Item 9.01 Financial Statements and Exhibits
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Item 2.01 Completion of Acquisition or Disposition of Assets.
THE SHARE EXCHANGE AND RELATED TRANSACTIONS
On July 9, 2022, the Company completed the Merger with Emissions Zero Module,
Inc, ("EZM" or "Emissions Zero"), a Wyoming corporation. Pursuant to the terms
of the Merger agreement, as amended entered into by the parties on November 21,
2021. The Company agreed to issue to the shareholders of EZM an aggregate of
110,695,500 newly issued shares of the Company's common stock, $.001 par value,
in exchange for all of the issued and outstanding shares of common stock (and
all securities convertible into common stock) of Emissions Zero. Our Board of
Directors and our shareholders, by written consent of the holders of 75.71%
of our Common Stock, approved the Merger Agreement, a name change of the Company
to Colambda Technology, Inc. and the election of new directors ("Director
Nominees") to be affected upon completion of the Merger.
The Company previously filed with the Securities and Exchange Commission a
definitive Information Statement on Schedule 14C with respect to the Merger and
proposed related transactions, which was filed on December 12, 2021. See the SEC
website for a copy of such filing:
https://www.sec.gov/edgar/browse/?CIK=1104462.
The Merger Agreement required us to submit the Merger and Name Change to the
Financial Industry Regulatory Authority ("FINRA") which oversees the
Over-the-Counter-Bulletin Board ("OTC") and to obtain a new stock trading
symbol. The parties have been submitting information and material to OTC since
its initial application in early December, 2021. By amendment to the Merger
Agreement, the parties have temporarily waived compliance with the provision of
the Merger Agreement which originally required obtaining the new symbol prior to
closing. The parties have agreed to continue their efforts to obtain a new
symbol for the Company's common stock.
We previously filed an amendment to our certificate of incorporation to change
our name to Colambda Technologies, Inc. The Name Change became effective under
Nevada law on January 4, 2022.
In addition, the parties to the Merger Agreement agreed that upon closing, the
pre- Merger directors and officers of Colambda Technology would resign from all
of their positions and new management would be appointed. The new management
are the officers and directors and nominees of Emissions Zero. See pages 4 and
42 and Item 5.02 below
At the Closing of the Merger, Emissions Zero is required to deliver the sum of
$105,000 to Robert J. Nielson and $105,000 to George Christodoulou, the
Company's pre- Merger President/Chief Executive Officer/Chief Financial
Officer/Director, as repayment of advances to the Company. Emissions Zero
previously delivered the sum of $25,000 to George Christodoulou and $25,000 to
Robert J. Nielson.
Pursuant to an amendment (Amendment No. 3) to the Merger Agreement executed
effective July 9, 2022, the parties agreed that Closing of the Merger was deemed
effective as of July 9, 2022. Further, the parties agreed to defer the payments
due to Robert Nielson and George Christodoulou which were conditions to Closing
until the earlier of 30 days after closing or receipt of a new trading symbol
from FINRA/OTC. A copy of the Amendment No. 3 to the Merger Agreement is filed
as an Exhibit to this Form 8-K.
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The issuance of shares of our Common Stock to holders of EZM's capital stock in
connection with the Share Exchange was not registered under the Securities Act,
in reliance upon the exemption from registration provided by Section 4(2) of the
Securities Act, which exempts transactions by an issuer not involving any public
offering, and Regulation D and/or Regulation S promulgated by the SEC under that
section. The shares issuable to the EZM shareholders will be deemed restricted
securities under the SEC's rules and regulations and will not be sellable under
the SEC's Rule 144 until certain conditions are satisfied. These conditions
are:
Ÿthe issuer of the securities has ceased to be a shell company;
Ÿthe issuer is subject to the reporting requirements of section 13 or 15(d) of
the Exchange Act;
Ÿthe issuer has filed all reports and other materials required to be filed by
section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12
months, other than Form 8-K reports; and
Ÿone year has elapsed since the issuer has filed current ''Form 10 information''
with the SEC reflecting its status as an entity that is no longer a shell
company.
