UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR QUARTERLY PERIOD ENDED JUNE 30, 2009
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Transition period from _______________ to ______________
COMMISSION FILE NUMBER: 814-00708
INFINITY CAPITAL GROUP, INC.
----------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 16-1675285
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
80 BROAD STREET, 5TH FLOOR, NEW YORK, NY 10004
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(212) 962-4400
--------------
Registrant's telephone number, including area code
--------------------------------------------------------
(Former name, former address and former fiscal year,
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 proceeding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes[_X_] No[__]
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 (ss.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
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_]
(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_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
As of August 19, 2009 the number of shares outstanding of the registrant's class
of common stock was 6,554,891.
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 2
Balance Sheets as of June 30, 2009 (Unaudited) and December 31, 2008 (Audited) 3
Statements of Operations (Unaudited) for the Three and Six Months Ended
June 30, 2009 and 2008 4
Statements of Cash Flows (Unaudited) for the Six Months Ended
June 30, 2009 and 2008 5
Schedule of Investments as of June 30, 2009 (Unaudited) 6
Statements of Changes in Net Assets for the Six Months Ended June 30, 2009 (Unaudited)
and the Year Ended December 31, 2008 (Audited) 7
Notes to Financial Statements (Unaudited) 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 17
Item 3. Quantitative and Qualitative Disclosures About Market Risk 20
Item 4. Controls and Procedures 20
Item 4T. Controls and Procedures 21
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - NOT APPLICABLE 22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3. Defaults upon Senior Securities - NOT APPLICABLE 22
Item 4. Submission of Matters to a Vote of Security Holders - NOT APPLICABLE 22
Item 5. Other Information 22
Item 6. Exhibits 22
Signatures 23
1
ITEM 1. FINANCIAL STATEMENTS
For financial information, please see the financial statements and the notes
thereto, attached hereto and incorporated by this reference.
The financial statements have been adjusted with all adjustments which, in the
opinion of management, are necessary in order to make the financial statements
not misleading.
The financial statements have been prepared by Infinity Capital Group, Inc.
without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnotes disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted as allowed by such rules
and regulations, and management believes that the disclosures are adequate to
make the information presented not misleading. These financial statements
include all the adjustments which, in the opinion of management, are necessary
for a fair presentation of financial position and results of operations. All
such adjustments are of a normal and recurring nature. These financial
statements should be read in conjunction with the audited financial statements
at December 31, 2008, included in the Company's Form 10-K.
2
INFINITY CAPITAL GROUP, INC.
- ----------------------------------------------------------------------------------------------------------------------------
Balance Sheets
June December
30, 2009 31, 2008
--------------- ---------------
(Unaudited) (Audited)
Assets
Investments in noncontrolled affiliates (Cost - $212,134 and $228,439) $ 737,550 $ 724,075
Controlled Investments (Cost - $232,000) 156,873 244,852
Promissory Note 52,477 27,477
Cash 138 2,891
Deferred offering costs - 4,608
Other assets 19,133 9,775
--------------- ---------------
Total assets $ 966,171 $ 1,013,678
=============== ===============
Liabilities
Accounts payable $ 279,090 $ 266,417
Accrued expenses payable 79,284 56,889
Notes payable 321,570 260,800
--------------- ---------------
Total liabilities 679,944 584,106
--------------- ---------------
Net Assets $ 286,227 $ 429,572
=============== ===============
Composition of net assets
Preferred stock, $0.001 par value,
10,000,000 shares authorized,
none issued or outstanding.
Common Stock. $0.001 par value,
100,000,000 shares authorized 6,554,891 and
6,513,399 issued and outstanding, respectively $ 6,555 $ 6,513
Additional paid-in capital 805,900 765,756
Accumulated income (deficit)
Accumulated net operating (deficit) (1,018,668) (866,226)
Net realized gain on investments, net of tax 186,117 178,794
Net unrealized increase of investments, net of tax 306,323 344,735
--------------- ---------------
Net Assets $ 286,227 $ 429,572
=============== ===============
Net Asset Value Per Share $ 0.04 $ 0.07
=============== ===============
The accompanying notes are an integral part of the financial statements
3
INFINITY CAPITAL GROUP, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the Quarter Ended For the Six Months Ended
June 30, June 30,
2009 2008 2009 2008
------------- -------------- --------------- ---------------
Investment Income
Interest Income 553 465 1,071 466
------------- -------------- --------------- ---------------
Total Investment Income 553 465 1,071 466
------------- -------------- --------------- ---------------
Expenses
Salaries and wages 25,914 6,000 62,995 12,000
Management fees 11,626 14,544 22,730 25,234
Professional fees 4,000 28,943 18,988 48,865
General and administrative 11,346 17,119 19,622 28,848
Interest & Settlement Costs 8,348 2,941 13,164 47,843
------------- -------------- --------------- ---------------
Total Expenses 61,234 69,547 137,499 162,790
------------- -------------- --------------- ---------------
Net Investment Income (Loss) before taxes (60,681) (69,082) (136,428) (162,324)
------------- -------------- --------------- ---------------
Provision for income tax 21,844 (22,485) 16,015 (221,598)
------------- -------------- --------------- ---------------
Net investment income (loss) (82,525) (46,597) (152,443) 59,274
Net realized and unrealized gains (losses):
Net realized gain (loss) on investments
net of tax 7,323 546 7,323 7,882
Net change in unrealized increase (decrease),
net of tax (49,726) 466,683 (38,410) 973,745
------------- -------------- --------------- ---------------
Net realized and unrealized gains (losses) (42,403) 467,229 (31,087) 981,627
------------- -------------- --------------- ---------------
Net increase (decrease) in net assets
from operations $ (124,928) $ 420,632 $ (183,530) $ 1,040,901
============= ============== =============== ===============
Net increase (decrease) in net assets per share
from continuing operations
Basic $ (0.02) $ 0.07 $ (0.03) $ 0.17
Diluted $ (0.02) $ 0.07 $ (0.03) $ 0.16
============= ============== =============== ===============
Weighted average number of shares outstanding
Basic 6,520,314 6,292,417 6,516,857 6,269,508
Diluted 6,520,314 6,332,917 6,516,857 6,310,008
============= ============== =============== ===============
The accompanying notes are an integral part of the financial statements
4
INFINITY CAPITAL GROUP, INC.
