		$	1,440,935			$	875,438
Prepaid expenses and other receivables			23,133				178,394
Total current assets			1,464,068				1,053,832
Property and equipment, net			78,935				84,885
Investment in Meta Company			50,000				50,000
TOTAL ASSETS		$	1,593,003			$	1,188,717
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses		$	154,425			$	191,046
Interest payable			112,023				54,871
Current liabilities of discontinued operations			-				27,835
Total current liabilities			266,448				273,752
Convertible debentures, net of debt discount			3,418,867				3,291,930
TOTAL LIABILITIES			3,685,315				3,565,682
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS’ DEFICIT
Common stock ($ 0.00001 par value; 500,000,000 authorized; 110,745,473 issued and 110,390,005 outstanding at May 31, 2015; 95,316,155 issued and 94,960,687 outstanding at August 31, 2014)			1,107				953
Additional paid in capital			67,802,140				63,866,965
Treasury stock, at cost 355,468 shares of common stock May 31, 2015 and August 31, 2014			(49,766	)			(49,766	)
Accumulated deficit			(69,787,882	)			(66,180,566	)
Accumulated other comprehensive loss			(57,911	)			(14,551	)
Total Stockholders' Deficit			(2,092,312	)			(2,376,965	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	1,593,003			$	1,188,717

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
UNAUDITED

 

		Three months ended May 31, 2015				Three months ended May 31, 2014				Nine months ended May 31, 2015				Nine months ended May 31, 2014
Research and Development expenses		$	(272,023	)		$	(221,200	)		$	(691,384	)		$	(1,050,691	)
Marketing, General and administrative expenses			(734,415	)			(1,920,975	)			(2,602,955	)			(3,802,001	)
Total Operating expenses			(1,006,438	)			(2,142,175	)			(3,294,339	)			(4,852,692	)
Interest and other finance income (expense)			(249,764	)			(218,949	)			(312,977	)			(521,812	)
Loss from continuing operations before income tax			(1,256,202	)			(2,361,124	)			(3,607,316	)			(5,374,504	)
Provision for income tax			-				-				-				-
Loss from continuing operations			(1,256,202	)			(2,361,124	)			(3,607,316	)			(5,374,504	)
Loss from discontinued operations			-				(296,319	)			-				(411,284	)
Net loss		$	(1,256,202	)		$	(2,657,443	)		$	(3,607,316	)		$	(5,785,788	)
Basic and diluted loss per common share
Continuing operations		$	(0.01	)		$	(0.03	)		$	(0.04	)		$	(0.06	)
Discontinued operations			-				-				-				-
Net loss per common share		$	(0.01	)		$	(0.03	)		$	(0.04	)		$	(0.06	)
Basic weighted average shares outstanding			109,244,335				100,929,777				100,682,547				100,026,230
Diluted weighted average shares outstanding			109,244,335				100,929,777				100,682,547				100,026,230
Net loss		$	(1,256,202	)		$	(2,657,443	)		$	(3,607,316	)		$	(5,785,788	)
Foreign currency translation adjustments			5,865				(8,601	)			(43,360	)			(25,833	)
Comprehensive loss		$	(1,250,337	)		$	(2,666,044	)		$	(3,650,676	)		$	(5,811,621	)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

 

		Nine months ended May 31,
		2015				2014
OPERATING ACTIVITIES
Net loss		$	(3,607,316	)		$	(5,785,788	)
Loss from discontinued operations			-				411,284
Adjustments to reconcile net loss to net cash (used in) provided by operations
Amortization of debt discount			687,677				490,139
Stock-based compensation			1,839,927				1,843,787
Finance income from conversion of convertible debt and warrants			(442,956	)			-
Foreign exchange gain on investment in subsidiary			-				(23,937	)
Loss on disposition of equipment			-				29,708
Issuance of stock for in-process research and development			-				26,110
Depreciation			25,974				40,413
Changes in operating assets and liabilities:
Prepaid expenses and other receivables and long-term receivables			142,792				(53,293	)
Accounts payable and accrued expenses			(32,909	)			(16,243	)
Interest payable			67,271				31,228
Net cash used in operating activities- continuing operations			(1,319,540	)			(3,006,592	)
Net cash (used in) provided by operating activities- discontinued operations			(22,987	)			(231,263	)
Net cash (used in) provided by operating activities			(1,342,527	)			(3,237,855	)
INVESTING ACTIVITIES
Purchase of leasehold improvements and equipment			(26,772	)			(77,392	)
Net cash used in investing activities			(26,772	)			(77,392	)
FINANCING ACTIVITIES
Proceeds from convertible debentures, net			1,967,500				3,130,000
Proceeds of Short term loans			-				443,660
Repayments of Short term loans			-				(443,660	)
Proceeds from exercise of stock options			-				164,717
Net cash provided by financing activities			1,967,500				3,294,717
Effect of exchange rate on cash and cash equivalents			(32,704	)			(6,723	)
Change in cash and cash equivalents			565,497				(27,253	)
Cash and cash equivalents, beginning			875,438				431,760
Cash and cash equivalents of continuing operations, ending		$	1,440,935			$	404,507
Supplemental disclosure of cash flow information:
Tax paid in cash		$	22,987			$	231,263
Non-cash Investing and Financing activities:
Warrants issued in connection with convertible debentures		$	249,145			$	1,133,895
Beneficial conversion feature		$	1,250,000			$	1,216,570
Conversion of convertible note receivables to preferred shares of Meta Company		$	-			$	50,000
Conversion of convertible note		$	1,061,595			$

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1:

NATURE AND CONTINUANCE OF OPERATIONS

 

Infinity Augmented Reality, Inc. (formerly known as Absolute Life Solutions, Inc.) (the “Company”) was originally incorporated as Shimmer Gold, Inc. in the State of Nevada on September 7, 2006. The Company was in the business of acquisition and exploration of mineral resources during the period from September 7, 2006 to May 21, 2010. Subsequently, a majority of our shareholders approved an amendment to our Articles of Incorporation changing our name to Absolute Life Solutions, Inc. During the fiscal year ended August 31, 2010, the Company commenced operations as a specialty financial services company engaged in the business of purchasing life settlement contracts for long-term investment purposes. Effective November 15, 2012, the Company is no longer engaged in its prior primary activity as a specialty financial services company primarily engaged in the purchase of life settlement contracts.

 

In May 2012, we formed a wholly-owned subsidiary Infinity Augmented Reality, LLC, (“IAR Subsidiary”), and commenced activities to enable it to be actively engaged in the development of software applications which is intended to utilize augmented reality. Effective March 7, 2013, the Company changed its name from Absolute Life Solutions, Inc. to Infinity Augmented Reality, Inc. On that same date, IAR Subsidiary was merged into the Company. Effective June 30, 2013, the Company formed a wholly owned Israeli subsidiary, Infinity Augmented Reality Israel Ltd. (“Infinity Israel”).

 

The Company is actively engaged in the development of an augmented reality software platform which will provide end users with a fully three dimensional (3D) interactive augmented reality experience with full hand controls and a completely natural user interface. Augmented reality (”AR”), is a technology which allows the projection of visual content that the viewer perceives as a real life experience and allows the viewer to intuitively interact with augmented content in his or her physical surroundings. The Company’s technology platform is made up of computer vision algorithms which will interface with any hardware including mobile or wearable devices that have two dimensional (2D) stereoscopic cameras. The Company’s technology will turn such hardware into a powerful content augmentation platform, will be usable both outdoors and indoors and will feature a lower power consumption.

 

The Company is developing three software development kits (“SDKs”), which will serve as the core platform for augmented reality software developers and wearable device manufacturers. Our solution is designed to assist application developers in easily and efficiently developing advanced augmented reality applications, in a shorter time-to-market, while still providing a rich augmented reality experience.

