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EX-31 - EXHIBIT 31.1 - INFORMATION ARCHITECTS CORPex311.htm
EX-32 - EXHIBIT 32.2 - INFORMATION ARCHITECTS CORPex321.htm


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009


COMMISSION FILE NUMBER 0-22325


INFORMATION ARCHITECTS CORPORATION

(Exact name of registrant as specified in its charter)


      

NORTH CAROLINA

State or other jurisdiction of incorporation


 87-0399301

IRS Employer Identification No.


7625 Chapelhill Drive

Orlando, FLA 32819

(Address of principal executive offices) (Zip Code)


(954) 358-7099

(Registrants telephone number, including area code)



Indicate by check mark whether we: (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 we were required to file such reports), and (2) has been subject to such filing requirements for past 90 days. Yes [] No [X]


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 (§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 [X]


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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one)

 

Large accelerated filer []   Accelerated filer []

Non-accelerated filer []       Smaller reporting company [X]


Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  [X] Yes [] No


The number of shares of common equity outstanding as at June 15, 2011 was 548,936,137.


1


PART I – FINANCIAL INFORMATION


ITEM 1 – Financial Statements


INFORMATION ARCHITECTS CORPORATION

CONDENSED BALANCE SHEETS

  

(Derived

  

from

  

audited

  

financial

 

(UNAUDITED)

statements)

 

March 31,

December 31,

 

2009

2008

   
   

Assets

  

Cash

 $                       -

 $                   -

Total assets

 $                       -

 $                   -

   

Liabilities and shareholders' deficit

  

Current liabilities

  

Accounts payable - trade

 $               7,639

 $           7,639

Other - Payroll taxes

               75,128

           75,128

Short term notes payable

                          -

                      -

Shareholder advances

                          -

                     -

Total current liabilities

                82,767

            82,767

   

Shareholders' deficit

  

Preferred stock issuable (Authorized 500,000,000 shares, par value $.001)

  

Preferred B - To be issued (2008 - 4,925,000 shares,

  

2009 - 4,925,000 shares)

                 4,925

              4,925

Common stock (Authorized 2,000,000,000 shares, par value $.001)

  

(Issued 2008 - 360,950,235 and 2009 - 360,950,235 shares)

              360,950

          360,950

Paid in capital

        75,532,701

     75,532,701

Accumulated deficit

     (75,981,343)

  (75,981,343)

Total Shareholders' deficit

              (82,767)

          (82,767)

Total liabilities and shareholders' deficit

$                       -

 $                   -

   

See the accompanying notes to unaudited condensed financial statements


2


INFORMATION ARCHITECTS CORPORATION

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

FOR THE QUARTERS ENDED MARCH 31, 2009 AND 2008

 

2009

2008

   

Sales

 $                 -

 $                 -

Less cost of goods sold

                    -

                    -

Gross profit

                    -

                    -

   

General and Administrative Expenses

                    -

                    -

   

Income from operations

                   -

                    -

   

Other income (expense)

                    -

                    -

   

Loss before provision for income taxes

                    -

                    -

   

Provision for income taxes

                    -

                    -

   

Loss before benefit from tax loss carryforward

                    -

                    -

   

Benefit from tax loss carryforward

                    -

                    -

   

Net Loss

 $                 -

 $                 -

   

Loss applicable to common stockholders

 $                -

 $                 -

   

Weighted average common shares outstanding

  360,950,235

  360,950,235

   

Basic and diluted loss per share

 $         (0.00)

 $         (0.00)

   

See the accompanying notes to unaudited condensed financial statements


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INFORMATION ARCHITECTS CORPORATION

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

FOR THE QUARTERS ENDED MARCH 31, 2009 AND 2008

 

Quarter ended

 

March 31,

 

2009

2008

   

Net loss

 $             -

 $             -

Adjustments to reconcile net loss to cash provided (used)

  

by operating activities

  

Add back issuance of stock for services

                -

                -

Changes in:

  

Accounts payable

                -

                -

 

 

 

   

Net cash used in operating activities

                -

                -

   

Cash flows from financing activities

  

Cash from short term notes payable

               -

 

Cash from shareholder advances

                -

 

Capital contribution

                -

                -

   

Net cash provided by financing activities

                -

 

   

Net change in cash

                -

 
   

Cash - Beginning of period

                -

                -

   

Cash - End of period

 $             -

 $             -

   

Supplemental cash flow information:

  

Cash paid during the period for interest

 $             -

 $             -

Cash paid during the period for taxes

 $             -

 $             -

   

See the accompanying notes to unaudited condensed financial statements


4


INFORMATION ARCHITECTS CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS



Note 1 - INTERIM FINANCIAL STATEMENTS

 

The accompanying condensed financial statements of Information Architects Corporation  (the “Company,” “we,” “us,” or “our”) have been prepared in accordance with the instructions to quarterly reports on Form 10-Q. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial position as of and at the end of this quarter, and for all periods presented, have been made. Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Annual Report on Forms 10-K filed with the Securities and Exchange Commission (the “SEC”) for the years ended December 31, 2010 and 2009. The results of operations for this quarter are not necessarily an indication of operating results for the full year.

