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EX-31.2 - EXHIBIT 31.2 - Adama Technologies Corps104100_ex31-2.htm
EX-99.2 - EXHIBIT 99.2 - Adama Technologies Corps104100_ex99-2.htm
EX-99.1 - EXHIBIT 99.1 - Adama Technologies Corps104100_ex99-1.htm
EX-32 - EXHIBIT 32 - Adama Technologies Corps104100_ex32.htm
EX-31.1 - EXHIBIT 31.1 - Adama Technologies Corps104100_ex31-1.htm

  

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-K

 

(Mark One)

 

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

 

For the fiscal year ended December 31, 2015

 

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

 

For the transition period from __________________ to __________________________.

 

Commission File Number: 333-148910

 

ADAMA TECHNOLOGIES CORPORATION

(Exact name of Company as specified in its charter)

 

Delaware   98-0552470
(State or other jurisdiction of incorporation)   (IRS Employer Identification No.)

 

10120 S. Eastern Avenue, Suite 130, Henderson, NV   89052
(Address of principal executive offices)   (Zip Code)

 

Company’s telephone number, including area code: (702) 896-1009

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to section 12(g) of the Act: Common Stock, $0.0001 par value

 

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

Yes  ¨ No  x

 

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

Yes  ¨ No  x

 

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

Yes x No ¨

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Company’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   

x

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

 

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

 

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

Yes  x  No ¨

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Company’s most recently completed fiscal quarter.

 

Approximately $1,315,000 based upon $.006 per share which was the last price at which the common equity purchased by non-affiliates was last sold.

 

The number of shares of the issuer’s common stock issued and outstanding as of June 6, 2016 was 328,851,197 shares.

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I    
Item 1 Business 1
Item 1A Risk Factors 4
Item 1B Unresolved Staff Comments 4
Item 2 Properties 5
Item 3 Legal Proceedings 5
Item 4 Removed and Reserved 5
     
PART II    
Item 5 Market for Company’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 5
Item 6 Selected Financial Data 6
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operation 6
Item 7A Quantitative and Qualitative Disclosures About Market Risk 7
Item 8 Financial Statements. 7
Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 7
Item 9A Controls and Procedures 7
Item 9B Other Information 8
     
PART III     
Item 10 Directors, Executive Officers and Corporate Governance 9
Item 11 Executive Compensation 11
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 11
Item 13 Certain Relationships and Related Transactions, and Director Independence 12
Item 14 Principal Accountant Fees and Services 12
     
PART IV    
Item 15 Exhibits, Financial Statement Schedules 13
     
SIGNATURES 13

 

i

 

 

ADAMA TECHNOLOGIES CORPORATION

Annual Report on Form 10-K for the

Year Ended December 31, 2015.

FORWARD LOOKING STATEMENTS

 

This annual report on Form 10-K for Adama Technologies Corporation (the “Company”) contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of revenue, expenses, earnings or losses from operations or investments, or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include risks that are described from time to time in our Securities and Exchange Commission, or the SEC, reports filed before this report.

 

The forward-looking statements included in this annual report represent our estimates as of the date of this annual report. We specifically disclaim any obligation to update these forward-looking statements in the future. Some of the statements in this annual report constitute forward-looking statements, which relate to future events or our future performance or financial condition. Such forward-looking statements contained in this annual report involve risks and uncertainties.

 

We use words such as anticipates, believes, expects, future, intends and similar expressions to identify forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements for any reason. We caution you that forward-looking statements of this type are subject to uncertainties and risks, many of which cannot be predicted or quantified.

 

The following analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto contained elsewhere in this Form 10-K, as well as the risk factors included in this Form 10-K under Item 1A.

 

Item 1.  Business.

 

HISTORY OF OUR COMPANY

 

We were incorporated in Delaware on September 17, 2007 as 1 Lane Technologies Corporation. On February 27, 2009, our corporate name was changed to Adama Technologies Corporation to better reflect our business activities. We acquired the rights to a patent-pending technology upon which a unique wireless data platform is built. On October 27, 2008, we abandoned the business relating to the patented technology and executed an exclusive brownfield license agreement with Solucorp Industries Ltd., pursuant to which we acquired a 15-year license to certain environmental hazard remediation technology. Subsequently, we have acquired and thereafter abandoned several mining and mining related companies, but as of December 31, 2014, we became a shell company and have no operating activities.

 

Our principal executive offices are now located at 10120 S. Eastern Avenue, Suite 130, Henderson, Nevada 89052 in space provided by Incubator Holdings, Inc. We are being provided this space for no additional charge. Our registered office in Delaware is located at 113 Barksdale Professional Center, Newark, DE 19711, and our registered agent is Delaware Intercorp. Our fiscal year end is December 31.

 

Our Current Business

 

During prior fiscal years, we engaged in various mining and mineral activities through acquisition and licensing transactions, as reported in a prior period reports for fiscal year ending December 31, 2013 and prior fiscal years. In the year ended December 31, 2014, we terminated all mining and mineral activities and began actively seeking merger or acquisition partners as our sole activity. As a result, we are now classified as a shell company under Rule 12b-2 under the Exchange Act.

 

 1 

 

 

On September 10, 2015, the Company entered into an Agreement and Plan of Merger and Acquisition with Incubator Holdings, Inc., a Wyoming corporation (the “Agreement”). Under the terms of that Agreement, Incubator Holdings formed an acquisition subsidiary, ADAC Acquisition Corp. in Florida; Incubator Holdings, Inc. (Wyoming) merged with that Florida subsidiary, which was the surviving entity and changed its corporate name to Incubator Holdings, Inc.; the Company will be acquired by Incubator Holdings, Inc.; the common shareholders of the Company will receive common shares of Incubator Holdings on the basis of 1 share of Incubator for each 250 shares of the Company held, the preferred shareholder of the Company will receive one preferred share of Incubator Holdings for each share of Series A Preferred Stock of the Company outstanding, and Incubator Holdings will assume the obligations of the Company as an SEC reporting entity. Incubator also obtained a new CUSIP number for the common shares and requested a new trading symbol. The Company will become a private subsidiary of Incubator Holdings, and will retain all of its existing debts and liabilities except for $352,500 in specific debt that will be assumed by Incubator Holdings under the Agreement. The existing common shareholders of the Company will receive a total of ten percent of the resulting outstanding common stock of Incubator Holdings and the existing common shareholders of Incubator Holdings will retain 90 percent of the common stock after the acquisition.

