SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

Commission File No. 333-51274

NEW COLOMBIA RESOURCES, INC.

(Exact Name of Issuer as specified in its charter)

Delaware	43-2033337
(State or other jurisdiction	(IRS Employer File Number)
of incorporation)

251 174th Street #816
Sunny Isles Beach, FL	33160
(Address of principal executive offices)	(zip code)

Securities to be Registered Pursuant to Section 12(b) of the Act: None

Securities to be Registered Pursuant to Section 12(g) of the Act:

Common Stock, $0.001 per share par value

Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes       No  X   

Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Yes       No  X   

Indicate by check mark whether the registrant (1) has filed all Reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  X   No       

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files.

Yes  X   No       

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K is contained in this form and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K.      

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Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

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

Yes       No X   .

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. The aggregate market value of the voting stock held by nonaffiliates computed by reference to the price at which the stock was sold as of June 30, 2014 was $0.

 

As of April 28, 2015, registrant had outstanding 144,065,295 shares of common stock.

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FORM 10-K

NEW COLOMBIA RESOURCES, INC.

INDEX

	Page
PART I
Item 1. Business	5
Item 1A. Risk Factors	9
Item 2. Property	9
Item 3. Legal Proceedings	9
Item 4. Mine Safety Disclosures	9
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	10
Item 6. Selected Financial Data	12
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	14
Item 8. Financial Statements and Supplementary Data	14
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	15
Item 9A(T). Controls and Procedures	15
Item 9B. Other Information	16
PART III
Item 10. Directors, Executive Officers and Corporate Governance	16
Item 11. Executive Compensation	18
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	19
Item 13. Certain Relationships and Related Transactions, and Director Independence	20
Item 14. Principal Accountant Fees and Services	20
Item 15. Exhibits Financial Statement Schedules	21
Signatures	21

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For purposes of this report, unless otherwise indicated or the context otherwise requires, all references herein to “New Colombia Resources,” “the Company” ,“we,” “us,” and “our,” refer to New Colombia Resources, Inc., a Delaware corporation.

 

Forward-Looking Statements

 

The following discussion contains forward-looking statements regarding us, our business, prospects and results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that may affect such forward-looking statements include, without limitation: our ability to successfully develop new products and services for new markets; the impact of competition on our revenues, changes in law or regulatory requirements that adversely affect or preclude clients from using us for certain applications; delays our introduction of new products or services; and our failure to keep pace with our competitors.

 

When used in this discussion, words such as "believes", "anticipates", "expects", "intends" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this report and other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business.

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PART I

 

Item 1. DESCRIPTION OF BUSINESS

 

General Information about Our Company

Our Corporate History

New Colombia Resources, Inc. F/K/A, VSUS Technologies Incorporated (“the Company”) was incorporated in Delaware on September 20, 2000. Following its establishment, the Company organized, at the end of 2000, two wholly-owned subsidiaries: Safe Mail International Ltd., a company registered in the British Virgin Islands and Safe Mail Development Ltd., a company registered in Israel. As of August 31, 2004, the Company established two additional wholly-owned subsidiaries: VSUS Secured Services, Inc., a Delaware corporation and First Info Network, Inc., a Delaware corporation. Since inception, and until a recent shift in the focus of its business operations, the Company had been a developer and marketer of highly secure communications systems for use over the Internet.

Effective as of April 13, 2005, the Company reorganized its business by transferring substantially all of its business assets into VSUS Secured Services, Inc., its wholly-owned subsidiary. Consequently, its two subsidiaries, Safe Mail Development Ltd. and Safe Mail International Ltd., became subsidiaries of VSUS Secured Services, Inc.

On April 14, 2005, VSUS Technologies Incorporated acquired 1stAlerts, Inc., a Delaware corporation (“1stAlerts”), a company that develops, markets and sells software applications, when 1stAlerts merged with and into the Company's wholly-owned Delaware subsidiary, First Info Network, Inc., hereinafter referred to as the “1stAlerts Acquisition”. At the time of the 1stAlerts Acquisition, among other things: (i) the Company exchanged 13,000,000 shares of its Common Stock, and 200 shares of its Series B Participating Preferred Stock, for all of the issued and outstanding shares of capital stock of 1stAlerts, (ii) the Company issued 1,861,841 of its Class A Warrants in exchange for warrants to purchase shares of Common Stock of 1stAlerts, (iii) the Company assumed $4,565,000 of promissory and convertible notes from 1stAlerts, and (iv) certain officers and directors of 1stAlerts became officers and directors of the Company. The 200 shares of series B Participating Preferred Stock, the 1,861,841 Class A Warrants which were never registered and a portion of the Convertible Notes were cancelled as a part of the June 24, 2009 Rescission Agreement with 1 ^st Alerts. The Company returned all of the Capitol stock of 1 ^st Alerts as part of the 2009 Rescission Agreement. No remaining 1 ^st Alerts Officers and Directors currently serve as Officers or Directors of the Company.

Each of the 1,861,841 Class A Warrants the Company issued in connection with the 1stAlerts Acquisition have a term of a term of two years from the effective date of a registration statement the Company's obligated to file to register, among other of its securities, the shares of the Company's Common Stock underlying these warrants, and an exercise price of $0.19. The class A Warrants and the registration obligation of the company have been negated and cancelled pursuant to the 2009 Rescission Agreement.

1 ^st Alerts agrees that as consideration for the execution of this Rescission Agreement, it shall: (a) relinquish and forever waive any ownership claim or right to the 13,000,000 shares of VSUT common stock issued to the shareholders of 1 ^st , or their designees pursuant to the terms of the Acquisition Agreement; including 200 shares of participating preferred shares issued subsequent to the Acquisition Agreement, and (b) to delivered forthwith to VSUT said shares, medallion guaranteed, with a notarized third party release, and notarized corporate resolution from 1st.

Following our acquisition of 1stAlerts, we shifted our business operations to primarily focus on the 1stAlerts business model. In connection with this change, we have terminated our operations in Israel.

In June 2005, we were introduced to NetCurrents Information Services, Inc. (“NetCurrents”), which owns a patented REAL-TIME search engine technology called “FIRST.” Our management believed that incorporating FIRST into the company's MyOneScreen software application would give it a competitive advantage over its competitors. On June 9, 2005, we entered into a strategic relationship with NetCurrents, pursuant to which NetCurrents granted us a 50-year license to modify and integrate NetCurrent’s patented FIRST (Fast Internet Real-Time Search Technology) Internet search technology (the "NetCurrents Technology") into our products.

In March 2006, we entered into a Memo of Understanding with Scientigo, Inc. (“Scientigo”), to integrate their patented TIGO Artificial Intelligence technology with FIRST. Scientigo is an emerging technology company that invented, patented and licenses the next-generation of intelligent document recognition, intelligent enterprise content management and intelligent search technologies. Their patented TIGO technology creates order from chaos by using artificial intelligence, machine learning, rule-based systems and patented XML technology to make it faster, easier and less costly to capture, file, organize and retrieve any type of information.

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In March of 2009 we entered into an LOI with My Vintage Baby, Inc. the company was going to acquire a majority interest in MVBY. Due to certain circumstances the company was not able to complete the acquisition. In September 2009 the company signed an LOI with ZenZuu, Inc., a leader in the internet social networking field.

On February 24, 2011, VSUS Technologies Inc. n/k/a New Colombia Resources, Inc., a Delaware corporation (the “Company”), closed the Final Purchase Agreement (the “Agreement”) with Erasmo Alfredo Almanza Latorre, a Columbian Citizen. The agreement provides for the acquisition of LA TABAQUERA COAL MINE (LA TABAQUERA) with Concession Contract No. ILE-09551, granted for the Exploration and Exploitation of a Carbon Mineral and other Grantable Mineral Deposits by the Colombian Institute of Geology and Mining.

Pursuant to the Agreement and addendum, the Company purchased 100% of Concession Contract ILE-09551 from Erasmo Almanza. The consideration paid to Erasmo Almanza is an aggregate of 5,606,410 fully paid shares of Common Stock of the Company (the “Shares”), for the concession contract, and $100,000.00 in cash payments.

On April 15, 2014, by Order No. 04141100650, Mr. Erasmo Almanza, Director of New Colombia Resources, presented the environmental license application File # 04141100650 to the Corporacion Autonoma Regional de Cundinamarca (CAR) for the operation of the La Tabaquera mine located in San Jose municipality of Guaduas.

On July 14, 2014, by Order No. 453, the Corporacion Autonoma Regional de Cundinamarca (CAR) initiated administrative proceedings for an environmental license for the operation of a mine for coal and other grantable mineral, mineral mining title No. ILE -09,551 in San Jose, Municipality of Guaduas.

On January 19, 2015, the Company received a Technical Evaluation, with Record # 8004-63.1-46825, regarding its application for the operation of the La Tabaquera mine located in the San Jose municipality of Guaduas, Colombia from the Corporación Autónoma Regional de Cundinamarca (“CAR”). The CAR is the local environmental agency in Guaduas, Colombia. The Company is addressing the comments from the evaluation. The official document can be viewed on the Company’s website at: http://www.newcolombiaresources.com/documents.php.

The Company was notified by the CAR, that, after May 1, 2015, the CAR will visit the work zone for socialization of the mining project with the community.

Amendments to Articles of Incorporation or Bylaws

Effective January 24, 2013, VSUS Technologies, Inc. has changed the Articles of Incorporation so that the “First” article shall read: The Company has changed its Corporate name from VSUS Technologies, Inc. to New Colombia Resources, Incorporated. This Corporate action was approved and announced by FINRA on January 24, 2013. The Company also has a new ticker symbol, (NEWC) also effective January 24, 2013.

Overview

About New Colombia Resources, Inc.

New Colombia Resources Inc. (“New Colombia” or the “Company”) is focused on the acquisition and development of high quality metallurgical coal properties in Colombia, considered one of the most attractive emerging markets. With an estimated US$378 billion in gross domestic product in 2013, it became the third largest economy in Latin America and is growing 4% to 6% per year. Colombia has the largest coal reserves in Latin America and is the fourth largest coal producer in the world. Total coal production decreased by 4% in 2013 to 85.5 million tonnes. Coal producers aim to increase coal output in 2014. Colombia privatized its coal sector in 2004 and is committed to investing in infrastructure to support increased mining.

They are focusing on the La Tabaquera coal and rock project (the “Project”) located in the Municipality of Guaduas, approximately 100 kilometers northwest of Bogota. This Project’s haul roads are easily accessible either by National Highway I-50 or the new Ruta del Sol. The property is within 50 Km of the Magdalena River, providing easy transport to terminals in Barranquilla, Santa Marta or Cartagena for export. The Magdalena River is being dredged to allow cargo from La Dorada which in close proximity to their mine.

During 2014, they purchased a rock crushing plant with a capacity to process over 100 m3/hour of aggregates which is expected to be operating in 2015. Demand is strong for building material in Colombia since many illegal mines have been closed as new construction and infrastructure projects come online. The construction industry in Colombia grew 10% in 2014.

An “Estimate of Probable Reserves and Grantable Potential of Coal at La Tabaquera Mine” report was prepared on behalf of New Colombia in September 2011. The report estimated reserves for La Tabaquera Project of 13,073,935 cubic meters for a total of 16,996,116 tons of bituminous coal (non JORC compliant), with 70% being metallurgical hard coking coal and 30% thermal coal.

