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  March 31 2013

[ ]

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.)

 

c/o Aviram Malik, 76/7 Zalman Shazar Street, Hod Hasharon, Israel 45350

(Address of principal executive offices)

 

972 - (544) 655-341

(Issuer's telephone number)

 

1 LANE TECHNOLOGIES CORP.

 

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

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 [ ] No [ X ]

 

As of  March 31 2013 , 439,851,197   shares of common stock, par value $0.0001 per share, were issued and outstanding.

 

 

---

 

 

 

TABLE OF CONTENTS

 

		Page
PART I
Item 1. Financial Statements		F-1
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		3
Item 3 Quantitative and Qualitative Disclosures About Market Risk		6
Item 4 Controls and Procedures		6
PART II
Item 1. Legal Proceedings		6
Item IA. Risk Factors		7
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		7
Item 3. Defaults Upon Senior Securities		7
Item 4. Submission of Matters to a Vote of Security Holders		7
Item 5. Other Information		7
Item 6. Exhibits		7

 

 

 

 

 

PART I

FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

 

ADAMA TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

 

INDEX TO FINANCIAL STATEMENTS

MARCH 31, 2013

 

Financial Statements-
Balance Sheets as of March 31, 2013 and December 31, 2012	F-2
Statements of Operations for the Three Months Ended
March 31, 2013 and 2012 and Cumulative from Inception	F-3
Statement of Changes in Stockholders’ Equity (Deficit) for the Period from Inception
Through March 31, 2013	F-4
Statements of Cash Flows for Three Months Ended March 31, 2013 and 2012
and Cumulative from Inception	F-5
Notes to Financial Statements	F-6

 

 

 

ADAMA TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

 

		As of				As of
		March 31,				December 31,
		2013				2012
ASSETS
Current Assets:
Cash in bank		$	601			$	601
Total current assets			601				601
Other Assets:
Investments			8,170,000				8,170,000
Allowance for impairment loss			(8,170,000	)			(8,170,000	)
Total Assets			601				601
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued liabilities		$	56,315			$	45,769
Loans from related parties - Directors and stockholders			92,194				92,194
Convertible notes payable, net of discount			115,500				113,191
Current maturities of long-term debt			250,000				250,000
Total current liabilities			514,009				501,154
Long-term debt			100,000				100,000
Total liabilities			614,009				601,154
Commitments and Contingencies
Stockholders' Deficit
Common stock, par value $.0001 per share, 500,000,000 shares
authorized; 439,851,197 shares issued and outstanding			43,982				43,982
Additional paid-in capital			17,086,952				17,086,952
Stock subscriptions receivable			(44,990	)			(44,990	)
(Deficit) accumulated during the development stage			(17,699,352	)			(17,686,497	)
Total stockholders' deficit			(613,408	)			(600,553	)
Total Liabilities and Stockholders' Deficit		$	601			$	601

 

 

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

 

ADAMA TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

(Unaudited)

 

		Three Months Ended								Cumulative
		March 31,								From
		2013				2012				Inception
Revenues		$	—			$	—			$	—
Expenses:
General and administrative-
Professional fees			3,500				16,842				264,969
Legal - incorporation			—				—				2,200
Consulting			—				556,875				4,744,092
Travel			—				—				22,890
Amortization			—				—				305,555
Rent			—				—				4,520
Impairment loss			—				—				12,924,445
Franchise tax			—				—				3,500
Other			—				30				29,271
Total general and administrative expenses			3,500				573,747				18,301,442
(Loss) from Operations			(3,500	)			(573,747	)			(18,301,442	)
Other Income (Expense)
Foreign currency transaction gains			—				—				2,769
Forgiveness of debt			—				—				840,000
Foreign currency transaction losses			—				—				(4,520	)
Interest expense			(9,355	)			(18,304	)			(236,159	)
Provision for income taxes			—				—				—
Net Income (Loss)		$	(12,855	)		$	(592,051	)		$	(17,699,352	)
Earnings (Loss) Per Common Share:
Earnings (Loss) per common share - Basic		$	(0.00	)		$	(0.01	)
Weighted Average Number of Common Shares
Outstanding - Basic			439,851,197				91,680,359

 

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

 

 

 

 

 

ADAMA TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS' EQUITY

(Unaudited)

 

