UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

             


FORM 10-Q

             


[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934


For the quarter ended June 30, 2015


[  ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934


For the transition period from  

to  


Commission file number: 333-148910

             


ADAMA TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

             


Delaware                                                                                                                        98-0552470

(State of incorporation)                                                                                           (I.R.S. Employer Identification No.)


5005 Elbow Drive SW, Suite 207

Calgary, Alberta, Canada T2S2T6

 (Address of principal executive offices)


Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [ X ]  No [   ]


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


Large accelerated filer               [   ]                                                      Accelerated filer                                 [   ]

Non-accelerated filer                [   ]                                                      Smaller reporting company                [X]

(Do not check if a smaller reporting company)


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [X ]  No [  ]


As of October 13, 2015, 328,851,197 shares of common stock, par value $0.0001 per share, were issued and outstanding and 500,000,000 common shares were authorized.





ADAMA TECHNOLOGIES CORPORATION

FORM 10-Q

SIX MONTHS ENDED JUNE 30, 2015


TABLE OF CONTENTS



Page



PART I - FINANCIAL INFORMATION

1

Item 1. Financial Statements (Unaudited)

F-1

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

2

Item 3 Quantitative and Qualitative Disclosures About Market Risk

4

Item 4 Controls and Procedures

4

PART II - OTHER INFORMATION

5

Item I. Risk Factors

5

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

5

Item 3. Defaults Upon Senior Securities

6

Item 4. Submission of Matters to a Vote of Security Holders

6

Item 5. Other Information

6

Item 6. Exhibits

7

Signatures

7



























i






PART I  FINANCIAL INFORMATION


Item 1. Financial Statements.



ADAMA TECHNOLOGIES CORPORATION


INDEX TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2015



Financial Statements

Page



Condensed Balance Sheets as of  June 30, 2015 (Unaudited) and December 31, 2014

F-1

Condensed Statements of Operations for the three and six months ended June 30, 2015 and 2014  (Unaudited)

F-2

Condensed Statements of Cash Flows for the six months ended June 30, 2015 and 2014  (Unaudited)

F-3

Notes to Unaudited Condensed Financial Statements

F-4































1

ADAMA TECHNOLOGIES CORP.


CONDENSED BALANCE SHEETS







June 30, 2015 (Unaudited)


December 31, 2014 (Audited)





Assets




Current Assets





Cash



 $                            -


 $                        -

Total Assets


 $                            -


 $                        -





Liabilities & Stockholders' Deficit




Current Liabilities





Accounts payable and accrued liabilities

 $                  149,271


   $             137,653


Loans from related parties - Directors and stockholders

-


                  22,500


Loans from third parties

                       3,000


                    3,000


Convertible notes payable, net of discount

                   506,250


                363,750


Judgment Payable

181,250


-


Derivative liability

                   124,243


                171,560

Total Liabilities

                   964,014


                698,463









Stockholder's Deficit





Common Stock, $0.0001 par value, 500,000,000 shares authorized





328,851,197 and 328,851,197 shares issued and outstanding

                     32,885


                  32,885


Preferred Stock, $0.001 par value, 1,000,000 shares authorized





1,000,000 and 0 shares issued and outstanding, respectively

                  1,000


                           -


Additional paid in capital

17,872,287


           17,781,857


Common stock issuable

67,240


-


Stock subscriptions receivable

-


                (51,070)


Accumulated deficit

            (18,937,426)


         (18,462,134)

Total Stockholders Deficit

                 (964,014)


              (698,463)

Total Liabilities and Stockholders' Deficit

 $                            -


 $                        -






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




F-1


ADAMA TECHNOLOGIES CORP.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)





For the Three Months Ended June 30,

For the Six Months Ended June 30,





2015

2014

2015

2014

Revenues

 $                     -

 $                     -

 $                     -

 $                     -

Expenses:





General and administrative






Professional fees

2,625

                        -

                  2,625

                5,200


Consulting

               90,000

               30,000

             120,000

              90,000


Other general and administrative expenses

                        -

                    284

                        -

                1,135

Total Expenses

92,625

               30,284

             122,625

              96,335

Loss before other income (expense)

