Attached files
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| EX-32 - ADM ENDEAVORS, INC. | ex32.htm |
| EX-31 - ADM ENDEAVORS, INC. | ex31.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal year ended December 31, 2017
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission File No. 333-191618
ADM ENDEAVORS, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 45-0459323 | |
| (State or Other Jurisdiction of | (I.R.S. Employer | |
| Incorporation or Organization) | Identification No.) |
| 2021 N 3rd St., Bismarck, ND | 58501 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(701) 226-9058
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]
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 registrant’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 registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| Large accelerated filer | [ ] | Accelerated filer | [ ] |
| Non-accelerated filer | [ ] | Smaller reporting company | [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2017: $14,542,000.
As of April 13, 2018, the issuer had 129,315,500 shares of its common stock issued and outstanding.
| TABLE OF CONTENTS |
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Forward-Looking Information
This Annual Report of ADM Endeavors, Inc. on Form 10-K contains forward-looking statements within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended, that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our industry, our beliefs and our assumptions. Words such as “anticipate,” “expects,” “intends,” “plans,” “believes,” “seeks” and “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-K. Investors should carefully consider all of such risks before making an investment decision with respect to the Company’s stock. The following discussion and analysis should be read in conjunction with our financial statements for ADM Endeavors, Inc. Such discussion represents only the best present assessment from our Management.
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The Company
We began operations in 1988, under the ownership and control of Ardell Mees, who provided installation services to grocery decor design companies. As our reputation for excellent workmanship has grown, we have expanded our operations to serve a larger geographic region. On January 4, 2001, we incorporated in North Dakota as ADM Enterprises, Inc. On May 9, 2006, the Company changed both its name to ADM Endeavors, Inc. (“ADM Endeavors,” or the “Company,” “we,” “us,” or “our”) and its domicile to the state of Nevada. On July 1, 2008, the Company acquired all of the assets of ADM Enterprises, LLC (“ADM Enterprises”), a sole proprietorship owned by Ardell and Tammera Mees, in exchange for 10,000,000 newly issued shares of our common stock. As a result, ADM Enterprises became a wholly-owned subsidiary of Company. Even though the Company was incorporated on January 4, 2001, it had no operations until the share exchange agreement with ADM Enterprises on July 1, 2008. All business operations are those solely of the Company’s wholly-owned subsidiary, ADM Enterprises.
In May 2013, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital. The authorized common stock increased to 800,000,000 shares at a par value of $0.001 per share and preferred stock increased to 80,000,000 shares at a par value of $0.001 per share.
Current Business Operations
We provide customized construction and installation of grocery store decor for both new and renovated grocery stores. Our service and expertise include the installation of grocery checkout stands, grid ceilings, cart-stops, shelving, customer service counter, office cabinetry and other grocery store equipment and fixtures. Our clients primarily consist of design companies, most of whom are subsidiaries of major retail grocery chains, or are affiliated with Associated Wholesale Grocers, the nation’s second largest retailer-owned grocery wholesaler. We believe that our success is the result of both our quality installation of grocery equipment and fixtures, and high level of personal service that we provide to our customers. We receive bid requests from all regions of the United States. Therefore, we are seeking to expand our operations to service additional geographic areas.
The majority of our contracts have been in the Midwestern United States including North Dakota, Kansas, Minnesota, Missouri, Oklahoma and Texas. Over the past 25 years, ADM Endeavors has completed projects in 25 states, including North Dakota, South Dakota, Minnesota, Montana, Nebraska, Wyoming, Kansas, Colorado, Oklahoma, Illinois, Idaho, Indiana, Iowa, Arkansas, Missouri, Texas, Tennessee, Kentucky, Michigan, Ohio, Pennsylvania, California, Nevada, and Florida.
The main focus of our expansion plan includes primarily the Midwestern United States including the states of North Dakota, South Dakota, Minnesota, Iowa, Wisconsin, Wyoming, Nebraska, and Kansas, as well as some southern states such as Texas, Oklahoma, Mississippi.
To effectuate our business plan during the next twelve months, we must increase our current customer base, as well as acquire additional employees and equipment so that we may accommodate our expanded customer base. We anticipate that we will establish an online presence to increase our market visibility and corporate recognition. We believe we can establish our industry presence and stimulate interest by constructing a trade show booth to market our services when we attend annual grocer tradeshows and conventions.
Use of Grocery Decor Installation Services in the Construction and Remodeling Industry has grown tremendously in recent years. The retail grocery industry is highly competitive and requires constant innovations to attract and retain customers. Accordingly, neighborhood markets battle for patrons by catering to customers’ desires for a modern, clean, and convenient shopping experience. Grocery stores, therefore, typically renovate every five to six years to maintain a new image.
In the past, store workers, painters or carpenters installed decor items. However, as the designs and materials became increasingly elaborate, the need for specialized and experienced installers grew. The installation process requires that an installer have special knowledge of various aspects of construction, including framing, finishing, and remodeling. Additionally, knowledge of standards for product usage, hanging methods and quality control are extremely helpful. As a result of the frequency of store renovations, coupled with the complexity of the items being installed secures the demand for custom installation services.
The Company reports its business under the following SIC Codes:
| SIC CODE | Description | |
| 1799 | Special Trade Contractors, Not Elsewhere Classified |
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Competition
We believe that the installation business competes on price, reputation for quality, timeliness, familiarity with retail construction, the availability of aggregate materials and financial strength. We believe that we compete favorably on the basis of the foregoing factors. The market for construction services, particularly services to national retail chains, is highly competitive. Several of our competitors are larger, better known and have substantially greater marketing, financial, personnel and other resources, including established reputations and working relationships, than we do. We cannot guaranty that our services will continue to be competitive in the market place. Our primary competitor in our respective market area of the Midwest is PFI, Inc., based in Denver, Colorado.
ADM ‘s chief competitors are located primarily in larger cities. The following identifies those with whom ADM competes on a regular basis and their applicable market share:
| Competitor | Location | Market Share | ||
| PFP | Kansas City, MO | 20% | ||
| A.N. Decor | Minneapolis, MN | 20% | ||
| PFI, Inc. | Denver, CO | 60% | ||
| Twin Store Fixtures | Chicago, Ill | 40% | ||
| Jamison Sign Co. | Spokane, WA | 30% |
These particular locations are representative of the markets in which ADM already does a small percentage of business. Because of past success in these markets, it is ADM’s belief that establishing a full-time presence will build revenues very quickly.
ADM’s reputation in the industry will be the basis for expanding into these new markets. Word of mouth and designer referrals has led to the company’s success up to the present time. Consequently, ADM staff will contact any and all designers in these designated markets to obtain referrals and will send introductory letters upon entering the market.