																		(Deficit)
																		Accumulated
										Additional				Stock				During the
		Common stock*								Paid-in				Subscriptions				Development
		Shares				Amount				Capital				Receivable				Stage				Totals
Balance - September 17, 2007			—			$	—			$	—			$	—			$	—			$	—
Common stock issued for cash			116,667				12				688				—				—				700
Net (loss) for the period			—				—				—				—				(5,118	)			(5,118	)
Balance - December 31, 2007			116,667				12				688				—				(5,118	)			(4,418	)
Common stock issued for cash			50,000				5				66,195				—				—				66,200
Common stock issued for cash			50,000				5				88,795				—				—				88,800
Common stock issued for acquired technology			29,633				3				3,999,997				—				—				4,000,000
Net (loss) for the year			—				—				—				—				(160,515	)			(160,515	)
Balance - December 31, 2008			246,300				25				4,155,675				—				(165,633	)			3,990,067
Common stock issued for cash			10,417				1				203,785				—				—				203,786
Common stock issued as compensation			417				—				22,001				—				—				22,001
Common stock issued for cash			5,000				1				119,999				—				—				120,000
Common stock issued as compensation			4,017				—				84,350				—				—				84,350
Common stock issued for cash			2,500				—				35,000				—				—				35,000
Common stock issued as compensation			4,167				—				58,750				—				—				58,750
Common stock issued as compensation			11,667				1				146,999				—				—				147,000
Common stock issued as compensation			11,667				1				146,999				—				—				147,000
Common stock issued as compensation			1,667				—				7,000				—				—				7,000
Net (loss) for the year			—				—				—				—				(5,780,153	)			(5,780,153	)
Balance - December 31, 2009			297,817				29				4,980,558				—				(5,945,786	)			(965,199	)
Common stock issued as compensation			13,333				1				27,999				—				—				28,000
Common stock issued as compensation			13,333				1				27,999				—				—				28,000
Common stock issued as compensation			13,333				1				27,999				—				—				28,000
Common stock issued as compensation			33,333				3				69,997				—				—				70,000
Common stock issued as compensation			11,333				1				23,799				—				—				23,800
Common stock issued as compensation			33,333				3				69,997				—				—				70,000
Common stock issued for cash			26,667				3				12,997				—				—				13,000
Common stock issued as compensation			23,333				2				62,998				—				—				63,000
Common stock issued as compensation			10,833				1				13,974				—				—				13,975
Common stock issued for cash			27,167				3				34,997				(28,000	)			—				7,000
Common stock issued as compensation			8,333				1				22,499				—				—				22,500
Common stock issued as compensation			37,000				4				110,996				—				—				111,000
Common stock issued as compensation			16,667				2				49,998				—				—				50,000
Common stock issued for cash			33,333				3				9,997				—				—				10,000
Payment of stock subscription receivable			—				—				—				9,000				—				9,000
Common stock issued as compensation			16,667				2				24,498				—				—				24,500
Common stock issued as compensation			49,833				5				209,295				—				—				209,300
Discount of convertible note			—				—				36,207				—				—				36,207
Common stock issued as compensation			23,701				2				49,418				—				—				49,420
Discount of convertible note			—				—				20,454				—				—				20,454
Net (loss) for the year			—				—				—				—				(867,327	)			(867,327	)
Balance - December 31, 2010			689,351				67				5,886,676				(19,000	)			(6,813,113	)			(945,370	)
Common stock issued as compensation			33,333				3				109,997				—				—				110,000
Common stock issued as compensation			8,333				1				27,499				—				—				27,500
Common stock issued as compensation			13,333				1				43,999				—				—				44,000
Common stock issued as compensation			3,333				—				11,000				—				—				11,000
Common stock issued as compensation			33,333				3				109,997				—				—				110,000
Stock subscriptions payments received			—				—				—				19,000				—				19,000
Common stock issued as compensation			60,000				6				50,394				—				—				50,400
Common stock issued as compensation			150,000				15				157,485				—				—				157,500
Common stock issued as compensation			30,000				3				25,197				—				—				25,200
Discount of convertible note			—				—				63,361				—				—				63,361
Common stock issued upon conversion of debt			128,491				13				79,058				—				—				79,071
Discount of convertible note			—				—				24,545				—				—				24,545
Common stock issued as compensation			5,000,000				500				849,500				—				—				850,000
Common stock issued as compensation			2,000,000				200				339,800				—				—				340,000
Common stock issued as compensation			2,000,000				200				339,800				—				—				340,000
Common stock issued as compensation			1,000,000				100				169,900				—				—				170,000
Common stock issued as compensation			500,000				50				84,950				—				—				85,000
Common stock issued as compensation			2,000,000				200				419,800				—				—				420,000
Common stock issued as compensation			1,000,000				100				209,900				—				—				210,000
Conversion of convertible note payable			107,733				11				9,989				—				—				10,000
Common stock issued to purchase asset			25,000,000				2,500				4,247,500				—				—				4,250,000
Common stock issued to purchase asset			20,000,000				2,000				3,398,000				—				—				3,400,000
Net loss for the year			—				—				—				—				(8,260,365	)			(8,260,365	)
Balance -  December 31, 2011			59,757,242				5,973				16,658,347				—				(15,073,478	)			1,590,842
Common stock issued for cash			8,500,000				850				7,650				(8,500	)			—				—
Common stock issued for cash			16,760,000				1,676				15,084				(16,760	)			—				—
Conversion of convertible note payable			407,692				41				26,459				—				—				26,500
Common stock issued for cash			19,730,000				1,973				17,757				(19,730	)			—				—
Conversion of convertible note payable			913,793				91				21,109				—				—				21,200
Conversion of convertible note payable			529,801				53				7,947				—				—				8,000
Discount of convertible note			—				—				23,533				—				—				23,533
Common stock issued as compensation			10,000,000				1,000				9,000				—				—				10,000
Common stock issued as compensation			1,500,000				150				1,350				—				—				1,500
Conversion of convertible note payable			862,069				86				9,914				—				—				10,000
Common stock issued as compensation			30,000,000				3,000				27,000				—				—				30,000
Common stock issued to purchase asset			120,000,000				12,000				108,000				—				—				120,000
Common stock issued as compensation			170,890,600				17,089				153,802				—				—				170,891
Net loss for the year			—				—				—				—				(2,613,019	)			(2,613,019	)
Balance - December 31, 2012			439,851,197			$	43,982			$	17,086,952			$	(44,990	)		$	(17,686,497	)		$	(600,553	)
Net loss for the period			—				—				—				—				(12,855	)			(12,855	)
Balance - March 31, 2013			439,851,197			$	43,982			$	17,086,952			$	(44,990	)		$	(17,699,352	)		$	(613,408	)