A copy of the Merger Agreement was previously filed as Exhibit 10.1 to the
Company's Form 8-K as filed with the SEC on November 22, 2021. All descriptions
of the terms of the Merger Agreement contained herein are qualified in their
entirety by reference to the text thereof filed as an exhibit to the November
22, 2021 Form 8-K, Amendment No. 1 to Merger Agreement, filed as an Exhibit to
Form 8-K filed on March 30, 2022, and the Amendments No. 2 and No. 3 to Merger
Agreement filed as Exhibits to this Form 8-K, all of which are incorporated
herein by reference.
Departure and Appointment of Directors and Officers
Effective with the closing of the Merger (July 9, 2021), our Board of Directors
consists of (5) members. On the Closing Date, George Christodoulou, Mark
Christodoulou, and Solon Piitarides, who were the officers and directors of
Colambda Technologies Inc. before the Merger, resigned their positions as a
directors and officers, and Sumit Isaranggunlnaayudhya, David Riggs, Kent Hush,
Russell E Klawunn, and Kim Mitchell were appointed as new members to the Board
of Directors.
Also on the Closing Date, George Christodoulou, our President, Secretary,
Treasurer and sole officer before the Share Exchange, resigned from these
positions, and Sumit Isaranggunlnaayudhya was appointed as President, David
Riggs was appointed as our Chief Executive Officer and Secretary, and Kent Hush
was appointed Chief Financial Officer and Treasurer.
Name Position Age Term
David Riggs President, Chief Executive Officer, Director 63 1 Year
Kent Hush Treasurer, Chief Financial Officer, Director 51 1 Year
Sumit Isaranggul Na Ayudhya Secretary, Chief Technology Officer, Chairman 61 1 Year
Russell E. Klawunn Chief Operating Officer, Director 56 1 Year
Kim Mitchell Director 71 1 Year
Summary of Beneficial Ownership of Securities of Colambda (formerly named New
Century Resources Corporation)
Prior to the Merger, the Company had 12,481,724 shares of common stock, of
which, 7,950,000 shares were beneficially owned by the then existing Officers
and Directors. Immediately after giving effect to the Merger and the issuance of
the shares of common stock to the Emissions Zero shareholders, the Company's
total common shares outstanding is 123,176,724, of which 96,107,699 shares are
beneficially owned by the newly appointed Officers and Directors.
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In December 2021, Emissions Zero completed a private placement offering of
convertible notes for total gross proceeds of $1,215,000. The Company may at any
time, or from time to time, make a voluntary prepayment, whether in full or in
part, of these Notes, without premium or penalty. The Notes mature in 24 months
and bear annual interest of 12%. The Notes were converted into Emissions Zero
common stock immediately prior to Closing of the Merger, and are therefore
considered part of the issued and outstanding shares of Common Stock of
Emissions Zero, and thus converted into Colambda shares of common stock as part
of the aggregate shares issued at closing of the Merger.
The Notes Offering was made to a limited number of investors pursuant to an
exemption available under the Securities Act of 1933 (the "Act"), specifically
Rule 506(b) promulgated under Regulation D, and under certain other laws,
including the securities law of certain states.
The Notes have automatically converted as a result of the completion of the
Merger. The following reflects the proceeds received under their respective
tiers and the number of common stock equity units issued at closing.
Tier 1 Tier 2
Price $0.20 $0.40
Proceeds $580,000 $635,000
Common Stock Issued 2,900,000 1,587,500
The number of shares issuable as a result of the Note conversions is included in
the aggregate of 110,695,000 shares of stock to be issued by the Company to the
Emissions Zero shareholders.
