Washington, D.C. 20549
For the transition period from __________________ to __________________________.
Securities registered pursuant to section
12(g) of the Act: Common Stock, $0.0001 par value
Indicate by check mark if the Company
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the Company
is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
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 Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.
Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of Company’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K/A or any amendment to this Form 10-K/A.
Indicate by check mark whether the Company
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Indicate by check mark whether the Company
is a shell company (as defined in Rule 12b-2 of the Act).
State the aggregate market value
of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of the last business day of the Company’s most
recently completed fiscal quarter.
Approximately $1,315,000 based upon
$.004 per share which was the last price at which the common equity purchased by non-affiliates was last sold.
The number of shares of the issuer’s
common stock issued and outstanding as of April 15, 2015 was 328,851,197 shares.
This amended annual report is filed to
correct certain errors in our financial statements for the year ended December 31, 2014, as disclosed in note 9 of the financial
statements. See also “Item 9A. Management’s Report on Internal Control Over Financial Reporting” regarding our
internal control over financial reporting.
This annual report on Form 10-K/A for
Adama Technologies Corp. (the “Company”) contains forward-looking statements that involve risks and uncertainties,
as well as assumptions that, if they never materialize or prove incorrect, could cause the results of the Company to differ materially
from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are
statements that could be deemed forward-looking statements, including any projections of revenue, expenses, earnings or losses
from operations or investments, or other financial items; any statements of the plans, strategies and objectives of management
for future operations; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing.
The risks, uncertainties and assumptions referred to above include risks that are described from time to time in our Securities
and Exchange Commission, or the SEC, reports filed before this report.
The forward-looking statements included
in this annual report represent our estimates as of the date of this annual report. We specifically disclaim any obligation to
update these forward-looking statements in the future. Some of the statements in this annual report constitute forward-looking
statements, which relate to future events or our future performance or financial condition. Such forward-looking statements contained
in this annual report involve risks and uncertainties.
We use words such as anticipates, believes,
expects, future, intends and similar expressions to identify forward-looking statements. Our actual results could differ materially
from those projected in the forward-looking statements for any reason. We caution you that forward-looking statements of this
type are subject to uncertainties and risks, many of which cannot be predicted or quantified.
The following analysis of our financial
condition and results of operations should be read in conjunction with our financial statements and the related notes thereto
contained elsewhere in this Form 10-K/A, as well as the risk factors included in this Form 10-K/A under Item 1A.
Item 1. Business.
HISTORY OF OUR COMPANY
Adama Technologies Corp. was incorporated
in Delaware on September 19, 2007. On November 25, 2007 we executed an exclusive worldwide patent-pending sale agreement with
the inventor of a patent-pending technology (Patent Application Number: 11/720,518) and planned to use that technology (security
systems for mobile vehicles, trucks, and shipping containers) to create a unique wireless data platform to support minute by minute
data transmissions. We completed a public offering of our common stock in the first half of 2008, raising aggregate
gross proceeds of $90,000 pursuant to a registration statement on Form SB-2 that was declared effective by the Securities and
Exchange Commission on February 19, 2008. A private placement of common stock was later completed on July 3, 2008,
raising aggregate gross proceeds of $90,000 from 22 investors. On July 28, 2008 we implemented a 5 for 1 forward
stock split. On October 28, 2011, the Company initiated a reverse stock split on its common stock of 300-1 which became
effective on October 28, 2011. The authorized shares of the Company did not change. In June, 2013, we relocated our corporate
offices to Florida.
Our principal executive offices were located
at 1365 N. Courtenay Parkway, Suite A, Merritt Island, Florida 32953, in offices provided by an independent consulting firm as
part of a contractual administrative and financial consulting agreement. 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.
Our
Current Business
During prior fiscal years, we engaged
in various mining and mineral activities through acquisition and licensing transactions, as reported in a prior periodic reports
for fiscal year ending December 31, 2013 and prior fiscal years. In the year ended December 31, 2014, we terminated all mining
and mineral activities and began actively seeking merger or acquisition partners as our sole activity. As a result, we are now
classified as a shell company under Rule 12b-2 under the Exchange Act.
Employees
We have no full time or part-time employees
except for such services as are required in connection with searching for suitable acquisition partners, which activities are
performed by our sole officer and director and by various consultants. We do not foresee any significant changes in the number
of employees or consultants we will have over the next twelve months, unless we complete a planned merger, as discussed in Other
Matters.
During the period covered by this
report, we conducted no business operations and generated no revenue. We intend to serve as a corporate vehicle that will
seek to effect a merger, exchange of capital stock, asset acquisition or other similar business combination (a
“Business Combination”) with an operating or development stage business (“Target Business”) that
desires to employ our Company to become a publicly traded corporation that reports under the Securities Exchange Act of 1934
(“Exchange Act”). Other than as described herein, we do not engage in any substantive commercial business or
other business operations. We face special risks inherent in the investigation, acquisition, or involvement in a new business
opportunity. We are in our development stage.
Our present officer and director is our
only employee, and he devotes a minimal amount of his time to our business. We have no full time employees. We expect to
use consultants, attorneys and accountants as necessary, and do not anticipate a need to engage any full-time employees while
we are seeking and evaluating Target Businesses. Our need for employees and their availability will be addressed in connection
with the decision whether or not to consummate a specific Business Combination.