 

 

*Restated to reflect reverse stock split

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

 

ADAMA TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Three Months Ended								Cumulative
		March 31,								From
		2013				2012				Inception
Operating Activities:
Net Income (loss)		$	(12,855	)		$	(592,051	)		$	(17,699,352	)
Adjustments to reconcile net (loss) to net cash
(used in) operating activities:							—
Common stock issued as compensation and interest			—				2,700				4,427,358
Amortization of beneficial conversion feature			2,309				17,559				168,102
Impairment loss			—				—				12,924,445
Amortization			—				—				305,555
Non-cash expense - default on convertible notes			—				—				38,500
Forgiveness of debt			—				—				(840,000	)
Changes in net assets and liabilities-
Prepaid expenses			—				556,875				—
Accounts payable and accrued liabilites			10,546				(16,455	)			56,315
Net Cash Used in Operating Activities			—				(31,372	)			(619,077	)
Investing Activities:
Acquisition and costs of intangible assets			—				—				(610,000	)
Net Cash Used in Investing Activities			—				—				(610,000	)
Financing Activities:
Proceeds from issuance of common stock			—				—				572,486
Proceeds from convertible note payable			—				—				225,000
Proceeds from debt			—				—				350,000
Payment of debt			—				—				(10,000	)
Proceeds from stockholder loans			—				30,748				752,187
Payment of stockholder loans			—				—				(659,995	)
Net Cash Provided by Financing Activities			—				30,748				1,229,678
Net (Decrease) Increase in Cash			—				(624	)			601
Cash - Beginning of Period			601				624				—
Cash - End of Period		$	601			$	—			$	601
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest		$	—			$	—			$	—
Income taxes		$	—			$	—			$	—
Supplemental schedule of noncash investing and financing activities:
Issuance of common stock for acquired technology		$	—			$	—			$	4,000,000
Obligation payable for acquired technology		$	—			$	—			$	850,000
Stock issued to settle convertible debts		$	—			$	45,000			$	148,000
Issuance of common stock for investments		$	—			$	—			$	7,770,000

 

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

ADAMA TECHNOLOGIES CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 

 

(1)  Summary of Significant Accounting Policies

 

Basis of Presentation and Organization

 

Adama Technologies Corp. (“Adama Technologies” or the “Company”) is a Delaware corporation in the development stage and has not commenced operations. The Company was incorporated under the laws of the State of Delaware on September 17, 2007.

 

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 financial statements of the Company as of March 31, 2013, and for the periods then ended, and cumulative from inception, 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 Company’s financial position as of March 31, 2013, and the results of its operations and its cash flows for the periods ended March 31, 2013, and cumulative from inception. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2013. 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 Company’s audited financial statements as of December 31, 2012, filed with the 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 three months or less to be cash and cash equivalents.

 

Revenue Recognition

 

The Company is in the development stage and has yet to realize revenues from operations. Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.

 

Earnings per Common Share

 

Basic earnings per share is 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 earnings 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 realizability 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 March 31, 2013 and December 31, 2012, 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.

 

Patent and Intellectual Property

 

The Company capitalizes the costs associated with obtaining a Patent or other intellectual property associated with its intended business plan. Such costs are amortized over the estimated useful lives of the related assets.

 

Deferred Offering Costs

 

The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.

 

Impairment of Long-Lived Assets

 

The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable.

 

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

 

We do not expect that any recently issued accounting pronouncements will have a material effect on our financial statements.

 

(2)  Development Stage Activities and Going Concern

 

The Company is currently in the development stage, 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, 2013, 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.

 

(3)  Patent Pending

 

In November 2007, the Company entered into an Invention Assignment Agreement with Eliezer Sheffer, the inventor, whereby the Company acquired from Eliezer Sheffer all of the right, title and interest in the Invention known as the “Security system for mobile vehicles, trucks and shipping containers” for consideration of $60,000. Under the terms of the Assignment Agreement, the Company was assigned rights to the Invention free of any liens, claims, royalties, licenses, security interests or other encumbrances. The inventor of the Invention is not an officer or director of the Company, nor an investor or promoter of such. The Invention is the subject of United States Patent Application 11/720,518 which was filed with the United States Patent and Trademark Office on May 31, 2007. Currently, the Patent Application is pending. The historical cost of obtaining the Invention and filing for the patent has been capitalized by the Company, and amounted to $60,000. During the year ended December 31, 2009, the Company recorded an impairment loss for the full value of the patent.

