(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
JUNE 30, 2011
Financial Statements-
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Balance Sheets as of June 30, 2011 and December 31, 2010
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F-2 |
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Statements of Operations for the Three Months and Six Month Ended
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|
June 30, 2011 and 2010, and Cumulative from Inception
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F-3 |
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Statement of Stockholders’ Equity for the Period from Inception
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|
|
|
Through June 30, 2011
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F-4 |
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Statements of Cash Flows for Six Months Ended June 30, 2011
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|
and Cumulative from Inception
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F-5 |
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Notes to Financial Statements
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F-6 |
|
ADAMA TECHNOLOGIES CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
AS OF JUNE 30, 2011 AND DECEMBER 31, 2010
ASSETS
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As of
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|
As of
|
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|
June 30,
|
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|
December 31,
|
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|
|
2011
|
|
|
2010
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
Current Assets:
|
|
|
|
|
|
|
Cash in bank
|
|
$ |
280 |
|
|
$ |
1,921 |
|
Prepaid expenses
|
|
|
275,938 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
276,218 |
|
|
|
1,921 |
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$ |
276,218 |
|
|
$ |
1,921 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
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|
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|
Current Liabilities:
|
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|
|
|
|
|
|
|
Accrued liabilities
|
|
$ |
14,963 |
|
|
$ |
31,214 |
|
Acquired technology obligation
|
|
|
- |
|
|
|
850,000 |
|
Loans from related parties - Directors and stockholders
|
|
|
- |
|
|
|
37,924 |
|
Convertible notes payable, net of discount
|
|
|
38,916 |
|
|
|
28,153 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
53,879 |
|
|
|
947,291 |
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
53,879 |
|
|
|
947,291 |
|
|
|
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|
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Commitments and Contingencies
|
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Stockholders' Equity
|
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|
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|
Common stock, par value $.0001 per share, 500,000,000 shares
|
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|
|
|
authorized; 337,110,096 and 206,755,000 shares
|
|
|
|
|
|
|
|
|
issued and outstanding, respectively
|
|
|
33,712 |
|
|
|
20,676 |
|
Additional paid-in capital
|
|
|
6,524,863 |
|
|
|
5,868,867 |
|
Discount on common stock
|
|
|
(2,800 |
) |
|
|
(2,800 |
) |
Stock subscriptions receivable
|
|
|
- |
|
|
|
(19,000 |
) |
(Deficit) accumulated during the development stage
|
|
|
(6,333,436 |
) |
|
|
(6,813,113 |
) |
|
|
|
|
|
|
|
|
|
Total stockholders' equity (deficit)
|
|
|
222,339 |
|
|
|
(945,370 |
) |
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$ |
276,218 |
|
|
$ |
1,921 |
|
The accompanying notes to financial statements are
an integral part of these financial statements.
ADAMA TECHNOLOGIES CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2011
AND 2010, AND CUMULATIVE FROM INCEPTION (SEPTEMBER 17, 2007)
JUNE 30, 2011
(Unaudited)
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
Cumulative
|
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|
June 30,
|
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|
June 30,
|
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|
From
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|
2011
|
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|
2010
|
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|
2011
|
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|
2010
|
|
|
Inception
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|
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|
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Revenues
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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Expenses:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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General and administrative-
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional fees
|
|
|
21,200 |
|
|
|
5,130 |
|
|
|
25,437 |
|
|
|
14,371 |
|
|
|
149,315 |
|
Legal - incorporation
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,200 |
|
Consulting
|
|
|
195,929 |
|
|
|
104,075 |
|
|
|
274,554 |
|
|
|
357,875 |
|
|
|
1,837,763 |
|
Travel
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
17,890 |
|
Amortization
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
305,555 |
|
Rent
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,520 |
|
Impairment loss
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,754,445 |
|
Other
|
|
|
2,655 |
|
|
|
88 |
|
|
|
2,685 |
|
|
|
1,088 |
|
|
|
32,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Total general and administrative expenses
|
|
|
219,784 |
|
|
|
109,293 |
|
|
|
302,676 |
|
|
|
373,334 |
|
|
|
7,104,212 |
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
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|
(Loss) from Operations
|
|
|
(219,784 |
) |
|
|
(109,293 |
) |
|
|
(302,676 |
) |
|
|
(373,334 |
) |
|
|
(7,104,212 |
) |
|
|
|
|
|
|
|
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|
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Other Income (Expense)
|
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|
|
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|
Foreign currency transaction gains
|
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|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,769 |
|
Forgiveness of debt
|
|
|
|
|
|
|
- |
|
|
|
840,000 |
|
|
|
|
|
|
|
840,000 |
|
Foreign currency transaction losses
|
|
|
|
|
|
|
- |
|
|
|
(789 |
) |
|
|
- |
|
|
|
(4,520 |
) |
Interest expense
|
|
|
(36,724 |
) |
|
|
- |
|
|
|
(56,858 |
) |
|
|
|
|
|
|
(67,473 |
) |
|
|
|
|
|
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|
|
|
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|
|
|
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|
Provision for income taxes
|
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|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
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|
Net Income (Loss)
|
|
$ |
(256,508 |
) |
|
$ |
(109,293 |
) |
|
$ |
479,677 |
|
|
$ |
(373,334 |
) |
|
$ |
(6,333,436 |
) |
|
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|
|
|
|
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|
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(Loss) Per Common Share:
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|
|
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|
|
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|
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(Loss) per common share - Basic and Diluted
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
$ |
0.00 |
|
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
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|
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|
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|
|
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|
Weighted Average Number of Common Shares
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Outstanding - Basic and Diluted
|
|
|
316,478,174 |
|
|
|
135,558,187 |
|
|
|
275,593,723 |
|
|
|
124,333,950 |
|
|
|
|
|
The accompanying notes to financial statements are
an integral part of these statements.