We intend to seek potential business opportunities
and effectuate a Business Combination with a Target Business with significant growth potential that, in the opinion of management,
could provide a profit to our Company and our stockholders. We may effect a Business Combination with a Target Business that may
be financially unstable or in its early stages of development or growth. We will not restrict our search to any specific
business, industry or geographical location, and we may participate in a business venture of virtually any kind or nature. Our
present affiliates may become involved in the management of the Target Business and/or may hire qualified but as yet unidentified
individuals to manage such Target Business. Presently, we have no plan, proposal, agreement, understanding or arrangement to effect
a Business Combination with any Target Business, and we have not identified any specific business or company for investigation
and evaluation.
We encounter intense competition from
other entities having a business objective similar to ours. Many of these entities are well established and have extensive experience
in connection with identifying and effecting Business Combinations directly or through affiliates. Many of these competitors possess
greater financial, marketing, technical, personnel and other resources than we do and we cannot assure you that we will have the
ability to compete successfully. Our financial resources are limited in comparison to those of many of our competitors. This inherent
competitive limitation could compel us to select certain less attractive acquisition prospects. We cannot assure you that
such prospects will permit us to meet our stated business objectives. Our limited funds and lack of full-time management will
likely make it impracticable to conduct a complete and exhaustive investigation and analysis of a Target Business before we commit
our resources thereto.
We cannot presently ascertain with any
degree of certainty the time and costs required to select and evaluate a Target Business (including conducting a due diligence
review) and to structure and complete a Business Combination (including negotiating relevant agreements and preparing requisite
documents for filing pursuant to applicable securities laws and state “blue sky” and corporation laws).
Until we raise sufficient capital and/or
complete a Business Combination, our Company does not expect to meet its current capital requirements for the next twelve months;
and we cannot assure you that even if we raise sufficient capital and complete a Business Combination, that we will ever meet
any of our capital requirements.
Our Company must generate additional resources
to enable us to pay our obligations as they come due, and our Company must ultimately implement a new business plan and achieve
profitable operations. We cannot assure you that we will be successful in any of these activities. Should any of these
events not occur, our financial condition will be materially adversely affected. If our Company remains dormant, we will need
to raise additional capital to meet our current capital requirements for the next twelve months.
If we consummate a Business Combination
with a Target Business which operates in an industry which is regulated or licensed by federal, state or local authorities, compliance
with such regulations could be a time-consuming and expensive process.
Employees
Our present officer and director is our
only employee, and he devotes minimal time to our business. We have no full-time employees. We expect to use consultant, attorneys
and accountants as necessary, and do not anticipate a need to engage any full-time employees while we are seeking and evaluating
Target Businesses.
Facilities
Our principal executive offices are now
located at 1365 N. Courtenay Parkway, Suite A, Merritt island, Florida 32953, in offices provided by an independent consulting
firm as part of a contractual administrative and financial consulting agreement. Our registered office in Delaware is located
at 113 Barksdale Professional Center, Newark, DE 19711, and our registered agent is Delaware Intercorp.
Government Regulations
During the period covered by this report,
our business was not subject to direct regulation by any domestic or foreign governmental agency, other than regulations generally
applicable to businesses, and we believe that we have complied with these laws and regulations in all material respects.
Item 1A.
Risk
Factors
The purchase of shares of capital stock
of our Company involves many risks. A prospective investor should carefully consider the following risk factors before making
a decision to purchase any such shares:
We have a limited operating history
and a history of losses.
Our Company has no current operations
and, as such, may not be able to overcome unanticipated difficulties that may be encountered related to the implementation of
its business plan. Our Company has a limited operating history, limited revenue from operations and a history of losses. In addition,
because our Company currently has no operations, our Company faces all of the risks inherent with a start-up business, including
the possibility that our Company cannot complete a Business Combination with a Target Business that is viable. We cannot assure
you that if our Company identifies and completes a Business Combination with a Target Business that such business will ever be
profitable. Our Company may also face unforeseen problems, difficulties, expenses or delays in implementing its business plan.
We need to obtain additional funds
to continue with our business.
We need to obtain additional funds to
continue with our business to fund general and administrative expenses and periodic reporting requirements, and we cannot assure
you that such funds will be available, or will be available on favorable terms. Failure to secure needed funds will directly impact
our Company’s ability to maintain its reporting status, and potentially, the corporate entity itself. While management has
dedicated itself to the efforts to secure needed funds, the outcome and ultimate success of those efforts is uncertain.
Investing in our stock is highly speculative
and an investor could lose some or the entire amount invested.
Our business plan is highly speculative
and, therefore, an investor in our common stock may lose his or her entire investment. The value of our common stock may decline
and may be affected by numerous market conditions, which could result in the loss of some or the entire amount invested in our
common stock. The securities markets frequently experience extreme price and volume fluctuations that affect market prices for
securities of companies in general and very small capitalization companies in particular.
The cost of maintaining our reporting
obligations is high compared to our available cash.
Our Company is obligated to maintain its
periodic public filings and public reporting requirements, on a timely basis, to remain current as a public company. In order
to meet these obligations, our Company will need to continue to raise capital. If adequate funds are not available to our Company,
it will be unable to comply with those requirements.
Our stockholders
face potential dilution in any new financing.
Any additional equity that our Company
raises would dilute the interest of the current stockholders and any persons who may become stockholders before such financing.
Such dilution in any financing of a meaningful amount could be substantial.
If we complete a Business Combination
with a Target Business, we will be dependent upon market acceptance and competitive factors.
The success of any Target Business we
complete a Business Combination with will be highly dependent upon, among other things, gaining market acceptance from customers
that will use our Target Business’ products and services. More specifically, these factors include, among other things,
how well its products or services perform (ease of implementation, ease of use by customers, reliability, and scope of products
and services), competitive forces, the level of consumer demand for products and services offered, the selling prices of its products
and services, and the effectiveness of our marketing activities.
