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EX-5.1 - OPINION AND CONSENT OF THE O'NEAL LAW FIRM, P.C. - EVCARCO, INC.exhibit_5-1.htm
EX-23.1 - CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - EVCARCO, INC.exhibit_23-1.htm

 
As filed with the Securities and Exchange Commission on August 23 , 2010
 
Registration No. 333-158293
 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM S-1/A
SECOND  AMENDMENT
 
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
 
EVCARCO, INC.

(Exact name of Registrant as specified in its charter)
 
 
Nevada
 
 
5012
 
 
26-3526039
(State or other jurisdiction of incorporation or organization)
 
(Primary Standard Industrial Classification Code Number)
 
(I.R.S. Employer
Identification Number)
 
7703 Sand Street
 Fort Worth, Texas 76118
(817) 595-0710

 (Address, including zip code, and telephone number, including area code,
of Registrant’s principal executive offices)
 
Nevada Agency and Trust Company
50 West Liberty Street
Suite 880
Reno, Nevada 89501
(775) 322-0626

 (Name, address, including zip code, and telephone number,
including area code, of agent for service)
 
Copies of all correspondence to:
The O'Neal Law Firm, P.C.
6626 E. Raftriver Road
Mesa, Arizona 85215
Tel: (480) 812-5058
Fax: (888) 353-8842
 
 
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box: x
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 

 
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If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
o
 
Accelerated filer
o
         
Non-accelerated filer
o
(Do not check if smaller reporting company)
Smaller reporting company
x
 
 
Calculation of Registration Fee
 
Title of Class of Securities to be Registered
 
Amount to be Registered(1)
   
Proposed Maximum Aggregate Price Per Share(2)
   
Proposed Maximum Aggregate Offering Price(2)
   
Amount of Registration Fee
 
Common Stock, $0.001 per share
   
61,225,000
   
$
0.04
   
$
2,449,000
   
$
  174.61  
Total
   
61,225,000
   
$
0.04
   
$
2,449,000
   
$
  174.61  
 
(1)
 The registration fee for these shares is based on an ask price of $0.04 on July 22, 2010 on the OTC Bulletin Board.  Reg. 230.457(c).
 
(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933.
 
 
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
 
 
 
 
The information in this prospectus is not complete and may be amended. The selling stockholders may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
 
 
SUBJECT TO COMPLETION DATED JULY [__], 2010
 
PRELIMINARY PROSPECTUS
 
EVCARCO, INC.
 
61,225,000 SHARES OF COMMON STOCK
  OFFERING PRICE $0.04 PER SHARE
 
We are offering on a best-efforts basis 61,225,000 shares of common stock in a direct public  offering,   without  any   involvement   of   underwriters  or broker-dealers.  We are offering the shares of common stock at a public offering price of $ 0.04 per share. Our common stock is currently quoted on the OTC Bulletin Board under the symbol “EVCA.OB.” The closing sales price of our common stock on the OTC Bulletin Board on July 22, 2010, was $0.04 per share. The offering does not require that we sell a minimum number of shares.  The proceeds from the sale of the shares in this offering will immediately be payable to EVCARCO, INC, and used in our operations. Funds will be held in our corporate bank account.  As a result, creditors could attach the funds.

 
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The  offering  shall  terminate  on the  earlier  of (i)  180  days  after  the effectiveness  of the  registration  statement  (ii) when the  offering is fully subscribed  for. Our ability to terminate the offering is limited to ending the duration of the offering and accepting the amount of shareholder funds as of the termination date
 
Our common stock will be sold by our officers and directors.
 
OUR BUSINESS IS SUBJECT TO MANY RISKS AND AN INVESTMENT IN OUR COMMON STOCK WILL ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING “RISK FACTORS” BEGINNING ON PAGE 8 BEFORE INVESTING IN OUR COMMON STOCK.
 
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
No underwriter or other person has been engaged to facilitate the sale of shares of common stock in this offering. You should rely only on the information contained in this prospectus and the information we have referred you to. We have not authorized any person to provide you with any information about this offering, EVCARCO, Inc. or the shares of our common stock offered hereby that is different from the information included in this prospectus. If anyone provides you with different information, you should not rely on it.
 
The date of this prospectus is ____, 2010
 

 
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TABLE OF CONTENTS
 
Page
Prospectus Summary
  5
Risk Factors
  7
Forward-Looking Statements
  11
Tax Considerations
  12
Use of Proceeds
  12
Price Range of Common Stock
  12
Dividend Policy
  13
Capitalization
  13
Dilution
  13
Management’s Discussion and Analysis of Financial Condition and Results of Operations Business
  14
Business Description
  15
Management
  19
Executive Compensation
  21
Certain Relationships and Related Party Transactions
  22
Principal Stockholders
  22
Description of Capital Stock
  23
Shares Eligible for Resale
  24
Underwriters
  25
Legal Matters
  25
Experts
  25
Legal Representation
  25
Where You Can Find Additional Information
  25
Disclosure of Commission Position on Indemnity
  25
Index to Consolidated Financial Statements
  F-1
 
You should rely only on the information contained in this Prospectus. We have not authorized anyone to provide you with information different from or in addition to that contained in this Prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are offering to sell, and are seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this Prospectus is accurate only as of the date of this Prospectus, regardless of the time of delivery of this Prospectus or of any sale of the common stock. Our business, financial conditions, results of operations and prospects may have changed since that date.
 
We have not done anything that would permit this offering or possession or distribution of this Prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this Prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this Prospectus outside of the United States.

 
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PROSPECTUS SUMMARY
 
This summary highlights certain information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including our financial statements and related notes, and especially the risks described under “Risk Factors” beginning on page 8. All references to “we,” “us,” “our,” “EVCARCO,” “Company” or similar terms used in this prospectus refer to EVCARCO, Inc.  Unless otherwise indicated, the term “fiscal year” refers to our fiscal year ending December 31. Unless otherwise indicated, the term “common stock” refers to shares of the Company’s common stock.
 
 Corporate Background and Business Overview
 
We were incorporated in the state of Nevada on October 14, 2008. Our offices are currently located at 7703 Sand Street, Fort Worth, Texas 76118. Our telephone number is (817) 595-0710. Our shares of common stock are currently traded on the OTC Bulletin Board. Our trading symbol is “EVCA.OB.”
 
