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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

             


FORM 10-Q

             


[X]

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

ACT OF 1934


For the quarter ended June 30, 2014


[  ]

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

ACT OF 1934


For the transition period from  

to  


Commission file number: 333-148910

             


ADAMA TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

             


Delaware                                                                                                                        98-0552470

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


1365 N. Courtenay Parkway, Suite A

Merritt Island, FL 32953

 (Address of principal executive offices)


(321) 452-9091

(Issuer's telephone number)


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

Yes [ X ]  No [   ]


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


Large accelerated filer               [   ]                                                      Accelerated filer                                 [   ]

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

(Do not check if a smaller reporting company)


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

Yes [X ]  No [  ]


As of August 14, 2014, 328,851,197 shares of common stock, par value $0.0001 per share, were issued and outstanding, and 500,000,000 common shares were authorized.







ADAMA TECHNOLOGIES CORPORATION

FORM 10-Q

QUARTER ENDED JUNE 30, 2014


TABLE OF CONTENTS



Page

PART I - FINANCIAL INFORMATION


Item 1. Financial Statements

F-1

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

2

Item 3 Quantitative and Qualitative Disclosures About Market Risk

4

Item 4 Controls and Procedures

4

PART II - OTHER INFORMATION


Item I. Risk Factors

5

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

5

Item 3. Defaults Upon Senior Securities

5

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

6

Item 5. Other Information

6

Item 6. Exhibits

6

Signatures

6



























i







PART I  FINANCIAL INFORMATION


Item 1. Financial Statements.



ADAMA TECHNOLOGIES CORPORATION


INDEX TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2014



Financial Statements

Page



Condensed Balance Sheets as of June 30,2014 (Unaudited) and December 31, 2013

F-1



Condensed Statements of Operations for the three and  six months ended June 30,2014 and 2013  (Unaudited)

F-2



Condensed Statements of Cash Flows for the six months ended June 30,2014 and 2013 (Unaudited)

F-3



Notes to Unaudited Condensed Financial Statements

F-4






















1


ADAMA TECHNOLOGIES CORP.

CONDENSED BALANCE SHEETS







June 30, 2014 (Unaudited)


December 31, 2013 (Audited)





Assets




Current Assets





Cash



 $                            -


 $                        -

Total Assets


 $                            -


 $                        -





Liabilities & Stockholders' Deficit




Current Liabilities





Accounts payable and accrued liabilities

 $                105,603


 $            116,787


Loans from related parties - Directors and stockholders

                     30,000


                  30,000


Loans from third parties

                       3,000


                    3,000


Convertible notes payable, net of discount

                   180,233


                123,750


Derivative liability

                   191,116


                215,282

Total Liabilities

                   509,952


                488,819









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, respectively

                     32,885


                  32,885


Additional paid in capital

              17,683,292


           17,564,292


Stock subscriptions receivable

                   (54,740)


                (44,990)


Accumulated deficit

            (18,171,389)


         (18,041,006)

Total Stockholders Deficit

                 (509,952)


              (488,819)

Total Liabilities and Stockholders' Deficit

 $                            -


 $                        -






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




F-1


ADAMA TECHNOLOGIES CORP.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)





For the Three Months Ended June 30,

For the Six Months Ended June 30,





2014

2013

2014

2013

Revenues


 $                        -

 $                        -

 $                        -

 $                        -

Expenses:






General and administrative






Professional fees

                           -

                           -

                   5,200

                   3,500


Consulting

                 30,000

                           -

                 90,000

                           -


Other general and administrative expenses

                      284

                   7,372

                   1,135

                   7,372

Total Expenses

                 30,284

                   7,372

                 96,335

                 10,872

Loss before other income (expense)

               (30,284)

                 (7,372)

               (96,335)

               (10,872)

Other income (expense)





Amortization of beneficial conversion feature

(40,482)

-

(40,482)

-

Change in fair value of derivatives

               (43,278)

-

                 24,166

                           -

Interest expense

                 (9,699)

                 (8,046)

               (17,732)

               (17,401)

Loss before income taxes

             (123,743)

               (15,418)

          (130,383)

               (28,273)

Income tax expense

                           -

                           -

                           -

                           -

Net Loss


 $          (123,743)

 $            (15,418)

 $          (130,383)

 $            (28,273)

Net loss per share - basic and diluted

 $                (0.00)

 $                (0.00)

 $                (0.00)

 $                (0.00)

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

        328,851,197

        439,851,197

        328,851,197

        439,851,197



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


F-2



ADAMA TECHNOLOGIES CORP.