 

Following the acquisition, the capital structure of the resulting entity, operating under the corporate name Incubator Holdings, Inc., will be as follows:

 

Pre-reverse common shares issued at 12-31-2015   328,851,197      
Shares issuable to JS Barkats (2.5% of outstanding)   8,221,280      
Fully diluted ADAC common shares   337,072,477      
250/1 reverse split of common shares   1,348,290    10%
Common shares of Incubator shareholders   12,134,610    90%
Total post-transaction shares   13,482,900    100%

 

The Agreement was submitted to the ADAC shareholders and approved by vote of the preferred shares representing 51 percent of the total vote), and then reported to the common shareholders on the Schedule 14C Information Statement filed with the SEC on December 18, 2015, mailed to the common shareholders on that date, and effective 20 days later, on January 7, 2016. The Agreement and transaction were subject to satisfaction of certain stated conditions to closing, including effectiveness of the Schedule 14C, the Financial Industry Regulatory Association (FINRA) approval of the corporate name change, symbol change and reverse split, and our remaining current on our required SEC filings.  Our 10-Q for the quarter ended June 30, 2015 was not filed until October 13, 2015 and the 10-Q for September 30, 2015 was filed on November 4, 2015.  The Preliminary Schedule 14C was then filed November 6, 2015, after the October 15, 2015 outside closing date in the Agreement; however, the Agreement also provides that, after October 15, 2015 if the transaction had not closed, any party could then terminate the Agreement by notice to the other parties, except that no party which was in default of a closing requirement, in breach of the agreement, could elect unilaterally to terminate the Agreement.  We were in breach of the Agreement at October 15, 2015 but there has been no notice by any party to terminate the Agreement at any time after October 15, and the parties expressly retained the power to extend the closing date in the Agreement.

 

ADAC, by Board resolutions, approved the extension of the closing date on October 15, 2015 (to January 31, 2016) and then approved an extension again on January 31 to a date 10 days after FINRA approval of the reverse split and corporate name change. 

 

The Company submitted a Notice of Corporate Action to FINRA on December 30, 2015 requesting approval of the reverse split, name change and symbol change, as the final step in the acquisition process; however, on March 21, 2016, FINRA formally notified the Company that it would not approve the requested corporate action. The FINRA response letter, a copy of which is filed with this Annual Report as Exhibit 99.1 stated that the corporate action request was deficient under FINRA Rule 6490(d)(3)(4) because FINRA had “actual knowledge” (provided by us) that “a person connected to the Issuer …may be potentially involved in fraudulent activities…” The “person” referenced by FINRA in the deficiency letter was Asher Enterprises, Inc., and its President, Curt Kramer, who was the subject of an SEC Cease and Desist Order (Administrative Proceeding File No. 3-15621, because Asher Enterprises, Inc. then held 4,166,667 of our common shares (approximately 1.2 percent of the outstanding shares) and two convertible promissory notes in the original principal amounts of $30,000 and $32,500 issued November 15, 2011 and April 17, 2012, respectively. Although we explained to FINRA that the Company had had no contact with Asher Enterprises, Inc. or Curt Kramer since 2012, that neither had any involvement of any kind in the company, other than as a passive investor, and that management since 2013 had had no dealings with them, FINRA apparently had concerns that Asher Enterprises, Inc. could continuously convert the notes into our common stock subject to a waivable 4.99 percent limit on holdings. Accordingly, our filing was deemed deficient.

 

 2 

 

 

The Company along with Incubator Holdings, Inc. has subsequently been in contact with Asher Enterprises, Inc., and has been advised that neither Asher Enterprises, Inc., nor any officer, director or affiliate of Asher Enterprises, Inc., currently holds any stock or other equity interest in the Company. We have entered into a Settlement and Release Agreement with Asher Enterprises, Inc. dated May 2, 2016, under which Asher Enterprises, Inc. has agreed to accept $50,000 in full payment and satisfaction of all debts owed to it by the Company, including the two convertible notes and further agreed that, pending payment of the settlement amount due on or before May 10, 2016, Asher Enterprises, Inc. would not elect to convert any portion of the two convertible notes into common stock. Accordingly, payment of the settlement amount will completely terminate any connection of any kind between us and Asher Enterprises, Inc., so the adverse conditions which caused FINRA to deny our request for the corporate name change, symbol change and reverse split have been eliminated. We intend to file a new Notice of Corporate Action with FINRA, seeking the same results, immediately upon the filing of this Annual Report with the SEC. All other aspects of the proposed acquisition transaction with Incubator Holdings have been approved and completed, and the Company anticipates completing the transaction in June, 2016 as soon as FINRA approval has been obtained.

 

Incubator Holdings is now a Florida company which has non-binding acquisition agreements in place for the acquisition of two existing operating companies:

 

Acquisition #1 specializes in precision machining and aerospace manufacturing. Since its inception in 1974, this company has concentrated on safety critical aerospace landing gear. It has government contracts extended over several years. As a result of work, this company was awarded the Award for Excellence by the U.S. Government. This company has state of the art technology coupled with programmers that have extensive education and expertise to meet customer expectations. In addition, this company has been profitable for many years.

 

Acquisition #2 protects families and businesses from identity theft which has become the number one crime in the nation. This company provides far more than the typical credit card protection. In fact, it supplies the “7” essential components of whole identity protection. These include:

 

1.Whole identity monitoring-not just credit cards
2.Cyber-crime protection—hackers, viruses, etc.
3.Credit-manage and protect your credit
4.Privacy-minimize junk mail, spam, etc.
5.Lost wallet protection
6.Whole identity recovery—restoration to pre-theft status
7.Cyberhood watch—24/7 real-time alerts

 

Closing of the acquisitions of these two target companies will be completed after the completion of the acquisition of the Company by Incubator Holdings. As a result, the Company will be filing Form 10 information to terminate its current status as a shell company within the meaning of the federal securities laws as soon as that acquisition closes.

 

There is no assurance, however, that the above acquisition will be completed.

 

 3 

 

 

Employees

 

We have no full time or part-time employees except for such services as are required in connection with searching for suitable acquisition partners, which activities are performed by our sole officer and director and by various consultants. We do not foresee any significant changes in the number of employees or consultants we will have over the next twelve months, unless we complete a planned merger, as discussed in Other Matters.

 

During the period covered by this report, we conducted no business operations and generated no revenue. Our business plan was to serve as a corporate vehicle that will seek to effect a merger, exchange of capital stock, asset acquisition or other similar business combination (a “Business Combination”) with an operating or development stage business that desires to employ our Company to become a publicly traded corporation that reports under the Securities Exchange Act of 1934 (“Exchange Act”). We entered into the acquisition agreement with Incubator Holdings, Inc. in September, 2015 for that purpose and our plan is to complete that transaction in June, 2016.Other than as described herein, we do not engage in any substantive commercial business or other business operations. We face special risks inherent in the investigation, acquisition, or involvement in a new business opportunity.

 

Our Company must generate additional resources to enable us to pay our obligations as they come due, and our Company must ultimately implement a new business plan and achieve profitable operations.  We cannot assure you that we will be successful in any of these activities.  Should any of these events not occur, our financial condition will be materially adversely affected. If our Company remains dormant, we will need to raise additional capital to meet our current capital requirements for the next twelve months.

 

Employees

 

Our present officers and directors are our only employees, and they devote a minimal amount of their time to our business. We have no full time employees.  We expect to use consultants, attorneys and accountants as necessary, and do not anticipate a need to engage any full-time employees until we have completed the pending transaction with Incubator Holdings, Inc. 

 

Facilities

 

Our principal executive offices are now located at 10120 S. Eastern Avenue, Suite 130, Henderson, Nevada 89052, in offices provided by Incubator Holdings, Inc. Our registered office in Delaware is located at 113 Barksdale Professional Center, Newark, DE 19711, and our registered agent is Delaware Intercorp.