Statement of Cash Flows
(Unaudited)
For the Six Months Ended
June 30, June 30,
2009 2008
-------------- ---------------
Cash Flows from Operating Activities:
Net (decrease) increase in net assets from operations $ (183,530) $ 1,040,901
Adjustments to reconcile net increase (decrease) in net assets
from operations to net cash used in operating activities
Change in unrealized (increase) decrease of investments, pre-tax 58,198 (1,475,372)
Proceeds from disposition of investment securities 27,400 33,960
Realized gain on investments, pre-tax (11,095) (11,942)
Net purchase of investments - (338,016)
Loan receivable and accrued interest (26,071) 24,020
Depreciation and amortization 698 462
Deferred offering costs 4,608 -
Grant of stock options to employees 34,995 -
Other assets (8,984) 3,524
Accounts payable 12,673 48,862
Accrued interest and expenses payable 22,395 15,482
Deferred Taxes Payable - 284,088
-------------- ---------------
Net cash provided by (used for)
operating activities (68,713) (374,031)
-------------- ---------------
Cash Flows from Investing Activities
Cash Flows from Financing Activities
Proceeds from notes payable 135,770 145,980
Payments on notes payable (75,000)
Stock issued to purchase investment 82,000
Sale of stock, net of offering costs (1,608) 39,200
Stock issued for note repayment and interest 6,798
Stock issued pursuant to settlement 39,840
-------------- ---------------
Net cash provided by (used for)
financing activities 65,960 307,020
-------------- ---------------
Decrease in Cash (2,753) (67,011)
Cash and Cash Equivalents - Beginning of Period 2,891 67,609
-------------- ---------------
Cash and Cash Equivalents - End of Period $ 138 $ 598
============== ===============
The accompanying notes are an integral part of the financial statements
5
SCHEDULE OF INVESTMENTS
June 30, 2009
(Unaudited)
Original
Date of Original Fair
Shares Warrants Acquisition Cost Value
- ----------------------------------------- ---------- ------------
Common stock in controlled affiliates,
55% of net assets
6,203,960 Jun-08 NPI08, Inc. publicly traded over the counter, $ 232,000 $ 156,873
55% of net assets, education and college
preparation company (1) ---------- ------------
Subtotal $ 232,000 $ 156,873
---------- ------------
Noncontrol Affiliate Investments,
258% of net assets
528,125 (2) Nov-04 Strategic Environmental & Energy Resources, Inc. $ 115,198 $ 589,660
100,000 (3) Mar-08 publicly traded over the counter, 65,221 111,651
125,000 Mar-08 provider of technology-based industrial services 24,490 35,819
in the environmental, energy and rail transport,
258% of net assets (4)
717,500 Aug-04 Lumonall, Inc. publicly traded over the counter, $ 7,225 $ 420
global supplier of photoluminescent products,
0% of net assets (5) ---------- ------------
Subtotal $ 212,134 $ 737,550
---------- ------------
TOTAL INVESTMENTS $ 444,134 $ 894,423
========== ============
(1) Acquired for a total of $150,000 cash and 102,500 shares of Infinity common stock
(2) Company reverse split the stock at 1 for 4 shares January 22, 2008
(3) Note plus $50,000 cash exchanged for Shares and Warrants of SENR
(4) Formerly Satellite Organizing Systems, Inc.
(5) Formerly Midland International Corporation
The accompanying notes are an integral part of the financial statements
6
INFINITY CAPITAL GROUP, INC.
Statements of Changes in Net Assets
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DEC. 31,
2009 2008
------------------ -------------------
UNAUDITED AUDITED
Changes in net assets from operations:
Net investment loss $ (152,443) $ (170,628)
Net realized gain (loss) on investments, net of tax 7,323 (28,410)
Net change in unrealized increase (decrease), net of tax (38,410) 292,651
------------------ -------------------
Net (decrease) increase in net assets from operations (183,530) 93,612
------------------ -------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from issuance of common stock, net of offering costs (1,608) 175,001
Issuance of common stock for debt and interest 6,798 -
Grant of employee stock options 34,995 56,205
------------------ -------------------
Net increase in net assets from stock transactions 40,185 231,206
------------------ -------------------
Net (decrease)increase in net assets (143,345) 324,818
Net assets at beginning of year 429,572 104,754
------------------ -------------------
NET ASSETS AT END OF PERIOD $ 286,227 $ 429,572
================== ===================
The accompanying notes are an integral part of the financial statements
7
INFINITY CAPITAL GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Infinity Capital Group, Inc. ("ICG", the "Company"), was incorporated in the
State of Maryland on July 8, 2003. ICG is a non-diversified, closed-end
management investment company that has elected to be treated as a Business
Development Company ("BDC") under the Investment Company Act of 1940 ("1040
Act").