 

On February 2, 2015, the Company and certain of its debenture holders and stockholders and their affiliates holding a majority of the Company’s outstanding voting equity securities (the “Security Holders”) entered into a definitive agreement to restructure a portion of the Company’s existing debt, provide for the assumption by certain of the stockholders of liabilities arising from the Company’s former business and serving as a first step in efforts to effect a recapitalization of the Company (the “Master Agreement”). Under the terms of the Master Agreement, Credit Strategies LLC, Platinum Partners Value Arbitrage Fund L.P. (“Platinum”) and ALS Capital Ventures LLC for itself and as agent for each of its affiliates on behalf of whom it holds the assets relating to our former business, the Life Settlement Business ( “ALS” and collectively, the “Indemnitors”) have assumed all liabilities relating to the Company’s former activities in the life settlement business and have agreed to indemnify the Company and its directors and officers from and against any losses related to such former business. In connection therewith, the Indemnitors have agreed to indemnify the Company for all legal fees and expenses and to assume all liability relating to the legal suit currently proceeding in State Court in New York which was commenced by CMS Life Insurance Opportunity Fund, L.P., and have agreed to reimburse the Company for all legal fees including those that have already been paid to the Company’s attorneys in respect of said proceeding.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1:

NATURE AND CONTINUANCE OF OPERATIONS (Cont.)

 

The Company issued debentures in an aggregate principal amount of $7,793,543 convertible into shares of the Company’s common stock, par value $0.00001 per share (“Common Stock”), at a rate of $0.25 per share (the “Debentures”). In connection with the issuance of the Debentures, the Company issued warrants to purchase up to 31,174,172 additional shares of Common Stock at an exercise price of $0.50 per share (the “Warrants”). Under the Master Agreement, the Security Holders, with the exception of ALS, have agreed to exchange these Debentures, accrued interest and Warrants for 52,767,193 shares of newly designated Preferred A Convertible Stock par value $0.00001 per share (the “Series A Preferred Stock”). ALS has agreed to convert all of its Debentures, accrued interest and Warrants into 9,918,883 shares of our Common Stock.

 

The Series A Preferred Stock will be authorized in accordance with an amendment to the Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock to be filed with the Nevada Secretary of State once the Authorized Capital Increase described below has been implemented. A total of 52,767,193 shares of Series A Preferred Stock will be so authorized.

 

The holders of Series A Preferred Stock will be entitled to a liquidation preference of an aggregate of $6,634,256, plus interest of 1.2% per annum commencing from January 1, 2015 (“Liquidation Preference”) payable upon the liquidation, consolidation or merger of the Company or upon the sale of all of substantially all of the assets or outstanding share capital of the Company (each, a “Deemed Liquidation”). Notwithstanding the foregoing, the holders of Series A Preferred Stock shall not be entitled to receive the Liquidation Preference and the Liquidation Preference shall be void, if such Series A Preferred Stock holders would have received an amount exceeding the Liquidation Preference pursuant to any actual or Deemed Liquidation distributed on an as converted basis (prior to calculating and applying the Liquidation Preference).

 

The Series A Preferred Stock shall vote together with the Common Stock as a single class, and shall not confer upon the holders thereof any rights senior to, or otherwise different from, the rights conferred upon the holders of Common Stock, other than the Liquidation Preference. At the option of the Series A Preferred Stock holder(s), the shares of Series A Preferred Stock shall be convertible into shares of Common Stock on a one-for-one basis, as adjusted for subdivision, combination or consolidation of Common Stock, stock dividends and other distributions. The Series A Preferred Stock shall automatically be converted into Common Stock upon the closing of a public offering of the Company’s Common Stock with net proceeds to the Company of at least $20,000,000 or upon the consent of the holders of a majority of the outstanding Series A Preferred Stock at such time, to so convert.

 

In addition, it was agreed under the Master Agreement that the Company should take all steps necessary in order to reduce the number of record holders of the Company’s Common Stock to below 300 holders of record, which would cause the Company’s reporting obligations under The Exchange Act of 1934, as amended (the “Exchange Act”) to become eligible for suspension under Rule12h-3 or Section 15(d) thereunder, and cause the Company’s Common Stock to become eligible for termination of registration under Rule 12g-4 and Section 12(g) of the Exchange Act. The purpose of these efforts is to reduce the administrative burden and costs associated with the Company’s reporting obligations under the Exchange Act. In addition, the prospect of additional financing (discussed further below) is premised on the Company successfully suspending its reporting obligation under the Exchange Act.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1:

NATURE AND CONTINUANCE OF OPERATIONS (Cont.)

 

In furtherance of the Company’s efforts to suspend its reporting obligation under the Act, the Master Agreement contemplates that the Company will implement a 101-for-1 reverse stock split of the Company’s outstanding Common Stock (the “Reverse Stock Split”) immediately followed by a 1-for-101 forward stock split of the Company’s outstanding Common Stock (the “Forward Stock Split”, and collectively with the Reverse Stock Split, the “Reverse/Forward Stock Split”). Holders of record of less than one share of Common Stock after the Reverse Stock Split would be cashed out at the rate of $0.15 per pre-split share. Holders of record of more than one share of Common Stock after the Reverse Stock Split will participate in the Forward Stock Split. Such amendments would not change the par value per share or the number of authorized shares of Common Stock. The Company intends to hold a special meeting of stockholders to approve such matters set for in the Master agreement which require stockholder approval (the “Special Meeting”).

 

If the Reverse/Forward Stock Split is implemented as contemplated, the number of record holders of the Company’s Common Stock would fall below 300 holders of record and the Company would no longer be required to file periodic reports with the Securities Exchange Commission (the “SEC”). The Company believes that the deregistration of its Common Stock under the Exchange Act should reduce significant outlays currently expended in complying with the Company’s reporting obligations and allow management to expend its time and resources to otherwise managing the growth of its business and maximizing long-term shareholder value.

 

Subject to the successful completion of all of the transactions contemplated under the Master Agreement, including the suspension of the Company’s reporting obligations under the Exchange Act, and approval by the Company’s board of directors, the Security Holders comprising the holders of a majority of the Company’s outstanding Common Stock have agreed that the Company should seek investment in the Company for an aggregate purchase price of up to $5,000,000 at a Company pre-money valuation of no less than $6,000,000. Any such investment would be on terms and conditions approved by the Company’s board of directors.

 

The Master Agreement contemplates an increase of the authorized share capital (the “Authorized Capital Increase”) of Common Stock from 500,000,000 shares of Common Stock, to 1,000,000,000 shares of Common Stock, and an increase of the Company’s authorized shares of preferred stock from 100,000,000 shares of preferred stock, par value $0.00001 per share (the “Preferred Stock”) to 500,000,000 shares of Preferred Stock, all of which are subject to requisite stockholder approval at the Special Meeting.

.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1:

NATURE AND CONTINUANCE OF OPERATIONS (Cont.)

 

The Authorized Capital Increase is intended, among other things, to provide for the issuance of the Series A Preferred Stock, Series B Preferred Stock, issuance of additional series of Preferred Stock to prospective investors and for the issuance of up to 155,000,000 shares of Common Stock to our directors and employees pursuant to the Company’s new incentive plan and to enhance corporate flexibility to finance and develop the operations of our business. Increasing the Company’s authorized shares of Common Stock will provide the Company with greater flexibility and allow for the issuance of additional shares of Common Stock at such times that the Company’s board may deem such issuance to be in the service of the Company’s interest, without the expense or delay of seeking approval from the stockholders. The Master Agreement Shareholders have advised the Company that they intend to vote in favor of the Capital increase.

