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UNITED STATESSECURITIES AND
EXCHANGE COMMISSION WASHINGTON, DC
20549


Form 10-K


(Mark One)


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


For the fiscal year ended December 31,
2008




or




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


For the transition period
from          toCommission
file number: 333-152775iGenii, Inc.(Exact name of registrant as
specified in its charter)




Delaware
            
            26-2046163(State or Other Jurisdiction of
      Incorporation or Organization)
            
            (IRS Employer Identification
      No.)11 Sunrise Plaza, Valley
      Stream, NY
            
            11580(Address of Principal Executive
      Offices)
            
            (Zip Code)


(516) 599-0064(Registrant’s
Telephone Number, Including Area Code)




Securities registered pursuant to
Section 12(b) of the Act: None




Securities
registered pursuant to Section 12(g) of the Act: Common Stock, $0.0001 par
value




Indicate by
check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o     No x




Indicate by
check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes x      No
o




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 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. Yes x     No o




Indicate by
check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K. x




Indicate by
check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a small reporting company. See definition of
“large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act. (Check One):




Large accelerated filer o
            
            Accelerated filer o
            
            Non-accelerated filer o (Do not check if a smaller
      reporting company)
            
            Smaller reporting company x


Indicate by
check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act.). Yes o No x




The
issuer’s revenues for its most recent fiscal year were $132,679.




There is no
market value of the voting and non-voting common equity held by non-affiliates
of the registrant.




As
of March 29, 2009, 9,126,160 shares of common stock, par value $0.001 per
share, were outstanding.




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Table of Contents




PART IItem 1.
            
            Business
            
            1Item 1A.
            
            Risk Factors
            
            3Item 1B.
            
            Unresolved Staff
      Comments
            
            5Item 2.
            
            Properties
            
            5Item 3.
            
            Legal Proceedings
            
            5Item 4.
            
            Submission of Matters to a Vote of
      Security Holders
            
            5PART IIItem 5.
            
            Market for Registrant’s Common Equity,
      Related Stockholder Matters and Issuer Purchases of Equity
      Securities
            
            5Item 6.
            
            Selected Financial Data
            
            6Item 7.
            
            Management’s Discussion and Analysis of
      Financial Condition and Results of Operations
            
            6Item 7A.
            
            Quantitative and Qualitative Disclosures
      About Market Risk
            
            7Item 8.
            
            Financial Statements and Supplementary
      Data
            
            7Item 9.
            
            Changes in and Disagreements With
      Accountants on Accounting and Financial Disclosure
            
            7Item 9A(T).
            
            Controls and Procedures
            
            7PART IIIItem 10.
            
            Directors, Executive Officers and
      Corporate Governance
            
            8Item 11.
            
            Principal Accounting Fees and
      Services
            
            9PART IVItem 12.
            
            Exhibits, Financial Statement
      Schedules
            
            12


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Forward-Looking
Statements




From time to time, we may provide information, whether orally
or in writing, including certain statements in this Annual Report on
Form 10-K, which are deemed to be “forward-looking” within the meaning of
the Private Securities Litigation Reform Act of 1995 (the “Litigation Reform
Act”). These forward-looking statements and other information are based on our
beliefs as well as assumptions made by us using information currently
available.




The words “believe,” “plan,” “expect,” “intend,” “anticipate,”
“estimate,” “may,” “will,” “should” and similar expressions are intended to
identify forward-looking statements. Such statements reflect our current views
with respect to future events and are subject to certain risks, uncertainties
and assumptions. Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results may vary
materially from those described herein as anticipated, believed, estimated,
expected or intended or using other similar expressions. We do not intend to
update these forward-looking statements, except as required by law. In
accordance with the provisions of the Litigation Reform Act, we are making
investors aware that such forward-looking statements, because they relate to
future events, are by their very nature subject to many important factors that
could cause actual results to differ materially from those contemplated by the
forward-looking statements contained in this Annual Report on Form 10-K,
any exhibits to this Form 10-K and other public statements we make. Such
factors are discussed in the “Risk Factors” section of this Annual Report on
Form 10-K.




PART
I




ITEM 1.
BUSINESS




We were incorporated under the laws of the State of Delaware
on February 22, 2008. We are an early stage company that is focused on becoming
an interactive-services and media company. Our primary activities involve
designing, creating and marketing the following core services: interactive web
site planning, design and development, as well as Internet marketing and
advertising consulting services.




Our marketing services are also expected to include, without
limitation, search engine marketing, banner advertising, news group postings,
statistical counters, web site tracking logs, as well as traditional marketing
methods. At this stage of our development, all services will be provided by our
officers and directors and the persons employed in our sales department.




Target
Markets and Marketing Strategy




Our operational activities since our incorporation on February
22, 2008 consist primarily of direct telephone sales of our products mainly to
small businesses and individuals. We mainly sell inexpensive web sites, hosting
and search engine optimization. During the next 12 months, we will continue our
marketing efforts toward executing our strategy in low end internet market. We
also hope to target larger private and government end-users, via
RFP’s




1




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Our other marketing initiatives will include the following:
placement of print advertisements in small business, entrepreneurial, and
special interest magazines; placement of advertisements and links to our website
in industry focused websites; promoting our products at industry tradeshows and
cable TV advertisements. We believe that these marketing initiatives will
optimize our access. We hope to execute our marketing strategy with the
assistance of sales representatives we intend to hire or by engaging an outside
marketing firm. In addition, with our website now operational we intend to
execute an internet specific marketing campaign. Such marketing would include
“pay-per-click” keyword campaigns on major search engines such as Google
and Yahoo and Search Engine Optimization (“SEO”). SEO is the process
of improving the volume and quality of traffic to a web site from search engines
via “natural” (“organic” or “algorithmic”) search results for targeted keywords.
Usually, the higher a site “ranks”, the more searchers will visit that site. SEO
means ensuring that web sites are accessible to search engines and are focused
in ways that help improve the chances they will be found. An organic search is a
process by which internet users find web sites having unpaid search engine
listings, as opposed to using the pay per click (PPC) advertisement listings
displayed among the search results. Our marketing initiatives will create
brand awareness and should help drive traffic to our website. We estimate that
the marketing expenses for the next 12 months will be approximately
$12,000.