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Based on the high quality of their coal, they expect to sell at a premium to other domestic coals. In August 2014, the market price for thermal coal in Colombia increased by 4% to $ 68/mt, coking coal blends sold for $ 95 per ton. Beginning in 2015, New Colombia will concentrate tunnel mining its hard coking coal seams first. The Company expects to mine 20,000 tons of hard coking coal per month and 10,000 tons of thermal coal per month.

New Colombia also has renewable resource projects in Colombia they plan to develop and possibly spin off as a dividend to shareholders.

On April 15, 2014, by Order No. 04141100650, Mr. Erasmo Almanza, Director of New Colombia Resources, presented the environmental license application File # 04141100650 to the Corporacion Autonoma Regional de Cundinamarca (CAR) for the operation of the La Tabaquera mine located in San Jose municipality of Guaduas.  

On July 14, 2014, by Order No. 453, the Corporacion Autonoma Regional de Cundinamarca (CAR) initiated administrative proceedings for an environmental license for the operation of a mine for coal and other grantable mineral, mineral mining title No. ILE -09,551 in San Jose, Municipality of Guaduas.

On January 19, 2015, the Company received a Technical Evaluation, with Record # 8004-63.1-46825, regarding its application for the operation of the La Tabaquera mine located in the San Jose municipality of Guaduas, Colombia from the Corporación Autónoma Regional de Cundinamarca (“CAR”). The CAR is the local environmental agency in Guaduas, Colombia. The Company is addressing the comments from the evaluation. The official document can be viewed on the Company’s website at: http://www.newcolombiaresources.com/documents.php.

The Company was notified by the CAR, that, after May 1, 2015, the CAR will visit the work zone for socialization of the mining project with the community.

Industry Background

The company has moved into the coal industry in Colombia, due to the decline in U.S. coal mining and the need to replace that coal with higher quality, lower cost of production coal from Colombia.  The government of Colombia is investing heavily in infrastructure projects that will benefit coal producers’ ability to move product to port.  Once the Magdalena River project is completed, coal transportation costs from the interior of the country are expected to be reduced by 50%.  

The Company, through its investment in Sannabis SAS,  has moved into the legal medical cannabis and hemp industries to take advantage of Colombia’s ideal growing environment, favorable indigenous regulations, low cost of production in a growing worldwide market.

About Guaduas, Colombia

Our first mining acquisition is in the town of Guaduas, Colombia. NEWC will become a responsible neighbor in Guaduas. The company will sponsor health centers, schools, and many other causes when needed. Under Colombian law, mining companies are required to donate for social benefit. Mr. Erasmo Almanza, shareholder, has strong ties to the community and expects NEWC to have the full faith and support of the Town of Guaduas. Guaduas is a municipality of 35,000 people with excellent electrical and water supply and an ample workforce. For more information on Guaduas, click. http://translate.google.com.co/translate?u=http://www.guaduas-cundinamarca.gov.co&hl=es&ie=UTF-8&sl=es&tl=en New Colombia Resources, Inc. (NEWC.PK), through its wholly owned subsidiary, will acquire, explore and develop coal mining concessions in Colombia. Our first acquisition, La Tabaquera Concession Contract No. ILE-09551 (“The Concession”) granted for the Exploration and Exploitation of a Carbon Mineral and other Grantable Mineral Deposits by the Colombian Institute of Geology and Mining (INGEOMINAS), will allow us to enter the growing Colombian coal mining industry. We will implement new US mining technologies to provide innovative approaches to geological engineering, and clean coal mining in Colombia.

Colombia Coal Sector

According to the World Energy Council, Colombia had 6,814 million short tons (MMst) of recoverable coal reserves in 2007, consisting largely of bituminous coal and a small amount of metallurgical coal. The country has the second-largest coal reserves in South America, slightly behind Brazil. Colombia’s coal is relatively clean-burning, with a sulfur content of less than 1 percent. Over the past decade, production has more than doubled, reaching 86.7 MMst in 2008. Colombia’s coal consumption was only 5.2 MMst in 2008, leaving most of the country’s production available for export; in 2008, Colombia was the fourth-largest net coal exporter in the world.

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Sector Organization

Colombia completed the privatization of its coal sector in 2004 with the closing of Minercol, the former state-owned coal company. The largest coal producer in Colombia is the Carbones del Cerrejon consortium, composed of Anglo-American, BHP Billiton, and Glencore. Drummond Co. operates the second-largest coal mine in Colombia, La Loma producing about 20 MMst per year.

Exports

Currently, most Colombia coal exports go to Europe, North America, and Latin America, as the vast majority of Colombia’s coal producing and exporting infrastructure is located on the Caribbean coast. Coal is an important part of the Colombian economy: in 2009, coal represented about one-quarter of total export earnings, and mining taxes and royalties paid to the Colombian government exceeded $1 billion. During the first nine months of 2009, the United States imported 13.6 MMst of coal from Colombia, about 80 percent of total U.S. coal imports.

According to media reports, Colombia began exporting sizable quantities of coal to Asian markets, especially China, in 2009. A combination of higher prices in Asia, lower freight costs, and falling exports to the United States created the conditions for such an opportunity. It is possible that the expansion of the Panama Canal (currently slated for completion by 2015) could facilitate greater exports of Colombian coal to Asia in the future.

Coal Bed Methane

Coal bed methane (CBM) is a gaseous hydrocarbon that occurs along with coal reserves. It is similar to natural gas and can be transported and used in similar ways. CBM has the potential to dramatically increase Colombia’s proven natural gas reserves, facilitate greater domestic production, and potentially allow additional exports to neighboring countries.

Employees

The Company’s team currently consists of one (1) employee and several independent contractors. Each management hire  will be carefully selected to address immediate needs in particular functional areas, but also with consideration of the Company’s future needs during a period of expected rapid growth and expansion. Value is placed not only on outstanding credentials in specific areas of functional expertise, but also on cross-functionality, collegiality, a strong knowledge of content acquisition and distribution, along with hands-on experience in scaling operations from initial beta and development stage through successful commercial deployment.

Clients and Competition

Competition

The mining industry is highly competitive, both in Colombia, as well as internationally.  Our ability to compete with other mining companies will be dependent on the success of our coal mines and our ability to secure sales of coal.  

Backlog

At December 31, 2014, we had no backlog.

 

Employees

As of December 31, 2014, we 0 full time employees aside from our President.  

Proprietary Information

We own no proprietary information.

Government Regulation

We may fall under international governmental regulations pertaining to the mining of coal and the export and sales of coal. However, it is our policy to fully comply with all governmental regulation and regulatory authorities.

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How to Obtain our SEC Filings

 

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports, are available on our website at www.newcolombiaresources.com, as soon as reasonably practicable after we file these reports electronically with, or furnish them to, the Securities and Exchange Commission (“SEC”). Except as otherwise stated in these reports, the information contained on our website or available by hyperlink from our website is not incorporated into this Annual Report on Form 10-K or other documents we file with, or furnish to, the SEC. 

 

Our investor relations department can be contacted at our principal executive office located at our principal office, 251 174^th Street, #816, Sunny Isles Beach, FL 33160. Our telephone number is (410)-236-8200.

Item 1A.  RISK FACTORS

 

Not required for smaller reporting companies.  

ITEM 1B. Unresolved Staff Comments

None.

ITEM 2. DESCRIPTION OF PROPERTY

 

Our executive and operations offices are located in Sunny Isles Beach, FL and also in Barranquilla, Colombia. The Company shares office space with other related parties, and does not make rental payments.  It considers that the current principal office space arrangement adequate and will reassess its needs based upon the future growth of the Company.

ITEM 3. LEGAL PROCEEDINGS

 

On November 19, 2014, the Company received a default notice from KBM Worldwide, Inc., stating that the Company was in default under two convertible notes.  The Company has since repaid one note in full, and entered into a second note with KBM Worldwide, Inc. On April 15, 2015, the Company received a Notice of Default from KBM Worldwide, Inc., which states that due to the Company’s failure to file its Annual Report on a timely basis, the Company is in default under Convertible Promissory Notes held by KBM Worldwide, Inc. As a result, the related outstanding principal balance, which amounted to a total of $68,500 prior to default, was increased by 150% to $102,750. This default balance, along with accrued default interest, is due to KBM Worldwide, Inc. In addition, KBM Worldwide, Inc. has the right to convert the default balance into common shares of the Company’s stock.

In July of 2013, the Company entered into an agreement to purchase a 50% interest in a farm in Colombia.  The purchase price for the 50% interest was $600,000.  In order to complete the transaction, the Company was required to pay an initial $200,000 in cash on or before December 31, 2014, with the remaining $400,000 to be paid in the Company’s common stock.  The Company was unable to pay the entire cash payment of $200,000, but did make payments in an aggregate amount of approximately $29,200 through April of 2014.  The Seller has entered into a separate sales contract with a third party, effectively removing the Company from the transaction.  The Company is entering litigation; depositions took place on March 24, 2015 in Colombia.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

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PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information

Our Common Stock is quoted on the OTC Bulletin Board of the National Association of Securities Dealers (“NASD”). Our trading symbol is “NEWC.”

Until the first quarter of 2005, there was no “public market” for our shares of Common Stock. For the periods indicated, the following table presents the range of high and low bid prices for the common stock as reported by the OTC Bulletin Board during the quarter being reported.

2014		High			Low
First Quarter		$	0.035		$	0.0200
Second Quarter			0.024			0.0110
Third Quarter			0.015			0.0095
Fourth Quarter			0.030			0.0116

2013		High			Low
First Quarter		$	0.08		$	0.019
Second Quarter			0.046			0.04
Third Quarter			0.046			0.0322
Fourth Quarter			0.044			0.0292

Holders

As of the date hereof, the aggregate number of shares of our Common Stock outstanding is 144,065,295 held of record by approximately 277 registered holders.

Dividends

We have not declared any cash dividends with respect to our Common Stock and do not intend to declare dividends in the foreseeable future. Our future dividend policy cannot be ascertained with any certainty.

The Securities Enforcement and Penny Stock Reform Act of 1990

 

The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

A purchaser is purchasing penny stock which limits the ability to sell the stock. The shares offered by this prospectus constitute penny stock under the Securities and Exchange Act. The shares will remain penny stocks for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.

 

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the Commission, which:

 

·

contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

·

contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of the Securities Act of 1934, as amended;

·

contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask price;

·

contains a toll-free telephone number for inquiries on disciplinary actions;

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·

defines significant terms in the disclosure document or in the conduct of trading penny stocks; and

·

contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation;

 

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:

 

·

the bid and offer quotations for the penny stock;

·

the compensation of the broker-dealer and its salesperson in the transaction;

·

the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

·

monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.

 

Recent Sales of Unregistered Securities

During 2013, the Company issued 1,000,000 common shares to an officer of the Company for accrued but unpaid salary of $44,240. The shares were valued at $69,900, and a resulting loss on settlement of accrued liabilities amounting to $25,660 was recognized.

During 2013, the Company issued 400,000 common shares in a conversion of a third party debt balance, along with accrued but unpaid interest. The shares were valued at $10,000. See Note 6.  

During 2013, the Company issued 1,666,667 common shares to a former officer of the Company for consulting services. The shares were valued at $50,000.

During 2013, the Company issued 300,000 common shares to a third party for consulting services. The shares were valued at $11,400.

During 2013, the Company sold an aggregate of 6,700,000 common shares to third parties. The aggregate purchase price was $167,500.

During 2013, the Company issued 500,000 common shares to a family member of the Company’s President for the purchase of a vehicle. The shares (and the related vehicle) were valued at $12,500. See Note 6.