 

Government Regulations

 

During the period covered by this report, our business was not subject to direct regulation by any domestic or foreign governmental agency, other than regulations generally applicable to businesses, and we believe that we have complied with these laws and regulations in all material respects.

 

Item 1A. Risk Factors

 

As a smaller reporting company, we are not required to provide this information.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS.

 

None

 

 4 

 

 

ITEM 2.  PROPERTIES.

 

Our executive offices are located at 1365 N. Courtenay Parkway, Suite A. Merritt Island, Florida 32953, in offices provided by an independent consulting firm as part of a contractual administrative and financial consulting agreement. We believe that this space is adequate for our current and immediately foreseeable operating needs.

 

ITEM 3.  LEGAL PROCEEDINGS.

 

On October 25, 2012, JS Barkats PLLC filed a breach of contract action against the Company and a former officer, Aviram Malik, in the Supreme Court of New York, for breach of contract relating to a funding transaction in June 2012. The Complaint was apparently served on former management but was never answered or otherwise responded to by former management and was never disclosed in our prior periodic filings. The Plaintiff seeks to recover $45,395 in cash finders’ fee allegedly due plus 2.5 percent of our issued and outstanding common stock as of the date the fee was earned, plus forfeiture to it of all of the common stock, warrants and options owned by Aviram Malik, individually. As a result of the failure to respond to the action by prior management, a default was entered against us, and plaintiff is seeking entry of a default judgment. As of the date of this report, no default judgment has been entered in the case, to our knowledge.

 

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

 

ITEM 4.  REMOVED AND RESERVED

 

PART II

 

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

 

Market Information

 

Our common stock is eligible to be traded on the OTC Markets, under the ticker symbol ADAC.  

 

Holders

 

As of December 31, 2015, there were 328,851,197 shares of our common stock issued and outstanding, which were held by 195 stockholders of record. No common shares were issued during the year ended December 31, 2015 or to the date of filing of this report.

 

Dividends

 

We have never declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future. Furthermore, we expect to retain any future earnings to finance our operations and expansion. The payment of cash dividends in the future will be at the discretion of our Board of Directors.

 

Equity Compensation Plans

 

On July 22, 2009, the Company adopted the Stock Incentive Plan, pursuant which the Company is authorized to grant equity-based awards in the form of stock options, restricted common stock, restricted stock units, stock appreciation rights, and other stock based awards to employees (including executive officers), directors, consultants and service providers of the Company and its subsidiaries. The maximum number of shares available for grant under the plan is 25,000,000 shares of common stock.  The number of shares available for award under the plan is subject to adjustment for certain corporate changes and based on the types of awards provided, all in accordance with the provisions of the plan. The plan is administered by the Board.   No shares have been issued under this Plan.

 

 5 

 

 

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

 

There were no sales or issuances of our common stock in the fiscal year ended December 31, 2015. 

 

ITEM 6.  SELECTED FINANCIAL DATA.

 

As a smaller reporting company, we are not required to provide this information.

 

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

 

We have not generated any revenues to date.  

 

Our sole business plan is to identify, negotiate and enter into an acquisition transaction with an operating company on terms to be negotiated in the best interests of our shareholders. We plan to complete the acquisition transaction with Incubator Holdings, Inc. in June, 2016.

 

Results of Operations

 

We have not generated any revenues to date.  Our operating expenses in the year ended December 31, 2015 amounted to $195,587 as compared to $218,310 for the year ended December 31, 2014. Expenses in 2015 were comprised primarily of third party consulting expenses and transfer agent fees.

 

Our net loss in the year ended December 31, 2015, amounted to $583,047 as compared to the net loss of $332,630 during the year ended December 31, 2014. Net loss in 2015 was comprised primarily of third party consulting expenses, interest, loss on extinguishment of debt, and other income.

 

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or our financial position. Amounts shown for machinery, equipment, and leasehold improvements and for costs and expenses reflect historical cost and do not necessarily represent replacement cost. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

 

Liquidity and Capital Resources

 

We had no cash at December 31, 2015, or at December 31, 2014.  

 

There is no cash on hand to fund our administrative and other operating expenses or our proposed research and development program for the next twelve months, and we do not anticipate that we will generate any revenues from operations for the next twelve months, unless we initiate or acquire a new operating business.   

 

At December 31, 2015, we had $566,250 in principal amount of outstanding convertible notes plus accrued interest of $60,473.

 

The Company had a working capital deficit of $1,322,336 and $806,529 for the year ended December 31, 2015 and 2014 respectively.  

 

Lack of Insurance

 

We currently have no insurance in force for our office facilities and operations and it cannot be certain that we can cover the risks associated with such lack of insurance or that we will be able to obtain and/or maintain insurance to cover these risks at economically feasible premiums.

 

 6 

 

 

Going Concern Consideration

 

Our auditors have issued an opinion on our financial statements which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months, unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated until we begin marketing the product. Accordingly, we must raise capital from sources other than the actual sale of the product to implement our plan of operations and stay in business.

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. We have not yet established any source of revenue to cover our operating costs, and we have incurred an operating loss since inception. Further, as of December 31, 2015, our cash resources were insufficient to meet our current business plan, and we had negative working capital. These and other factors raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from our possible inability to continue as a going concern. As of December 31, 2015, the Company has an accumulated deficit of $18,949,683.

 

Off-Balance Sheet Arrangements

 

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

 

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

As a smaller reporting company, we are not required to provide this information.

 

ITEM 8.  FINANCIAL STATEMENTS.

 

The financial statements and supplementary financial information required by this Item are set forth immediately following the signature page and are incorporated herein by reference.

 

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

None.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this annual report, has concluded that our disclosure controls and procedures are effective at a reasonable assurance level based on their evaluation of these controls and procedures as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15.

 

Management’s Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rules 13a-15(f) under the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of, our principal executive, principal accounting and principal financial officers, or persons performing similar functions, and effected by the our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. 

 

 7 

 

 

Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. 

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Our management, including our Chief Executive Officer and Principal Financial Officer assessed the effectiveness of our internal control over financial reporting as of December 31, 2015. In making this assessment, management used the framework in Internal Control - Integrated Framework promulgated by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the COSO criteria. Based on the assessment performed, management believes that as of December 31, 2015, our internal control over financial reporting was not effective based upon the COSO criteria. Additionally, based on management’s assessment, we determined that there were material weaknesses in our internal control over financial reporting as of December 31, 2015.

 

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

 

Changes in Internal Controls

 

During the year ended December 31, 2015, there was no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

 

ITEM 9B.  OTHER INFORMATION.

 

Depository Chill

 

The Depository Trust Company (“DTC”) has advised us that DTC has imposed a restriction on physical and electronic deposit transactions (the “Deposit Chill”) in shares of our common stock. The effect of the Deposit Chill is that DTC will no longer accept share certificates for deposit, thereby preventing the deposit of the underlying shares into DTC-participant broker accounts. Generally speaking, as long as the Deposit Chill is in place, persons holding such shares will be unable to deposit or trade them electronically.