 

The Master Agreement contemplates that the Company approve an equity incentive plan in order to facilitate the grant of Restricted Stock Units and/or options to purchase Common Stock of the Company to such executive officers, employees and consultants of the Company and its subsidiary, as the Board of Directors deems fit, from time to time (the “2015 Incentive Plan”).

 

Subject to the stockholder approval of the 2015 Incentive Plan, it is anticipated that the Company will issue 60,000,000 restricted stock units to each of Motti Kushnir, our Chief Executive Officer and Matan Protter, the Chief Technology Officer of our Infinity Israel and 12,600,000 Restricted Stock Units to Ortal Zanzuri, our Chief Financial Officer.

 

On April 6, 2015, the Company entered into a definitive agreement (the “Agreement”) with Singulariteam Fund II L.P. , an affiliate of an existing stockholder of the Company (“Singulariteam II”), Platinum, an existing stockholder of the Company, and SUNCORPORATION of Japan (collectively, the “Investors”), for the purpose of raising funds through a private placement, for the Company’s operation and activities. According to the Agreement, the Investors invested $1,250,000 at the initial closing and received convertible notes (the “Notes”) which will be convertible into Series B Preferred Stock, par value $0.00001 each (the “Preferred B Stock”) upon the designation and issuance thereof. The Agreement also provides that after a certificate of designation of Series B Preferred Stock of the Company is filed with the Secretary of State of Nevada and is deemed effective, the Investors are obligated to invest an additional aggregate amount of $3,750,000.

 

The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws.

 

The holders of Preferred B Stock will be entitled to vote together with the Common Stock as a single class. The Preferred B Stock will confer upon the holder(s) thereof special approval rights, as well as the right to appoint a director on behalf of all of the Preferred B Stockholders, preemptive rights, the right of first refusal, Co-Sale and Drag Along Rights. In addition, holders of Preferred B Stock shall be entitled to a liquidation preference of 3 times the amount that has been invested plus interest at the rate of 1.2% per annum (the “Preferred B Preference”). Notwithstanding the foregoing, the holders of Series B Preferred Stock will not be entitled to receive the Preferred B Preference and the Preferred B Preference shall be void, if such Series B Preferred Stock holders would have received an amount exceeding the Preferred B Preference pursuant to any actual or deemed liquidation distributed on an as converted basis (prior to calculating and applying the Preferred B Preference). The Preferred B Stock may be converted to Common Stock at any time and shall be automatically converted to Common Stock upon a public offering by the company with proceeds of at least $20,000,000, or upon the consent of the holders of a majority of the outstanding Series B Preferred Stock at such time, to so convert.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1:

NATURE AND CONTINUANCE OF OPERATIONS (Cont.)

 

The Notes issued at the initial closing bear interest at the rate of 1.2% per annum, commencing on the date of its purchase and until the conversion or repayment thereof, and are, without any further action, convertible into Series B Preferred Stock immediately upon the effectiveness of the Certificate of Designation of the Series B Preferred Stock. The holders of the Notes may convert the Note into Common Stock at any time prior to the creation of such Preferred B Stock.

 

The continued existence of the Company is dependent upon its ability to generate profit from its augmented reality business and to meet its obligations as they become due. The Company intends to finance the future capital required for continued operations from a combination of traditional debt and equity markets. However, there is no assurance that (a) traditional debt and equity markets may be accessible as required, or if so, on acceptable terms and, or (b) the demand for and selling prices of the Company’s augmented reality products, may not be sufficient to meet cash flow expectations. The outcome of these matters cannot be predicted with certainty and therefore the Company may not be able to continue or expand operations as planned. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These unaudited financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. However, as contemplated by the Agreement subject to the filing of certificate of designation of Series B Preferred Stock of the Company with the Secretary of State of Nevada and after such certificate of designation is deemed effective, the Investors are obligated to invest an additional aggregate amount of $3,750,000.

 

NOTE 2:

SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements as of May 31, 2015 and for the three months and nine months ended May 31, 2015 and 2014, have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC and on the same basis as the annual audited financial statements. The unaudited condensed consolidated financial statements include the accounts of the Company and our wholly-owned subsidiary. All significant intercompany accounts and transactions are eliminated in the consolidation process. The unaudited Balance Sheet as of May 31, 2015, Statements of Operations and comprehensive loss for the three months and nine months ended May 31, 2015 and May 31, 2014, and Statements of Cash Flows for the nine months ended May 31, 2015 and May 31, 2014, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the period presented. The results for the three months and nine months ended May 31, 2015 are not necessarily indicative of results to be expected for the year ending August 31, 2015 or for any future interim period. In addition, the balance sheet data at August 31, 2014 was derived from the audited financial statements but does not include all disclosures required by GAAP. The accompanying financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on November 26, 2014.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 2:

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP 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. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The most significant estimates with regard to these financial statements relate to deferred income tax amounts and rates and timing of the reversal of income tax differences.

 

Loss per Share

 

Basic loss per share is calculated using the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the "if converted" method. As of May 31, 2015, 78,310,344 shares of common stock, comprised of 26,230,172 convertible debentures with a conversion price of $0.25, 26,230,172 warrants with an exercise price of $0.50, and stock options exercisable into 25,850,000 Common Stock are not included in diluted loss per share since their effect would be anti-dilutive. As of May 31, 2014, 86,845,263 shares of common stock, comprised of 20,230,172 convertible debentures with a conversion price of $0.25, 20,230,172 warrants with an exercise price of $0.50, and stock options exercisable into 46,384,919 Common Stock are not included in diluted loss per share since their effect would be anti-dilutive.

 

Stock-Based Compensation

 

The Company records stock-based compensation expense in accordance with ASC 718, Compensation - Stock Compensation. The Company expenses stock-based compensation to employees over the requisite service period based on the estimated grant-date fair value of the awards and forfeiture rates. For stock-based compensation awards to non-employees, the Company re-measures the fair value of the non-employee awards at each reporting period prior to vesting and finally at the vesting date of the award. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 2:

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

Valuation Assumptions

 

The Company estimates the fair value of stock option grants using a Black-Scholes option pricing model. In applying this model, the Company uses the following assumptions:

 

●

Risk-Free Interest Rate: The Company determined the risk-free interest rate equivalent to the expected term based on the U.S. Treasury constant maturity rate.

 

●

Expected Volatility: The Company determined its future stock price volatility based on the average historical stock price volatility of comparable peer companies.

 

●

Expected Term: Due to the limited exercise history of the Company’s stock options, the Company determined the expected term based on the stratification of employee groups and the expected effect of events that have indications on future exercise activity. Expected life for options granted to employees uses the Simplified Method, while options granted to non-employees uses an expected term equal to the life of the contract.

 

●

Expected Dividend Rate: The Company has not paid and does not anticipate paying any cash dividends in the near future.

 

The fair value of each option award was estimated on the grant date using the Black Scholes option-pricing model and expensed under the straight line method. The following assumptions were used:

 

			Three Months ended May 31,				Nine Months ended May 31,
			2015		2014		2015		2014
	Exercise price		-		$0.01		$0.07		$0.01 - $0.40
	Expected stock price volatility		-		84.9%		94.29% -105.62%		66.3% - 92.4%
	Risk-free rate of interest		-		2.74%		0.98% - 1.39%		0.04% - 2.74%
	Expected life of options		-		5.5-6.5 Years		2.75-4 Years		1-6.5 Years

  

Recent Accounting Pronouncements

 

In November 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-17, Pushdown Accounting. This ASU provides companies with the option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. The election to apply pushdown accounting can be made either in the period in which the change of control occurred, or in a subsequent period. This ASU is effective as of November 18, 2014. The adoption will not have a material impact on the Company’s results of operations, cash flows or financial position.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 2:

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, as a new Topic, Accounting Standards Codification (ASC) Topic 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU is effective for annual periods beginning after December 15, 2016 (fiscal 2018) and shall be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Company’s results of operations, cash flows or financial position.