During 2013, the Company issued 3,500,000 common shares in a conversion of the 3,500,000 shares of the Company’s Series B Convertible Preferred stock.

During 2013, the Company cancelled 9,380,000 common shares for services having not been rendered.

During 2013, the Company cancelled 533,333 common shares related to a consulting agreement.

During 2013, related parties contributed capital through forgiveness of debt in the amount of $94,851. See Note 6 for details.

During 2014, the Company issued 3,708,334 common shares to a former officer of the Company for consulting services. The shares were valued at $50,000.

During 2014, the Company issued a total of 500,000 common shares, of which 250,000 common shares were issued to a third party for consulting services, and 250,000 common shares were issued to a Director of the Company for services provided to the Company. The shares were valued at $4,525.

During 2014, the Company sold an aggregate of 38,400,001 common shares to third parties. The aggregate purchase price was $290,500.

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ITEM 6. SELECTED FINANCIAL DATA

A smaller reporting company is not required to provide the information in this Item.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis or Plan of Operation contains forward-looking statements that involve future events, our future performance and our expected future operations and actions. In some cases, you can identify forward-looking statements by the use of words such as “may”, “will”, “should”, “anticipate”, “believe”, “expect”, “plan”, “future”, “intend”, “could”, “estimate”, “predict”, “hope”, “potential”, “continue”, or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including, but not limited to, the matters discussed in this report under the caption “Risk Factors”. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. We undertake no obligation to publicly update any forward looking-statements, whether as a result of new information, future events or otherwise.

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this report.

 

The following table provides selected financial data about us for the fiscal years ended December 31, 2014 and 2013. For detailed financial information, see the audited Financial Statements included in this report.

		Years Ended December 31,
Balance Sheet Data:		2014		2013
Cash		$	1,627	$	-
Total assets			526,367		133,592
Total liabilities			1,344,114		1,051,175
Shareholders' equity (deficit)			(796,710)		(917,583)
Operating Data:
Revenues			-		-
Operating expenses			1,871,137		905,502
Net loss		$	(1,899,853)	$	(1,265,803)

Results of Operations

For the year ended December 31, 2014 and December 31, 2013

The Company generated $0 in revenue during the year ended December 31, 2014, which compares to revenue of $0 for the year ended December 31, 2013.  Since the Company did not incur any sales for either comparative period, no cost of sales have been recognized.

Operating expenses, which consisted of geology and engineering costs, royalty expenses, depreciation expense, and general and administrative expenses, for the year ended December 31, 2014, were $1,871,137. This compares with operating expenses for the year ended December 31, 2013 of $905,502.  The major components of general and administrative expenses include accounting fees, legal, and professional fees. Our operating expenses increased during the year ended December 31, 2014 primarily due to increases in our royalty expenses, as well as our general and administrative expenses.

As a result of the foregoing, we had a net loss of $1,899,853 for the year ended December 31, 2014. This compares with a net loss for the year ended December 31, 2013 of $1,265,803.  

In its audited financial statements as of December 31, 2014, the Company was issued an opinion by its auditors that raised substantial doubt about the ability to continue as a going concern based on the Company’s current financial position. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to successfully develop and market our products and our ability to generate revenues.

Liquidity and Capital Resources

As of December 31, 2014 we had cash equivalents of $1,627.  As of December 31, 2013 we had cash or cash equivalents of $0.  

12

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If our revenue is not sufficient to allow us to meet our cash requirements during the next twelve months, the Company may need to raise additional funds through the sale of its equity securities. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover these operating costs. Failure to generate sufficient revenues or additional financing when needed could cause us to go out of business.

Net cash used in operating activities was $337,873 for the year ended December 31, 2014. This compares to net cash used in operating activities of $205,374 for the year ended December 31, 2013. This increase is due primarily to stock issued for compensation and stock option expense.  

Cash flows used in investing activities were $113,500 for the year end December 31, 2014, which compares to cash flows used in investing activities of $18,376 for the year ended December 31, 2013.  We do not anticipate significant cash outlays for investing activities over the next twelve months.

Cash flows provided by financing activities was $474,037 for the year ended December 31, 2014 which compares to cash flows provided by financing activities of $223,750 for the year ended December 31, 2013.  The change in cash flows related to financing activities is due primarily to an increase in proceeds received on notes payable and capital contributions by an officer, offset by payments on convertible debentures.

As of December 31, 2014, our total assets were $526,367 and our total liabilities were $1,344,114.  As of December 31, 2013, our total assets were $133,592 and our total liabilities were $1,051,175.

 

Our principal source of liquidity will be our operations and the sale of our common stock. We expect variation in revenues to account for the difference between a profit and a loss.  Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to successfully develop and retain our customers and our ability to generate revenues.

 

Our primary activity will be to seek to develop clients for our services and, consequently, our sales. If we succeed in developing clients for our services and generating sufficient sales, we will become profitable. We cannot guarantee that this will ever occur. Our plan is to build our company in any manner which will be successful.

Off-Balance Sheet Arrangements

In July of 2013, the Company entered into an agreement to purchase a 50% interest in a farm in Colombia.  The purchase price for the 50% interest was $600,000.  In order to complete the transaction, the Company was required to pay an initial $200,000 in cash on or before December 31, 2014, with the remaining $400,000 to be paid in the Company’s common stock.  The Company was unable to pay the entire cash payment of $200,000, but did make payments in an aggregate amount of approximately $29,200 through April of 2014.  The Seller has entered into a separate sales contract with a third party, effectively removing the Company from the transaction.  The Company is entering litigation, litigation, depositions took place on March 24, 2015 in Colombia.

Plan of Operation

The following milestones are estimates only. The working capital requirements and the projected milestones are approximations only and subject to adjustment based on sales, costs and needs.  

Our plan for the twelve months beginning January 1, 2015 is to operate at a profit or at break even.  Our plan is to acquire additional coal mining locations in Colombia in order to become profitable in our operations.

We are currently focusing our attention on the coal mining industry in Colombia.  We are also focused on the hemp and legal medical cannabis industry.

On April 15, 2014, by Order No. 04141100650, Mr. Erasmo Almanza, Director of New Colombia Resources, presented the environmental license application File # 04141100650 to the Corporacion Autonoma Regional de Cundinamarca (CAR) for the operation of the La Tabaquera mine located in San Jose municipality of Guaduas.  

On July 14, 2014, by Order No. 453, the Corporacion Autonoma Regional de Cundinamarca (CAR) initiated administrative proceedings for an environmental license for the operation of a mine for coal and other grantable mineral, mineral mining title No. ILE -09,551 in San Jose, Municipality of Guaduas.

Recently Issued Accounting Pronouncements.

We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial position, or cash flows.

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Seasonality.

We do not expect our revenues to be impacted by seasonal demands for our services.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

A smaller reporting company is not required to provide the information in this Item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

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TABLE OF CONTENTS

F-1

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

New Colombia Resources, Inc. and Subsidiaries

Sunny Isles Beach, Florida

We have audited the accompanying consolidated balance sheets of New Colombia Resources, Inc. and its subsidiary, (collectively, the “Company") as of December 31, 2014 and 2013, and the related consolidated statement of operations, changes in stockholders' deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of New Colombia Resources, Inc. and its subsidiary as of December 31, 2014 and 2013, and the consolidated results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of business, realization of assets, and liquidation of liabilities in the ordinary course of business. As discussed in Note 4 to the consolidated financial statements, the Company has a working capital deficit and has incurred significant losses. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 4. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

April 28, 2015

F-2

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NEW COLOMBIA RESOURCES, INC.

Consolidated Balance Sheets

		As of		As of
		December 31,		December 31,
		2014		2013
ASSETS
Current Assets
Cash and cash equivalents	$	1,627	$	-
Prepaid expenses and other current assets		16,067		362
Total Current Assets		17,694		362
Non-Current Assets
Equipment, net of accumulated depreciation of $3,823 and $1,146, respectively		329,209		11,354
Investment in properties		56,344		18,376
Loan receivable – related party		-		3,500
Mining rights		100,000		100,000
Equity method investment		23,120		-
TOTAL ASSETS	$	526,367	$	133,592
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	349,401	$	256,168
Accounts payable and accrued interest – related parties		53,713		240,007
Other liability		660,000		-
Short-term convertible debt		281,000		-
Make whole liability		-		555,000
Total Current Liabilities		1,344,114		1,051,175
Total Liabilities		1,344,114		1,051,175
Stockholders' Deficit:
Preferred stock, $0.001 par value (shares authorized-20,000,000; 10,000,000 shares undesignated) Series A Convertible: 10,000,000 shares designated; 10,000,000 shares issued and outstanding at December 31, 2014 and at December 31, 2013		10,000		10,000
Preferred stock, $0.001 par value (shares authorized-10,000,000;    -0- shares undesignated) Series B Convertible: 10,000,000 shares    designated; 2,500,492 and 1,500,000 shares issued and outstanding at    December 31, 2014 and December 31, 2013		2,500		1,500
Common stock, $0.001 par value (shares authorized-500,000,000); 125,008,477 shares issued and outstanding at December 31, 2014 and 82,400,142 at December 31, 2013		125,008		82,400
Additional paid-in capital		26,926,947		24,970,866
Deficit accumulated		(27,861,165)		(25,982,349)
Total Stockholders’ Deficit of New Columbia Resources, Inc.		(796,710)		(917,583)
Non-controlling interest		(21,037)		-
Total Stockholders’ Equity Deficit		(817,747)		(917,583)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	526,367	$	133,592

See accompanying notes to the consolidated financial statements

F-3

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NEW COLOMBIA RESOURCES, INC.

Consolidated Statements of Operations

				December 31,		December 31,
				2014		2013
Revenues			$	-	$	-
Operating Expenses
	Geology and engineering			38,916		55,807
	Royalty expense			105,000		-
	Depreciation expense			2,677		1,146
	General and administrative			1,724,544		848,549
Total Operating Expenses				1,871,137		905,502
Loss from Operations				(1,871,137)		(905,502)
	(Gain) loss on settlement of debt			(48,662)		344,677
	Interest expense			84,798		39,374
	Penalty for early extinguishment of debt			-		13,750
	Penalty upon loan default			61,950		-
	Gain on derivatives			(71,250)		(37,500)
	Loss from equity investment			1,880		-
Net loss			$	(1,899,853)	$	(1,265,803)
Net loss attributable to non-controlling interest				21,037		-
Net loss attributable to New Columbia Resources, Inc.				(1,878,816)		(1,265,803)
Basic and diluted loss per share			$	(0.02)	$	(0.02)
Weighted average number of
shares outstanding-
basic and diluted				98,029,823		80,028,397

See accompanying notes to the consolidated financial statements

F-4

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NEW COLOMBIA RESOURCES, INC.

Consolidated Statement of Changes in Stockholders’ Deficit

See accompanying notes to the consolidated financial statements

F-5

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NEW COLOMBIA RESOURCES, INC.

