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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

FORM 10-Q
___________________

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

 

For the quarterly period ended March 31, 2014

  

 

Commission file number 0-54862
 

ADB INTERNATIONAL GROUP, INC.
(Exact Name Of Registrant As Specified In Its Charter)

New Jersey 90-0964924
(State of Incorporation) (I.R.S. Employer Identification No.)
    
1440 West Bitters Road, #1931, San Antonio, TX 78248
(Address of Principal Executive Offices) (ZIP Code)

 Registrant's Telephone Number, Including Area Code: (407) 496-3000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act) or a smaller reporting company .

Large accelerated filer ¨ Accelerated filer ¨  Non-Accelerated filer ¨  Smaller reporting company x

On May 8, 2014, the Registrant had 284,548,014 shares of common stock outstanding.






 

TABLE OF CONTENTS

Item
Description
Page
 

PART I - FINANCIAL INFORMATION

 
ITEM 1.    FINANCIAL STATEMENTS - UNAUDITED. 3
     Balance Sheets 4
     Statements of Operations 5
     Statements of Cash Flows 6
     Notes to Financial Statements 7
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS. 8
ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 10
ITEM 4.    CONTROLS AND PROCEDURES. 10
   

PART II - OTHER INFORMATION

   
ITEM 1.    LEGAL PROCEEDINGS. 11
ITEM 1A.    RISK FACTORS. 11
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 11
ITEM 3.    DEFAULT UPON SENIOR SECURITIES. 11
ITEM 4.    MINE SAFTY DISCLOSURE. 11
ITEM 5.    OTHER INFORMATION. 11
ITEM 6.    EXHIBITS. 11

 




PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS Back to Table of Contents

 

ADB INTERNATIONAL GROUP, INC.
(A Development Stage Company)
f/k/a Centriforce Technology Corporation
BALANCE SHEETS

Back to Table of Contents

  March 31, 2014
(Unaudited)

December 31, 2013

ASSETS

Current assets:
   Cash $ 52,781 $ 76,535
      Total current assets 52,781 76,535
 
        Total Assets $ 52,781 $ 76,535
 

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

 
Current liabilities:
   Accrued expenses $ 27,091 $ 21,368
   Convertible notes payable to related parties, net of discount 22,515 4,874
   Convertible notes payable, net of discount 101,017 89,106
   Total current liabilities 150,623 115,348
 
Stockholders' deficiency:
   Preferred stock, no par value; 25,000,000 shares authorized; no shares issued and outstanding - -
   Common stock, $0.0001 par value; 500,000,000 shares authorized; and
     284,548,014 issued and outstanding at March 31, 2014 and December 31, 2013, respectively 284,548 284,548
   Additional paid in capital 3,259,349 3,259,349
   Deficit accumulated before re-entry to the development stage (2,290,748) (2,290,748)
   Accumulated deficit after re-entry to development stage (1,350,991) (1,291,962)
     Total stockholders' (deficit) (97,842) (38,813)
       Total Liabilities and Stockholders' (Deficit) $ 52,781

$

76,535
 
See Notes to Unaudited Interim Financial Statements.


ADB INTERNATIONAL GROUP, INC.

(A Development Stage Company)

f/k/a Centriforce Technology Corporation

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013 AND FOR THE PERIOD FROM
RE-ENTERING DEVELOPMENT STAGE (JANUARY 1, 2011) TO MARCH 31, 2014 (Unaudited)
(Unaudited)

Back to Table of Contents

 

For the period from

For the three

For the three

re-entering development

months ended

months ended

  stage (January 1, 2011)

March 31, 2014

March 31, 2013

to March 31, 2014

  

Revenues

$

-

$

-

$

-

 
Expenses
General and administrative

23,754

16,329

1,198,021

Total

23,754

16,329

1,198,021

 
(Loss) from operations (23,754) (16,329) (1,198,021)
Other income (expense)
   Interest expense (5,723) (4,227) (52,907)
  Amortization of debt discount

(29,552)

(9,763)

(100,063)

Total other (expense) (35,275) (13,990) (152,970)
   Total cost and expense (59,029) (30,319) (1,350,991)
 
Loss from continuing operations before income taxes (59,029) (30,319) (1,350,991)
Income tax

-

-

-

Net loss

$

(59,029)

$

(30,319)

$

(1,350,991)

 
(Loss) per common share - basic and diluted
Basic and diluted net loss

$

(0.00)

$

(0.00)

 
Weighted average number of common shares outstanding (basic and diluted)

284,548,014

76,994,799

 
See Notes to Unaudited Interim Financial Statements.