ADAMA TECHNOLOGIES CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 17, 2007)
THROUGH JUNE 30, 2011
(Unaudited)
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
(Deficit)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Accumulated
|
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|
|
|
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|
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Additional
|
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Discount on
|
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|
Stock
|
|
|
During the
|
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|
|
|
|
|
Common stock
|
|
|
Paid-in
|
|
|
Common
|
|
|
Subscriptions
|
|
|
Development
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stock
|
|
|
Receivable
|
|
|
Stage
|
|
|
Totals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - September 17, 2007
|
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Common stock issued for cash
|
|
|
35,000,000 |
|
|
|
3,500 |
|
|
|
- |
|
|
|
(2,800 |
) |
|
|
- |
|
|
|
- |
|
|
|
700 |
|
Net (loss) for the period
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,118 |
) |
|
|
(5,118 |
) |
Balance - December 31, 2007
|
|
|
35,000,000 |
|
|
|
3,500 |
|
|
|
- |
|
|
|
(2,800 |
) |
|
|
- |
|
|
|
(5,118 |
) |
|
|
(4,418 |
) |
Common stock issued for cash
|
|
|
15,000,000 |
|
|
|
1,500 |
|
|
|
64,700 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
66,200 |
|
Common stock issued for cash
|
|
|
15,000,000 |
|
|
|
1,500 |
|
|
|
87,300 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
88,800 |
|
Common stock issued for acquired technology
|
|
|
8,890,000 |
|
|
|
889 |
|
|
|
3,999,111 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,000,000 |
|
Net (loss) for the year
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(160,515 |
) |
|
|
(160,515 |
) |
Balance - December 31, 2008
|
|
|
73,890,000 |
|
|
|
7,389 |
|
|
|
4,151,111 |
|
|
|
(2,800 |
) |
|
|
- |
|
|
|
(165,633 |
) |
|
|
3,990,067 |
|
Common stock issued for cash
|
|
|
3,125,000 |
|
|
|
313 |
|
|
|
203,473 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
203,786 |
|
Common stock issued as compensation
|
|
|
125,000 |
|
|
|
13 |
|
|
|
21,988 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
22,001 |
|
Common stock issued for cash
|
|
|
1,500,000 |
|
|
|
150 |
|
|
|
119,850 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
120,000 |
|
Common stock issued as compensation
|
|
|
1,205,000 |
|
|
|
121 |
|
|
|
84,230 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
84,350 |
|
Common stock issued for cash
|
|
|
750,000 |
|
|
|
75 |
|
|
|
34,925 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
35,000 |
|
Common stock issued as compensation
|
|
|
1,250,000 |
|
|
|
125 |
|
|
|
58,625 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
58,750 |
|
Common stock issued as compensation
|
|
|
3,500,000 |
|
|
|
350 |
|
|
|
146,650 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
147,000 |
|
Common stock issued as compensation
|
|
|
3,500,000 |
|
|
|
350 |
|
|
|
146,650 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
147,000 |
|
Common stock issued as compensation
|
|
|
500,000 |
|
|
|
50 |
|
|
|
6,950 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
7,000 |
|
Net (loss) for the year
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,780,153 |
) |
|
|
(5,780,153 |
) |
Balance - December 31, 2009
|
|
|
89,345,000 |
|
|
|
8,935 |
|
|
|
4,974,452 |
|
|
|
(2,800 |
) |
|
|
- |
|
|
|
(5,945,786 |
) |
|
|
(965,200 |
) |
Common stock issued as compensation
|
|
|
4,000,000 |
|
|
|
400 |
|
|
|
27,600 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
28,000 |
|
Common stock issued as compensation
|
|
|
4,000,000 |
|
|
|
400 |
|
|
|
27,600 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
28,000 |
|
Common stock issued as compensation
|
|
|
4,000,000 |
|
|
|
400 |
|
|
|
27,600 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
28,000 |
|
Common stock issued as compensation
|
|
|
10,000,000 |
|
|
|
1,000 |
|
|
|
69,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
70,000 |
|
Common stock issued as compensation
|
|
|
3,400,000 |
|
|
|
340 |
|
|
|
23,460 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
23,800 |
|
