☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED July 31, 2020
Commission file number 000-55369
ADAIAH DISTRIBUTION INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
C/O
YOSEF YAFE
BET IRAEL 4
JERUSALEM
ISRAEL
(Address of principal executive offices, including zip code.)
972-52-5408519
(Telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☒
(Do not check if a smaller reporting company)
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☒ NO ☐
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 31,518,466 shares as of August 10, 2020.
ITEM 1. FINANCIAL STATEMENTS
ADAIAH DISTRIBUTION INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
July 31,
2020
October 31,
2019
(Unaudited)
(Audited)
ASSETS
Current Assets
Cash
0
0
TOTAL ASSETS
0
0
LIABILITIES AND STOCKHOLDERS EQUITY
LIABILITIES
Accrued expenses
8,065
11,141
Convertible Promissory Note (Related Party)
4,700
9,956
TOTAL LIABILITIES
12,765
21,097
STOCKHOLDERS' EQUITY (DEFECIENCY)
Common Stock; Authorized 750,000,000, par value $0.001 Issued and Outstanding as at July 31, 2020 and as at October 31, 2019 31,518,466 and 517,853 respectively
31,518
518
Additional Paid in Capital
250,482
250,482
(Accumulated Deficit)
-294,765
-272,097
Total Stockholders ' equity (deficiency)
-12,765
-21,097
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
0
0
All share amounts reflect the reverse split 1-400 on June 5, 2020 retroactively
The accompanying notes are an integral part of these financial statements
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ADAIAH DISTRIBUTION INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Nine Months
Three Months
Nine Months
Three Months
Ended
Ended
Ended
Ended
July 31, 2020
July 31, 2020
July 31, 2019
July 31, 2019
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Operating Expenses
General and Administrative
22,189
10,508
94,056
94,056
Total Expenses
22,189
10,508
94,056
94,056
Interest Expense (related party)
479
269
-
-
Net (Loss) for the Period
22,668
10,777
94,056
94,056
Net (Loss) Per Share
0
0
0
0
(Basic and Diluted)
0.0000
0.0000
0.0000
0.0000
Weighted Number of Average Shares outstanding
3,273,409
517,853
255,353
255,353
All share amounts reflect the reverse split 1-400 on June 5, 2020 retroactively
The accompanying notes are an integral part of these financial statements
3
ADAIAH DISTRIBUTION INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Nine months
ended
July 31, 2020
Nine months
ended
July 31, 2019
(Unaudited)
(Unaudited)
Net (Loss)
-22,668
-94,056
Adjustments to reconcile Net Lossto net cashused in Operations
Operating Activities
Increase (Decrease) in accrued expenses
-3,076
82,425
Increase (Decrease) in accrued interest expense on convertible note (related party)
479
Net cash used in operating activities
-25,265
-11,631
Financing Activities
Loans received from a related party
25,265
11,631
Net cash provided for by financing activities
25,265
11,631
Investing Activities
Net cash (used in) provided by investing activities
Net (Decrease) in Cash
0
0
Cash at the beginning of the period
Cash at the end of the period
0
0
Supplemental disclosure
Cash paid for income taxes
0
0
Cash paid for interest expense
0
0
Non Cash Transactions
Conversion of $31,000 of the convertible note in 31,000,000 common shares
31,000
The accompanying notes are an integral part of these financial statements
4
ADAIAH DISTRIBUTION INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN SHAREHOLDER‘S EQUITY (DEFICIENCY)
Additional paid
Accumulated
Three months ending July 31, 2019
Shares
Common Stock
In Capital
Deficit
Total
Balance April 30, 2019 (Unaudited)
255,353
255
145,745
-146,000
0
Net income (loss) for the three months ending July 31, 2019
-94,056
-94,056
Balance July 31, 2019 (Unaudited)
255,353
255
145,745
-240,056
-94,056
Additional paid
Accumulated
Nine months ending July 31, 2019
Shares
Common Stock
In Capital
Deficit
Total
Balance October 31, 2018 ( Audited )
255,333
255
145,745
-146,000
0
Net income (loss) for the nine months ending July 31, 2019
-94,056
-94,056
Balance July 31, 2019 (Unaudited)
255,333
255
145,745
-240,056
-94,056
Additional paid
Accumulated
Three months ending July 31, 2020
Shares
Common Stock
In Capital
Deficit
Total
Balance April 30, 2020 (Unaudited)
517,853
518
250,482
-283,988
-32,988
Net income (loss) for the threemonths ending July 31, 2020
-10,777
-10,777
Issuance of shares upon conversion of loan to common stock (related party)
31,000,000
31,000
31,000
Issuance of shares to Cede and Co and Shareholders for rounding on the reverse split
613
Balance July 31, 2020 (Unaudited)
31,518,466
31,518
250,482
-294,765
-12,765
Additional paid
Accumulated