EVCARCO, Inc. was formed to sell environmentally conscious automobiles through automotive dealerships it establishes, owns and manages as well as sell franchises for its dealerships in multiple cities throughout the U.S. The Company will offer both new electric and pre-owned vehicles, along with the traditional related services including financing, warranties, and maintenance and mechanical work. The first Company owned location is in Fort Worth, Texas and was started in December of 2008. The second Company owned location was opened in May of 2010, in Dallas, Texas. Currently available products are from Wheego Electric Cars, Inc., manufactured in the US, and The Tazzari Group, produced in Italy. Executives in the Company have experience in the automobile industry managing large dealerships in the Dallas, Fort Worth, and North Texas regions.
 
We are earning revenues through new car sales, pre-owned car sales, parts, service, both warranty, and customer pay repairs, finance & insurance sales, accessory sales, and aftermarket products. At this stage in our development, there can be no assurance that we will be successful in generating revenues from the sale of our products and services.
 
From October 14, 2008 (inception) to March 31, 2010, we have generated revenues of $1,082,599 through retail sales of 12 new electric cars, 38 used vehicles, and 43 wholesale deals. With assets of $1,502,041, as of March 31, 2010, and we have incurred accumulated net losses of $1,719,303.  Based on our financial history since inception, our independent auditor has expressed doubt as to our ability to continue as a going concern.  Additional financing and capital of $1,200.000.00 per Dealership will be required to continue operations. We have a current “burn rate” of $55,000.00 per month and resources for 90-120 days. The $1,200,000.00 is for vehicle inventory, office/maintenance equipment, personnel, and marketing/advertising.
 
Since our incorporation, we have not made any significant purchases or sale of assets, nor have we been involved in any mergers, acquisitions or consolidations. EVCARCO has never declared bankruptcy, has never been in receivership, and has never been involved in any legal action or proceedings.
 
We have three executive officers who also serve as three of our four directors.  Mr. Dale Long, our President and a Director, resides in Forth Worth, Texas. He has over 20 years of experience in the auto industry. Mr. Nikolay Frolov, our Treasurer and a Director, resides in Fort Worth, Texas. Mr. Scott Neal, our Secretary and a Director, also resides in Fort Worth, Texas. None of our officers live in Nevada.
 
Summary of the Offering
 
Shares of common stock being offered by the selling stockholders:
 
   61,225,000 shares of our common stock.
Off Offering price:
 
$0.04 per share of common stock or prevailing market prices.
Nu  Number of shares outstanding before the offering:
 
72,330,500
Nu  Number of shares outstanding after the offering, if all the shares are sold:
 
133,555,500
Use of Proceeds:
 
Acquisition of inventory, opening of new locations, payment of debts, working capital and general corporate expenses.  See “Use of Proceeds” on page 12.
MaOTC Bulletin Board Trading Symbol
 
EVCA.OB
Use
   
Ris Risk Factors:
 
See “Risk Factors” beginning on page 8 and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock.
DiviDividend Policy:
 
We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.
 

 
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Summary Financial Data
 
The following selected financial information as of December 31, 2009 (Audited) and March 31, 2010 (Unaudited) and for the period from Inception (October 14, 2008) through March 31, 2010, is derived from our audited annual, and reviewed quarterly financial statements. The information contained in this table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and the financial statements and accompanying notes included in this prospectus.
 
Our auditors have issued an audit opinion which includes a statement describing their doubts about whether we will continue as a going concern. In addition, our financial status creates substantial doubt whether we will continue as a going concern.
 
 Statement of Operations
 
   
Inception
(October 14, 2008)
Through
December 31, 2009
   
For the Three Months Ended March 31, 2010
 
Net loss
  $ (1,160,354 )   $ (558,949 )
                 
Net loss per common share:
               
Basic and diluted (less than $0.01 per share)
    (0.02 )     (0.01 )
                 
Weighted average number of common shares outstanding
    55,631,667       62,312,300  
 
Balance Sheet Data
 
   
December 31, 2009
   
March 31, 2010
 
Total assets
 
$
209,033
     
1,502,041
 
Total liabilities
   
416,297
     
613,254
 
Total Liabilities and Stockholders’ Equity
 
$
209,033
     
1,502,041
 
 

 
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RISK FACTORS
 
An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and other information in this prospectus before deciding to invest in our Company. If any of the following risks actually occur, our business, financial condition, results of operations and prospects for growth could be seriously harmed. As a result, the trading price of our common stock could decline and you could lose all or part of your investment.
  
Risks Related to Our Business
 
Our independent auditors have expressed doubt about our ability to continue as a going concern, indicating the possibility that we may not be able to continue to operate.
 
From inception through March 31, 2010, we have incurred cumulative net losses of $1,719,303. Though we have generated revenues of $1,082,599 for the same period, we anticipate generating losses for the next 12 months. Therefore, we may be unable to continue operations in the future as a going concern. No adjustment has been made in the accompanying financial statements to the amounts and classification of assets and liabilities which could result should we be unable to continue as a going concern. In addition, our independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern.
 
As a company in the early stage of development with an unproven business strategy, our limited history of operations makes evaluation of our business and prospects difficult.
 
We were incorporated on October 14, 2008. Our business prospects are difficult to predict because of our limited operating history, early stage of development and unproven business strategy. Our primary business activities will be to earn revenues through new car sales, pre-owned car sales, parts, service, both warranty, and customer pay repairs, finance & insurance sales, accessory sales, and aftermarket products. Although we believe that our business plan has significant profit potential, we may not attain profitable operations and our management may not succeed in realizing our business objectives.
 
 Our business plan may be unsuccessful, and if it fails, we will not have alternate services or products to offer in order to ensure our continuation as a going concern.
 
The success of our business plan is dependent on the development of our products and services. Our ability to develop our products and services is unproven, and the lack of operating history makes it difficult to validate our business plan. In addition, the success of our business plan is dependent upon the market acceptance of our products and services. Should our market strategy be too narrowly focused or should the target market not be as responsive as we anticipate, we will not have in place alternate services or products that we can offer to ensure our continuation as a going concern.
  
We have maintained losses since inception, which we expect will continue in the future.
 