Common stock issued as compensation
|
|
|
10,000,000 |
|
|
|
1,000 |
|
|
|
69,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
70,000 |
|
Common stock issued for cash
|
|
|
8,000,000 |
|
|
|
800 |
|
|
|
12,200 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
13,000 |
|
Common stock issued as compensation
|
|
|
7,000,000 |
|
|
|
700 |
|
|
|
62,300 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
63,000 |
|
Common stock issued as compensation
|
|
|
3,250,000 |
|
|
|
325 |
|
|
|
13,650 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
13,975 |
|
Common stock issued for cash
|
|
|
8,150,000 |
|
|
|
815 |
|
|
|
34,185 |
|
|
|
- |
|
|
|
(28,000 |
) |
|
|
- |
|
|
|
7,000 |
|
Common stock issued as compensation
|
|
|
2,500,000 |
|
|
|
250 |
|
|
|
22,250 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
22,500 |
|
Common stock issued as compensation
|
|
|
11,100,000 |
|
|
|
1,110 |
|
|
|
109,890 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
111,000 |
|
Common stock issued as compensation
|
|
|
5,000,000 |
|
|
|
500 |
|
|
|
49,500 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
50,000 |
|
Common stock issued for cash
|
|
|
10,000,000 |
|
|
|
1,000 |
|
|
|
9,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,000 |
|
Payment of stock subscription receivable
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
9,000 |
|
|
|
- |
|
|
|
9,000 |
|
Common stock issued as compensation
|
|
|
5,000,000 |
|
|
|
500 |
|
|
|
24,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
24,500 |
|
Common stock issued as compensation
|
|
|
14,950,000 |
|
|
|
1,495 |
|
|
|
207,805 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
209,300 |
|
Discount of convertible note
|
|
|
- |
|
|
|
- |
|
|
|
36,207 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
36,207 |
|
Common stock issued as compensation
|
|
|
7,060,000 |
|
|
|
706 |
|
|
|
48,714 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
49,420 |
|
Discount of convertible note
|
|
|
- |
|
|
|
- |
|
|
|
20,455 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
20,455 |
|
Net (loss) for the year
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(867,327 |
) |
|
|
(867,327 |
) |
Balance - December 31, 2010
|
|
|
206,755,000 |
|
|
$ |
20,676 |
|
|
$ |
5,868,868 |
|
|
$ |
(2,800 |
) |
|
$ |
(19,000 |
) |
|
$ |
(6,813,113 |
) |
|
$ |
(945,370 |
) |
Common stock issued as compensation
|
|
|
10,000,000 |
|
|
|
1,000 |
|
|
|
109,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
110,000 |
|
Common stock issued as compensation
|
|
|
2,500,000 |
|
|
|
250 |
|
|
|
27,250 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
27,500 |
|
Common stock issued as compensation
|
|
|
4,000,000 |
|
|
|
400 |
|
|
|
43,600 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
44,000 |
|
Common stock issued as compensation
|
|
|
1,000,000 |
|
|
|
100 |
|
|
|
10,900 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,000 |
|
Common stock issued as compensation
|
|
|
10,000,000 |
|
|
|
1,000 |
|
|
|
109,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
110,000 |
|
Stock subscriptions payments received
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
19,000 |
|
|
|
- |
|
|
|
19,000 |
|
Common stock issued as compensation
|
|
|
18,000,000 |
|
|
|
1,800 |
|
|
|
48,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,400 |
|
Common stock issued as compensation
|
|
|
45,000,000 |
|
|
|
4,500 |
|
|
|
153,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
157,500 |
|
Common stock issued as compensation
|
|
|
9,000,000 |
|
|
|
900 |
|
|
|
24,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,200 |
|
Common stock issued upon conversion of debt
|
|
|
30,855,096 |
|
|
|
3,086 |
|
|
|
66,985 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,071 |
|
Discount of convertible note
|
|
|
- |
|
|
|
- |
|
|
|
63,361 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
63,361 |
|
Net (income) for the year
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
479,677 |
|
|
|
479,677 |
|
Balance - June 30, 2011
|
|
|
337,110,096 |
|
|
$ |
33,711 |
|
|
$ |
6,524,864 |
|
|
$ |
(2,800 |
) |
|
$ |
- |
|
|
$ |
(6,333,436 |
) |
|
$ |
222,339 |
|
The accompanying notes to financial statements are
an integral part of these statements.