 

(4)  Investments

 

On October 27, 2008, the Company entered into an Exclusive Brownfield License Agreement with Solucorp Industries Ltd. Pursuant to the terms of the Agreement, Solucorp granted the Company an exclusive worldwide license of its MBS Process, for remediating Brownfield and Redevelopment Sites, with the exception of North America, Central America, South America, Russia and China. The Company was also granted a non-exclusive license for use of the MBS Process for the remediation of contaminated sites and superfunded like sites. The term of the Agreement is 15 years.

 

During the year ended December 31, 2009, the Company recorded an impairment loss for the full value of the acquired technology.

 

In consideration for the rights granted under the Agreement, the Company issued 29,633 shares (post reverse stock split) of its common stock to Solucorp, valued in the amount of $4,000,000. In addition, the sum of $1,000,000 was payable to Solucorp within 12 months of October 27, 2008 according to an amendment to the original agreement.

 

During 2011 the Company paid $160,000 of the agreed sum. The exclusive rights under the agreement have been terminated and the remaining $840,000 obligation was written off.

 

In the event the Company sells or develops the Brownfield or Redevelopment property after remediation, the Company shall pay 1% of the royalty of such sale or redevelopment cost to Solucorp.

 

On November 21, 2011, the Company entered into a stock purchase agreement to purchase 477 shares of YGE Mining PLC.  As payment for the 477 shares of YGE Mining PLC, the Company issued 20,000,000 shares of its unregistered common stock valued at $3,400,000.

 

On December 15, 2011, the Company entered into an agreement with Ansalt Multicommertz, a limited liability company organized under the laws of Liechtenstein, pursuant to which the Assignor assigned to the Registrant its 90% interest in the Harrison Lake (Talc) Creek Magnesium property in exchange of the issuance of 25,000,000 restricted common stock of the Company to the Assignor. As part of the transaction the Company assumed an obligation to pay a vendor of Ansalt Multicommertz $400,000 of which $350,000 remained payable at March 31, 2013.

Effective July 9, 2012, the Company entered into a Mineral Property Acquisition Agreement with MineSadco S.A., an Ecuadorian company. MineSadco is the owner of an undivided, 100% interest in a certain mineral property located in Canton Portovelo, El Oro Province, in the South of Ecuador. Pursuant to the terms of the agreement, the Company acquired the rights to commercially exploit 100% of the mineral rights to the Property for a period of twenty years. In consideration, the Company issued 120,000,000 restricted shares of its common stock to MineSadco. In addition, if within eighteen months from the closing date certain production millstones will be completed, MineSadco will be entitled to additional shares representing up to 55% of the Companies diluted capital at the closing date.

During 2012 the Company determined that the carrying value of the investments may not be recoverable. Therefore, the Company recorded an allowance for impairment to reduce the carrying value to zero.

 

(5)  Convertible Notes Payable

 

On June 7, 2011, 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 March 7, 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. $18,000 of principal on the note was paid by conversion to shares. 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 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. 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 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. 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.

 

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.

 

As of March 31, 2013 and December 31, 2012, the balance of convertible notes payable was $115,500 and $113,191 net of unamortized discounts of $0 and $2,309, respectively.

 

For the three months ended March 31, 2013 the Company has recognized $7,046 in interest expense related to the notes and has amortized $2,309 of the beneficial conversion features which has been recorded as interest expense.

 

(6)  Long-Term Debt

 

As disclosed in note 4, the Company entered into an agreement with Ansalt Multicommertz, a limited liability company organized under the laws of Liechtenstein, pursuant to which the Assignor assigned to the Registrant its 90% interest in the Harrison Lake (Talc) Creek Magnesium property in exchange of the issuance of 25,000,000 restricted common stock of the Company to the Assignor. As part of the transaction the Company assumed an obligation to pay a vendor of Ansalt Multicommertz $400,000 of which $350,000 remained payable at March 31, 2013. The payments are due as follows:

 

May 2012 (past due) $50,000

November 2012(past due) $100,000

November 2013$100,000

November 2014 $100,000

 

(7)  Common Stock

 

On November 13, 2007, the Company issued 116,667 shares (post reverse stock split) of its common stock to seven individuals who are founders of the Company, including the Company's initial Directors and officers, for proceeds of $700.

 

The Company commenced a capital formation activity to submit a Registration Statement on Form SB-2 to the SEC to register and sell 50,000 (post reverse stock split) shares of newly issued common stock in a self-directed offering at an offering price of $0.03 per share for proceeds of up to $90,000. As of May 19, 2008, the Company had incurred $25,000 of deferred offering costs related to this capital formation activity. As of May 19, 2008, the Company issued 50,000 (post reverse stock split) shares of common stock pursuant to the Registration Statement on Form SB-2, and deposited proceeds of $90,000.