We expect, however, to continue to incur operating losses in future periods. These losses will occur because we do not yet have sufficient revenues to offset the expenses associated with the development, marketing and sales of our products and services. We cannot guarantee that we will ever be successful in generating sufficient revenues in the future. We recognize that if we are unable to generate revenues, we will not be able to earn profits or continue operations. There is no history upon which to base any assumptions regarding the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
  
To date, we have completed only initial stages of our business plan and we can provide no assurance that we will be able to generate enough revenue from our business in order to achieve profitability. It is not possible at this time for us to predict with assurance the potential success of our business. The revenue and income potential of our proposed business and operations are unproven, and the lack of operating history makes it difficult to evaluate the future prospects of our business. If we cannot continue as a viable entity, our stockholders may lose some or all of their investment in our Company.
 
We may not be able to execute our business plan or stay in business without additional funding.
 
Our ability to successfully develop our technology and to eventually produce and sell our product to generate operating revenues depends on our ability to obtain the necessary financing to implement our business plan. We will require additional financing, through issuance of debt and/or equity, in order to establish profitable operations. Such financing, if required, may not be forthcoming. Even if additional financing is available, it may not be available on terms we find favorable. At this time, there are no anticipated sources of additional funds in place. Failure to secure the needed additional financing will have an adverse effect on our ability to remain in business.

 
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RISK FACTORS - continued
 
We may not be able to compete effectively against our competitors.
 
We are engaged in a rapidly evolving industry, and face direct competition from competitors that may have greater resources, research and development staff, sales and marketing staff and facilities than we do. In addition, other recently developed technologies are, or may in the future be, the basis of competitive products. There can be no assurance that our competitors will not develop technologies and products that are more effective than those being developed by us or that would render our technology and product obsolete or noncompetitive.
 
We need to retain key personnel to support our product and ongoing operations.
 
The development and marketing of our product will continue to place a significant strain on our management and other resources. Our future success depends upon the continued services of our executive officers who have critical industry experience and relationships that we rely on to implement our business plan. The loss of the services of Dale Long, our President and a Director, would negatively impact our ability to sell our product, which could adversely affect our financial results and impair our growth. Currently, we have no employment agreement with Mr. Long and do not anticipate entering into any such agreement in the foreseeable future.
 
Risks Relating to Our Common Stock
 
Because we are subject to “penny stock” rules, the level of trading activity in our stock may be reduced.
 
Broker-dealer practices in connection with transactions in “penny stocks” are regulated by penny stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules. If a trading market does develop for our common stock, these regulations will likely be applicable, and investors in our common stock may find it difficult to sell their shares.
 
FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
 
FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares of our common stock.
 
The price of our common stock may be volatile, which substantially increases the risk that you may not be able to sell your shares at or above the price that you may pay for the shares.
 
Our common stock is currently quoted on the OTC Bulletin Board under the trading symbol “EVCA.OB.” The market price of our common stock may be volatile. It may fluctuate significantly in response to the following factors:
 
 
variations in quarterly operating results;
 
 
our announcements of significant contracts and achievement of milestones;
 
 
our relationships with other companies or capital commitments;
 
 
additions or departures of key personnel;
 
 
sales of common stock or termination of stock transfer restrictions;
 

 
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RISK FACTORS - continued
 
 
changes in financial estimates by securities analysts, if any; and
 
 
fluctuations in stock market price and volume.
 
Your inability to sell your shares during a decline in the price of our stock may increase losses that you may suffer as a result of your investment.
 
Our insiders beneficially own a significant portion of our stock, and accordingly, may have control over stockholder matters, the company’s business and management.
 
The percentage ownership information shown in the table below is calculated based on 61,125,500 shares of our common stock issued and outstanding as of December 31, 2009. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock.
 
       
Amount and Nature
       
Title of
     
of Beneficial
       
Class
 
Name of Beneficial Owner
 
Ownership
   
Percentage
 
Common
 
Dale Long,
   
14,963,500
     
24.48
%
Stock
 
President, Chief Executive Officer and Director
               
Common
 
Nikolay Frolov
   
7,495,000
     
12.26
%
Stock
 
Chief Financial Officer, Treasurer and Director
               
Common
 
Scott O'Neal
   
14,968,700
     
24.49
%
Stock
 
Chief Operating Officer, Secretary, Vice President and Director
               
Common
 
Edouard Prous
   
14,982,300
     
24.51
%
Stock
 
Chief Technical Officer, Vice President and Director
               
                     
   
All Officers and Directors as a Group
   
52,409,500
     
85.74
%
                     
   
Total  shares outstanding
   
61,125,500
         
 
As a result, our executive officers, directors and affiliated persons will have significant influence to:
 
 
elect or defeat the election of our directors;
 
 
amend or prevent amendment of our articles of incorporation or bylaws;
 
 
effect or prevent a merger, sale of assets or other corporate transaction; and
 
 
affect the outcome of any other matter submitted to the stockholders for vote.
 
Moreover, because of the significant ownership position held by our insiders, new investors will not be able to effect a change in the Company’s business or management, and therefore, shareholders would be subject to decisions made by management and the majority shareholders.
 
In addition, sales of significant amounts of shares held by our directors and executive officers, or the prospect of these sales, could adversely affect the market price of our common stock. Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
  
Purchasers in this offering will experience immediate and substantial dilution.
 
The public offering price of our common stock pursuant to this Prospectus will be substantially higher than the pro forma net tangible book value per share of our common stock immediately after this offering. Therefore, if you purchase our common stock in this offering, you will incur an immediate dilution of $0.006 per share, which represents the difference between our net tangible book value per share after this offering and the price you paid, based upon the assumed public offering price of $0.04 per share of common stock and the net tangible book value and shares outstanding as of March 31, 2010. In addition, if we raise funds by issuing additional securities, the newly issued securities may further dilute your ownership interest.

 
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RISK FACTORS - continued
 
The sale of securities by us in any equity or debt financing could result in dilution to our existing stockholders and have a material adverse effect on our earnings.
 