             (92,625)

             (30,284)

           (122,625)

            (96,335)

Other income (expense)





Forgiveness of debt

22,030

-

22,030

-

Loss on judgment

(248,490)

-

(248,490)

-

Loss on extinguishment of debt

           (112,500)

             (40,482)

           (142,500)

            (40,482)

Change in fair value of derivatives

           3,524

             (43,278)

47,316

              24,166

Interest expense

             (17,095)

               (9,699)

             (31,022)

            (17,732)

Loss before income taxes

           (445,156)

           (123,743)

           (475,291)

          (130,383)

Income tax expense

                        -

                        -

                        -

                        -

Net Loss


 $        (445,156)

 $        (123,743)

 $        (475,291)

 $       (130,383)

Net loss per share - basic and diluted

 $              (0.00)

 $              (0.00)

 $              (0.00)

 $             (0.00)

Weighted average number of shares outstanding during the period - basic and diluted

      328,851,197

      328,851,197

      328,851,197

     328,851,197



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


F-2



ADAMA TECHNOLOGIES CORP.

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)


 For the Six Months Ended June 30, 2015

 For the Six Months Ended June 30, 2014

OPERATING ACTIVITIES:



Net loss

 $             (475,291)

 $            (130,383)

Adjustments to reconcile net loss to net cash



used in operating activities:



   Loss on extinguishment of debt

142,500

40,482

   Forgiveness of debt

(22,030)

-

   Judgment payable

248,490

-

   Change in fair value of derivatives

                 (47,316)

                (24,166)

Changes in operating assets and liabilities:



   Accounts payable and accrued liabilities

                 153,647

               114,067

Net Cash Used in Operating Activities

                            -

                            -

Net Increase (decrease) in Cash

                            -

                            -

Cash, beginning of period

                            -

                            -

Cash, end of period

 $                         -

 $                         -

SUPPLEMENTARY CASH FLOW INFORMATION



Cash paid during the period for:



Income Taxes

 $                         -

 $                         -

Interest

 $                         -

 $                         -

SUPPLEMENTARY CASH FLOW INFORMATION



Notes issued to settle payables

 $             142,500

 $               90,000

Settlement of Judgement

$               67,240

$                         -



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


F-3




ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2015 (Unaudited)


Note 1  Summary of Significant Accounting Policies


Basis of Presentation and Organization


Adama Technologies Corporation (Adama Technologies or the Company) was incorporated under the laws of the State of Delaware on September 17, 2007.  The Company currently conducts no active operations and is engaged in identifying and merging with a suitable operating company.  An Agreement and Plan of Merger has been signed with Incubator Holdings, Inc., a Wyoming corporation, for a three-way merger, expected to close by October 31, 2015. See Note 7. Subsequent Events.


The accompanying condensed financial statements of Adama Technologies were prepared from the accounts of the Company under the accrual basis of accounting.


Unaudited Interim Financial Statements


The interim condensed financial statements of the Company as of June 30, 2015, and for the period then ended, are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the Companys financial position as of June 30, 2015, and the results of its operations and its cash flows for the period ended June 30, 2015. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2015. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States. Refer to the Companys audited financial statements as of December 31, 2014, filed with the Securities and Exchange Commission (SEC), for additional information, including significant accounting policies.


Cash


For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with an original maturity of three months or less to be cash and cash equivalents. There were no cash and cash equivalents at June 30, 2015 and 2014.


Loss per Share

 

Basic earnings per share are computed by dividing the net income attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Common stock equivalents were not included in the computation of diluted loss per share in the statement of operations due to the fact that the Company reported a net loss and to do so would be anti-dilutive for the periods presented.


Income Taxes


Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.



F-4



 ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2015 (Unaudited)


Note 1  Summary of Significant Accounting Policies (continued)


The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Companys financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the federal tax laws.


Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about ability to realize the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.


Fair Value of Financial Instruments


Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 Fair Value Measurements and Disclosures (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) a reporting entitys own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of six broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The six levels of the fair value hierarchy are described below:

 

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.


Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

 

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of June 30, 2015 and December 31, 2014, the carrying value of accounts payable and loans that are required to be measured at fair value, approximated fair value due to the short-term nature and maturity of these instruments.

F-5




ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2015 (Unaudited)


Note 1  Summary of Significant Accounting Policies (continued)


Payables


During the quarter ended June 30, 2015, the Company determined that a total of $22,030 in open accounts payable should be written off as they were more than 3 years old and no longer enforceable under Delaware law.


Estimates


The condensed financial statements are prepared on the basis of accounting principles generally accepted in the United States. 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, liabilities and expenses. Actual results could differ from those estimates made by management.


Beneficial Conversion Features


In accordance with ASC 470, the Company has analyzed the beneficial nature of the conversion terms and determined that a beneficial conversion feature (BCF) exists.  The Company calculated the value of the BCF using the intrinsic method as stipulated in ASC 470. The BCF has been recorded as a discount to the notes payable and to Additional Paid-in Capital.


Recent Accounting Pronouncements


In August, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40), which now requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entitys ability to continue as a going concern within one year after the date the financial statements are issued. If conditions or events raise substantial doubt about an entitys ability to continue as a going concern and substantial doubt is not alleviated after consideration of managements plans, additional disclosures are required. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. These requirements were previously included within auditing standards and federal securities law, but are now included within U.S. GAAP. We are currently assessing the impact on the adoption of ASU and do not believe the adoption will have significant impact on our financial statements and disclosures.


We have evaluated the other recent accounting pronouncements through ASU 2015-08 and believe that none of them will have a material effect on our financial statements.


Note 2 Going Concern


The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of June 30, 2015, the cash resources of the Company were insufficient to meet its current business plan. These and other



factors raise substantial doubt about the Companys ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result


F-6

ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2015 (Unaudited)



from the possible inability of the Company to continue as a going concern. As of June 30, 2015, the Company has no cash and an accumulated deficit of $18,937,426.


Note 3 Convertible Notes Payable


On November 18, 2011, the Company signed a $30,000 convertible promissory note with a third party. The note bears interest at 8% per annum and was due on August 18, 2012. The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance into the Companys common stock at a price equal to 58% of the average of the lowest six trading prices for the Common Stock during the most recent ten day period. The conversion feature was determined to exist and was recorded at the time of issue as a derivative liability, but has been fully amortized in prior periods. This note is in default. According to the terms of the note upon default the balance due is 150% of the unpaid principal balance. In addition, from the date of default the notes bear interest at 22% per annum. The investor may in its sole discretion convert the default amount into equity. The balance outstanding on this note at June 30, 2015 was $45,000.


On April 27, 2012, the Company signed a $32,500 convertible promissory note with a third party. The note bears interest at 8% per annum and was due on January 27, 2013. The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance into the Companys common stock at a price equal to 58% of the average of the lowest six trading prices for the Common Stock during the most recent ten day period. The conversion feature was determined to exist and was recorded at the time of issue as derivative liability, but has been fully amortized in prior periods. This note is in default. According to the terms of the note upon default the balance due is 150% of the unpaid principal balance. In addition, from the date of default the notes bear interest at 22% per annum. The investor may in its sole discretion convert the default amount into equity. The balance outstanding on this note at June 30, 2015 was $48,750.


On October 15, 2013, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on October 15, 2014. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A beneficial conversion feature of $30,000 was determined to exist and was recorded at the time of issue. $30,000 of the beneficial conversion feature has been amortized as of June 30, 2015. This note is in default.


On January 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on January 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $23,564 was determined to exist and was recorded at the time of issue. This note is in default.


On March 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $30,000 was determined to exist and was recorded at the time of issue. This note is in default.




On March 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $30,000 was determined to exist and was recorded at the time of issue. This note is in default March 31, 2015.                                                      F-7

ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2015 (Unaudited)


Note 3  Convertible Notes Payable (continued)


On June 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on June 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $30,000 was determined to exist and was recorded at the time of issue. This note is in default.