Accounting Treatment; Change of Control
The Share Exchange is being accounted for as a "reverse acquisition," and EZM is
deemed to be the acquirer in the reverse acquisition. Consequently, the assets
and liabilities and the historical operations that will be reflected in the
financial statements prior to the Share Exchange will be those of Colambda
Technologies, Inc. and the consolidated financial statements after completion of
the Share Exchange will include the assets and liabilities of EZM, historical
operations of EZM and its subsidiary from the closing date of the Share
Exchange. As a result of the issuance of the shares of our Common Stock pursuant
to the Share Exchange, a change in control of the Company occurred as of the
date of consummation of the Share Exchange. Except as described in this Current
Report, no arrangements or understandings exist among present or former
controlling stockholders with respect to the election of members of our Board of
Directors and, to our knowledge, no other arrangements exist that might result
in a change of control of the Company.
We continue to be a "smaller reporting company," as defined under the Exchange
Act, following the Share Exchange. We believe that as a result of the Share
Exchange we have ceased to be a "shell company" (as such term is defined in Rule
12b-2 under the Exchange Act).
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DESCRIPTION OF BUSINESS
Historical Background
Colambda Technologies, Inc., formerly New Century Resources Corporation, was
incorporated under the laws of the State of Utah in July of 1979 as WEM
Petroleum, Inc. To fund its original business purpose, WEM Petroleum, Inc. filed
a registration statement under the Utah Securities Act, and relied on the
exemption from federal registration provided for in Section 3(a)11, Rule 147, of
the Securities Act of 1933, as amended (the "Securities Act"), for the purpose
of offering for sale an aggregate of 4,000,000 of its unregistered common shares
on an intrastate basis. The Issuer's Prospectus was declared effective on
September 19, 1979 and the Company closed its offering with all shares offered
sold to residents of the State of Utah for gross proceeds of $100,000. The
Company subsequently amended its Articles of Incorporation to increase in its
capital from 10,000,000 common shares authorized to 50,000,000 common shares
authorized. From inception through 1981, the Company conducted operations in the
oil and gas industry. Pursuant to an option granted the Company in August of
1979, the Company exercised its right to drill exploratory wells on 640 acres in
Cache County, Utah. Although various wells were drilled and completed, the
Company did not realize any revenues from these oil and gas operations. In 1984,
the Company attempted to refocus its business efforts into the mining industry
by entering into an option to lease property and mining equipment in Montana. It
ceased any significant business operations in the latter part of the 1980's when
it failed to exercise the option, due to lack of funding. In 1988, the Company
made an effort to commence conducting business again by expanding its business
purpose to include the marketing and development of high-tech products. The
Company's Board was also authorized to seek out suitable candidates for
acquisition or merger. In addition, the Company authorized a reverse split of
its issued and outstanding shares one (1) share for ten (10) shares, although
the same was never affected. The Company ceased doing business until late 1993.
In October 1993, the Corporation changed its name to New Century Resources
Corporation, acquiring 100% of the outstanding stock of G.C. Gulf Western
Trading Limited (G.C.) in exchange for 7,200,000 shares of stock, which gave the
stockholders of G.C. control of the Corporation by which it has conducted its
operations. This acquisition was accounted for as a reverse merger or
recapitalization of G.C. No goodwill or other write-up to fair market value of
the assets of G.C. occurred at the time of the merger. In 1994, the company was
re-domiciled in the state of Nevada. The Nevada entity became the surviving
corporation and the Utah Corporation was dissolved on February 14, 1994. As a
result of the merger/change of domicile, the Articles of Incorporation of the
Nevada entity became the Articles of the Company.
The Company divested itself of its 100% owned subsidiary G.C. on December 12,
2000, thereby eliminating the Trekkopje mining claims, a capitalized cost of
$10,533,252, the related liabilities amounting to $8,500,000 from its
acquisition, the note payable to its principal stockholder, which aggregated,
came to a total of $1,046,640, and any claims to accrued interest. This
divestiture was the unanimous decision of the board of directors, which was
based in part, upon the Corporation's inability to raise the necessary capital
to fund the exploration and development of the Trekkopje Uranium reserves. In
addition, a feasibility study conducted by Dr. Brian Hamilton Jones played
crucial role in their decision-making process, concluding that, due to the
current Uranium market, exploitation of the Uranium reserves on the property
would not be financially viable, and did not foresee any immediate or mid-term
prospects in world market conditions and pricing which would lead to a pricing
level justifiable of the exploitation of the Uranium reserves. Upon the
disposition, the Company re-entered the business development stage and
accumulated deficits during the business development stage are reported
effective as of January 1, 2005.