ADAMA TECHNOLOGIES CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH ENDED JUNE 30, 2011 AND 2010,
AND CUMULATIVE FROM INCEPTION (SEPTEMBER 17, 2007)
THROUGH JUNE 30, 2011
(Unaudited)
|
|
Six Months Ended
|
|
|
Cumulative
|
|
|
|
June 30,
|
|
|
From
|
|
|
|
2011
|
|
|
2010
|
|
|
Inception
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
|
$ |
479,677 |
|
|
$ |
(373,334 |
) |
|
$ |
(6,333,436 |
) |
Adjustments to reconcile net (loss) to net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
(used in) operating activities:
|
|
|
|
|
|
|
- |
|
|
|
|
|
Common stock issued as compensation
|
|
|
539,671 |
|
|
|
347,275 |
|
|
|
1,797,267 |
|
Amortization of beneficial conversion feature
|
|
|
52,624 |
|
|
|
- |
|
|
|
62,439 |
|
Impairment loss
|
|
|
- |
|
|
|
- |
|
|
|
4,754,445 |
|
Amortization
|
|
|
- |
|
|
|
- |
|
|
|
305,555 |
|
Forgiveness of debt
|
|
|
(840,000 |
) |
|
|
- |
|
|
|
(840,000 |
) |
Changes in net assets and liabilities-
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
(275,938 |
) |
|
|
- |
|
|
|
(275,938 |
) |
Accrued liabilites
|
|
|
(16,251 |
) |
|
|
7,000 |
|
|
|
14,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating Activities
|
|
|
(60,217 |
) |
|
|
(19,059 |
) |
|
|
(514,706 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and costs of intangible assets
|
|
|
- |
|
|
|
- |
|
|
|
(210,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Investing Activities
|
|
|
- |
|
|
|
- |
|
|
|
(210,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred offering costs
|
|
|
- |
|
|
|
- |
|
|
|
(25,000 |
) |
Proceeds from issuance of common stock
|
|
|
19,000 |
|
|
|
20,000 |
|
|
|
597,486 |
|
Proceeds from convertible note payable
|
|
|
87,500 |
|
|
|
- |
|
|
|
162,500 |
|
Payment of debt
|
|
|
(10,000 |
) |
|
|
- |
|
|
|
(10,000 |
) |
Proceeds from stockholder loans
|
|
|
24,650 |
|
|
|
(560 |
) |
|
|
590,952 |
|
Payment of stockholder loans
|
|
|
(62,574 |
) |
|
|
- |
|
|
|
(590,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing Activities
|
|
|
58,576 |
|
|
|
19,440 |
|
|
|
724,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash
|
|
|
(1,641 |
) |
|
|
381 |
|
|
|
280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash - Beginning of Period
|
|
|
1,921 |
|
|
|
83 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash - End of Period
|
|
$ |
280 |
|
|
$ |
464 |
|
|
$ |
280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Income taxes
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of noncash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for acquired technology
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
4,000,000 |
|
Obligation payable for acquired technology
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
850,000 |
|
Stock issued to settle convertible debts
|
|
$ |
66,000 |
|
|
$ |
- |
|
|
$ |
66,000 |
|
The accompanying notes to financial statements are
an integral part of these statements.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(1)Summary of Significant Accounting Policies
Basis of Presentation and Organization
Adama Technologies Corp. (“Adama Technologies” or the “Company”) is a Delaware corporation in the development stage and has not commenced operations. The Company was incorporated under the laws of the State of Delaware on September 17, 2007. The Company has ceased its original plan of operations of the Mobile Technology and instead the business plan of the company is to concentrate on the exclusive brownfield license agreement with Solucorp Industries Ltd., pursuant to which it acquired a 15 year license to certain environmental hazard remediation technology (as discussed in Note 4). The accompanying financial statements of Adama Technologies were prepared from the accounts of the Company under the accrual basis of accounting.
Unaudited Interim Financial Statements
The interim financial statements of the Company as of June 30, 2011, and for the periods then ended, and cumulative from inception, are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the Company’s financial position as of June 30, 2011, and the results of its operations and its cash flows for the periods ended June 30, 2011, and cumulative from inception. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2011. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States. Refer to the Company’s audited financial statements as of December 31, 2010, filed with the SEC, for additional information, including significant accounting policies.