On July 1, 2014, the Company converted $60,000 of amounts due to officers into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on July 31, 2015. The note has conversion rights that allow the holder of the note after six months to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015.


On September 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on September 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $30,000 was determined to exist and was recorded at the time of issue.


On December 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on December 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $30,000 was determined to exist and was recorded at the time of issue.


On March 15, 2015, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $30,000 was determined to exist and was recorded at the time of issue.




On April 1, 2015, the Company converted $52,500 of compensation owed into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 31, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $52,500 was determined to exist and was recorded at the time of issue.


On April 1, 2015, the Company converted $30,000 of compensation owed into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 31, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $30,000 was determined to exist and was recorded at the time of issue.




On June 15, 2015, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on June 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $30,000 was determined to exist and was recorded at the time of issue.


F-8

ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2015 (Unaudited)


Note 3  Convertible Notes Payable (continued)


As of June 30, 2015 and December 31, 2014, the balance of convertible notes payable was $506,250 and $363,750.  


For the six months ended June 30, 2015 and 2014, the Company has recognized $31,022 and $17,732 in interest expense, respectively.


Note 4 Derivative Liability


The Company has various convertible instruments outstanding more fully described in Note 3, some of which contain derivative features. As of June 30, 2015, the fair value of the Companys derivative liabilities was $124,243.


The following table summarizes the derivative liabilities included in the balance sheets:


Note 4 Derivative Liability (continued)

 

  

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Derivative Liabilities:

  

 

 


Balance at December 31, 2014

  

$

171,560

Additions

  

 

-

Change in fair value

  

 

(47,317)

Deletions

  

 

-

Balance at June 30, 2015 (unaudited)

  

124,243


The fair values of derivative instruments were estimated using the Black Scholes pricing model based on the following weighted-average assumptions: 

 

  

Convertible Debt Instruments

Risk-free rate

  

 

0.18% 

Expected volatility

  

 

2.31%

Expected life

  

 

 0.25 year  


Note 5 Stockholders Deficit


During the quarter ended June 30, 2015, the Company did not issue any shares of common stock. As a result, the total shares outstanding as of June 30, 2015 remained at 328,851,197.


On March 25, 2014, Novation Holdings, Inc., an unrelated party, agreed to purchase 1,000,000 shares of voting preferred stock for $15,000.  The preferred shares have voting power equal to 51 percent of the total combined voting power of all classes of stock entitled to vote on any matter.  The issuance of the shares was approved by the Board of Directors. The preferred shares have been issued and were subsequently transferred by Novation Holdings during the six months ended June 30, 2015.






F-9

ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2015 (Unaudited)


Note 6  Pending Litigation.


On October 25, 2012, JS Barkats PLLC filed a breach of contract action against the Company and a former officer, Aviram Malik in the Supreme Court of New York, for breach of contract relating to a funding transaction in June 2012.  The Complaint, which was apparently served on former management but was never answered or otherwise responded to by former management and which was never disclosed in our prior periodic filings, seeks to recover $45,395 in a cash finders fee allegedly due plus 2.5 percent of our issued and outstanding common stock as of the date the fee was earned, plus forfeiture of all of the common stock, warrants and options owned by Aviram Malik, individually.  As a result of the failure to respond to the action by prior management, the Company is in default in this action and plaintiff is seeking entry of a default judgment.  On June 5, 2015, the Court entered a default judgment against the Company in the amount of $170,000 plus 2.5 percent of the outstanding common stock plus attorneys fees of $11,250. The Company has recorded the amount of $248,490, as compensation for the quarter ended June 30, 2015 and has reserved 6,724,015 common shares ($67,240 value) for issuance under this judgment.  The Company has no assets available to satisfy the judgment amount, which is reported on the financial statements as an unsecured liability.


There are no other known 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 has no property so no property of the Company is the subject of any other pending legal proceedings.