On April 29, 2005, the Company entered into a Plan of Merger with Fayber Group,
Inc. ("Fayber"). The Company acquired all of the outstanding shares of Fayber
for the purposes of accomplishing the Merger of the Company and Fayber. All
shares of Fayber were retired by virtue of the merger. The Merger was completed
on May 2, 2005 with the Company as the surviving corporation. The Company
acquired 100% of Fayber in exchange for 100,000 shares of common stock and a
$20,000 Promissory Note.
As a BDC, the Company must be primarily engaged in the business of furnishing
capital and making available managerial assistance to companies that generally
do not have ready access to capital through conventional financial channels.
Such companies are termed "portfolio" companies.
The Company invests in portfolio companies that management identifies as
emerging growth companies positioned to benefit from additional financing and
managerial assistance. The portfolio companies frequently have little or no
prior operating history. The Company intends on investing in emerging growth
companies, defined as (A) publicly traded companies whose market for their
securities are thinly traded which may be caused by a shift in business
direction, change in market or industry in which they operate, or various other
factors causing their stock and trading in their stock to not be in or fall out
of favor; (B) publicly traded companies that have a market capitalization under
$250 million and seek expansion or mezzanine capital to implement growth
strategies executable within 12-24 months; and (C) private companies seeking
expansion or mezzanine financing and which wish to access the equity capital
markets within the next 12 months.
The Company received a letter from the Securities and Exchange Commission dated
August 14, 2009 detailing comments on the Company's Regulation E filing in the
second quarter of 2009. The Company is reviewing the comments and if it is
determined the Company has a material weakness in its internal control over
financial reporting, this will be noted in future filings and the Company will
take corrective action to insure adequate internal control over financial
reporting is in place.
8
INFINITY CAPITAL GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (continued)
The accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position as of
June 30, 2009, and the results of operations and cash flows for all periods
presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. These financial
statements should be read in conjunction with the audited financial statements
and related notes and schedules included in the Company's 2008 Annual Report
filed dated December 31, 2008. The results of operations for the periods ended
June 30, 2009 and 2008 are not necessarily indicative of the operating results
for the full years.
GOING CONCERN
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company's current
liabilities exceed the current assets by $608,196 at June 30, 2009.
The Company's ability to continue as a going concern is dependent upon its
ability to develop additional sources of capital or locate a merger candidate
and ultimately, achieve profitable operations. There can be no assurance that
the Company will be successful in obtaining such financing, or that it will
attain positive cash flow from operations. Management believes that actions
presently being taken provide the opportunity for the Company to continue as a
going concern. The accompanying financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
Management is seeking new capital to carry forward the purposes of the Company.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:
In December 2007, the FASB issued FASB Statement No. 160 "Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB No. 51"
("SFAS No. 160"), which causes noncontrolling interests in subsidiaries to be
included in the equity section of the balance sheet. SFAS No. 160 applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008, except for the presentation and disclosure requirements,
which shall be applied retrospectively for all periods presented. The Company
will adopt this standard at the beginning of the Company's fiscal year ending
December 31, 2008 for all prospective business acquisitions. The Company has not
determined the effect that the adoption of SFAS No. 160 will have on the
financial results of the Company.
9
INFINITY CAPITAL GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION (continued)
In March 2008, the Financial Accounting Standards board (FASB) issued Statement
of Financial Accounting Standards No. 161, "Disclosures about Derivative
Instruments and Hedging Activities" (SFAS 161). SFAS 161 is effective for fiscal
years and interim periods beginning after November 15, 2008. SFAS 161 requires
enhanced disclosures about Fund's derivative and hedging activities. Management
is currently evaluating the impact the adoption of SFAS 161 will have on the
Company's financial statement disclosures.
The FASB has revised SFAS No. 141. This revised statement establishes uniform
treatment for all acquisitions. It defines the acquiring company. The statement
further requires an acquirer to recognize the assets acquired, the liabilities
assumed, and any non-controlling interest in the acquired at the acquisition
date, measured at their fair market values as of that date. It requires the
acquirer in a business combination achieved in stages to recognize the
identifiable assets and liabilities, as well as the non-controlling interest in
the acquired, at the full amounts of their fair values. This changes the way
that minority interest is recorded and modified as a parent's interest in a
subsidiary changes over time. This statement also makes corresponding
significant amendments to other standards that related to business combinations,
namely, 109, 142 and various EITF's. This statement applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. The Company believes the implementation of this standard will have no
effect on our financial statements.
In May 2008, FASB issued SFAS 162, "The Hierarchy of Generally Accepted
Accounting Principles". Effective 60 days following the SEC's approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles. The Board does not expect that this Statement will result in a
change in current practice. However, transition provisions have been provided in
the unusual circumstance that the application of the provisions of this
Statement results in a change in practice. The Company believes the
implementation of this standard will have no effect on our financial statements.
In May, 2008 FASB issued SFAS 163. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement also clarifies how Statement 60
applies to financial guarantee insurance contracts, including the recognition
and measurement to be used to account for premium revenue and claim liabilities.
Those clarifications will increase comparability in financial reporting of
financial guarantee insurance contracts by insurance enterprises. This Statement
requires expanded disclosures about financial guarantee insurance contracts. The
Company believes the implementation of this standard will have no effect on our
financial statements.