Nine months ending July 31, 2020
Shares
Common Stock
In Capital
Deficit
Total
Balance October 31, 2019 (Audited)
517,853
518
250,482
-272,097
-21,097
Net income (loss) for the nine months ending July 31, 2020
-22,668
-22,668
Issuance of shares upon conversion of loan to common stock (related party)
31,000,000
31,000
31,000
Issuance of shares to Cede and Co and Shareholders for rounding on the reverse split
613
Balance July 31, 2020 (Unaudited)
31,518,466
31,518
250,482
-294,765
-12,765
All share amounts reflect the reverse split 1-400 on June 5, 2020 retroactively
The accompanying notes are an integral part of these financial statements
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Adaiah Distribution Inc.
Notes to the Financial Statements
July 31, 2020
Note 1: Organization and Basis of Presentation
Adaiah Distribution, Inc. (the “Company”) is a for profit corporation established under the corporation laws in the State of Nevada, United States of America on September 12, 2013.
The Company is not currently engaged in any business operations. It is however seeking to identify, locate and if warranted acquire new commercial opportunities.
The accompanying unaudited interim financial statements of Adaiah Distribution, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Registration Statement on Form S-1 filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the fiscal year ended October 31, 2019 as reported on Form 10-K have been omitted.
Unless the context otherwise requires, all references to “Adaiah Distribution,” “we,” “us,” “our” or the “company” are to Adaiah Distribution, Inc.
On April 25, 2019, the eighth judicial District Court of Nevada appointed Yosef Yafe as custodian for the Company, proper notice having been given. There was no opposition. Pursuant to the Order of Custodianship, a Special Meeting of Shareholders was held on May 29, 2019 at 8:00 a.m. PST, Yosef Yafe as limited custodian. Notice was sent May 13, 2019 in compliance with Court Order. Present were Yosef (holding shares through Cede & Co.) and two additional proxies also holding shares through Cede & Co.).
Note 2: Going Concern
The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern for the one year from the date these financial statements were available to be issued.
The Company’s ability to continue as a going concern is dependent upon the Company’s ability to generate sufficient revenues to operate profitably or raise additional capital through debt financing and/or through sales of common stock. In the event the Company is not able to do so the director of the Company has agreed to provide the necessary funding for the Company to continue in a limited operations scenario for the next 12 months, which would include the costs associated with maintaining reporting status with the Securities and Exchange Commission.
The failure to achieve the necessary levels of profitability or obtain the additional funding would be detrimental to the Company.
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Adaiah Distribution Inc.
Notes to the Financial Statements
July 31, 2020
Note 3: Significant Accounting Policies and Recent Accounting Pronouncements
Use of Estimates and Assumptions
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 period. Actual results could differ from those estimates.
Due to the limited level of operations, the Company has not had to make material assumptions or estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Fair Value of Financial Instruments
ASC 825, “Disclosures about Fair Value of Financial Instruments”, requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31 , 2020.
The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accrued liabilities and notes payable. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair value.
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Adaiah Distribution Inc.
Notes to the Financial Statements
July 31, 2020
Basic and Diluted Loss Per Share
The Company computes earnings (loss) per share in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments, and therefore, basic and diluted earnings (loss) per share are equal. Stock splits are given retroactive recognition for earnings or loss per share.
Revenue Recognition
The company follows the guidelines of ASC 605-15 for revenue recognition.
No revenues were recorded for the fiscal periods ending July 31, 2019 and July 31, 2020.
Income Taxes
We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
Note 4: Property and Equipment
The Company has no carrying value of fixed assets as of July 31, 2019 or July 31, 2020 and no depreciation was recorded for these respective periods.