We are authorized to issue up to 180,000,000 shares of common stock, of which 72,330,500 shares are issued and outstanding. Our Board of Directors has the authority to cause us to issue additional shares of common stock, and to determine the rights, preferences and privilege of such shares, without consent of any of our stockholders. Any sale of common stock by us in a future private placement offering could result in dilution to the existing stockholders as a direct result of our issuance of additional shares of our capital stock. In addition, our business strategy may include expansion through internal growth by acquiring complementary businesses, acquiring or licensing additional brands, or establishing strategic relationships with targeted customers and suppliers. In order to do so, or to finance the cost of our other activities, we may issue additional equity securities that could dilute our stockholders’ stock ownership. We may also assume additional debt and incur impairment losses related to goodwill and other tangible assets, and this could negatively impact our earnings and results of operations.
 
If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our common stock, our stock price and trading volume could decline.
 
The trading market for our common stock may be influenced by the research and reports that industry or securities analysts publish about us or our business. If any of the analysts who cover us downgrade our common stock, our common stock price would likely decline. If analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our common stock price or trading volume to decline.
 
If we continue to fail to maintain an effective system of internal controls, we might not be able to report our financial results accurately or prevent fraud; in that case, our stockholders could lose confidence in our financial reporting, which could negatively impact the price of our stock.
 
Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. In addition, Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, requires us to evaluate and report on our internal control over financial reporting for all our current operations.. The process of implementing our internal controls and complying with Section 404 will be expensive and time - consuming, and will require significant attention of management. We cannot be certain that these measures will ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Even if we conclude, and our independent registered public accounting firm concurs, that our internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. If we or our independent registered public accounting firm discover a material weakness or a significant deficiency in our internal control, the disclosure of that fact, even if quickly remedied, could reduce the market’s confidence in our financial statements and harm our stock price. In addition, a delay in compliance with Section 404 could subject us to a variety of administrative sanctions, including ineligibility for short form resale registration, action by the Securities and Exchange Commission, and the inability of registered broker-dealers to make a market in our common stock, which could further reduce our stock price and harm our business.
 
Because we do not intend to pay any dividends on our common stock, holders of our common stock must rely on stock appreciation for any return on their investment.
 
There are no restrictions in our Articles of Incorporation or Bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend we would not be able to pay our debts as they become due in the usual course of business; or our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution. We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future. Accordingly, holders of our common stock will have to rely on capital appreciation, if any, to earn a return on their investment in our common stock.
 
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified members for our Board of Directors.
 
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act. The requirements of these rules and regulations increase our legal, accounting and financial compliance costs, may make some activities more difficult, time-consuming and costly and may also place undue strain on our personnel, systems and resources.

 
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 RISK FACTORS - continued
 
In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we will need to expend significant resources and provide significant management oversight. We have a substantial effort ahead of us to implement appropriate processes, document our system of internal control over relevant processes, assess their design, remediate any deficiencies identified and test their operation. As a result, management’s attention may be diverted from other business concerns, which could harm our business, operating results and financial condition. These efforts will also involve substantial accounting-related costs.
 
Our financial results could vary significantly from quarter to quarter and are difficult to predict.
 
Our revenues and operating results could vary significantly from quarter to quarter because of a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. In addition, we may not be able to predict our future revenues or results of operations. We base our current and future expense levels on our internal operating plans and sales forecasts, and our operating costs are to a large extent fixed. As a result, we may not be able to reduce our costs sufficiently to compensate for an unexpected shortfall in revenues, and even a small shortfall in revenues could disproportionately and adversely affect financial results for that quarter. Individual products and services represent meaningful portions of our revenues and net loss in any quarter. We may incur significant or unanticipated expenses when licenses are renewed.
 
In addition to other risk factors discussed in this section, factors that may contribute to the variability of our quarterly results include:
 
 
the number of new products and services released by us and our competitors;
 
 
the amount we reserve against returns and allowances;
 
 
the timing of release of new products and services by us and our competitors, particularly those that may represent a significant portion of revenues in a period;
 
 
the popularity of new products and services, and products and services released in prior periods;
 
 
the timing of charges related to impairments of goodwill, intangible assets, royalties and minimum guarantees;
 
 
changes in pricing policies by us or our competitors;
 
 
fluctuations in the size and rate of growth of overall consumer demand for our products and services;
 
 
strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;
 
 
our success in entering new geographic markets;
 
 
foreign exchange fluctuations;
 
 
accounting rules governing recognition of revenue;
 
 
the timing of compensation expense associated with equity compensation grants; and
 
 
decisions by us to incur additional expenses, such as increases in marketing or research and development.
 
As a result of these and other factors, our operating results may not meet the expectations of investors or public market analysts who choose to follow our company. Our failure to meet market expectations would likely result in decreases in the trading price of our common stock.
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
This prospectus contains forward-looking statements and information relating to our business that are based on our beliefs as well as assumptions made by us or based upon information currently available to us. These statements reflect our current views and assumptions with respect to future events and are subject to risks and uncertainties. Forward-looking statements are often identified by words like: “believe,” “expect,” “estimate,” “anticipate,” “intend,” “project” and similar expressions or words which, by their nature, refer to future events. In some cases, you can also identify forward-looking statements by terminology such as “may,” “will,” “should,” “plans,” “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 beginning on page 5, that 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. In addition, you are directed to factors discussed in the Management’s Discussion and Analysis of Financial Condition and Results of Operation section beginning on page 33, and the section entitled “Our Business” beginning on page 22, and as well as those discussed elsewhere in this prospectus. Other factors include, among others: general economic and business conditions; industry capacity; industry trends; competition; changes in business strategy or development plans; project performance; availability, terms, and deployment of capital; and availability of qualified personnel.

 
11

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS - continued
 
These forward-looking statements speak only as of the date of this prospectus. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or achievements. Except as required by applicable law, including the securities laws of the United States, we expressly disclaim any obligation or undertaking to disseminate any update or revisions of any of the forward-looking statements to reflect any change in our expectations with regard thereto or to conform these statements to actual results.
  
TAX CONSIDERATIONS
 
We are not providing any tax advice as to the acquisition, holding or disposition of the securities offered herein. In making an investment decision, investors are strongly encouraged to consult their own tax advisor to determine the U.S. federal, state and any applicable foreign tax consequences relating to their investment in our securities.
  
USE OF PROCEEDS
 
We estimate that we will receive approximately $2,430,000 in net proceeds from the sale of 61,225,000 shares of common stock in this offering, based on an assumed public offering price of $0.04 per share and after deducting estimated offering expenses of $19,000.
 