ADB INTERNATIONAL GROUP, INC.

(A Development Stage Company)

f/k/a Centriforce Technology Corporation

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013 AND FOR THE PERIOD FROM
RE-ENTERING DEVELOPMENT STAGE (JANUARY 1, 2011) TO MARCH 31, 2014
(Unaudited)

Back to Table of Contents

  
For the three For the three For the period from re-entering
months ended months ended development stage (January 1, 2011)
March 31, 2014 March 31, 2013 to March 31, 2014
 

Cash flows from operating activities:

Net loss

$

(59,029)

$

(30,319)

$

(1,350,991)

Adjustments to reconcile net loss to net cash used in operating activities:
   Donated services - 3,000 36,000
   Shares issued for services - - 1,000,000
   Amortization of debt discount 29,552 9,763 100,063
Changes in assets and liabilities:
   Increase (decrease) in prepaid expenses

-

900

-

   Increase (decrease) in accounts payable and accrued expenses

5,723

1,443

62,663

Cash provided by (used in) operating activities

(23,754)

(15,213)

(152,265)

  
Cash flow from financing activities:
   Proceeds from sale of common stock - - 2,000
   Proceeds from issuance of convertible notes payable - related parties - - 74,851
   Proceeds from issuance of convertible notes payable - 15,000 110,195
Cash provided by financing activities

-

15,000

205,046

  
Change in cash

(23,754)

(213)

52,781

Cash - beginning of period

76,535

2,900

-

Cash - end of period

$

52,781

$

2,687

$

52,781

 
Supplemental cash flow disclosure:
Non-cash transactions:
   Debt converted to common stock $ - $ - $ 146,032
   Discount on convertible debt $ - $ 15,000 $ 161,577
   Forgiveness of accrued salary by related party $ - $ - $ 6,847
 
See Notes to Unaudited Interim Financial Statements.


ADB INTERNATIONAL GROUP, INC.
(A Development Stage Company)
f/k/a Centriforce Technology Corporation
Notes to Unaudited Financial Statements
March 31, 2014

Back to Table of Contents

1.    The Company and Significant Accounting Policies

Organizational Background: ADB International Group, Inc., (“ADBI” or the “Company”) is a New Jersey corporation based in Florida with offices in Israel. ADB International Group, Inc. (“ADB”) is a holding company with two subsidiaries. Centriforce Technology Corp (Centriforce), which is wholly owned by ADB, and Subsea Oil Technologies, Inc.

Basis of Presentation: 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 March 31, 2014, the cash resources of the Company were insufficient to meet its current business plan, and the Company had negative working capital. 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.

Significant Accounting Policies

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

Cash and Cash EquivalentsFor financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were no cash equivalents as of March 31, 2014 and December 31, 2013.

Property and Equipment: New property and equipment are recorded at cost. Property and equipment included in the bankruptcy proceedings and transferred to the Trustee had been valued at liquidation value. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 5 years. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place.

Development Stage Enterprise: As of January 1, 2011, the Company re-entered the development stage. The financial statements have been updated to reflect this change as of this date.

Valuation of Long-Lived Assets: We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

Stock Based Compensation: Stock-based awards are accounted for using the fair value method in accordance with ASC 718, Share-Based Payments. Our primary type of share-based compensation consists of stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options include the market value of the Company’s common stock, the estimated volatility of the Company’s common stock, the exercise price of the warrants and the risk free interest rate.

Accounting For Obligations And Instruments Potentially To Be Settled In The Company’s Own Stock: We account for obligations and instruments potentially to be settled in the Company’s stock in accordance with FASB ASC 815, Accounting for Derivative Financial Instruments. This issue addresses the initial balance sheet classification and measurement of contracts that are indexed to, and potentially settled in, the Company’s own stock.