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Adaiah Distribution Inc.
Notes to the Financial Statements
July 31, 2020
Note 5: Legal Matters
The Company has no known legal issues pending.
Note 6: Capital Stock
On October 28, 2013 the Company authorized 75,000,000 shares of commons stock with a par value of $0.001 per share.
On October 28, 2013 the Company issued 250 shares of common stock for a purchase price of $0.001 per share to its sole director. The Company received aggregate gross proceeds of $4,000.00.
In January 2015 a total of 63 shares were issued to a total of 30 shareholders for $.04 per share for total proceeds of $40,000. The shares were registered pursuant to a Registration Statement on Form S-1 as filed with the Securities and Exchange Commission that was declared effective on November 3, 2014.
On November 29, 2015, the Company’s board of directors elected by unanimous written consent to file Articles of Amendment to its Articles of Incorporation with the Nevada Secretary of State to (i) increase the Company’s authorized number of shares of common stock from 75 million to 750 million, and (ii) increase the Company’s total issued and outstanding shares of common stock by conducting a forward split of such shares at the rate of 25 shares for every one (1) share currently issued and outstanding (the “Forward Split”). On December 4, 2015, the Company filed such Articles of Amendment with the Nevada Secretary of State. The record date for the Forward Split is December 1, 2015.
On December 4, 2015, the Company filed an Issuer Company-Related Action Notification Form with FINRA requesting that the aforementioned Forward Split be affected in the market. Such notification form is being reviewed by FINRA.
On December 2, 2015, the Company by written consent of the Board of Directors approved the issuance to Mr. Nikolay Titov of 40 restricted shares of the Company’s common stock in exchange for continued services as the sole member of the Board and the Company’s sole executive officer.
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Adaiah Distribution Inc.
Notes to the Financial Statements
July 31, 2020
On September 19, 2016, the Company filed Articles of Amendment to its Articles of Incorporation with the Nevada Secretary of State whereby it amended its Articles of Incorporation by (i) decreasing the Company’s authorized number of shares of common stock from 750 million to 750,000, and (ii) decreasing the Company’s total issued and outstanding shares of common stock by conducting a reverse split of such shares at the rate of one (1) share for every one thousand (1,000) share currently issued and outstanding, resulting in 353 shares being issued and outstanding.
On November 8, 2016 the Company’s request for the Reverse Split was approved by FINRA and effected in the market. The Company’s ticker symbol was also changed to “ADAD”.
In January 2017 the Company filed with the State of Nevada and increased the authorized shares to 750,000,000.
On February 13, 2017 the Company issued 76,000,000 shares to its sole director for continuation of his services to the Company (190,000 post the reverse split of 1-400).
On February 13, 2017 the Company issued 25,000,000 shares in exchange of conversion of $25,000 of debt to a third party (62,500 post the reverse split of 1-400).
On May 2, 2017 the Company issued 1,000,000 shares to 3D PIONEER SYSTEMS LTD as an advance payment for an asset purchase agreement (2,500 post the reverse split of 1-400).
On September 5, 2019 the Company issued 100,000,000 common shares of the Company to the CEO pursuant to the equity compensation agreement signed August 10, 2019 for the fiscal year ending October 31, 2019 (250,000 post the 1-400 reverse split).
On September 5 the Company issued 5,000,000 common shares upon conversion of $5,000 of the convertible note signed on August 10, 2019 (12,500 post the 1-400 reverse split).
On April 28 the majority shareholders of the Company voted to effect a reverse split of 1-400 on its common stock. The authorized amount of 750,000,000 is to be unchanged and hence the par value of the Company of $0.001 is also to remain unchanged.
On June 5, 2020 Finra approved the reverse split and it became effective on that date too.
On June 5 2020 concurrent with the reverse split the Company issued new additional 613 shares to certain shareholders as part of rounding differences.
On July 7 the CEO converted $31,000 of his debt in accordance to the convertible note at the conversion rate of $0.001 and 31,000,000 restricted common shares were issued accordingly.
As of July 31, 2020 there were no outstanding stock options or warrants.
As of July 31, 2020, as a result of the reverse split and the issuance of the shares upon the conversion of the $31,000 in there were 31,518,466 shares of common stock outstanding
10
Adaiah Distribution Inc.