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


 For the Six Months Ended June 30, 2014

 For the Six Months Ended June 30, 2013

OPERATING ACTIVITIES:



Net loss

 $              (130,383)

 $             (28,273)

Adjustments to reconcile net loss to net cash



used in operating activities:



Amortization of beneficial conversion feature

40,482

                    2,309

Change in fair value of derivatives

                 (24,166)

                            -

Accounts payable and accrued liabilities

                 114,067

                  24,964

Net Cash Used in Operating Activities

                            -

                  (1,000)

FINANCING ACTIVITIES:



Proceeds from stockholder loans

                            -

                    1,000

Net Cash Provided by Financing Activities

                            -

                    1,000

Net Increase (decrease) in Cash

                            -

                            -

Cash, beginning of period

                            -

                       601

Cash, end of period

 $                         -

 $                    601

SUPPLEMENTARY CASH FLOW INFORMATION



Cash paid during the year/period for:



Income Taxes

 $                         -

 $                         -

Interest

 $                         -

 $                         -

SUPPLEMENTARY CASH FLOW INFORMATION



Notes issued to settle payables

 $              120,000

 $                         -

Beneficial conversion feature

 $              104,000

$                         -



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


F-3






ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2014 (Unaudited)


Note 1  Summary of Significant Accounting Policies


Basis of Presentation and Organization


Adama Technologies Corporation (Adama Technologies or the Company) is a Delaware corporation. The Company was incorporated under the laws of the State of Delaware on September 17, 2007.  The Company currently conducts no active operations and is engaged in identifying and merging with a suitable operating company.


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


Unaudited Interim Financial Statements


The interim condensed financial statements of the Company as of June 30, 2014, and for the period then ended, are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the Companys financial position as of June 30, 2014, and the results of its operations and its cash flows for the period ended June 30, 2014. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2014. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States. Refer to the Companys audited financial statements as of December 31, 2013, filed with the Securities and Exchange Commission (SEC), for additional information, including significant accounting policies.


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 a maturity of six months or less to be cash and cash equivalents.


Loss per Share

 

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


Income Taxes


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







F-4





ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2014 (Unaudited)


Note 1  Summary of Significant Accounting Policies (continued)


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


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


Fair Value of Financial Instruments


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

 

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

 

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

 

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

 

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of June 30, 2014 and December 31, 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.



F-5






ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2014 (Unaudited)


Note 1  Summary of Significant Accounting Policies (continued)


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 June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-10 during the quarter ended May 31, 2014, thereby no longer presenting or disclosing any information required by Topic 915.


Note 2  Going Concern


The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of June 30, 2014, the cash resources of the Company were insufficient to meet its current business plan. These and other factors raise substantial doubt about the Companys ability to continue as a going concern.


The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. As of June 30, 2014, the Company has an accumulated deficit of $18,171,389.


F-6





ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2014 (Unaudited)


Note3  Convertible Notes Payable


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


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


On October 15, 2013, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on October 15, 2014. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Companys common stock at a fixed price of $0.0015. A beneficial conversion feature of $30,000 was determined to exist and was recorded at the time of issue. $21,288 of the beneficial conversion feature has been amortized as of June 30, 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 Companys common stock at a fixed price of $0.0015. A beneficial conversion feature of $2,000 was determined to exist and was recorded at the time of issue. $915 of the beneficial conversion feature has been amortized as of June 30, 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 Companys common stock at a fixed price of $0.0015. A beneficial conversion feature of $30,000 was determined to exist and was recorded at the time of issue. $8,877 of the beneficial conversion feature has been amortized as of June 30, 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 Companys common stock at a fixed price of $0.0015. A beneficial conversion feature of $30,000 was determined to exist and was recorded at the time of issue. $8,877 of the beneficial conversion feature has been amortized as of June 30, 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 Companys common stock at a fixed price of $0.0015. A beneficial conversion feature of $12,000 was determined to exist and was recorded at the time of issue. $526 of the beneficial conversion feature has been amortized as of June 30, 2014.


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





notes payable and to Additional Paid-in Capital.

F-7





ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2014 (Unaudited)


Note3  Convertible Notes Payable (continued)


As of June 30, 2014 and December 31, 2013, the balance of convertible notes payable was $180,233 and $123,750.  