Our Sole Officer and Director Controls
Our Company’s Affairs and Operations and One Shareholders Controls more than Half the Vote.
Our management owns none of the issued
and outstanding shares of our common stock, but one holder, iEquity Corp., owns all of the preferred stock which carries 60 percent
of the total vote on all matters submitted to the shareholders for approval. Our Company’s articles of incorporation
do not provide for cumulative voting for the election of directors. Consequently, even if additional shares of our common stock
are issued, so long as one holder continues to own 60% of the total vote of our issued and outstanding shares of common and preferred
stock, that holder can elect all of our directors, appoint officers and otherwise control our affairs and operations. Further,
our board of directors currently has no formal committees, such as a compensation committee or an audit committee, and most likely
will not form such committees until sometime after the consummation of a Business Combination.
The Public Trading Market for Our Company’s
Securities is Inactive and We Cannot Assure You That an Active Public Trading Market Will Develop.
Although our common shares trade on the
OTC Markets under the symbol ADAC, there is minimal public trading activity. We cannot assure you that a regular trading
market will develop for the shares of our Common Stock or that, if developed, any such market will be sustained. Trading of our
Common Stock will likely be conducted through what is customarily known as the Over-The-Counter Bulletin Board.
Rules related to low-priced equity
securities may make it harder for you to sell our common stock.
Our Company’s securities, if and
when available for trading, will likely be subject to the SEC’s rules that regulate broker-dealer practices in connection
with transactions in “penny stocks”. These rules regulate broker-dealer practices in connection with transactions
in “penny stocks.” Penny stocks are defined by law generally as equity securities with a price of less than $5.00
per share (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided
that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
The penny stock rules place additional responsibilities on broker-dealers effecting transaction in such securities. These requirements
may have the effect of reducing the level of trading activity in the secondary markets for a stock that is subject to the penny
stock rules.
Rule 144 May Not Be Available To You
When and If You Decide To Sell Securities of our Company
Our Company is a shell company and you
will not be eligible to utilize Rule 144 for the resale of your shares of common stock until one year after we file “Form
10 information” with the SEC reflecting our status as an entity that is no longer a shell company, but, only for so long
as we have been current with the filing of all of our periodic reports with the SEC and remain current with such filings. In the
event this does not occur, you will not be able to resell your securities pursuant to Rule 144. If there is no other exemption
available to you at the time, you will not be able to resell your securities and recoup your investment unless and until our Company
has remedied its periodic filing obligations with the SEC. There can be no assurance that our Company will remedy such deficiency.
Any Returns on Investment May Be Limited
to the Value of our Company’s Common Stock
We have never paid cash dividends on our
common stock and we do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common
stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board
of directors may consider relevant. Our Company’s common stock may be less valuable because a return on investment will
only occur if its stock price appreciates
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None
ITEM 2. PROPERTIES.
Our executive offices are located at 1365
N. Courtenay Parkway, Suite A. Merritt Island, Florida 32953, in offices provided by an independent consulting firm as part of
a contractual administrative and financial consulting agreement. We believe that this space is adequate for our current and immediately
foreseeable operating needs.
ITEM 3. LEGAL PROCEEDINGS.
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 was apparently served on former management but was never
answered or otherwise responded to by former management and was never disclosed in our prior periodic filings. The Plaintiff seeks
to recover $45,395 in 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 to it 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, a default was entered against us, and plaintiff is seeking
entry of a default judgment. As of the date of this report, no default judgment has been entered in the case, to our knowledge.
There are no other pending legal proceedings
to which the Company is a party or in which any director, officer or affiliate of the Company, or any owner of record or beneficially
of more than 5% of any class of voting securities of the Company, is a party adverse to the Company or has a material interest
adverse to the Company. The Company has no property and is not the subject of any other pending legal proceedings.
ITEM 4. REMOVED
AND RESERVED
PART II
ITEM 5. MARKET FOR COMPANY’S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our common stock is eligible to be traded
on the OTC Markets, under the ticker symbol ADAC.
Holders
As of December 31, 2014, there were 328,851,197
shares of our common stock issued and outstanding, which were held by 195 stockholders of record. No common shares were issued
during the year ended December 31, 2014 or to the date of filing of this report.
Dividends
We have never declared or paid any cash
dividends on our common stock nor do we anticipate paying any in the foreseeable future. Furthermore, we expect to retain any
future earnings to finance our operations and expansion. The payment of cash dividends in the future will be at the discretion
of our Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other
factors the Board considers relevant.
Equity Compensation Plans
On July 22, 2009, the Company adopted
the Stock Incentive Plan, pursuant which the Company is authorized to grant equity-based awards in the form of stock options,
restricted common stock, restricted stock units, stock appreciation rights, and other stock based awards to employees (including
executive officers), directors, consultants and service providers of the Company and its subsidiaries. The maximum number
of shares available for grant under the plan is 25,000,000 shares of common stock. The number of shares available for
award under the plan is subject to adjustment for certain corporate changes and based on the types of awards provided, all in
accordance with the provisions of the plan. The plan is administered by the Board. No shares have been issued under
this Plan.
Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities
There were no sales or issuances of our
common stock in the fiscal year ended December 31, 2014.
ITEM 6. SELECTED FINANCIAL DATA.
As a smaller reporting company, we are not required to provide
disclosure pursuant to this Item 6.
ITEM 7. MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
We have not generated any revenues to
date.
Our sole business plan is to identify,
negotiate and enter into an acquisition transaction with an operating company on terms to be negotiated in the best interests
of our shareholders
Results of Operations
We have not generated any revenues to
date. Our operating expenses in the year ended December 31, 2014 amounted to $218,310 as compared to $108,632 for the
year ended December 31, 2013. Expenses in 2014 were comprised primarily of third party consulting expenses and transfer agent
fees.