 

The Deposit Chill applies to all shares newly issued on or after the Chill Effective Date, as well as all shares previously issued as “restricted securities” that are cleared for resale on or after the effective date, pursuant to an effective registration statement under the Securities Act or pursuant to Rule 144 under the Securities Act.

 

As long as the Deposit Chill is in place, persons with share certificates representing freely tradable shares or restricted shares will be unable to deposit their shares into a broker account and effect trades electronically. This will likely have a material adverse effect on the public trading market for our shares; and will represent a significant obstacle to shareholders holding share certificates who wish to sell their shares.

 

 8 

 

 

Management Changes.

 

At a meeting of the Board of Directors held on February 4, 2014, Mr. Michael Gelmon resigned as a director and officer, effective immediately, after first appointing Michael Choo as a director. On February 4, 2014, Michael Choo, of Los Angeles, California, was appointed as an additional director of Registrant by the Board of Directors to fill an existing vacancy, effective immediately. On February 4, 2014, Mr. Choo was elected by the Board of Directors to serve as Chairman, President, Secretary and Chief Executive and Financial Officer. On March 31, 2016, Mr. Choo appointed John Griffin as a director of the Company and thereafter resigned as an officer and director. Mr. Griffin then was appointed as Chairman, CEO, President and Secretary and now serves as our sole officer and director. Mr. Griffin also serves as President of Incubator Holdings, Inc. This change in management was reported on a Form 8-K filed with the SEC on April 15, 2016.

 

Alberta, Canada Securities Commission Cease Trade Order.

 

In late January, 2014, we were notified by letter from the Alberta Securities Commission in Calgary, Alberta, Canada, that we are considered by them to be an “Alberta reporting company” by virtue of an Alberta ordinance making any US company with its shares trading in the US over-the-counter markets, automatically an Alberta reporting company if any officer, director or consultant with executive or fund-raising responsibilities is a resident of Alberta. Since Michael Gelmon, our former CEO, was a Calgary resident, the Alberta Securities Commission deemed the Company to be a reporting issuer, required retroactively to file periodic reports in Alberta and to submit to the regulatory control of the Alberta Securities Commission, and accordingly issued a trading “cease and desist” order against trading of our common stock in Alberta. Mr. Gelmon was only affiliated with the Company from June 19, 2013 to February 4, 2015. There has been no further activity or response to this action and currently the Company has no officers or directors, shareholders of record, offices, assets or business located in Alberta. On closing of the pending transaction with Incubator Holdings, Inc., the Company will become a wholly-owned, private subsidiary of Incubator Holdings, Inc. and will no longer be a reporting company. The cease trade order should have no effect on Incubator Holdings, Inc.

 

Acquisitions.

 

We expect to close the pending transaction with Incubator Holdings, Inc. in June, 2016.

 

PART III

 

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

DIRECTORS AND EXECUTIVE OFFICERS

 

The following table sets forth certain information regarding the members of our Board of Directors and our executive officers as of December 31, 2015.  

 

Name   Age   Positions and Offices Held
         
Michael Choo   51   Chief Executive Officer, Chief Financial/Accounting Officer, Secretary and Director

 

Our Directors hold office until the next annual meeting of our stockholders or until their successors is duly elected and qualified. Set forth below is a summary description of the principal occupation and business experience of each of our Directors and executive officers for at least the last five years.

 

 9 

 

 

MICHAEL O. CHOO, 51, an experienced senior executive, is the former President & Chief Executive Officer of Bellflower Medical Center, Los Angeles, CA. Previously served as Principal, Managing Partner & President & Chief Executive Officer of Integra Healthcare, Inc., Principal, Managing Partner, & Chairman of The Board of Directors of Doctors’ Hospital of Shreveport, and Principal, Managing Partner & Senior Vice President of Operations for Ethicus Healthcare Management, LLC. Mr. Choo was also previously the Senior Vice President of Promise Healthcare, Inc. and Chief Executive Officer of Promise Specialty Hospital of Shreveport, a 146 bed JCAHO long-term acute care, acute rehabilitation, gerontologic and adult psych turnaround hospital located in Shreveport, Louisiana. As second in command of the Company, he had corporate oversight of the Company’s 14 other facilities from the standpoint of corporate recruitment, new business development, and operational turnaround. Before his departure from Promise Healthcare, Inc., he brought together over 120+ collective years of corporate operational experience, leadership, structure, “team concept” and organization to the Promise Healthcare Executive team. Mr. Choo has over 29 years of experience in healthcare with expertise in Operational Executive Management, Hospital Turnarounds, Hospital Acquisitions, and Ground Floor Start-ups. He has vast experience in the clinical setting as well as the operational and organizational development & structure of hospitals and healthcare organizations to comply with state & federal regulatory agency guidelines. Mr. Choo is finishing his Master’s degree in Business Administration from California Coast University, and served in executive positions with various hospitals and companies managing hospitals. He held a previous position as the Chief Executive Officer of HealthSouth in Reno a 63 Acute Rehabilitation Freestanding Hospital in Reno, NV acting as Team Leader for the HealthSouth Surgical center, and HealthSouth Sports Clinic in Carson City, NV. He also has been the Vice President of NPSI with responsibility for 4 major hospitals in the Los Angeles and San Diego area, and Regional Chief Operations Officer of ARMS with responsibilities for 5 hospital turnarounds and 2 ground floor start-ups.

 

Although subsequent to the date of this Annual Report, Mr. Choo resigned in March 2016 and was replaced as sole officer and director by John Griffin.

 

JOHN GRIFFIN. Since June 2009, Mr. Griffin has been serving as President and CEO of AutoHood Media, LLC, an advertising company targeting the mobile out-of-home advertising markets, with a focus on the taxi advertising market. From 2005 to 2009, Mr. Griffin served as President and CEO of Xtreme Sports Group, LLC. From 1990 to 2005, Mr. Griffin served as President and CEO of Music City Motorsports, Inc. Prior to that, Mr. Griffin was President of Griffin Contractors, Inc., a residential and commercial contractor, and Griffin Properties, Inc., a residential and commercial real estate brokerage in Nashville, Tennessee. Mr. Griffin received his Bachelor’s in Business Administration degree from Middle Tennessee State University.

 

Audit Committee and Financial Expert

 

We do not have an audit committee or an audit committee financial expert. Our corporate financial affairs are simple at this stage of development and each financial transaction can be viewed by any officer or Director at will. We will form an audit committee if it becomes necessary as a result of growth of the Company or as mandated by public policy.

 

Code of Ethics

 

We do not currently have a Code of Ethics applicable to our principal executive, financial and accounting officers; however, the Company plans to implement such a code in the second quarter of 2015.

 

Potential Conflicts of Interest

 

Since we do not have an audit or compensation committee comprised of independent Directors, the functions that would have been performed by such committees are performed by our Board of Directors. Thus, there is a potential conflict of interest, in that our Directors who are also our officers have the authority to determine issues concerning management compensation, and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our Directors or officers.

 

 10 

 

 

ITEM 11. EXECUTIVE COMPENSATION

 

Any compensation received by our officers, directors, and management personnel will be determined from time to time by our Board of Directors. Our officers, directors, and management personnel will be reimbursed for any out-of-pocket expenses incurred on our behalf.