Some of the targeted markets for expansion currently are showing enough demand for services that the full-time presence is already justified and those locations would grow even more quickly. Those select locations are scheduled first for expansion.
Compliance with Government Regulation
We believe that we are and will continue to be in compliance in all material respects with applicable statutes and the regulations passed in the United States. There are no current orders or directions relating to our company with respect to the foregoing laws and regulations.
Environmental Regulations
We do not believe that we are or will become subject to any environmental laws or regulations of the United States. While our products and business activities do not currently violate any laws, any regulatory changes that impose additional restrictions or requirements on us or on our products or potential customers could adversely affect us by increasing our operating costs or decreasing demand for our products or services, which could have a material adverse effect on our results of operations.
Bankruptcy or Similar Proceedings
There has been no bankruptcy, receivership or similar proceeding pertaining to the Company.
Reorganizations, Purchase or Sale of Assets
There have been no material reclassifications, mergers, consolidations, purchases or sales of a significant amount of assets not done in the ordinary course of business pertaining to the Company.
Patents, Trademarks, Franchises, Concessions, Royalty Agreements, or Labor Contracts
The Company claims no ownership of any patent or trademark, nor is it bound by any outstanding royalty agreements related thereto.
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Employees
The Company only has one employment agreement with its chief executive officer and chief financial officer. On January 3, 2015 and on January 3, 2017, the Company executed a two-year employment agreement, respectively, with Ardell D. Mees, the Company’s Chief Executive Officer and Chief Financial Officer. As compensation for services, Mr. Mees is to receive an annual base salary of $72,000.
Company Information
The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is www.sec.gov.
As a smaller reporting company, we are not required to provide the information required by this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
Description of Property
The Company currently maintains its corporate office at 2021 N. 3rd St., Bismarck, North Dakota 58501. At this location, Ardell D. Mees provides two office spaces for the exclusive use of the Company. No monthly fee is being charged to the Company, as management believes such cost is nominal and so forth does not recognize any rent expense in the financial statements. The Company rents a storage unit for exclusive use of the Company in Mandan, North Dakota for a total cost of $1,560 per year.
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of April 13, 2018, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELAED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
The Company accepted effective status as a reporting company on September 18, 2013 through the filing of an S-1 registration statement with the Securities and Exchange Commission. As of the filing date of this annual report, there is no market for the Company’s stock. The Company is working with a market maker and is planning to submit its application to FINRA to acquire a ticker symbol in the near future. The Company plans on listing the stock for quotation on the Over-The-Counter Markets and will submit an application with FINRA for a trading symbol.
Holders
As of December 31, 2017, there were approximately 129,315,500 shares of common stock issued and outstanding, held by 49 stockholders of record. The number of stockholders of record does not include beneficial owners of our common stock, whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.
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Dividend Policy
We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. The declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then-current financial condition, results of operations, capital requirements, and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends.
Equity Compensation Plans
The Company does not sponsor any compensation plan under which equity securities are authorized for issuance.
Penny Stock
Our common stock is considered “penny stock” under the rules the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ Stock Market System, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that:
| ● | contains a description of the nature and level of risks in the market for penny stocks in both public offerings and secondary trading; |
| ● | contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities’ laws; contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; |
| ● | contains a toll-free telephone number for inquiries on disciplinary actions; |
| ● | defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and |
| ● | contains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation. |
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with:
| ● | bid and offer quotations for the penny stock; |
| ● | the compensation of the broker-dealer and its salesperson in the transaction; |
| ● | the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the marker for such stock; and |
| ● | monthly account statements showing the market value of each penny stock held in the customer’s account. |
In addition, the penny stock rules that require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgement of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.
Common and Preferred Shares Authorized
The Company was incorporated on January 4, 2001, at which time the Company authorized 300,000,000 shares of common stock with $0.001 par value and 30,000,000 shares of preferred stock with $0.001 par value.
In May 2013, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital. The authorized common stock increased to 800,000,000 shares at a par value of $0.001 per share and preferred stock increased to 80,000,000 shares at a par value of $0.001 per share.
On June 5, 2013, the Company designated 80,000,000 preferred shares as Series A Convertible Preferred Stock which has the voting power equal to 100 common shares per each share of preferred stock. Each Series A Convertible Preferred Stock is convertible into 10 common shares at any time by the holder. As of December 31, 2017, there are no preferred shares outstanding.
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Forward Looking Statements
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended, that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our industry, our beliefs and our assumptions. Words such as “anticipate,” “expects,” “intends,” “plans,” “believes,” “seeks” and “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-K. Investors should carefully consider all of such risks before making an investment decision with respect to the Company’s stock. The following discussion and analysis should be read in conjunction with our financial statements and summary of selected financial data for ADM Endeavors, Inc. Such discussion represents only the best present assessment from our Management.
Current and Planned Operations
Currently, the Company has to travel to and from its only office in North Dakota to the mid-west to bid and compete for sales. The Company hopes to expand operations by opening a satellite office in the mid-western region whereby it could aggressively bid on projects easier and more efficiently. The Company also plans to mitigate the uncertainty of the U.S. economy by increasing its customer base to include mid-sized grocery chains as well.
The large national supermarket chains usually remodel their stores every four to six years. The Company has noticed that national chains will more typically begin remodeling projects in the second half of the year, with completion before the holiday season. The majority of the Company’s revenues are derived from Super Valu, Inc or Associated Wholesale Grocers which are two of many interior grocery store décor design companies. The duration of the contracts awarded can range anywhere from one week to one month, depending on how large the store is. It normally takes 21 to 30 days upon completion of projects to be paid in full.
Expanding the Company’s market reach and physical presence is the key to its continued growth. Because current ADM staff is limited by geographic considerations when bidding for jobs, it is necessary to provide more staff in more regions. Below is a list of planned district offices for the Company and the geographical areas they will serve. Through the Company’s efforts to go public and enter the equities markets, the Company is seeking to secure additional funds from outside investors to execute its planned expanded operations in the near future. The Company has not entered into any agreements, verbal or written, with regards to securing additional funding necessary to finance planned future operations. Moreover, there are no agreements in place with any officer of the Company nor with outside entities to fund the Company if it were to have a shortfall in capital. It is estimated that each of the Company’s five targeted expansion areas will require approximately $200,000 each in startup capital for a total of $1,000,000 over a two-year rollout period.