Consolidated Statements of Cash Flows

		December 31,		December 31,
		2014		2013
Cash Flows from Operating Activities
Net loss attributable to New Columbia Resources, Inc.	$	(1,878,816)	$	(1,265,803)
Non-controlling interest		(21,037)		-
Net loss for the period		(1,899,853)		(1,265,803)
Adjustments to reconcile net loss to net cash
used in operating activities:
Stock issued for compensation		863,468		648,789
Stock option expense		599,088		-
Depreciation expense		2,677		1,146
Loss from equity investment		1,880		-
(Gain) loss on settlement of make whole liability and/or debt		(48,662)		322,716
Loss on settlement of accrued salary		-		25,660
Gain on derivative liability		(71,250)		(37,500)
Amortization of discount on convertible debenture		71,250		37,500
Royalty expense		105,000		-
Penalty for early extinguishment of debt		-		13,750
Penalty upon loan default		61,950		-
Changes in operating assets and liabilities:
Prepaid expenses		(15,705)		-
Other receivables		3,500		(3,500)
Accounts payable and accrued expenses		10,493		57,413
Accounts payable and accrued interest – related parties		(37,496)		(5,545)
Net cash used in operating activities		(353,660)		(205,374)
Cash Flows from Investing Activities
Investment in properties		(37,968)		(18,376)
Equity Investment		(25,000)		-
Purchase of fixed assets		(50,532)		-
Net cash used in investing activities		(113,500)		(18,376)
Cash Flows from Financing Activities
Payments on convertible debentures		(199,616)		-
Proceeds received on notes payable		327,903		-
Issuance of shares for cash		290,500		223,750
Contribution from officer		50,000		-
Net cash provided by financing activities		468,787		223,750
Increase (Decrease) in Cash and Cash Equivalents		1,627		-
Cash and Cash Equivalents--Beginning of Period		-		-
Cash and Cash Equivalents--End of Period	$	1,627	$	-
Supplemental Disclosures of Cash Flow Information
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-
Non-Cash Investing and Financing Activities
Cancellation of common stock	$	-	$	9,913
Common stock issued for conversion of debentures	$	-	$	45,000
Common stock issued for conversion of preferred stock	$	-	$	3,500
Common stock issued for accrued salary	$	-	$	44,240
Common stock issued for purchase of fixed assets	$	-	$	12,500
Debt discount from derivative liabilities	$	-	$	37,500
Contribution to capital	$	-	$	94,851
Payable for equipment	$	270,000	$	-
Loan proceeds paid directly to services providers	$	96,097	$	-
Preferred stock issued for accrued expenses – related parties	$	143,932	$	-
Debt discount	$	71,250	$	-
Preferred stock issued for accounts payable and accruals	$	52,700	$	-
Reclass from make whole liability to other liability	$	555,000	$	-

F-6

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See accompanying notes to the consolidated financial statements

 

F-7

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NEW COLOMBIA RESOURCES, INC.

Notes to the Consolidated Financial Statements

NOTE 1-ORGANIZATION AND HISTORY

New Colombia Resources, Inc. (formerly VSUS Technologies, Inc.) (the “Company”) was incorporated in Delaware on September 20, 2000. Following its establishment, the Company organized, at the end of 2000, two wholly-owned subsidiaries: Safe Mail International Ltd., a company registered in the British Virgin Islands and Safe Mail Development Ltd., a company registered in Israel. As of August 31, 2004, the Company established two additional wholly-owned subsidiaries: VSUS Secured Services, Inc., a Delaware corporation, and First Info Network, Inc., a Delaware corporation. Since inception, and until a recent shift in the focus of its business operations, the Company had been a developer and marketer of highly secure communications systems for use over the internet.

Effective as of April 13, 2005, the Company reorganized its business by transferring substantially all of its business assets into VSUS Secured Services, Inc., its wholly-owned subsidiary. Consequently, its two subsidiaries, Safe Mail Development Ltd. and Safe Mail International Ltd., became subsidiaries of VSUS Secured Services, Inc.

On April 14, 2005, VSUS Technologies, Inc. acquired 1stAlerts, Inc., a Delaware corporation (“1stAlerts”), a company that develops, markets and sells software applications, when 1stAlerts merged with and into the Company's wholly-owned Delaware subsidiary. First Info Network, Inc., hereinafter referred to as the “1stAlerts Acquisition.” At the time of the 1stAlerts Acquisition, among other things: (i) the Company exchanged 13,000,000 shares of its Common Stock, and 200 shares of its Series B Participating Preferred Stock, for all of the issued and outstanding shares of capital stock of 1stAlerts, (ii) the Company issued 1,861,841 of its Class A Warrants in exchange for warrants to purchase shares of Common Stock of 1stAlerts, (iii) the Company assumed $4,565,000 of promissory and convertible notes from 1stAlerts, and (iv) certain officers and directors of 1stAlerts became officers and directors of the Company. The 200 shares of Series B Participating Preferred Stock, the 1,861,841 Class A Warrants, which were never registered, and a portion of the Convertible Notes were cancelled as a part of the June 24, 2009 Rescission Agreement with 1st Alerts. The Company returned all of the capital stock of 1st Alerts as part of the 2009 Rescission Agreement. No remaining 1st Alerts Officers and Directors currently serve as Officers or Directors of the Company.

New Colombia Resources, Inc. specializes in the acquisition of potential revenue generating enterprises.  During 2011, the Company executed an agreement and acquired La Tabaquera, a coal property with concession contract ILE-09551. 

Effective in January 2013, the Company changed its name from VSUS Technologies, Inc. to New Colombia Resources, Inc. The Company trades under the ticker symbol NEWC. New Colombia Resources is developing coal, rock mining, medical cannabis and hemp operations in Colombia.

Effective March 3, 2014, the Company was granted a 51% interest in the Colombian mining company Compañía Minera San Jose Ltda. (“Cia Minera San Jose Ltda.”) for no consideration, but, for the proportionate share assumption of future and subsequent liability for the expenses and obligations of Cia Minera San Jose Ltda.  The Company is required to present the consolidated net income and the portion of the consolidated net income allocable to the non-controlling interests and to the stockholders of the Company separately in its consolidated statements of operations. Losses applicable to the non-controlling interests are allocated to the non-controlling interests even when those losses are in excess of the non-controlling interests’ investment basis. The Company is also required to report its non-controlling interests as a separate component of equity. During the year ended December 31, 2014, the Company recorded a net loss allocable to non-controlling interests of ($21,037), respectively.

Effective December 1, 2014, the Company acquired 50% of ownership interest in Sannabis SAS, a Colombian entity, for a consideration of $25,000.   The Company agreed to a total contribution of $125,000 for the 50% ownership.  As of December 31, 2014, the Company had only contributed $25,000.  The Company agreed to the acceptance of the ownership, receiving 50%, ownership of Sannabis SAS.  New Colombia accounts for its investment in Sannabis SAS as an equity method investment  The Company has reviewed the relationship between the Company and Sannabis SAS, and has determined that the relationship does not meet the criteria regarding variable interest entities (“VIE”) as defined in ASC 810 Consolidation.  As such, the Company has not accounted for Sannabis SAS as a VIE, and have not included the accounts of Sannabis SAS in the consolidated financial statements as of and for the year ended December 31, 2014.  The Company has not entered into any side agreements that would materially affect the accounting for Sannabis SAS.

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America.

F-8

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Principles of Consolidation

The accompanying consolidated financial statements represent the consolidated operations of New Colombia Resources, Inc. and its wholly-owned subsidiary, Compañía Minera San Jose, Ltda. Intercompany balances and transactions have been eliminated in consolidation.

Development Stage

The Company has limited operations and is considered to be in the development stage. During the year ended December 31, 2014, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this ASU allows the company to remove the inception to date information and all references to development stage.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the consolidated financial statements are published, and (iii) the reported amount of net sales and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of consolidated financial statements; accordingly, actual results could differ from these estimates.

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash equivalents include cash on hand and cash in the bank.

Property, Plant, Equipment, Depreciation, Amortization and Long-Lived Assets

 

Long-lived assets include:

 

Property, plant and equipment – Assets acquired in the normal course of business are recorded at original cost and may be adjusted for any additional significant improvements after purchase. We depreciate the cost evenly over the assets’ estimated useful lives. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other income or expense. 

 

Identifiable intangible assets – These assets are recorded at acquisition cost. Intangible assets with finite lives are amortized evenly over their estimated useful lives.

 

When triggering events occur, the Company reviews all long-lived assets for impairment. When necessary, the Company records changes for impairments of long-lived assets for the amount by which the present value of future cash flows, or some other fair value measure, is less than the carrying value of these assets.

Impairment of Long-Lived Assets

 

Management of the Company will periodically review the net carrying value of its investments in properties and mining rights on a property-by-property basis. These reviews will consider the net realizable value of each property to determine whether a permanent impairment in value has occurred and the need for any asset write-down. An impairment loss will be recognized when the estimated future cash flows (undiscounted and without interest) expected to result from the use of an asset are less than the carrying amount of the asset. Measurement of an impairment loss will be based on the estimated fair value of the asset if the asset is expected to be held and used.

 

Although management will make its best estimate of the factors that affect net realizable value based on current conditions, it is reasonably possible that changes could occur in the near-term which could adversely affect management's estimate of net cash flows expected to be generated from its assets, and necessitate asset impairment write-downs.

There was no impairment loss on fair value of its investments in properties or mining rights for the years ended December 31, 2014 and 2013.

F-9

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Asset Retirement Obligations

 

The Company plans to recognize liabilities for statutory, contractual or legal obligations, including those associated with the reclamation of properties and any plant and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. Initially, a liability for an asset retirement obligation will be recognized at its fair value in the period in which it is incurred. Upon initial recognition of the liability, the corresponding asset retirement cost will be added to the carrying amount of the related asset and the cost will be amortized as an expense over the economic life of the asset using either the unit-of-production method or the straight-line method, as appropriate. Following the initial recognition of the asset retirement obligation, the carrying amount of the liability will be increased for the passage of time and adjusted for changes to the amount or timing of the underlying cash flows needed to settle the obligation. As of December 31, 2014, the Company had not begun development activities, and therefore, did not record a liability.

Foreign Currency

 

The financial statements of the Company’s subsidiary in Colombia, for which the functional currency is the local currency, the Colombian Peso, are translated into the reporting currency, U.S. dollars, using the exchange rate at the balance sheet date for all assets and liabilities.  The capital accounts are translated at historical exchange rates prevailing at the time of the transactions, while income and expenses items are translated at the average exchange rate for the period. Gain or losses from foreign currency transactions are recognized in income.

Equity Method Investment

The investment consists of a 50% ownership interest in Sannabis SAS, a Cololmbian company. In accordance with U.S. GAAP, we have adopted the equity method of accounting. Under the equity method of accounting, the Company records the investment at cost.  The Company’s investment in the entity is increased by additional contributions to the entity as well as its proportionate share of earnings in the entity.  Conversely, the Company’s investment is decreased by distributions made by the Company and by its proportionate share of losses.  

Income Taxes

 

The Company has adopted Accounting Standards Codification Subtopic 740-10, Income Taxes (“ASC 740-10”). ASC 740-10 requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.

Concentration of Credit Risk

The Company maintains its operating cash balances in banks in California. The Federal Deposit Insurance Corporation (FDIC) insures accounts at each institution up to $250,000.

Share-Based Compensation

 

The Company applies Topic 718 “Share-Based Payments” (“Topic 718”) to share-based compensation, which requires the measurement of the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized when the event occurs. The Black-Scholes option-pricing model is used to estimate the fair value of options granted.

The Company accounts for equity-based transactions with non-employees under the provisions of ASC Topic No. 505-50, “Equity-Based Payments to Non-Employees” (“Topic No. 505-50”). Topic No. 505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

Basic and Diluted Net Loss Per Share

 

Net loss per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted net loss per share for the Company is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.  As of December 31, 2014 there were a total of 116,509,085 dilutive shares from convertible Series A preferred stock, convertible Series B preferred stock, convertible debt and employee stock options.

F-10

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Fair Value of Financial Instruments

 

The Company’s financial instruments consist primarily of cash, affiliate receivable, settlement receivable, accounts payable and accrued expenses and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange, or from future earnings, or cash flows. 