Cash and Cash Equivalents
For purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.
Revenue Recognition
The Company is in the development stage and has yet to realize revenues from operations. Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any related receivable is probable.
Earnings per Common Share
Basic earnings per share is computed by dividing the net income attributable to the common stockholders by the weighted average number of shares of common stock outstanding during the period. Fully diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Common stock equivalents were not included in the computation of diluted earnings per share in the statement of operations when the Company reported a net loss and to do so would be anti-dilutive for the periods presented. For the period ended June 30, 2011 the weighted average number of shares outstanding on a fully diluted basis was 298,501,354 shares and the fully diluted earnings per share was less than $0.01.
Income Taxes
Deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.
The Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the federal tax laws.
Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Fair Value of Financial Instruments
The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current market exchange. As of June 30, 2011, the carrying value of accrued liabilities, and loans from directors and stockholders approximated fair value due to the short-term nature and maturity of these instruments.
Patent and Intellectual Property
The Company capitalizes the costs associated with obtaining a Patent or other intellectual property associated with its intended business plan. Such costs are amortized over the estimated useful lives of the related assets.
Deferred Offering Costs
The Company defers as other assets the direct incremental costs of raising capital until such time as the offering is completed. At the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations during the period in which the offering is terminated.
Impairment of Long-Lived Assets
The Company evaluates the recoverability of long-lived assets and the related estimated remaining lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable. For the period ended June 30, 2011, no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.
Common Stock Registration Expenses
The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are expensed as incurred.
Estimates
The financial statements are prepared on the basis of accounting principles generally accepted in the United States. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of June 30, 2011, and expenses for the period June 30, 2011, and cumulative from inception. Actual results could differ from those estimates made by management.
Recent Accounting Pronouncements
In April 2010, the FASB issued ASU No. 2010-17, Revenue Recognition—Milestone Method (ASU 2010-017). ASU 2010-017 provides guidance in applying the milestone method of revenue recognition to research or development arrangements. This guidance concludes that the milestone method is a valid application of the proportional performance model when applied to research or development arrangements. Accordingly, an entity can make an accounting policy election to recognize a payment that is contingent upon the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. The guidance is effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2010. The adoption of this accounting standard had no impact on the Company's financial position or results of operations.
In February 2010, the FASB issued amended guidance on subsequent events. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements. This guidance was effective immediately and the Company adopted these new requirements upon issuance of this guidance.
In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06, Fair Value Measurements and Disclosures (Topic 820)—Improving Disclosures about Fair Value Measurements (ASU No. 2010-06). ASU No. 2010-06 requires: (1) fair value disclosures of assets and liabilities by class; (2) disclosures about significant transfers in and out of Levels 1 and 2 on the fair value hierarchy, in addition to Level 3; (3) purchases, sales, issuances, and settlements be disclosed on gross basis on the reconciliation of beginning and ending balances of Level 3 assets and liabilities; and (4) disclosures about valuation methods and inputs used to measure the fair value of Level 2 assets and liabilities. ASU No. 2010-06 becomes effective for the first financial reporting period beginning after December 15, 2009, except for disclosures about purchases, sales, issuances, and settlements of Level 3 assets and liabilities which will be effective for fiscal years beginning after December 15, 2010. The adoption of this accounting standard had no impact on the Company's financial position or results of operations.
In October 2009, the FASB issued ASU No. 2009-13, Revenue Recognition (Topic 605)—Multiple-Deliverable Revenue Arrangements: a consensus of the FASB Emerging Issues Task Force (ASU 2009-13). ASU 2009-13 establishes a selling-price hierarchy for determining the selling price of each element within a multiple-deliverable arrangement. Specifically, the selling price assigned to each deliverable is to be based on vendor-specific objective evidence (VSOE) if available, third-party evidence, if VSOE is unavailable, and estimated selling prices if neither VSOE or third-party evidence is available. In addition, ASU 2009-13 eliminates the residual method of allocating arrangement consideration and instead requires allocation using the relative selling price method. ASU 2009-13 will be effective prospectively for multiple-deliverable revenue arrangements entered into, or materially modified, in fiscal years beginning on or after June 15, 2010The adoption of this accounting standard had no impact on the Company's financial position or results of operations.
In August 2009, the FASB issued ASU No. 2009-05, Fair Value Measurements and Disclosures (Topic 820)—Measuring Liabilities at Fair Value (ASU 2009-05). ASU 2009-05 provides guidance in measuring the fair value of a liability when a quoted price in an active market does not exist for an identical liability or when a liability is subject to restrictions on its transfer. ASU 2009-15 was effective for the Company beginning with the quarter ended December 31, 2009. The adoption of this accounting standard had no impact on the Company's financial position or results of operations.
