The accompanying notes are an integral
part of these condensed financial statements.
The accompanying notes are an integral
part of these condensed financial statements.
The accompanying notes are an integral
part of these condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2016
(Unaudited)
(THESE STATEMENTS HAVE NOT BEEN REVIEWED)
Note 1 Summary of Significant Accounting Policies
Basis of Presentation and Organization
Adama Technologies Corporation ( “
Adama Technologies ” or the “ Company ” ) was incorporated under the laws of the State of Delaware on September
17, 2007. The Company currently conducts no active operations and is engaged in identifying and merging with a suitable operating
company. An Agreement and Plan of Merger has been signed with Capital Interchange Corporation, a Florida corporation, for
a three-way merger, expected to close June 30, 2016. See, Subsequent Events.
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 condensed financial statements
of the Company as of June 30, 2016, and for the period then ended, 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, 2016, and the results of its operations and its cash flows for the period ended
June 30, 2016. These results are not necessarily indicative of the results expected for the calendar year ending December 31, 2016.
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, 2015, filed with
the Securities and Exchange Commission ( ” 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 an original maturity of three months or less to be cash and cash equivalents.
There were no cash equivalents at June 30, 2016 and 2015.
Loss per Share
Basic earnings per share are computed
by dividing the net income attributable to the common stockholders by the weighted average number of shares of common stock outstanding
during the period. Fully diluted earnings per share is computed similar to basic earnings per share except that the denominator
is increased to include the number of additional common shares that would have been outstanding if the potential common shares
had been issued and if the additional common shares were dilutive. Common stock equivalents were not included in the computation
of diluted loss per share in the statement of operations due to the fact that the Company reported a net loss and to do so would
be anti-dilutive for the periods presented.
ADAMA TECHNOLOGIES CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2016 (Unaudited)
(THESE STATEMENTS HAVE NOT BEEN REVIEWED)
Note 1 Summary of Significant Accounting Policies
(continued)
Income Taxes
Deferred tax assets and liabilities
are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial
reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification
of the assets and liabilities generating the differences.
The Company maintains a valuation allowance
with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing
the deferred tax asset and taking into consideration the Company ’ s financial position and results of operations for the
current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the
carry-forward period under the federal tax laws.
Changes in circumstances, such as the
Company generating taxable income, could cause a change in judgment about ability to realize the related deferred tax asset. Any
change in the valuation allowance will be included in income in the year of the change in estimate.
Fair Value of Financial Instruments
Financial Accounting Standards Board
(FASB) Accounting Standards Codification (ASC) 820 “ Fair Value Measurements and Disclosures ” (ASC 820) defines fair
value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement
date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed
based on market data obtained from independent sources (observable inputs) and (2) a reporting entity ’ s own assumptions
about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).
The fair value hierarchy consists of six broad levels, which gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The six levels of the fair
value hierarchy are described below:
Level 1 - Unadjusted quoted prices in
active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 - Inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices
for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that
are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs
that are derived principally from or corroborated by observable market data by correlation or other means.
ADAMA TECHNOLOGIES CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2016 (Unaudited)
(THESE STATEMENTS HAVE NOT BEEN REVIEWED)
Note 1 Summary of Significant Accounting Policies
(continued)
Level 3 - Inputs that are both significant
to the fair value measurement and unobservable.
The Company estimates the fair value
of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating
fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current
market exchange. As of June 30, 2016 and December 31, 2015, the carrying value of accounts payable and loans that are required
to be measured at fair value, approximated fair value due to the short-term nature and maturity of these instruments.
Estimates
The financial statements are prepared
on the basis of accounting principles generally accepted in the United States. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts
of assets, liabilities and expenses. Actual results could differ from those estimates made by management.
Beneficial Conversion Features
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.
Recent Accounting Pronouncements
In August, 2015, the Financial Accounting
Standards Board ( “ FASB ” ) issued Accounting Standards Update (ASU) No. 2015-15, Presentation of Financial Statements
– Going Concern (Subtopic 205-40), which now requires management to evaluate whether there are conditions or events, considered
in the aggregate, that raise substantial doubt about the entity ’ s ability to continue as a going concern within one year
after the date the financial statements are issued. If conditions or events raise substantial doubt about an entity ’ s ability
to continue as a going concern and substantial doubt is not alleviated after consideration of management ’ s plans, additional
disclosures are required. The amendments in this update are effective for the annual period ending after December 15, 2016, and
for annual periods and interim periods thereafter. Early application is permitted. These requirements were previously included
within auditing standards and federal securities law, but are now included within U.S. GAAP. We are currently assessing the impact
on the adoption of ASU and do not believe the adoption will have significant impact on our financial statements and disclosures.