 

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU raises the threshold for a disposal to qualify as discontinued operations and requires new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. Under the new standard, companies report discontinued operations when they have a disposal that represents a strategic shift that has or will have a major impact on operations or financial results. This update will be applied prospectively and is effective for annual periods, and interim periods within those years, beginning after December 15, 2014 (fiscal 2016). Early adoption is permitted provided the disposal was not previously disclosed. This update will not have a material impact on the Company's reported results of operations and financial position. The impact is non-cash in nature and will not affect the Company's cash position.

 

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the condensed financial statements of the Company.

 

NOTE 3:

CONVERTIBLE DEBENTURES

 

During the nine months ended May 31, 2015, the Company issued a (i) five-year Convertible Series A-14 Debentures (the “A-14 Debentures”) for an aggregate principal amount of $750,000, bearing interest at 1.2% per annum, convertible into shares of Common Stock, at a conversion price of $0.25, and (ii) a five-year Warrant (the “2014 Warrants”) to purchase 3,000,000 shares of Common Stock, to Credit Strategies, LLC, pursuant to Securities Purchase Agreements dated March 26, 2014.

 

The Company accounts for the beneficial conversion feature (“BCF”) and warrant valuation in accordance with ASC 470-20, Debt with Conversion and Other Options. The Company records a BCF related to the issuance of convertible debt that has conversion features at fixed rates that are “in-the-money” when issued and the fair value of warrants issued in connection with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to warrants, based on their relative fair value, and as a reduction to the carrying amount of the convertible debt equal to the intrinsic value of the conversion feature. The discount recorded in connection with the BCF and warrant valuation is recognized as non-cash interest expense and is amortized over the terms of the convertible notes.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 3:

CONVERTIBLE DEBENTURES (Cont.)

 

During the nine months ended May 31, 2015, the Company recorded an aggregate of $249,145 for the calculated fair value of 2014 Warrants and BCF, in conjunction with A-14 Debentures issued on September 15 and November 7, 2014.

 

The Company valued the warrants at the date the warrants were issued, using the Black-Scholes valuation model and the following assumptions:

 

			September 15, 2014				November 7, 2014
	Contractual term (Years)			5.0				5.0
	Volatility			139.6	%			162.5	%
	Dividend yield			0.0	%			0.0	%
	Risk-free interest rate			1.80	%			1.60	%

 

The Company has issued Debentures in an aggregate principal amount of $7,793,543 convertible into shares of the Company’s Common Stock, at a rate of $0.25 per share. In connection with the issuance of the Debentures, the Company also issued Warrants to purchase up to 31,174,172 additional shares of Common Stock at an exercise price of $0.50 per share. Under the Master Agreement, all the Debenture and Warrant holders, with the exception of ALS, agreed to exchange such Debentures, accrued interest and Warrants for 52,767,193 shares of newly designated Series A Preferred Stock. ALS agreed to convert all of its Debentures, accrued interest and Warrants into 9,918,883 shares of Common Stock.

 

On February 2, 2015, the Company issued 9,918,883 shares of Common Stock to ALS in exchange for its Debentures, accrued interest and Warrants. The entire unamortized discount remaining at the date of the conversion in the amount of approximately $443,000 was recognized immediately as interest income. The carrying amount of the debt was credited to equity to reflect the stock issued.

 

On April 6, 2015, the Company and Investors entered into the Agreement, for the purpose of raising funds through a private placement, for the Company’s operation and activities. Under the Agreement, the Investors invested $1,250,000 at the initial closing and received convertible Notes which will be convertible into Preferred B Stock upon the creation thereof and prior to the creation of Series B Stock are convertible to Common Stock. Platinum has assigned half of its rights under the Agreement to its affiliate Credit Strategies LLC.

  

			May 31, 2015				August 31, 2014
	1.2% convertible debentures			7,807,543				7,043,543
	Debt discount/ beneficial conversion feature			(4,388,676	)			(3,751,613	)
	Balance		$	3,418,867			$	3,291,930

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 4:

COMMITMENTS AND CONTINGENT LIABILITIES

 

With respect to our prior activities in the life insurance settlement business, we were joined as a defendant in a lawsuit captioned as CMS Life Ins. Opportunity Fund L.P., et al. v. Progressive Capital Solutions in the New York State Supreme Court, New York County. The intervening plaintiffs, Genesis Merchant Partners, LP and Genesis Merchant Partners II, LP, to which we collectively refer to herein as Genesis, claim that we owned certain unidentified "Life Settlement" insurance policies, that are subject to Genesis' rights.

 

Genesis is seeking declaratory and injunctive relief (but no money damages). We exited the life settlement insurance business in November 2012 and do not own or claim any rights in any such life settlement insurance policies. Accordingly, we believe that the claims are frivolous and intend to vigorously defend against the allegations.

 

On December 8, 2014, the Company filed a Motion to Dismiss Genesis’ Complaint as it relates to both of the claims against the Company. On March 5, 2015, oral argument was held and the Judge partially granted and partially denied the Motion to Dismiss dismissing the preliminary injunction cause of action in Genesis’ Complaint, and denied the Motion to Dismiss the declaratory judgement cause of action. The Company filed an Answer to the Genesis Complaint, including affirmative defenses, on April 6, 2015.

 

The case is currently in the discovery stage of the litigation. Genesis has noticed depositions of the Company’s representatives for September of 2015 which we have objected to. Following the close of discovery, we may file a summary judgment motion to dismiss the Genesis Complaint.

 

NOTE 5:

COMMON STOCK, WARRANTS AND STOCK OPTIONS

 

Common Stock

 

On February 2, 2015, the Company issued 9,918,883 shares of Common Stock to ALS in exchange for its Debentures, accrued interest and Warrants.

 

On March 17, 2015, Coventry Enterprises, LLC exercised 5,957,227 warrants at a cashless exercise. The Company issued Coventry Enterprises, LLC 5,510,435 shares of Common Stock.

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 5:

WARRANTS AND STOCK OPTIONS (Cont.)

 

Warrants

 

Warrant transactions are summarized as follows:

 

			Number of warrants				Weighted average exercise price				Weighted average life remaining (in years)
	Balance as at August 31, 2014 – Issued			34,174,172				0.41				3.97 years
	Additions			3,000,000				0.50				4.61 years
	Conversions into Common Shares			(10,901,227	)			0.00				-
	Expiration			(42,773	)			0.01				-
	Balance as at May 31, 2015			26,230,172				0.50				3.88 years

 

During the nine months ended May 31, 2015, Coventry Enterprises, LLC exercised 5,957,227 warrants at a cashless exercise. The Company issued Coventry Enterprises, LLC 5,510,435 shares of Common Stock. The remaining 42,773 warrants expired on May 31, 2015.

 

As of May 31, 2015, there were 26,230,172 warrants outstanding and exercisable with expiration dates from April 2018 through November 2019.

As indicated above, all of such warrants will be converted into shares of Series A Preferred Stock pursuant to the Master Agreement upon the creation of Series A Preferred Stock.

Stock options

 

On December 7, 2014, the Board of Directors granted to an Infinity Israel employee 50,000 Non-Qualified Stock Options with an exercise price of $0.07, vesting semiannually over the next 3 years and expiring on December 7, 2019.