Notes to the Financial Statements
July 31, 2020
Note 7: Income Taxes
The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.
ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.
Note 8: Related Party Transactions
On August 10, 2019 the Company signed a convertible note for funds being advanced to the Company by the CEO as at that date and for a twelve month period following that date which can be converted by the CEO at any time into restricted common shares of the Company at a conversion rate of $0.001 per share. The note bears interest of 4% per annum. The balance of the note as at October 31, 2019 was $9,956 net of $5,000 being converted into 12,500 shares in September of 2019. During the nine months ended July 31 2020 the CEO advanced additional funds to the Company in the amount of $25,265 and on July 7, 2020 converted $31,000 into 31,000,000 restricted common shares of the Company. The balance of the note as at July 31, 2020 was $4,700 which also includes accrued interest expense of $479.That fair value of the note as at that date approximates the outstanding carrying amount of $4,700.
Note 9: Subsequent events
The Company has evaluated events subsequent to the date these financial statements have been issued to assess the need for potential recognition or disclosure in this report. Such events were evaluated through August 9, 2020. Based upon this evaluation, it was determined that other than the event disclosed above, no other subsequent events occurred that require recognition or disclosure in the financial statements.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States dollars ($US) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this report, unless otherwise specified, all references to “common stock” refer to the common shares in our capital stock.
As used in this quarterly report, the terms “we”, “us”, “our”, “Adaiah” and “Adaiah Distribution” mean Adaiah Distribution Inc., unless the context clearly requires otherwise.
Results of Operations
On October 28, 2013 the Company authorized 75,000,000 shares of commons stock with a par value of $0.001 per share.
On October 28, 2013 the Company issued 250 shares of common stock for a purchase price of $0.001 per share to its sole director. The Company received aggregate gross proceeds of $4,000.00.
In January 2015 a total of 63 shares were issued to a total of 30 shareholders for $.04 per share for total proceeds of $40,000. The shares were registered pursuant to a Registration Statement on Form S-1 as filed with the Securities and Exchange Commission that was declared effective on November 3, 2014.
On November 29, 2015, the Company’s board of directors elected by unanimous written consent to file Articles of Amendment to its Articles of Incorporation with the Nevada Secretary of State to (i) increase the Company’s authorized number of shares of common stock from 75 million to 750 million, and (ii) increase the Company’s total issued and outstanding shares of common stock by conducting a forward split of such shares at the rate of 25 shares for every one (1) share currently issued and outstanding (the “Forward Split”). On December 4, 2015, the Company filed such Articles of Amendment with the Nevada Secretary of State. The record date for the Forward Split is December 1, 2015.
On December 4, 2015, the Company filed an Issuer Company-Related Action Notification Form with FINRA requesting that the aforementioned Forward Split be affected in the market. Such notification form is being reviewed by FINRA.
On December 2, 2015, the Company by written consent of the Board of Directors approved the issuance to Mr. Nikolay Titov of 40 restricted shares of the Company’s common stock in exchange for continued services as the sole member of the Board and the Company’s sole executive officer.
12
On September 19, 2016, the Company filed Articles of Amendment to its Articles of Incorporation with the Nevada Secretary of State whereby it amended its Articles of Incorporation by (i) decreasing the Company’s authorized number of shares of common stock from 750 million to 750,000, and (ii) decreasing the Company’s total issued and outstanding shares of common stock by conducting a reverse split of such shares at the rate of one (1) share for every one thousand (1,000) share currently issued and outstanding, resulting in 353 shares being issued and outstanding.
On November 8, 2016 the Company’s request for the Reverse Split was approved by FINRA and effected in the market. The Company’s ticker symbol was also changed to “ADAD”.
In January 2017 the Company filed with the State of Nevada and increased the authorized shares to 750,000,000.
On February 13, 2017 the Company issued 76,000,000 shares to its sole director for continuation of his services to the Company (190,000 post the reverse split of 1-400).
On February 13, 2017 the Company issued 25,000,000 shares in exchange of conversion of $25,000 of debt to a third party (62,500 post the reverse split of 1-400).
On May 2, 2017 the Company issued 1,000,000 shares to 3D PIONEER SYSTEMS LTD as an advance payment for an asset purchase agreement (2,500 post the reverse split of 1-400).