 

The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosure about fair value measurements. The standard provides a consistent definition of fair value, which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based measurements.

 

The three-level hierarchy for fair value measurements is defined as follows:

 

Level 1–inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level 2–inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable of the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; and

Level 3–inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Reclassifications

 

Certain prior year amounts have been reclassified to conform to the current period presentation for comparative purposes.

Mineral Exploration and Development Costs

 

All exploration expenditures are expensed as incurred. Costs of acquisition and option costs of mineral rights are capitalized upon acquisition. Mine development costs incurred to develop new deposits, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is determined to be a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. If we do not continue with exploration after the completion of the feasibility study, the cost of mineral rights will be expensed at that time. Costs of abandoned projects are charged to mining costs, including related property and equipment costs. To determine if capitalized costs are in excess of their recoverable amount, periodic evaluation of the carrying value of capitalized costs and any related property and equipment costs are performed based upon expected future cash flows and/or estimated salvage value.

Non-Controlling Interest

 

We are required to report our non-controlling interest as a separate component of shareholders’ deficit. We are also required to present the consolidated net income and the portion of the consolidated net income allocable to the non-controlling interest and to our shareholders separately in our consolidated statements of operations. Losses applicable to the non-controlling interest are allocated to the non-controlling interest even when those losses are in excess of the non-controlling interest’s investment basis.

Recent Accounting Pronouncements

In August 2014, the FASB issued an ASU requiring, when applicable, disclosures regarding uncertainties about an entity’s ability to continue as a going concern. During the preparation of quarterly and annual financial statements, management should evaluate

whether conditions or events exist that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued. If this evaluation indicates that it is probable that an entity will be unable to meet its obligations when they become due within one year of the financial statement issuance date, management must evaluate whether its mitigation plans will alleviate the substantial doubt of continuing as a going concern. If substantial doubt exists, regardless of whether the mitigation plan alleviates the concern, additional disclosures are required in the financial statements addressing the conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events, and management’s mitigation plans. This new guidance will become effective for the Company for all reporting periods beginning in 2016. Early application is permitted. The Company’s management currently does not expect that this new guidance will have a significant effect on its consolidated financial statements when adopted.

F-11

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NOTE 3-ACQUISTION OF INTEREST IN A SUBSIDIARY

On February 24, 2011, the Company acquired La Tabaquera, a Colombian mine, and the associated asset, “Concession Contract No. IE-09551 from Erasmo Almanza, granted for the Exploration and Exploitation of a Carbon Mineral and other Grantable Mineral Deposits by the Colombian Institute of Geology and Mining” for a period of 4 - 30 years.

Under the agreement, the Company issued 5,606,410 shares of common stock and agreed to pay the owner $100,000 in cash. Due to the lack of an active market for the Company’s common shares, the Company determined the fair value of the common stock was $0 on the acquisition date. As of December 31, 2014, $78,484 of the cash payment had been paid, with the remaining $21,516 still owed and included in accounts payable and accrued expenses in the consolidated balance sheet. The $21,516 has no specific terms of repayment and is unsecured. The Company expects to pay the remaining amount upon receipt of future funding. If the amounts are not paid, the Company may have to re-negotiate with the seller.

On March 3, 2014, the Company was granted a 51% interest in the Columbian mining entity, Compania Minera San Jose Ltda. (“Cia Minera San Jose Ltda.”) for no consideration, but the assumption of future liabilities and expenses for which Cia Minera San Jose Ltda. would incur.  The Company agreed to the acceptance of the ownership, receiving 51%, or 6,120 shares, of the common stock of Cia San Jose Ltda., consolidating the nominal assets and liabilities, which consisted of cash of $431, investment in properties of $2,125, an intercompany receivable of $4,356, and an intercompany payable of $9,036, of the Cia Minera San Jose Ltda. as a subsidiary, reporting non-controlling interest as a separate component of shareholders’ deficit, and allocating the portion of consolidated net income allocable to non-controlling interest separately in the Company’s consolidated statement of operations.  The Company reviewed the transaction under ASC 805 Business Combinations, and determined that the fair value of non-controlling interest was assumed to be $0, as the Company did not pay any consideration for the acquisition target.  No goodwill was recorded, as the acquisition target was in the deficit position.

NOTE 4-GOING CONCERN

As shown in the accompanying consolidated financial statements, the Company incurred net losses of $1,899,853 and $1,265,803 for the years ended December 31, 2014, and 2013, respectively, and had a working capital deficit of $1,326,421 as of December 31, 2014. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management's plan in this regard includes raising additional cash from current and potential stockholders and lenders, making strategic acquisitions, and increasing the marketing of its products and services. The Company has no current arrangements with respect to any additional financing. Consequently, there can be no assurance that any future financing will be available to the Company when needed, and on commercially reasonable terms. The Company's inability to derive sufficient revenues from the sale of its products, or obtain additional financing when needed, would have a material adverse effect on the Company, requiring the Company to curtail or cease operations. In addition, any equity financing may involve substantial dilution to the Company's then current stockholders.

NOTE 5-PROPERTY AND EQUIPMENT

Major classes of property and equipment together with their estimated useful lives, consisted of the following:

	Years		December 31, 2014		December 31, 2013
Vehicle	5	$	12,500	$	12,500
Furniture and equipment	3		532		-
Crushing plant machinery	-		320,000		-
Total			333,032		12,500
Less: accumulated depreciation			(3,823)		(1,146)
Net property and equipment		$	329,209	$	11,354

On March 20, 2014, the Company acquired crushing plant machinery from a third party, at a cost of $320,000.  In connection with the transaction, the Company is scheduled to make payments to the third party through 2015.  As of December 31, 2014, the Company had made payments amounting to $50,000, which resulted in a due to of $270,000 in the Company’s consolidated balance sheet under accounts payable and accrued liabilities.  The due to is non-interest bearing.  See Note 8.

Depreciation expense was $2,677 and $1,146 for the years ended December 31, 2014 and 2013, respectively.

NOTE 6-INVESTMENT IN PROPERTIES

During 2014 and 2013, the Company made certain investments in Colombia, related primarily to investments in local farms.  As of December 31, 2014 and 2013, investment in properties was $56,344 and $18,376, respectively.

F-12

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NOTE 7-EQUITY METHOD INVESTMENT

Effective December 1, 2014, the Company acquired 50% of ownership interest in Sannabis SAS, a Colombian entity, for consideration of $25,000.   The Company agreed to a total contribution of $125,000 for the 50% ownership.  As of December 31, 2014, the Company had only contributed $25,000.  The Company agreed to the acceptance of the ownership, receiving 50%, ownership of Sannabis SAS.

In accordance with U.S GAAP, we have adopted the equity method of accounting. Under the equity method of accounting, the Company records the investment at cost.  The Company’s investment in the entity is increased by additional contributions to the entity as well as its proportionate share of earnings in the entity.  Conversely, the Company’s investment is decreased by distributions made by the Company and by its proportionate share of losses.  As of December 31, 2014 the Company’s proportionate share of losses in the investment is $1,880.  The Company has made no distributions, nor has it made any additional contributions as of the balance sheet date.

NOTE 8-DEBT

On February 18, 2014, the Company issued a convertible promissory note to a third party in the amount of $47,500.  The note accrues interest at the rate of 8% per annum and has a maturity date of November 20, 2014.  The note is convertible after 180 days from the date of issuance at 58% of the average lowest three-day trading price of common stock during the 10 days preceding the date of conversion.  Loan proceeds amounting to $22,597 were paid directly to service providers. Starting on April 16, 2014, the Company is in default under this Note. The principal amount was increased by 50% to the sum of $71,250. During 2014, the Company settled the repayment of this note with the lender, repaying principal and accrued interest of $65,916 and recognizing a gain on settlement of debt of $5,334. As of December 31, 2014, this note has been fully settled, repaid and terminated.

On April 24, 2014, the Company issued a convertible promissory note to a third party in the amount of $42,500. The note accrues interest at the rate of 8% per annum and has a maturity date of January 28, 2015.  The note is convertible after 180 days from the date of issuance at 58% of the average lowest three-day trading price of common stock during the 10 days preceding the date of conversion. Loan proceeds amounting to $25,500 were paid directly to service providers. During 2014, the Company settled the repayment of this note with the lender, repaying principal and accrued interest of $59,500. As of December 31, 2014, this note has been fully settled, repaid and terminated.

On June 16, 2014, the Company issued a convertible promissory note to a third party in the amount of $53,000. The note accrues interest at the rate of 8% per annum and has a maturity date of March 18, 2015.  The note is convertible after 180 days from the date of issuance at 58% of the average lowest three-day trading price of common stock during the 10 days preceding the date of conversion. Loan proceeds amounting to $10,500 were paid directly to service providers. During 2014, the Company settled the repayment of this note with the lender, repaying principal and accrued interest of $74,200. As of December 31, 2014 this note has been fully settled, repaid and terminated.

On July 28, 2014, the Company issued a convertible promissory note to a third party in the amount of $32,250. The note accrues interest at the rate of 8% per annum and has a maturity date of April 28, 2015. The default interest rate is 22%. The note is convertible after 180 days from the date of issuance at 55% of the average lowest two-day trading price of common stock during the 25 days preceding the date of conversion. Loan proceeds amounting to $5,250 were paid directly to service providers. Principal and accrued interest was $32,250 and 1,103 as of December 31, 2014, respectively.

On September 5, 2014, the Company issued a convertible promissory note to a third party in the amount of $37,500. The note accrues interest at the rate of 8% per annum and has a maturity date of June 9, 2014. The note is convertible after 180 days from the date of issuance at 55% of the average lowest three-day trading price of common stock during the 10 days preceding the date of conversion. Loan proceeds amounting to $11,000 were paid directly to service providers. Principal and accrued interest was $37,500 and 962 as of December 31, 2014, respectively.

On September 18, 2014, the Company issued a convertible promissory note to a third party in the total amount of $50,000. The note accrues interest at the rate of 8% per annum and has a maturity date of September 24, 2015. The note is convertible into common stock at discount of 50% at maturity. Loan proceeds amounting to $2,500 were paid directly to service providers. Principal and accrued interest was $50,000 and 1,140 as of December 31, 2014, respectively.

F-13

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On November 5, 2014, the Company entered into a securities purchase agreement with a third party, whereby the Company shall issue an 8% convertible note in an aggregate principal amount of $63,000, convertible into shares of common stock of the Company. The note shall accrue interest at a rate of 8% per annum, commencing on November 5, 2014.  The third party, at their option, any time after 180 days after full payment of the agreed upon cash, may convert all or any amount of the principal face amount of the note into shares of the Company’s common stock at a price equal to 55% of the lowest trading price of the Company’s common stock on the national Quotations Bureau (“OTCQB”) exchange or any exchange upon which the Company’s stock is traded, for the twenty prior trading days, including the day upon which notice of conversion is received by the Company. As a result of the agreement, the Company received $60,000 in cash, not including an additional $3,000 in legal fees paid by the third party purchaser of the convertible notes. Principal and accrued interest was $63,000 and 773 as of December 31, 2014, respectively.

On November 17, 2014, the Company issued a convertible redeemable note to a third party in the amount of $43,000. The note accrues interest at the rate of 8% per annum and has a maturity of nine months.  The note is convertible after 180 days from the date of issuance at 55% of the lowest three trading price of common stock during the 10 days preceding the date of conversion. Loan proceeds amounting to $10,500 were paid directly to the investor’s counsel for transaction preparation. Principal and accrued interest was $43,000 and 415 as of December 31, 2014, respectively.