Our net loss in the year ended December
31, 2014, amounted to $325,630 as compared to the net loss of $354,509 during the year ended December 31, 2013. Net
loss in 2014 was comprised primarily of third party consulting expenses, interest, loss on extinguishment of debt, and other income
.
The amounts presented in the financial
statements do not provide for the effect of inflation on our operations or our financial position. Amounts shown for machinery,
equipment, and leasehold improvements and for costs and expenses reflect historical cost and do not necessarily represent replacement
cost. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging
operations with amounts that represent replacement costs or by using other inflation adjustments.
Liquidity and Capital Resources
We had no cash at December 31, 2014, or
at December 31, 2013.
There is no cash on hand to fund our administrative
and other operating expenses or our proposed research and development program for the next twelve months, and we do not anticipate
that we will generate any revenues from operations for the next twelve months, unless we initiate or acquire a new operating business.
At December 31, 2014, we had $363,750
in principal amount of outstanding convertible notes plus accrued interest of $74,341.
The Company had working capital deficit
of $806.529 and $488,819 for the year ended December 31, 2014 and 13 respectively.
Lack
of Insurance
We currently have no insurance in force for our office facilities
and operations and it cannot be certain that we can cover the risks associated with such lack of insurance or that we will be
able to obtain and/or maintain insurance to cover these risks at economically feasible premiums.
Going Concern Consideration
Our auditors have issued an opinion on
our 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. This is because we have not generated any revenues and no revenues are anticipated
until we begin marketing the product. Accordingly, we must raise capital from sources other than the actual sale of the product
to implement our plan of operations and stay in business.
The accompanying 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. We have not yet established any source of revenue to cover our operating costs,
and we have incurred an operating loss since inception. Further, as of December 31, 2014, our cash resources were insufficient
to meet our current business plan, and we had negative working capital. These and other factors raise substantial doubt about
our 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 from our possible inability to continue as a going concern. As of December 31, 2014, the Company has an accumulated
deficit of $18,366,636.
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 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company, we are
not required to provide disclosure pursuant to this Item 7A.
ITEM 8. FINANCIAL
STATEMENTS.
The financial statements and supplementary
financial information required by this Item are set forth immediately following the signature page and are incorporated herein
by reference.
ITEM 9. CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES
Our Chief Executive Officer and Principal
Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures” (as defined in the Securities
Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this annual report, has
concluded that our disclosure controls and procedures are effective at a reasonable assurance level based on their evaluation
of these controls and procedures as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15.
Management’s Report on Internal Control Over Financial
Reporting
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting. As defined in Rules 13a-15(f) under the Securities Exchange
Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of, our principal executive,
principal accounting and principal financial officers, or persons performing similar functions, and effected by the our Board
of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted
in the United States of America.
Our internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
Our management, including our Chief Executive
Officer and Principal Accounting Consultant assessed the effectiveness of our internal control over financial reporting as of
December 31, 2014. In making this assessment, management used the framework in Internal Control - Integrated Framework promulgated
by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the COSO criteria. Based on the
assessment performed, management believes that as of December 31, 2014, our internal control over financial reporting was effective
based upon the COSO criteria. Additionally, based on management’s assessment, we determined, based on the restatement of
our financials, that there were material weaknesses in our internal control over financial reporting as of December 31, 2014.
This Annual Report does not include an
attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s
report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit
us to provide only management’s report in this annual report.
Changes in Internal Controls
During the year ended December 31, 2014,
there was no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially
affect our internal control over financial reporting.
ITEM
9B. OTHER INFORMATION.
Depository
Chill
The Depository Trust Company (“DTC”)
has advised us that DTC has imposed a restriction on physical and electronic deposit transactions (the “Deposit Chill”)
in shares of our common stock. The effect of the Deposit Chill is that DTC will no longer accept share certificates for deposit,
thereby preventing the deposit of the underlying shares into DTC-participant broker accounts. Generally speaking, as long as the
Deposit Chill is in place, persons holding such shares will be unable to deposit or trade them electronically.
The Deposit Chill
applies to all shares newly issued on or after the Chill Effective Date, as well as all shares previously issued as “restricted
securities” that are cleared for resale on or after the effective date, pursuant to an effective registration statement
under the Securities Act or pursuant to Rule 144 under the Securities Act.
As long as the
Deposit Chill is in place, persons with share certificates representing freely tradable shares or restricted shares will be unable
to deposit their shares into a broker account and effect trades electronically. This will likely have a material adverse effect
on the public trading market for our shares; and will represent a significant obstacle to shareholders holding share certificates
who wish to sell their shares.
Management Changes
.
At a meeting of the Board of Directors
held on February 4, 2014, Mr. Michael Gelmon resigned as a director and officer, effective immediately, after first appointing
Michael Choo as a director. On February 4, 2014, Michael Choo, of Los Angeles, California, was appointed as an additional director
of Registrant by the Board of Directors to fill an existing vacancy, effective immediately. On February 4, 2014, Mr. Choo was
elected by the Board of Directors to serve as Chairman, President, Secretary and Chief Executive and Financial Officer.
Alberta, Canada Securities Commission
Cease Trade Order.