Growth
Strategy




Our objective is to become a leading provider of web
development and search engine optimization products. We believe there are
significant opportunities to increase our revenues through the further
implementation of our operating strategy and by growing our customer base, both
organically and through strategic acquisitions. Key elements of our growth
strategy for the next 12 months will focus on the most efficient methods to
acquire new customers and increase sales with existing customers. We intend to
implement our growth strategy through the following methods:




o
                        selectively expand our web development and SEO product
      lines;o
                        target new categories of customers such as large private
      firms, not-for-profits and governmental entities;o
                        tailor our marketing, advertising and promotions to
      attract new customers and increase sales with existing
      customers;o
                        actively seek to evaluate opportunities to develop or
      acquire businesses within web development and SEO categories or with a
      similar customer base;o
                        attend tradeshows in order to create awareness of our
      company and products;o
                        hire an independent sales reps; ando
                        enhance relationships with clients by providing high
      quality customer service which will include low prices, efficient and
      timely product fulfillment, and providing excellent communication channels
      between our company and our customers.


Competition




The web development and SEO market is highly fragmented and
competitive. We compete directly or indirectly with the following categories of
companies: web.com and verizone.net. Many of our competitors have a
substantially greater market presence, name recognition and financial,
distribution, marketing and other resources than we have. In addition, if our
competitors reduce their prices, we may have to reduce our prices in order to
compete. As a result of this competition, we may need to spend significant sums
on advertising and promotion. If these competitors were to begin offering a
broader array of competing products, or if any of the other factors listed above
occurred, our revenues could be reduced or our costs could be increased,
resulting in reduced profitability.




2




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Significant
Customers




Company has no major customers that represent any substantial
percentage of sales.




Employees




We have 3 employees.




ITEM 1A. RISK
FACTORS




The Company’s business is subject to numerous risk factors,
including the following.




1.        Our
limited operating history makes it difficult for us to evaluate our future
business prospects and make decisions based on those estimates of our future
performance.




We were incorporated on February 22, 2008. Since our
inception, we have not entered into any contracts or significant relationship.
Our limited operating history, based upon limited revenues and a lack of
profitability makes it difficult to evaluate our business on the basis of
historical operations. As a consequence, our past results may not be indicative
of future results. Although this is true for any business, it is particularly
true for us because of our limited operating history. Reliance on historical
results may hinder our ability to anticipate and timely adapt to increases or
decreases in sales, revenues or expenses. For example, if we overestimate our
future sales for a particular period or periods based on our historical growth
rate, we may increase our overhead and other operating expenses to a greater
degree than we would have if we correctly anticipated the lower sales level for
that period and reduced our controllable expenses accordingly. If we make poor
budgetary decisions as a result of unreliable historical data, we could continue
to incur losses.




2.        The
revenue of our business model is unproven and our success is dependent on our
ability to develop and then expand our customer base.




Our business model is to generate revenues from the sale of
web development and SEO to small and medium size private businesses. Our
business model is new, and our ability to generate revenue is unproven. During
the fiscal year ended December 31, 2008, a significant portion of our revenues
was generated from sales under $100. It is not possible for us to predict the
future level of demand for our products that will be generated by these
customers or the future demand for the products in the end-user marketplace. Our
success is dependent on our ability to develop and then expand our customer
base. We cannot guarantee that we will ever be successful in doing this in order
to generate revenues in the future. We recognize that if we are unable to
generate revenues, we will not be able to earn profits or continue operations.
There is no history upon which to base any assumption as to the likelihood that
we will prove successful, and we can provide investors with no assurance that we
will generate any operating revenues or ever achieve profitable
operations.




3.        We
may require additional funding in the future and our operations could be
curtailed if we are unable to obtain required additional funding when
needed.




For the year ended December 31, 2008, we had gross revenues of
$132,679 cost of sales of $250,189 and net loss of $115,510. If we continue to
realize similar gross margins, we will continue to have cash flow problems and
will not be able to fund our operating expenses over the next twelve months. We
anticipate that we will require a minimum of $250,000 to fund our activities for
the next twelve months. We hope that we may be able to increase sales and
thereby increase our cash position. However, there is no assurance that we will
be successful in this regard or that the increase in sales will raise cash
positions to sufficient levels. We may therefore require additional funding
to sustain operations through the next twelve months. The inability to
raise the required capital will restrict our ability to grow and may reduce our
ability to continue to conduct business operations. If we are unable to obtain
necessary financing, we will likely be required to curtail our development plans
which could cause the Company to become dormant. Any additional equity financing
may involve substantial dilution to our then existing stockholders.




4.        We
may be unable to anticipate changes in consumer preferences for web development
and SEO, which may result in decreased demand for our products and may
negatively affect our revenues and our operating results.




Our continued operation in the sales of web development and
SEO products is in large part dependent on our ability to anticipate selling
products that appeal to the changing tastes, spending habits and preferences of
customers. If we are not able to anticipate and identify new consumer trends and
sell new products accordingly, demand for our products may decline and our
operating results may be adversely affected. In addition, we may incur
significant costs relating to identifying new consumer trends and marketing new
products or expanding our existing product lines in reaction to what we perceive
to be a consumer preference or demand. Such development or marketing may not
result in the level of market acceptance, volume of sales or profitability
anticipated.




3




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5.        The
loss of our Chief Executive Officer or our inability to recruit a suitable
replacement may harm our business.




We are highly dependent on the Chief Executive Officer, Mr.
Ross Lavnikevich, to manage our overall operations and identify new products to
expand our sales and enhance our existing product line. We do not maintain key
man life insurance on any of our officers and directors. The loss of Mr.
Lavnikevich would have a material adverse effect on our business and operations.
If we were to lose his services, or if he is not available to us when we need
him, our ability to continue our business model would suffer and we may be
forced to cease operations until such time as we could hire a suitable
replacement.




6.        We
may, in the future, issue additional common shares, which would reduce
investors’ percent of ownership and may dilute our share
value.




Our Certificate of Incorporation authorizes the issuance of
95,000,000 shares of common stock, par value $0.001 per share, of which
9,126,160 shares are issued and outstanding. The future issuance of shares
of common stock may result in substantial dilution in the percentage of our
common stock held by our then existing shareholders. We may value any common
stock issued in the future on an arbitrary basis. The issuance of common stock
for future services or acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by our investors, and might have
an adverse effect on any trading market for our common stock.




7.        Our
common shares are subject to the “Penny Stock” Rules of the SEC and the trading
market in our securities is limited, which makes transactions in our stock
cumbersome and may reduce the value of an investment in our
stock.