Fair Value of Financial Instruments: FASB ASC 825, “Financial Instruments,” requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At March 31, 2014 and December 31, 2013, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses.) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.

Fair Value Measurements: The Company measures fair value under a framework that utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of inputs which prioritize the inputs used in measuring fair value are:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Other inputs that are observable, directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs.

Level 3: Unobservable inputs are used when little or no market data is available, which requires the Company to develop its own assumptions about how market participants would value the assets or liabilities. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques in its assessment that maximize the use of observable inputs and minimize the use of unobservable inputs. The following table presents the Company’s financial assets and liabilities that are carried at fair value, classified according to the three categories described above:

Fair Value Measurements at March 31, 2014

Quoted Prices in Active

Significant Other

Significant

Markets for Identical Assets

Observable Inputs

Unobservable Inputs

Total

(Level 1)

(Level 2)

(Level 3)

None

$

-

$

-

$

-

$

-

Total assets at fair value

$

-

$

-

$

-

$

-

 

Fair Value Measurements at December 31, 2013

Quoted Prices in Active

Significant Other

Significant

Markets for Identical Assets

Observable Inputs

Unobservable Inputs

Total

(Level 1)

(Level 2)

(Level 3)

None

$

-

$

-

$

-

$

-

Total assets at fair value

$

-

$

-

$

-

$

-

When the Company changes its valuation inputs for measuring financial assets and liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those assets or liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the fiscal periods ended March 31, 2014 and December 31, 2013, there were no significant transfers of financial assets or financial liabilities between the hierarchy levels.

Earnings per Common Share: We compute net income (loss) per share in accordance with ASC 260, Earning per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. All per share disclosures retroactively reflect shares outstanding or issuable as though the reverse split had occurred January 1, 2011.

Income Taxes: We have adopted ASC 740, Accounting for Income Taxes. Pursuant to ASC 740, we are required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

We must make certain estimates and judgments in determining income tax expense for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.

Deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax basis of assets and liabilities using the tax rates and laws in effect when the differences are expected to reverse. ASC 740 provides for the recognition of deferred tax assets if realization of such assets is more likely than not to occur. Realization of our net deferred tax assets is dependent upon our generating sufficient taxable income in future years in appropriate tax jurisdictions to realize benefit from the reversal of temporary differences and from net operating loss, or NOL, carryforwards. We have determined it more likely than not that these timing differences will not materialize and have provided a valuation allowance against substantially all of our net deferred tax asset. Management will continue to evaluate the realizability of the deferred tax asset and its related valuation allowance. If our assessment of the deferred tax assets or the corresponding valuation allowance were to change, we would record the related adjustment to income during the period in which we make the determination. Our tax rate may also vary based on our results and the mix of income or loss in domestic and foreign tax jurisdictions in which we operate.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and to the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we will reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We will record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.

ASC 740 which requires recognition of estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income tax is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.

Uncertain Tax Positions

The Financial Accounting Standards Board issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109, Accounting for Income Taxes” (“FIN No. 48”) which was effective for the Company on January 1, 2007.  FIN No. 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under FIN No. 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.  The tax benefits recognized in the financial statements from such position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.  FIN No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements.

Our federal and state income tax returns are open for fiscal years ending on or after December 31, 2008. We are not under examination by any jurisdiction for any tax year. At December 31, 2013 we had no material unrecognized tax benefits and no adjustments to liabilities or operations were required under FIN 48.

Recent Accounting Pronouncements

In July 2013, FASB issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." The provisions of ASU No. 2013-11 require an entity to present an unrecognized tax benefit, or portion thereof, in the statement of financial position as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward, with certain exceptions related to availability. ASU No. 2013-11 is effective for interim and annual reporting periods beginning after December 15, 2013. The adoption of ASU No. 2013-11 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.

The Financial Statements presented herein have been prepared by us in accordance with the accounting policies described in our December 31, 2013 Annual Report and should be read in conjunction with the Notes to Financial Statements which appear in that report.

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on going basis, we evaluate our estimates, including those related intangible assets, income taxes, insurance obligations and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.

In the opinion of management, the information furnished in these interim financial statements reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the three-month periods ended March 31, 2014 and 2013. All such adjustments are of a normal recurring nature. The Financial Statements do not include some information and notes necessary to conform to annual reporting requirements.