 

On July 3, 2008, the Company raised $90,000 and issued 50,000 (post reverse stock split) shares of its common stock, purchase price $0.03 per share, to 22 investors. The Company received net proceeds of $88,800.

 

On October 27, 2008, the Company entered into an Exclusive Brownfield License Agreement with Solucorp Industries Ltd. In consideration for the rights granted under the Agreement, the Company issued 29,633 (post reverse stock split) shares of its common stock to Solucorp, valued in the amount of $4,000,000.

 

On May 11, 2009, the Company raised $250,000 and issued 10,417 (post reverse stock split) shares of its common stock, purchase price $0.08 per share, to an investor. The Company received net proceeds of $203,786.

 

On June 2, 2009, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 417 (post reverse stock split) shares of its unregistered common stock on said date valued at $22,001. The fair value of the unregistered shares is determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.

 

On September 16, 2009, the Company raised $120,000 and issued 5,000 (post reverse stock split) shares of its common stock, purchase price $0.08 per share, to an investor. The Company received net proceeds of $120,000.

 

On October 5, 2009, the Company entered into an agreement with an unrelated third-party consultants.  As payment for the consultants’ services, the Company issued 4,017 (post reverse stock split) shares of its unregistered common stock valued at $84,350. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.

 

On October 5, 2009, the Company raised $35,000 and issued 2,500 (post reverse stock split) shares of its common stock, purchase price $0.047 per share, to an investor.

 

On October 5, 2009, the Company entered into an agreement with a shareholder consultant.  As payment for the consultant’s services, the Company issued 4,167 (post reverse stock split) shares of its unregistered common stock on said date valued at $58,750. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.

 

On October 27, 2009, the Company entered into an agreement with a resigning Director to receive as compensation for his services, 11,667 (post reverse stock split) shares of its unregistered common stock valued at $147,000. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.

 

On October 27, 2009, the Company entered into an agreement with a resigning Director to receive as compensation for his services, 11,667 (post reverse stock split) shares of its unregistered common stock valued at $147,000. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount

 

On December 1, 2009, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 1,667 (post reverse stock split) shares of its unregistered common stock on said date valued at $7,000. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.

 

On January 12, 2010, the Company issued 26,667 (post reverse stock split) shares of its unregistered common stock valued at $56,000 to two directors of the Company. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On January 12, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for past services, the Company issued 13,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $28,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On February 3, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s past services, the Company issued 33,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $70,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On February 16, 2010, the Company entered into an agreement with unrelated third-party consultants.  As payment for the consultants' past services, the Company issued 11,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $23,800. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On February 25, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s past services, the Company issued 33,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $70,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On April 25, 2010, the Company raised $13,000 and issued 26,667 (post reverse stock split) shares of its common stock, with a purchase price $0.0016 per share, to investors.

 

On May 26, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s past services, the Company issued 23,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $63,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On June 16, 2010, the Company entered into agreements with unrelated third-party consultants.  As payment for the consultant’s past services, the Company issued 10,833 (post reverse stock split) shares of its unregistered common stock on said date valued at $13,975. The fair value of the unregistered shares was determined based on comparable sales.

 

On June 16, 2010, the Company raised $35,000 and issued 27,167 (post reverse stock split) shares of its common stock, with a purchase price $0.0043 per share, to investors.

 

On June 21, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s past services, the Company issued 8,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $22,500. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On August 13, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s past services, the Company issued 37,000 (post reverse stock split) shares of its unregistered common stock on said date valued at $111,000. The fair value of the unregistered shares was determined based on comparable sales.

 

On August 30, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s past services, the Company issued 16,667 (post reverse stock split) shares of its unregistered common stock on said date valued at $50,000. The fair value of the unregistered shares was determined based on comparable sales.

 

On August 31, 2010, the Company raised $10,000 and issued 33,333 (post reverse stock split) shares of its common stock, with a purchase price $0.001 per share, to investors.

 

On October 1, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s past services, the Company issued 16,667 (post reverse stock split) shares of its unregistered common stock on said date valued at $24,500. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On October 18, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s past services, the Company issued 49,833 (post reverse stock split) shares of its unregistered common stock on said date valued at $209,300. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On December 15, 2010, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s past services, the Company issued 23,701 (post reverse stock split) shares of its unregistered common stock on said date valued at $49,420. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 33,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $110,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.

 

On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 8,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $27,500. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.

 

On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 13,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $44,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.

 

On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 3,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $11,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.

 

On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 33,333 (post reverse stock split) shares of its unregistered common stock on said date valued at $110,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.

 

On April 1, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 60,000 (post reverse stock split) shares of its unregistered common stock on said date valued at $50,400. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.

 

On April 5, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 150,000 (post reverse stock split) shares of its unregistered common stock on said date valued at $157,500. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.

 

On April 13, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 30,000 (post reverse stock split) shares of its unregistered common stock on said date valued at $25,200. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.