Bismarck, North Dakota will continue to remain the headquarters for the Company. Because approximately 80% of the Company’s current clients come from the Kansas City area, this is the first area targeted for expansion.
| District Location | Geographic Area | Target Date | ||
| Kansas City, MO | Missouri, Kansas, Oklahoma, Arkansas | March 1, 2019 | ||
| Minneapolis, MN | Minnesota, Iowa, Wisconsin, Northern Illinois, and the UP of Michigan | September 1, 2019 | ||
| Denver, CO | Colorado, Wyoming, Western Nebraska, and Western Kansas | March 1, 2020 | ||
| Chicago, IL | Illinois, Indiana, Michigan, and Eastern Wisconsin | September 1, 2020 | ||
| Spokane, WA | Washington, California, Idaho, and Montana | March 1, 2021 |
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The Company hopes this expansion will result in large revenue gains over the next three years. As each new location becomes self-sufficient, revenues will grow proportionately. In order to ensure each location is self-sufficient as quickly as possible, the Company will implement an expansion plan company wide, including the following practices:
| ● | A full technological update, which will include the installation of a computer network with its main server located in Bismarck, North Dakota. Each outlying location will have a computer station so as to centralize each location. The headquarters will continue to be responsible for all accounting, billing, tracking, administrative, and management activities. Each location will simply provide data inputs of current activity to keep data current at all times. |
COMPARISON OF THE YEAR ENDED DECEMBER 31, 2017 TO THE YEAR ENDED DECEMBER 31, 2016
Results of Operations
Revenue
For the year ended December 31, 2017, the Company had revenues of $159,836 compared to $189,406 for the same period in 2016. The decrease in revenue of $29,570, or 15.6%, is primarily due to reduction in customers during the 4th quarter of 2017.
Cost of Revenues
The cost of revenues for the year ended December 31, 2017 was $27,156 compared to $53,290 for the same period in 2016. Cost of revenues for 2017 was 17.0% of revenue compared to 28.1% of revenue for 2016. The primary cause of the decrease in the cost revenue was due to the decrease in revenues whereas the decrease in the percent of revenue was primarily due to increased efficiencies.
General and Administrative Expenses
The general and administrative expenses was $808,013 for the year ended December 31, 2017 compared to $900,911 for the same period in 2016. The expenses decreased in 2017 primarily due to the decrease in consulting expenses in 2017.
Net Loss
The net loss for the year ended December 31, 2017 was $688,165 compared to $771,946 for the same period in 2016.
Liquidity and Capital Resources
General
At December 31, 2017, we had cash of $9,356. We have historically met our cash needs through a combination of cash flows from operating activities and proceeds from loans and financing by our officers and directors. Our cash requirements are generally for selling, general and administrative activities. We believe that our cash balance is not sufficient to finance our cash requirements for expected operational activities, capital improvements, and partial repayment of debt through the next 12 months.
Our operating activities used cash of $64,835 for the year ended December 31, 2017, and we had $65,352 of cash used in operations during the same period in 2016. The principal elements of cash flow from operations for the year ended December 31, 2017, included a net loss of $688,165.
Cash used in investing activities during the year ended December 31, 2017, was $0 compared to $4,757 during the same period in 2016.
Cash generated in our financing activities was $58,230 for the year ended December 31, 2017, compared to cash generated of $40,067 during the comparable period in 2016. Cash generated was reduced by principal repayments on notes payable of $4,247 and $4,138, respectively.
As of December 31, 2017, current liabilities exceeded current assets. Current assets decreased from $16,156 at December 31, 2016, to $9,356 at December 31, 2017, whereas current liabilities increased from $235,824 at December 31, 2016, to $345,195 at December 31, 2017.
| For the years ended | ||||||||
| December 31, | ||||||||
| 2017 | 2016 | |||||||
| Cash used in operating activities | $ | (64,835 | ) | $ | (65,352 | ) | ||
| Cash used in investing activities | - | (4,757 | ) | |||||
| Cash provided by financing activities | 58,230 | 40,067 | ||||||
| Net changes to cash | $ | (6,605 | ) | $ | (30,042 | ) | ||
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Going Concern
The Company has a net loss for the year ended December 31, 2017 of $688,165 and a working capital deficit as of December 31, 2017 of $335,838 and has used cash in operations of $64,835 for the year ended December 31, 2017. In addition, as of December 31, 2017, the Company had a stockholders’ deficit and accumulated deficit of $338,987 and $15,932,612, respectively. Without further funding, these conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements.
There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.
Off Balance Sheet Arrangements
The Company currently has no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies and Estimates
Use of Estimates
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 and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Such estimates include management’s assessments of the carrying value of certain assets, useful lives of assets, and related depreciation and amortization methods applied.
Fair Value of Financial Instruments and Fair Value Measurements
The Company measures their financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses escrow liability and short-term loans the carrying amounts approximate fair value due to their short maturities.
We have adopted accounting guidance for financial and non-financial assets and liabilities. The adoption did not have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
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Revenue Recognition
The Company recognizes revenue for our services in accordance with ASC 605-10, “Revenue Recognition in Financial Statements.” Under these guidelines, revenue is recognized on transactions when all of the following exist: persuasive evidence of an arrangement did exist, delivery of service has occurred, the sales price to the buyer is fixed or determinable and collectability is reasonably assured. The Company has one revenue stream of providing installation services to grocery decor design companies.
Stock-Based Compensation
The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model.
Recently Issued Accounting Pronouncements
We have decided to take advantage of the exemptions provided to emerging growth companies under the JOBS Act and as a result our financial statements may not be comparable to companies that comply with public company effective dates. We may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, delay compliance with new or revised accounting standards that have different effective dates for public and private companies until they are made applicable to private companies.
Company management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As the Company is a “smaller reporting company,” this item is inapplicable.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by Item 8 are presented in the following order:
TABLE OF CONTENTS
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of ADM Endeavors, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of ADM Endeavors, Inc. (the Company) as of December 31, 2017 and 2016, and the related statements of income, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2017, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financials have been prepared assuming the Company will continue as a going concern. As of December 31, 2017, the Company had accumulated losses of approximately $15,935,000, has generated limited revenue, has negative working capital of approximately $330,000, and may experiences losses in the near term. These factors and the need for additional financing in order for the Company to meet its business plan, raise substantial doubt about its ability to continue as a going concern. Management’s plan to continue as a going concern is also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Company’s auditors since 2015.
