UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended: September 30, 2014
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file Number: 0-19470
REDIFY GROUP INC.
(Exact name of registrant as specified in its Charter)
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Delaware | 13-4069968 |
(State or other Jurisdiction of Incorporation or organization) | (I.R.S. Employer Identification No.) |
1440 Broadway, Suite 2350
New York, NY 10018
(Address of Principal Executive Offices)
( 212) 658-0779
(Registrant’s Telephone Number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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. (1) Yes [X] 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 (§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 [X] No [ ] The Company has no corporate Web site.
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Applicable Only to Registrants Involved in Bankruptcy Proceedings During the Preceding Five Years
Not applicable.
Outstanding Shares
At November 18, 2014 there were 3,512,286 shares of the Registrant's Common Stock and 50,400 shares of Series 1 Class A 8% Cumulative Preferred Stock outstanding.
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REDIFY GROUP INC. AND SUBSIDIARY
TABLE OF CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Unaudited Consolidated Balance Sheet
as of September 30, 2014 and Audited Consolidated
Balance Sheet as of December 31, 2013
4
Unaudited Consolidated Statements of
Operations, for the Three and Nine Month Periods
Ended September 30, 2014 and 2013
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Unaudited Consolidated Statements of Cash
Flows, for the Nine Month Period Ended
September 30, 2014 and 2013
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Notes to Unaudited Consolidated Financial Statements
7
Item 2. Management's Discussion and Analysis of Financial
Condition or Plan of Operation
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Item 3. Quantitative and Qualitative Disclosures About
Market Risks
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Item 4. Controls and Procedures
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PART II. OTHER INFORMATION
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SIGNATURES
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3
PART I FINANCIAL INFORMATION
ITEM 1 CONSOLIDATED FINANCIAL STATEMENTS
REDIFY GROUP INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
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| September 30, 2014 (Unaudited) |
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| December 31, 2013 |
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ASSETS |
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Current Assets: |
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Cash | $ | 3,143 |
| $ | 8,372 |
Prepaid expenses |
| 1,400 |
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| 500 |
Media rights |
| 1,000 |
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| - |
Total Current Assets |
| 5,543 |
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| 8,872 |
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Total Assets | $ | 5,543 |
| $ | 8,872 |
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current Liabilities: |
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Accounts payable | $ | 20,248 |
| $ | 13,235 |
Accrued expenses |
| 20,060 |
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| 15,268 |
Stock compensation payable |
| 1,100 |
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| - |
Convertible notes payable |
| 79,000 |
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| 79,000 |
Total Current Liabilities |
| 120,408 |
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| 107,503 |
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Stockholders’ Deficit: |
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Preferred stock ($0.01 par value) 1,000,000 shares authorized, 50,400 shares issued and outstanding |
| 504 |
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| 504 |
Common stock ($0.01 par value) 50,000,000 shares authorized, 3,512,286 and 2,942,286 issued and outstanding |
| 35,123 |
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| 29,423 |
Additional paid-in-capital |
| 4,336,269 |
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| 4,269,569 |
Retained deficit prior to development stage |
| (1,077,063) |
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| (1,077,063) |
Retained deficit during development stage |
| (3,409,698) |
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| (3,321,064) |
Total Stockholders’ Deficit |
| (114,865) |
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| (98,631) |
Total Liabilities and Stockholders’ Deficit | $ | 5,543 |
| $ | 8,872 |
The accompanying notes are an integral part of these consolidated financial statements.