 

The following table summarizes the stock-based compensation expense from stock option, employee stock purchase programs and restricted Common Stock awards for the nine months and three months ended May 31, 2015 and 2014:

 

			Three months ended May 31,								Nine months ended May 31,
			2015				2014				2015				2014
	Employee awards		$	427,714			$	1,549,165			$	1,839,927			$	1,807,798
	Non- employee awards, net of forfeitures		$	-			$	-			$	-			$	35,989
	Total stock options compensation expense		$	427,714			$	1,549,165			$	1,839,927			$	1,843,787

 

 

INFINITY AUGMENTED REALITY, INC. AND ITS SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 5:

WARRANTS AND STOCK OPTIONS (Cont.)

 

The following table summarizes stock option activity:

 

			Number of Shares				Weighted Average Exercise Price				Total Weighted Average Intrinsic Value				Weighted Average Remaining Contractual Life (in years)
	Outstanding at August 31, 2014			25,800,000				0.07				0.07				8.41
	Options granted			50,000				0.07				0.01				4.77
	Options exercised			-				-				-				-
	Options forfeited			-				-				-				-
	Options cancelled			-				-				-				-
	Outstanding at May 31, 2015			25,850,000				0.07				0.05				7.91
	Options exercisable at May 31, 2015			12,541,667				0.07				0.05				7.68

 

NOTE 6:

SUBSEQUENT EVENTS

 

On June 28, 2015, Infinity Israel entered into a five year lease agreement for new research and operation premises in Petach-Tikva Israel which consist of approximately 370 square feet. Infinity Israel’s annual rent obligation starting on September 1, 2015 will be approximately NIS 300,000 per annum (approximately $77,400 at the exchange rate of 3.876 per dollar on June 30, 2015).

 

The Company evaluates events that have occurred after the balance sheet date through the date the financial statements were publicly available. Based upon the evaluation, the Company did not identify any other recognized or non-recognized subsequent events that would have required adjustment to or disclosure in the financial statements.

 

- - - - - - - - - - - - - - - - - - -

 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Special Note:  Certain statements in this quarterly report on Form 10-Q concerning our business prospects or future financial performance, anticipated revenues, expenses, profitability or other financial items, estimates as to size, growth in or projected revenues, developments in industry regulations and the application of such regulations, expected outcomes of pending or potential litigation and regulatory actions, and our strategies, plans and objectives, together with other statements that are not historical facts, are “forward-looking statements” as that term is defined under the federal securities laws.  All of these forward-looking statements are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. You should carefully review the risks described herein and in other documents we file from time to time with the Securities and Exchange Commission, or the SEC, including our Annual Report on Form 10-K for the Company's fiscal year ended August 31, 2014, particularly in the sections entitled “Item 1A – Risk Factors” and “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  

 

Unless required by law, we undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this Report or to reflect the occurrence of unanticipated events. Shareholders and potential shareholders should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this Report. Management cautions that these statements are qualified by their terms and/or important factors, many of which are outside of our control, and involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially from the statements made, including, but not limited to, the following:

 

	●	Market Acceptance of our products;
	●	Market acceptance of augmented reality products;
	●	the risks associated with the adequacy of our existing cash resources and our ability to continue as a going concern;
	●	the risks associated with dependence upon key personnel;
	●	the cost, delays and uncertainties associated with our product development;
	●	regulatory announcements, proceedings or changes;
	●	competitive product developments and legal developments;
	●	our history of operating losses since our inception and since we began to develop augmented reality in 2012;
	●	risks associated with our ability to protect our intellectual property;
	●	risks associate with our ability to raise additional funds; and
	●	our liquidity.

 

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements.

 

Overview

 

We were originally incorporated as Shimmer Gold, Inc. in the State of Nevada on September 7, 2006. In May, 2010, a majority of our shareholders approved an amendment to our Articles of Incorporation changing our name to Absolute Life Solutions, Inc. In May 2012, we formed a wholly-owned subsidiary Infinity Augmented Reality, LLC, or IAR Subsidiary, which was actively engaged in the development of software applications which were intended to utilize augmented reality.

 

  

Effective March 7, 2013, we changed our name from Absolute Life Solutions, Inc. to Infinity Augmented Reality, Inc. On that same date, we merged IAR Subsidiary into our Company. On June 30, 2013, we formed a wholly owned Israeli subsidiary, Infinity Augmented Reality Israel Ltd, or Infinity Israel.

 

We are a company engaged in the development of an Augmented Reality software platform which will provide end users with a fully three dimensional (3D), interactive augmented reality experience with full hand controls and a completely natural user interface. Augmented reality, or AR, is a technology which allows the projection of visual content that the viewers feel is a real life experience despite the fact that the visual content is not physically right in front of them, and allows them to intuitively interact with augmented content in their physical surroundings. Our technology platform is made up of computer vision algorithms which will interface with any hardware, including mobile or wearable devices, that have two small and light two dimensional (2D) stereoscopic cameras. Our technology will turn such hardware into a powerful content augmentation platform. Our technology will be usable both outdoors and indoors and will feature a lower power consumption that focuses mainly on the user’s point of view.

 

We are developing three software development kits, or SDKs, that will serve as the core platform for augmented reality software developers and wearable device manufacturers. Our solution is designed to assist application developers to easily and efficiently develop advanced augmented reality applications using our platform, in a shorter time-to-market, while still providing a rich augmented reality experience.

 

Currently, augmented reality technology is mainly used to provide mobile device users with an additional layer of visual content while looking at the world around them through the screen on their smart phones or tablets. New technologies are emerging to combine both wearable devices like AR glasses and mobile devices. Such a combination will enable the users to benefit from a many different augmented reality experiences that are not available today. However, such technologies rely on expensive cameras and sensors requiring vast energy consumption and are overall unsuitable for incorporation into everyday wearable and mobile devices because they require either connection to electricity or relatively heavy batteries.

 

Our platform will provide application developers and wearable device manufacturers with a light, simple platform utilizing only simple, passive 2D cameras, requiring only one tenth (1/10) the power consumption of current AR solutions thus can be operated by light batteries. Our technology enables the extraction, representation and digitization of the physical world and provides an intelligent understanding of the 3D scene. Furthermore, the technology is designed to provide a unique advanced “hand controlled” natural user interface, which enables, empowering the augmented reality application developers’ community to create a real life experience for application users that focuses mainly on the user’s point of view.

 

On February 2, 2015, we and certain of our debenture holders and stockholders and their affiliates holding a majority of our outstanding voting equity securities, or the Security Holders, entered into a definitive agreement, or the Master Agreement, to restructure a portion of our existing debt, provide for the assumption by certain of the stockholders of liabilities arising from our former business and serving as a first step in efforts to effect a recapitalization of our Company. Under the terms of the Master Agreement, Credit Strategies LLC, or Credit, Platinum Partners Value Arbitrage Fund L.P., or Platinum, and ALS Capital Ventures LLC for itself and as agent for each of its affiliates on behalf of whom it holds the assets relating to our former business, the Life Settlement Business, or ALS, to which we may refer to collectively as the Indemnitors, have assumed all liabilities relating to our former activities in the life settlement business and have agreed to indemnify us and our directors and officers from and against any losses related to such former business. In connection therewith, the Indemnitors have agreed to indemnify us for all legal fees and expenses and to assume all liability relating to the legal suit currently proceeding in State Court in New York which was commenced by CMS Life Insurance Opportunity Fund, L.P., and have agreed to reimburse us for all legal fees including those that have already been paid to our attorneys in respect of said proceeding.