On December 19, 2014, the Company issued a convertible redeemable note to a third party in the amount of $55,250. The note accrues interest at the rate of 8% per annum and has a maturity of nine months.  The note is convertible after 180 days from the date of issuance at 55% of the lowest two trading price of common stock during the 25 days preceding the date of conversion. Loan proceeds amounting to $5,250 were paid directly to the investor’s counsel for transaction preparation. Principal and accrued interest was $55,250 and 145 as of December 31, 2014, respectively.

On March 20, 2014, the Company acquired crushing plant machinery from a third party, at a cost of $320,000 (See Note 5).  In connection with the transaction, the Company is scheduled to make payments to the third party through 2015.  As of December 31, 2014, the Company had made payments amounting to $50,000, which resulted in a due to of $270,000 in the Company’s consolidated balance sheet under accounts payable and accrued liabilities.  The due to is non-interest bearing.

NOTE 9-RELATED PARTY TRANSACTIONS

Related Party Debt

On April 14, 2008, the Company signed a loan agreement in which it borrowed an aggregate of $328,000 from Ararat, LLC, a Company owned by a family member of Kyle Gotshalk (a former officer). The note originally matured on December 31, 2012 and carried a 10% interest rate. On November 14, 2012, the Company restructured the debt into a new convertible note, which does not accrue interest. The lender has the right to convert the loan within twenty-four months at a price of $0.30 per share. Any net proceeds from the stock currently held by the lender or by the preferred shareholder which are liquidated within the next twenty-four months will be credited against the loan.

At the end of the twenty-four months, the lender has the right to demand stock as payment of the debt at 90% of the bid price for the preceding ten-day weighted average. The lender will not be subject to the floor price of $0.30 after November 15, 2014.

F-14

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The Company evaluated the aforementioned debt modification under FASB ASC 470-50 and determined that the modification qualified as an extinguishment of debt due to substantial modifications, which included, an extension of the maturity date, the modification of the interest rate, and the modification of the conversion price. In accordance with FASB ASC 470-50-40-2, the extinguishment of debt was accounted for as an increase in the principal in the amount of $20,634, resulting in a loss on debt restructuring for that same amount. The resulting derivative liability was reclassified and accounted for as an increase to additional paid-in capital.

On March 27, 2013, Ararat, LLC agreed to cancel the entire debt balance in exchange for 1,500,000 preferred B shares of New Colombia Resources. These shares can be exchanged for 1,500,000 common shares within the next 19 months. If, at the end of 19 months, the 1,500,000 common shares have a value less than $600,000, the Company will issue additional shares, which, when added to the aforementioned 1,500,000 shares, will total $600,000 at 90% of the average bid price of the trailing ten days. The Company evaluated the aforementioned debt modification under FASB ASC 470-50 and determined that the modification qualified as an extinguishment of debt due to substantial modifications, which included, an increase in the fair value of the conversion option of more than 10%. In accordance with FASB ASC 470-50-40-2, the extinguishment of debt was accounted for as a conversion of principal and accrued interest of $348,634 and $53,290, respectively, a loss on settlement of debt of $198,076, and a related make whole liability of $550,000 was recorded as a provision for the aforementioned 1,500,000 common shares having a market value of less than $600,000 as of June 30, 2014.

On September 11, 2014, the Company and Ararat, LLC entered into the Amended of the Debt Settlement Agreement and Royalty Agreement, (the “Ararat Debt Settlement Agreement”) which supersedes and replaces the Debt Settlement Agreement dated March 27, 2013.  The Ararat Debt Settlement Agreement provided for the resolution of all debt and mutual release of all liabilities between the Company and Ararat for future Royalty interest payments totaling $660,000 from the sales of future production from certain gravel and coal mines held by the Company, of which $80,000 must be received by Ararat, LLC by December 31, 2014.  Should the Company fail to remit the $80,000 by December 31, 2014, Ararat, LLC will retain its rights to convert the Preferred stock shares pursuant to the agreements dated, November 114, 2012 and March 27, 2013.  Should Ararat, LLC fail to convert its shares prior to November 15, 2015, pursuant to the Debt Settlement Agreement and Royalty Agreement, Ararat, LLC will relinquish all rights to do so thereafter.

As a result of the above Debt Settlement Agreement and Royalty Agreement, the Company reversed the Make Whole Liability of $555,000 and recognized a current liability of $660,000 for the effective elimination of the obligation to fulfill requirements under the Make Whole Liability obligation. The Company recognized $105,000 in royalty expense related to the amended agreement during the year ended December 31, 2014. See Note 9, Fair Value Measurements, for further details regarding the Make Whole Liability.

Related Party Transactions

As of December 31, 2013, the accounts payable and accrued liabilities-related parties balance represents expenses which were paid directly by and owed to an officer of the Company. As of December 31, 2013, the accrued liabilities and accrued interest-related parties balance was $240,007, which is composed of $47,724 of expenses which were paid directly by and owed to an officer of the Company, $192,012 in accrued salaries and expenses payable to an officer and former officers of the Company, and $271 of accrued interest.

On July 15, 2013, the Company issued 500,000 common shares to a family member of the Company’s President for the purchase of a vehicle. The shares (and the related vehicle) were valued at $12,500.

During 2013, 20,000,000 options held by two former officers of the Company were cancelled.

As of December 31, 2014, the accounts payable and accrued liabilities-related parties balance represents expenses which were primarily paid directly to current and former officers of the Company. As of December 31, 2014, the accrued liabilities and accrued interest-related parties balance was composed of $53,713 in accrued salaries and expenses payable to the Company’s current Chief Executive Officer, as well as expenses payable to a consulting company owned by the Company’s current Chief Executive Officer.

On July 25, 2014, the Company issued 250,000 shares of restricted common stock to one of its Directors for services provided to the Company.  

On September 22, 2014, the Company issued 78,856 shares of Preferred Series B Stock for related party obligations to the Company’s current Chief Executive Officer for obligations, salaries, and services provided during the year ended December 31, 2014, pursuant to the officer’s employment agreement.

On September 29, 2014, the Company entered in a Royalty Agreement with its Chief Executive Officer and Director, Mr. Campo.  Pursuant to the Royalty Agreement the Company received $50,000 in cash as a contribution, and provided to Mr. Campo guaranteed royalty payments for a period of 60 months beginning the first month of production of assets from certain properties in Colombia held by the Company. There has been no production as of December 31, 2014.

F-15

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NOTE 10-SHAREHOLDERS' EQUITY

Preferred Stock Series A

There are 20,000,000 shares of authorized preferred stock. During 2011, the Company issued 10,000,000 shares of Series A Convertible Preferred Stock to the Company’s former Chief Executive Officer for services. The shares are convertible into 51% of outstanding common stock, hold 66 2/3% voting rights, and do not receive dividends. The Company evaluated the preferred stock under ASC 718-10-25, ASC 480-10-25, and ASC 815-10-25, and determined that equity classification was appropriate. As the conversion option can be exercised into 51% of the outstanding shares of the Company, the Company determined that the holder of the preferred shares receives additional value each time the Company issues common shares, thereby increasing the number of common shares the preferred shares can be converted into. As a result, the Company has determined the incremental value given to the preferred shareholder upon additional issuances of common shares should be recorded at fair value and charged to expense. During 2013, the Company issued an aggregate of 14,066,667 shares and cancelled 9,913,333 shares. The Company determined the aggregate incremental cost of the share issuance to be $570,721. During the year ended December 31, 2014, the Company issued an aggregate of 42,608,335 common shares.  The Company determined the aggregate incremental cost of the share issuance to be $807,943, which is included as a component of stock-based compensation in the Company’s consolidated statement of changes in shareholders’ deficit and as a component of stock-based compensation in the Company’s consolidated statement of cash flows as of and for the year ended December 31, 2014.

Preferred Stock Series B

During 2013, the Company issued 1,500,000 Preferred Series B shares and a make whole agreement in exchange for the cancellation of an Ararat, LLC debt balance of $401,924. The shares are convertible into 1,500,000 shares of common stock within 19 months of issuance of the preferred stock. The make whole liability guarantees the holder value of $600,000 resulting in a make whole liability at December 31, 2013 of $555,000. At issuance, the shares were valued at $68,850 and when combined with the make whole liability of $555,000, a resulting loss on settlement of debt amounting to $221,926 was recognized. The $68,850 is included in the loss on settlement of debt in the statement of stockholders deficit as of December 31, 2013.  See Note 11 –Fair Value Measurements and Notes 8 and 9–Debt and Related Party Transactions, respectively, regarding further details related to the make whole liability obligations.

During 2013, the Company issued 1,500,000 preferred B shares in a conversion of a third party debt balance of $35,000, along with accrued but unpaid interest. These shares will have the right to be converted into common shares after six months. The shares have attached warrants, for an additional 1,500,000 common shares at 50% of the trailing five-day bid price, or $0.10, whichever is less. The third party will have two years to exercise these warrants. The shares were valued at $135,000, and a resulting loss on settlement of debt amounting to $100,790 was recognized. See Note 5. These shares were converted into 1,500,000 shares of common stock during the fourth quarter of 2013.

During 2013, the Company sold an aggregate of 2,000,000 preferred B shares to a third party. The aggregate purchase price was $50,000. These shares will have the right to be converted into common shares after six months. The shares have attached warrants, for an additional 2,000,000 common shares at 50% of the trailing five-day bid price, or $0.10, whichever is less. The third party will have two years to exercise these warrants. These shares were converted into 2,000,000 shares of common stock during the fourth quarter of 2013.

On September 22, 2014, the Company issued 1,000,492 shares of Preferred Series B Stock to certain employees, vendors and related parties for services and to settle $250,183 of liabilities for such services.  The Preferred Series B Stock granted can be converted into legend free common stock any time after December 10, 2014.  Upon conversion, the holder shall be entitled to ten shares of common stock for every one share of Preferred Series B Stock converted. Additionally, each respective individual holder granted Preferred Series B Stock, in settlement of the Company’s obligations, is limited to not converting more than $12,000 worth of common stock in any single fiscal quarter commencing after December 1, 2014.

As a result of this settlement of liabilities and the exchange of Preferred Series B Stock, the Company reduced the related liabilities of each recipient of the shares, recognizing an increase of $1,000 in the par value of its Preferred Series B Stock, a gain of $53,550 on the settlement of liabilities, with a $195,633 increase additional paid in capital.

A total of 687,000 shares of Preferred Series B Stock was issued to certain vendors for services totaling $171,810, a total of 234,636 shares of Preferred Series B Stock was issued to the Company’s former Chief Executive Officer pursuant to the terms of his employment agreement for services totaling $171,810, and 78,856 shares of Preferred Series B Stock for related party obligations to the Company current Chief Executive Officer.  See Notes 8 and 9–Debt and Related Party Transactions, respectively, for further details regarding settlement of related party transactions.

F-16

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Common Stock

During 2013, the Company issued 1,000,000 common shares to an officer of the Company for accrued but unpaid salary of $44,240. The shares were valued at $69,900, and a resulting loss on settlement of accrued liabilities amounting to $25,660 was recognized.

During 2013, the Company issued 400,000 common shares in a conversion of a third party debt balance, along with accrued but unpaid interest. The shares were valued at $10,000. See Note 8.  

During 2013, the Company issued 1,666,667 common shares to a former officer of the Company for consulting services. The shares were valued at $50,000.