   

Summary Compensation

 

Employment Contracts . We have no employment agreements with any of our Directors or executive officers.

 

Stock Options/SAR Grants .   On July 22, 2009, the Company adopted the Stock Incentive Plan, pursuant which the Company is authorized to grant equity-based awards in the form of stock options, restricted common stock, restricted stock units, stock appreciation rights, and other stock based awards to employees (including executive officers), directors, consultants and service provider of the Company and its subsidiaries. The maximum number of shares available for grant under the plan is 25,000,000 shares of common stock.  The number of shares available for award under the plan is subject to adjustment for certain corporate changes and based on the types of awards provided, all in accordance with the provisions of the plan. The plan may be administered by the Board.  No options have been issued to date under the plan.

 

SUMMARY COMPENSATION TABLE

 

Name and principal
position
  Year  Accrued
Salary
($)
   Bonus
($)
   Stock
Awards
($)
   Option
Awards
($)
   Non-Equity
Incentive Plan
Compensation
($)
   Nonqualified
Deferred
Compensation
Earnings ($)
   All Other
Compensation
($)
   Total
($)
 
Michael Choo CEO  2015   0    0    0    0    0    0    0   $0 
   2014   52,500    0    0    0    0    0    0   $52,500 
Michael Gelmon, Former CEO  2015   0    0    0    0    0    0    0   $0 
   2014   0    0    0    0    0    0    30,000   $30,000 

 

Long-Term Incentive Plans. As of December 31, 2015, we had no group life, health, hospitalization, or medical reimbursement or relocation plans in effect. Further, we had no pension plans or plans or agreements which provide compensation on the event of termination of employment or corporate change in control.

 

Outstanding Equity Awards. As of December 31, 2015, none of our Directors or executive officers holds unexercised options, stock that has not vested, or equity incentive plan awards.

 

Compensation of Directors

 

During the year 2015 no compensation has been paid to any of our Directors in consideration for their services rendered in their capacity as directors.

 

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

 

The following table lists the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

 

 11 

 

 

The percentages below are calculated based on 328,851,197 shares of our common stock issued and outstanding as of December 31, 20151. The address of each person listed is c/o the Company

 

Officers, Directors and 5% Stockholders 

No. of

Shares

  

Percentage

Ownership

 
Michael Choo   0    - 
Anoe SA   20,000,000    6.0%
Ahoran Albacher   43,000,000    13.1%
Roni Kotler   42,000,000    12.8%
Dori Sharoni   20,500,000    6.2%

1 The vote attributed to the common stock listed above is only 49% of the total vote

 

iEquity Corp. held 1 million shares of preferred stock with 51% of the total vote, which it contracted to sell to International Ambitions, LLC in September, 2015. As majority voting shareholder, iEquity Corp. approved the original acquisition agreement with Incubator Holdings, Inc. In October, 2015, the purchase and sale agreement was amended, International Ambitions, LLC paid a portion of the total consideration for the preferred stock, and granted a security interest in the preferred stock to iEquity securing the balance due for the purchase. Subject to the security interest held by iEquity Corp., International Ambitions, LLC is now the controlling voting shareholder of the Company, with 51 percent of the total voting power of all classes of stock voting on any matter.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

We have not entered into any transaction nor are there any proposed transactions in which our Director, executive officer, stockholders or any member of the immediate families of the foregoing had or is to have a direct or indirect material interest during the year ended December 31, 2015.

 

Director Independence

 

We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have a majority of “independent directors” on our board of directors.  We do not believe that any of our current directors are independent.

 

Item 14. Principal Accountant Fees and Services.

 

Fees Paid to Principal Accountant

 

Anton & Chia has served as our independent auditor for the fiscal years ended December 31, 2015 and 2014. The following table reflects the fees paid or accrued to our independent auditors in years ended December 31, 2015 and 2014:

 

   December 31, 2015   December 31, 2014 
Audit Fees  $13,125   $13,000 
Tax Fees  $-   $- 
All Other Fees  $-   $- 

 

 12 

 

 

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm.

 

As of December 31, 2015, the Board has not established a formal documented pre-approval policy for the fees of our principal accountant.

 

The percentage of hours expended on the principal accountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.

 

Part IV

 

Item 15. Exhibits, Financial Statement Schedules.

 

Exhibit No.   Description
     
31.1   Certification of Chief Executive Officer required by Rule 13a-14(a) under the Exchange Act (filed herewith).
     
31.2   Certification of Chief Financial Officer required by Rule 13a-14(a) under the Exchange Act (filed herewith).
     

32

  Certification of Principal Executive, Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (filed herewith).
     
99.1   March 31, 2016 Deficiency Letter from FINRA
     
99.2   Settlement and release Agreement with Asher Enterprises, Inc. dated May 2, 2016

 

SIGNATURES

 

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

 

  ADAMA TECHNOLOGIES CORP.  
       
Date:  September 14, 2016 By:  /s/ Eric Sills  
    Eric Sills  
    Chief Executive Officer & Chief Financial Officer  
     

 

 13 

 

 

ADAMA TECHNOLOGIES CORP.

 

INDEX TO FINANCIAL STATEMENTS

DECEMBER 31, 2015 AND 2014

 

Report of Independent Registered Public Accounting Firm F-1
   
Financial Statements  
   
Balance Sheets as of December 31, 2015 and December 31, 2014 (as restated) F-2
   
Statements of Operations for the Years Ended December 31, 2015 and 2014 (as restated) F-3
   

Statement of Changes in Stockholders' Deficit for the Years Ended December 31, 2015 and 2014 (as restated)

F-4
   
Statements of Cash Flows for the Years Ended December 31, 2015 and 2014 (as restated) F-5
   
Notes to Financial Statements F-6

 

F-1

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders

 

Adama Technologies Corporation

 

We have audited the accompanying balance sheets of Adama Technologies Corporation (the "Company”) as of December 31, 2015 and 2014, and the related statements of operations, changes in stockholders’ deficit and cash flows for the two years then ended. These 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company was 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 financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the two years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has had no revenues and incurred an accumulated deficit of $18,949,683 and $18,366,636 as of December 31, 2015 and 2014 (as restated), respectively. The Company is also in default under certain of its loan agreements. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans concerning these matters are also described in Note 2, which includes the raising of additional equity financing or merger with another entity. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Anton & Chia, LLP

 

Newport Beach, California

 

September 19, 2016

 

 F- 1 

 

 

ADAMA TECHNOLOGIES CORP.