 

 

We have issued debentures in an aggregate principal amount of $7,793,543 convertible into our shares of common stock, par value $0.00001 per share, or the Common Stock, at a rate of $0.25 per share, or the Debentures. In connection with the issuance of the Debentures, we also issued warrants to purchase up to 31,174,172 additional shares of Common Stock at an exercise price of $0.50 per share, or the Warrants. Under the Master Agreement, the Security Holders, with the exception of ALS, have agreed to exchange these Debentures, accrued interest and Warrants for 52,767,193 shares of newly designated Preferred A Convertible Stock par value $0.00001 per share, or the Series A Preferred Stock. ALS has agreed to convert all of its Debentures, accrued interest and Warrants into 9,918,883 shares of our Common Stock.

 

The Series A Preferred Stock will be authorized in accordance with an amendment to the Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock to be filed with the Nevada Secretary of State if the Authorized Capital Increase described below has been approved at the Special Meeting and thereafter, implemented. A total of 52,767,193 shares of Series A Preferred Stock will be so authorized.

 

The holders of Series A Preferred Stock will be entitled to a liquidation preference of an aggregate of $6,634,256, plus interest of 1.2% per annum commencing from January 1, 2015, or the Liquidation Preference, payable upon the liquidation, consolidation or merger of our Company or upon the sale of all of substantially all of the assets or outstanding share capital of our Company, or a Deemed Liquidation. Notwithstanding the foregoing, the holders of Series A Preferred Stock shall not be entitled to receive the Liquidation Preference and the Liquidation Preference shall be void, if such Series A Preferred Stock holders would have received an amount exceeding the Liquidation Preference pursuant to any actual or Deemed Liquidation distributed on an as converted basis (prior to calculating and applying the Liquidation Preference).

 

The Series A Preferred Stock vote together with the Common Stock as a single class, and do not confer upon the holders thereof any rights senior to, or otherwise different from, the rights conferred upon the holders of Common Stock, other than the Liquidation Preference. At the option of the Series A Preferred Stock holder(s), the shares of Series A Preferred Stock are convertible into shares of Common Stock on a one-for-one basis, as adjusted for subdivision, combination or consolidation of Common Stock, stock dividends and other distributions. The Series A Preferred Stock l automatically convert into Common Stock upon the closing of a public offering of our Common Stock with net proceeds to us of at least $20,000,000 or upon the consent of the holders of a majority of the outstanding Series A Preferred Stock at such time, to so convert.

 

In addition, it was agreed under the Master Agreement that we shall take all steps necessary in order to reduce the number of record holders of our Common Stock to below 300 holders of record, which would cause our reporting obligations under The Exchange Act of 1934, as amended, or Exchange Act, to become eligible for suspension under Rule12h-3 or Section 15(d) thereunder, and cause the our Common Stock to become eligible for termination of registration under Rule 12g-4 and Section 12(g) of the Exchange Act. The purpose of these efforts is to reduce the administrative burden and costs associated with our reporting obligations under the Exchange Act. In addition, the prospect of additional financing (discussed further below) is premised on us successfully suspending our reporting obligation under the Exchange Act.

 

In furtherance of our efforts to suspend its reporting obligation under the Act, the Master Agreement contemplates that we will implement a 101-for-1 reverse stock split of our outstanding Common Stock, or the Reverse Stock Split, immediately followed by a 1-for-101 forward stock split of our outstanding Common Stock, or Forward Stock Split. We refer to the Reverse Stock Split and the Forward Stock Split collectively as the Stock Splits. Holders of record of less than one share of Common Stock after the Reverse Stock Split would be cashed out at the rate of $0.15 per pre-split share. Holders of record of more than one share of Common Stock after the Reverse Stock Split will participate in the Forward Stock Split. Such amendments would not change the par value per share or the number of authorized shares of Common Stock. We intend to hold a special meeting of stockholders to approve such matters set for in the Master agreement which require stockholder approval, or the Special Meeting. Holders of 57,288,844 shares of Common Stock who are party to the Master Agreement, or approximately 51.9% of the Common Stock eligible to be cast at the Special Meeting (including those held by our directors and executive officers), or the Master Agreement Shareholders, have advised us that they intend to vote in favor of the Reverse/Forward Stock Split.

 

 

If the Stock Splits are implemented as contemplated, the number of record holders of our Common Stock would fall below 300 holders of record and we would no longer be required to file periodic reports with the Securities Exchange Commission, or the SEC. We believe that the deregistration of our Common Stock under the Exchange Act should reduce significant outlays currently expended in complying with our reporting obligations and allow our management to expend its time and resources to otherwise managing the growth of its business and maximizing long-term shareholder value.

 

Subject to the successful completion of all of the transactions contemplated under the Master Agreement, including the suspension of our reporting obligations under the Exchange Act, and approval by our board of directors, the Security Holders comprising the holders of a majority of our outstanding Common Stock have agreed that we seek investment(s) in our Company in an amount of up to an aggregate purchase price of up to $5,000,000 at a Company pre-money valuation of no less than $6,000,000. Any such investment would be on terms and conditions approved by our board of directors.

 

The Master Agreement contemplates an increase of the authorized share capital, or the Authorized Capital Increase, of our Common Stock from 500,000,000 shares of Common Stock, to 1,000,000,000 shares of Common Stock, and an increase of our authorized shares of preferred stock from 100,000,000 shares of preferred stock, par value $0.00001 per share, or the Preferred Stock, to 500,000,000 shares of Preferred Stock.

 

The Authorized Capital Increase is intended, among other things, to provide for the issuance of the Series A Preferred Stock, issuance of additional series of Preferred Stock to prospective investors and for the issuance of up to 155,000,000 shares of Common Stock to our directors and employees pursuant to our new incentive plan and to enhance corporate flexibility to finance and develop the operations of our business. Increasing our authorized shares of Common Stock will provide us with greater flexibility and allow for the issuance of additional shares of Common Stock at such times that our board of directors may deem such issuance to be in the service of our interest, without the expense or delay of seeking approval from the stockholders. The Master Agreement Shareholders have advised us that they intend to vote in favor of such Authorized Capital Increase.

 

The Master Agreement contemplates that an equity incentive plan be adopted in order to facilitate the grant of Restricted Stock Units and/or options to purchase our Common Stock to such executive officers, and employees and consultants of our Company and its subsidiary, as our board of directors deems fit, from time to time, or the 2015 Incentive Plan. The incentive plan is being presented to our stockholder for their review and proposal at the Special Meeting.

 

It is anticipated that we will issue 60,000,000 Restricted Stock Units to each of Motti Kushnir, our Chief Executive Officer and Matan Protter, the Chief Technology Officer of our Infinity Israel and 12,600,000 Restricted Stock Units to Ortal Zanzuri, our Chief Financial Officer.

 

On April 6, 2015, the Company entered into a definitive agreement, or the Agreement with Singulariteam Fund II L.P. an affiliate of an existing stockholders of the Company, or Singulariteam II, Platinum Partners Value Arbitrage Fund, LP, an existing stockholder of the Company, or Platinum, and SUNCORPORATION of Japan, collectively referred to herein as, the Investors, for the purpose of raising funds through a private placement for the Company’s operation and activities. According to the Agreement, the Investors invested $1,250,000 at the initial closing and receive convertible notes, or the Notes, which will be convertible into Series B Preferred Stock, par value $0.00001 each, upon the creation thereof. The Agreement also provides that after a certificate of designation of Series B Preferred Stock of our Company is filed with the Secretary of State of Nevada and is deemed effective, the Investors are obligated to invest an additional aggregate amount of $3,750,000. Platinum has assigned half of its rights under the Agreement to its affiliate Credit Strategies LLC.