4
REDIFY GROUP INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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| July 1 to September 30, 2014 |
| July 1 to September 30, 2013 |
| January 1 to September 30, 2014 |
| January 1 to September 30, 2013 |
| From inception of development stage on April 1, 2003 to September 30, 2014 | |
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Revenues | $ | - | $ | - | $ | - | $ | - | $ | 356 | |
Cost of Goods Sold |
| - |
| - |
| - |
| - |
| - | |
Gross Profit |
| - |
| - |
| - |
| - |
| 356 | |
Expenses |
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Research and development |
| - |
| - |
| - |
| (255,771) |
| - | |
Payroll and related |
| 8,125 |
| 8,000 |
| 24,600 |
| 33,500 |
| 2,052,619 | |
Selling, General and Administrative |
| 2,477 |
| 7,636 |
| 8,943 |
| 17,743 |
| 934,845 | |
Legal and Professional |
| 24,887 |
| 4,443 |
| 55,101 |
| 20,483 |
| 547,699 | |
Amortization |
| - |
| - |
| - |
| - |
| 12,000 | |
Total operating Expense |
| 35,489 |
| 20,079 |
| 88,644 |
| (184,045) |
| 3,547,163 | |
Operating Income (Loss) |
| (35,489) |
| (20,079) |
| (88,644) |
| 184,045 |
| (3,546,807) | |
Other Income |
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Interest Income |
| 3 |
| 10 |
| 10 |
| 29 |
| 137,109 | |
Total other income |
| 3 |
| 10 |
| 10 |
| 29 |
| 137,109 | |
Net Income (Loss) | $ | (35,486) | $ | (20,069) | $ | (88,634) | $ | 184,074 | $ | (3,409,698) | |
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Basic (loss) per share | $ | (0.01) | $ | (0.01) | $ | (0.03) | $ | 0.08 |
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Weighted Average Number of shares outstanding |
| 3,512,286 |
| 2,332,105 |
| 3,253,389 |
| 2,332,105 |
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Diluted Income (loss) per share | $ | (0.01) | $ | (0.01) | $ | (0.02) | $ | 0.06 |
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Weighted Average Number of shares outstanding |
| 4,047,286 |
| 2,867,105 |
| 3,788,389 |
| 2,867,105 |
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The accompanying notes are an integral part of these consolidated financial statements.
5
REDIFY GROUP INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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| January 1, 2014 to September 30, 2014 |
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| January 1, 2013 to September 30, 2013 |
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| From inception of development stage on April 1, 2003 to September 30, 2014 |
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Cash Flows from Operating Activities: |
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Net Income (Loss) | $ | (88,634) |
| $ | 184,074 |
| $ | (3,409,698) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Amortization of deferred compensation |
| - |
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| 13,751 |
Amortization of software |
| - |
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| - |
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| 12,000 |
Compensation costs of common stock issued or payable to employees and consultants |
| 3,400 |
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| 4,000 |
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| 178,755 |
Cost of donated services |
| 14,000 |
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| 31,000 |
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| 197,000 |
Cost of common stock issued to shareholders |
| - |
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| - |
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| 16,500 |
Common stock payable |
| 1,100 |
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| (255,771) |
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| 1,100 |
Changes in assets and liabilities: |
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Decrease (increase) in Media rights |
| (1,000) |
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| - |
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| (1,000) |
Decrease (increase) in accounts receivable |
| - |
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| - |
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| 31,250 |
Decrease (increase) in prepaid expenses |
| (900) |
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| (1,500) |
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| 13,352 |
(Decrease) increase in accounts payable and accrued expenses |
| 11,805 |
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| 121 |
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| (187,185) |
Net cash used in operating activities |
| (60,229) |
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| (38,076) |
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| (3,134,175) |
Net cash provided by investing activities |
| - |
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| - |
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| - |
Cash Flows from Financing activities: |
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Convertible notes payable |
| - |
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| 5,000 |
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| 79,000 |
Common stock |
| 55,000 |
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| 50,000 |
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| 105,000 |
Net cash provided by financing activities |
| 55,000 |
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| 55,000 |
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| 184,000 |
Net Increase (Decrease) in cash and cash equivalents |
| (5,229) |
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| 16,924 |
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| (2,950,175) |
Cash and Cash Equivalents, beginning of period |
| 8,372 |
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| 370 |
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| 2,953,318 |
Cash and Cash Equivalents, end of period | $ | 3,143 |
| $ | 17,294 |
| $ | 3,143 |
Cash paid during the period for: |
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Income taxes | $ | - |
| $ | - |
| $ | 12,609 |
Interest | $ | - |
| $ | - |
| $ | - |
Supplemental Disclosures of Non-Cash Investing and Financing Activities: |
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Common stock issued for accrued liabilities | $ | - |
| $ | - |
| $ | 51,230 |
Common stock issued to prior shareholders | $ | - |
| $ | - |
| $ | 16,500 |
Conversion of preferred stock | $ | - |
| $ | - |
| $ | 2 |
Cost of donated services | $ | 14,000 |
| $ | 31,000 |
| $ | 197,000 |
Common Stock options issued for software purchase | $ | - |
| $ | - |
| $ | 5,114 |
Software acquired with common stock options | $ | - |
| $ | - |
| $ | 12,000 |
The accompanying notes are an integral part of these consolidated Financial Statements.