 

On October 28, 2011, the Company implemented a 1 for 300 reverse stock split on its issued and outstanding shares of common stock to the holders of record as of October 28, 2011. After the reverse split, the number of shares of common stock issued and outstanding were 1,149,509 shares. The accompanying financial statements and related notes thereto have been adjusted accordingly to reflect this reverse stock split.

 

On November 21, 2011, the Company entered into an agreement with a director.  As payment for services, the Company issued 5,000,000 shares of its unregistered common stock on said date valued at $850,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 15% discount for restricted trading.

 

On November 21, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 2,000,000 shares of its unregistered common stock on said date valued at $340,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 15% discount for restricted trading.

 

On November 21, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 2,000,000 shares of its unregistered common stock on said date valued at $340,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 15% discount for restricted trading.

 

On November 21, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 1,000,000 shares of its unregistered common stock on said date valued at $170,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 15% discount for restricted trading.

 

On November 21, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 500,000 shares of its unregistered common stock on said date valued at $85,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.

 

On November 21, 2011, the Company entered into an agreement with an unrelated third-party to purchase 477 shares of YGE Mining PLC.  As payment for the 477 shares of YGE Mining PLC, the Company issued 20,000,000 shares of its unregistered common stock on said date valued at $3,400,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 15% discount for restricted trading.

 

On December 1, 2011, the Company entered into an agreement with a director.  As payment for services, the Company issued 2,000,000 shares of its common stock on said date valued at $420,000. The fair value of the shares was determined based on the recent closing price of the Company’s stock on the date of grant.

 

On December 1, 2011, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 1,000,000 shares of its common stock on said date valued at $210,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant.

 

On December 8, 2011, the Company entered into an agreement with an unrelated third-party to purchase a magnesium property.  As payment for the property, the Company issued 25,000,000 shares of its unregistered common stock on said date valued at $4,250,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 15% discount for restricted trading.

 

From January 1, 2011 to December 31, 2011, the Company issued 236,224 shares of its common stock upon conversion of convertible debt of $85,000 and $4,071 of interest.

 

On January 4, 2012, the Company raised $8,500 and issued 8,500,000 shares of its common stock, with a purchase price $0.001 per share, to investors. As of March 31, 2013 the investment was receivable.

 

On January 13, 2012, the Company raised $16,760 and issued 16,760,000 shares of its common stock, with a purchase price $0.001 per share, to investors. As of March 31, 2013 the investment was receivable.

 

On February 21, 2012, the Company raised $19,730 and issued 19,730,000 shares of its common stock, with a purchase price $0.001 per share, to investors. As of March 31, 2013 the investment was receivable.

 

On May 22, 2012, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 10,000,000 shares of its common stock on said date valued at $10,000. The fair value of the unregistered shares was determined based on trading restrictions on the date of grant.

 

On May 31, 2012, the Company entered into an agreement with an unrelated third-party consultant.  As payment for the consultant’s services, the Company issued 1,500,000 shares of its common stock on said date valued at $1,500. The fair value of the unregistered shares was determined based on trading restrictions on the date of grant.

 

On July 15, 2012, the Company entered into an agreement with unrelated third-party consultants.  As payment for the consultant’s services, the Company issued 30,000,000 shares of its common stock on said date valued at $30,000. The fair value of the unregistered shares was determined based on trading restrictions on the date of grant.

 

On July 15, 2012, the Company issued 120,000,000 shares of its unregistered common stock valued at $120,000 to MineSadco S.A., an Ecuadorian company, to purchase a 100% interest to exploit and commercialize a mining property located in Ecuador for 20 years.

 

On July 18, 2012, August 8, 2012, September 28, 2012 and December 6, 2012, the Company issued a total of 170,890,600 shares of common stock pursuant to agreements with unrelated third-parties for consulting services. The shares of common stock were valued at $170,891. The fair value of the unregistered shares was determined based on trading restrictions on the date of grant.

 

From January 1, 2012 to December 31, 2012, the Company issued 2,713,355 shares of its common stock upon conversion of convertible debt of $63,000 and $2,700 of interest.

 

(8)  Income Taxes

 

The provision (benefit) for income taxes for the periods ended March 31, 2013 and 2012 was as follows (assuming a 23% effective tax rate):

 

		2013				2012
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		$	2,957			$	136,172
Non-deductible expenses			(531	)			(4,039	)
Change in valuation allowance			(2,426	)			(132,133	)
Total deferred tax provision		$	—			$	—

 

The Company had deferred income tax assets as of March 31, 2013 and December 31, 2012, as follows:

 

		2013				2012
Loss carryforwards		$	1,059,565			$	1,057,140
Less - Valuation allowance			(1,059,565	)			(1,057,140	)
Total net deferred tax assets		$	—			$	—

 

The Company provided a valuation allowance equal to the deferred income tax assets for the periods ended March 31, 2013 and December 31, 2012, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.

 

As of March 31, 2013, the Company had approximately $4,607,000 in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and expire by the year 2033.

 

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.

 

(9)  Related Party Transactions

 

On November 20, 2007, the Company issued 25,083 (post reverse stock split) shares of common stock to Mr. Aviram Malik, President and Director, for a cash payment of $150.