In late January, 2014, we were notified
by letter from the Alberta Securities Commission in Calgary, Alberta, Canada, that we are considered by them to be an “Alberta
reporting company” by virtue of an Alberta ordinance making any US company with its shares trading in the US over-the-counter
markets, automatically an Alberta reporting company if any officer, director or consultant with executive or fund-raising responsibilities
is a resident of Alberta. Since Michael Gelmon, our now former CEO, is a Calgary resident, the Alberta Securities Commission deemed
the Company to be a reporting issuer, required retroactively to file periodic reports in Alberta and to submit to the regulatory
control of the Alberta Securities Commission, and accordingly issued a trading “cease and desist” order against trading
of the common stock in Alberta. Mr. Gelmon was only affiliated with the Company from June 19, 2013 to February 4, 2014. There
has been no further activity or response to this action and currently the Company has no officers or directors, shareholders of
record, offices, assets or business located in Alberta.
Acquisitions.
Our management has been in discussions
for some time regarding a possible acquisition of or merger with a financial industry company based in Florida. As these discussions
continue and come to fruition as expected, we will announce the details and effect of such a transaction.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain
information regarding the members of our Board of Directors and our executive officers.
Name
|
|
Age
|
|
Positions
and Offices Held
|
|
|
|
|
|
Michael Choo
|
|
51
|
|
Chief Executive Officer , Chief Financial/Accounting
Officer, Secretary and Director
|
Our Directors hold office until the next
annual meeting of our stockholders or until their successors is duly elected and qualified. Set forth below is a summary description
of the principal occupation and business experience of each of our Directors and executive officers for at least the last five
years.
MICHAEL O. CHOO
, 51, an experienced
senior executive, is the former President & Chief Executive Officer of Bellflower Medical Center, Los Angeles, CA. Previously
served as Principal, Managing Partner & President & Chief Executive Officer of Integra Healthcare, Inc., Principal, Managing
Partner, & Chairman of The Board of Directors of Doctors’ Hospital of Shreveport, and Principal, Managing Partner &
Senior Vice President of Operations for Ethicus Healthcare Management, LLC. Mr. Choo was also previously the Senior Vice President
of Promise Healthcare, Inc. and Chief Executive Officer of Promise Specialty Hospital of Shreveport, a 146 bed JCAHO long-term
acute care, acute rehabilitation, gerontologic and adult psych turnaround hospital located in Shreveport, Louisiana. As second
in command of the Company, he had corporate oversight of the Company’s 14 other facilities from the standpoint of corporate
recruitment, new business development, and operational turnaround. Before his departure from Promise Healthcare, Inc., he brought
together over 120+ collective years of corporate operational experience, leadership, structure, “team concept” and
organization to the Promise Healthcare Executive team. Mr. Choo has over 29 years of experience in healthcare with expertise in
Operational Executive Management, Hospital Turnarounds, Hospital Acquisitions, and Ground Floor Start-ups. He has vast experience
in the clinical setting as well as the operational and organizational development & structure of hospitals and healthcare
organizations to comply with state & federal regulatory agency guidelines. Mr. Choo is finishing his Master’s degree
in Business Administration from California Coast University, and served in executive positions with various hospitals and companies
managing hospitals. He held a previous position as the Chief Executive Officer of HealthSouth in Reno a 63 Acute Rehabilitation
Freestanding Hospital in Reno, NV acting as Team Leader for the HealthSouth Surgical center, and HealthSouth Sports Clinic in
Carson City, NV. He also has been the Vice President of NPSI with responsibility for 4 major hospitals in the Los Angeles and
San Diego area, and Regional Chief Operations Officer of ARMS with responsibilities for 5 hospital turnarounds and 2 ground floor
start-ups.
Audit Committee and Financial Expert
We do not have an audit committee or an
audit committee financial expert. Our corporate financial affairs are simple at this stage of development and each financial transaction
can be viewed by any officer or Director at will. We will form an audit committee if it becomes necessary as a result of growth
of the Company or as mandated by public policy.
Code of Ethics
We do not currently have a Code of Ethics
applicable to our principal executive, financial and accounting officers; however, the Company plans to implement such a code
in the second quarter of 2014.
Potential Conflicts of Interest
Since we do not have an audit or compensation
committee comprised of independent Directors, the functions that would have been performed by such committees are performed by
our Board of Directors. Thus, there is a potential conflict of interest, in that our Directors who are also our officers have
the authority to determine issues concerning management compensation, and audit issues that may affect management decisions. We
are not aware of any other conflicts of interest with any of our Directors or officers.
ITEM 11. EXECUTIVE COMPENSATION
Any compensation received by our officers,
directors, and management personnel will be determined from time to time by our Board of Directors. Our officers, directors, and
management personnel will be reimbursed for any out-of-pocket expenses incurred on our behalf.
Summary Compensation
Employment Contracts
. We
have no employment agreements with any of our Directors or executive officers.
Stock Options/SAR Grants
.
On July 22, 2009, the Company adopted the Stock Incentive Plan, pursuant which the Company is authorized to grant equity-based
awards in the form of stock options, restricted common stock, restricted stock units, stock appreciation rights, and other stock
based awards to employees (including executive officers), directors, consultants and service provider of the Company and its subsidiaries. The
maximum number of shares available for grant under the plan is 25,000,000 shares of common stock. The number of shares
available for award under the plan is subject to adjustment for certain corporate changes and based on the types of awards provided,
all in accordance with the provisions of the plan. The plan may be administered by the Board. No options have been issued
to date under the plan.
SUMMARY COMPENSATION TABLE
Name and principal
position
|
|
Year
|
|
Accrued
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Choo CEO
|
|
2014
|
|
|
52,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
52,500
|
|
|
|
2013
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
0
|
|
Michael Gelmon, Former CEO
|
|
2014
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
30,000
|
|
|
$
|
30,000
|
|
|
|
2013
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Long-Term Incentive Plans.