/s/ Soles, Heyn & Company, LLP
Soles, Heyn & Company, LLP
West Palm Beach, Florida
April 17, 2018
| 13 |
ADM ENDEAVORS, INC.
| December 31, 2017 | December 31, 2016 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 9,356 | $ | 15,960 | ||||
| Accounts receivable | - | 196 | ||||||
| Total current assets | 9,356 | 16,156 | ||||||
| Properties and equipment, net | 7,180 | 17,676 | ||||||
| Total assets | $ | 16,536 | $ | 33,832 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 112,689 | $ | 70,514 | ||||
| Accrued expenses | 90,015 | 80,696 | ||||||
| Customer deposits | - | 5,000 | ||||||
| Due related party | 137,885 | 75,408 | ||||||
| Current portion of note payable | 4,606 | 4,206 | ||||||
| Total current liabilities | 345,195 | 235,824 | ||||||
| Note payable, net of current portion | 10,328 | 14,975 | ||||||
| Total liabilities | 355,523 | 250,799 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred stock; $0.001 par value, 80,000,000 shares authorized, none issued | - | - | ||||||
| Common stock; $0.001 par value, 800,000,000 shares authorized, 129,315,500 and 123,170,000 shares issued and outstanding, respectively | 129,316 | 127,051 | ||||||
| Additional paid in capital | 15,464,309 | 14,900,429 | ||||||
| Accumulated deficit | (15,932,612 | ) | (15,244,447 | ) | ||||
| Total stockholders’ deficit | (338,987 | ) | (216,967 | ) | ||||
| Total liabilities and stockholders’ deficit | $ | 16,536 | $ | 33,832 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| 14 |
ADM ENDEAVORS, INC.
Consolidated Statements of Operations
| For the Years Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
| Revenues | $ | 159,836 | $ | 189,406 | ||||
| Cost of revenues | 27,156 | 53,290 | ||||||
| Gross margin | 132,680 | 136,116 | ||||||
| Operating expenses: | ||||||||
| General and administrative | 139,787 | 133,674 | ||||||
| Consulting expense | 559,896 | 645,750 | ||||||
| Officer compensation | 87,108 | 89,070 | ||||||
| Travel | 21,222 | 32,417 | ||||||
| Total operating expenses | 808,013 | 900,911 | ||||||
| Operating loss | (675,333 | ) | (764,795 | ) | ||||
| Other expenses | ||||||||
| Interest expense | 12,832 | 7,151 | ||||||
| Total other expenses | 12,832 | 7,151 | ||||||
Provision for income taxes |
- |
- |
||||||
| Net loss | $ | (688,165 | ) | $ | (771,946 | ) | ||
| Net loss per share - basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
| Weighted average number of shares outstanding – basic and diluted | 128,272,703 | 125,908,651 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 15 |
ADM ENDEAVORS, INC.
Consolidated Statements of Cash Flow
| 2016 | 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITES: | ||||||||
| Net loss | $ | (688,165 | ) | $ | (771,946 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Common stock issued for services | 566,145 | 645,751 | ||||||
| Bad debt expense | 196 | - | ||||||
| Depreciation | 10,496 | 7,925 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | - | 39,813 | ||||||
| Accounts payable | 42,175 | 43,988 | ||||||
| Customer deposits | (5,000 | ) | 5,000 | |||||
| Accrued expenses | 9,318 | (35,883 | ) | |||||
| Cash flows used in operating activities | (64,835 | ) | (65,352 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of equipment | - | (4,757 | ) | |||||
| Net cash used in investing activities | - | (4,757 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Payments on note payable | (4,247 | ) | (4,138 | ) | ||||
| Proceeds from shareholder loan | 62,477 | 44,205 | ||||||
| Net cash provided by financing activities | 58,230 | 40,067 | ||||||
| Net decrease in cash | (6,605 | ) | (30,042 | ) | ||||
| Cash at beginning of period | 15,960 | 46,002 | ||||||
| Cash at end of period | $ | 9,355 | $ | 15,960 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid during the year for: | ||||||||
| Interest | $ | 12,832 | $ | 7,151 | ||||
| Franchise and income taxes | $ | - | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial statements.
| 16 |
ADM ENDEAVORS, INC.
STATEMENTS OF CONSOLIDATED STOCKHOLDERS’ DEFICIT
| Additional | ||||||||||||||||||||
| Common | Common | Paid in | Accumulated | |||||||||||||||||
| Shares | Stock | Capital | Deficit | Total | ||||||||||||||||
| Balance December 31, 2015 | 124,467,916 | $ | 124,468 | $ | 14,257,261 | $ | (14,472,501 | ) | $ | (90,772 | ) | |||||||||
| Stock issued for services | 350,000 | 350 | 87,150 | - | 87,500 | |||||||||||||||
| Stock to be issued for services | 2,233,001 | 2,233 | 556,018 | 558,251 | ||||||||||||||||
| Net loss for the year ended | - | - | - | (771,946 | ) | (771,946 | ) | |||||||||||||
| Balance December 31, 2016 | 127,050,917 | 127,051 | 14,900,429 | (15,244,447 | ) | (216,967 | ) | |||||||||||||
| Stock to be issued for services | 2,264,583 | 2,265 | 563,880 | - | 566,145 | |||||||||||||||
| Net loss for the year ended | - | - | - | (688,165 | ) | (688,165 | ) | |||||||||||||
| Balance December 31, 2017 | 129,315,500 | $ | 129,316 | $ | 15,464,309 | $ | (15,244,447 | ) | $ | (338,987 | ) | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 17 |
ADM ENDEAVORS, INC.
Notes to the Consolidated Financial Statements
December 31, 2017
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
We began operations in 1988, under the ownership and control of Ardell Mees, who provided installation services to grocery decor design companies. As our reputation has grown, we have expanded our operations to serve a larger geographic region. On January 4, 2001, we incorporated in North Dakota as ADM Enterprises, Inc. On May 9, 2006, the Company changed both its name to ADM Endeavors, Inc. (“ADM Endeavors,” also, the “Company,” “we,” “us,” or “our”) and its domicile to the state of Nevada. On July 1, 2008, the Company acquired all of the assets of ADM Enterprises, LLC (“ADM Enterprises”), a sole proprietorship owned by Ardell and Tammera Mees, in exchange for 10,000,000 newly issued shares of our common stock. As a result, ADM Enterprises became a wholly owned subsidiary of the Company. Even though the Company was incorporated on January 4, 2001, it had no operations until the share exchange agreement with ADM Enterprises on July 1, 2008. All business operations are those solely of the Company’s wholly-owned subsidiary ADM Enterprises.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include all of the accounts of the Company and its wholly-owned subsidiary, AMD Enterprises, at December 31, 2017 and 2016. All significant intercompany balances and transactions have been eliminated.
Going Concern
The Company has sustained losses and may continue to experience losses in the near term. We continue to be dependent on sales of our equity securities and debt financing to meet our cash requirements for the future proposed expansion of operations. The Company needs to maintain a steady operating structure, ensuring that expenses are contained such that profits are consistently achieved. In order to expand the Company’s business, the Company would likely require additional financing. Management of the Company must continually develop and refine its strategies and goals in order to execute the business plan of the Company on a broad scale and expand the business.