2. Stockholders' Equity

Common Stock-We are currently authorized to issue up to 500,000,000 shares of $0.001 par value common stock. All issued shares of common stock are entitled to vote on a 1 share/1 vote basis.

Recent Issuances of Common Stock-2013:

On October 14, 2013 we issued 7,553,215 shares of our common stock in settlement of $50,000 due to a former related party plus associated accrued interest of $25,532. The conversion occurred within the terms of the promissory note and no gain or loss resulted.

On December 23, 2013 we issued 200,000,000 shares of common stock in exchange for $20,000.These shares were sold to an officer of the company at a discount to market at the date of the agreement. The shares were valued at the closing price as of the date of the agreement and resulted in recognition of $1,000,000 in compensation services for the year ended December 31, 2013.

Historical Activity Prior to December 31, 2013:

In 2013, our former CEO provided services to the Company without cost valued at $3,000.

Stock Issued upon conversion of debt-During the year ended December 31, 2012, we issued 7,020,500 shares of our common stock in settlement of $50,000 due to a former related party plus associated accrued interest of $20,500. The conversion occurred within the terms of the promissory note and no gain or loss resulted.

Preferred Stock-We are currently authorized to issue up to 25,000,000 shares of no par value preferred stock. Effective December 31, 2007 the board of directors approved the cancellation of all previously issued preferred shares and approved the cancellation and extinguishment of all common and preferred share conversion rights of any kind, including without limitation, warrants, options, convertible debt instruments and convertible preferred stock of every series and accompanying conversion rights of any kind.

Stock Option-There are no employee or non-employee option grants.

3. Related Party Transactions not Disclosed Elsewhere

Mr. Zekri, our Secretary and director, provided without cost to the Company his services valued at $800 per month which totaled $2,400 for 2014. He also provided without cost to the Company office space valued at $200 per month, which totaled $600 for the three-month period ended March 31, 2014.

4. Disposition of Inactive Subsidiaries

On January 30, 2012, ADBI relinquished its 100% ownership and all rights to Centriforce Technology Corporation and its 50% ownership in Sub Sea Oil Technologies, Inc. The underlying assets of both Centriforce and SubSea had no value at that time.

5. Convertible Notes

During 2013 the Company signed a series of twelve new unsecured promissory notes for an aggregate of $128,920 to related parties. One note for $71,545 is due to current officer/director of the company. The notes bear interest at 15% per annum and are due approximately one year from the date of issuance. The maturity dates range from February 5, 2014 to December 31, 2014 with all amounts recorded as current liabilities. The notes have conversion rights that allow the holder of the note to convert the principal balance into the Company's common stock at the lender's sole discretion at $0.0035 per share except for the officer/director note of $71,545 which is convertible at $0.0001 per share.

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 because the effective conversion price was less than the quoted market price at the time of the issuance. The Company calculated the value of the BCF using the intrinsic method as stipulated in ASC 470. The BCF of $128,920 has been recorded as a discount to the 2013 notes payable and a corresponding entry to Additional Paid-in Capital. The historical aggregate discount arising from the BCF on all such notes is $185,046.

For the three months ended March 31, 2014 and 2013 the Company has recognized $5,723 and $4,227 in accrued interest expense, respectively, and has amortized $29,552 and $9,763, respectively of the beneficial conversion feature which has also been recorded as interest expense. The aggregate carrying value of convertible notes is as follows:

March 31, 2014

December 31, 2013

Face amount of the notes $ 185,046 $ 185,046
Less unamortized discount $ (61,514) $ (91,066)
Carrying value $ 123,532 $ 93,980

Since Inception:-On January 20, 2009, the Company received $50,000 through the issuance of a convertible note. The note bears interest at the rate of 10% per annum and has a maturity date of 12 months. The note is convertible into common stock at a price of $0.01 per share. The company recorded a debt discount of $50,000 all of which was amortized to interest expense during 2009. During the year ended December 31, 2012, the Company issued 7,020,500 shares in connection with the conversion of this debt into equity, along with $20,500 of accrued interest. The conversion occurred within the terms of the promissory note and no gain or loss resulted. The net balance of the note was zero as of 12/31/2012 and $50,000 as of 12/31/2011.