 

 

The holders of Preferred B Stock vote together with the Common Stock as a single class. The Preferred B Stock will confer upon the holder(s) thereof special approval rights, as well as the right to appoint a director on behalf of all of the Preferred B Stockholders, preemptive rights, the right of first refusal, Co-Sale and Drag Along Rights. In addition, holders of Preferred B Stock shall be entitled to a liquidation preference of 3 times the amount that has been invested plus interest at the rate of 1.2% per annum, or the Preferred B Preference. Notwithstanding the foregoing, the holders of Series B Preferred Stock shall not be entitled to receive the Preferred B Preference and the Preferred B Preference shall be void, if such Series B Preferred Stock holders would have received an amount exceeding the Preferred B Preference pursuant to any actual or deemed liquidation distributed on an as converted basis (prior to calculating and applying the Preferred B Preference). The Preferred B Stock may be converted by the holders thereof to Common Stock at any time and shall be automatically converted to Common Stock upon a public offering by us with proceeds of at least $20,000,000, or upon the consent of the holders of a majority of the outstanding Series B Preferred Stock at such time, to so convert.

 

Our continued existence is dependent upon its ability to generate profit from its augmented reality business and to meet our obligations as they become due. We intend to finance the future capital required for continued operations from a combination of traditional debt and equity markets. However, there is no assurance that (a) traditional debt and equity markets may be accessible as required, or if so, on acceptable terms and, or (b) the demand for and selling prices of our augmented reality products, may not be sufficient to meet cash flow expectations. The outcome of these matters cannot be predicted with certainty and therefore we may not be able to continue or expand operations as planned. These conditions raise substantial doubt about our ability to continue as a going concern. However, as contemplated by the Agreement, subject to the filing of certificate of designation of Series B Preferred Stock of the Company with the Secretary of State of Nevada and after such certificate of designation is deemed effective, the Investors are obligated to invest an additional aggregate amount of $3,750,000

 

 

Results of Operations

 

Our results of operations for the three months and nine months ended May 31, 2015 and 2014, consisted of operating and administrative expenses for personnel, leased office space and professional fees.

 

Three months and nine months ended May 31, 2015 compared to three months and nine months ended May 31, 2014

 

INFINITY AUGMENTED REALITY INC.

 

		Three months ended May 31, 2015				Three months ended May 31, 2014				Nine months ended May 31, 2015				Nine months ended May 31, 2014
Research and Development expenses		$	(272,023	)		$	(221,200	)		$	(691,384	)		$	(1,050,691	)
Marketing, general and administrative expenses			(734,415	)			(1,920,975	)			(2,602,955	)			(3,802,001	)
Total Operating expenses			(1,006,438	)			(2,142,175	)			(3,294,339	)			(4,852,692	)
Interest and other finance income (expense)			(249,764	)			(218,949	)			(312,977	)			(521,812	)
Loss from continuing operations before income tax			(1,256,202	)			(2,361,124	)			(3,607,316	)			(5,374,504	)
Provision for income tax			-				-				-				-
Loss from continuing operations			(1,256,202	)			(2,361,124	)			(3,607,316	)			(5,374,504	)
Loss from discontinued operations, net of tax			-				(296,319	)			-				(411,284	)
Net loss		$	(1,256,202	)		$	(2,657,443	)		$	(3,607,316	)		$	(5,785,788	)

 

Research and development. Research and development expenses increased from $221,200 for the three months ended May 31, 2014 to $272,023 for the three months ended May 31, 2015. The increase is primarily attributable to an increase in outsourcing expenses. Research and development expenses decreased from $1,050,691 for the nine months ended May 31, 2014 to $691,384 for the nine months ended May 31, 2015. The decrease is primarily attributable to a decrease in payroll expenses, mainly in Infinity Israel, due to a decrease in the number of employees in research and development activities.

 

Marketing, general and administrative expenses. Marketing, general and administrative expenses decreased from $1,920,975 and $3,802,001 for the three months and nine months ended May 31, 2014, respectively, to $734,415 and $2,602,955 for the three months and nine months ended May 31, 2015, respectively. The decrease of approximately $1,187,000 for the three months ended May 31, 2015 compared to the three months ended May 31, 2014, is primarily attributable to a decrease related to the fair value of stock options issued to employees and directors of our Company and of Infinity Israel. The decrease of approximately $1,199,000 for the nine months ended May 31, 2015 compared to the nine months ended May 31, 2014, is primarily attributable to a decrease of approximately $620,000 in professional fees and consulting expenses, a decrease of approximately $470,000 in payroll expenses, and a decrease of approximately $109,000 in travel, rent and other office expenses due to cost reduction efforts.

 

Interest and other Income (Expense): We recorded approximately $250,000 and $313,000 as interest and other expense for the three months and nine months ended May 31, 2015, respectively, as compared to approximately $219,000 and $522,000 for the three months and nine months ended May 31, 2014, respectively. During the nine months ended May 31, 2015 we issued 9,918,883 shares of Common Stock to ALS in exchange for its Debentures, accrued interest and Warrants. The entire unamortized discount remaining at the date of the conversion in amount of approximately $443,000 was recognized immediately as interest income.

 

Interest expenses include interest on Convertible Debts and amortization of debt discount related to convertible debt.

 

 

Income Tax:  There were no income tax expenses in the three months and nine month ended May 31, 2015 and 2014 because we recorded a full valuation allowance against the deferred tax asset resulting from the our NOL, since we concluded that it is more likely than not that we will not realize the benefit of our deferred tax assets by generating sufficient taxable income in future years.

 

Net Loss from continuing operations: We reported a net loss from continuing operations of approximately $1,256,000 and $3,607,000 for the three months and nine months ended May 31, 2015, respectively, compared to a net loss of approximately $2,361,000 and $5,375,000 for the three months and nine months ended May 31, 2014 respectively.  Refer to preceding discussions for explanation of variances.

 

Liquidity and Capital Resources

 

Net cash used in operating activities for the nine months ended May 31, 2015 was approximately $1,343,000. Net cash used in investing activities was approximately $27,000 arising from purchase of computer equipment. Net cash provided by financing activities was $1,967,500 arising from proceeds from convertible debentures. This resulted in an increase in cash of approximately $565,000.

 

Working Capital and Capital Availability: As of May 31, 2015, we had working capital of approximately $1,198,000 including cash and cash equivalents of approximately $1,441,000. We anticipate, that barring unforeseen developments, proceeds received from convertible debt financing(s) will be sufficient to sustain our operations until October 2015. While no assurance can be provided as to ultimate success, we anticipate raising additional funds to continue our augmented reality operations through subsequent debt or equity offerings to one or more accredited investors..

 

On April 6, 2015, we entered into the Agreement with the Investors for the purpose of raising funds through a private placement for the Company’s operation and activities. Under the Agreement, the Investors invested $1,250,000 at the initial closing and received Notes which will be convertible into Series B Preferred Stock upon the designation thereof. The Agreement also provides that after a certificate of designation of Series B Preferred Stock of the Company is filed with the Secretary of State of Nevada and is deemed effective, the Investors are obligated to invest an additional aggregate amount of $3,750,000. All of these actions are subject to our obtaining the requisite stockholder approval at the Special Meeting for the increase in authorized share capital.

 

Additional issuances of equity will dilute the interests of our existing shareholders.

 

Going Concern Qualification

 

We need to raise additional operating capital on an immediate basis.  Management believes that current cash resources, will allow us to meet current working capital requirements through October 2015.  However, without additional sources of cash and/or the deferral, reduction, or elimination of significant planned expenditures, the Company will not have the cash resources to remain as a going concern thereafter. Except for the $3,750,000 million commitment to purchase Series B Preferred Stock (as discussed), which is subject to our stockholders approving an increase in our authorized share capital, we have no commitments for any such funding, and there are no assurances that additional sources of liquidity can be obtained on terms acceptable to the Company, or at all. If the Company is unable to obtain adequate financing or financing on terms satisfactory to the Company, the Company will not have the cash resources to continue as a going concern after October 2015.  These conditions raise substantial doubt about our ability to continue as a going concern.