As
of December 31, 2014, we had no group life, health, hospitalization, or medical reimbursement or relocation plans in effect. Further,
we had no pension plans or plans or agreements which provide compensation on the event of termination of employment or corporate
change in control.
Outstanding Equity Awards
As of December 31, 2014, none of our Directors or executive officers holds unexercised options, stock that has not vested, or
equity incentive plan awards.
Compensation of Directors
During the year 2014 no compensation has
been paid to any of our Directors in consideration for their services rendered in their capacity as directors. The salary to Mr.
Choo has been accrued and not paid.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following
table lists 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 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 328,851,197 shares of our common stock issued and outstanding as of December 31, 2014
1
. The address of each
person listed is c/o the Company
Officers, Directors and 5% Stockholders
|
|
No.
of
Shares
|
|
|
Percentage
Ownership
|
|
Michael Choo
|
|
|
0
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Anoe SA
|
|
|
20,000,000
|
|
|
|
6.0
|
%
|
Ahoran Albacher
|
|
|
43,000,000
|
|
|
|
13.1
|
%
|
Roni Kotler
|
|
|
42,000,000
|
|
|
|
12.8
|
%
|
Dori Sharoni
|
|
|
20,500,000
|
|
|
|
6.2
|
%
|
1
The vote attributed to the common stock listed above is only 40% of the total vote
iEquity Corp. holds
1 million shares of preferred stock with 60% of the total vote.
Item 13. Certain Relationships and Related Transactions,
and Director Independence.
We have not entered into any transaction
nor are there any proposed transactions in which our Director, executive officer, stockholders or any member of the immediate
families of the foregoing had or is to have a direct or indirect material interest during the year ended December 31, 2014.
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 a majority of
“independent directors” on our board of directors. We do not believe that any of our current directors
are independent.
Item 14. Principal Accountant Fees and Services.
Fees Paid to Principal Accountant
Anton & Chia has served as our independent auditor
for the fiscal years ended December 31, 2014 and 2013. The following table reflects the fees paid or accrued to our independent
auditors in years ended December 31, 2014 and 2013:
|
|
Fiscal Year Ended
|
|
|
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Audit Fees
|
|
$
|
13,000
|
|
|
$
|
14,000
|
|
Audit-Related Fees
|
|
|
|
|
|
|
|
|
Tax Fees
|
|
$
|
0
|
|
|
$
|
500
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Registered Public Accounting Firm.
As of December 31, 2014, the Board has not established a formal
documented pre-approval policy for the fees of our principal accountant.
The percentage of hours expended on the principal accountant’s
engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons
other than the principal accountant’s full-time, permanent employees was 0%.
The accompanying notes are an integral
part of these financial statements.
The accompanying notes are an integral
part of these financial statements.
The accompanying notes are an integral
part of these financial statements.
The accompanying notes are an integral
part of these financial statements.
NOTES TO FINANCIAL STATEMENTS (RESTATED)
(1)
Summary of Significant Accounting Policies
Basis of Presentation and Organization
Adama Technologies Corp. (“Adama
Technologies” or the “Company”) is a Delaware corporation and was incorporated under the laws of the State of
Delaware on September 17, 2007.
The accompanying financial statements
have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United
States of America.
Cash and Cash Equivalents
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 equivalents at December 31, 2014 and 2013.
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.
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 Company’s 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
carryforward period under the federal tax laws.
Changes in circumstances, such as the Company generating taxable
income, could cause a change in judgment about the reliability of 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 entity’s own assumptions about
market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The
fair value hierarchy consists of three 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 three 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 December 31, 2014 and 2013, 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.
Common Stock Registration Expenses
The Company considers incremental costs
and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain
date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are
expensed as incurred.
Estimates
The 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.
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 entity’s 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 entity’s ability
to continue as a going concern, and substantial doubt is not alleviated after consideration of management’s 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.
In June, 2014, the FASB issued ASU No.
2014-10, Development Stage Entities (Topic 915) – Elimination of Certain Financial Reporting Requirements, Including an
Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage
entity (DSE) its entirety from current accounting guidance. We have elected early adoption of this standard, which eliminates
the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.
We have evaluated the other recent accounting
pronouncements through ASU 2015-02 and believe that none of them will have a material effect on our financial statements.
(2)
Going Concern
The accompanying 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 December 31, 2014, the cash resources of the Company
were insufficient to meet its current business plan. These and other factors raise substantial doubt about the Company’s
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
from the possible inability of the Company to continue as a going concern. As of December 31, 2014, the Company has an accumulated
deficit of $18,366,636
(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 Company’s common stock at a price equal to 58% of the average of the lowest three
trading prices for the Common Stock during the most recent ten day period. As of December 31, 2012 this note was 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 December 31, 2014 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 Company’s common stock at a price equal to 58% of the average of the lowest three
trading prices for the Common Stock during the most recent ten day period. As of January 28, 2013 this note was 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. As of
December 31, 2014, the note balance 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 Company’s common stock at a fixed price of $0.0015. A loss on
extinguishment of debt of $50,000 was determined to exist and was recorded at the time of issue and is credited to a debt
premium on the balance sheet. $1,917 has been accreted to other income at December 31, 2014. $50,000 has been accreted to
other income as of December 31, 2014.
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 Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of
debt of $2,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance
sheet. $1,917 has been accredited to other income as of December 31, 2014. This note is in default subsequent to the year ended
December 31, 2014.
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 Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of
debt of $50,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance
sheet. $39,863 has been accredited to other income as of December 31, 2014. This note is in default subsequent to the year ended
December 31, 2014.
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 Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of
debt of $50,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance
sheet. $39,863 has been accredited to other income as of December 31, 2014. This note is in default subsequent to the year ended
December 31, 2014.