10
INFINITY CAPITAL GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 2 - INVESTMENTS
As of June 30, 2009, the Company has made investments in five target companies
that total approximately $593,000 in funded capital. We have completed the
following transactions:
- -------------------------------------------------------- ------ ------------------ -- ----------------------- --- -----------
PORTFOLIO COMPANY DATE INVESTMENT COST
- -------------------------------------------------------- ------ ------------------ -- ----------------------- --- -----------
Strategic Environmental & Energy Resources, Inc.* November 2004 Common stock 121,336
- -------------------------------------------------------- ------ ------------------ -- ----------------------- --- -----------
Strategic Environmental & Energy Resources, Inc.* March 2008 Common stock 75,510
- -------------------------------------------------------- ------ ------------------ -- ----------------------- --- -----------
Strategic Environmental & Energy Resources, Inc.* March 2008 Warrants 24,490
- -------------------------------------------------------- ------ ------------------ -- ----------------------- --- -----------
Heartland, Inc. September 2004 Common stock 12,500
- -------------------------------------------------------- ------ ------------------ -- ----------------------- --- -----------
Fluid Media Networks May 2007 Common stock 85,000
- -------------------------------------------------------- ------ ------------------ -- ----------------------- --- -----------
Lumonall, Inc. ** August 2004 Common stock 42,100
- -------------------------------------------------------- ------ ------------------ -- ----------------------- --- -----------
NPI08, Inc. June 2008 Common stock 232,000
- -------------------------------------------------------- ------ ------------------ -- ----------------------- --- -----------
TOTAL 592,936
- -----------------------------------------------------------------------------------------------------------------------------
*In January 2008, Satellite Organizing Solutions, Inc. changed its name to
Strategic Environmental & Energy Resources, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
**On July 18, 2005, Azonic Corporation changed its name to Midland International
Corporation. On August 16, 2007, Midland International Corporation changed its
name to Lumonall, Inc.
- -----------------------------------------------------------------------------------------------------------------------------
In September of 2008, the Company acquired an 87.5% interest in NPI08 for
$232,000 consisting of 102,500 shares in Company stock and $150,000 cash. NPI08
is a publicly traded shell which the Company intends to hold for possible future
merger or acquisition.
Investments are stated at "value" as defined in the 1940 Act and in the
applicable regulations of the Securities and Exchange Commission. Value, as
defined in Section 2(a) (41) of the 1940 Act, is (i) the market price for those
securities for which a quotation is readily available and (ii) the fair value as
determined in good faith by, or under the direction of, the Board of Directors
for all other assets.
11
INFINITY CAPITAL GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 2 - INVESTMENTS (continued)
The Company, as a BDC, will generally invest in illiquid and restricted
securities. The Company's investments may be subject to certain restrictions on
resale and may have no ready trading market. The Company values substantially
all of its investments at fair value as determined in good faith by the Board of
Directors in accordance with the Company's valuation policy. The Company
determines fair value to be the amount for which an investment could be
exchanged in orderly disposition over a reasonable period of time between
willing parties rather than in a forced or liquidation sale. Factors that the
Board of Directors may consider in determining fair value of an individual
investment are financial performance and condition, business plan and progress
towards plan, restrictions on the investment securities, liquidity, trading
activity, financing activity and relative valuation to comparable companies.
With respect to our investments for which market quotations are not readily
available and/or investments subject to restrictions, our Board of Directors
recently adopted a multi-step valuation process for each quarter as described
below:
1) Management reviews all investments and summarizes current status:
2) An independent valuation firm conducts independent appraisals of all
investments;
3) The audit committee of our board of directors reviews the managements
summary and the report of the independent valuation firm and
supplements with additional comments; and
4) The Board of Directors discusses valuation and determines the fair
value of each investment in our portfolio in good faith based on the
input of management, the independent valuation firm and the audit
committee.
This policy became effective for the quarter ending September 30, 2006. Previous
to adopting this process management communicated informally with the independent
valuation firm whose report was submitted to the board of directors for review
and comment. The audit committee was formed in April 2006 and has reviewed the
valuation reports and financial statements beginning with the quarter ended June
30, 2006.
12
INFINITY CAPITAL GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 2 - INVESTMENTS (continued)
Without a readily available market value, the value of the Company's portfolio
of equity securities may differ significantly from the values that would be
placed on the portfolio if there existed a ready market for such equity
securities. All equity securities owned at June 30, 2009 and December 31, 2008
are stated at fair value as determined by the Board of Directors, in the absence
of readily available fair values. The Company generally uses the first-in,
first-out (FIFO) method of accounting for sales of its investments but will
sometimes sell specifically identified investments or shares.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company for the six ended June 30, 2009 and 2008 incurred expenses of
approximately $22,730 and $25,234 respectively to a company affiliated through
an Officer & Director for management fees and expenses.
NOTE 4 - NOTES PAYABLE & INTEREST EXPENSE
During the six months ended June 30, 2009 the Company issued new notes to
individuals totaling $135,770 and retired $75,000 in existing notes payable. As
partial compensation for a new $125,000 note the Company transferred 15,000
shares of its investment in SENR to the lender and the lender will receive 10%
of the post-merger retained interest upon consummation of an equity transaction
involving NPIE. The 15,000 shares of SENR have been recorded as a financing cost
and the cost related to the 10% of NPIE will be recorded upon consummation of a
triggering transaction.
As of June 30, 2009 $195,820 in notes payable plus related accrued interest are
in default for lack of repayment by their due date. For the six month period
ended June 30, 2009 the Company incurred interest expense on notes payable of
$13,164.