6
REDIFY GROUP INC. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014 and DECEMBER 31, 2013
NOTE 1: THE COMPANY AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company
The Company consists of Redify Group, Inc. (“RGI”, non-operating parent corporation) and its sole and wholly-owned operating subsidiary, TradinGear.Com, Incorporated (“Tradingear,” combined, the "Company"). The company changed its name to Redify Group, Inc. from TGFIN Holdings, Inc. (“TGFN”) on October 2, 2013. The Company reactivated its previously inactive operating subsidiary, Tradingear in order to resume its previous business of developing software, under a new d/b/a: iDEV3.
On April 15, 2013 the company filed a Definitive 14C for the purpose of changing the Company’s name and effectuating a ten (10) to one (1) reverse split of the Company’s common stock. These corporate actions were approved by the Financial Industry Regulatory Authority (“FINRA”) on February 28, 2014, and became effective with the OTCQB at the opening of trading on February 28, 2014 under the symbol “TGFND”. The “D” appeared on the Company’s ticker symbol for the following 20 business days. Thereafter, the Company’s ticker symbol became RDFY.
Redify Group, Inc. was incorporated under the laws of Delaware in March 1985 as Mark, Inc. From March 1992 to September 12, 2002 Redify Group, Inc. was known as Digitran Systems, Incorporated ("DSI"), and from September 12, 2002 to October 2, 2013 it was known as TGFIN Holdings, Inc. during which time, TradinGear.com, Incorporated (incorporated under the laws of the State of Delaware on July 7, 1999) became the operating subsidiary of Redify Group, Inc. Redify Group, Inc., then known as TGFIN Holdings, Inc. sold the assets of Tradingear.com Incorporated effective March 31, 2003.
TradinGear currently produces software applications (“Apps”) for telephones and other hand-held devices.
Condensed financial statements
The accompanying consolidated financial statements have been prepared by the Company without audit. They include information of Redify and TradinGear. In the opinion of management, all material adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at September 30, 2014, the results of operations for the three and nine month periods ended September 30, 2014 and 2013, and the cash flows for the nine month periods ended September 30, 2014 and 2013, have been made.
7
REDIFY GROUP INC. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014 and DECEMBER 31, 2013
(Continued)
Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's December 31, 2013 audited financial statements. The results of operations for the three and nine month periods ended September 30, 2014 and 2013 are not necessarily indicative of the operating results for the respective full years.
Revenue recognition
The company sells its current software at the Online Apple Store, which records all sales made on a daily basis. The company recognizes its portion of the sales as revenue as of the date of the sale.
In June 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. This ASU removes the definition of a development stage entity and all incremental financial reporting requirements from U.S. GAAP for development stage entities. Topic 915 Development Stage Entities will be removed from the FASB Accounting Standards Codification The elimination of the development stage entity financial reporting requirements is effective for annual reporting periods beginning after December 15, 2014. A public business entity may adopt this guidance early for any annual reporting period or interim period for which financial statements have not been issued. All other entities may adopt this guidance early for financial statements that have not yet been made available for issue. The Company has not yet adopted this pronouncement but will for the December 31, 2014 audit. Adopting this pronouncement will only have a material impact on the presentation of the financial statements.
NOTE 2: COMMITMENTS AND CONTINGENCIES
Litigation
In the normal course of business, there may be various legal actions and proceedings pending which seek damages against the Company. As of September 30, 2014 there were no claims asserted or threatened against the Company.