 

Principles of Consolidation

 

The accompanying financial statements include only the accounts of Information Architects Corporation.


Loss per share

 

Loss per share of common stock is computed based on the weighted average number of common shares outstanding during the period. Conversions of preferred shares are not considered in the calculation, as the impact of the potential common shares would be to decrease loss per share. Therefore, diluted loss per share is equivalent to basic loss per share. Equivalent common shares not included in the calculation of net loss per share if all preferred shares were converted at of the end of each quarter were as follows:


  

Equivalent

 

 Preferred  

Common

 

 B shares

Shares

2009

  

First quarter

                    4,925,000

            492,500,000

Second quarter

                   7,705,000

            770,500,000

Third quarter

                   7,705,000

            770,500,000

Forth quarter

                   7,705,000

            770,500,000

   

2010

  

First quarter

                   7,705,000

            770,500,000

Second quarter

                   9,975,141

            997,514,100

Third quarter

                 10,167,291

         1,016,729,100

Forth quarter

                 10,167,291

         1,016,729,100


5


Going Concern

 

The accompanying interim financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred operating losses, has a retained deficit and limited liquid assets. Management's plans with regard to these matters are to actively search for merger candidates and for opportunities for related funding activities. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.  The Company’s ability to continue as a going concern depends on the success of management's plans in this regard.



Note 2 – Equity transactions


Equity transactions for all quarters in 2008, 2009, and 2010 were as follows:


2008 – There were no equity transactions during 2008.


2009:

First quarter - There were no equity transactions during the first quarter of 2009.


Second quarter – 2,780,000 Preferred B shares were designated for issuance as stock compensation (fair value of $278,000). 2,500,000 of these shares were issuable to the Company’s Acting CEO.


Third quarter - There were no equity transactions during the third quarter of 2009.


Forth quarter - There were no equity transactions during the forth quarter of 2009.


2010:


First quarter - There were no equity transactions during the first quarter of 2010.


Second quarter:


557,359 Preferred B shares were converted to 55,735,900 common shares.


2,827,150 Preferred B shares were designated for issuance as stock compensation (fair value of $282,715).


Third quarter:


192,500 Preferred B shares were designated for issuance as stock compensation (fair value of $19,250).


132,250,002 common shares were issued as stock compensation (fair value of $132,250).


Forth quarter - There were no equity transactions during the forth quarter of 2010.


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Note 5 – Income Taxes


The Company records its income taxes in accordance with ASC 740 Income Taxes.  The Company incurred net operating losses during all periods presented resulting in a deferred tax asset, which has been fully allowed for; therefore, the net benefit and expense resulted in no income taxes.


The Company’s policy is to record estimated interest and penalties related to the underpayment of income taxes as income tax expense in the consolidated statements of operations.  There has been no interest or penalties recognized in the condensed financial statements.


Note 6 – Subsequent Events


The Company has evaluated events and transactions occurring subsequent to this quarter through June 15, 2011, the date these financial statements were available to be issued. During this period, there were no subsequent events other than those described below requiring recognition or disclosure in the accompanying financial statements.


On its Form 10K for December 31, 2010, the Company reported that it had begun investigating two business opportunities. As of June 15, 2011 there have been no transactions related to these opportunities which would require adjustment to the accompanying financial statements as no transactions have occurred and the due diligence operations continue.


Also, in its Form 10K for December 31, 2010, the Company reported that it was anticipating that its corporate charter would be re-instated by the State of North Carolina within 60 days for the date of filing. On April 5, 2011, the Department of The Secretary of State of North Carolina posted a letter on its website wherein they stated that the Company had been re-instated.


During the first quarter of 2011, three shareholders advanced a total of $6,400 to the Company for the payment of various expenses. There are no specified repayment terms regarding these advances, which are shown as current liabilities on the accompanying financial statements. The amounts are due to a shareholder, officer and director (a related party transaction) - $3,800, a shareholder and officer (a related party transaction) - $600, and a shareholder - $2,000.


7


During the first quarter of 2011, the Company borrowed $20,000 under the terms of three separate short term notes payable from unrelated parties (One note for $10,000 (due April 28, 2011) and two separate notes for $5,000 each totaling $10,000 (one note is due May 2, 2011 and one is due May 4, 2011)). The terms of the notes require payment at three months from the date of the notes, which dates occurred in the second quarter of 2011. The notes were extended for another 90 days at that point. The two $5,000 notes give each of the holders the right to convert to 10,000,000 shares (20,000,000 total shares) of common stock at any time prior to maturity ($.0005 per share conversion rate, fair value of the shares at the time the notes were negotiated). The $10,000 note gives the holder the right to convert to common stock at any time prior to maturity at a rate of $.0006 per share (fair value of the shares at the time the note was negotiated) (total potential shares 16,666,667) and granted warrants to purchase 250,000 common shares at $.05 par share for a three month period from the maturity date (the fair value of the warrants was calculated using the Black-Scholes method which resulted in a zero valuation). There were no interest rates specified on the notes. Since the fair value of the notes approximated the conversion rates at the time the notes were negotiated, no beneficial conversion feature existed at the time the notes were negotiated and therefore no such expense was recognized.