 

 

Application of Critical Accounting Policies and Estimates

 

Our discussion and analysis of financial condition and results of operations are based on our financial statements that were prepared in accordance with accounting principles generally accepted in the United States of America. To guide our preparation, we follow accounting policies, some of which represent critical accounting policies as defined by the SEC. The SEC defines critical accounting policies as those that are both most important to the portrayal of a company’s financial condition and results and require management’s most difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates involve significant judgments, assumptions and estimates by management that may have a material impact on the carrying value of certain assets and liabilities, disclosures of contingent liabilities, and the reported amounts of income and expenses during the reporting period that management considers critical accounting estimates. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, knowledge of the accounts and other factors that are believed to be reasonable. Because of the nature of the judgments and assumptions made by management, actual results may differ materially from these judgments and estimates, which could have a material impact on the carrying values of assets and liabilities and the results of our operations. Areas affected by our estimates and assumptions are identified below.

 

We apply the principles of ASC 985-20, Software- Costs of Software to Be Sold, Leased, or Marketed, which requires that software development costs incurred in conjunction with product development be charged to research and development expense until technological feasibility is established. Thereafter, until the product is released for sale, software development costs must be capitalized and reported at the lower of unamortized cost or net realizable value of the related product. We have adopted the “tested working model” approach to establishing technological feasibility for its products. Under this approach, a product in development is not considered to have passed the technological feasibility milestone until we have produced a model of the product that contains essentially all the functionality and features of the final product and have tested the model to ensure that it works as expected. We have expensed all software development costs when incurred since they have not reached technological feasibility.

 

We account for the BCF and warrant valuation in accordance with ASC 470-20, Debt with Conversion and Other Options. We record a BCF related to the issuance of convertible debt that has conversion features at fixed rates that are “in-the-money” when issued and the fair value of warrants issued in connection with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to warrants, based on their relative fair value, and as a reduction to the carrying amount of the convertible debt equal to the intrinsic value of the conversion feature. The discount recorded in connection with the BCF and warrant valuation is recognized as non-cash interest expense and is amortized over the terms of the convertible notes.

 

We record stock-based compensation expense in accordance with ASC 718, Compensation - Stock Compensation. We expense stock-based compensation to employees over the requisite service period based on the estimated grant-date fair value of the awards and forfeiture rates. For stock-based compensation awards to non-employees, we re-measure the fair value of the non-employee awards at each reporting period prior to vesting and finally at the vesting date of the award. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

 

We review the carrying value of the property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment includes current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, there was no impairment during the three months and nine months ended May 31, 2015.

 

We evaluate the useful lives of our property and equipment to assure that an adequate amount of depreciation is being charged to operations. Useful lives are based generally on specific knowledge of an asset’s life.

 

We are required to estimate our income taxes. This process involves estimating our current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and financial reporting purposes. These differences result in deferred tax assets and liabilities. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income, and, to the extent we believe that recovery is not likely, we establish a valuation allowance. To the extent we establish a valuation allowance or increase this allowance in a period, we include a tax provision or reduce our tax benefit in the statements of operations. We use our judgment to determine our provision or benefit for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.

 

 

We cannot predict what future laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes in laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when we deem it necessary.

 

We have not made any material changes to our critical accounting estimates or assumptions or the judgments affecting the application of those estimates or assumptions.

  

Off-Balance Sheet Arrangements

 

We did not engage in any off-balance sheet arrangements or transactions.

 

Outlook

 

We believe our Company and our industry are fundamentally sound and well positioned to deal with the current uncertainty in the financial and capital markets.  We carry no operational debt and do not rely on leverage in our capital structure. We do rely, however, upon the availability of investment capital. While it is conceivable that a financial crisis could diminish the supply of investment capital throughout the economy, we believe that greater investment capital will be placed in the augmented reality sector. We believe this is due to the fact that augmented reality is one of the technologies of the future.

  

We believe that domestic and international demand for augmented reality products will continue to grow as the industry continues to mature.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures. With the participation of our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended or the Exchange Act, as of the end of the period covered by this report.  Based upon such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures were not effective due to the material weaknesses noted below, in ensuring that (i) information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Due to the small size of our staff, we did not have sufficient segregation of duties to support our internal control over financial reporting.

 

There were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f)) during the fiscal quarter ended May 31, 2015, that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

  

 

PART II—OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

With respect to our prior activities in the life insurance settlement business, we were joined as a defendant in a lawsuit captioned as CMS Life Ins. Opportunity Fund L.P., et al. v. Progressive Capital Solutions in the New York State Supreme Court, New York County. The intervening plaintiffs, Genesis Merchant Partners, LP and Genesis Merchant Partners II, LP, to which we collectively refer to herein as Genesis, claim that we owned certain unidentified "Life Settlement" insurance policies, that are subject to Genesis' rights.

 

Genesis is seeking declaratory and injunctive relief (but no money damages). We exited the life settlement insurance business in November 2012 and do not own or claim any rights in any such life settlement insurance policies. Accordingly, we believe that the claims are frivolous and we intend to vigorously defend against the allegations.

 

On December 8, 2014, the Company filed a Motion to Dismiss Genesis’ Complaint as it relates to both of the claims against the Company. On March 5, 2015, oral argument was held and the Judge partially granted and partially denied the Motion to Dismiss dismissing the preliminary injunction cause of action in Genesis’ Complaint, and denied the Motion to Dismiss the declaratory judgement cause of action. We filed an Answer to the Genesis Complaint, including affirmative defenses, on April 6, 2015.

 

The case is currently in the discovery stage of the litigation. Genesis has noticed depositions of the Company’s representatives for September of 2015 which we have objected to. Following the close of discovery, we may file a summary judgment motion to dismiss the Genesis Complaint.

 

Item 1A. Risk Factors.

 

There have been no material changes to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended August 31, 2014.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

Pursuant to the publicly announced Reverse/Forward Stock Split, we anticipate purchasing approximately 35,500 shares of Common Stock of the Company at a price of $0.15 per share.

 

Item 3. Defaults Upon Senior Securities.

 

The Company currently does not have senior securities

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

As noted above, on April 6, 2015, we entered into the Agreement, issuing notes in the aggregate amount of $1,250,000 which will be convertible into Series B Preferred Stock. The Agreement also provides that after a certificate of designation of our Series B Preferred Stock is filed with the Secretary of State of Nevada and is deemed effective, the Investors are obligated to invest an additional aggregate amount of $3,750,000. The Preferred B Stock will confer upon the holder(s) thereof special approval rights, as well as the right to appoint a director on behalf of all of the Preferred B Stockholders.

 

As noted above, on June 28, 2015, Infinity Israel entered into a 5 year lease agreement for new research and operation facilities in Petach-Tikva Israel which consist of approximately 370 square feet. Infinity Israel’s annual rent obligation starting on September 1, 2015 will be approximately NIS 300,000 annually (approximately $77,400 at the exchange rate of 3.876 per dollar on June 30, 2015).

 

 

Item 6. Exhibits.

 

See the Exhibit Index following the signature page to this Quarterly Report on Form 10-Q for a list of exhibits filed or furnished with this report, which Exhibit Index is incorporated herein by reference.

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	INFINITY AUGMENTED REALITY, INC.
July 2, 2015	/s/ Motti Kushnir
	Motti Kushnir
	Chief Executive Officer
July 2, 2015	/s/ Ortal Zanzuri
	Ortal Zanzuri Chief Financial Officer

 

 

EXHIBIT INDEX

 

Exhibit Number		Exhibit Description
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

 

31