NOTE 3: GOING CONCERN QUALIFICATION
The Company has been a Development Stage Company since April 1, 2003. It has continuously sought an acceptable merger or acquisition candidate during that period and has incurred operating losses in virtually every year. At September 30, 2014 the company had a Retained Deficit of $4,486,761. The company’s cash reserves of $3,143 as of September 30, 2014 are not adequate to fund all of the anticipated expenses for the year ending December 31, 2014. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.
The company plans to merge with, acquire existing Apps or companies, and continue to operate during the year ending December 31, 2014. Should the acquired or merged operating entity not have sufficient resources of its own to fund the combined entity’s operations, the Company will issue stock to raise sufficient operating capital if sufficient capital is not raised from operations.
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REDIFY GROUP INC. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014 and DECEMBER 31, 2013
NOTE 4: CONVERTIBLE NOTES PAYABLE
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| September 30, 2014 |
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| December 31, 2013 |
Convertible notes payable | $ | 79,000 |
| $ | 79,000 |
Total Notes payable | $ | 79,000 |
| $ | 79,000 |
The Convertible 8% Notes Payable were originated on various dates in 2010, 2011, 2012, and 2013. The Notes originated in 2010 are convertible into Class A Common Stock of RGI at $.30 per share at any time at the holder’s option. The Notes originated in 2011 are convertible into common stock of RGI at $.15 per share at any time at the holder’s option. The Notes originated in 2012 and 2013 are convertible into common stock of RGI at $.10 per share at any time at the holder’s option. Accrued interest related to these notes as of September 30, 2014 was $20,060. As of September 30, 2014 the Convertible Notes Payable were convertible into 535,000 shares of RGI Class A Common Stock. On October 14, 2014 the company received an additional $5,000 loan under the existing Convertible 8% Note Payable Agreement, convertible into common stock of RGI at $.10 per share.
NOTE 5: STOCK OPTIONS AND WARRANTS
A summary of the status of the Company's outstanding stock options and warrants (all of which were exercisable) as of September 30, 2014 and December 31, 2013 and changes during the periods then ended, is presented below:
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| Nine months ending September 30, 2014 |
| Year ending December 31, 2013 | ||||||
| Warrants |
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| Weighted Average Exercise Price |
| Warrants |
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| Weighted Average Exercise Price |
Outstanding, beginning balance | - |
| $ | - |
| 60,000 |
| $ | .30 |
Granted | 550,000 |
| $ | .50 |
| - |
| $ | - |
Expired/Cancelled | - |
| $ | - |
| (60,000) |
| $ | .30 |
Exercised | - |
| $ | - |
| - |
| $ | - |
Outstanding ending balance | 550,000 |
| $ | .50 |
| - |
| $ | - |
Exercisable | 550,000 |
| $ | .50 |
| - |
| $ | - |
On May 9, 2014 the company issued 550,000 warrants to purchase shares of Class A Common stock at $.50 a share in conjunction with investment terms (offered to and accepted by) two directors. The Investment warrants expire on May 9, 2024.
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REDIFY GROUP INC. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014 and DECEMBER 31, 2013
NOTE 6: CAPITAL STOCK
Common stock
The authorized capital stock of the Company consists of 50,000,000 shares of common stock, par value $0.01 per share, of which 3,512,286 were outstanding at September 30, 2014.
On January 1 and April 1, 2014 the Company awarded 10,000 shares of common stock to each Director and the Chairman in accordance with a Board Resolution. The shares were valued at the market price at the date of issuance of $.17 and $.11, respectively, per share resulting in compensation expense of $4,500, of which $1,125 and $3,600 was recognized in the three and nine months ended September 30, 2014. As of the date of this report, 10,000 of the shares have not been issued, so the Company recognized stock compensation payable of $1,100 as of September 30, 2014.
On May 9, 2014 the company sold 550,000 shares of its common stock for $55,000 or $.10 per share to two investors.