The Securities and Exchange Commission has adopted Rule 15g-9
which establishes the definition of a “penny stock,” for the purposes relevant
to us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless exempt, the
rules require:




•
              that a broker or dealer approve a person’s account for
      transactions in penny stocks; and•
              the broker or dealer receive from the investor a written
      agreement to the transaction, setting forth the identity and quantity of
      the penny stock to be purchased.


In order to approve a person’s account for transactions in
penny stocks, the broker or dealer must:




•
              obtain financial information and investment experience
      objectives of the person; and•
              make a reasonable determination that the transactions in
      penny stocks are suitable for that person and the person has sufficient
      knowledge and experience in financial matters to be capable of evaluating
      the risks of transactions in penny stocks.


The broker or dealer must also
deliver, prior to any transaction in a penny stock, a disclosure schedule
prescribed by the Commission relating to the penny stock market, which, in
highlight form:




•
              sets forth the basis on which the broker or dealer made
      the suitability determination; and•
              that the broker or dealer received a signed, written
      agreement from the investor prior to the transaction.


Generally, brokers may be less willing to execute transactions
in securities subject to the “penny stock” rules. This may make it more
difficult for investors to dispose of our Common shares and cause a decline in
the market value of our stock.




Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.




8.        Because
we do not intend to pay any cash dividends on our common stock, our stockholders
will not be able to receive a return on their shares unless they sell
them.




We intend to retain any future earnings to finance the
development and expansion of our business. We do not anticipate paying any cash
dividends on our common stock in the foreseeable future. Unless we pay
dividends, our stockholders will not be able to receive a return on their shares
unless the value of such shares appreciates and they sell them. There is no
assurance that stockholders will be able to sell shares when
desired.




4




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9.
          We may issue shares
of preferred stock in the future that may adversely impact your rights as
holders of our common stock.




Our Certificate of Incorporation authorizes us to issue up to
5,000,000 shares of “blank check” preferred stock. Accordingly, our board of
directors will have the authority to fix and determine the relative rights and
preferences of preferred shares, as well as the authority to issue such shares,
without further stockholder approval. As a result, our board of directors could
authorize the issuance of a series of preferred stock that would grant to
holders preferred rights to our assets upon liquidation, the right to receive
dividends before dividends are declared to holders of our common stock, and the
right to the redemption of such preferred shares, together with a premium, prior
to the redemption of the common stock. To the extent that we do issue such
additional shares of preferred stock, your rights as holders of common stock
could be impaired thereby, including, without limitation, dilution of your
ownership interests in us. In addition, shares of preferred stock could be
issued with terms calculated to delay or prevent a change in control or make
removal of management more difficult, which may not be in your interest as
holders of common stock.




ITEM 1B. UNRESOLVED STAFF
COMMENTS




None.




ITEM 2.
PROPERTIES




The Company has no properties and at this time has no
agreements to acquire any properties. The Company’s office is located at 11
Sunrise Plaza, Valley Stream, NY 11580. Company pays $1,100 rent on a
month-to-month basis.




ITEM 3. LEGAL
PROCEEDINGS




There are no pending legal proceedings to which the Company is
a party or in which any director, officer or affiliate of the Company, any owner
of record or beneficially of more than 5% of any class of voting securities of
the Company, or security holder is a party adverse to the Company or has a
material interest adverse to the Company. The Company’s property is not the
subject of any pending legal proceedings.




ITEM 4. SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS




No matters were submitted to a vote of the Company’s
shareholders during the fiscal year ended December 31, 2008.




PART II




ITEM 5. MARKET FOR THE
REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIESMARKET INFORMATION




Our Registration Statement, as filed with the SEC on Form S-1
on August 21, 2008, was declared effective by the SEC on August 28, 2008. Due to
the market condition company did not initiated registration with FINRA as of
December 31, 2008




Holders




On March 30, 2009, there were approximately 49 holders of
record of the Company’s common stock.




DIVIDEND POLICY




The Company has never paid cash dividends on any of its
securities. The Company currently intends to retain any earnings for use in its
operations and does not anticipate paying cash dividends in the foreseeable
future. Future dividend policy will be determined by the Company’s Board of
Directors based upon the Company’s earnings, if any, its capital needs and other
relevant factors.




5




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Securities
authorized for issuance under equity compensation plans




We do not have any equity compensation plans.




Purchases of
equity securities by the issuer and affiliated purchasers




None.




ITEM 6. SELECTED FINANCIAL
DATA




The Company is not subject to this requirement since it is a
smaller reporting company.




ITEM 7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS




This discussion contains forward-looking statements which
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as “may”, “should”,
“expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”,
“potential” or “continue” or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled “Risk Factors,” that may cause our or our industry’s actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements. While these forward-looking
statements, and any assumptions upon which they are based, are made in good
faith and reflect our current judgment regarding the direction of our business,
actual results will almost always vary, sometimes materially, from any
estimates, predictions, projections, assumptions or other future performance
suggested herein. Except as required by applicable law, including the Securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results. We are an early stage
company engaged in the direct sales of outdoor camping and survival products
mainly to commercial resellers and governmental agencies involved in emergency
management and public safety.




Results of
Operation




For the year ended December 31, 2008, we had gross revenues of
$132,679from sales of web sites and SEO, cost of sales was $250,189 and net loss
was $117,510.




6




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Liquidity and
Capital Resources




As of December 31, 2008, we had a cash balance of $10,971.




In a private placement completed in May 2008, we raised
$115,281 from the 49 selling security holders. The proceeds from the sale of the
shares were used to fund our operating expenses which include among others,
professional fees, insurance, payroll and office expenses. We do not believe
that such funds will be sufficient to fund our operating expenses over the next
twelve months. If our operating revenues during the next twelve months are
similar to those of the previous twelve months, we will not be able to finance
our continued operations from our operating revenues and will have to raise the
funds to pay for these expenses. We may have to borrow money from shareholders
or issue debt or equity or enter into a strategic arrangement with a third
party. There can be no assurance that additional capital will be available to
us. We currently have no agreements, arrangements or understandings with any
person to obtain funds through bank loans, lines of credit or any other sources.
Since we have no such arrangements or plans currently in effect, our inability
to raise funds for a marketing program will have a severe negative impact on our
ability to remain a viable company.