(2)Development Stage Activities and Going Concern
The Company is currently in the development stage, and has no operations. The Company has ceased its original plan of operations of the Mobile Technology and instead the business plan of the company is to concentrate on the exclusive brownfield license agreement with Solucorp Industries Ltd., pursuant to which it acquired a 15 year license to certain environmental hazard remediation technology (as discussed in Note 4).
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception. Further, as of June 30, 2011, the cash resources of the Company were insufficient to meet its current business plan, and the Company had negative working capital. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.
(3)Patent Pending
In November 2007, the Company entered into an Invention Assignment Agreement with Eliezer Sheffer, the inventor, whereby the Company acquired from Eliezer Sheffer all of the right, title and interest in the Invention known as the “Security system for mobile vehicles, trucks and shipping containers” for consideration of $60,000. Under the terms of the Assignment Agreement, the Company was assigned rights to the Invention free of any liens, claims, royalties, licenses, security interests or other encumbrances. The inventor of the Invention is not an officer or director of the Company, nor an investor or promoter of such. The Invention is the subject of United States Patent Application 11/720,518 which was filed with the United States Patent and Trademark Office on May 31, 2007. Currently, the Patent Application is pending. The historical cost of obtaining the Invention and filing for the patent has been capitalized by the Company, and amounted to $60,000. As of December 31, 2009, the Company recorded an impairment loss for the full value of the patent.
(4)Acquired Technology
On October 27, 2008, the Company entered into an Exclusive Brownfield License Agreement with Solucorp Industries Ltd. Pursuant to the terms of the Agreement, Solucorp granted the Company an exclusive worldwide license of its MBS Process, for remediating Brownfield and Redevelopment Sites, with the exception of North America, Central America, South America, Russia and China. The Company was also granted a non-exclusive license for use of the MBS Process for the remediation of contaminated sites and superfunded like sites. The term of the Agreement is 15 years.
As of December 31, 2009, the Company recorded an impairment loss for the full value of the acquired technology.
In consideration for the rights granted under the Agreement, the Company issued 8,890,000 shares of its common stock to Solucorp, valued in the amount of $4,000,000. In addition, the sum of $1,000,000 is payable to Solucorp within 12 months of October 27, 2008 according to an amendment to the original agreement.
As of June 30, 2011 the Company has paid $160,000 of the agreed sum. The exclusive rights under the agreement have been terminated and the remaining $840,000 obligation was written off.
In the event the Company sells or develops the Brownfield or Redevelopment property after remediation, the Company shall pay 1% of the royalty of such sale or redevelopment cost to Solucorp.
(5)Convertible Notes Payable
On October 15, 2010, the Company signed a $50,000 convertible promissory note with a third party. The note bears interest at 8% per annum and is due on July 27, 2011. The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance into the Company’s common stock at a price equal to 58% of the average of the lowest three trading prices for the Common Stock during the most recent ten day period. As of June 30, 2011 this note paid by conversion to shares.
On December 13, 2010, the Company signed a $25,000 convertible promissory note with a third party. The note bears interest at 8% per annum and is due on September 15, 2011. The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance into the Company’s common stock at a price equal to 55% of the average of the lowest three trading prices for the Common Stock during the most recent ten day period. As of June 30, 2011 this $16,000 of the note was paid by conversion to shares and the remaining note balance is $9,000.
On April 4, 2011, the Company signed a $25,000 convertible promissory note with a third party. The note bears interest at 8% per annum and is due on January 6, 2012. The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance into the Company’s common stock at a price equal to 58% of the average of the lowest three trading prices for the Common Stock during the most recent ten day period.
On May 12, 2011, the Company signed a $30,000 convertible promissory note with a third party. The note bears interest at 8% per annum and is due on February 12, 2012. The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance into the Company’s common stock at a price equal to 58% of the average of the lowest three trading prices for the Common Stock during the most recent ten day period.
On June 7, 2011, the Company signed a $32,500 convertible promissory note with a third party. The note bears interest at 8% per annum and is due on March 7, 2012. The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance into the Company’s common stock at a price equal to 58% of the average of the lowest three trading prices for the Common Stock during the most recent ten day period.
In accordance with ASC 470, the Company has analyzed the beneficial nature of the conversion terms and determined that a beneficial conversion feature (BCF) exists. The Company calculated the value of the BCF using the intrinsic method as stipulated in ASC 470. The BCF has been recorded as a discount to the notes payable and to Additional Paid-in Capital.
As of June 30, 2011, the balance of convertible notes payable is $38,916 net of unamortized discounts of $57,584.
