INFINITE GROUP INC 10-Q for FY2021 Q1

INFINITE GROUP INC (IMCI)

10-Q 2021-05-17 For: 2021-03-31

Added on April 06, 2026

About this 10-Q

INFINITE GROUP INC filed this 10-Q on May 17, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.82M; down 4.0% from $1.9M a year earlier
Net loss: $152.23K; compared with a net loss of $6062 a year earlier

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Common Stock, $0.001 par value per share	IMCI	OTC Bulletin Board
(Title of each class)	(Trading Symbol)	(Name of each exchange on which registered)

Infinite Group, Inc.
Quarterly Report on Form 10-Q
For the Period Ended March 31, 2021

Table of Contents

PART I - FINANCIAL INFORMATION	PAGE

Item 1. Financial Statements

Balance Sheets – March 31, 2021 (Unaudited) and December 31, 2020	3

Statements of Operations (Unaudited) for the three months ended March 31, 2021 and 2020	4

Statements of Stockholders’ Deficiency (Unaudited) for the three months ended March 31, 2021 and 2020	5

Statements of Cash Flows (Unaudited) for the three months ended March 31, 2021 and 2020	6

Notes to Financial Statements – (Unaudited)	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 3. Quantitative and Qualitative Disclosures About Market Risk	15

Item 4. Controls and Procedures	15

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	16

Item 1A. Risk Factors	16

Item 6. Exhibits	16

SIGNATURES	17

INFINITE GROUP, INC. BALANCE SHEETS
	March 31,	December 31,
	2021 (Unaudited)	2020
ASSETS
Current assets:
Cash	$42,472	$32,313
Accounts receivable, net of allowance of $10,089	794,997	953,826
Prepaid expenses and other current assets	107,332	96,483
Total current assets	944,801	1,082,622
Right of use asset – lease, net	101,402	120,777
Property and equipment, net	46,905	48,199
Software, net	377,996	354,905
Deposit	6,937	6,937
Total assets	$1,478,041	$1,613,440

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
Accounts payable	$297,582	$343,073
Accrued payroll	427,255	353,268
Accrued interest payable	560,887	531,409
Accrued retirement	267,322	264,675
Deferred revenue	272,614	320,042
Accrued expenses – other and other current liabilities	65,078	74,579
Operating lease liability - short-term	81,787	80,258
Current maturities of long-term obligations-other	1,006,084	1,004,445
Current maturities of long-term obligations-related parties	100,000	0
Notes payable	162,500	162,500
Total current liabilities	3,241,109	3,134,249

Long-term obligations:
Notes payable:
Other	457,902	457,769
Related parties	918,422	1,015,820
Accrued payroll taxes	69,025	69,025
Operating lease liability - long-term	21,332	42,347
Total liabilities	4,707,790	4,719,210

Stockholders' deficiency:
Common stock, $.001 par value, 60,000,000 shares authorized; 29,061,883 shares issued and outstanding	29,061	29,061
Additional paid-in capital	30,791,965	30,763,717
Accumulated deficit	(34,050,775)	(33,898,548)
Total stockholders’ deficiency	(3,229,749)	(3,105,770)
Total liabilities and stockholders’ deficiency	$1,478,041	$1,613,440

See notes to unaudited financial statements.

INFINITE GROUP, INC. STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended March 31,
	2021	2020

Revenue	$1,824,342	$1,899,595
Cost of revenue	1,072,916	1,123,066
Gross profit	751,426	776,529

Costs and expenses:
General and administrative	464,392	374,530
Selling	387,725	346,701
Total costs and expenses	852,117	721,231

Operating income (loss)	(100,691)	55,298

Interest expense
Interest expense:
Related parties	(14,513)	(15,863)
Other	(37,023)	(45,497)
Total interest expense	(51,536)	(61,360)

Net loss	$(152,227)	$(6,062)

Net loss per share – basic and diluted	$(.01)	$.00

Weighted average shares outstanding – basic	29,061,883	29,061,883

Weighted average shares outstanding – diluted	29,061,883	29,061,883

See notes to unaudited financial statements.