Note 7 Subsequent Events


On September 10, 2015, the Company entered into an Agreement and Plan of Merger and Acquisition with Incubator Holdings, Inc., a Wyoming corporation.  Under the terms of that Agreement, Incubator Holdings formed an acquisition subsidiary, ADAC Acquisition Corp. in Florida, the Company will merge into that subsidiary, the common shareholders of the Company will receive common shares of Incubator Holdings on the basis of 1 share of Incubator for each 250 shares of the Company held, the preferred shareholder of the Company will receive one preferred share of Incubator Holdings for each share of Series A Preferred Stock of the Company outstanding, and Incubator Holdings will assume the obligations of the Company as an SEC reporting entity.  Incubator also will apply for a new CUSIP number for the common shares and a new trading symbol.  The Company will become a private subsidiary of Incubator Holdings, and will retain all of its existing debts and liabilities except for $352,500 in specific debt that will be assumed by Incubator Holdings under the Agreement.  The existing common shareholders of the Company will receive a total of ten percent of the resulting outstanding common stock of Incubator Holdings and the existing common shareholders of Incubator Holdings will retain 90 percent of the common stock after the acquisition.


Completion of the proposed acquisition will require approval of a majority vote of the shareholders of the Company as well as compliance with all regulatory requirements.  Closing is expected to be on or before October 31, 2015, subject to completion of all required regulatory filings.


Incubator Holdings is a Wyoming Holding company which has acquisition agreements in place for the acquisition of two existing operating companies:



F-10


ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2015 (Unaudited)


Note 7 Subsequent Events (continued)


Acquisition #1 specializes in precision machining and aerospace manufacturing. Since its inception in 1974, this company has concentrated on safety critical aerospace landing gear. It has numerous government contracts extended over several years. As a result of quality work, this company was awarded the Award for Excellence by the U.S. Government. This company has state of the art technology coupled with programmers that have extensive education and expertise to meet customer expectations.


Acquisition #2 protects families and businesses from identity theft which has become the number one crime in the nation. This company provides far more than the typical credit card protection. In fact, it supplies the 7 essential components of whole identity protection. These include:


1.

Whole identity monitoring-not just credit cards

2.

Cyber-crime protectionhackers, viruses, etc.

3.

Credit-manage and protect your credit

4.

Privacy-minimize junk mail, spam, etc.

5.

Lost wallet protection

6.

Whole identity recoveryrestoration to pre-theft status

7.

Cyberhood watch24/7 real-time alerts


Closing of the acquisitions of these two target companies will be completed after the merger of the Company with ADAC Acquisition Corp.  As a result the Company will be filing Form 10 information to terminate its current status as a shell company within the meaning of the federal securities laws as soon as that merger closes.


















F-11


Item 2. Managements Discussion and Analysis or Plan of Operations.


As used in this Form 10-Q, references to Adama, the Company, we, our or us refer to Adama Technologies Corporation, unless the context otherwise indicates.


Forward-Looking Statements


The following discussion should be read in conjunction with our unaudited financial statements, which are included elsewhere in this Form 10-Q (the Report). This Report 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 that may cause our or our industrys 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.


For a description of such risks and uncertainties, refer to our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on April 15, 2015. 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.


Corporate Background


We were incorporated in Delaware on September 17, 2007 as 1 Lane Technologies Corporation. On February 27, 2009, our corporate name was changed to Adama Technologies Corporation to better reflect our business activities.  We acquired the rights to a patent- pending technology upon which a unique wireless data platform is built. On October 27, 2008, we abandoned the business relating to the patent technology and executed an exclusive brownfield license agreement with Solucorp Industries Ltd., pursuant to which we acquired a 15 year license to certain environmental hazard remediation technology.  Subsequently, we have acquired and thereafter abandoned several mining and mining related companies, but as of September 30, 2014, we became a shell company and have no operating activities.


Our principal executive offices are located at 5005 Elbow Drive, Calgary, Alberta, Canada T2S2T6 in space provided by an independent management consultant.  We are being provided this space for no additional charge. Our registered office in Delaware is located at 113 Barksdale Professional Center, Newark, DE 19711, and our registered agent is Delaware Intercorp.  Our fiscal year end is December 31.