BALANCE SHEETS

AS OF DECEMBER 31, 2015 AND 2014 (as restated)

 

   December 31, 2015   December 31, 2014 
       (as restated) 
Assets          
Current Assets          
Cash  $-   $- 
Total Assets  $-   $- 
Liabilities & Stockholders' Deficit          
Current Liabilities          
Accounts payable and accrued liabilities   178,609    137,653 
Loans from related parties - Directors and stockholders   -    22,500 
Loans from third parties   16,075    3,000 
Convertible notes payable, net of discount   566,250    363,750 
Convertible note premium   233,925    108,066 
Judgement payable   181,250    - 
Derivative liability   146,227    171,560 
Total Liabilities   1,322,336    806,529 
           
Stockholder's Deficit          
Common Stock, $0.0001 par value, 500,000,000 shares authorized 328,851,197 and 328,851,197 shares issued and outstanding   32,885    32,885 
Preferred Stock, $0.001 par value, 1,000,000 shares authorized 1,000,000 and 0 shares issued and outstanding   1,000    - 
Additional paid in capital   17,526,222    17,579,292 
Common stock issuable   67,240    - 
Stock subscriptions receivable   -    (52,070)
Accumulated deficit   (18,949,683)   (18,366,636)
Total Stockholders’ Deficit   (1,322,336)   (806,529)
Total Liabilities and Stockholders' Deficit  $-   $- 

 

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

 

 F- 2 

 

 

ADAMA TECHNOLOGIES CORP.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2015 and 2014 (as restated)

 

   For the Year Ended December 31, 
   2015   2014 
       (as restated) 
Revenues  $-   $- 
           
Expenses:          
General and administrative          
Professional fees   7,875    10,400 
Consulting   180,000    202,500 
Other general and administrative expenses   7,712    5,410 
Total Expenses   195,587    218,310 
Loss from operations   (195,587)   (218,310)
           
Other income (expense)          
Forgiveness of debt   22,030    - 
Judgement   (248,490)   - 
Loss on extinguishment of debt   (497,500)   (302,000)
Amortization of convertible debt premium   371,640    193,934 
Change in fair value of derivatives   25,333    43,724 
Interest expense   (60,473)   (42,978)
Loss before income taxes   (583,047)   (325,630)
Income tax expense   -    - 
Net Loss  $(583,047)  $(325,630)
Net loss per share - basic and diluted  $(0.00)  $(0.00)
Weighted average number of shares outstanding during the period - basic and diluted   328,851,197    328,851,197 

 

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

 

 F- 3 

 

 

ADAMA TECHNOLOGIES CORP.

STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 (as restated)

 

   Common Stock *   Preferred Stock   Additional Paid   Common Stock   Stock
Subscriptions
  

Deficit

Accumulated

During the

Development

  

Total

Stockholders'

 
   Shares   Amount   Shares   Amount   In Capital   Issuable   Receivable   Stage   Deficit 
Balance - December 31, 2013   328,851,197   $32,885    -   $-   $17,564,292   $-   $(44,990)  $(18,041,006)  $(488,819)
NOHO subscription agreement   -    -    -    -    15,000    -    (15,000)   -    - 
Payments on subscription receivable   -    -    -    -    -    -    7,920    -    7,920 
Beneficial conversion feature   -    -    -    -    -    -    -    -    - 
Net loss for the year ended December 31, 2014   -    -    -    -    -    -    -    (325,630)   (325,630)
Balance - December 31, 2014 (as restated)   328,851,197   $32,885    -   $-   $17,579,292   $-   $(52,070)  $(18,366,636)  $(806,529)
Judgment stock issuable   -    -    -    -    -    67,240    -    -    67,240 
Write off of  stock subscription receivable   -    -    -    -    (52,070)   -    52,070    -    - 
Issuance of preferred shares   -    -    1,000,000    1,000    (1,000)   -    -    -    - 
Net loss for the year ended December 31, 2015   -    -    -    -    -    -    -    (583,047)   (583,047)
Balance - December 31, 2015   328,851,197   $32,885    1,000,000   $1,000   $17,526,222   $67,240   $-   $(18,949,683)  $(1,322,336)

 

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

 

 F- 4 

 

 

ADAMA TECHNOLOGIES CORP.

STATEMENTS OF CASH FLOWS

 

  

For the Year Ended

December 31, 2015

  

For the Year Ended

December 31, 2014

 
       (as restated) 
OPERATING ACTIVITIES:          
Net Income (loss)  $(583,047)  $(325,630)
Adjustments to reconcile net loss to net cash used in operating activities:          
Loss on extinguishment of debt   497,500    302,000 
Other income   (371,640)   (193,934)
Forgiveness of debt   (22,030)   - 
Judgement payable   248,490    - 
Change in fair value of derivatives   (25,333)   (43,724)
Accounts payable and accrued liabilities   242,985    261,288 
Net Cash Used in Operating Activities   (13,075)   - 
           
FINANCING ACTIVITIES:          
Proceeds from third party   13,075    - 
Net Cash Provided by Financing Activities   13,075    - 
Net Decrease in Cash   -    - 
Cash, beginning of period   -    - 
Cash, end of period  $-   $- 
SUPPLEMENTARY CASH FLOW INFORMATION          
Cash paid during the year/period for:          
Income Taxes  $-   $- 
Interest  $-   $- 
SUPPLEMENTARY CASH FLOW INFORMATION          
Notes issued to settle payables  $202,500   $270,000 
Shares reserved for judgement  $67,240   $- 

 

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

 

 F- 5 

 

 

ADAMA TECHNOLOGIES CORP.

NOTES TO FINANCIAL STATEMENTS

 

EXPLANATORY NOTE

 

The Company will file an amended annual report on Form 10-K/A for the year ended December 31, 2014 to restate the 2014 financial statements relating to accounting for the extinguishment of debt.

 

(1)   Summary of Significant Accounting Policies

 

Basis of Presentation and Organization

 

Adama Technologies Corporation (“Adama Technologies” or the “Company”) was incorporated under the laws of the State of Delaware on September 17, 2007. The Company currently conducts no active operations and is engaged in identifying and merging with a suitable operating company. An Agreement and Plan of Merger has been signed with Incubator Holdings, Inc., a Wyoming corporation, for acquisition of the Company, expected to close by the end of June, 2016. See Note 8. Subsequent Events.

 

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

 

Cash

 

For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with an original maturity of three months or less to be cash and cash equivalents. There were no cash and cash equivalents at December 31, 2015 and 2014.

 

Loss per Share

 

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

 

Income Taxes

 

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

 

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

 

 F- 6 

 

 

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

 

Fair Value of Financial Instruments

 

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

 

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

 

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

 

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

 

The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of December 31, 2015 and December 31, 2014, the carrying value of accounts payable and loans that are required to be measured at fair value, approximated fair value due to the short-term nature and maturity of these instruments.

 

Estimates

 

The condensed financial statements are prepared on the basis of accounting principles generally accepted in the United States. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. Actual results could differ from those estimates made by management.

 

 F- 7 

 

 

Recent Accounting Pronouncements

 

In August, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), which now requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued. If conditions or events raise substantial doubt about an entity’s ability to continue as a going concern and substantial doubt is not alleviated after consideration of management’s plans, additional disclosures are required. The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. These requirements were previously included within auditing standards and federal securities law, but are now included within U.S. GAAP. We are currently assessing the impact on the adoption of ASU and do not believe the adoption will have significant impact on our financial statements and disclosures.

 

We have evaluated the other recent accounting pronouncements through ASU 2015-08 and believe that none of them will have a material effect on our financial statements.

 

Note 2 Going Concern

 

The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of December 31, 2015, the cash resources of the Company were insufficient to meet its current business plan. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. As of December 31, 2015, the Company has no cash and an accumulated deficit of $18,949,683.