Our current estimate of the use of the net proceeds from this offering is as follows:
 
 
Approximate
Allocation of
Net Proceeds
 
 
Inventory acquisition 
 $
  1,000,000
 
New locations
 
400,000
 
Debt pay-off
 
600,000
 
Working capital and general corporate purposes
 
430,000
 
Total
$
2,430,000
 
 
PRICE RANGE OF COMMON STOCK
 
Our common stock is listed for trading on the OTC Bulletin Board under the symbol “EVCA.OB.” The market for our common stock has often been sporadic, volatile and limited. The closing sales price of our common stock on the OTC Bulletin Board on July 22, 2010 was $0.04 per share.
 
The following table sets forth, for the periods indicated, the high and low bid quotations for our common stock as reported by the OTC Bulletin Board. The prices reflect inter-dealer quotations, without retail mark-up, markdown or commissions, and may not represent actual transactions.
Period
 
High
   
Low
 
             
December 15, 2009 - December 31, 2009
 
$
0.510
   
$
0.080
 
January 1, 2010 - March 31, 2010
 
$
0.515
   
$
0.090
 
April 1, 2010 - June 30, 2010
 
$
0.390
   
$
0.030
 
 
 
 
 
 

 
12

 

PRICE RANGE OF COMMON STOCK - continued
 
Holders of Common Stock.
 
On July 22, 2010, we had approximately 173 common stockholders of record. There were also an undetermined number of holders who hold their stock in nominee or “street” name.
 
DIVIDEND POLICY
 
Since our inception, we have not declared or paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of our Board of Directors and will depend upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.
 
CAPITALIZATION
 
The following table sets forth our short-term debt, long-term debt and capitalization as of March 31, 2010:
 
 
on an actual basis; and
 
 
on a pro forma as adjusted basis to reflect the estimated net proceeds we will receive from the sale of 61,225,000 shares of common stock offered by us at an assumed public offering price of $0.04 per share, after deducting estimated offering expenses payable by us of approximately $19,000.
 
   
As of March 31, 2010
 
  
 
Actual
   
Pro Forma, as
Adjusted(1)
 
  
 
(Unaudited)
 
  
 
 
 
Short-term debt
 
$
613,254
 
$
13,254
 
Long-term debt
   
0
   
0
 
Capitalization (64,129,500 shares times $0.10 - closing price on March 31, 2010)
   
6,412,950
       
 
 
This table should be read with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes appearing elsewhere in this Prospectus.
 
DILUTION
 
Purchasers of common stock in this offering will suffer immediate dilution to the extent of the difference between the public offering price per share of our common stock and the net tangible book value per share of our common stock immediately after the completion of this offering. Dilution results from the fact that the per share offering price of the common stock is substantially in excess of the book value per share attributable to the existing stockholders for the presently outstanding stock.
 
The net tangible book value of our common stock on March 31, 2010 was ($247,100) or ($0.004) per share of common stock. Net tangible book value per share is calculated by subtracting our total liabilities from our total tangible assets, which is total assets less intangible assets of $1,135,887, and dividing this amount by the number of shares of our common stock outstanding on March 31, 2010 before giving retroactive effect to this offering.
 
After giving effect to the sale by us of 61,225,000 shares of common stock in this offering at the assumed public offering price of $0.040 per share, and after deducting our estimated offering costs, our pro forma as adjusted net tangible book value as of March 31, 2010 would have been $2,182,900, or $0.034 per share of our common stock. This represents an immediate increase in net tangible book value of $0.038 per share to our existing stockholders and an immediate dilution of $0.006 per share to new investors purchasing shares in this offering.
 
The following table illustrates this dilution to new investors on a per share basis:
             
AssumAssumed Public offering price per share
       
$
0.040
 
Net tangible book value per share as of March 31, 2010
 
$
(0.004)
         
Increase per share attributable to this offering
   
0.038
         
 
Pro fo Pro forma as adjusted net tangible book value per share after this offering
           
0.034
 
Diluti Dilution in net tangible book value per share to new investors
         
$
0.006
 
 

 
13

 

DILUTION - continued
 
The number of shares of our common stock to be outstanding after this offering is based on 64,129,500 shares of common stock outstanding as of March 31, 2010, and does not include 8,201,000 additional shares of common stock issued after that date;
 
In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible securities, the issuance of these securities could result in further dilution to our stockholders.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 
The following discussion of our financial condition and results of operation should be read in conjunction with the financial statements and related notes that appear elsewhere in this prospectus. This discussion contains forward-looking statements and information relating to our business that reflect our current views and assumptions with respect to future events and are subject to risks and uncertainties, including the risks in the section entitled Risk Factors beginning on page 8, that 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.
 
These forward-looking statements speak only as of the date of this prospectus. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or achievements. Except as required by applicable law, including the securities laws of the United States, we expressly disclaim any obligation or undertaking to disseminate any update or revisions of any of the forward-looking statements to reflect any change in our expectations with regard thereto or to conform these statements to actual results.
 
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with accounting principles generally accepted in the United States.
  
Overview
 
EVCARCO, Inc is a development stage company that was incorporated on October 14, 2008 in the State of Nevada.  We have begun our business operations and we currently have minimal revenue and no significant assets, as a result, we face substantial liquidity risk and uncertainty, near-term and otherwise, which threatens our ability to continue.  EVCARCO, Inc has never declared bankruptcy, has never been in receivership, and has never been involved in any illegal action or proceedings.
 
Since becoming incorporated, EVCARCO, Inc has not made any significant purchases or sale of assets, nor has it been involved in any mergers, acquisitions or consolidations. EVCARCO, Inc is not a blank check registrant as that term is defined in Rule 419(a) (2) of Regulation C of the Securities Act of 1933, since it has a specific business plan or purpose.
 
Neither EVCARCO, Inc nor its officers, directors, promoters, or affiliates has had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements, or understandings with any representatives of the owners of any business or company regarding the  possibility of an acquisition or merger.
 
Plan of Operation
 
Over the next twelve months, we will concentrate on the following six areas to grow our operations:
 
 
Capital and Funding – Seek to obtain capital from all available sources.
 
 
Advertising and Marketing – Work with TKMG, LLC to develop brand identity, marketing materials, and our web site. Utilize all available marketing venues and public relations opportunities to promote the Company and its products.
 