During 2013, the Company issued 300,000 common shares to a third party for consulting services. The shares were valued at $11,400.

During 2013, the Company sold an aggregate of 6,950,000 common shares to third parties. The aggregate purchase price was $173,750.

During 2013, the Company issued 500,000 common shares to a family member of the Company’s President for the purchase of a vehicle. The shares (and the related vehicle) were valued at $12,500. See Note 8.

During 2013, the Company issued 3,500,000 common shares in a conversion of the 3,500,000 shares of the Company’s Series B Convertible Preferred stock.

During 2013, the Company cancelled 9,380,000 common shares for services having not been rendered.

During 2013, the Company cancelled 533,333 common shares related to a consulting agreement.

During 2013, related parties contributed capital through forgiveness of debt in the amount of $94,851. See Note 8 for details.

During 2014, the Company issued 3,708,334 common shares to a former officer of the Company for consulting services. The shares were valued at $50,000.

During 2014, the Company issued a total of 500,000 common shares, of which 250,000 common shares were issued to a third party for consulting services, and 250,000 common shares were issued to a Director of the Company for services provided to the Company. The shares were valued at $4,525.

During 2014, the Company sold an aggregate of 38,400,001 common shares to third parties. The aggregate purchase price was $290,500.

Stock Options

During 2011, an aggregate of 5,000,000 options with a fair value of $50,000 were issued to John Campo, President, as part of his employment agreement. The shares have a strike price of $0.10/share and the options have no expiration date. The options vest equally over three years. During 2013, 20,000,000 options held by two former officers of the Company were cancelled. For the year ended December 31, 2014, $4,167 was expensed as stock-based compensation. For the year ended December 31, 2013, $16,668 was expensed as stock-based compensation.

On October 21, 2014, the Company entered an option agreement with a third party, for up to a total of $300,000 with 6,000,000 fully paid and non-assessable shares of common stock at the price of $0.05 per share. This option may be exercised at any time commencing on January 10, 2015 to and include December 31, 2015.

On October 21, 2014, the Company entered an option agreement with a third party, for up to a total of $250,000 with 25,000,000 fully paid and non-assessable shares of common stock at the price of $0.01 per share. This option may be exercised at any time commencing on October 25, 2014 to and include March 31, 2015.

On October 21, 2014, the Company entered an option agreement with a third party, for up to a total of $220,000 with 36,666,667 fully paid and non-assessable shares of the common stock at the price of $0.006 per share. This option may be exercised at any time commencing on November 1, 2014 to and include February 28, 2015.

F-17

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On October 21, 2014, the Company entered an option agreement with a third party, for up to a total of $200,000 with 8,000,000 fully paid and non-assessable shares of common stock at the price of $0.025 per share. This option may be exercised at any time commencing on January 10, 2015 to and include June 30, 2015.The fair value of the options granted during 2014 was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Estimated market value of stock on grant date (1)			$0.02
Risk-free interest rate range (2)			0.02% – 0.10	%
Dividend yield (3)			0.00	%
Volatility factor (4)			267.25	%
Expected life range (5)			0.36 – 1.19 years
Expected forfeiture rate (6)			10.0	%

(1) The estimated market value of the stock on the date of grant was based on the reported public market prices.

(2) The risk-free interest rate was determined by management using the U.S. Treasury zero-coupon yield over the contractual term of the option on date of grant.

(3) Management determined the dividend yield to be 0% based upon its expectation that there will not be earnings available to pay dividends in the near term.

(4) The volatility factor was estimated by management using the trading history of the Company’s common stock.

(5) The expected life was estimated by management as the midpoint between the vesting date and the expiration date of the options.

(6) Management estimated that the forfeiture rate at 10% based on its experience with companies in similar industries and regions.

During the year ended December 31, 2014, the Company recognized stock option expense of $599,088.

During 2014, an aggregate of 15,500,000 options with weighted average exercise price $0.01 per share were exercised. For the year ended December 31, 2014, exercisable option balance was 65,166,667

The following table summarizes the Company’s stock options:

			Options		Weighted Average Exercise Price		Aggregate Intrinsic Value		Exercisable		Weighted Average Remaining Life
Balance, December 31, 2012			25,000,000	$	0.10		250,000		9,583,333		No Expiration
Granted			-		-
Expired			-		-
Exercised			-		-
Cancelled			(20,000,000)		0.10
Balance, December 31, 2013			5,000,000	$	0.10		-		4,583,333		No Expiration
Granted			75,666,667		0.01
Expired			-		-		-
Exercised			(15,500,000)		0.01		-
Cancelled			-		-		-
Balance, December 31, 2014			65,166,667	$	0.02		-		65,166,667		0.33 years

NOTE 11-FAIR VALUE MEASUREMENTS

As defined in FASB ASC Topic 820, fair value is the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This Topic requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

F-18

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Level 2: Pricing inputs other than quoted market prices included in Level 1 that are based on observable market data and are directly or indirectly observable for substantially the full term of the asset or liability. These include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and yield curves, volatilities or default rates observable at commonly quoted intervals or inputs derived from observable market data by correlation or other means.

Level 3: Pricing inputs that are unobservable or less observable from objective sources. Unobservable inputs should only be used to the extent observable inputs are not available. These inputs maintain the concept of an exit price from the perspective of a market participant and should reflect assumptions of other market participants. An entity should consider all market participant assumptions that are available without unreasonable cost and effort. These are given the lowest priority and are generally used in internally developed methodologies to generate management's best estimate of the fair value when no observable market data is available.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

Certain assets and liabilities are reported at fair value on a recurring or nonrecurring basis in the Company’s consolidated balance sheets. The following methods and assumptions were used to estimate the fair values:

Cash and Cash Equivalents, Prepaid Expenses, Mining Rights, Accounts Payable and Accrued Liabilities

The carrying amounts approximate fair value because of the short-term nature or maturity of the instruments.

Make Whole Liability/Other Liability

As a result of a Debt Settlement Agreement and Royalty Agreement, the Company reversed the Make Whole Liability of $555,000 and recognized a current liability of $660,000 for the effective elimination of the obligation to fulfill requirements under the Make Whole Liability obligation. The Company recognized $105,000 in royalty expense related to the amended agreement during the year ended December 31, 2014. See Notes 8 and 9–Debt and Related Party Transactions, respectively, for further details regarding the Make Whole Liability.

The following table sets forth, by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2013 and December 31, 2014, respectively:

		December 31, 2013 and December 31, 2014, respectively
Description		(Level 1)		(Level 2)		(Level 3)		Total Carrying Value
Make Whole Liability - 2013	$	555,000	$	-	$	-	$	555,000
Other Liability  - 2014	$	660,000	$	-	$	-	$	660,000

NOTE 12-DERIVATIVES LIABILITES

Asher Convertible Notes

On February 18, 2014, the Company issued a convertible promissory note to a third party in the amount of $47,500.  The note accrues interest at the rate of 8% per annum and has a maturity date of November 20, 2014.  The note is convertible after 180 days from the date of issuance at 58% of the average lowest three-day trading price of common stock during the 10 days preceding the date of conversion.  Loan proceeds amounting to $22,597 were paid directly to service providers. Starting on April 16, 2014, the Company is in default under this Note. The principal amount was increased by 50% to the sum of $71,250. The Company analyzed these conversion options, and determined that these instruments should be classified as liabilities and recorded at fair value due to there being no explicit limit as to the number of shares to be delivered upon settlement of the aforementioned conversion options.

The note became convertible on April 21, 2014. During the year ended December 31, 2014, a gain of $71,250 was recognized, and the related note was subsequently paid off, which resulted in a derivative liability of $0 as of December 31, 2014.

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The following tables set forth the changes in the fair value measurements of our Level 3 derivative liabilities during the year ended December 31, 2014:

		December 31, 2013		Increase (Decrease) in Fair Value of Derivative Liability		Settlement of Derivative Liability		December 31, 2014
Derivative liability–convertible note	$	-	$	71,250	$	(71,250)	$	-

The following table summarizes the Company’s derivative liability during the year ended December 31, 2014:

Derivative liability–convertible note		Amount
Derivative liability as of December 31, 2013		$	-
Derivative liability recognized as debt discount			71,250
Gain on settlement of derivative liability			(71,250)
Derivative liability as of December 31, 2014		$	-

NOTE 13-INCOME TAX EXPENSE

At December 31, 2014, the Company had unused federal and state net operating loss carryforwards available of approximately $1,500,000, which may be applied against future taxable income, if any, and which expire in various years through 2034.  

The Company’s deferred tax assets as of December 31, 2014 and 2013 are as follows:

		2014		2013
Benefit from net operating losses	$	499,988	$	352,179
Valuation allowance		(499,988)		(352,179)
Net tax expense	$	-	$	-

NOTE 14-SUBSEQUENT EVENTS

On January 9, 2015, the Company entered into a Stock Purchase Agreement with a third party for the purchase of 2,500,000 shares of common stock for a purchase price of $15,000.

On January 15, 2015, the Company issued 650,000 shares to a former officer of the Company, pursuant to a Consulting Agreement dated January 1, 2013, for services rendered between March 2014 and September 2014.

On January 21, 2015, the Company entered into a Stock Purchase Agreement with a third party for the purchase of 500,000 shares of common stock for a purchase price of $5,000.

On January 26, 2015, the Company entered into a Stock Purchase Agreement with a third party for the purchase of 600,000 shares of common stock for a purchase price of $4,800.

On January 29, 2015, the Company entered into a Securities Purchase Agreement with a third party KBM Worldwide, Inc. for the purchase of an 8% Convertible Note in an amount of $54,000.

On February 11, 2015, the Company entered into a Stock Purchase Agreement with a third party for the purchase of 2,500,000 shares of common stock for a purchase price of $15,000.

On March 2, 2015, the Company entered into a Stock Purchase Agreement with at third party for the purchase of 1,500,000 shares of common stock for a purchase price of $9,000.

On March 10, 2015, the Company received a notice from KBM Worldwide, Inc. to convert $12,000 of debt, pursuant to a Note dated September 5, 2014, to 2,181,818 shares of common stock.

On March 11, 2015, the Company cancelled 425,000 Preferred B shares previously issued to Clinton Hall LLC on December 17, 2014.

On March 17, 2015, the Company entered into a Stock Purchase Agreement with a third party for the purchase of 2,000,000 shares of common stock for a purchase price of $10,000.

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March 19, 2015, the Company entered into a Stock Purchase Agreement with a third party for the purchase of 1,000,000 shares of common stock for a purchase price of $9,000.

On March 25, 2015, the Company agreed to issue 3,125,000 shares of common stock to Bold Leego Enterprises, Inc. pursuant to a conversion of $12,500 of debt originating from a Promissory Note dated September 18, 2014.

On April 7, 2015, the Company entered into a Stock Purchase Agreement with a third party for the purchase of 2,500,000 shares of common stock for a purchase price of $12,500.

On April 15, 2015, the Company received a Notice of Default from KBM Worldwide, Inc., which states that due to the Company’s failure to file its Annual Report on a timely basis, the Company is in default under Convertible Promissory Notes held by KBM Worldwide, Inc. As a result, the related outstanding principal balance, which amounted to a total of $68,500 prior to default, was increased by 150% to $102,750. This default balance, along with accrued default interest, is due to KBM Worldwide, Inc. In addition, KBM Worldwide, Inc. has the right to convert the default balance into common shares of the Company’s stock.

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ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We did not have any disagreements on accounting and financial disclosures with our present accounting firm during the reporting period.

ITEM 9A(T). CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures.