Plan of Operation

 

Effective November 14, 2014, the Company entered into an Agreement and Plan of Merger and Acquisition with Capital Interchange Corporation, a Florida corporation  (CIC), Focus Gold Commercial Resolution, Inc., a Florida corporation, and Focus Gold Financial Corp., a Florida corporation, for a three-way merger, which was expected to close by December 31, 2014. The proposed transaction has now been abandoned.


On September 10, 2015, the Company entered into an Agreement and Plan of Merger and Acquisition

with Incubator Holdings, Inc., a Wyoming corporation.  Under the terms of that Agreement, Incubator Holdings formed an acquisition subsidiary, ADAC Acquisition Corp. in Florida, the Company will merge


2

into that subsidiary, the common shareholders of the Company will receive common shares of Incubator Holdings on the basis of 1 share of Incubator for each 250 shares of the Company held, the preferred shareholder of the Company will receive one preferred share of Incubator Holdings for each share of Series A Preferred Stock of the Company outstanding, and Incubator Holdings will assume the obligations of the Company as an SEC reporting entity.  Incubator also will apply for a new CUSIP number for the common shares and a new trading symbol.  The Company will become a private subsidiary of Incubator Holdings, and will retain all of its existing debts and liabilities except for $352,500 in specific debt that will be assumed by Incubator Holdings under the Agreement.  The existing common shareholders of the Company will receive a total of ten percent of the resulting outstanding common stock of Incubator Holdings and the existing common shareholders of Incubator Holdings will retain 90 percent of the common stock after the acquisition.


Completion of the proposed acquisition will require approval of a majority vote of the shareholders of the Company as well as compliance with all regulatory requirements.  Closing is expected to be on or before October 31, 2015, subject to completion of all required regulatory filings.


Incubator Holdings is a Wyoming Holding company which has acquisition agreements in place for the acquisition of two existing operating companies:


Acquisition #1 specializes in precision machining and aerospace manufacturing. Since its inception in 1974, this company has concentrated on safety critical aerospace landing gear. It has numerous government contracts extended over several years. As a result of quality work, this company was awarded the Award for Excellence by the U.S. Government. This company has state of the art technology coupled with programmers that have extensive education and expertise to meet customer expectations. In addition, this company which does several million dollars annually in revenue has been profitable for many years.


Acquisition #2 protects families and businesses from identity theft which has become the number one crime in the nation. This company provides far more than the typical credit card protection. In fact, it supplies the 7 essential components of whole identity protection. These include:


1.

Whole identity monitoring-not just credit cards

2.

Cyber-crime protectionhackers, viruses, etc.

3.

Credit-manage and protect your credit

4.

Privacy-minimize junk mail, spam, etc.

5.

Lost wallet protection

6.

Whole identity recoveryrestoration to pre-theft status

7.

Cyberhood watch24/7 real-time alerts


Projected revenues for this company are very strong for this year and the delivery system allows for significant profits.

Closing of the acquisitions of these two target companies will be completed after the merger of the Company with ADAC Acquisition Corp.  As a result the Company will be filing Form 10 information to terminate its current status as a shell company within the meaning of the federal securities laws as soon as that merger closes.


Employees


We have no employees at June 30, 2015 and our sole officer and director provides services as needed without additional compensation.                    


Transfer Agent


We previously engaged Nevada Agency and Trust as our stock transfer agent. Nevada Agency and Trust in

3

Reno, Nevada 89501. As part of the pending merger with ADAC Acquisition Corp., we anticipate that our transfer agent will become the transfer agent for Incubator Holdings, Inc. The transfer agent is responsible for all record-keeping and administrative functions in connection with our issued and outstanding common stock.


Results of Operations


Results of operations for the three and six months ended June 30, 2015 and 2014


Revenues


The Company did not generate any revenues from operations for the three and six months ended June 30, 2015 and June 30, 2014.


During the three months ended June 30, 2015 and 2014, total operating expenses were $92,625 and $30,284, respectively. The operating expenses were primarily the result of professional and consulting fees associated with fulfilling the Companys SEC reporting requirements and equity compensation for consulting expenses in relation to the business operations and development.