Failure to raise adequate capital and generate adequate revenues could result in the Company having to curtail or cease operations. The Company’s ability to raise additional capital through the future issuances of the common stock or debt is unknown. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern; however, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classifications of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Use of Estimates
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 and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Such estimates include management’s assessments of the carrying value of certain assets, useful lives of assets, and related depreciation methods applied.
Cash equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At December 31, 2017 and 2016, the Company had no cash equivalents.
Fair value of financial instruments
The Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements.
The Fair Value Topic 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. It requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. It also establishes a fair value hierarchy, which prioritizes the valuation inputs into three broad levels.
| 18 |
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
A) Market approach—Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Prices may be indicated by pricing guides, sale transactions, market trades, or other sources;
B) Cost approach—Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost); and
C) Income approach—Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about the future amounts (includes present value techniques, and option-pricing models). Net present value is an income approach where a stream of expected cash flows is discounted at an appropriate market interest rate.
Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. An active market for an asset or liability is a market in which transactions for the asset or liability occur with significant frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Example of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on the Company’s assessment of the assumptions that are market participants would use in pricing the asset or liability.
The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid consulting expense, accounts payable, and note payable approximate their fair value because of the short maturity of those instruments. The Company’s note payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2017 and 2016.
The Company had no assets or liabilities measured at fair value on a recurring basis at December 31, 2017 and 2016.
Property and Equipment
Property and equipment are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life of three years for equipment, five years for automobile, and seven years for furniture and fixtures. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in statements of operations.
Impairment of long-lived assets
The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
The Company determined that there were no impairments of long-lived assets at December 31, 2017 and 2016.
Revenue recognition
The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. In addition, the Company records allowances for accounts receivable that are estimated to not be collectible.
| 19 |
Stock-Based Compensation
In December 2004, the FASB issued FASB Accounting Standards Codification No. 718, Compensation – Stock Compensation. Under FASB Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company applies this statement prospectively.
Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards Codification No. 718. FASB Accounting Standards Codification No. 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB Accounting Standards Codification.
Net Loss per Share
The Company computes basic and diluted loss per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic loss per share is computed by dividing net loss available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share is computed by dividing net loss available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.
There were no potentially dilutive shares outstanding at December 31, 2017 and 2016.
Income Taxes
The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry-forwards and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled.
The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.
Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions as of December 31, 2017 and 2016. Interest and penalties in any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the periods ended December 31, 2017 and 2016.
On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carry forward net operating losses previously accumulated and results in a revaluation of deferred tax assets recorded on our balance sheet. Given that the deferred tax assets are offset by a full valuation allowance, these changes will have no net impact on the Company’s financial position and net loss. However, if and when we become profitable, we will receive a reduced benefit from such deferred tax assets. Had this legislation passed prior to our June 30, 2017, fiscal year-end, the effect of the legislation would have been a reduction in deferred tax assets and the corresponding valuation allowance.
Recently issued accounting pronouncements
In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU No. 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. The new standard is effective for annual reporting periods beginning after December 15, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has reviewed the provisions of this ASU to and determined there will be no material impact on our results of operations, cash flows or financial condition.
| 20 |
In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments in this Update are intended render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606. The Company has reviewed the provisions of this ASU to and determined there will be no material impact on our results of operations, cash flows or financial condition.
The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Company’s financial statement.
NOTE 3 – PROPERTY AND EQUIPMENT
Fixed assets, stated at cost, less accumulated depreciation at December 31, 2017 and 2016 consisted of the following:
| December 31, 2017 | December 31, 2016 | |||||||
| Equipment | $ | 10,489 | $ | 10,489 | ||||
| Trucks | 35,000 | 35,000 | ||||||
| Less: accumulated depreciation | (38,309 | ) | (27,813 | ) | ||||
| Property and equipment, net | $ | 7,180 | $ | 17,676 | ||||
Depreciation expense
Depreciation expense for the years ended December 31, 2017 and 2016 was $10,496 and $7,925 respectively.
NOTE 4 – NOTE PAYABLE
On March 3, 2014, the Company purchased a vehicle to use for projects that require management to work extended stays on location. The Company paid $5,000 as a down payment and financed $30,015 with 4.122% APR due on March 10, 2021. The loan calls for monthly payments of $412.
As of December 31, 2017, and 2016, the Company has a note payable balance of $14,934 and $19,181, respectively.
| Future minimum debt payments: | ||||
| 2018 | $ | 4,425 | ||
| 2019 | 4,607 | |||
| 2020 | 4,796 | |||
| 2021 | 1,106 | |||
| Total minimum lease payments | $ | 14,934 | ||
| 21 |
NOTE 5 – RELATED PARTY TRANSACTIONS
The Company has been provided office space by its chief executive officer, Ardell Mees, at no cost. Management has determined that such cost is nominal and did not recognize the rent expense in its financial statements.
During the years ended December 31, 2017 and 2016, a related party advanced the Company $62,477 and $44,205, respectively. The amounts are non-interest bearing and payable upon demand. The imputed interest is immaterial.
Employment Agreement
On January 3, 2015 and January 3, 2017, the Company executed a two-year employment agreement, respectively, with Ardell D. Mees, the Company’s Chief Executive Officer and Chief Financial Officer. As compensation for services, Ms. Mees is to receive an annual base salary of $72,000. The amount payable to Mr. Mees at December 31, 2017 and 2016 was $83,132 and $87,892, respectively.
Consulting Agreements
During the year ended December 31, 2016 the Company issued 927,084 shares of common stock valued at $231,771 related to the 2015 consulting agreement and 1,297,916 shares of common stock valued at $324,479 related to the 2016 consulting agreement to a related party.
During the year ended December 31, 2017 the Company issued 952,083 shares of common stock valued at $238,021 related to the 2016 consulting agreement and 1,312,500 shares of common stock valued at $328,124 related to the 2017 consulting agreement to a related party.
NOTE 6 – STOCKHOLDERS’ EQUITY
Our Articles of Incorporation authorize the issuance of 800,000,000 shares of common stock and 80,000,000 shares of preferred stock, both $0.001 par value per share. There were 129,315,500 and 127,050,917 outstanding shares of common stock and no outstanding shares of Preferred stock at December 31, 2017 and 2016, respectively. Need to add the fact that the Company issues 328,124 under the 2016 contract – the total for both the 2016 and 2017 agreements was $566,145.
Common shares issued and to be issued
On May 30, 2016, the Company granted 2,250,000 shares of common stock valued at $562,500 or $0.25 per share for consulting services to a related party. The $562,500 is being amortized over the one-year term on the contract. During the year ended December 31, 2017, the Company recognized consulting expense of $238,021 related to this grant.