NOTE 5 - STOCKHOLDERS' EQUITY
During the six months ended June 30, 2009 the Company issued 7,500 shares of
common stock for cash, 21,492 shares of common stock as payment of interest
expense on a note payable and 12,500 shares of common stock as partial repayment
of a note payable.
13
INFINITY CAPITAL GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 6 - STOCK BASED COMPENSATION PLANS
The Company accounts for stock-based compensation in accordance with SFAS No.
123R, "Share-Based Payment," using the fair value recognition provisions of SFAS
No. 123, "Accounting for Stock-Based Compensation." The Company recognized
expense under SFAS No. 123R in the amount of $34,995 for the six months ended
June 30, 2009. 196,000 options were granted in the period of which 50,000 vested
immediately, 73,000 vest on the one year anniversary and 73,000 vest on the two
year anniversary. The cost of options vesting immediately was recorded in the
period and the cost of options vesting in the future is being recorded on a
straight-line basis over the vesting period. The related impact on basic and
diluted earnings per share for the six months ended June 30, 2009 was less than
$0.01 per share. There was no impact on the Company's cash flow.
The Company's stock incentive plan is the Infinity Capital Group, Inc. 2008
Stock Option Plan (the "Plan") which is shareholder approved. The Plan provides
for the grant of non-qualified stock options to selected employees and
directors. The Plan is administered by the Compensation Committee of the Board
and authorizes the grant of options 970,934. The Compensation Committee
determines which eligible individuals are to receive options or other awards
under the Plan, the terms and conditions of those awards, the applicable vesting
schedule, the option price and term for any granted options, and all other terms
and conditions governing the option grants and other awards made under the
Plans.
The fair value of each option award was estimated on the date of grant using the
Black-Scholes option valuation model using the assumptions noted as follows:
expected volatility was based on historical trading in the company's stock from
inception of trading on September 11, 2008 through the January 2, 2009 which was
the last day of trading before the options were issued. The expected term of
options granted was determined using the simplified method under SAB 107 and
represents one-half the exercise period. The risk-free rate is calculated using
the U.S. Treasury yield curve, and is based on the expected term of the option.
The Company has estimated there will be no forfeitures.
During the six months ended June 30, 2009, Joseph M. Chiappetta, the Company's
Vice-President of Corporate Development, was issued an option exercisable for
196,000 shares of the Company's common stock. The Black-Scholes option pricing
model was used with the following weighted-average assumptions for options
granted during the six months ended June 30, 2009:
Risk-free interest rate 1.67%
Expected option life 10.0 years
Expected volatility 87.71%
Expected dividend yield 0.0%
14
INFINITY CAPITAL GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 6 - STOCK BASED COMPENSATION PLANS (continued)
Further information relating to stock options is as follows:
Weighted
Weighted Average
Number Average Remaining
of Exercise Contract
Shares Price Life (years)
----------- ------------- -------------
Outstanding options at 12/31/08 404,000 $ 0.80 9.10
Granted 196,000 0.50 9.55
Exercised - - -
Forfeited/expired - - -
----------- ------------- -------------
Outstanding options at 6/30/09 600,000 $ 0.70 9.23
=========== ------------- -------------
Exercisable on 6/30/09 454,000 $ 0.77 9.14
The options have a contractual term of ten years. The aggregate intrinsic value
of shares outstanding and exercisable was $0 at June 30, 2009 as the market
price of the Company's common stock was below the weighted-average exercise
price of all of the options. Total intrinsic value of options exercised was $0
for the six months ended June 30, 2009 as no options were exercised during this
period.
At June 30, 2009, shares available for future stock option grants to employees
and directors under the 2008 Stock Option Plan were 370,934.
NOTE 7 - EMPLOYMENT CONTRACTS
On April 20, 2006 Gregory Laborde and Theodore A. Greenberg signed employment
contracts with the Company with annual compensation set at $90,000 for each. Mr.
Greenberg has agreed to reduced compensation of $2,000 per month until the
Company has completed its planned Regulation E offering for at least $1,500,000
and to defer a proportionate amount of his compensation if the offering raises
less than $3,000,000. Such deferral until the Company has raised additional
capital or sufficient income from fees and/or investments is achieved. In lieu
of Mr. Laborde's salary, management fees have been paid to a company he is
affiliated with. These fees have been in an amount lower than the contractual
amount. Mr. Laborde and Mr. Greenberg have agreed to waive all salary amounts
due under their contracts which were not paid or accrued by June 30, 2009.
15
INFINITY CAPITAL GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009
(Unaudited)
NOTE 7 - EMPLOYMENT CONTRACTS
On January 5, 2009, Joseph M. Chiappetta signed an employment contract with the
Company with an annual compensation set at $60,000. As part of Mr. Chiappetta's
contract he received a stock option grant of 196,000 options of which 50,000
vested immediately. The option grant was in lieu of Mr. Chiappetta's first two
months salary. On June 5, 2009 Mr. Chiappetta's employment contract was amended
by both parties to reflect an annual compensation level of $12,000.
NOTE 8 - FINANCIAL HIGHLIGHTS
The following is a schedule of financial highlights for the six month period
ended June 30, 2009 and the year ended December 31, 2008.