For the six months ended June 30, 2014 the Company has recognized $17,731 in interest expense related to the notes and amortized $40,482 of the beneficial conversion features.


Note 4 Derivative Liability


The Company has various convertible instruments outstanding more fully described in Note 3, some of which contain derivative features. As of June 30, 2014, the fair value of the Companys derivative liabilities was $191,116.


The following table summarizes the derivative liabilities included in the consolidated 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

  

 

(24,166)

Deletions

  

 

-

Balance at June 30, 2014 (unaudited)

  

191,116


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

 

  

Convertible Debt Instruments

Risk-free rate

  

 

0.16% 

Expected volatility

  

 

342.19%

Expected life

  

 

 0.170 year  


Note 5 Stockholders Deficit


During the quarter ended June 30, 2014, the Company did not issue any shares of common stock. As a result, the total shares outstanding as of June 30, 2014 remained at 328,851,197. On March 25, 2014, Novation Holdings, Inc., an unrelated party, agreed to purchase 1,000,000 shares of voting preferred stock for $7,500.  The preferred shares will have voting power equal to 51 percent of the total combined voting power of all classes of stock entitled to vote on any matter.  The issuance of the shares was approved by the Board of Directors. The preferred shares have not been issued as the total purchase price has not been paid in full as of June 30, 2014.



F-8





ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2014 (Unaudited)


Note 6  Income Taxes


The provision (benefit) for income taxes for the periods ended June 30, 2014 and 2013 was as follows (assuming a 23% effective tax rate):


2014

2013

Current Tax Provision



Net income

 $                        -

 $                        -

Non-deductible expenses

                           -

                           -

Taxable income

                           -

                           -

Net operating loss carry-forward

                           -

                           -

Total current tax provision

 $                        -

 $                        -

Deferred Tax Provision:



Federal-



Deferred tax benefit on current loss

 $              29,988

 $                2,957

Non-deductible expenses

                           -

(531)

Change in valuation allowance

(29,988)

(2,426)

Total deferred tax provision

 $                        -

 $                        -


The Company had deferred income tax assets as of June 30, 2014 and December 31, 2013, as follows:


2014

2013

Loss carry-forwards

 $         1,129,590

 $         1,099,602

Less-Valuation allowance

         (1,129,590)

         (1,099,602)

Total net deferred assets

 $                        -

 $                        -


The Company provided a valuation allowance equal to the deferred income tax assets as of June 30, 2014 and December 31, 2013, because it is not presently known whether future taxable income will be sufficient to utilize the loss carry-forwards.

 

As of June 30, 2014, the Company had approximately $4,513,028 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.




F-9






ADAMA TECHNOLOGIES CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

June 30, 2014 (Unaudited)


Note 7  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, which was apparently served on former management but was never answered or otherwise responded to by former management and which was never disclosed in our prior episodic filings, seeks to recover $45,395 in a cash finders fee allegedly due plus 2.5 percent of our issued and outstanding common stock as of the date the fee was earned, plus forfeiture of all of the common stock, warrants and options owned by Aviram Malik, individually.  As a result of the failure to respond to the action, we are now in default in this action and plaintiff is seeking entry of a default judgment.  Management has engaged with plaintiff and is attempting to reach an amicable resolution of the matter. No amount has been accrued in the financial statements related to the legal proceedings.


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








F-10






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


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


Forward-Looking Statements


The following discussion should be read in conjunction with our unaudited financial statements, which are included elsewhere in this Form 10-Q (the Report). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as may, should, expects, plans, anticipates, believes, estimates, predicts, potential or continue or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industrys actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.


For a description of such risks and uncertainties, refer to our Annual Report on Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission on April 15, 2014. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.


Corporate Background


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


Our principal executive offices are located at1365 North Courtenay Parkway, Merritt Island, Florida in space provided by an independent management consultant.  We are being provided this space for no additional charge. Our registered office in Delaware is located at 113 Barksdale Professional Center, Newark, DE 19711, and our registered agent is Delaware Intercorp.  Our fiscal year end is December 31.


Plan of Operation

 

The Company will attempt to locate and negotiate with a business entity for the combination of that target company with the Company. The combination will normally take the form of a merger, stock-for-stock exchange or stock-for-assets exchange (the business combination). In most instances, the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that the Company will be successful in locating or negotiating with any target business.