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 Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt
of $12,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet.
$6,542 has been accredited to other income as of December 31, 2014.
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 Company’s common stock at a fixed price of $0.0015. A loss on extinguishment
of debt of $104,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance
sheet. $52,142 has been accredited to other income as of December 31, 2014.
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 Company’s common stock at a fixed price of $0.0015. A loss on extinguishment
of debt of $42,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance
sheet. $12,312 has been accredited to other income as of December 31, 2014.
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 Company’s common stock at a fixed price of $0.0015. A loss on extinguishment
of debt of $42,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance
sheet. $1,841 has been accredited to other income as of December 31, 2014.
For the year ended December 31, 2014 and
2013 the Company has recognized $42,978 and $30,595 in interest expense related to the notes, has amortized $nil and $2,310 of
the beneficial conversion features which has been recorded as interest expense, and credited $193,934 and $nil to other income
respectively.
(4)
Derivative Liabilities
The Company has various convertible instruments
outstanding more fully described in Note 3.
As of December 31, 2014, the fair value
of the Company’s derivative liabilities was $171,560.
The following table summarizes the derivative liabilities included
in the balance sheet:
|
|
Fair
Value
Measurements
Using Significant
Unobservable
Inputs
(Level 3)
|
|
Derivative Liabilities:
|
|
|
|
|
Balance at December 31, 2013
|
|
$
|
215,282
|
|
Additions
|
|
|
-
|
|
Change in fair value
|
|
|
(43,722
|
)
|
Deletions
|
|
|
-
|
|
Balance at December 31, 2014
|
|
$
|
171,560
|
|
The fair values of derivative instruments were estimated using
the Black Scholes valuation model based on the following weighted-average assumptions:
|
|
Convertible
Debt
Instruments
|
|
Risk-free rate
|
|
|
0.12
|
%
|
Expected volatility
|
|
|
200.29
|
%
|
Expected life
|
|
|
0.496
year
|
|
(5)
Common Stock
The Company issued no common stock during
the year ended December 31, 2014. Details of prior stock issues are listed in the Company’s annual report for the year ended
December 31, 2013. On March 25, 2014, Novation Holdings, Inc., an unrelated party, purchased 1,000,000 shares of voting preferred
stock for $7,500. The preferred shares has voting power equal to 60 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.
(6)
Income Taxes
The provision (benefit) for income taxes
for the years ended December 31, 2014 and 2013 was as follows (assuming a 23% effective tax rate):
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
Current Tax Provision:
|
|
|
|
|
|
|
|
|
Federal-
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-deductible expenses
|
|
|
—
|
|
|
|
—
|
|
Taxable income
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Net operating loss carryforward
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total current tax provision
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Deferred Tax Provision:
|
|
|
|
|
|
|
|
|
Federal-
|
|
|
|
|
|
|
|
|
Deferred tax benefit on current loss
|
|
$
|
74,895
|
|
|
$
|
81,537
|
|
Non-deductible expenses
|
|
|
-
|
|
|
|
-
|
|
Change in valuation allowance
|
|
|
(74,895
|
)
|
|
|
(81,537
|
)
|
|
|
|
|
|
|
|
|
|
Total deferred tax provision
|
|
$
|
—
|
|
|
$
|
—
|
|
The Company had deferred income tax assets as of December 31,
2014 and 2013, as follows:
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
Loss carryforwards
|
|
$
|
1,174,497
|
|
|
$
|
1,099,602
|
|
Less - Valuation allowance
|
|
|
(1,174,497
|
)
|
|
|
(1,099,602
|
)
|
|
|
|
|
|
|
|
|
|
Total net deferred tax assets
|
|
$
|
—
|
|
|
$
|
—
|
|
The Company provided a valuation allowance
equal to the deferred income tax assets for the period ended December 31, 2014 and 2013, because it is not presently known whether
future taxable income will be sufficient to utilize the loss carryforwards.
As of December 31, 2014, the Company had
approximately $4,556,486 in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and expire
by the year 2032.
The Company did not identify any material
uncertain tax positions. The Company did not recognize any interest or penalties for unrecognized tax benefits.
The Company has filed income tax returns in the United States.
All tax years are closed by expiration of the statute of limitations.
(7) 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 was apparently served on former management but was never
answered or otherwise responded to by former management and was never disclosed in our prior periodic filings. The Plaintiff seeks
to recover $45,395 in 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 to it 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, a default was entered against us, and plaintiff is seeking
entry of a default judgment. As of the date of this report, no default judgment has been entered in the case, to our knowledge.
There are no other pending legal proceedings to which the Company
is a party or in which any director, officer or affiliate of the Company, or any owner of record or beneficially of more than
5% of any class of voting securities of the Company, is a party adverse to the Company or has a material interest adverse to the
Company. The Company has no property and is not the subject of any other pending legal proceedings.
(8) Subsequent Events
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, expected to close by December 31, 2014. Under the terms of the agreed merger
transaction, CIC will become the parent holding company of the Company and the Focus Gold companies, the latter of which will
also merge with each other; CIC will assume the reporting obligations of the Company under the Securities and Exchange Act of
1934; CIC will acquire and manage distressed debt obligations; and the Focus Gold companies will continue their existing
business of accounts receivable management, including collecting activities with respect to purchased debt provided to it by
CIC. Certain defined debts of the Company and the Focus Gold companies will be assumed by CIC as part of the acquisition
price, but otherwise the Company and the Focus Gold companies will remain as separate corporate entities. CIC will issue one
new share of common stock to the shareholders of the Company for each 1,000 fully diluted common shares of the Company then
outstanding; the outstanding Series A Preferred Stock of the Company will be exchanged for Series A Preferred Stock of CIC on
the same terms and preferences; each share of each of the Focus Gold companies will be exchanged for ten shares of CIC common
stock, and CIC common shareholders will retain a fifty percent ownership of the resulting common shares outstanding after the
transaction.