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In January 2022, the Company changed its name to Colambda Technologies, Inc. as
a condition precedent to closing of the Merger with Emissions Zero. Immediately
following the completion of the Merger on July 9, 2022, the business of
Emissions Zero and its wholly owned subsidiary, Job Air Group, Inc. ("JAG")
became our businesses.
Emissions Zero Module
Development of Products
Emissions Zero Module, Inc. was a Wyoming company founded in 2021 by Sumit
Isaranggul Na Ayudhya and William Tiley and is based in Tucson, Arizona.
Emissions Zero was founded to eliminate carbon monoxide in automobile emissions
and simultaneously reduce all other elements in these emissions (including
carbon monoxide, carbon dioxide, nitrous oxide, and methane). EZM intends
specifically to bring a patented product (called the Emissions Zero Modules) to
market that was developed to eliminate the harmful effects of tailpipe emissions
produced by internal combustion engines. The Emissions Zero Module connects
directly to the existing battery in any automobile or truck and works with the
car's existing electrical apparatus to create conditions within the engine's
combustion chamber that allows for a more complete combustion of fuel. The
internal combustion engine powers 99% of all cars and trucks in use today. The
Emissions Zero Module significantly reduces the carbon footprint of the standard
automobile and will help enable any vehicle to comply with new emissions
standards. We expect to continue to support clean air initiatives by improving
the Emissions Zero Module and introducing ever-evolving products.
The improved combustion of fuel results in a significant reduction of total
tailpipe emissions, increase performance, and increased miles per gallon of
fuel. The EZM is intended to work on all types of vehicles including cars, SUVs,
diesel trucks, large over-the-road semis and can also be utilized in aircraft
engines.
The internal combustion engine powers 99% of all cars and trucks in use today.
The EZM significantly reduces the carbon footprint of the standard automobile
and will help enable any vehicle to comply with new emissions standards.
Emissions Zero will continue to support clean air initiatives by improving the
EZM and introducing ever-evolving products.
Just as the catalytic converter began to reduce the pollutants in the air in
response to the 1963 Clean Air Act, the Emissions Zero Module will provide the
automobile industry the ability to comply with the stricter emissions standards.
We are currently performing a large-scale, detailed study of the Emissions Zero
Module. Management is also applying for the various governmental approvals
necessary to distribute an aftermarket product such as the Emissions Zero
Module.
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TECHNOLOGY
Combustion engines create energy from burning a fuel/air mixture. Spark ignition
introduces a spark to a compressed fuel/air mix and the burning causes an
expansion of hot gases to push a piston within a cylinder, converting the linear
movement of the piston into the rotating movement of a crankshaft that turns the
wheels of your car. Compression ignition, or diesel, only air is brought in and
compressed before a measured amount of fuel is sprayed into the hot compressed
air, causing it to ignite and power the vehicle. The EZM performs emissions
control on all types of engines. The EZM is a patented and proprietary emissions
control device. The Module is attached directly to the vehicle's battery with
the supplied power leads. Upon starting the engine, the Module affects the
characteristics of the fuel combustion in the combustion chambers. Through its
design and novel use of components, it causes a more efficient and complete burn
of the fuel. This enhanced combustion results in a dramatic drop in carbon
monoxide, unburnt fuel, and other gasses. As a result of this complete
combustion, vehicles will see an increase in fuel efficiency, overall
performance, and emissions reduction. This effect occurs in both spark and
compression ignition engines and can be adjusted for the size of the
vehicle/engine.