On July 26, 2016, the Company granted 350,000 shares valued at $87,500, or $0.25 per share, for consulting services.
On May 30, 2017, the Company granted 2,250,000 common shares valued at $562,500 for consulting services to a related party. The $562,500 is being amortized over the one-year term on the contract.
During the year ended December 31, 2017, the Company issued 1,312,500 shares of common stock valued at approximately $328,125, or $0.25 per share.
NOTE 7 – CONCENTRATION OF CUSTOMER
For the year ended December 31, 2017, the Company has three customers which amounted to substantially all of its sales with one of the customers equaling 82%. For the year ended December 31, 2016 the Company has two customers which amounted to substantially all of its sales with one of the customers equaling 90.05%.
NOTE 8 – INCOME TAXES
On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “TCJA”) that significantly reforms the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The TCJA, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, effective as of January 1, 2018; limitation of the tax deduction for interest expense; limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, in each case, for losses arising in taxable years beginning after December 31, 2017 (though any such tax losses may be carried forward indefinitely); modifying or repealing many business deductions and credits, including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions generally referred to as “orphan drugs;” and repeal of the federal Alternative Minimum Tax (“AMT”).
| 22 |
The staff of the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the TCJA. In connection with the initial analysis of the impact of the TCJA, the Company remeasured its deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The remeasurement of the Company’s deferred tax assets and liabilities was offset by a change in the valuation allowance.
The Company is still in the process of analyzing the impact to the Company of the TCJA. Where the Company has been able to make reasonable estimates of the effects related to which its analysis is not yet complete, the Company has recorded provisional amounts. The ultimate impact to the Company’s consolidated financial statements of the TCJA may differ from the provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the TCJA. The accounting is expected to be complete when the Company’s 2017 U.S. corporate income tax return is filed in 2018.
At December 31, 2017 and 2016 respectively, the Company had net operating loss carryforwards for income tax purposes of $120,685 and $239,740 available as offsets against future taxable income. The net operating loss carryforwards are expected to expire at various times from 2017 through 2037. Utilization of the Company’s net operating losses may be subject to substantial annual limitation if the Company experiences a 50% change in ownership, as provided by the Internal Revenue Code and similar state provisions. Such an ownership change would substantially increase the possibility of net operating losses expiring before complete utilization.
The provision for income taxes is different than would result from applying the U.S. statutory rate to profit before taxes for the reasons set forth in the following reconciliation:
| 2017 | 2016 | |||||||
| Tax benefit computed at U.S. Statutory rate | $ | (143,650 | ) | $ | (262,462 | ) | ||
| Increase (decrease) in taxes resulting from: | ||||||||
| Non-deductible items | 118,891 | 219,555 | ||||||
| Change in valuation allowance | (30,053 | ) | (47,487 | ) | ||||
| State taxes | (5,384 | ) | (5,192 | ) | ||||
| Total | $ | - | $ | - | ||||
The tax effects of the primary temporary differences giving rise to the Company’s deferred tax assets and liabilities are as follows for the year ended December 31, 2017 and 2016:
| 2017 | 2016 | |||||||
| Deferred tax assets | ||||||||
| Net operating loss carryforward | $ | 27,617 | $ | 42,295 | ||||
| Accrued compensation | 2,436 | 5,192 | ||||||
| Total deferred tax assets | 30,053 | 47,487 | ||||||
| Less valuation allowance | (30,053 | ) | (47,487 | ) | ||||
| Net deferred tax asset | $ | - | $ | - | ||||
A reconciliation of the Company’s income taxes to amounts calculated at the federal statutory rate is as follows for the years ended December 31:
| 2017 | 2016 | |||||||
| Federal statutory taxes | (35 | )% | (35 | )% | ||||
| Change in tax rate estimate | 14 | % | — | |||||
| Change in valuation allowance | 21 | % | 35 | % | ||||
| — | % | — | % | |||||
Because of the Company’s lack of earnings history, the deferred tax assets have been fully offset by a valuation allowance. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during those periods that the temporary differences become deductible. The Company believes that the tax positions taken in its tax returns would be sustained upon examination by taxing authorities. The Company files income tax returns in the U.S. federal jurisdiction, and other required state jurisdictions. The Company’s periodic tax returns filed in 2012 and, thereafter, are subject to examination by taxing authorities under the normal statutes of limitations in the applicable jurisdictions.
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth the names and ages of our current directors and executive officers. Also the principal offices and positions with us held by each person and the date such person became our director, executive officer. Our executive officers are appointed by our Board of Directors. Our directors serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors. There are no family relationships among our directors, executive officers, director nominees.
| Name | Age | Position | ||
| Ardell Mees | 62 | Chief Executive Officer, Chief Financial Officer, and Director | ||
| Tammera Anne Mees | 57 | Secretary and Director | ||
| Larry Aamold | 57 | Director | ||
| Charmaine Matteis | 34 | Director |
Ardell D. Mees, CEO, CFO, Director. Mr. Mees has been our Chief Executive Officer, Chief Financial Officer, Treasurer and Director since our inception. Mr. Mees originally founded our Company’s original predecessor, ADM Enterprises, a sole proprietorship, in 1988. At all times, in the 25 year history of this company, Mr. Mees has maintained and has been responsible for all the day-to-day operations of the Company. In 2006, the Company redomiciled to the State of Nevada and changed our name to ADM Endeavors, Inc. Mr. Mees has specialized training as a decor installation contractor. He acts as Chief Installer on a majority of our installation projects. He is responsible for securing and maintaining relationships with our contracted grocers, design firms and remodelers. Mr. Mees maintains the upkeep of the installation equipment and vehicles. Additionally, Mr. Mees is responsible for transporting the company vehicles and utility trailers, with tools and parts, to and from job sites across the United States. He also maintains the Company vehicles, customer accounts, and handles all public relations with clients. In addition, Mr. Mees coordinates and oversees all onsite installations, and is responsible for the costing and bidding process. The attributes and experience Mr. Mees possesses makes him a valuable Director of the Company.
Tammera Mees, Secretary and Director. Tammera Mees has been the Company’s Secretary, Principal Accounting Officer and Director since its inception. Her duties for the last 23 years have included managing the Company’s finances which include but are not limited to; processing accounts receivable, accounts payable, project estimating, bidding and scheduling. Tammera Mees attended the University of North Dakota studying Business Management and has had 27 years of office management experience that gives her the necessary experience to keep the business well managed and coordinated. Tammera has worked onsite with Ardell on many projects since 1990 and understands the project requirements and timelines giving her an advantage of estimating the projects accordingly. Tammera’s vast knowledge and expertise in the interior design industry allows her to be a valuable officer and director of the Company.