 
Sales – Grow sales to 45-50 new cars, and 125-175 pre-owned cars per quarter.
 
 
Product Development – Continue to work with existing manufacturers and new manufacturers.
 
 
Franchise Development – Begin marketing the EVCARCO franchise concept and licensing of Company’s Trademarks, with the short term objective of securing several territories and establishing five to ten Dealer Development Candidates during 2010. Several candidates in various states have already been identified for dealer development.
 
 
Product Research and Development – Continue working on identifying and testing products and vehicles from U.S. companies, as well as foreign manufacturers, which can provide cleaner, safer, faster, and more economical forms of transportation, by utilizing the latest developments in the alternative fuel area


 
14

 

 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION - continued
 
Maintaining an adequate inventory of automobiles requires significant capital.  Given the Company’s liquidity limitations its inventory levels may be adversely impacted.
 
Operating Environment
 
The Company continues to operate in a tough economic climate, tight equity and credit markets, which caused significant decline in automobile sales and put many dealers out of business. This challenging operating environment also presents tremendous opportunity for our concept: decrease in competition, rise of fuel prices, consumers becoming more cost conscious, and environmental issues gaining a lot of traction, are making our products a lot more attractive alternative to traditional transportation solutions.
 
Operating Results
 
Since inception through March 31, 2010, we have generated revenues of $1,082,599 and incurred cumulative net losses of $1,719,303.
 
Limited financial resources have affected our ability to acquire inventory. A majority of our gross revenues since inception have come from wholesale operations, with quick turnaround, but very low margins. Margins on the sales of new electric vehicles have been significant, and show a lot of promises for the future.
 
Liquidity and Capital Resources
 
As of March 31, 2010, the Company had no significant cash reserves or other liquid assets. 
 
Meeting future liquidity needs will require sales of dealership franchises, as well as income from new and pre-owned auto sales and service. We estimate it will take an estimated $165,000 per Company dealership location in addition to a line of credit of $1.2 Million for floor plans at each location. This means as a company in an early stage of development, our ability to proceed with our plan of operation will continually be a function of our ability to raise sufficient capital to continue our operations.
 
We do not currently have any arrangements for financing and we can provide no assurance to investors we will be able to find such financing. There can be no assurance that additional financing will be available to us, or on terms that are acceptable. Consequently, we may not be able to proceed with our intended business plans or complete the development and commercialization of our product.
 
Going Concern Consideration
 
Our independent auditors included an explanatory paragraph in their report on the accompanying financial statements expressing concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.
  
Off-Balance Sheet Arrangements
 
We have no off-balance sheet arrangements.
 
Critical Accounting Policies
 
The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures about contingent assets and liabilities. We base these estimates and assumptions on historical experience and on various other information and assumptions that are believed to be reasonable under the circumstances. Estimates and assumptions about future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as additional information is obtained, as more experience is acquired, as our operating environment changes and as new events occur.  Our critical accounting polices are listed in the notes to our audited financial statements included in  of this Registration Statement.
 
BUSINESS DESCRIPTION
 
Overview
 
EVCARCO, Inc. was formed to sell environmentally conscious automobiles through automotive dealerships it establishes, owns and manages as well as sell franchises for its dealerships in multiple cities throughout the U.S. The Company will offer both new electric and pre-owned vehicles, along with the traditional related services including financing, warranties, and maintenance and mechanical work. The first Company owned location is in Fort Worth, Texas and was started in December of 2008. The second Company owned location was opened in May of 2010, in Dallas, Texas. Currently available products are from Wheego Electric Cars, Inc., manufactured in the US, and The Tazzari Group, produced in Italy. Executives in the Company have experience in the automobile industry managing large dealerships in the Dallas, Fort Worth, and North Texas regions.

 
15

 

BUSINESS DESCRIPTION - continued
 
Products and Services
 
EVCARCO‘s business model for automotive dealerships is intended to provide customers with quality, eco-friendly, and alternative-fuel vehicles, with an emphasis on performance, safety, affordability, and superior service. The Company already has established its first dealership at its Company headquarters in Fort Worth, Texas and is establishing its second location in Dallas, Texas which will then serve as the Company’s headquarters.
 
EVCARCO intends to initially establish company-owned dealerships in other Texas markets, including Houston, Austin, and San Antonio. The Company is also offering franchise dealerships in major markets across the country, initially focusing in the South and Southeast. The rate of expansion of company and franchise locations will largely depend on market acceptance of the new products and availability of capital. EVCARCO dealerships will offer the latest new electric vehicles, multiple pre-owned car brands that utilize various green technologies, such as electric, hydrogen, and compressed natural gas, and a small portion of regular preowned cars. Other products and services will include financing, warranties, maintenance, and mechanical services. Some automobiles being sold by the Company are restricted by states to maximum speeds and streets with certain maximum speed limits due to their sale being pursuant to an exemption from certain Department of Transportation (“DOT”) safety requirements. Also, certain automobiles that are not subject to these  restrictions are being sold from manufacturers without certain DOT safety standards being certified as having been met, based on an ability to manufacture and sell a limited number of models while the DOT certification is being obtained. These limitations may restrict the market for the models the Company offers, or limit the volume of models available to be sold.
 
The following is a limited list of manufactures, whose products we sell, or intend to sell in the near future:
 
 
Wheego Electric Cars, Inc. - manufactures Wheego Whip, fully electric car, currently certified as Low Speed Vehicle (LSV), capable of traveling 40 miles on a single charge, with a base model delivered retail price of $19.995.  Wheego wants to make the best electric cars in the world and educate everyone as to the practical benefits of owning and driving one.  EVCARCO is offering Wheegos under exclusive authorized dealership contract for Tarrant Country, Texas and has options on other territories in several states.
 
 
·
The Tazzari Group - manufactures ZERO, currently a LSV, an Italian electric urban sports vehicle, powered by the latest generation lithium batteries. Depending on the driving mode, ZERO has a range of up to 80 miles and starts at $31,000.  Tazzari’s mission is to provide the very best technology and quality at a really competitive price for a vehicle that is totally innovative and without peers in the field of ecological mobility - a trailblazer in the new age of lithium powered electric drive.  Currently, EVCARCO is the exclusive dealer of ZERO in the US.
 
