CMOT Curtiss Motorcycles Company Inc (PK)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-K/A-1

 

(Mark One)

☒   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2014

 

☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 000-52500

 

Confederate Motors, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		26-4182621
(State or other jurisdiction of incorporation or organization)		(IRS employer identification number)
3029 2nd Avenue South, Birmingham, AL		35233
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code:  (205) 324-9888

 

Securities registered pursuant to Section 12(b) of the Act:  None

 

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, Par Value $0.001

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐  No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐  No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

 

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 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company.  See definitions of “large accelerated filer,” “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	☒

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐   No ☒

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity as of the last business day of the registrant’s most recently competed second fiscal quarter was $2,357,618.

 

The number of shares outstanding of the registrant’s common stock on April 15, 2015, was 29,029,556.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None

 

 

 

EXPLANATORY NOTE

 

The purpose of this Amendment No. 1 is to amend Item 9A, CONTROLS AND PROCEDURES.

 

Item 9A, CONTROLS AND PROCEDURES, has been amended to revise the “Disclosure Controls and Procedures” section to disclose that our disclosure controls and procedures were not effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

This Amendment No. 1 continues to speak as of the date of the original Form 10-K, and the Company has not updated or amended the disclosures contained in the amended items to reflect events that have occurred since the filing of the original Form 10-K, or modified or updated those disclosures in any way other than as described in the preceding paragraph. Accordingly, this Amendment No. 1 should be read in conjunction with the Company’s filings made with the SEC subsequent to the filing of the original Form 10-K on April 16, 2015. As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications of our principal executive officer and principal financial and accounting officer are also being filed as exhibits to this Amendment.

 

 

 

Table of Contents

 

PART II	4
ITEM 9A. CONTROLS AND PROCEDURES	4
PART IV	6
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	6
SIGNATURES	7

 

 

PART II

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

Our principal executive officer, H. Matthew Chambers, and our principal financial officer, Jay Etheridge, have concluded, based on their evaluation, that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report were not effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining internal control over financial reporting. Internal Control Over Financial Reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

1.	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

 

2.

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the registrant; and

 

3.	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

 

Management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2014, based on the framework established in Internal Control-Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  Based on this assessment, management concluded that as of December 31, 2014, it had material weaknesses in its internal control procedures, therefore the Company's internal controls were not effective.

 

A material weakness is a control deficiency, or combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.  We have concluded that our internal control over financial reporting was not effective as of December 31, 2014.

 

 

The Company’s assessment identified certain material weaknesses which are set forth below:

 

Entity Level Controls

 

We have insufficient corporate governance policies. Our corporate governance activities and processes are not always formally documented. Specifically, decisions made by the board to be carried out by management should be documented and communicated on a timely basis to reduce the likelihood of any misunderstandings regarding key decisions affecting our operations and management.

 

We currently have insufficient resources which may restrict our ability to gather, analyze and report information relative to the financial statements in a timely manner, including insufficient documentation and review of the selection and application of generally accepted accounting principles to significant non-routine transactions. In addition, the limited size of the accounting department makes it impractical to achieve an optimum segregation of duties.

 

Functional Controls and Segregation of Duties

 

We have an inadequate segregation of duties consistent with control objectives. Our management is composed of a small number of individuals resulting in a situation where limitations on segregation of duties exist. In order to remedy this situation we would need to hire additional staff to provide greater segregation of duties. Currently, it is not feasible to hire additional staff to obtain optimal segregation of duties.  Management intends to reassess this matter during the current fiscal year to determine whether improvement in segregation of duties is feasible.

 

Management believes that the material weaknesses set forth above were the result of the scale of our operations and are intrinsic to our small size.  Management believes these weaknesses did not have a material effect on our financial results and intends to take remedial actions upon receiving funding for our business operations.

 

We are committed to improving our financial organization. As part of this commitment, we will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us.