			Additional
	Common Stock		Paid-in	Accumulated
	Shares	Amount	Capital	Deficit	Total

Balance - December 31, 2020	29,061,883	$29,061	$30,763,717	$(33,898,548)	$(3,105,770)

Stock based compensation	0	0	28,248	0	28,248
Net loss	0	0	0	(152,227)	(152,227)

Balance - March 31, 2021	29,061,883	$29,061	$30,791,965	$(34,050,775)	$(3,229,749)


Three Months Ended March 31, 2020
			Additional
	Common Stock		Paid-in	Accumulated
	Shares	Amount	Capital	Deficit	Total

Balance - December 31, 2019	29,061,883	$29,061	$30,638,173	$(34,574,544)	$(3,907,310)

Stock based compensation	0	0	2,130	0	2,130
Net loss	0	0	0	(6,062)	(6,062)

Balance - March 31, 2020	29,061,883	$29,061	$30,640,303	$(34,580,606)	$(3,911,242)


See notes to unaudited financial statements.

INFINITE GROUP, INC. STATEMENTS OF CASH FLOWS (Unaudited)
	Three Months Ended March 31,
	2021	2020
Cash flows from operating activities:
Net loss	$(152,227)	$(6,062)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Stock based compensation	28,248	2,130
Depreciation and amortization	41,127	12,450
(Increase) decrease in assets:
Accounts receivable	158,829	(4,423)
Prepaid expenses and other assets	(10,849)	15,077
Increase (decrease) in liabilities:
Accounts payable	(45,491)	71,993
Deferred revenue	(47,428)	(59,656)
Accrued expenses	96,699	135,115
Accrued retirement	2,647	2,543
Net cash provided by operating activities	71,555	169,167

Cash flows from investing activities:
Purchase of property and equipment	(3,354)	(4,924)
Capitalization of software development costs	(58,042)	(57,522)

Net cash used by investing activities	(61,396)	(62,446)

Cash flows from financing activities:
Repayments of notes payable - related party	0	(6,680)

Net cash used by financing activities	0	(6,680)

Net increase in cash	10,159	100,041

Cash - beginning of period	32,313	6,398

Cash - end of period	$42,472	$106,439

Supplemental Disclosures of Cash Flow Information:
Cash payments for interest	$16,754	$53,404

See notes to unaudited financial statements.

Risk-free interest rate	0.16%-0.21%
Expected dividend yield	0%
Expected stock price volatility	100%
Expected life of options	2.75 years

	Number of Options Outstanding	Weighted Average Exercise Price	Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2020	12,430,500	$.05
Granted	385,000	.13
Forfeited	(280,000)	.05
Expired	0	.00
Outstanding at March 31, 2021	12,535,500	$.06	3.1 years	$2,180,700

At March 31, 2021 - vested or
expected to vest and exercisable	12,535,500	$.06	3.1 years	$2,180,700

Description	Classification	March 31, 2021	December 31, 2020
Right of Use Asset – Lease, net	Other assets (non-current)	$101,402	$120,777
Operating Lease liability – Short-term	Accrued liabilities	81,787	80,258
Operating Lease liability – Long-term	Other long-term liabilities	21,332	42,347
Total operating lease liability		$103,119	$122,605

Discount rate – operating lease			6.0%

	Three Months Ended March 31,
					2021 vs. 2020
		As a % of		As a % of	Amount of	% Increase
	2021	Sales	2020	Sales	Change	(Decrease)

Sales	$1,824,342	100.0%	$1,899,595	100.0%	$(75,253)	(4.0)%
Cost of sales	1,072,916	58.8	1,123,066	59.1	(50,150)	(4.5)
Gross profit	751,426	41.2	776,529	40.9	(25,103)	(3.2)
General and administrative	464,392	25.5	374,530	19.7	89,862	24.0
Selling	387,725	21.2	346,701	18.3	41,024	11.8
Total costs and expenses	852,117	46.7	721,231	38.0	130,886	18.1
Operating income (loss)	(100,691)	(5.5)	55,298	2.9	(155,989)	(282.1)
Interest expense	(51,536)	(2.8)	(61,360)	(3.2)	(9,824)	(16.0)
Net loss	$(152,227)	(8.3)%	$(6,062)	(0.3)%	$(146,165)	2,411.2%

Net loss per share - basic and diluted	$(.01)		$.00		$(.01)

	Infinite Group, Inc. (Registrant)
Date: May 17, 2021	/s/ James Villa
	James Villa
	Chief Executive Officer
	(Principal Executive Officer)


Date: May 17, 2021	/s/ Richard Glickman
	Richard Glickman
	VP Finance and Chief Accounting Officer
	(Principal Financial Officer)

	INDEX TO EXHIBITS
Exhibit No.	Description
31.1	Chief Executive Officer Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002. *
31.2	VP Finance Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002. *
32.1	Chief Executive Officer Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002. *
32.2	VP Finance Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002. *
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*

* Filed as an exhibit hereto.