SIX MONTHS ENDED YEAR ENDED
JUN 30, DEC 31,
2009 2008
------------- -------------
Per share information
Net asset value, beginning of period 0.07 0.02
------------- -------------
Net investment (loss) (1) (0.03) (0.03)
Net realized and unrealized gain (loss) (1) (0.01) 0.04
------------- -------------
Net(decrease) increase in net assets
resulting from operations (1) (0.04) 0.01
Issuance of common stock, warrants
and other new equity (1) 0.01 0.04
------------- -------------
Net asset (deficit) value, end of period 0.04 0.07
============= =============
Per share market value, end of period(2) $ 0.40 $ 0.50
Total Return Based Upon Net Asset Value -41% 62%
Ratios and Supplemental Data
Net assets (deficit), end of year/period 286,227 429,572
Common shares outstanding at end of year 6,554,891 6,513,399
Diluted weighted average number of
shares outstanding during the year 6,516,857 6,573,138
Ratio of expenses to average net assets (3) 69% 41%
Ratio of net increase (decrease) in net assets
from operations to average net assets (3) -94% 12%
Average Debt Outstanding 283,997 216,364
Average Debt Per Share (1) 0.04 0.03
(1) Calculated based on diluted weighted average number of shares outstanding
during the year.
(2) Shares are thinly traded, price shown is last trade prior to statement date
(3) Annualized for interim period
16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED
FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN. IN CONNECTION WITH, AND
BECAUSE WE DESIRE TO TAKE ADVANTAGE OF, THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WE CAUTION READERS REGARDING
CERTAIN FORWARD LOOKING STATEMENTS IN THE FOLLOWING DISCUSSION AND ELSEWHERE IN
THIS REPORT AND IN ANY OTHER STATEMENT MADE BY, OR ON OUR BEHALF, WHETHER OR NOT
IN FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING
STATEMENTS ARE STATEMENTS NOT BASED ON HISTORICAL INFORMATION AND WHICH RELATE
TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS.
FORWARD LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS
THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY
OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE.
THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING
STATEMENTS MADE BY, OR ON OUR BEHALF. WE DISCLAIM ANY OBLIGATION TO UPDATE
FORWARD-LOOKING STATEMENTS.
OVERVIEW
Infinity Capital Group is a non-diversified, closed-end management investment
company that has elected to be treated as a Business Development Company ("BDC")
under the Investment Company Act of 1940 ("1940 Act"). As a BDC, the Company
must be primarily engaged in the business of furnishing capital and making
available managerial assistance to companies that generally do not have ready
access to capital through conventional financial channels. Such companies are
termed "portfolio" companies.
The Company invests in portfolio companies that management identifies as
emerging growth companies positioned to benefit from additional financing and
managerial assistance. The portfolio companies frequently have little or no
prior operating history. The Company intends on investing in emerging growth
companies, defined as (A) publicly traded companies whose market for their
securities are thinly traded which may be caused by a shift in business
direction, change in market or industry in which they operate, or various other
factors causing their stock and trading in their stock to not be in or fall out
of favor; (B) publicly traded companies that have a market capitalization under
$250 million and seek expansion or mezzanine capital to implement growth
strategies executable within 12-24 months; and (C) private companies seeking
expansion or mezzanine financing and which wish to access the equity capital
markets within the next 12 months.
On January 5, 2009, Infinity Capital Group, Inc. appointed Joseph M. Chiappetta
as Vice President of Corporate Development and Managing Director with
responsibility for Strategic Planning and Business Development. Mr. Chiappetta
will focus on developing Infinity's strategic relationships and building
Infinity's capital base.
The Company received a letter from the Securities and Exchange Commission dated
August 14, 2009 detailing comments on the Company's Regulation E filing in the
second quarter of 2009. The Company is reviewing the comments and if it is
determined the Company has a material weakness in its internal control over
financial reporting, this will be noted in future filings and the Company will
take corrective action to insure adequate internal control over financial
reporting is in place.
The Company has no plans at this time for purchases or sales of fixed assets
which would occur in the next twelve months.
The Company has no expectation or anticipation of significant changes in number
of employees in the next twelve months; it may acquire or add employees of an
unknown number in the next twelve months.
17
RESULTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2009 COMPARED TO THE THREE MONTH
PERIOD ENDED JUNE 30, 2008.
The Company recognized $553 in investment income during the three month period
ended June 30, 2009. During the three month period ended June 30, 2008, the
Company recognized investment income of $465. The increase of $88 was a result
of interest income.
Total expenses during the three month period ended June 30, 2009 were $61,234
compared to $69,547 during the three month period ended June 30, 2008. The
decrease of $8,313 was a result of a decrease of $24,943 in professional fees
related to the one time use of a project consultant and a decrease in general
and administrative costs of $5,773. The decrease was offset by a $19,914
increase in salaries and wages resulting from accrued salary and a stock option
grant to Joseph M. Chiappetta who joined the Company in 2009 and an increase of
$5,407 in interest expense and settlement costs.
During the three month period ended June 30, 2009, the Company had a net
investment loss of $82,525 compared to a net investment loss of $46,597 in the
three month period ended June 30, 2008. The increased loss of $35,298 is a
result of a change in provision for income tax of $44,329 resulting from lower
cumulative offset of net operating losses against unrealized investment gains
offset by the $8,313 decrease in total expenses, described above.
During the three month period ended June 30, 2009, the Company had net realized
and unrealized losses of $42,403 compared to net realized and unrealized gains
of $467,229 during the three month period ended June 30, 2008. The decrease of
$509,632 was a result of gains in the three month period ended June 30, 2008
from the Company's investment in Strategic Environmental and Energy Solutions
which did not repeat in the three month period ended June 30, 2009.