Under the supervision and with the participation of our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act. As a result of this evaluation, we identified material weaknesses in our internal control over financial reporting as of December 31, 2014 as is identified below.  Accordingly, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2014 as is described below.

Management’s Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-(f) under the Exchange Act. Our internal control over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U. S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

 

i.

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

ii.

provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our  consolidated financial statements in  accordance with U. S. generally accepted accounting principles, and  that our receipts and expenditures are being made only in accordance with  authorizations of our management and directors; and

iii.

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

 

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.

Management has concluded that our internal control over financial reporting was not effective as December 31, 2014 due to the existence of material weaknesses. The material weaknesses identified include the following:

Management’s assessment identified several material weaknesses in our internal control over financial reporting. These material weaknesses include the following:

·

Lack of appropriate segregation of duties;

·

Limited capability to interpret and apply accounting principles generally accepted in the United States;

·

Lack of formal accounting policies and procedures that include multiple levels of review; and

·

Failure to properly record transactions related to asset acquisitions, derivative liabilities, and equity based payments to employees and non-employees.

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Inherent Limitations Over Internal Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our control systems are designed to provide such reasonable assurance of achieving their objectives. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

Changes in Internal Control Over Financial Reporting.

We have made no change in our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of the Registered Public Accounting Firm.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report on Form 10-K.

ITEM 9B. OTHER INFORMATION

In July of 2013, the Company entered into an agreement to purchase a 50% interest in a farm in Colombia.  The purchase price for the 50% interest was $600,000.  In order to complete the transaction, the Company was required to pay an initial $200,000 in cash on or before December 31, 2014, with the remaining $400,000 to be paid in the Company’s common stock.  The Company was unable to pay the entire cash payment of $200,000, but did make payments in an aggregate amount of approximately $29,200 through April of 2014.  The Seller has entered into a separate sales contract with a third party, effectively removing the Company from the transaction.  The Company has entered into arbitration, and the arbitration hearing is to take place on March 24, 2015 in Colombia,

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Set forth below are the names of the directors and officers of the Company, all positions and offices with the Company held, the period during which he has served as such, and the business experience during at least the last five years:

 

Name		Age		Positions and Offices Held
John Campo		44		Director and President
Erasmo Almanza		72		Director
Jose Ramirez		35		Director

The above listed officers and directors are not involved, and have not been involved in the past five years, in any legal proceedings that are material to an evaluation of their ability or integrity.

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DESCRIPTION

Background Information about Our Officers and Directors

John Campo, President of New Colombia Resources, Inc., has been involved in public companies for over 20 years. He began his career as a registered representative with a boutique firm in Baltimore, MD.  He was President of Elite Equity Marketing, a public relations firm catering to emerging growth companies, from 2001-2008 with offices in Towson, MD and North Miami Beach, FL. He later began Wall Street International focusing on creating awareness for international companies trading in the U.S. In 2009, he introduced Mr. Erasmo Almanza, a Colombian national with coal mining concessions, to VSUS Technologies Inc. n/k/a New Colombia Resources, Inc. to roll up coal mining concessions and get them into production. Mr. Campo is a Colombian American who resides in Sunny Isles Beach, FL and Barranquilla, Colombia.

Erasmo Almanza, Director, is a citizen of the Republic of Colombia.  He is a retired petroleum engineer with 40 years experience in the oil and coal industries in Colombia and the United States. He has been exploring for coal in Guaduas, Cundinamarca for over 15 years. He has held several management positions within the energy sector including BAROID International Co. and Core Laboratories International in Houston, TX. He was general manager of Ingepetrol and Compañía Minera Vizcaya in Colombia. He was City Manager and Secretary of Public Works for the State of Arauca. Mr. Almanza earned a Bachelor Degree in Petroleum Engineering from the Universidad America in Bogota, Colombia.

Jose Ramirez, Director, has been a financial controller for several companies in Miami, FL.  He advises the company on accounting issues.

Family Relationships

 

There are no family relationships among our directors and executive officers. No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it. No director or executive officer has been convicted of a criminal offense within the past five years or is the subject of a pending criminal proceeding. No director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities. No director or officer has been found by a court to have violated a federal or state securities or commodities law.

 

Committees of the Board of Directors

There are no committees of the Board of Directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (the “34 Act”) requires our officers and directors and persons owning more than ten percent of the Common Stock, to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Additionally, Item 405 of Regulation S-K under the 34 Act requires us to identify in its Form 10-K and proxy statement those individuals for whom one of the above referenced reports was not filed on a timely basis during the most recent year or prior years. We have nothing to report in this regard.

Code of Ethics

Our board of directors has not adopted a code of ethics but plans to do so in the future.

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Item 11. EXECUTIVE COMPENSATION

Summary Compensation

The following table discloses, for the fiscal years ended December 31, 2014, 2013, certain compensation paid and accrued to our named executive officers and our former executive officers.

Name and Principal Position	Year	Salary and Other Annual Compensation ($)
John Campo, President and Director	2014	$60,000
	2013	$60,000
Cherish Adams, Former Sec/Treasurer and Director	2014	$0
	2013	$0
Kyle Gotshalk, former CEO and Director	2014	$0
	2013	$0

These amounts are accrued and unpaid per the employment agreements with the Company.

The following table provides information on option/SAR grants during the fiscal year ended December 31, 2014 to our named executive officers.  There were no option/SAR grants during the fiscal year ended December 31, 2013.

Name	Number Of Securities Underlying Options/SARS Granted (#)	Percent Of Total Options/ SARs Granted To Employees In Fiscal Year	Exercise Or Base Price ($/SH)	Expiration Date
John Campo	5,000,000	100%	$0.10	No Exp. Date

Option/SAR Exercises and Year-End Option/SAR Values

The following table sets forth information with respect to those executive officers listed above, concerning exercise of options during the last fiscal year and unexercised options and SARs held as of the end of the fiscal year:

Name	Shares Acquired on Exercise (#)	Value Realized ($)	Number of Securities Underlying Unexercised Options/SARs at FY-End (#) Exercisable/Unexercisable	Value of Unexercised In-The-Money Options/SARs at FY-End ($) (1) Exercisable/Unexercisable
John Campo	0	0	4,583,333/416,667	$0/$250,000

Long-Term Incentive Awards

We made no long-term incentive awards to our named executive officers in the fiscal year ended December 31, 2014.

Employment Contracts and Termination of Employment and Change-in-Control Arrangements

John Campo has an employment agreement with the company.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following sets forth the number of shares of our $.0.001 par value common stock beneficially owned by (i) each person who, as of December 31, 2014, was known by us to own beneficially more than five percent (5%) of its common stock; (ii) our individual Directors and (iii) our Officers and Directors as a group. A total of 125,008,477 common shares were issued and outstanding as of December 31, 2014.

Name and Address	Amount and Nature of	Percent of
of Beneficial Owner	Beneficial Ownership (1)(2)	Class
John Campo (3)	11,000,000	8.8%
Erasmo Almanza (4)	5,606,412	4.5%
Jose Ramirez (4)	250,000	0.2%
All Officers and Directors as a Group	16,856,412	13.48%
Yorktown Consultancy (55) 3435 W. Fairview Street Miami, FL 33133	7,599,256	6.1%
Gregory Walsh 2065 Fairway Close Terr Lawrenceville, GA 30043	11,800,000	9.4%

(1)

All ownership is beneficial and of record, unless indicated otherwise.  Unless otherwise indicated, the address of our officers and directors is c/o New Colombia Resources Inc. 251 174^th Street # 816, Sunny Isles Beach, FL 33160.

(2)

The Beneficial owner has sole voting and investment power with respect to the shares shown.

(3)

John Campo is the President and director of the Company. John Campo also owns 10,000,000 shares of Series A Preferred Stock.  The Preferred A Stock is convertible into 51% of the outstanding shares of the Company, and holds voting rights of 66 2/3% of the outstanding shares of common stock.  

(4)

Erasmo Almanza and Jose Ramirez are Directors of the Company.

(5)

The owner of Yorktown Consultancy is Ingrid Charbit.

Preferred A Stock

Name and Address	Amount and Nature of	Percent of
of Beneficial Owner	Beneficial Ownership (1)(2)	Class
John Campo (3)	10,000,000	100.00%
All Officers and Directors as a Group	10,000,000	100.00%

(1)

All ownership is beneficial and of record, unless indicated otherwise.  Unless otherwise indicated, the address of our officers and directors is c/o New Colombia Resources Inc. 251 174^th Street # 816, Sunny Isles Beach, FL 33160.

(2)

The Beneficial owner has sole voting and investment power with respect to the shares shown.

(3)

John Campo is the President and director of the Company.  The Preferred A Stock is convertible into 51% of the outstanding shares of the Company, and holds voting rights of 66 2/3% of the outstanding shares of common stock.  

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Preferred B Stock

Name and Address	Amount and Nature of	Percent of
of Beneficial Owner	Beneficial Ownership (1)	Class
Ararat, LLC (2)(5) 1200 Butler Creek Road Ashland, OR 97520	1,500,000	60.0%
Clinton Hall LLC (3)(5) 1200 Butler Creek Road Ashland, OR 97520	425,000	17.0%
Kyle Gotshalk (3)(4) 1200 Butler Creek Road Ashland, OR 97520	234,636	9.4%
Top Flight Consulting LLC (3)(4) 1200 Butler Creek Road Ashland, OR 97520	34,000	1.4%
Cherish Adams (3)(4) 1200 Butler Creek Road Ashland, OR 97520	228,000	9.1%
John Campo 251 174th Street, #816 Sunny Isles Beach, FL 33160	78,856	3.2%

(1)

All ownership is beneficial and of record, unless indicated otherwise.  

(2)

The Series B Preferred stock holds no voting rights, and is convertible into Common stock on a 1 for 1 basis.

(3)

The Series B Preferred stock holds no voting rights, and is convertible into Common stock on a 1 Preferred share to 10 Common share basis.

(4)

Kyle Gotshalk and Cherish Adams are former officers of the Company.  Top Flight Consulting LLC is owned by Kyle Gotshalk.

(5)

The principals of Ararat LLC and Clinton Hall LLC are family members of Kyle Gotshalk and Cherish Adams.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our independent auditor, MaloneBailey, LLP, Certified Public Accountants billed an aggregate of $11,500 for the year ended December 31, 2014 and for professional services rendered for the audit of the Company's annual financial statements and review of the financial statements included in our quarterly reports.

We do not have an audit committee and as a result our board of directors performs the duties of an audit committee. Our board of directors evaluates the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services.

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ITEM 15. EXHIBITS FINANCIAL STATEMENT SCHEDULES

The following financial information is filed as part of this report:

(a)

(1)

FINANCIAL STATEMENTS

(2)

SCHEDULES

(3)

EXHIBITS. The following exhibits required by Item 601 to be filed herewith are incorporated by reference to previously filed documents:

Exhibit Number	Description
31.1		Certification of Chief Executive Officer pursuant to Section 302
31.2		Certification of Chief Financial Officer pursuant to Section 302
32.1		Certification of Chief Executive Officer pursuant to Section 906
32.2		Certification of Chief Financial Officer pursuant to Section 906

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SIGNATURES

In accordance with Section 12 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 on April 28, 2015.

New Colombia Resources, Inc.

By: /s/ John Campo   

John Campo, Chief Executive Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed   below by the following person on behalf of the Registrant and in the capacity and on the date indicated.

/s/ John Campo   

President Chief Executive Officer,

     April 28, 2015

John Campo

Chief Financial Officer and Director

Date

Title

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