Going Concern




The Company has incurred significant losses and
had negative cash flow from operations since inception The Company’s continued
existence is dependent upon management’s ability to develop profitable operation
and resolve its liquidity problems. There can be no assurance that sufficient
funds will be generated during the next twelve months or thereafter from the
Company’s current operations, or that funds will be available from external
sources such as debt or equity financings or other potential sources. The lack
of additional capital could force the Company to curtail or cease operations and
would, therefore, have a material adverse effect on its business. Furthermore,
there can be no assurance that any such required funds, if available, will be
available on attractive terms or that they will not have a significant dilutive
effect on the Company’s existing stockholders.




Company tries to increase its sale force in
order to generate more sales. There can be no assurance that the Company can
successfully accomplish these steps and or business plans, and it is uncertain
that the Company will achieve a profitable level of operations and be able to
obtain additional financing.




There can be no assurance that any additional
financings will be available to the Company on satisfactory terms and
conditions, if at all. In the event we are unable to continue as a going
concern, we may elect or be required to seek protection from our creditors by
filing a voluntary petition in bankruptcy or may be subject to an involuntary
petition in bankruptcy. To date, management has not considered this alternative,
nor does management view it as a likely occurrence.




The accompanying consolidated financial
statements do not include any adjustments related to the recoverability or
classification of asset-carrying amounts or the amounts and classifications of
liabilities that may result should the Company be unable to continue as a going
concern.




Off-Balance
Sheet Arrangements




We have no off-balance sheet arrangements.




ITEM 7A. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK




The Company is not subject to this requirement since it is a
smaller reporting company.




ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA




The Financial Statements of the Company called for by this
item are contained in a separate section of this report. See “Index to
Consolidated Financial Statements” on Page F-1.




ITEM 9. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES




Morgenstern, Svoboda & Baer, CPA’s, P.C. is our auditors.
There have not been any changes in or disagreements with accountants on
accounting and financial disclosure or any other matter.




ITEM 9A(T). CONTROLS AND
PROCEDURES




(a) Evaluation of disclosure
controls and procedures




The Company’s Chief Executive Officer (acting also as the
principal financial officer) has conducted an evaluation of the Company’s
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of December 31st, 2008. Based on his
evaluation, the Company’s Chief Executive Officer has concluded that the
Company’s disclosure controls and procedures were effective as of the end of
such period.




(b) Changes in internal
controls




Additionally, there were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the evaluation date. We have not identified any
significant deficiencies or material weaknesses in our internal controls, and
therefore there were no corrective actions taken. This annual report does not
include a report of management’s assessment regarding internal control over
financial reporting or an attestation report of the company’s registered public
accounting firm due to a transition period established by rules of the
Securities and Exchange Commission for newly public companies.




7




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PART III




ITEM 10. DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE




DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS




Directors and Executive
Officers




Set forth below is certain information relating to our current
sole director and executive officer, including his name, age, and business
experience.




Name
      and Business Address
            
            Age
            
            PositionRoss Lavnikevich
            
            41
            
            President, Chief Executive Officer and DirectorRafeal Abdurachmanov
            
            44
            
            Chief Financial Officer and DirectorRafeal Mordukhaev
            
            44
            
            Treasurer, Secretary and Director


Ross
Lavnikevichhas been our President, Chief Executive Officer and a
Director since our inception on February 22, 2008. Since 1992, Mr. Lavnikevich
has worked at a Computer Scientist for Citibank, Merrill Lynch, NYSE and Solomon
Brothers. Mr. Lavnikevich obtained a B.S. in Electronic Engineering from New
York Polytechnic University in 1992.




Rafael
Abdurachmanovhas been our Chief Financial Officer and a Director since
our inception on February 22, 2008. Mr. Abdurachmanov has over 20 years of
diversified Public and Private Accounting experience. From 2003 to 2006, Mr.
Abdurachmanov worked with the accounting firm of Morgenstern Svoboda & Baer,
CPAs, P.C. and From 2001 to 2003 he worked as a certified public accountant with
BuyFuton.com. From 1998 to 2001, Mr. Abdurachmanov worked with the accounting
firm of Deloitte & Touche, LLC. as a certified public accountant. Mr.
Abdurachmanov obtained a B.A. in Economics, Accounting and Informational Systems
from the City University of New York, Queens College.




Rafael
Mordukhaevhas been our Treasurer, Secretary and Director since our
inception on February 22, 2008. Since 2003 Mr. Mordukhaev has been a real estate
developer and is currently the owner and manager of Cross Town Realty LLC. In
1992, Mr. Mordukhaev founded CityRide Transportation, a limousine company. Mr.
Mordukhaev graduated from Tashkent Radio and Television Broadcasting Institute
in 1988.




There are no familial relationships among any of our directors
or officers. None of our directors or officers is a director in any other U.S.
reporting companies. None of our directors or officers has been affiliated with
any company that has filed for bankruptcy within the last five years. The
Company is not aware of any proceedings to




8




---





which any of the Company’s officers or directors, or any
associate of any such officer or director, is a party adverse to the Company or
any of the Company’s subsidiaries or has a material interest adverse to it or
any of its subsidiaries.




Each director of the Company serves for a term of one year or
until the successor is elected at the Company’s annual shareholders’ meeting and
is qualified, subject to removal by the Company’s shareholders. Each officer
serves, at the pleasure of the board of directors, for a term of one year and
until the successor is elected at the annual meeting of the board of directors
and is qualified.




The Board of Directors has not established an audit committee
and does not have an audit committee financial expert. The Board is of the
opinion that an audit committee is not necessary since the Company has only
three directors, and to date such directors have been performing the functions
of an audit committee.




Code of
Ethics




We do not currently have a Code of Ethics applicable to our
principal executive, financial or accounting officer.




Item 11. Executive
Compensation




Summary
Compensation




Since our incorporation on February 22, 2008 we have not paid
any compensation to our directors or officers in consideration for their
services rendered to our Company in their capacity as such. We have no
employment agreements with any of our directors or executive officers. We have
no pension, health, annuity, bonus, insurance, stock options, profit sharing or
similar benefit plans.




Outstanding Equity
Awards




We have no pension, health, annuity, bonus, insurance, equity
incentive, non-equity incentive, stock options, profit sharing or similar
benefit plans. No stock options or stock appreciation rights were granted to any
of our directors or executive officers during the period from the date of our
incorporation through December 31, 2008.