For the six months ended June 30, 2011 the Company has recognized $4,234 in interest expense related to the notes and has amortized $52,624 of the beneficial conversion features which has been recorded as interest expense.
(6)Common Stock
On November 13, 2007, the Company issued 35,000,000 shares (post forward stock split) of its common stock to seven individuals who are founders of the Company, including the Company's initial Directors and officers, for proceeds of $700.
The Company commenced a capital formation activity to submit a Registration Statement on Form SB-2 to the SEC to register and sell 15,000,000 (post forward stock split) shares of newly issued common stock in a self-directed offering at an offering price of $0.03 per share for proceeds of up to $90,000. As of May 19, 2008, the Company had incurred $25,000 of deferred offering costs related to this capital formation activity. As of May 19, 2008, the Company issued 15,000,000 (post forward stock split) shares of common stock pursuant to the Registration Statement on Form SB-2, and deposited proceeds of $90,000.
On July 3, 2008, the Company raised $90,000 and issued 15,000,000 (post forward stock split) shares of its common stock, purchase price $0.03 per share, to 22 investors. The Company received net proceeds of $88,800.
On July 28, 2008, the Company implemented a 5 for 1 forward stock split on its issued and outstanding shares of common stock to the holders of record as of July 25, 2008. As a result of the split, each holder of record on the record date automatically received four additional shares of the Company’s common stock. After the split, the number of shares of common stock issued and outstanding are 65,000,000 shares. The accompanying financial statements and related notes thereto have been adjusted accordingly to reflect this forward stock split.
On October 27, 2008, the Company entered into an Exclusive Brownfield License Agreement with Solucorp Industries Ltd. In consideration for the rights granted under the Agreement, the Company issued 8,890,000 shares of its common stock to Solucorp, valued in the amount of $4,000,000.
On May 11, 2009, the Company raised $250,000 and issued 3,125,000 shares of its common stock, purchase price $0.08 per share, to an investor. The Company received net proceeds of $203,786.
On June 2, 2009, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 125,000 shares of its unregistered common stock on said date valued at $22,000. The fair value of the unregistered shares is determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.
On September 16, 2009, the Company raised $120,000 and issued 1,500,000 shares of its common stock, purchase price $0.08 per share, to an investor. The Company received net proceeds of $120,000.
On October 5, 2009, the Company entered into an agreement with an unrelated third-party consultants. As payment for the consultants’ services, the Company issued 1,205,000 shares of its unregistered common stock valued at $84,350. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.
On October 5, 2009, the Company raised $35,000 and issued 750,000 shares of its common stock, purchase price $0.047 per share, to an investor.
On October 5, 2009, the Company entered into an agreement with a shareholder consultant. As payment for the consultant’s services, the Company issued 1,250,000 shares of its unregistered common stock on said date valued at $58,750. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.
On October 27, 2009, the Company entered into an agreement with a resigning Director to receive as compensation for his services, 3,500,000 shares of its unregistered common stock valued at $147,000. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.
On October 27, 2009, the Company entered into an agreement with a resigning Director to receive as compensation for his services, 3,500,000 shares of its unregistered common stock valued at $147,000. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount
On December 1, 2009, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 500,000 shares of its unregistered common stock on said date valued at $7,000. The fair value of the unregistered shares was determined based on the closing price of the Company’s stock on the date of grant less a 30% discount.
On January 12, 2010, the Company issued 8,000,000 shares of its unregistered common stock valued at $56,000 to two directors of the Company. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On January 12, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for past services, the Company issued 4,000,000 shares of its unregistered common stock on said date valued at $28,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On February 3, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s past services, the Company issued 10,000,000 shares of its unregistered common stock on said date valued at $70,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On February 16, 2010, the Company entered into an agreement with unrelated third-party consultants. As payment for the consultants' past services, the Company issued 3,400,000 shares of its unregistered common stock on said date valued at $23,800. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On February 25, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s past services, the Company issued 10,000,000 shares of its unregistered common stock on said date valued at $70,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On April 25, 2010, the Company raised $13,000 and issued 8,000,000 shares of its common stock, with a purchase price $0.0016 per share, to investors.
On May 26, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s past services, the Company issued 7,000,000 shares of its unregistered common stock on said date valued at $63,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On June 16, 2010, the Company entered into agreements with unrelated third-party consultants. As payment for the consultant’s past services, the Company issued 3,250,000 shares of its unregistered common stock on said date valued at $13.975. The fair value of the unregistered shares was determined based on comparable sales.
On June 16, 2010, the Company raised $35,000 and issued 8,150,000 shares of its common stock, with a purchase price $0.0043 per share, to investors.