 

Note 3 Convertible Notes Payable

 

On November 18, 2011, the Company signed a $30,000 convertible promissory note with a third party. The note bears interest at 8% per annum and was due on August 18, 2012. The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance into the Company’s common stock at a price equal to 58% of the average of the lowest six trading prices for the Common Stock during the most recent ten-day period. The conversion feature was determined to exist and was recorded at the time of issue as a derivative liability, but has been fully amortized in prior periods. This note is in default. According to the terms of the note upon default the balance due is 150% of the unpaid principal balance. In addition, from the date of default the notes bear interest at 22% per annum. The investor may in its sole discretion convert the default amount into equity. The balance outstanding on this note at December 31, 2015 was $45,000. The holder has agreed as of May 2, 2016 to accept a lump sum in full payment of this Note. See Note 8. Subsequent Events.

 

 F- 8 

 

 

On April 27, 2012, the Company signed a $32,500 convertible promissory note with a third party. The note bears interest at 8% per annum and was due on January 27, 2013. The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance into the Company’s common stock at a price equal to 58% of the average of the lowest six trading prices for the Common Stock during the most recent ten day period. The conversion feature was determined to exist and was recorded at the time of issue as derivative liability, but has been fully amortized in prior periods. This note is in default. According to the terms of the note upon default the balance due is 150% of the unpaid principal balance. In addition, from the date of default the notes bear interest at 22% per annum. The investor may in its sole discretion convert the default amount into equity. The balance outstanding on this note at December 31, 2015 was $48,750. The holder has agreed as of May 2, 2016 to accept a lump sum in full payment of this Note. See Note 8. Subsequent Events.

 

On October 15, 2013, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on October 15, 2014. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $50,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $50,000 has been accreted to other income as of December 31, 2015. This note is in default.

 

On January 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on January 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $2,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $2,000 has been accreted to other income as of December 31, 2015. This note is in default.

 

On March 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $50,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $50,000 has been accreted o other income as of December 31, 2015. This note is in default.

 

On March 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $50,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $50,000 has been accreted to other income as of December 31, 2015.

 

On June 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on June 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $12,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $12,000 has been accreted to other income as of December 31, 2015.

 

On July 1, 2014, the Company converted $60,000 of amounts due to officers into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on July 31, 2015. The note has conversion rights that allow the holder of the note after six months to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $104,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $104,000 has been accreted to other income as of December 31, 2015.This note is in default.

 

 F- 9 

 

 

Note 3 Convertible Notes Payable (continued)

 

On September 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on September 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $42,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $42,000 has been accreted to other income as of December 31, 2015. This note is in default.

 

On December 15, 2014, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on December 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $42,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $42,000 has been accreted to other income as of December 31, 2015. This note is in default.

 

On March 15, 2015, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $50,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $39,863 has been accreted to other income as of December 31, 2015.

 

On April 1, 2015, the Company converted $52,500 of compensation owed into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 31, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $87,500 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $65,685 has been accreted to other income as of December 31, 2015.

 

On April 1, 2015, the Company converted $30,000 of compensation owed into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on March 31, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $50,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $37,534 has been accreted to other income as of December 31, 2015.

 

On June 15, 2015, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on June 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $50,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $27,260 has been accreted to other income as of December 31, 2015.

 

On September 15, 2015, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on September 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $170,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $49,836 has been accreted to other income as of December 31, 2015.

 

 F- 10 

 

 

Note 3 Convertible Notes Payable (continued)

 

On December 15, 2015, the Company converted $30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due on December 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the remaining principal balance into the Company’s common stock at a fixed price of $0.0015. A loss on extinguishment of debt of $90,000 was determined to exist and was recorded at the time of issue and is credited to a debt premium on the balance sheet. $3,945 has been accreted to other income as of December 31, 2015.

 

As of December 31, 2015 and December 31, 2014, the balance of convertible notes payable was $566,250 and $363,750.

 

For the year ended December 31, 2015 and 2014, the Company has recognized $60,473 and $49,978 in interest expense, respectively.

 

Note 4 Derivative Liabilities

 

The Company has various convertible instruments outstanding more fully described in Note 3.

 

As of December 31, 2015, the fair value of the Company’s derivative liabilities was $146,227.

 

The following table summarizes the derivative liabilities included in the balance sheet:

 

  

Fair Value

Measurements

Using Significant

Unobservable

Inputs (Level 3)

 
Derivative Liabilities:     
Balance at December 31, 2014  $171,560 
Additions   - 
Change in fair value   (25,333)
Deletions   - 
Balance at December 31, 2015  $146,227 

 

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

 

  

Convertible Debt

Instruments

 
Risk-free rate   0.24%
Expected volatility   97.41%
Expected life    0.25 year   

 

Note 5 Preferred Stock

 

The Company issued no common stock during the year ended December 31, 2015. Details of prior stock issues are listed in the Company’s annual report for the year ended December 31, 2014. On March 25, 2014, an unrelated party, purchased 1,000,000 shares of voting preferred stock for $7,500. The preferred shares has voting power equal to 51 percent of the total combined voting power of all classes of stock entitled to vote on any matter. The issuance of the shares was approved by the Board of Directors. The shares have since been sold and conveyed and are now held by International Ambitions, LLC.

 

 F- 11 

 

 

Note 6 Income Taxes

 

The provision (benefit) for income taxes for the years ended December 31, 2015 and 2014 was as follows (assuming a 23% effective tax rate):

 

   2015   2014 
         
Current Tax Provision:          
Federal-          
Net income  $   $ 
Non-deductible expenses        
Taxable income        
           
Net operating loss carryforward        
           
Total current tax provision  $   $ 
           
Deferred Tax Provision:          
Federal-          
Deferred tax benefit on current loss  $134,101   $74,895 
Non-deductible expenses   -    - 
Change in valuation allowance   (134,101)   (74,895)
           
Total deferred tax provision  $   $ 

 

The Company had deferred income tax assets as of December 31, 2015 and 2013, as follows:

 

   2015   2014 
         
Loss carryforwards  $1,308,598   $1,174,497 
Less - Valuation allowance   (1,308,598)   (1,174,497)
           
Total net deferred tax assets  $   $ 

 

The Company provided a valuation allowance equal to the deferred income tax assets for the period ended December 31, 2015 and 2014, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.

 

As of December 31, 2015, the Company had approximately $4,690,587 in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and expire by the year 2032.

 

The Company did not identify any material uncertain tax positions.  The Company did not recognize any interest or penalties for unrecognized tax benefits.

 

The Company has filed income tax returns in the United States. All tax years are closed by expiration of the statute of limitations.

 

 F- 12 

 

 

Note 7 Pending Litigation

 

On October 25, 2012, JS Barkats PLLC filed a breach of contract action against the Company and a former officer, Aviram Malik in the Supreme Court of New York, for breach of contract relating to a funding transaction in June 2012. The Complaint, which was apparently served on former management but was never answered or otherwise responded to by former management and which was never disclosed in our prior periodic filings, sought to recover $45,395 in a cash finders’ fee allegedly due plus 2.5 percent of our issued and outstanding common stock as of the date the fee was earned, plus forfeiture of all of the common stock, warrants and options owned by Aviram Malik, individually. As a result of the failure to respond to the action by prior management, the Company is in default in this action and plaintiff is seeking entry of a default judgment. On June 5, 2015, the Court entered a default judgment against the Company in the amount of $170,000 plus 2.5 percent of the outstanding common stock plus attorneys’ fees of $11,250. The Company has recorded the amount of $248,490, as compensation for the quarter ended June 30, 2015 and has reserved 8,221,280 common shares (2.5 percent of the fully diluted common shares outstanding) for issuance under this judgment. The Company currently has no assets available to satisfy the judgment amount, which is reported on the financial statements as an unsecured liability.