During the six months ended June 30, 2015 and 2014, total operating expenses were $122,625 and $96,335, respectively. The operating expenses were primarily the result of professional and consulting fees associated with fulfilling the Companys SEC reporting requirements and equity compensation for consulting expenses in relation to the business operations and development.


Net loss


During the three months ended June 30, 2015 and 2014 the net loss was $445,156 and $123,743 respectively.  The net loss in the quarter ended June 30, 2015 was the result of consulting expenses in relation to the business operations and development, compensation resulting from the entry of a judgment gain and loss on extinguishment of debt, and a loss on change in fair value of derivatives.


During the six months ended June 30, 2015 and 2014 the net loss was $475,291 and $130,383 respectively.  The net loss in the six months ended June 30, 2015 was the result of consulting expenses in relation to the business operations and development, compensation resulting from the entry of a judgment gain and loss on extinguishment of debt, and a loss on change in fair value of derivatives.




Liquidity and Capital Resources


Our cash balance as of June 30, 2015 was $0. Cash and cash equivalents from inception to date have been sufficient to provide the operating capital necessary to operate to date.


There is not enough cash on hand to fund our administrative and other operating expenses or our proposed acquisition activities for the next twelve months, and we do not anticipate that we will generate any revenues from operations for the next twelve months.


Going Concern Consideration


Our auditors have issued an opinion on our annual financial statements which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations or merge with an operating company. This is because we have not generated any revenues and no revenues are anticipated until we have acquired or merged with an operating company.


4

Off-Balance Sheet Arrangements


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.




Item 3. Quantitative and Qualitative Disclosures About Market Risk.


A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.


Item 4. Controls and Procedures. Disclosure Controls and Procedures


(a)

Evaluation of disclosure controls and procedures


It is managements responsibility for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, we have evaluated the effectiveness of our disclosure controls and procedures as required by the Exchange Act Rule 13a-15(d) as of September 30, 2015 (the Evaluation Date). Based on the evaluation by management, they have concluded these disclosure controls and procedures were not effective as of the Evaluation Date as a result of material weaknesses in internal control over financial reporting as more fully discussed below.


Under Rule 13a-15(e)/15d-15(e); Regulation S-K, Item 307, the SEC states that disclosure controls and procedures have the following characteristics:

4

designed to ensure disclosure of information that is required to be disclosed in the reports that we file or submit under the Exchange Act;


recorded, processed, summarized and reported with the time period required by the SECs rules and forms; and


accumulated and communicated to management to allow them to make timely decisions about the required disclosures.


As of June 30, 2015, our management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on conducting such assessments.


Management concluded, during the three and six months ended June 30, 2015, internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules. Management realized there are deficiencies in the design or operation of our internal control that adversely affected our internal controls which management considers being material weaknesses. Those weaknesses continued through the quarter ended June 30, 2015.


Material Weaknesses


Management assessed the effectiveness of our internal control over financial reporting as of the Evaluation Date and identified the following material weaknesses:



5


Due to a significant number and magnitude of out-of-period adjustments identified during the quarter-end closing process, management has concluded that the controls over the quarter-end financial reporting process were not operating effectively. A material weakness in the quarter-end financial reporting process could result in our not being able to meet our regulatory filing deadlines and, if not remedied, has the potential to cause a material misstatement or to miss a filing deadline in the future. Management override of existing controls is possible given the small size of the organization and lack of personnel.


There is no system in place to review and monitor internal control over financial reporting. This is due to our maintaining an insufficient complement of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting.


(a)

Changes in control over financial reporting


There were no changes in our internal controls over financial reporting during the three and six months ended June 30, 2015 that have materially affected, or are reasonably likely to material affect, our internal control over financial reporting.



PART II

OTHER INFORMATION


Item 1. Risk Factors


A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.


During the quarter ended June 30, 2015, the Company did not issue any shares of common stock.


Item 3. Defaults Upon Senior Securities.