On January 18, 2010, the Company received $50,000 through the issuance of a convertible note. The note bears interest at the rate of 10% per annum and has a maturity date of 12 months. The note is convertible into common stock at a price of $0.01 per share. The company recorded a debt discount of $50,000 all of which was amortized to interest expense during 2010. The net balance of the note was $50,000 as of 12/31/2012 and 12/31/2011.

During 2012, the Company received a total of $56,126 through the issuance of convertible notes to 5 shareholders. The notes bear interest at the rate of 15% per annum and having a maturity date of 12 months. The notes are convertible into common stock par value $0.001 per share. The Company recorded interest expense on the amount of $12,525 during 2012 and $12,610 in amortization of debt discount during 2012.

6. Development Stage Activities and Going Concern

The Company is currently in the development stage, which it re-entered on January 1, 2011 and has limited operations. 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 March 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.

7. Subsequent Events

There were no subsequent events following the period ended March 31, 2014 through the date the financial statements were issued.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION Back to Table of Contents

Overview

Since early 2012, following our transition from our water desalinization technology business, we have pursued our plan to serve as a distributor of water treatment products manufactured by established companies in the water treatment industry. During 2012, the Company’s business activities involved evaluating the water treatment business and product research, seeking marketing and distribution agreements, evaluating the regulatory requirements and engaging in related activities to become a distributor of water treatment products in certain markets.

During 2012, the Company consulted with third parties, including its shareholders and technical persons known by or introduced to the Company having knowledge of the water treatment industry, in order to evaluate competing water treatment technologies and potential "partners" for which the Company could potentially serve as distributor. These efforts resulted in the execution of Distribution Agreements with Treatec21 and GreenEng, companies that we believe have competitive and innovative water treatment technologies and products.

The Company was successful in entering into Distribution Agreements with both Treatec21 and GreenEng and plans to evaluate other potential water treatment product manufacturers, whether based in Israel or elsewhere, and enter into additional distribution agreements. Our initial focus was to market and sell the Treatec and GreenEng water treatment products in North America through direct sales and representatives, as well as in Australia and New Zealand through our representative, Mr. Tal Yoresh, a resident of Australia. The Company believed that the Treatec21 and GreenEng water treatment products, as well as other water treatment technology products, had the potential to enable us to be competitive in the water treatment markets in which we operate.

Background-Water Treatment Business

In furtherance of our business plan, we entered into distribution agreements with Treatec21 Industries Ltd (treatec21.com/Eng/), a major Israeli-based private company ("Treatec"), a wholly-owned subsidiary for Yaad, a company with securities traded on the Tel Aviv Exchange, and in January 2013 with Green Eng Absolute Green Engineering Ltd, also a private Israeli company. Both Treatec21 and Green Eng are engaged in the water treatment industry with Treatec having significant sales in Israel, China and Europe, while most of GreenEng sales are in Israel. While there was no assurance, the Company believed that it would have been able to successfully enter into licensing agreements with other companies in the water treatment industry during 2013.

Following execution of our license agreements with Treatec and GreenEng, we estimated that to implement and complete the first phase of our business plan, we would require approximately $400,000. However, we did have any financing arrangements in place and we were not able to secure such financing to pursue our business plan and, notwithstanding our belief that we would be able to successfully sell and distribute both the Treatec and GreenEng water treatment products in North America, we were not able to generate any revenues from the sale of any water treatment products.

During the last quarter of 2013, we had discussion with a principal shareholder, Ron Weissberg, who is now our Chairman, CEO, CFO and control shareholder, about considering other business opportunities for the Company. To that end, Mr. Weissberg invested $91,545 in December 2013, evidenced by his subscription for 200 million shares at par value and a convertible note in the amount of $71,545. The convertible note payable to Mr. Weissberg bears interest at the rate of 15% per annum, is due in December 2014 and is convertible into shares of the Company's common stock at a price of $0.0001 per share. At March 31, 2014, the Company is deemed to be a shell company as that term is defined under Rule 144(i) promulgated by the SEC under the Securities Act of 1933, as amended.