Item 12.
Security Ownership of Certain Beneficial Owners and
Management




SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS




The following table lists, as of March 30, 2009, the number of
shares of common stock of our Company that are beneficially owned by (i) each
person or entity known to our Company to be the beneficial owner of more than 5%
of the outstanding common stock; (ii) each officer and director of our Company;
and (iii) all officers and directors as a group. Information relating to
beneficial ownership of common stock by our principal shareholders and
management is based upon information furnished by each person using “beneficial
ownership” concepts under the rules of the Securities and Exchange Commission.
Under these rules, a person is deemed to be a beneficial owner of a security if
that person has or shares voting power, which includes the power to vote or
direct the voting of the security, or investment power, which includes the power
to vote or direct the voting of the security. The person is also deemed to be a
beneficial owner of any security of which that person has a right to acquire
beneficial ownership within 60 days. Under the Securities and Exchange
Commission rules, more than one person may be deemed to be a beneficial owner of
the same securities, and a person may be deemed to be a




9




---





beneficial owner of securities as to which he or she may not
have any pecuniary beneficial interest. Except as noted below, each person has
sole voting and investment power.




The percentages below are calculated based on 9,126,160 shares
of our common stock issued and outstanding as of March 30, 2009. We do not have
any outstanding options, warrants or other securities exercisable for or
convertible into shares of our common stock. Unless otherwise indicated, the
address of each person listed is c/o iGenii Inc., 11 Sunrise Plaza, Suite 304,
Valley Stream, New York, 11580.




Name of
      Beneficial Owner
            
            Title Of
      Class
            
            Amount
      and Nature ofBeneficial Ownership
            
            Percent
      of ClassRoss Lavnikevich
            
            Common Stock
            
            3,000,000
            
            32.87%Rafael Abdurachmanov
            
            Common Stock
            
            2,500,000
            
            27.39%Rafael Mordukhaev
            
            Common Stock
            
            3,090,000(1)
            
            33.86%Directors and Officers as a Group (3
person)
            
            Common Stock
            
            8,590,000
            
            94.13%


(1)
            Includes 64,000 shares of common
      stock owned by Elena Mordukhaev, the wife of Rafael
      Mordukhaev.


Item 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE




On February 22, 2008 by action taken by our board of
directors, we issued 3,000,000 shares of our common stock to Ross Lavnikevich,
our President, Chief Executive Officer and a director, at the purchase price of
$0.0073 per share for the aggregate consideration of $21,900. This transaction
was conducted in reliance upon an exemption from registration provided under
Section 4(2) of the Securities Act of 1933, as amended. Mr. Lavnikevich was our
officer and director and had access to all of the information which would be
required to be included in a registration statement, and the transaction did not
involve a public offering.




On February 22, 2008 by action taken by our board of
directors, we issued 2,936,000 shares of our common stock to Rafeal Mordukhaev,
our Secretary, Treasurer and a director at the purchase price of $0.0073 per
share for the aggregate consideration of $21,433. This transaction was conducted
in reliance upon an exemption from registration provided under Section 4(2) of
the Securities Act of 1933, as amended. Mr. Mordukhaev was our officer and
director and had access to all of the information which would be required to be
included in a registration statement, and the transaction did not involve a
public offering. In addition company sold to Rafael Mordukhaev following shares:
On September 16, 2008 20,000 of common stock for $10,000. On October 11, 2008
20,000 of common stock for $10,000. On November 6, 2008 20,000 of common stock
for $10,000. On November 14, 2008 10,000 of common stock for $5,000. On December
9, 2008 20,000 of common stock for $10,000.




On February 22, 2008 by action taken by our board of
directors, we issued 2,500,000 shares of our common stock to Rafeal
Abdurachmanov, our Chief Finanical Officer and a director, at the purchase price
of $0.0073 per share for the aggregate consideration of $18,250. This
transaction was conducted in reliance upon an exemption from registration
provided under Section 4(2) of the Securities Act of 1933, as amended. Mr.
Abdurachmanov was our officer and a director and had access to all of the
information which would be required to be included in a registration statement,
and the transaction did not involve a public offering.




10




---





DIRECTOR
INDEPENDENCE




We are not subject to listing requirements of any national
securities exchange or national securities association and, as a result, we are
not at this time required to have our board comprised of a majority of
“independent directors.” We do not believe that any of our directors currently
meet the definition of “independent” as promulgated by the rules and regulations
of the American Stock Exchange.




Item 14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES




Our Board of Directors unanimously approved 100% of the fees
paid to the principal accountant for audit-related, tax and other fees. Our
Board of Directors pre-approves all non-audit services to be performed by the
auditors.




Audit Fees




Morgenstern, Svoboda & Baer, CPA’s, P.C. provided audit
services to iGenii in connection with its annual report for the fiscal year
ended December 31, 2008. The aggregate fees billed by Morgenstern Svoboda &
Baer for the audit of our annual financial statements during the fiscal year
ended December 31, 2008 was $10,000




Audit Related
Fees




Morgenstern, Svoboda & Baer, CPA’s, P.C billed $10,000for
fees in 2008 for professional services rendered to iGenii that are reasonably
related to the audit or review of iGenii’s financial statements that are not
disclosed in “Audit Fees” above.




Tax Fees




Tax returns were prepared internally by our CFO in order to
keep operating expenses to the minimum.All Other Fees




Morgenstern, Svoboda & Baer, CPA’s, P.C billed no fees in
2008 for other professional services rendered to iGenii or any other services
not disclosed above.




Audit
Committee Pre-Approval




iGenii does not have a standing audit committee. Therefore,
all services provided to iGenii by Morgenstern, Svoboda & Baer, CPA’s, P.C
as detailed above, were pre-approved by iGenii’s board of
directors.




11




---





PART IV




ITEM 12. EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES




Financial
Statements.See index to financial statements




Exhibits




Exhibit
              
              Description3.1
              
              Certificate of Incorporation of Registrant*3.2
              
              By-Laws of Registrant*10.1
              
              Form of Regulation D Subscription Agreement
      *


* filed as an exhibit to the Registration Statement on Form
S-1 (No. 152775)




Exhibit
              
              Description31.1
              
              Certificate of Chief Executive Officer and Chief
      Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.32.1
              
              Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.


12




---





SIGNATURES




Pursuant to the requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Registrant has caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized,
on the 29thday
of March, 2009.






REGISTRANT




iGenii, Inc.