Six convertible promissory notes issued in September 7, 2011, November 15, 2011 and April 17, 2012, were declared in default by letter dated January 10, 2013. According to the terms of the notes, upon default the balance due becomes 150% of the unpaid principal balance. In addition, from the date of default the notes bear interest at 22% per annum. The investor may in its sole discretion convert the default amount into equity.  As a result of subsequent conversions by the holder, the principal balance due on the two notes



as of June 30, 2015 was $93,750 and the September 17, 2011 note has been fully discharged as of June 30, 2015.


Item 4. Submission of Matters to a Vote of Security Holders.


None


Item 5. Other Information.


On June 5, 2015, the Supreme Court of the State of New York entered a default judgment against us and in favor of J S Barkats, PLLC, a New York law firm, in a suit filed against us in October, 2012, to which former management failed to respond.  The default judgment was in the amount of $170,000 plus attorneys fees of $11,250, plus 2.5 percent of the common stock outstanding, as claimed in the complaint in the action.  We have recorded this amount as compensation in the balance sheet ended June 30, 2015 and as an unsecured current liability of the Company, and have reserved 6,724,015 common shares for issuance.


6

Item 6. Exhibits


10       Agreement and Plan of Merger and Acquisition dated September 10, 2015


31       Certification of Principal Executive and Financial Officer pursuant to Section 302 of  the Sarbanes-Oxley Act


32     Certification of Principal Executive and Financial Officer pursuant to Section 906 of the Sarbanes-Oxley (filed herewith)


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


October 13, 2015


ADAMA TECHNOLOGIES CORPORATION


By:     /s/ Michael Choo

 

      Michael Choo

      Chairman and CEO

































7





Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION


I, Michael Choo certify that:


(1) 

I have reviewed this quarterly report on Form 10-Q of Adama Technologies Corporation.


(2) 

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

 

 

(3) 

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

 

(4) 

The issuers other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and we have:


 

(a) 

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

(b) 

Evaluated the effectiveness of the issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon based such evaluation; and

 

 

 

 

(c) 

Disclosed in this report any change in the issuers internal control over financial reporting that occurred during the small business issuers most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuers internal control over financial reporting;

 

(5) 

The issuers other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuers auditors and the audit committee of the issuers board of directors (or persons performing the equivalent function):


 

(a) 

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuers ability to record, process, summarize and report financial information; and


 

(b) 

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuers internal controls over financial reporting.


Dated: October 13, 2015

By:

/s/ Michael Choo

 

 

 

Michael Choo

Chief Executive Officer

 

 







Exhibit 31.2

PRINCIPAL ACCOUNTING OFFICER CERTIFICATION


I, John Burke, certify that:


(1) 

I have reviewed this quarterly report on Form 10-Q of Adama Technologies Corporation.


(2) 

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

 

 

(3) 

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

 

(4) 

The issuers other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and we have:


 

(a) 

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

(b) 

Evaluated the effectiveness of the issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon based such evaluation; and

 

 

 

 

(c) 

Disclosed in this report any change in the issuers internal control over financial reporting that occurred during the small business issuers most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuers internal control over financial reporting;

 

(5) 

The issuers other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuers auditors and the audit committee of the issuers board of directors (or persons performing the equivalent function):


 

(a) 

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuers ability to record, process, summarize and report financial information; and


 

(b) 

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuers internal controls over financial reporting.


Dated: October 13, 2015

By:

/s/ John Burke

 

 

 

John Burke

Principal Accounting Officer

 

 







Exhibit 32

CERTIFICATION

 

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, each of the undersigned officers of Adama Technologies Corporation, (the Company), does hereby certify, to each such officers knowledge, that:  


(1)    The quarterly report on form 10-Q of the Company for the quarter ended June 30, 2015 (the Report) fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

 

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.


Dated: October 13, 2015

By:

/s/ Michael Choo

 

 

Michael Choo

Chief Executive Officer

Dated: October 13, 2015

By:

/s/ John Burke

 

 

John Burke

Principal Accounting Officer

 


A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.