In June 2015, the FASB issued ASU 2015-10,
Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2015-10 eliminates the distinction
of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information
on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2015-10 will be effective prospectively
for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, however early
adoption is permitted. The Company adopted ASU 2015-10 during the quarter ended May 31, 2016, thereby no longer presenting or disclosing
any information required by Topic 915.
ADAMA TECHNOLOGIES CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2016 (Unaudited)
(THESE STATEMENTS HAVE NOT BEEN REVIEWED)
We have evaluated the other recent accounting
pronouncements through ASU 2016-08 and believe that none of them will have a material effect on our financial statements.
Note 2 Going Concern
The accompanying unaudited condensed
financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America,
which contemplate continuation of the Company as a going concern. The Company has not established any source of revenue to cover
its operating costs, and as such, has incurred an operating loss since inception. Further, as of June 30, 2016, the cash resources
of the Company were insufficient to meet its current business plan. These and other factors raise substantial doubt about the Company’
s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result
from the possible inability of the Company to continue as a going concern. As of June 30, 2016, the Company has an accumulated
deficit of $18,492,269.
Note 3 Convertible Notes Payable
On November 18, 2011, the Company signed
a $30,000 convertible promissory note with a third party. The note bears interest at 8% per annum and was due on August 18, 2012.
The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal
balance into the Company ’ s common stock at a price equal to 58% of the average of the lowest six trading prices for the
Common Stock during the most recent ten day period. A beneficial conversion feature was determined to exist and was recorded at
the time of issue, but has been fully amortized in prior periods. This note is in default. According to the terms of the note upon
default the balance due is 150% of the unpaid principal balance. In addition, from the date of default the notes bear interest
at 22% per annum. The investor may in its sole discretion convert the default amount into equity. The balance outstanding on this
note at June 30, 2016 was $45,000.
On April 27, 2012, the Company signed
a $32,500 convertible promissory note with a third party. The note bears interest at 8% per annum and was due on January 27, 2013.
The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal
balance into the Company ’ s common stock at a price equal to 58% of the average of the lowest six trading prices for the
Common Stock during the most recent ten day period. A beneficial conversion feature was determined to exist and was recorded at
the time of issue, but has been fully amortized in prior periods. This note is in default. According to the terms of the note upon
default the balance due is 150% of the unpaid principal balance. In addition, from the date of default the notes bear interest
at 22% per annum. The investor may in its sole discretion convert the default amount into equity. The balance outstanding on this
note at June 30, 2016 was $48,750.
On October 15, 2013, the Company converted
$30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due
on October 15, 2015. The note has conversion rights that allow the holder of the note at any time to convert all or any part of
the remaining principal balance into the Company ’ s common stock at a fixed price of $0.0015. A beneficial conversion feature
of $30,000 was determined to exist and was recorded at the time of issue. $30,000 of the beneficial conversion feature has been
amortized as of June 30, 2016. This note is in default.
ADAMA TECHNOLOGIES CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2016 (Unaudited)
(THESE STATEMENTS HAVE NOT BEEN REVIEWED)
Note 3 Convertible Notes Payable
(continued)
On January 15, 2015, the Company converted
$30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due
on January 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of
the remaining principal balance into the Company ’ s common stock at a fixed price of $0.0015. A loss on extinguishment of
debt of $23,564 was determined to exist and was recorded at the time of issue. This note is in default.
On March 15, 2015, the Company converted
$30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due
on March 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the
remaining principal balance into the Company ’ s common stock at a fixed price of $0.0015. A loss on extinguishment of debt
of $30,000 was determined to exist and was recorded at the time of issue. This note is in default.
On March 15, 2015, the Company converted
$30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due
on March 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the
remaining principal balance into the Company ’ s common stock at a fixed price of $0.0015. A loss on extinguishment of debt
of $30,000 was determined to exist and was recorded at the time of issue. This note is in default June 30, 2016.
On June 15, 2015, the Company converted
$30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due
on June 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the
remaining principal balance into the Company ’ s common stock at a fixed price of $0.0015. A loss on extinguishment of debt
of $30,000 was determined to exist and was recorded at the time of issue.