By:
            
            /s/ Ross LavnikevichName:
            
            Ross LavnikevichTitle:
            
            President, Chief Executive Officer,and Director
      (Principal ExecutiveOfficer)By:
            
            /s/ Rafael AbdurachmanovName:
            
            Rafael AbdurachmanovTitle:
            
            Chief Financial Officer, Treasurerand Director
      (Principal Financial andAccounting Officer)


13




---





iGENII, INC.FINANCIAL
STATEMENTS




DECEMBER 31, 2008




TABLE OF CONTENTS




Report of Independent Registered Public
      Accounting Firm
            
            F-2Balance Sheet
            
            F-3Statement of Income
            
            F-4Statement of Cash Flows
            
            F-5Statement of Stockholders
      Equity
            
            F-6Notes to Financial
      Statements
            
            F-7 - F-13


---





MORGENSTERN, SVOBODA & BAER,
CPA’s, P.C.




CERTIFIED
PUBLIC ACCOUNTANTS40 Exchange Place, Suite 1820New York, NY
10005TEL: (212) 925-9490FAX: (212) 226-9134E-MAIL:
msbcpas@gmail.com




Report of
Independent Registered Public Accounting Firm




Board of Directors and Stockholders ofiGenii, Inc.




We have audited the accompanying balance sheet
of iGenii, Inc. (“the
Company”) as of December 31, 2008 and the related statements of income,
comprehensive losses, statement of stockholders’ deficit, and cash flows for the
period February 22, 2008 (inception) to December 31, 2008. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audit.




We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States of
America). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.




In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial
position of iGenii,
Inc. as of December 31, 2008 and the results of their operations and their cash
flows for the period February 22, 2008 (inception) to December 31, 2008, in
conformity with generally accepted accounting principles in the United States of
America.




The accompanying financial statements have been
prepared assuming that the company will continue as a going concern. As
discussed in the notes to the financial statements, the company has no
established source of revenue and no operations. This raises substantial doubt
about the company’s ability to continue as a going concern. The financial
statements do not include any adjustments that might result from this
uncertainty.




Morgenstern, Svoboda & Baer, CPAs, PCCertified Public
Accountants




New York, NYJanuary 29, 2009










---





iGENII, INCBALANCE
SHEET DECEMBER 31, 2008




ASSETSCurrent
      AssetsCash
      and cash equivalents
            
            $
            10,971Total Current Assets
            
            
            10,971Equipment (net of depreciation of $2,606)
            
            
            16,844Intangibles (net of amortization of $880)
            
            
            5,070Infinite life intangibles
            
            
            15,000Security deposit
            
            
            2,200Total
Assets
            
            $
            50,085LIABILITIES AND
      STOCKHOLDERS’ EQUITYCurrent
      LiabilitiesAccounts payable and accrued expenses
            
            $
            7,314Total Current Liabilities
            
            
            7,314Stockholders’
      EquityCommon
      stock, $.001 par value, 95,000,000 shares authorized, 9,126,160 issued and
      outstanding
            
            $
            9,126Preferred stock, 5,000,000 shares authorized
            
            
            —Additional paid in capital
            
            
            151,155Retained earnings
            
            
            (117,510
            )Total Stockholders’ Equity
            
            
            42,771Total
      Liabilities and Stockholders’ Equity
            
            $
            50,085


The accompanying notes are an integral part of
these consolidated financial statements.




F-3




---





iGENII, INCSTATEMENT
OF INCOMEFROM INCEPTION ON FEBRUARY 22, 2008 TO DECEMBER 31,
2008




Sales
            
            $
            132,679Selling, general and administrative expenses
            
            
            250,189Income (loss) from
      operations
            
            
            (117,510
            )Income (loss) before income
      taxes
            
            
            (117,510
            )Provision for income taxes
            
            
            —Net income
      (loss)
            
            $
            (117,510
            )


The accompanying notes are an integral part of
these consolidated financial statements.




F-4




---





iGENII, INC. STATEMENT OF CASH FLOWS FROM INCEPTION ON FEBRUARY 22, 2008 TO
DECEMBER 31, 2008




CASH FLOWS USED OPERATING
      ACTIVITIESNet
      income (loss)
            
            $
            (117,510
            )Adjustments to reconcile net income to net cash provided by
      operating activities:Depreciation and amortization
            
            
            3,486(Increase) / decrease in assets:Security deposit
            
            
            (2,200
            )Increase/(decrease) in current liabilities:Accounts payable
            
            
            7,314Net cash used by operating
      activities
            
            
            (108,910
            )CASH FLOWS USED INVESTING
      ACTIVITIESPurchase of computer equipment
            
            
            (19,640
            )Purchase of intangibles
            
            
            (20,950
            )Net cash used by investing
      activities
            
            
            (40,400
            )CASH FLOWS FROM FINANCING
      ACTIVITIESProceeds from sale of common stock
            
            
            110,881Collection of Subscription receivable
            
            
            49,400Net cash provided by financing
      activities
            
            
            160,211Net change in cash and cash
      equivalents
            
            
            10,971Cash and cash equivalents,
      beginning balance
            
            
            0Cash and cash equivalents,
      ending balance
            
            $
            10,971SUPPLEMENTAL
      DISCLOSURES:Cash
      paid during the year for:Taxes
            
            $
            —Interest payments
            
            $
            —


The accompanying notes are an integral part of
these consolidated financial statements.




F-5




---





iGENII, INCSTATEMENT OF
STOCKHOLDERS’ EQUITY FROM INCEPTION ON FEBRUARY 22, 2008 TO DECEMBER 31,
2008




AdditionalPaid-InCapital
            
            Retained
      Earnings(AccumulatedDeficit)
            
            TotalStockholders’Equity/DeficitCommon
StockShares
            
            AmountBalance
      February 22, 2008
            
            
            —
            
            
            —
            
            
            —
            
            
            
            
            
            —Sale of common stock
            
            
            9,126,160
            
            $
            9,126
            
            $
            151,155
            
            
            
            
            $
            160,281Income for the period ended Dec 31,2008
            
            
            
            
            
            
            
            
            
            
            $
            (117,510
            )
            $
            (117,510
            )Balance
      December 31, 2008
            
            
            9,126,160
            
            $
            9,126
            
            $
            151,155
            
            $
            (117,510
            )
            $
            42,771


The accompanying notes are an integral part of
these consolidated financial statements.