During the three month period ended June 30, 2009, the Company had a net
decrease in net assets from operations of $124,928 compared to a net increase in
net assets of $420,632 during the three month period ended June 30, 2008. The
change in net assets was a result of the decrease in net realized and unrealized
gains, the decrease in investment income and the decrease in total expenses, as
discussed above. Net assets per share from operations decreased $0.02 per share
during the three month period ended June 30, 2009 and increased by $0.07 per
share during the three month period ended June 30, 2008.
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2009 COMPARED TO THE SIX MONTH PERIOD
ENDED JUNE 30, 2008.
The Company recognized $1,071 in investment income during the six month period
ended June 30, 2009. During the six month period ended June 30, 2008, the
Company recognized investment income of $466. The increase of $605 was a result
of interest income.
Total expenses during the six month period ended June 30, 2009 were $137,499
compared to $162,790 during the six month period ended June 30, 2008. The
decrease of $25,291 was a result of a decrease of $29,877 in professional fees
related to the one time use of a project consultant, a decrease in general and
administrative costs of $9,226 and a decrease of $34,679 in interest expense and
settlement costs. The decrease was offset by a $50,995 increase in salaries and
wages resulting from accrued salary and a stock option grant to Joseph M.
Chiappetta who joined the Company in 2009.
During the six month period ended June 30, 2009, the Company had a net
investment loss of $152,443 compared to net investment income of $59,274 in the
six month period ended June 30, 2008. The increased loss of $211,717 is a result
of a change in provision for income tax of $237,613 resulting from lower
cumulative offset of net operating losses against unrealized investment gains
offset by the $25,291 decrease in total expenses, described above.
During the six month period ended June 30, 2009, the Company had net realized
and unrealized losses of $31,087 compared to net realized and unrealized gains
of $981,627 during the six month period ended June 30, 2008. The decrease of
18
$1,012,714 was a result of gains in the six month period ended June 30, 2008
from the Company's investment in Strategic Environmental and Energy Solutions
which did not repeat in the six month period ended June 30, 2009.
During the six month period ended June 30, 2009, the Company had a net decrease
in net assets from operations of $183,530 compared to a net increase in net
assets of $1,040,901 during the six month period ended June 30, 2008. The change
in net assets was a result of the decrease in net realized and unrealized gains,
the decrease in investment income and the decrease in total expenses, as
discussed above. Net assets per share from operations decreased $0.03 per share
during the six month period ended June 30, 2009 and increased by $0.17 per share
during the six month period ended June 30, 2008.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a cash balance at June 30, 2009 of $138 compared to $2,891 at
December 31, 2008. Current liabilities exceed current assets by $608,196. The
Company had $737,550 in non-controlled affiliate investments and $156,873 in
controlled investments at June 30, 2009. The Company expects to raise capital in
connection with a Regulation E offering and anticipates that the funds available
from the offering would provide required working capital for the next twelve
months. The Company filed a new Regulation E offering circular with the
Securities and Exchange Commission in the second quarter of 2009. The Company
received a letter from the Securities and Exchange Commission dated August 14,
2009 detailing comments on the Company's Regulation E filing in the second
quarter of 2009; until such comments are cleared and any necessary changes are
made, the Company will not be able to sell securities under Regulation E.
The notes payable of the Company increased from $260,800 as of June 30, 2008 to
$321,570 as of June 30, 2009. This net increase was attributable to the
following: (i) In the fourth quarter of 2008, the Company sold a $7,800 of
promissory note to Theodore A. Greenberg the proceeds of which were uses for
general corporate purposes (ii) In the first quarter of 2009, the Company sold
$8,820 in promissory notes to two individuals, the proceeds of which were used
for general corporate purposes (iii) In the second quarter 2009, the Company
sold $126,950 in promissory notes to two individuals, the proceeds of which were
used to repay $75,000 in existing notes payable and for general corporate
purposes.
During the six month period ended June 30, 2009, the Company used $68,713 in
operating activities. During the six month period ended June 30, 2008, the
Company used $374,031 in operating activities. The decrease of $305,318 was due
to the Company's investments in Strategic Environmental and Energy Services and
NPI08, Inc. during the six month period ended June 30, 2008. During the six
month period ended June 30, 2009, the Company had a increase in other assets of
$8,984, an increase in accounts payable of $12,673 and an increase in accrued
expenses of $22,395.
During the six month period ended June 30, 2009, the Company did not use or
receive funds from investing activities. During the six month period ended June
30, 2009, the Company received net funds of $65,960 from financing activities.
The Company received funds of $135,770 from promissory notes, repaid $75,000 in
promissory notes and $5,190 from sale of stock and stock issued to repay notes
payable and interest expense, net of offering costs. During the six month period
ended June 30, 2008, the Company received funds of $307,820 from its financing
activities that included $145,980 from promissory notes, and $161,040 from sale
of stock, stock issued as part of the Company's investment in NPI08, Inc. and
stock issued as part of a settlement with one of the Company's creditors, net of
offering costs.
NEED FOR ADDITIONAL FINANCING
The Company had an operating loss during the six month period ended June 30,
2009 and while the Company had an operating profit during the six month period
ended June 30, 2008, the Company may have operating losses in the future unless
adequate income can be achieved to meet expenses. While the Company is seeking
capital sources for investment, there is no assurance that sources can be found.
In addition, the United States and the global business community has experienced
severe instability in the commercial and investment banking systems which is
likely to continue to have far-reaching effects on the economic activity in the
country for an indeterminable period. The long-term impact on the United States
19
economy and the Company's operating activities and ability to raise capital
cannot be predicted at this time, but may be substantial.