Larry Aamold, Director. Larry Aamold was appointed to the Board of Director in June of 2013. Since 1989, Larry has worked as a self-employed construction contractor under the name Larry Aamold Construction. Larry’s experience ranges from framing houses to finish work and commercial construction. Since1989, Larry has subcontracted installation work through ADM and has worked on numerous projects for ADM since that time. Larry has first-hand knowledge of the installation techniques and standards of ADM. He has successfully managed many of ADM’s projects with multiple crew members. Larry was brought onto the Board of Directors to take advantage of his vast construction expertise and knowledge as the company expands. Larry will assist in managing and supervisation of additional construction crews in the Company’s planned expansion of operations.
Charmaine Matteis, Director. Charmaine Matteis was appointed to the Board of Director’s in June of 2013. From 2003 to present, she has managed three Comfort Inn properties in Bismarck, ND. In this position she oversees and is responsible for all day to day operations of the three properties which include employee supervision, payroll, financial reporting, and finances. Since 2010 Charmaine has assisted the Company with all aspects of the Company’s books and records and required filings with the State and tax returns. Charmaine’s back office experience combined with her ability to manage multiple locations will be invaluable to the Company’s Board of Directors. Charmaine will assist in managing the additional personnel, records, payroll and other filings needed once the Company expands with its future planned operations.
Our directors are elected at the annual meeting of the shareholders, with vacancies filled by the Board of Directors, and serve until their successors are elected and qualified, or their earlier resignation or removal. Officers are appointed by the board of directors and serve at the discretion of the board of directors or until their earlier resignation or removal. Any action required can be taken at any annual or special meeting of stockholders of the corporation which may be taken without a meeting, without prior notice and without a vote, if consent of consents in writing setting forth the action so taken, shall be signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office, its principle place of business, or an officer or agent of the corporation having custody of the book in which the proceedings of meetings are recorded.
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Indemnification of Directors and Officers
Nevada Corporation Law allows for the indemnification of officers, directors, and any corporate agents in terms sufficiently broad to indemnify such persons under certain circumstances for liabilities, including reimbursement for expenses, incurred arising under the 1933 Act. The Bylaws of the Company provide that the Company will indemnify its directors and officers to the fullest extent authorized or permitted by law and such right to indemnification will continue as to a person who has ceased to be a director or officer of the Company and will inure to the benefit of his or her heirs, executors and Consultants; provided, however, that, except for proceedings to enforce rights to indemnification, the Company will not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred will include the right to be paid by the Company the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition.
The Company may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Company similar to those conferred to directors and officers of the Company. The rights to indemnification and to the advancement of expenses are subject to the requirements of the 1940 Act to the extent applicable.
Furthermore, the Company may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Company or another company against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the Nevada General Corporation Law.
Board Composition
Our bylaws provide that the Board of Directors shall consist of one or more members. Each director of the Company serves for a term of one year or until a successor is elected at the Company’s annual shareholders meeting and is qualified, subject to removal by the Company’s shareholders. Each officer serves, at the pleasure of the Board of Directors, for a term of one year and until a successor is elected at the annual meeting of the Board of Directors and is qualified.
Involvement on Certain Material Legal Proceedings During the Last Five Years
No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations.
No bankruptcy petitions have been filed by or against any business or property of any director, officer, significant employee or consultant of the Company nor has any bankruptcy petition been filed against a partnership or business association where these persons were general partners or executive officers.
No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities.
No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law.
Directors’ and Officers’ Liability Insurance
ADM Endeavors, Inc. does not have directors’ and officers’ liability insurance insuring our directors and officers against liability for acts or omissions in their capacities as directors or officers.
Code of Ethics
We intend to adopt a code of ethics that applies to our officers, directors and employees, including our principal executive officer and principal accounting officer, but have not done so to date due to our relatively small size. We intend to adopt a written code of ethics in the near future.
Corporate Governance & Board Independence
Our Board of Directors consists of two directors and has not established a Nominating or Governance Committees as standing committees. The Board does not have an executive committee or any committees performing a similar function. We are not currently listed on a national securities exchange or in an inter-dealer quotation system that has requirements that a majority of the board of directors be independent.
Due to our lack of operations and size, and since we are not currently listed on a national securities exchange, we are not subject to any listing requirements mandating the establishment of any particular committees; all functions of a nominating/governance committee were performed by our whole board of directors. Our board of directors intends to appoint such persons and form such committees as are required to meet the corporate governance requirements imposed by the national securities exchanges as necessary. Our board of directors does not believe that it is necessary to have such committees at the early stage of the company’s development, and our board of directors believes that the functions of such committees can be adequately performed by the members of our board of directors.
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We believe that members of our board of directors are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. We believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that we have not generated any material revenues to date.
Board Leadership Structure and the Board’s Role in Risk Oversight.
The Board of Directors is led by the Chairman who is also the controlling shareholder. The Company has two directors, and a Chief Executive Officer and a Chief Financial Officer (roles currently filled by a single executive officer) reporting to the Board of Directors. Our structure provides the Company with multiple leaders who represent the Company to our stockholders, regulators, business partners and other stakeholders, among other reasons set forth below.
| ● | This structure creates efficiency in the preparation of the meeting agendas and related Board materials as the Company’s Chief Executive Officer works directly with those individuals preparing the necessary Board materials and is more connected to the overall daily operations of the Company. Agendas are also prepared with the permitted input of the full Board of Directors allowing for any concerns or risks of any individual director to be discussed as deemed appropriate. The Board believes that the Company has benefited from this structure is in the best interest of the stockholders. |
| ● | The Company believes this structure allows for efficient and effective oversight, given the Company’s relatively small size, its corporate strategy and focus. |
The Board of Directors does not have a specific role in risk oversight of the Company. The Chairman, President and Chief Executive Officer and other executive officers and employees of the Company provide the Board of Directors with information regarding the Company’s risks.
Family Relationships
Ardell Mees and Tammera Mees are married. Other than this relationship, there are no family relationships among any of our officers, directors, or persons nominated for such positions.