F-6




---





iGENII, INC.NOTES TO
FINANCIAL STATEMENTSDECEMBER 31, 2008




Note 1 -
ORGANIZATION




IGenii, Inc. was incorporated on February 22,
2008 under the laws of the State of Delaware. The Company is now engaged in
Internet consulting business. The Company exists to provide fast, reliable
technical assistance to any business entity in order to achieve meaningful
internet presence.




Note 2 -
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES




Basis of
Presentation




The accompanying financial statements have been
prepared in conformity with accounting principle generally accepted in the
United States of America.




Going Concern




These consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
applicable to a going concern, which contemplates the realization of assets and
the satisfaction of liabilities and commitments in the normal course of
business. As of December 31, 2008, the company has not recognized significant
revenue to date and has accumulated operating losses of $117,510. The company’s
ability to continue as a going concern is contingent upon the successful
completion of additional financing arrangements and its ability to achieve and
maintain profitable operations. While the company is expending its best efforts
to achieve the above plans, there is no assurance that any such activity will
generate funds that will be available for operations.




These conditions raise substantial doubt about
the Company’s ability to continue as a going concern. These financial statements
do not include any adjustments that might arise from this
uncertainty.




Use
of Estimates




The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.




Risks and
Uncertainties




The Company is subject to substantial risks
from, among other things, intense competition associated with the industry in
general, other risks associated with financing, liquidity requirements, rapidly
changing customer requirements, limited operating history and the volatility of
public markets.




F-7




---





iGENII, INC.NOTES TO FINANCIAL
STATEMENTSDECEMBER 31, 2008




Contingencies




Certain conditions may exist as of the date the
financial statements are issued, which may result in a loss to the Company but
which will only be resolved when one or more future events occur or fail to
occur. The Company’s management and legal counsel assess such contingent
liabilities, and such assessment inherently involves an exercise of judgment. In
assessing loss contingencies related to legal proceedings that are pending
against the Company or unasserted claims that may result in such proceedings,
the Company’s legal counsel evaluates the perceived merits of any legal
proceedings or unasserted claims as well as the perceived merits of the amount
of relief sought or expected to be sought.




If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the
liability can be estimated, then the estimated liability would be accrued in the
Company’s financial statements. If the assessment indicates that a potential
material loss contingency is not probable but is reasonably possible, or is
probable but cannot be estimated, then the nature of the contingent liability,
together with an estimate of the range of possible loss if determinable and
material would be disclosed.




Loss contingencies considered to be remote by
management are generally not disclosed unless they involve guarantees, in which
case the guarantee would be disclosed.




Cash and Cash Equivalents




Cash and cash equivalents include cash in hand
and cash in time deposits, certificates of deposit and all highly liquid debt
instruments with original maturities of three months or less.




Long-Lived Assets




Since inception, the Company adopted Statement
of Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets (SFAS 144), which addresses financial accounting
and reporting for the impairment or disposal of long-lived assets and supersedes
SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of, and the accounting and reporting provisions
of APB Opinion No. 30, Reporting the Results of Operations for a Disposal of a
Segment of a Business. The Company periodically evaluates the carrying value of
long-lived assets to be held and used in accordance with SFAS 144. SFAS 144
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets
carrying amounts. In that event, a loss is recognized based on the amount by
which the carrying amount exceeds the fair market value of the long-lived
assets. Loss on long-lived assets to be disposed of is determined in a similar
manner, except that fair market values are reduced for the cost of disposal.
Based on its review, the Company believes that, as of March 31, 2008 there were
no significant impairments of its long-lived assets.




F-8




---





iGENII, INC.NOTES TO FINANCIAL
STATEMENTSDECEMBER 31, 2008




Note 2 -
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)




Fair
Value of Financial Instruments




Statement of financial accounting standard No.
107, Disclosures about fair value of financial instruments, requires that the
Company disclose estimated fair values of financial instruments. The carrying
amounts reported in the statements of financial position for current assets and
current liabilities qualifying as financial instruments are a reasonable
estimate of fair value.




Revenue Recognition




The Company’s revenue recognition policies are
in compliance with Staff accounting bulletin (SAB) 104. Revenue is recognized at
the date the price is fixed or determinable, the delivery is completed, no other
significant obligations of the Company exist and collectibility is reasonably
assured. Payments received before all of the relevant criteria for revenue
recognition are satisfied are recorded as unearned revenue.




Advertising




Advertising expenses consist primarily of costs
of promotion for corporate image and product marketing and costs of direct
advertising. The Company expenses all advertising costs as incurred.




Income
Taxes




The Company utilizes SFAS No. 109, Accounting
for Income Taxes, which requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
included in the financial statements or tax returns. Under this method, deferred
income taxes are recognized for the tax consequences in future years of
differences between the tax bases of assets and liabilities and their financial
reporting amounts at each period end based on enacted tax laws and statutory tax
rates applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized.




Intangibles




Intangible assets are amortized using the
straight-line method over their estimated period of benefit. Evaluation of the
recoverability of intangible assets is made annually to take into account events
or circumstances that warrant revised estimates of useful lives or that indicate
that impairment exists. Not all of our intangible assets are subject to
amortization. No impairments of intangible assets have been identified during
any of the periods presented. On July 1, 2008 Company signed agreement to
purchase a website and telephone number for $20,000. Five thousand dollars of
the purchase price was allocated to the website and this finite life intangible
is being amortized over 36 months using the straight line method. In addition
Company paid $950 dollars for registering iGENII’s Trademark, this intangible
assets’ finite life is being amortized over 120 months under the straight line
method. The fifteen thousand dollars paid for the telephone number is deemed an
intangible asset with an infinite life and is not being amortized.




F-9




---





iGENII, INC.NOTES TO FINANCIAL
STATEMENTSDECEMBER 31, 2008




Note
2- SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)




Intangibles (CONTINUED)




12/31/2008Website and Trademarks
            
            
            5,950Accumulated amortization
            
            
            (880
            )Totals
            
            
            5,070


Total amortization expenses for the year ended December 31,
2008 amounted to $880.




Future amortization expense for the company’s finite life
intangible assets is estimated to be:




12/31/2009
            
            $
            1,76212/31/2010
            
            $
            1,76212/31/2011
            
            $
            929Thereafter
            
            $
            617$
            5,070


Concentration of Credit
Risk




Financial instruments that potentially subject
the Company to concentrations of credit risk are cash, accounts receivable and
other receivables arising from its normal business activities. The Company
places its cash in what it believes to be credit-worthy financial institutions.
The Company controls credit risk related to accounts receivable through credit
approvals, credit limits and monitoring procedures. The Company routinely
assesses the financial strength of its customers and, based upon factors
surrounding the credit risk, establishes an allowance, if required, for
uncollectible accounts and, as a consequence, believes that its accounts
receivable credit risk exposure beyond such allowance is limited.