 

There are no other known pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company has no property so no property of the Company is the subject of any other pending legal proceedings.

 

Note 8 Agreement and Plan of Merger and Acquisition with Incubator Holdings, Inc.

 

On September 10, 2015, the Company entered into an Agreement and Plan of Merger and Acquisition with Incubator Holdings, Inc., a Wyoming corporation (the “Agreement”). Under the terms of that Agreement, Incubator Holdings formed an acquisition subsidiary, ADAC Acquisition Corp. in Florida; Incubator Holdings, Inc. (Wyoming) merged with that Florida subsidiary, which was the surviving entity and changed its corporate name to Incubator Holdings, Inc.; the Company will be acquired by Incubator Holdings, Inc.; the common shareholders of the Company will receive common shares of Incubator Holdings on the basis of 1 share of Incubator for each 250 shares of the Company held, the preferred shareholder of the Company will receive one preferred share of Incubator Holdings for each share of Series A Preferred Stock of the Company outstanding, and Incubator Holdings will assume the obligations of the Company as an SEC reporting entity. Incubator also obtained a new CUSIP number for the common shares and requested a new trading symbol. The Company will become a private subsidiary of Incubator Holdings, and will retain all of its existing debts and liabilities except for $352,500 in specific debt that will be assumed by Incubator Holdings under the Agreement. The existing common shareholders of the Company will receive a total of ten percent of the resulting outstanding common stock of Incubator Holdings and the existing common shareholders of Incubator Holdings will retain 90 percent of the common stock after the acquisition.

 

Following the acquisition, the capital structure of the resulting entity, operating under the corporate name Incubator Holdings, Inc., will be as follows:

 

Pre-reverse common shares issued at 12-31-2015   328,851,197      
Shares issuable to JS Barkats (2.5% of outstanding)   8,221,280      
Fully diluted ADAC common shares   337,072,477      
250/1 reverse split of common shares   1,348,290    10%
Common shares of Incubator shareholders   12,134,610    90%
Total post-transaction shares   13,482,900    100%

 

The Agreement was submitted to the ADAC shareholders and approved by vote of the preferred shares (representing 51 percent of the total vote), and then reported to the common shareholders on the Schedule 14C Information Statement filed with the SEC on December 18, 2015, mailed to the common shareholders on that date, and effective 20 days later, on January 7, 2016. The Agreement and transaction were subject to satisfaction of certain stated conditions to closing, including effectiveness of the Schedule 14C, the Financial Industry Regulatory Association (FINRA) approval of the corporate name change, symbol change and reverse split, and our remaining current on our required SEC filings.  The 10-Q for the quarter ended June 30, 2015 was not filed until October 13, 2015 and the 10-Q for December 31, 2015 was filed on November 4, 2015.  The Preliminary Schedule 14C was then filed November 6, 2015, after the October 15, 2015 outside closing date in the Agreement; however, the Agreement also provides that, after October 15, 2015 if the transaction had not closed, any party could then terminate the Agreement by notice to the other parties, except that no party which was in default of a closing requirement, in breach of the agreement, could elect unilaterally to terminate the Agreement.  The Company was in breach of the Agreement at October 15, 2015 but there has been no notice by any party to terminate the Agreement at any time after October 15, and the parties expressly retained the power to extend the closing date in the Agreement.

 

The Company, by Board resolutions, approved the extension of the closing date on October 15, 2015 (to January 31, 2016) and then approved an extension again on January 31 to a date 10 days after FINRA approval of the reverse split and corporate name change. 

 

 F- 13 

 

 

Note 9 Subsequent Events

 

The Company submitted a Notice of Corporate Action to FINRA on December 30, 2015 requesting approval of the reverse split, name change and symbol change, as the final step in the acquisition process (see Note 8); however, on March 21, 2016, FINRA formally notified the Company that it would not approve the requested corporate action. The FINRA response letter, a copy of which is filed with this Annual Report as Exhibit 99.1 stated that the corporate action request was deficient under FINRA Rule 6490(d)(3)(4) because FINRA had “actual knowledge” (provided by us) that “a person connected to the Issuer …may be potentially involved in fraudulent activities…” The “person” referenced by FINRA in the deficiency letter was Asher Enterprises, Inc., and its President, Curt Kramer, who was the subject of an SEC Cease and Desist Order (Administrative Proceeding File No. 3-15621, because Asher Enterprises, Inc. then held 4,166,667 of our common shares (approximately 1.2 percent of the outstanding shares) and two convertible promissory notes in the original principal amounts of $30,000 and $32,500 issued November 15, 2011 and April 17, 2012, respectively. Although we explained to FINRA that the Company had had no contact with Asher Enterprises, Inc. or Curt Kramer since 2012, that neither had any involvement of any kind in the company, other than as a passive investor, and that management since 2013 had had no dealings with them, FINRA apparently had concerns that Asher Enterprises, Inc. could continuously convert the notes into our common stock subject to a waivable 4.99 percent limit on holdings. Accordingly, our filing was deemed deficient.

 

The Company along with Incubator Holdings, Inc. has subsequently been in contact with Asher Enterprises, Inc., and has been advised that neither Asher Enterprises, Inc., nor any officer, director or affiliate of Asher Enterprises, Inc., currently holds any stock or other equity interest in the Company. We have entered into a Settlement and Release Agreement with Asher Enterprises, Inc. dated May 2, 2016, under which Asher Enterprises, Inc. has agreed to accept $50,000 in full payment and satisfaction of all debts owed to it by the Company, including the two convertible notes and further agreed that, pending payment of the settlement amount due on or before May 10, 2016, Asher Enterprises, Inc. would not elect to convert any portion of the two convertible notes into common stock. Accordingly, payment of the settlement amount will completely terminate any connection of any kind between us and Asher Enterprises, Inc., so the adverse conditions which caused FINRA to deny our request for the corporate name change, symbol change and reverse split have been eliminated. We intend to file a new Notice of Corporate Action with FINRA, seeking the same results, immediately upon the filing of this Annual Report with the SEC. All other aspects of the proposed acquisition transaction with Incubator Holdings have been approved and completed, and the Company anticipates completing the transaction in June, 2016 as soon as FINRA approval has been obtained.

 

On March 31, 2016, Mr. Choo appointed John Griffin as a director of the Company and thereafter resigned as an officer and director. Mr. Griffin then was appointed as Chairman, CEO, President and Secretary and now serves as our sole officer and director. Mr. Griffin also serves as President of Incubator Holdings, Inc. This change in management was reported on a Form 8-K filed with the SEC on April 15, 2016.

 

 F- 14