Results of Operations during the three months ended March 31, 2014 as compared to the period ended March 31, 2013

We have not generated any revenues since inception. We had operating expenses related to general and administrative expenses, being a public company and interest expenses. During the period ended March 31, 2014, we incurred $59,029 in net loss due to general and administrative expenses of $23,754 and other expenses of $35,275 consisting of interest expense of $5,723 and $29,552 in amortization in debt discount compared to a net loss during the period ended March 31, 2013 of $30,319 mainly due to general and administrative expenses of $16,329, interest expenses of $4,227 and $9,763 in amortization of debt discount.

Our general and administrative expenses increased by $7,425 or 45% during the period ended March 31, 2014 as compared to the same period in the prior year mainly due to an increase in professional fees. During the three months ended March 31, 2014, our interest expenses increased by $1,496 or 35% as compared to the same period in the prior year. Amortization of debt discount increase by $19,789 or 202% as compared to the same period in the prior year.

Liquidity and Capital Resources

On March 31, 2014, we had total assets of $52,781 consisting of cash in the same amount. We had total current liabilities of $150,623 consisting of $27,091 in accrued expenses and $123,532 in convertible notes compared to accrued expenses of $21,368 and $93,980 in convertible notes on December 31, 2013. Our accumulated deficits as of March 31, 2014 and December 31, 2013 were $3,641,739 and $3,582,710, respectively.

We used $23,754 in our operating activities during the three months ended March 31, 2014, which was due to a net loss of $59,029 offset by amortization of debt discount of $29,552 and an increase in accounts payable of $5,723. We used $15,213 in our operating activities during the three months ended March 31, 2013, which was due to a net loss of $30,319 offset by donated services valued at $3,000, amortization of debt discount of $9,763, increase in prepaid expenses of $900 and an increase in accounts payable of $1,443.

We financed our negative cash flow during the three months ended March 31, 2014 through available cash resources. We financed our negative cash flow from operations during the same period in the prior year through the issuance of convertible notes of $15,000.

There can be no assurance that additional capital will be available to us as we pursue other business opportunities. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

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. There are no limitations in our articles of incorporation on our ability to borrow funds or raise funds through the issuance of restricted common stock. Our limited resources and lack of operating history may make it difficult to do borrow funds or raise capital. Our inability to borrow funds or raise funds through the issuance of restricted common stock required to facilitate our business plan may have a material adverse effect on our financial condition and future prospects. Any borrowing will subject us to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Back to Table of Contents

None.

ITEM 4. CONTROLS AND PROCEDURES Back to Table of Contents

Evaluation of disclosure controls and procedures. As of March 31, 2014, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the  Exchange Act. Based upon the evaluation of these controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.

Changes in internal controls. During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS Back to Table of Contents

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. However, from time to time, we may become a party to certain legal proceedings in the ordinary course of business.

ITEM 1A. RISK FACTORS  Back to Table of Contents

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1. Description of Business, subheading "Risk Factors” in our Annual Report on Form 10-K/A for the year ended December 31, 2013, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K/A are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Back to Table of Contents

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES Back to Table of Contents

None.

ITEM 4. MINE SAFTY DISCLOSURE. Back to Table of Contents

Not applicable.

ITEM 5. OTHER INFORMATION Back to Table of Contents

Not applicable.

ITEM 6. EXHIBITS Back to Table of Contents

(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

Exhibit No.

Description
31.1 Section 302 Certification of the Sarbanes-Oxley Act of 2002 of Sharar Ginsberg, filed herewith.
32.1

Section 906 of the Sarbanes-Oxley Act of 2002 of Sharar Ginsberg, filed herewith


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned.

ADB INTERNATIONAL INC.
By: /s/ Ron Weissberg
Ron Weissberg
Chief Executive Officer and Chairman
(Principal Executive Officer)
Date: May 8, 2014

By: /s/ Ron Weissberg
Ron Weissberg
Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
Date: May 8, 2014

Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ Ron Weissberg
Ron Weissberg
Chief Executive Officer and Chairman
(Principal Executive Officer)
Date: May 8, 2014

By: /s/ Yoseph Zekri
Yoseph Zekri
Director
Date: May 8, 2014