Note
2- SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)




Recent accounting
pronouncements




In July, 2006, the FASB issued Interpretation
No. 48 (FIN 48). “Accounting for uncertainty in Income Taxes”. FIN 48 clarifies
the accounting for Income Taxes by prescribing the minimum recognition threshold
a tax position is required to meet before being recognized in the financial
statements. It also provides guidance on de-recognition, measurement,
classification, interest and penalties, accounting in interim periods,
disclosure and transition and clearly scopes income taxes out of SFAS 5,
“Accounting for Contingencies”. FIN 48 is effective for fiscal years beginning
after December 15, 2006. The adoption of these standards had no impact on the
Company’s financial statements.




In September, 2006, FASB issued SFAS 157 ‘Fair
Value Measurements’. This Statement defines fair value, establishes a framework
for measuring fair value in generally accepted accounting principles (GAAP), and
expands disclosures about fair value measurements. This Statements applies under
other accounting pronouncements that require or permit fair value measurements,
the Board having previously concluded in those accounting pronouncements that
fair value is the relevant measurement attribute. Accordingly, this Statement
does not require any new fair value measurements. However, for some




F-10




---





iGENII, INC.NOTES TO FINANCIAL
STATEMENTSDECEMBER
31, 2008




Note
2- SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)




entities, the application of this Statement will
change current practice. This Statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. The adoption of these standards had no impact on the
Company’s financial statements.




In December, 2006, the FASB issued FSP EITF
00-19-2, Accounting for Registration Payment Arrangements (“FSP 00-19-2”) which
addresses accounting for registration payment arrangements. FSP 00-19-2
specifies that the contingent obligation to make future payments or otherwise
transfer consideration under a registration payment arrangement, whether issued
as a separate agreement or included as a provision of a financial instrument or
other agreement, should be separately recognized and measured in accordance with
FASB Statement No. 5, Accounting for Contingencies. FSP 00-19-2 further
clarifies that a financial instrument subject to a registration payment
arrangement should be accounted for in accordance with other generally accepted
accounting principles without regard to the contingent obligation to transfer
consideration pursuant to the registration payment arrangement.




For registration payment arrangements and
financial instruments subject to those arrangements that were entered into prior
to the issuance of EITF 00-19-2, this guidance shall be effective for financial
statements issued for fiscal years beginning after December 15, 2006 and interim
periods within those fiscal years. The adoption of these standards had no impact
on the Company’s financial statements.




In February 2007, the FASB issued SFAS No. 159,
“The Fair Value Option for Financial Asset and Financial Liabilities.’ SFAS 159
permits entities to choose to measure many financial instruments, and certain
other items, at fair market value. SFAS 159 applies to reporting periods
beginning after November 15, 2007. The adoption of these standards had no impact
on the Company’s financial statements.




In December 2007, the FASB issued SFAS No. 160,
“Non-controlling Interests in Consolidated Financial Statements”. This Statement
amends ARB 51 to establish accounting and reporting standards for the
non-controlling (minority) interest in a subsidiary and for the deconsolidation
of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is
an ownership interest in the consolidated entity that should be reported as
equity in the consolidated financial statements. SFAS No. 160 is effective for
the Company’s fiscal year beginning October 1, 2009. Management is currently
evaluating the effect of this pronouncement on financial
statements.




In March 2008, the FASB issued FASB Statement
No. 161, “Disclosures about Derivative Instruments and Hedging Activities”. The
new standard is intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced disclosures to enable
investors to better understand their effects on an entity’s financial position,
financial performance, and cash flows. It is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. The new standard also improves transparency
about the location and amounts of derivative instruments in an entity’s
financial statements; how derivative instruments and related hedged items are
accounted for under Statement 133; and how derivative instruments and hedged
items affect its financial position, financial performance, and cash flows.
Management is currently evaluating the effect of this pronouncement on financial
statements.




F-11




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iGENII, INC.NOTES TO FINANCIAL
STATEMENTSDECEMBER
31, 2008




Note
2- SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (CONTINUED)




On May 8, 2008, FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles,” which will provide framework for selecting
accounting principles to be used in preparing financial statements that are
presented in conformity with U.S. generally accepted accounting principles
(GAAP) for nongovernmental entities. With the issuance of SFAS No. 162, the GAAP
hierarchy for nongovernmental entities will move from auditing literature to
accounting literature. The Company is currently assessing the impact of SFAS No.
162 on its financial position and results of operations. Management is currently
evaluating the effect of this pronouncement on financial
statements.




Note 3 –
INCOME
TAXES




The Company, through its operations in the
United States had incurred net accumulated operating losses of approximately
$117,510 as of December 31, 2008 for income tax purposes. However a forty
percent allowance has been created on the deferred tax asset of approximately
$47,004 due to uncertainty of its realization.




Note 4 –
COMMITMENTS




The Company leases office space for 1,100
dollars per month. Company signed 6 months lease agreement from May 1, 2008 to
November 30, 2008, with option to extended lease till April 30, 2011. As of
today company did not sign new agreement and leases premises on month-to-month
basis.




F-12




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iGENII, INC.NOTES TO FINANCIAL
STATEMENTSDECEMBER
31, 2008




Note 5 –
PROPERTY, PLANT &
EQUIPMENT




Computer equipment depreciated over 5 years using straight
line method.




ASSETSComputer Equipment
            
            $
            19,450Accumulated Depreciation
            
            
            (2,606
            )Total
            
            $
            16,844


Note 6– COMMON
STOCK




As of December 31, 2008 the company had 9,126,160 shares of
common stock issued and outstanding. During initial public offering, from
inception on February 22, 2008 and up to April 30, 2008, company sold 9,036,160
shares.In addition company sold: On September 16, 2008 20,000 of
common stock for $10,000On October 11, 2008 20,000 of common stock for
$10,000On November 6, 2008 20,000 of common stock for $10,000On November
14, 2008 10,000 of common stock for $5,000On December 9, 2008 20,000 of
common stock for $10,000




Note 7– SUBSEQUENT
EVENTS




On January 16, 2009 the company sold an additional 20,000
shares of common stock for $10,000.




F-13