 

On November 20, 2007, the Company issued 8,333 (post reverse stock split) shares of common stock to Mr. Gal Ilivitzki, Secretary and Director, for a cash payment of $50.

 

On October 27, 2009, the Company entered into an agreement with a resigning Director to receive as compensation for his services, 11,667 (post reverse stock split) shares of its unregistered common stock valued at $147,000. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.

 

On October 27, 2009, the Company entered into an agreement with a resigning Director to receive as compensation for his services, 11,667 (post reverse stock split) shares of its unregistered common stock valued at $147,000. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount

 

On January 12, 2010, the Company issued 26,667 (post reverse stock split) shares of its unregistered common stock valued at $56,000 to two directors of the Company. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.

 

On November 21, 2011, the Company entered into an agreement with a director.  As payment for services, the Company issued 5,000,000 shares of its unregistered common stock on said date valued at $850,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 15% discount for restricted trading.

 

On December 1, 2011, the Company entered into an agreement with a director.  As payment for services, the Company issued 2,000,000 shares of its common stock on said date valued at $420,000. The fair value of the shares was determined based on the recent closing price of the Company’s stock on the date of grant.

 

As of March 31, 2013 and December 31, 2012 the Company owed $92,194 to Directors, officers, and principal stockholders of the Company for working capital loans. The loans are unsecured, non-interest bearing, and have no terms for repayment.

 

(10)  Concentration of Credit Risk

 

The Company’s cash and cash equivalents are invested in a major bank in Israel and are not insured. Management believes that the financial institution that holds the Company’s investments is financially sound and accordingly, minimal credit risk exists with respect to these investments.

 

(11)  Equity Purchase Agreement

Effective July 31, 2012, the Company entered into a Binding Letter of Intent with Southridge Partners II LP, an institutional investor, for the equity purchase agreement of an amount of up to $7 million. Pursuant to the agreement, the Company has the right, in its sole discretion, to sell to Southridge up to $7 million of its common stock over a 24-month period.  The Company will have the right, but is not obligated, to sell stock to Southridge depending on certain conditions as set forth in the equity purchase agreement.

 

 

 

Item 2. Management’s Discussion and Analysis or Plan of Operations.

 

As used in this Form 10-Q, references to the “Adama,” 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 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 industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

For a description of such risks and uncertainties refer to our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 29, 2013. 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 and are a development stage company. We have acquired the rights to a patent-pending technology upon which a unique wireless data platform is built. This platform supports minute-by-minute data transmission intended for several key areas. Preliminary tests have already been run in a real-world environment. The patent-pending technology utilizes the ISM (Industrial Scientific Method) non-licensed spectrum to provide short message transmission and data transmission. The unique element of this system is that it can perform this functionality at an order of magnitude delivering more capacity and much higher robustness than any currently available wireless or cellular network, without interfering whatsoever with other network activities.

 

On October 27, 2008, the Company abandoned the business relating to the patent technology and executed an exclusive brownfield license agreement with Solucorp Industries Ltd., pursuant to which it acquired a 15 year license to certain environmental hazard remediation technology (as discussed below).

 

We completed a public offering of our common stock in the first half of 2008, raising aggregate gross proceeds of $90,000 pursuant to 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 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 February 27, 2009, at special meeting of the shareholders of our Company, the board of directors was given authorization to change the name of the Company from “1 Lane Technologies Corp.” to “Adama Technologies Corporation” to better reflect the proposed business activities.

 

During the third quarter of 2011 the majority shareholders of the Company voted to implement a reverse split on the Company's Common Stock at a ratio of 1-300. The reverse split was effective on October 28 2011.

 

Our Principal executive offices are located at 76/7 Zalman Shazar Street, Hod Hasharon, Israel, in the home of Aviram Malik, our Chief Executive Officer and President. 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 Business

 

On October 27, 2008, the Company entered into an Exclusive Brownfield  License Agreement with Solucorp Industries Ltd. pursuant to which the  Company acquired a 15 year license to certain environmental hazard  remediation technology. The foundation of the license is its $60,000,000  patented MBS (Molecular Bonding System) technology. The Company is to  provide long-term permanent solutions to hazardous heavy metal waste  problems. The MBS technology successfully treats all Resource Conservation &  Recovery Act (RCRA) and Universal Treatment Standards (UTS) metals such as:  arsenic, cadmium, chromium, lead, mercury, etc., and treats multiple metals  concurrently. The ability to treat difficult waste streams along with being  able to treat multiple metals with different solubility points successfully  separates our MBS technology from any other existing technology. The types  of applications include soils, sludge's, ashes, baghouse dusts and barrel  wastes. The MBS technology provides superior efficacy and has significant  cost advantages over both hazardous waste landfill and alternative remedial  technology options. 