ITEM 11. EXECUTIVE COMPENSATION
Our Board of Directors has not established a separate compensation committee. Instead, the Board of Directors reviews and approves executive compensation policies and practices, reviews salaries and bonuses for our officer(s), decides on benefit plans, and considers other matters as may, from time to time, be referred to it. We do not currently have a Compensation Committee Charter. Our Board continues to emphasize the important link between our performance, which ultimately benefits all shareholders, and the compensation of our executives. Therefore, the primary goal of our executive compensation policy is to closely align the interests of the shareholders with the interests of the executive officer(s). In order to achieve this goal, we attempt to (i) offer compensation opportunities that attract and retain executives whose abilities and skills are critical to our long-term success and reward them for their efforts in ensuring our success and (ii) encourage executives to manage from the perspective of owners with an equity stake in us.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary
($) | Bonus
($) | Stock Awards ($) | Option Awards ($) | Non-equity Incentive Plan Compensation ($) | Non-qualified
Deferred Compensation Earnings ($) | All Other Compensation ($) | Total
($) | |||||||||||||||||||||||||||
| Ardell Mees | 2017 | 72,000 | 0 | 0 | 0 | 0 | 0 | 15,108 | 87,108 | |||||||||||||||||||||||||||
| CEO, CFO, and Director | 2016 | 107,882 | 0 | 0 | 0 | 0 | 0 | 0 | 107,882 | |||||||||||||||||||||||||||
| Tammera Mees | 2017 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
| Secretary and Director | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
| Larry Aamold | 2017 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
| Director | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
| Charmaine Matteis | 2017 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
| Director | 2016 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||
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Employment Agreements
As compensation for services, Mr. Mees will receive an annual base salary of $72,000. For the years ended December 31, 2017 and 2016, the Company accrued a salary to Mr. Mees in the amount of $72,000. For the years ended December 31, 2017 and 2016, the Company actually paid Mr. Mees $107,882 and $88,503, respectively, against his accrued salary.
Retirement
There are no annuity, pension or retirement benefits proposed to be paid to officers, directors or employees in the event of retirement at normal retirement date pursuant to any presently existing plan provided or contributed to by the Company or any of its subsidiaries, if any.
Stock Option Plans
There are no stock option plans.
Board of Directors
The Company’s Board of Director’s are not compensated for their services nor are they reimbursed for any costs incurred while performing their duties.
OUTSTANDING EQUITY AWARDS
As of December 31, 2017, the following named executive officers had the following unexercised options, stock that has not vested, and equity incentive plan awards:
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options # Exercisable | # Un-exercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock Not Vested | Market Value of Shares or Units Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights Not Vested | Value of Unearned Shares, Units or Other Rights Not Vested | |||||||||||||||||||||||||||
| Ardell Mees, CEO and Director | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| Tammera Mees, Secretary, CAO and Director | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| Larry Aamold, Director | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| Charmaine Matteis, Director | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
STOCK OPTIONS
No grants of stock options or stock appreciation rights were made during the year ended December 31, 2017.
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LONG-TERM INCENTIVE PLANS
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of December 31, 2017, we had 129,315,500 shares of common stock issued and outstanding. The following table sets forth information known to us as of December 31, 2017 relating to the beneficial ownership of shares of our common stock by:
| ● | each person who is known by us to be the beneficial owner of more than 5% of our outstanding common stock; | |
| ● | each director; | |
| ● | each named executive officer; and | |
| ● | all named executive officers and directors as a group. |
Unless otherwise indicated, the business address of each person listed is in care of 2021 N 3rd St., Bismarck, ND 58501. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.
The following table sets forth certain information regarding the beneficial ownership of our common stock as of the date of this Annual Report by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officers, and all of our directors and executive officers as a group. Except as otherwise indicated, the address of each of the stockholders listed below is: 2021 N. 3rd Street, Bismarck, North Dakota 58501.
| Title of Class | Name and Address of Beneficial Owner | Number of Shares Beneficially Owned (1) | Percent of Class (2) | |||||||
| Common Stock | Ardell Mees (3) | 43,000,000 | 33.25 | % | ||||||
| Common Stock | Tammera Mees (4) | 22,000,000 | 17.01 | % | ||||||
| Common Stock | Larry Aamold (4) | - | 0.0 | % | ||||||
| Common Stock | Chramaine Matteis (4) | - | 0.0 | % | ||||||
| Common Stock | All directors and named executive officers as a group (4 persons) | 65,000,000 | 50.26 | % | ||||||
| (1) | Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power to the shares of the Company’s common stock. | |
| (2) | As of December 31, 2017, a total of 127,050,917 shares of the Company’s common stock are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1). For each Beneficial Owner listed, any options exercisable within 60 days have been also included for purposes of calculating their percent of class. | |
| (3) | Officer. | |
| (4) | Director. |
Changes in Control
Our management is not aware of any arrangements which may result in “changes in control” as that term is defined by the provisions of Item 403(c) of Regulation S-K.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Office Space
The Company has been provided office space by its chief executive officer, Ardell Mees at no cost. Management has determined that such cost is nominal and did not recognize the rent expense in its financial statements.
Share Exchange Agreement
On July 1, 2008, the Company executed a share exchange agreement with ADM Enterprises, LLC (“ADM Enterprises”) whereby the Company acquired all of the outstanding stock of ADM Enterprises for 10,000,000 newly issued shares of the Company’s common stock. As a result, ADM Enterprises became a wholly-owned subsidiary of the Company. The Company shares the same officers, Ardell Mees and Tammera Mees, with ADM Enterprises. Since the share exchange agreement was between related parties, there was no goodwill or excess consideration recorded.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit Fees
The aggregate audit fees incurred for the fiscal years ended December 31, 2017 and 2016 were $24,500. Such fees included work completed for our annual audit and for the review of our financial statements included in our Forms 10-K and 10-Q.
Tax Fees
For the fiscal years ended December 31, 2017 and 2016, there were no fees billed for services for tax compliance, tax advice, and tax planning work by our principal accountants.
All Other Fees
None.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
| 101.INS (1) | XBRL Taxonomy Extension Instance Document | |
| 101.SCH (1) | XBRL Taxonomy Extension Schema Document | |
| 101.CAL (1) | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF (1) | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB (1) | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE (1) | XBRL Taxonomy Extension Presentation Linkbase Document |
* Filed herewith
(1) Incorporated by reference from Form S-1 filed with the SEC on October 8, 2013.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| ADM ENDEAVORS, INC. | ||
| Date: April 17, 2018 | By: | /s/ Ardell Mees |
| Name: | Ardell Mees | |
| Title: | Principal Executive Officer and Principal Financial Officer | |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| SIGNATURE | TITLE | DATE | ||
| /s/ Ardell Mees | April 17, 2018 | |||
| Ardell Mees | Director | |||
| /s/ Tammera Mees | April 17, 2018 | |||
| Tammera Mees | Director | |||
| /s/ Larry Aamold | April 17, 2018 | |||
| Larry Aamold | Director | |||
| /s/ Charmaine Matteis | April 17, 2018 | |||
| Charmaine Matteis | Director |
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