Closing of the transaction will close
as soon as all of the regulatory compliance matters have been completed, including the registration of shares to be issued in
the transaction as required by applicable federal and state securities laws, and is expected to close by June 30, 2015.
(9) Restatement
Company management subsequently restated our financial statements
included in our Form 10-K as previously filed for the year ended December 31, 2014. The restatement primarily comprises of a reclassification
of loss on extinguishment of debt to convertible debt premium..
ADAMA TECHNOLOGIES CORP.
RESTATED CONDENSED BALANCE SHEETS
|
|
Balance Sheets at December 31, 2014
|
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
Restated
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
Total Assets
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
Liabilities & Stockholders' Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
137,653
|
|
|
|
-
|
|
|
|
137,653
|
|
Loans from related parties - Directors and stockholders
|
|
|
22,500
|
|
|
|
-
|
|
|
|
22,500
|
|
Loans from third parties
|
|
|
3,000
|
|
|
|
-
|
|
|
|
3,000
|
|
Convertible notes payable
|
|
|
363,750
|
|
|
|
-
|
|
|
|
363,750
|
|
Convertible note premium
|
|
|
-
|
|
|
|
108,066
|
(a)
|
|
|
108,066
|
|
Derivative liability
|
|
|
171,560
|
|
|
|
-
|
|
|
|
171,560
|
|
Total Liabilities
|
|
|
698,463
|
|
|
|
108,066
|
|
|
|
806,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
Additional paid in capital
|
|
|
17,781,857
|
|
|
|
(203,565
|
)(b)
|
|
|
17,578,292
|
|
Stock subscriptions receivable
|
|
|
(51,070
|
)
|
|
|
|
|
|
|
(51,070
|
)
|
Deficit accumulated during the development stage
|
|
|
(18,462,134
|
)
|
|
|
95,498
|
|
|
|
(18,366,636
|
)
|
Total Deficit
|
|
|
(698,463
|
)
|
|
|
108,067
|
|
|
|
(806,529
|
)
|
Total Liabilities and Stockholders' Deficit
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
ADAMA TECHNOLOGIES CORP.
RESTATED CONDENSED STATEMENTS OF OPERATIONS
|
|
For the Year Ended December 31, 2014
|
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
Restated
|
|
Revenues
|
|
$
|
-
|
|
|
|
|
|
|
$
|
-
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional fees
|
|
|
10,400
|
|
|
|
-
|
|
|
|
10,400
|
|
Legal-incorporation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Consulting
|
|
|
202,500
|
|
|
|
-
|
|
|
|
202,500
|
|
Travel
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Rent
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Impairment loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Franchise tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other general and administrative expenses
|
|
|
5,410
|
|
|
|
-
|
|
|
|
5,410
|
|
Total Expenses
|
|
|
218,310
|
|
|
|
-
|
|
|
|
218,310
|
|
Loss before other income (expense)
|
|
|
(218,310
|
)
|
|
|
-
|
|
|
|
(218,310
|
)
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency transaction gains
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Forgiveness of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Foreign currency transaction losses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Derivative expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Loss on extinguishment of debt
|
|
|
(203,564
|
)
|
|
|
(98,436
|
)(c)
|
|
|
(302,000
|
)
|
Other income
|
|
|
-
|
|
|
|
193,934
|
(d)
|
|
|
193,934
|
|
Change in fair value of derivatives
|
|
|
43,724
|
|
|
|
-
|
|
|
|
43,724
|
|
Interest expense
|
|
|
(42,978
|
)
|
|
|
-
|
|
|
|
(42,978
|
)
|
Loss before income taxes
|
|
|
(421,129
|
)
|
|
|
95,498
|
|
|
|
(325,631
|
)
|
Income tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
$
|
(421,129
|
)
|
|
$
|
95,498
|
|
|
$
|
(325,631
|
)
|
Net loss per share - basic and diluted
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
$
|
(0.00
|
)
|
Weighted average number of shares outstanding during
the period - basic and diluted
|
|
|
328,851,197
|
|
|
|
-
|
|
|
|
328,851,197
|
|
ADAMA TECHNOLOGIES CORP.
RESTATED CONDENSED STATEMENT OF CASH
FLOWS
|
|
For the Year Ended December 31, 2014
|
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
Restated
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
|
$
|
(421,129
|
)
|
|
$
|
95,498
|
|
|
$
|
(325,631
|
)
|
Adjustments to reconcile net loss to net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Amortization of beneficial conversion feature
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Impairment loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Loss on extinguishment of debt
|
|
|
203,564
|
|
|
|
98,436
|
|
|
|
302,000
|
|
Other income
|
|
|
-
|
|
|
|
(193,934
|
)
|
|
|
(193,934
|
)
|
Amortization
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Forgiveness of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Derivative expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Change in fair value of derivatives
|
|
|
(43,724
|
)
|
|
|
-
|
|
|
|
(43,724
|
)
|
Accounts payable and accrued liabilities
|
|
|
261,288
|
|
|
|
-
|
|
|
|
261,288
|
|
Net Cash Used in Operating Activities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
(a) Reclass adjustment of loss on extinguishment of debt to
convertible debt premium.
(b) Reverse adjustment to take loss on extinguishment of debt
out of APIC.
(c) Net adjustment to loss on extinguishment of debt.
(d) Adjustment to record the accretion of convertible debt
premium to other income.