 

We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.  We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies, including:

 

1.	Adding personnel with the depth of knowledge and time commitment to provide a greater level of review for corporate activities;

 

2.	Continuing to update the documentation of our internal control processes, including formal risk assessment of our financial reporting processes; and

 

3.	Soliciting independent directors to enhance corporate governance and Board composition.

 

We intend to consider the results of our remediation efforts and related testing as part of our assessment of the effectiveness of our internal control over financial reporting.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART IV

 

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

Exhibits

 

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

Filed Herewith

2.1

Agreement and Plan of Merger dated February 12, 2009

8-K

000-52500

2.1

2/12/09

3.1

Amended and Restated Certificate of Incorporation

10-K

000-52500

3.1

4/16/13

3.2

Certificate of Merger filed March 13, 2009

10-K

000-52500

3.2

4/1/11

3.3

Bylaws

10-K

000-52500

3.3

4/1/11

4.1 & 10.1

2008 Incentive Plan*

8-K

000-52500

10.1

2/12/09

4.2 & 10.2

2014 Stock Incentive Plan*

8-K

000-52500

4.1

10/16/14

4.3

Securities Purchase Agreement dated January 30, 2009

8-K

000-52500

4.1

2/12/09

4.4

Registration Rights Agreement dated February 12, 2009

8-K

000-52500

4.2

2/12/09

10.3

Employment Agreement with H. Matthew Chambers*

8-K

000-52500

10.2

2/12/09

10.4

Employment Agreement with H. Matthew Chambers effective February 15, 2012*

10-K

000-52500

3.1

4/16/13

10.5

Terny Settlement Agreement

10-K

000-52500

3.1

4/16/13

10.6

Promissory Note dated September 27, 2012

10-K

000-52500

3.1

4/16/13

10.7

Subscription Agreement dated December 24, 2013 with Optimum Solution Pte. Ltd.

10-K

000-52500

10.7

4/15/14

10.8

Agreement with Rhiti Sports dated October 22, 2013

10-Q

000-52500

10.1

8/14/14

10.9

Sublease Agreement dated October 31, 2013

10-K

000-52500

10.9

4/16/15

14.1

Code of Ethics

8-K

000-52500

14.1

2/12/09

21.1

List of Subsidiaries

10-K

000-52500

21.1

4/16/15

31.1

Rule 13a-14(a) Certification by Principal Executive Officer

X

31.2

Rule 13a-14(a) Certification by Principal Financial Officer

X

32.1

Section 1350 Certification of Principal Executive Officer

10-K

000-52500

32.1

4/16/15

32.2

Section 1350 Certification of Principal Financial Officer

10-K

000-52500

32.2

4/16/15

101.INS

XBRL Instance Document

10-K

000-52500

101.INS

4/16/15

101.SCH

XBRL Taxonomy Extension Schema Document

10-K

000-52500

101.SCH

4/16/15

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

10-K

000-52500

101.CAL

4/16/15

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

10-K

000-52500

101.DEF

4/16/15

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

10-K

000-52500

101.LAB

4/16/15

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

10-K

000-52500

101.PRE

4/16/15

 

* Management contract on compensatory plan or arrangement required to be filed as an exhibit.

 

[SIGNATURE PAGE FOLLOWS]

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	Confederate Motors, Inc.
Date: November 20, 2015	By:	/s/ H. Matthew Chambers
		H. Matthew Chambers, Chief Executive Officer

 

 

7

Exhibit 31.1

 

Certification

 

I, H. Matthew Chambers, certify that:

 

1.           I have reviewed this Amendment No. 1 on Form 10-K/A to the annual report of Confederate Motors, Inc. for the year ended December 31, 2014;

 

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

 

(a)             Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)            Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)             Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)            Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)            All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)            Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 20, 2015

 

/s/ H. Matthew Chambers

H. Matthew Chambers, Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

 

Certification

 

I, Jay Etheridge, certify that:

 

1.          I have reviewed this Amendment No. 1 on Form 10-K/A to the annual report of Confederate Motors, Inc. for the year ended December 31, 2014;

 

2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.          The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

 

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.          The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 20, 2015

 

/s/ Jay Etheridge

Jay Etheridge, Controller

(Principal Financial Officer)