 
EnVision Motor Company, Inc. - the exclusive distributor for Electric Motor Cars family of all electric vehicles, which include a 7 passenger station wagon, a cargo van, and a pick-up truck.  Production is scheduled to begin in the next few months, with the estimated price between $35,000 and $40,000.   EVCARCO is a non-exclusive authorized dealer of EMC products, and is in current negotiations regarding exclusive distribution rights for several states.
 
 
Venta, Inc. - operates with the goal of discovering and distributing environmentally friendly automotive products. It currently has distribution contracts for Tazzari and Foton vehicles, with many others in the works.  Venta and EVCARCO work closely on brining new electric vehicles to US market.
 
 
Green Vehicles - manufactures fully electric vehicles for many lifestyles. Models include the Triac™, a freeway commuter; the Moose™, a van that retails for $16,995; and the Buckshot™, a heavy-duty work truck with a best-in-class 1/2 ton payload capacity, retailing for $23,995.  We are currently in negotiations to finalize the agreement with this manufacturer.
 
 
RONN Motor Company, Inc. - developed Scorpion HX™, hydrogen fuel injected hybrid vehicle. Estimated price for this exotic sports car is $250,000.  Full production is scheduled to begin at the end of April, 2010.  Their other products, H2GO™ real time hydrogen generation system and RonnZoil™ line of biodegradable lubricants will be available for sale in the near future.  EVCARCO has signed a memorandum of understanding with RMC, and is working to finalize the agreement for retail sales of their products.
 
 
Coulomb Technologies Charging Stations - Coulomb Technologies provides networked charging stations for the electric vehicles.  Coulomb offers 24/7 service and support for all of its stations as well as a Network Operating System that provides a smart charging infrastructure.  EVCARCO is an authorized dealer of Coulomb products.
 

 
16

 

BUSINESS DESCRIPTION - continued
 
Strategic Marketing Plan
 
Our overall marketing objective is to drive rapid market penetration of EVCARCO products, establishing us in the marketplace with high quality electric new cars and hybrid pre-owned vehicles. We will establish our branding as an environmentally responsible automobile dealership.
 
There are five (5) key phases to the strategy in which EVCARCO intends to penetrate the marketplace:
 
 
Launch EVCARCO franchises, with new electric vehicles and pre-owned operations.
 
 
Establish EVCARCO through branding the Company as eco-friendly by use of:
 
-
Billboards and other outside advertising
 
-
Internet sales and advertising
 
-
Industry specific magazines and articles
 
-
Involve local media by using the Go Green campaign
 
-
Join and sponsor environmental clubs and groups, plus participate in their community activities
 
-
Get involved in political issues which support the environment
 
 
Set up outside dealership displays and events to create awareness of the product capabilities:
 
-
Ride and Drive events
 
-
Kiosk in malls with information
 
-
Exposure through daily use of vehicles
 
 
Develop Green projects and sustainable transportation programs with various governmental entities, non-profit and educational organizations.
 
 
Aggressively market its brand through social media, online strategic partnerships, and search engine optimization.
 
Market Analysis
 
Hybrid Vehicles
 
According to R.L. Polk, registrations for new hybrid vehicles totaled 315,668 in 2008, down slightly from 2007 but still a 3,270% increase from 2000.  Sales of hybrids show strong correlation with the price of gasoline.  With the predicted rise in oil prices, due to growing global demand, future of these vehicles remains optimistic.  In 2008, hybrids comprised 2.8 percent of all vehicles in North America, that number is expected to raise to 5.3 percent by 2012.  Although, some experts believe, that hybrid vehicles are only a stepping stone on the path toward even cleaner and more energy efficient cars, powered completely by electricity, fuel cells and other developing technologies.
 
Electric Vehicles
 
In 2006, a documentary titled “Who Killed the Electric Car” was released as an expose of the various forces that brought about the demise of the General Motors (“GM”) EV1. The EV1 was introduced to consumers in California in the 1990s, and enjoyed strong consumer demand before vanishing from the market and the media. This film brought the electric car back to the forefront of environmentally conscious Americans, who began searching for electric vehicle options once again.
 
Current U.S. Administration announced plans for significant financial support for development of fuel-efficient vehicles, as well as advanced electric and hybrid batteries.
 
Most existing car manufacturers have electric cars in their production plans.  Some of the models have already been announced for upcoming years: BMW Megacity, BYD E6, Coda (Electric Sedan), Ford Focus EV and Transit Connect Electric, Mercedes BlueZero, Mini E, Mitsubishi iMiEV, Nissan Leaf, Pininfarina Blue Car, Renault Fluence, Smart ED, Subaru R1E, Toyota FT-EV, Tesla Model S.
 
Compressed Natural Gas (“CNG”)
 
Currently, the only production CNG vehicle available is the Honda Civic GX; however, several companies sell aftermarket conversion kits for cars and trucks. The U.S. Environmental Protection Agency has stated that CNG is the cleanest internal-combustion technology available. Attributes include:
 

 
17

 
 
BUSINESS DESCRIPTION - continued
 
 
Reduction of carbon monoxide emissions of 90 to 97 percent
 
Reduction of carbon dioxide emissions of 25 percent
 
Reduction of nitrogen oxide emissions of 35 to 60 percent
 
Potential reduction of non-methane hydrocarbon emissions of 50 to 75 percent
 
Emission of fewer toxic and carcinogenic pollutants
 
Emission of little or no particulate matter
 
Elimination of evaporative emissions
 
Competition
 
The Company’s franchise model will be deployed so that it faces minimal competition in each of its markets. However, the Company will face competition from electric carmakers sold through other dealers. Some of these are major players in the automotive industry (GM, Nissan, and others), while others are small companies that have hit upon the correct formula of price, performance, and features to make consumers demand their cars.
 
Competitive Advantage
 
EVCARCO believes that its competitive advantages include:
 
 
The Company is the first automotive retail group dedicated to opening car dealerships that only sell eco-friendly vehicles
 
Management team has more than 45 years of combined experience in sales, service, ownership, and management of multiple automobile dealerships
 
Selling products that use the most advanced clean technologies available
 
Offering multiple brands with selections of both new and pre-owned electric vehicles and other environmentally friendly vehicles
 
 
Establishing multiple sources of operating revenue
 
Creative marketing tactics that will reach a large segment of customers
 
Sources and Availability of Products and Supplies
 
Currently the company has access to an adequate supply of products, from various manufacturers.  These companies and their products are new, not well established, and are a subject to significant risk and uncertainty.
 