PATENTS
Emissions Zero has been granted a United States patent with respect to the
technology being used to reduce harmful emissions and improve overall engine
efficiency. Additional patents on products used on the same technology are
currently planned and in progress to strengthen the Company's position with
regard to all current and future product lines.
MARKET ANALYSIS SUMMARY
Management believes that the Emissions Zero Module should be considered a part
of the automobile aftermarket product category. For classification purposes,
management believes that it may be considered as a battery enhancement device.
The improvements in emissions and efficiency are equally beneficial to all
vehicles that utilize an internal combustion engine. The market ranges from
small single horsepower tractors to commercial and industrial vehicles or
machines powered by engines with thousands of horsepower. Even though the main
focus of the Emissions Zero Module is emissions reduction or elimination, the
fact that it connects to the battery may, in management's opinion, help the
process of obtaining ASTM (American Society for Testing and Materials)
certification. Management is unable to determine how large a share of the market
the Emissions Zero Module will control. Management believes that there are
currently no competitive products that compares to the Emissions Zero Module.
The closest environmental equivalent to the Emissions Zero Module is the modern
catalytic converter. The precursor to the catalytic converter was invented by
Eugene Houdry, a French mechanical engineer and expert in catalytic oil refining
who lived in the U.S. around 1950. The further refinements and perfection of
this concept led the catalytic converter to be adopted by all US auto
manufactures as standard equipment in 1975 to comply with the 1963 Clean Air
Act. Management believes that the Emissions Zero Module will reach the same
level of acceptance in a much shorter period, due to its immediate need and
simplistic operational platform. The Emissions Zero Module will initially be
sold as an aftermarket product.
EMPLOYEES
As of July 9, 2022, we had 232 full-time employees, including our executive
officers, and 6 part-time employees. Our contractual relationship with employees
consists of management agreements, consulting agreements, and employee
agreements. We have never experienced a work stoppage and believe our
relationship with our employees is good. None of our employees are part of a
unionized workforce.
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The Acquisition of and Business of Job Aire Group, Inc.
Effective January 1, 2022, Emissions Zero Module entered into a Stock Purchase
Agreement with the sole shareholder of Job Aire Group ("JAG") to acquire all of
the outstanding shares of JAG. Job Aire Group was a privately owned entity and
is a staffing company which provides employees to third parties such as
airlines, aircraft engine shops, repair facilities and similar entities and the
employees provide services to the airline maintenance business. Pursuant to
the terms of the acquisition agreement, Emissions Zero agreed to pay $745,000 in
installments and 2% of net revenue received by the Company, up to $1,000,000,
for the 36-month period following the closing date. At closing, Emissions Zero
paid an initial installment of $25,000 and will make 36 payments of $20,000
each, beginning January 2, 2022. As a result of the Stock Purchase Agreement,
JAG became a wholly owned subsidiary of Emissions Zero.
HISTORY OF JOB AIRE GROUP
Job Aire Group was incorporated under the laws of the State of Arizona. Job
Aire Group is a multi-technical aviation company whose employees specialize in
aircraft and engine inspection and audit, plus hard-core aeronautical
engineering. Also skilled in aircraft maintenance marketing, we place aircraft
into FAR 145 facilities for repair, refurbishment, painting, modification and
overhaul. JAG is well known for providing experienced and professional heavy
transport aircraft maintenance technicians world-wide. We do not directly
contract aircraft repair or maintenance; we are in essence an employee
leasing company.
Job Aire Group was a corporate expansion of Job-Aire Aviation Services, a
company created in 1997 by William D. Tiley, a retired Air Force Officer and
Commercial Pilot. Mr. Tiley retired in 2021 and Nick Ammons, as of January 1,
2022, commenced serving as the President and Chairman of the Board.
OVERVIEW OF INDUSTRY
Job Aire is an employee leasing company (sometimes also referred to as staff
leasing). Job Aire contracts with airline maintenance facilities to provide the
specialized employees needed for these maintenance facilities to complete their
contracts with the major airlines.