On January 1 and April 1, 2013 the Company awarded 10,000 shares of common stock to each Director and the Chairman in accordance with a Board Resolution. The shares were valued at the market price at the date of issuance of $.10 and $.20, respectively, per share resulting in compensation expense of $4,000, of which $1,000 was recognized in the quarter ended September 30, 2013.
On March 12, and April 22, 2013 the company sold 250,000 shares of its common stock for $50,000 or $.20 per share to two investors.
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REDIFY GROUP INC. AND SUBSIDIARY
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014 and DECEMBER 31, 2013
NOTE 6: CAPITAL STOCK (Continued)
Preferred stock
The Series 1 Class A 8% Cumulative Convertible Preferred Stock has a par value of $0.01 per share. As of September 30, 2014 there were 50,400 shares outstanding. Holders of preferred shares are entitled to cumulative dividends of 8% per annum on the stated value of the stock, designated at $7 per share. Dividends are payable semi-annually on September 15 and March 15. No dividends have been paid since March 15, 1993, resulting in dividends in arrears at September 30, 2014 of approximately $606,816 or $12.04 per share. Dividends are not payable on any other class of stock ranking junior to the preferred stock until the full cumulative dividend requirements of the preferred stock have been satisfied. The preferred stock carries a liquidation preference equal to its stated value plus any unpaid dividends. Holders of the preferred stock are entitled to one-tenth of a vote for each share of preferred stock held. The Company may, at its option, redeem at any time all shares of the preferred stock or some of them upon notice to each preferred stockholder at a per share price equal to the stated value ($7.00) plus all accrued and unpaid dividends thereon (whether or not declared) to the date fixed for redemption, subject to certain other provisions and requirements. Preferred Shares may be converted into Common Shares on a one share of Preferred Stock for two shares of Common Stock basis.
NOTE 7: SUBSEQUENT EVENTS
On October 14, 2014 the company received a $5,000 loan under its existing Convertible 8% Note Payable Agreement, convertible at any time at the holder’s option, into common stock of RGI at $.10 per share.
The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional events to disclose.
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PART 1 FINANCIAL INFORMATION (Continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS
Management's Discussion and Analysis:
The following discussion should be read in conjunction with the consolidated historical financial statements of the Company and related notes thereto included elsewhere in this Form 10-Q and the Annual Report on Form 10-K for the year ended December 31, 2013. This discussion contains forward-looking statements regarding the business and industry of the Company within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current plans and expectations of the Company and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements.
The information set forth and discussed below for the three month and nine month periods ended September 30, 2014 and 2013 is derived from the consolidated financial statements included elsewhere herein. The financial information set forth and discussed below is unaudited but, in the opinion of management, reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of such information. The results of operations of the Company for the fiscal quarter ended September 30, 2014 and the nine month period ended September 30, 2014 may not be indicative of results expected for the entire fiscal year ended December 31, 2014.
Liquidity and Capital Resources:
At its current level of operations, the Company will need to begin profitable operations, borrow and or raise additional capital during the next fiscal year.
Capital expenditures planned for the current year are not expected to be significantly different than those of the previous year.
Results of Operations:
For the quarter ended September 30, 2014:
Operating costs of $35,489 for the three months ended September 30, 2014 increased by $15,410 or 76.9% versus those of the three months ended September 30, 2013, due primarily to the following changes: (1) additional consulting expense of $15,000, or 100%, for sales and marketing support of the company’s updated website and sales proposals (2) an increase in Legal and professional expenses of $5,444, or122.5%, due to the extra work involved in bringing about the corporate actions of the company’s name change and reverse split in 2014, and (3) a decrease in travel reimbursement of $4,700, or 100% in 2014 versus those of the three months ended September 30, 2013.
12
For the nine months ended September 30, 2014:
There was one unusual transaction that made up the vast majority of the variation in the results of operations from 2013 to 2014: The company credited Research and development costs of $255,771, or 100% as a result of the termination of a purchase agreement in the nine months ended September 30, 2013 versus no such activity for the same period in 2014. This unusual transaction occurred during the quarter ended June 30, 2013 and represents $255,771, or 93.8%, of the difference of $272,689 for the nine months ended September 30, 2014.