No commitments to provide additional funds have been made by management or other
stockholders. Accordingly, there can be no assurance that any additional funds
will be available to the Company to allow it to cover expenses as they may be
incurred.
GOING CONCERN
The Company has a deficit in working capital and assets, which may be illiquid.
Management plans to fund operations of the Company through interest bearing
advances from existing shareholders and the sale of its securities including in
its Regulation E offering, until such time as a business combination or other
profitable investment may be achieved.
There are no written agreements in place for such funding, and there can be no
assurance that such funding will be available in the future.
The critical assumption made by management of the Company is that the Company
will continue to operate as a going concern. The Company's auditors have
expressed a concern that the Company may not be able to continue as a going
concern.
The independent registered public accounting firm's report on the Company's
financial statements as of December 31, 2008 and 2007 includes a "going concern"
explanatory paragraph that describes substantial doubt about the Company's
ability to continue as a going concern.
The Company may raise additional capital through the sale of its equity
securities, through an offering of debt securities, or through borrowings from
financial institutions or individuals. Management believes that actions
presently being taken to obtain additional funding provide the opportunity for
the Company to continue as a going concern."
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable
ITEM 4. CONTROLS AND PROCEDURES
Disclosures Controls and Procedures
The Company maintains a system of disclosure controls and procedures that are
designed for the purposes of ensuring that information required to be disclosed
in our SEC reports is recorded, processed, summarized, and reported within the
time periods specified in the SEC rules and forms, and that such information is
accumulated and communicated to our management, including the Chief Executive
Officer as appropriate to allow timely decisions regarding required disclosure.
Management, after evaluating the effectiveness of the Company's disclosure
controls and procedures as defined in Exchange Act Rules 13a-14(c) as of June
30, 2009 (the "Evaluation Date") concluded that as of the Evaluation Date, the
Company's disclosure controls and procedures were effective to ensure that
material information relating to the Company would be made known to them by
individuals within those entities, particularly during the period in which this
annual report was being prepared and that information required to be disclosed
in our SEC reports is recorded, processed, summarized, and reported within the
time periods specified in the SEC's rules and forms.
20
The Company received a letter from the Securities and Exchange Commission dated
August 14, 2009 detailing comments on the Company's Regulation E filing in the
second quarter of 2009. The Company is reviewing the comments and if it is
determined the Company has a material weakness in its internal control over
financial reporting, this will be noted in future filings and the Company will
take corrective action to insure adequate internal control over financial
reporting is in place.
ITEM 4T. CONTROLS AND PROCEDURES
Management's Quarterly Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company in accordance with as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes
those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our
assets;
(ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations
of our management and directors; and
(iii)provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of our assets that
could have a material effect on our financial statements.
Management's assessment of the effectiveness of the Registrant's internal
control over financial reporting is as of the quarter ended June 30, 2009. We
believe that internal control over financial reporting is effective. We have not
identified any, current material weaknesses considering the nature and extent of
our current operations and any risks or errors in financial reporting under
current operations.
The Company received a letter from the Securities and Exchange Commission dated
August 14, 2009 detailing comments on the Company's Regulation E filing in the
second quarter of 2009. The Company is reviewing the comments and if it is
determined the Company has a material weakness in its internal control over
financial reporting, this will be noted in future filings and the Company will
take corrective action to insure adequate internal control over financial
reporting is in place.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
This quarterly report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this annual report.
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended June 30, 2009, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
21
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the six months ended June 30, 2009, the Company granted 196,000 options
to purchase Company stock at $0.50 per share and a term of 10 years to an
officer of the Company.
Exemption From Registration Claimed
All of the sales by the Company of its unregistered securities were made by the
Company in reliance upon Section 4(2) of the Securities Act of 1933, as amended
(the "1933 Act"). The individual and/or entity listed above that received the
unregistered securities was known to the Company and its management, through
pre-existing business relationships. The individual and/or entity was provided
access to all material information, which was requested, and all information
necessary to verify such information and were afforded access to management of
the Company in connection with the issuance. The individual and/or entity of the
unregistered securities acquired such securities for investment and not with a
view toward distribution, acknowledging such intent to the Company. All
certificates or agreements representing such securities that were issued
contained restrictive legends, prohibiting further transfer of the certificates
or agreements representing such securities, without such securities either being
first registered or otherwise exempt from registration in any further resale or
disposition.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
The Company received a letter from the Securities and Exchange Commission dated
August 14, 2009 detailing comments on the Company's Regulation E filing in the
second quarter of 2009. The Company is reviewing the comments and if it is
determined the Company has a material weakness in its internal control over
financial reporting, this will be noted in future filings and the Company will
take corrective action to insure adequate internal control over financial
reporting is in place.
ITEM 6. EXHIBITS
The following is a complete list of exhibits filed as part of this Form 10-Q.
Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of
Regulation S-K.
EXHIBIT NO. DESCRIPTION
- ------------------ -----------------------------------------------------
31.1 Section 302 Certification - CEO
31.2 Section 302 Certification - CFO
32.1 Section 906 Certification - CEO
32.2 Section 906 Certification - CFO
22
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
INFINITY CAPITAL GROUP, INC.
-------------------------------------
(Registrant)
Dated: August 19, 2009 BY: /s/Gregory H. Laborde
-------------------------------------
Gregory H. Laborde,
Principal Executive Officer,
President & Chief Executive Officer
Dated: August 19, 2009 BY: /s/Theodore A. Greenberg
-------------------------------------
Theodore A. Greenberg,
Principal Accounting Officer,
Chief Financial Officer,
Chief Investment Officer &
Secretary
23