10-Q
2012-09-30
false
Incoming, Inc.
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--12-31
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2012
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<!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'>Note 1 <u>Organization, and Summary of Significant Accounting Policies</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'><i><u>Organization</u></i></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>Incoming, Inc. (“We”, “our” or “the Company”) was incorporated in Nevada on December 22, 2006. Our subsidiary North American Bio-Energies, LLC (“NABE”) operates a biodiesel production facility doing business as Foothills Bio-Energies in Lenoir, North Carolina.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'><i><u>Reclassifications</u></i></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>We have reclassified certain prior-year amounts to conform to the current year’s presentation.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'><i><u>Consolidation</u></i></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>The accompanying consolidated financial statements represent the consolidated operations of Incoming, Inc. and its wholly-owned subsidiary North American Bio-Energies, LLC. Intercompany balances and transactions have been eliminated in consolidation.</p>
<!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>Note 2 <u>Going Concern</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>These financial statements have been prepared on a going concern basis. As of December 31, 2011, the Company had a working capital deficiency of $192,239, and had accumulated a deficit of $5,532,978. As of September 30, 2012, the Company had a working capital deficiency of $319,535, and had an accumulated deficit of $5,786,936. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time. These factors raise substantial doubt that the Company will be able to continue as a going concern. The Company to date has funded its initial operations through the issuance of capital stock and common stock options, loans from related parties, and revenue generated in the normal course of business. Management plans to continue to provide for its capital needs by the issuance of common stock and related party advances. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.</p>
<!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>Note 3 <u>Related Party Transactions</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>NABE sells a portion of its finished goods to Verde Bio Fuels and Echols Oil Company, companies owned by Incoming, Inc’s CEO, R. Samuel Bell, Jr. During the nine months ended September 30, 2012, sales to these related companies were $110,005. As of September 30, 2012, the Company had outstanding receivables from these companies of $278,781. As of September 30, 2012, the Company had outstanding payables to these companies of $297,566. During the nine months ended September 30, 2012, $10,000 in related party debt was repaid and there is no remaining short-term debt payable to related parties.</p>
<!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>Note 4 <u>Impairment of Fixed Assets</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>During the nine months ended September 30, 2012, NABE placed steel vertical storage tanks into service. These tanks had previously been reflected in the Construction in Process line item of the balance sheet. Placing the tanks in service allowed the biodiesel production facility in Lenoir to store its crude glycerin and recovered methanol in vessels other than storage totes. The totes were in service for five years and, as a result of extensive usage, evaluated to be unsuitable for selling or for using in other applications at the plant. As a result, the Company declared the assets impaired and recorded a loss on impairment of $73,790. This loss was partially offset by a $1,680 gain on disposal of fixed assets recorded during the three months ended September 30, 2012.</p>
<!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>Note 5 <u>Gain on Forgiveness of Trade Payables</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>The Company recognized a gain on forgiveness of trade payables of $30,000 for the period January 1, 2012 through September 30, 2012. This $30,000 reduction of the Company’s trade payable balance resulted from forgiveness on third-party payables.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'> </p>
<!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>Note 6 <u>Equity Transactions</u></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>During the nine months ended September 30, 2012, Incoming consummated the following equity transactions:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:1.0in;margin-bottom:.0001pt;text-indent:-.25in;line-height:normal;text-autospace:none'>1.     On October 18, 2011, the Company sold 250,000 Class A Common Shares and warrants to purchase 250,000 Class A Common shares for $100,000. The warrants, which were exercisable immediately upon issuance at $0.40 per share, were never exercised and all of the outstanding warrants expired on April 18, 2012. No other options or warrants were outstanding during the nine months ended September 30, 2012.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:1.0in;margin-bottom:.0001pt;text-indent:-.25in;line-height:normal;text-autospace:none'>2.     On June 9, 2011, the Company granted 2,000,000 shares of Class A Common Stock to a director with a fair value of $300,000. 500,000 of the shares vested immediately and additional 500,000-share allotments vested each quarter through March 2012. During the nine months ended September 30, 2012, the Company issued the remaining 500,000 Class A Common shares in conjunction with this grant and recognized the remaining $16,667 of stock-based compensation. As of September 30, 2012, the Company had issued the full 2,000,000 shares related to this grant.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:1.0in;margin-bottom:.0001pt;text-indent:-.25in;line-height:normal;text-autospace:none'>3.     In the third quarter, $15,006 of related party payables was forgiven. The related party was partially owned by the CEO of the Company. As such, the reduction in the payable balance was recorded as an increase to additional paid in capital.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p>
<!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'><i><u>Reclassifications</u></i></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>We have reclassified certain prior-year amounts to conform to the current year’s presentation.</p>
<!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'><i><u>Consolidation</u></i></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:justify;text-justify:inter-ideograph;line-height:normal;text-autospace:none'> </p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.75in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>The accompanying consolidated financial statements represent the consolidated operations of Incoming, Inc. and its wholly-owned subsidiary North American Bio-Energies, LLC. Intercompany balances and transactions have been eliminated in consolidation.</p>
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