On June 21, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s past services, the Company issued 2,500,000 shares of its unregistered common stock on said date valued at $22,500. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On August 13, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s past services, the Company issued 11,100,000 shares of its unregistered common stock on said date valued at $111,000. The fair value of the unregistered shares was determined based on comparable sales.
On August 30, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s past services, the Company issued 5,000,000 shares of its unregistered common stock on said date valued at $50,000. The fair value of the unregistered shares was determined based on comparable sales.
On August 31, 2010, the Company raised $10,000 and issued 10,000,000 shares of its common stock, with a purchase price $0.001 per share, to investors.
On October 1, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s past services, the Company issued 5,000,000 shares of its unregistered common stock on said date valued at $24,500. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On October 18, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s past services, the Company issued 14,950,000 shares of its unregistered common stock on said date valued at $209,300. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On December 15, 2010, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s past services, the Company issued 7,060,000 shares of its unregistered common stock on said date valued at $49,420. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount.
On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 10,000,000 shares of its unregistered common stock on said date valued at $110,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.
On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 2,500,000 shares of its unregistered common stock on said date valued at $27,500. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.
On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 4,000,000 shares of its unregistered common stock on said date valued at $44,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.
On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 1,000,000 shares of its unregistered common stock on said date valued at $11,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.
On January 1, 2011, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 10,000,000 shares of its unregistered common stock on said date valued at $110,000. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.
On April 1, 2011, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 18,000,000 shares of its unregistered common stock on said date valued at $50,400. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.
On April 5, 2011, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 45,000,000 shares of its unregistered common stock on said date valued at $157,500. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.
On April 13, 2011, the Company entered into an agreement with an unrelated third-party consultant. As payment for the consultant’s services, the Company issued 9,000,000 shares of its unregistered common stock on said date valued at $25,200. The fair value of the unregistered shares was determined based on the recent closing price of the Company’s stock on the date of grant less an approximate 30% discount for restricted trading.
From April 1, 2011 to June 30, 2011, the Company issued 30,855,096 shares of its common stock upon conversion of convertible debt of $66,000 and $4,071 of interest.
(7)Income Taxes
The provision (benefit) for income taxes for the periods ended June 30, 2011 and 2010, was as follows (assuming a 23% effective tax rate):
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
Current Tax Provision:
|
|
|
|
|
|
|
Federal-
|
|
|
|
|
|
|
Net income
|
|
$ |
479,677 |
|
|
$ |
- |
|
Non-deductible expenses
|
|
|
52,624 |
|
|
|
- |
|
Taxable income
|
|
|
532,301 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Net operating loss carryforward
|
|
|
(532,301 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total current tax provision
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Deferred Tax Provision:
|
|
|
|
|
|
|
|
|
Federal-
|
|
|
|
|
|
|
|
|
Deferred tax benefit on current loss
|
|
$ |
- |
|
|
$ |
25,137 |
|
Non-deductible expenses
|
|
|
- |
|
|
|
- |
|
Change in valuation allowance
|
|
|
- |
|
|
|
(25,137 |
) |
|
|
|
|
|
|
|
|
|
Total deferred tax provision
|
|
$ |
- |
|
|
$ |
- |
|
The Company had deferred income tax assets as of June 30, 2011 and December 31, 2010, as follows:
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
Loss carryforwards
|
|
$ |
348,807 |
|
|
$ |
473,494 |
|
Less - Valuation allowance
|
|
|
(348,807 |
) |
|
|
(473,494 |
) |
|
|
|
|
|
|
|
|
|
Total net deferred tax assets
|
|
$ |
- |
|
|
$ |
- |
|
The Company provided a valuation allowance equal to the deferred income tax assets for the period ended June 30, 2011, because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.
As of June 30, 2011, the Company had approximately $1,517,000 in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and expire by the year 2031.
The Company did not identify any material uncertain tax positions on returns that have been filed or that will be filed. The Company did not recognize any interest or penalties for unrecognized tax benefits.
The Company has filed income tax returns in the United States. All tax years are closed by expiration of the statute of limitations.
(8)Related Party Transactions
On November 20, 2007, the Company subscribed 7,525,000 shares (post forward stock split) of common stock to Mr. Aviram Malik, President and Director, for a cash payment of $150.
On November 20, 2007, the Company subscribed 2,500,000 shares (post forward stock split) of common stock to Mr. Gal Ilivitzki, Secretary and Director, for a cash payment of $50.
For the period ended June 30, 2011, the Company paid commissions and consulting fees of $6,000 to Directors and officers of the Company.
(9)Concentration of Credit Risk
The Company’s cash and cash equivalents are invested in a major bank in Israel and are not insured. Management believes that the financial institution that holds the Company’s investments is financially sound and accordingly, minimal credit risk exists with respect to these investments.