On July 1, 2015, the Company converted
$60,000 of amounts due to officers into a convertible promissory note with a third party. The note bears interest at 8% per annum
and was due on July 31, 2016. The note has conversion rights that allow the holder of the note after six months to convert all
or any part of the remaining principal balance into the Company ’ s common stock at a fixed price of $0.0015.
On September 15, 2015, the Company converted
$30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due
on September 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part
of the remaining principal balance into the Company ’ s common stock at a fixed price of $0.0015. A loss on extinguishment
of debt of $30,000 was determined to exist and was recorded at the time of issue.
On December 15, 2015, the Company converted
$30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due
on December 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of
the remaining principal balance into the Company ’ s common stock at a fixed price of $0.0015. A loss on extinguishment of
debt of $30,000 was determined to exist and was recorded at the time of issue.
On March 15, 2016, the Company converted
$30,000 of payables into a convertible promissory note with a third party. The note bears interest at 8% per annum and was due
on March 15, 2016. The note has conversion rights that allow the holder of the note at any time to convert all or any part of the
remaining principal balance into the Company ’ s common stock at a fixed price of $0.0015. A loss on extinguishment of debt
of $30,000 was determined to exist and was recorded at the time of issue.
ADAMA TECHNOLOGIES CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2016 (Unaudited)
(THESE STATEMENTS HAVE NOT BEEN REVIEWED)
Note 3 Convertible Notes Payable
(continued)
As of June 30, 2016 and December 31,
2015, the balance of convertible notes payable was $393,750 and $363,750.
For the three months ended June 30,
2016 the Company has recognized $13,926 in interest expense.
Note 4
Derivative Liability
The Company has various convertible instruments outstanding
more fully described in Note 3, some of which contain derivative features. As of June 30, 2016, the fair value of the Company ’
s derivative liabilities was $127,768.
The following table summarizes the derivative liabilities
included in the balance sheet:
|
|
Fair Value Measurements
Using Significant Unobservable Inputs
(Level 3)
|
|
Derivative Liabilities:
|
|
|
|
|
Balance at December 31, 2015
|
|
$
|
171,560
|
|
Additions
|
|
|
-
|
|
Change in fair value
|
|
|
(43,792
|
)
|
Deletions
|
|
|
-
|
|
Balance at June 30, 2016 (unaudited)
|
|
$
|
127,768
|
|
The fair values of derivative instruments were estimated
using the Black Scholes pricing model based on the following weighted-average assumptions:
|
|
Convertible Debt Instruments
|
|
Risk-free rate
|
|
|
0.17
|
%
|
Expected volatility
|
|
|
182.71
|
%
|
Expected life
|
|
|
0.25 year
|
|
Note 5 Stockholders ’ Deficit
During the quarter ended June 30, 2016,
the Company did not issue any shares of common stock. As a result, the total shares outstanding as of June 30, 2016 remained at
328,851,197.
On March 25, 2015, Novation Holdings,
Inc., an unrelated party, agreed to purchase 1,000,000 shares of voting preferred stock for $15,000. The preferred shares
have voting power equal to 51 percent of the total combined voting power of all classes of stock entitled to vote on any matter.
The issuance of the shares was approved by the Board of Directors. The preferred shares have been issued.
ADAMA TECHNOLOGIES CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2016 (Unaudited)
(THESE STATEMENTS HAVE NOT BEEN REVIEWED)
Note 6 Pending Litigation.
On October 25, 2012, JS Barkats PLLC
filed a breach of contract action against the Company and a former officer, Aviram Malik in the Supreme Court of New York, for
breach of contract relating to a funding transaction in June 2012. The Complaint, which was apparently served on former management
but was never answered or otherwise responded to by former management and which was never disclosed in our prior episodic filings,
seeks to recover $45,395 in a cash finders ’ fee allegedly due plus 2.5 percent of our issued and outstanding common stock
as of the date the fee was earned, plus forfeiture of all of the common stock, warrants and options owned by Aviram Malik, individually.
As a result of the failure to respond to the action, the Company is now in default in this action and plaintiff is seeking
entry of a default judgment. Management has engaged with plaintiff and attempted to reach an amicable resolution of the matter.
No amount has been accrued in the financial statements related to the legal proceedings, no judgment has been entered and the current
status of the matter is unknown.
There are no other known pending legal
proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record
or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the
Company or has a material interest adverse to the Company. The Company ’ s property is not the subject of any other pending
legal proceedings.