The Company has ceased to continue its original business plan in relation to the wireless data platform acquired in 2007

 

In consideration for the rights granted under the Exclusive Brownfield License Agreement, the Company issued 29,633 (post split) shares of its common stock to Solucorp, valued in the amount of $4,000,000. In addition, the sum of $1,000,000 is payable to Solucorp within 12 months of October 27, 2008. As of March 31 2011 , the Company paid only $160,000 of the agreed sum. The remaining $840,000 liability has been alleviated in exchange of the acceptance of  the NON-Exclusivity clause under the agreement  , hence the termination of the Exclusivity rights.

  

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 .

 

On November 18, 2011, Adama Technologies Corporation (the “Registrant”)  entered a Stock Purchase Agreement with ANOE SA, organized under the laws of St. Vincent and the Grenadines (“ANOE”), to acquire 477 shares, representing approximately 19.5% of the outstanding shares of YGE Mining PLC, organized under the laws of the Federal Democratic Republic of Ethiopia (“YGE”). YGE is the owner of an exclusive license to conduct exploration for gold and tantalum in an area of 40 kilometers in Ethiopia. Tantalum is used in the manufacture tantalum capacitors that are widely used in circuit designs because of their volumetric efficiency, basic reliability and process compatibility   for electronic equipment such as mobile phones, DVD players, video game systems and computers. The Stock Purchase Agreement between the Registrant and ANOE, which provides for the issuance of 20,000,000 restricted shares of the Registrant’s common stock in consideration for the acquisition of the YGE Shares, is attached as Exhibit 99.1 hereto.

 

On December 15, 2011, Adama Technologies Corporation (the “Registrant”) entered an agreement with Ansalt Multicommertz, a limited liability company organized under the laws of Liechtenstein (the “Assignor”), pursuant to which the Assignor assigned to the Registrant its 90% interest in the Harrison Lake (Talc) Creek Magnesium property in exchange of the issuance of 25,000,000 restricted common stock of the Registrent to the Assignor.

 

Effective July 9, 2012, the Company entered into a Mineral Property Acquisition Agreement with MineSadco S.A., an Ecuadorian company. MineSadco is the owner of an undivided, 100% interest in a certain mineral property located in Canton Portovelo, El Oro Province, in the South of Ecuador. Pursuant to the terms of the agreement, the Company acquired the rights to commercially exploit 100% of the mineral rights to the Property for a period of twenty years. In consideration, the Company issued 120,000,000 restricted shares of its common stock to MineSadco. In addition, if within eighteen months from the closing date certain production millstones will be completed, MineSadco will be entitled to additional shares representing up to 55% of the Companies diluted capital at the closing date.

 

 

Employees

 

Other than our current directors and officers,  we have three part-time employees .

 

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 months ended March 31 2013

 

Revenues

 

The Company did not generate any revenues for the   three months ended March 31 2013, or March 31 2012

 

During the three months ended March 31 2013 and March 31 2012 , total operating expenses were $3,500 and $573,747, respectively. The general and administrative expenses were primarily the result of fees for bookkeeping expenses and professional fees associated with fulfilling the Company’s SEC reporting requirements and equity compensation expense  for consulting expenses in relation to the  business operations and  development .

 

Net loss

 

During the three months ended March 31 2013, and 2012 the net loss was $12,855 and $592,051  respectively.

 

We expect to continue to incur significant operating expenses. As a result, we will need to generate significant revenues to achieve profitability, which may not occur. We expect our operating expenses to increase as a result of our planned expansion . Even if we do achieve profitability, we may be unable to sustain or increase profitability on a quarterly or annual basis in the future. We expect to have quarter-to-quarter fluctuations in revenues, expenses, losses and cash flow, some of which could be significant. Results of operations will depend upon numerous factors, some beyond our control, including regulatory actions, market acceptance of our products and services, new products and service introductions, and competition.

 

Liquidity and Capital Resources

 

Our cash balance as of March 31 2013 was $600. 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 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.

 

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. We must raise capital to implement our project and stay in business.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

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

 

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive officer and principal financial and accounting officers have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this Quarterly Report on Form 10-Q and have concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the last day they were evaluated by our principal executive officer and principal financial and accounting officers.

 

Changes in Internal Controls over Financial Reporting

 

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 

PART II

OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

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

 

Item 1A. 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.

 

None

 

Use of Proceeds

 

None

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

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

 

None

 

Item 5. Other Information.

 

None

 

Item 6. Exhibits

 

31.1		Certification of Principal Executive Officer pursuant to Section 302 of  the Sarbanes-Oxley Act (filed herewith)
31.2		Certification Principal Financial and Accounting Officer pursuant to  Section 302 of the Sarbanes-Oxley Act (filed herewith)
32.1		Certification of Principal Executive Officer pursuant to Section 906 of  the Sarbanes-Oxley (filed herewith)
32.2		Certification of Principal Financial and Accounting 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.

 

	ADAMA TECHNOLOGIES CORPORATION
Date: May 20 2013	By:	/s/ Asher Zwebner
		Name: Asher Zwebner
		Title: Chief Executive Officer, President and
		Director (Principal Executive Officer)

 

Date: May 20 2013	By:	/s/ Asher Zwebner
		Name: Asher Zwebner
		Title:  Chief Financial Officer
		(Principal Financial and Accounting Officer)