On September 5, 2019 the Company issued 100,000,000 common shares of the Company to the CEO pursuant to the equity compensation agreement signed August 10, 2019 for the fiscal year ending October 31, 2019 (250,000 post the 1-400 reverse split).
On September 5 the Company issued 5,000,000 common shares upon conversion of $5,000 of the convertible note signed on August 10, 2019 (12,500 post the 1-400 reverse split).
On April 28 the majority shareholders of the Company voted to effect a reverse split of 1-400 on its common stock. The authorized amount of 750,000,000 is to be unchanged and hence the par value of the Company of $0.001 is also to remain unchanged.
On June 5, 2020 Finra approved the reverse split and it became effective on that date too.
On June 5 2020 concurrent with the reverse split the Company issued new additional 613 shares to certain shareholders as part of rounding differences.
On July 7 the CEO converted $31,000 of his debt in accordance to the convertible note at the conversion rate of $0.001 and 31,000,000 restricted common shares were issued accordingly.
As of July 31, 2020 there were no outstanding stock options or warrants.
As of July 31, 2020, as a result of the reverse split and the issuance of the shares upon the conversion of the $31,000 in there were 31,518,466 shares of common stock outstanding
13
The Company currently has no operations. It is however seeking to identify, locate and if warranted acquire new commercial opportunities.
During the nine months ended July 31, 2019 ( and for the three months then ended ) and for the nine months ended July 31, 2020 the Company incurred expenses in the amount of $94,056 and $22,668 for legal and other professional fees incurred for the preparation and filing of the reports required to be filed with the SEC and including $479 for accrued interest on the note payable to the CEO. The nine months ending July 31, 2019, included $70,000 of equity compensation to the CEO.
For the three months ending July 31, 2020 the Company incurred expenses in the amount of $10,777 which relate to legal, and professional fees incurred with the filing of its reports with the SEC and also including $210 of interest expense accrued on the note payable to the CEO.
Balance Sheet
The main changes from the balance sheet from October 31, 2019 to July 31, 2020 was a decrease in accrued expenses in the amount of $3,076 and a decrease in the convertible note of $5,256 of which $479 relates to accrued interest on the note payable. A reverse split of 1-400 also became effective on June 5, 2020 and 31,000,000 additional new shares were issued after the reverse split upon the conversion of the convertible note of the CEO.
Liquidity and Capital Resources
The Company’s ability to continue as a going concern is dependent upon the Company’s ability to generate sufficient revenues to operate profitably or raise additional capital through debt financing and/or through sales of common stock. In the event the Company is not able to do so the director of the Company has agreed to provide the necessary funding for the Company to continue in a limited operations scenario for the next 12 months, which would include the costs associated with maintaining reporting status with the Securities and Exchange Commission.
The failure to achieve the necessary levels of profitability or obtain the additional funding would be detrimental to the Company.
Our director has agreed, verbally, to continue to loan the company funds for operating expenses in a limited scenario, but he has no legal obligation to do so.
Cash Flows
For the fiscal periods ending July 31, 2020 and July 31, 2019 the Company used cash in operating activities of $25,265 and $11,631, respectively and received cash from financing activities of $25,265 and $11,631 respectively.
14
Voting Matters
On April 28 the majority shareholders of the Company voted to affect a reverse split of 1-400 on its common stock. The authorized amount of 750,000,000 is to be unchanged and hence the par value of the Company of $0.001 is also to remain unchanged. The reverse split was approved by FINRA and became effective on June 5, 2020.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Management maintains “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of July 31 , 2020
Based on that evaluation, management concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Securities and Exchange Commission’s rules and forms.
Changes in Internal Controls over Financial Reporting
As of the end of the period covered by this report, there have been no changes in the internal controls over financial reporting during the quarter ended July 31, 2020, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting subsequent to the date of management’s last evaluation.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS.
The following exhibits are included with this quarterly filing. Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our Registration Statement on Form S-1, filed under SEC File Number 000-55369, at the SEC website at www.sec.gov:
Interactive data files pursuant to Rule 405 of Regulation S-T
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Adaiah Distribution Inc.
Registrant
Date: August 10, 2020
By:
/s/ Yosef Yafe
Yosef Yafe
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer & Sole Director
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