After removing the unusual transaction described above, the remaining operating costs of $88,644 for the nine months ended September 30, 2014 increased by $16,918 or 23.6% versus those of the nine months ended September 30, 2013, due primarily to the following changes: (1) the additional consulting expense of $25,000, or 100%, for sales and marketing support of the company’s updated website and sales proposals in 2014, (2) an increase in Legal and professional expenses of $9,618, or 47.0%, due to the extra work involved in bringing about the corporate actions of the company’s name change and reverse split in 2014, (3) a decrease of $10,000, or 40.0%, of the costs of imputed labor in 2014 versus 2013 due to the additional work involved in 2013 with respect to an asset acquisition which was later unwound, and (4) a decrease in travel reimbursement of $8,700, or 100% in 2014 versus those of the nine months ended September 30, 2013.
PLAN OF OPERATIONS
Management's Plans are to seek App providers who wish to “equitize” their Apps’ potential by selling their developed App(s) for shares in Redify group Inc.
The company will always be open to other merger or acquisition candidates, depending upon the circumstances and opportunity offered. Management's main objective is to seek to increase shareholder value. All viable alternatives will be evaluated, including, but not limited to: investments, mergers, purchases, or the offering of Company securities, etc. Alternatives that provide existing shareholders with the greatest potential benefit will be favored.
Management encourages its shareholders to communicate directly with the Company for its typical investor relations, including address changes and for general corporate information by calling or writing to the Company at its administrative offices or by posting a message to idev3.com. Management also encourages shareholders to keep their address current with the Company.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This quarterly report includes forward looking statements which involve risks and uncertainties. Such statements can be identified by the use of forward-looking language such as "will likely result", "may", "are expected to", "is anticipated", "estimate", "believes", "projected", or similar words. All statements other than statements of historical fact included in this section, are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations
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will prove to have been correct. The Company's actual results could differ materially from those anticipated in any such forward-looking statements as a result of various risks, including, without limitation, the dependence on a single line of business; the failure to close proposed financing; rapid technological change; inability to attract and retain key personnel; the potential for significant fluctuations in operating results; the loss of a major customer; and the potential volatility of the Company's common stock.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The company operates minimally and has no meaningful assets subject to market risk. Therefore, this item is not applicable given the company’s current operations.
ITEM 4: CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)
of the Securities Exchange Act of 1934 (the “Exchange Act”)), and management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management’s control objectives. You should note that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Based upon the foregoing evaluation, our Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that 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 rules and forms of the SEC, and to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Internal Control Over Financial Reporting
There were no changes in internal control over financial reporting that occurred during the third quarter of 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
ITEM 1 Legal Proceedings
In the normal course of business, there may be various legal actions and proceedings pending which seek damages against the Company. As of September 30, 2014 there were no other claims asserted or threatened against the Company.
ITEM 1A. Risk Factors
This item is not required of smaller reporting companies.
ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds
On May 9, 2014 the company sold 550,000 shares of its common stock for $55,000 or $.10 per share to two investors. The proceeds were used or reserved for general corporate purposes.
ITEM 3 Defaults on Senior Securities
Holders of Series 1 Class A 8% Cumulative Convertible Preferred Stock are entitled to receive cumulative dividends at the annual rate of $.56 per share, payable semi-annually on September 15 and March 15 of each year beginning September 15, 1992. Unpaid dividends have resulted in aggregate dividends in arrears of $606,816. The potential liability for dividends in arrears is contingent upon the Company's declaration of a dividend. The company does not plan to declare a dividend.
ITEM 4 Mine Safety Disclosures
None; not applicable.
ITEM 5 Other Information
None
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ITEM 6 Exhibits
Exhibits
31.1 302 Certification
31.2 302 Certification
32 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 19, 2014
Redify Group Inc.
(Registrant)
By_/s/ Samuel H. Gaer
Samuel H. Gaer, CEO
Principal Executive Officer,
By_/s/ Scott Emerson Lybbert
Scott Emerson Lybbert, CFO
Principal Financial Officer
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