Job Aire has been in the industry for over 14 years and has an extensive
employee resource pool of highly desirable qualified employees from around the
world. Job Aire hires the employees then places these employees with clients in
the aviation maintenance, repair and operations (MRO) industry, based on the MRO
requirements and employee's certifications.
Job Aire is paid on a contract basis. Job Aire directly pays the employees and
then invoices the individual MRO on a net-30 term using a cost-plus formula. Job
Aire is the employer of record and provides and pays for workers' compensation
insurance, taxes and wages related to the employees.
We generally assume responsibility for, and manage certain risks associated
with:
•payments of salaries, wages and certain other compensation to work site
employees ("WSE") from our own bank accounts (based on client reports and
payments), including the processing of garnishment and wage deduction orders,
•reporting of wages, withholding and deposit of associated payroll taxes as the
employer of record,
•provision and maintenance of workers' compensation insurance and workers'
compensation claims processing,
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•access to, and administration of, group health, welfare, and retirement
benefits to WSEs under our-sponsored benefit plans,
•administration of unemployment claims, and
•provision of various HR policies and agreements, including employee handbooks
and worksite employee agreements.
The Aircraft Maintenance, Repair and Overhaul ("MRO") market in the U.S. is
estimated at US$9.9 Billion in the year 2021. China, the world's second largest
economy, is forecast to reach a projected market size of US$6.3 Billion by the
year 2026 trailing a compound annual growth rate (CAGR) of 5.9% over the
analysis period. Among the other noteworthy geographic markets are Japan and
Canada, each forecast to grow at 2.2% and 2.3% respectively over the analysis
period. Within Europe, Germany is forecast to grow at approximately 2.8% CAGR.
Low labor, service costs, easy access to skilled labor and enhanced service
levels, have made Asia-Pacific a highly attractive outsourcing and MRO
destination. Asian operators are driving maintenance, repair, and overhaul (MRO)
growth with low-cost labor markets such as Vietnam and Thailand. Airline
operators worldwide are currently outsourcing nearly 30% of wide-body heavy
airframe maintenance needs to China and Asia Pacific region. The repatriation
of wide-body heavy maintenance work is anticipated to create some revenue growth
in stagnant MRO markets in North America and Western Europe.
The Line Maintenance Segment is to expected to reach $8.9 billion by 2026.
Aircraft Line Maintenance involves inspection, identification and rectification
of problem on the aircraft body. The process also comprises of crucial aircraft
maintenance and regular repairs as per requirement. Line maintenance and
planning which was preferred to be retained in-house accounts for a larger share
of MRO outsourcing in recent years as several carriers are increasingly moving
heavy and base maintenance work to the emerging regions, primarily in Asia, as
they offer cheaper and efficient services. In the global Line Maintenance
segment, USA, Canada, Japan, China and Europe will drive the 2.2% CAGR estimated
for this segment. These regional markets accounting for a combined market size
of US$5.5 Billion in the year 2020 will reach a projected size of US$6.4 Billion
by the close of the analysis period. China will remain among the fastest growing
in this cluster of regional markets. Led by countries such as Australia, India,
and South Korea, the market in Asia-Pacific is forecast to reach US$1.2 Billion
by the year 2026, while Latin America will expand at a 2.5% CAGR through the
analysis period.
The Aviation Maintenance Group (AMG) predicts shortages for the next 10 years
globally. This is supported by the Aviation Technician Education Council (ATEC,
founded in 1961) 2021 Pipeline Report where ATEC concluded the shortage of
Aviation Technicians will continue to be a global dynamic for the next 15 years.
Additional research by SOURCE Global Industry Analysts, Inc. shows that
consumers in this industry primarily focus on the following factors when making
purchasing decisions:
·Availability
·Experience
·Cost
·Retention
·Work History
Once these criteria are met, the decision to utilize Job Aire Group is solely
. . .
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