 

The Company has not restricted its search for any specific kind of businesses, and it may acquire a business which is in its preliminary or development stage, which is already in operation, or in essentially any stage





of its business life. It is impossible to predict the status of any business in which the Company may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.

2





In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. It is anticipated that any securities issued in any such business combination would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of its transaction, the Company may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times hereafter. If such registration occurs, it will be undertaken by the surviving entity after the Company has entered into an agreement for a business combination or has consummated a business combination. The issuance of additional securities and their potential sale into any trading market which may develop in the Companys securities may depress the market value of the Companys securities in the future if such a market develops, of which there is no assurance.

 

The Company will participate in a business combination only after the negotiation and execution of appropriate agreements. Negotiations with a target company will likely focus on the percentage of the Company, which the target company shareholders would acquire in exchange for their shareholdings. Although the terms of such agreements cannot be predicted, generally such agreements will require certain representations and warranties of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by the parties prior to and after such closing and will include miscellaneous other terms. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the percentage of shares held by the Companys shareholders at such time. 


Employees


Other than our current directors and officers, we have no employees at June 30, 2014.


Transfer Agent


We have engaged Nevada Agency and Trust as our stock transfer agent. Nevada Agency and Trust is located at 50 West Liberty Street, Reno, Nevada 89501. Their telephone number is (775) 322-0626 and their fax number is (775) 322-5623. The transfer agent is responsible for all record-keeping and administrative functions in connection with our issued and outstanding common stock.


Results of Operations


Results of operations for the three and six months ended June 30, 2014 and 2013


Revenues


The Company did not generate any revenues from operations for the three and six months ended June 30, 2014 and December 31, 2013.


During the six months ended June 30, 2014 and June 30, 2013, total operating expenses were $96,335 and $10,872, respectively. The operating expenses were primarily the result of professional fees associated with fulfilling the Companys SEC reporting requirements and equity compensation for consulting expenses in relation to the business operations and development.


Net loss


During the three months ended June 30, 2014, and 2013 the net loss was $123,743 and $15,418 respectively.  The net loss in the quarter ended June 30, 2014 was the result of consulting expenses in relation to the business operations and development, amortization of beneficial conversion feature, and a gain on change in fair value of derivatives.





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During the six months ended June 30, 2014, and 2013 the net loss was $130,383 and $28,273 respectively.  The net loss in the quarter ended June 30, 2014 was the result of consulting expenses in relation to the business operations and development, amortization of beneficial conversion feature, and a gain on change in fair value of derivatives.


Liquidity and Capital Resources


Our cash balance as of June 30, 2014 was $0. Cash and cash equivalents from inception to date have been sufficient to provide the operating capital necessary to operate to date.


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


Going Concern Consideration


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


Off-Balance Sheet Arrangements


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


Item 3. Quantitative and Qualitative Disclosures About Market Risk.


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


Item 4. Controls and Procedures. Disclosure Controls and Procedures


(a)

Evaluation of disclosure controls and procedures


It is managements responsibility for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, we have evaluated the effectiveness of our disclosure controls and procedures as required by the Exchange Act Rule 13a-15(d) as of June 30, 2014 (the Evaluation Date). Based on the evaluation by management, they have concluded these disclosure controls and procedures were not effective as of the Evaluation Date as a result of material weaknesses in internal control over financial reporting as more fully discussed below.


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

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


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


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

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As of June 30, 2014, our management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on conducting such assessments.


Management concluded, during the six months ended June 30, 2014, internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules. Management realized there are deficiencies in the design or operation of our internal control that adversely affected our internal controls which management considers being material weaknesses.


Material Weaknesses


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


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


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


(a)

Changes in control over financial reporting


There were no changes in our internal controls over financial reporting during the six months ended June 30, 2014 that have materially affected, or are reasonably likely to material affect, our internal control over financial reporting.


PART II

OTHER INFORMATION


Item 1. Risk Factors


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


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


During the quarter ended June 30, 2014, the Company did not issue any shares of common stock.


Item 3. Defaults Upon Senior Securities.


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





as of June 30, 2014 was $93,750 and the September 17, 2011 note has been fully discharged as of June 30, 2014.

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


None


Item 5. Other Information.


None


Item 6. Exhibits


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


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


SIGNATURES


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


August 14, 2014


ADAMA TECHNOLOGIES CORPORATION


By:     /s/ Michael Choo

 

      Michael Choo

      Chairman and CEO








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