In the second quarter of 2011, the three short term notes payable (one note for $10,000 and two notes each for $5,000, totaling $20,000) were all extended 90 additional days subsequent to March 31, 2011 with no other changes in their terms. No payments of any kind have been made on any of the notes.


During the quarter ended March 31, 2011, the Company had the following related party transactions:


Transactions with an officer:


A total of $3,050 was advanced to the officer for payment of office expenses.


$4,500 was paid to the officer for consulting fees.


The officer advanced $2,600 to the Company and the Company repaid $2,000 to the officer, leaving a net balance due the officer at March 31, 2011 of $600.


Transactions with an officer and director:


$4,000 was paid to the officer and director for consulting fees.


The officer and director advanced $14,800 to the Company and the Company repaid $11,000 to the officer and director, leaving a net balance due the officer and director at March 31, 2011 of $3,800.


8


ITEM 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations


We were founded in 1982 as a Utah corporation under the name of Enertronix Corporation. In 1992 we changed our name to Alydaar Software Corporation ("Alydaar"). Alydaar later changed its corporate domicile to North Carolina through a merger with and into Daar Corporation, a North Carolina corporation established by Alydaar. Alydaar was the surviving corporation. On June 28, 1999 we changed our name to Information Architects Corporation. Information Architects Corporation is referred to herein as the "Company" or "IA." The Company is currently listed as active in the State of North Carolina.

Results of Operations


Three-month Period Ended March 31, 2009 compared to Three-month Period Ended March 31, 2008


There were no transactions in the first quarter of either 2009 or 2008.


Historical operating results by quarters



2008

Total

2008 by quarter

 

2008

1Q

2Q

3Q

4Q

Source

     

 Stock compensation (at fair value)

 $        -

 $        -

 $        -

 $        -

 $        -

 Other G&A expenses

           -

           -

           -

           -

           -

      

General and Administrative Expenses

 $        -

 $        -

 $        -

 $        -

 $        -


2009

Total

2009 by quarter

 

2009

1Q

2Q

3Q

4Q

Source

     

Stock compensation (at fair value)

$278,000

$         -

$278,000

$         -

$         -

Other G&A expenses

-

-

-

-

-

      

General and Administrative Expenses

$278,000

$         -

$278,000

$         -

$         -

   

2010

Total

2010 by quarter

 

2010

1Q

2Q

3Q

4Q

Source

     

Stock compensation (at fair value)

$434,215

$         -

$282,715

$151,500

$         -

Other G&A expenses

10,586

-

-

-

10,586

      

General and Administrative Expenses

$444,801

$         -

$282,715

$151,500

$10,586


9


Due to the nature of the Company’s operations during the last three years there is no discernable pattern to describe the fluctuations from period to period and the foregoing tables are presented for informational purposes. The Company has been largely dormant since 2006 except for some stock compensation transactions during the years ended December 31, 2010 and 2009, which have been reported on previously filed Forms 10K. The Company is currently actively seeking potential merger candidates and business opportunities.

  

Liquidity and Capital Resources


For all quarters in 2009 and 2008, the Company did not have any cash or cash equivalents.

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

 

Certain statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations and other portions of this report are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements or our industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or other comparable terminology. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Unless otherwise required by applicable securities laws, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

 

Not applicable to smaller reporting companies.

 

Item 4 - Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures.

 

Our management, including our acting chief executive officer, has conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the last day of the period of the accompanying interim financial statements (the “Evaluation Date”). Based on that review and evaluation, our acting chief executive officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were adequate and effective to ensure that material information relating to us would be made known to them by others within the Company in a timely manner, particularly during the period in which this quarterly report on Form 10-Q was being prepared, and that no changes are required at this time. 

 

10


Changes in Internal Control over Financial Reporting

 

There was no change in internal controls over financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified in connection with the evaluation described in the preceding paragraph that occurred during the Company’s first fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

 

PART II   OTHER INFORMATION


Item 1 - Legal Proceedings

 

None.

 

Item 1A - Risk Factors

 

The Company’s business, financial condition, operating results and cash flows can be impacted by a number of factors, any one of which could cause the Company’s actual results to vary materially from recent results or from the Company’s anticipated future results.  See Form 10-K for the year ended December 31, 2010 for the Company’s Risk Factors.

 

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

 

None.


Item 3 - Defaults Upon Senior Securities

 

None.

 

Item 4 - (Removed and Reserved)


Item 5 - Other Information

 

None.

 

Item 6 - Exhibits

  

31.1

Certification of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934 (1)

32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1) (2)


(1) Filed herewith.

(2) Furnished upon request.


11


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


INFORMATION ARCHITECTS CORPORATION

DATED:

June 15, 2011,

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 


      BY: /s/ Roland Breton

      ——————————————

      Roland Breton

      President and Acting Chief Executive and Financial Officer


12