The Company believes that due to the number of manufacturers who are trying to develop alternative fuel products and constant progress in new technologies and new entrants to the market, loss of one or several sources will not have significant negative impact on our operations.
 
Dependence on One or A Few Major Customers
 
We do not anticipate dependence on one or a few major customers into the foreseeable future.
 
Patents, Trademarks, Licenses, Franchise Restrictions and Contractual Obligations & Concessions
 
We own, and have registered the following marks on the Principal Register of the United States Patent and Trademark Office.
 
MARK
REGISTRATION NO.
REGISTRATION DATE
EVCARCO (standard characters)
3812043
June 29, 2010
EV-CAR-CO (standard characters)
3808446
June 22, 2010
EV-CAR-CO (stylized design)
3808448
June 22, 2010
FUTURE DRIVEN (standard characters)
3808447
June 22, 2010
 
Currently, there are no pending infringement, opposition, or cancellation proceeding or any pending material litigation involving the Marks. There are no agreements currently in effect, which significantly limit our rights to use or license the use of the Marks in any material manner. We are not aware of any superior prior rights or infringing uses of the Marks in any state.
 
 

 
18

 

BUSINESS DESCRIPTION - continued
 
Regulations
 
We operate in a highly regulated industry. A number of state and federal laws and regulations affect our business. In every state in which we operate, we must obtain dealer licenses issued by state regulatory authorities. Federal regulations and a lot of states require franchise or business opportunity registrations. Numerous laws and regulations govern our conduct of business, including those relating to our sales, operations, financing, insurance, advertising, and employment practices. These laws and regulations include state franchise laws and regulations, consumer protection laws, privacy laws, escheatment laws, anti-money laundering laws, and other extensive laws and regulations applicable to new and used motor vehicle dealers, as well as a variety of other laws and regulations. These laws also include federal and state wage-hour, anti-discrimination, and other employment practices laws.
 
Furthermore, we expect that new laws and regulations, particularly at the federal level, in the labor and employment, health care, environmental, and consumer protection areas may be enacted that could also affect our business.
 
Safety, required gas mileage regulations, and state lemon laws, while affecting the automobile industry generally, could have an increased impact on the Company due to its size and limited scope of automobiles intended to be sold.  Additionally many of the automobiles offered by the Company are subject to state LSV regulations, which vary by state.
 
Reports to Security Holders
 
As a reporting company, we are required to file reports with the SEC pursuant to the Securities Exchange Act of 1934, as amended. These reports include annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. You may obtain copies of these reports from the SEC’s Public Reference Room at 100 F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m. or on the SEC’s website, at www.sec.gov. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
 
We will also make these reports available on our website.
 
MANAGEMENT
 
Directors and Executive Officers of Registrant
 
The name, age and position of each of our directors and executive officers as of December 31, 2009 are as follows:
 
Name
 
Age
 
Position
Dale Long
 
49
 
President, Chief Executive Officer and Director
Nikolay Frolov
 
37
 
Chief Financial Officer, Treasurer and Director
Scott O'Neal
 
39
 
Chief Operating Officer, Secretary, Vice President and Director
Edouard Prous
 
34
 
Chief Technology Officer, Vice President and Director
 
Mr. Dale Long is our President, Chief Executive Officer and Director. He has served in these capacities since we were incorporated on October 14, 2008. Mr. Long is the founder and CEO of EVCARCO, Inc. With over 20 successful years in the auto industry, Mr. Long devoted the past two years to researching a plausible business model for a new automobile franchise that could deliver viable eco-friendly, alternative fuel vehicles to customers at reasonable prices, without sacrificing quality, safety or performance. He fulfilled his vision in 2008 when he launched EVCARCO. Mr. Long has been the managing partner and general manager for Executive Imports, a highline pre owned auto dealership in Dallas, Texas. From 2000 to 2004, Mr. Long was the general sales manager for Huffines Auto Group, Inc. and the new car sales director for Dallas Dodge and Group One, Inc. From 2000 to 2002, Mr. Long was the director of training and development for Park Place Auto Group, where he developed a standardized training policy, procedures, and manual for the entire dealership group for Houston, Dallas, Plano, Euless, and Grapevine, Texas. Mr. Long served in the United States Army Aviation Branch as a Commissioned Officer from 1979 to 1987 when he resigned with honors.
 
Mr. Nikolay Frolov, CPA, is our Chief Financial Officer, Treasurer and Director. He has served in these capacities since we were incorporated on October 14, 2008. Mr. Frolov has over 15 years of experience in accounting. Before joining EVCARCO in 2008 as the CFO, Mr. Frolov was the assistant controller for Romacorp, Inc.  Prior to this role, Mr. Frolov was a manager for Travis, Wolff & Co., LLP. Mr. Frolov was a senior consultant with Taylor and Taylor, LLP from 1994-2006. Mr. Frolov graduated with honors from the University of Texas at Arlington with Bachelor’s and Master’s degrees in Accounting.
 
Mr. Scott O’Neal is our Chief Operating Officer, Secretary, Vice President and Director. He has served in these capacities since we were incorporated on October 14, 2008. Mr. O’Neal oversees sales and manufacturer relations for EVCARCO. With over 20 years of experience in the auto industry, Mr. O’Neal began in the auto business in 1988, working at family dealerships in Fort Worth, Texas. In 1995, he joined New Toyota Franchise Dealership as the fleet sales manger, achieving multiple Toyota Gold Sales Society Awards, Toyota’s top sales award. During the last ten years, Mr. O'Neal owned and operated independent car dealerships and other successful companies. Since 2006, Mr. O’Neal has helped launch companies such as Fireman’s Contractors and EVCARCO, for which he continues to serve as COO, advisor, and investor.

 
19

 

MANAGEMENT - continued
 
Mr. Edouard Prous is our CTO, Vice President of International Operations and Distribution, and Director. He has served in these capacities since we were incorporated on October 14, 2008. Mr. Prous, a Russian native, has extensive experience in international business and the auto industry. Prior to joining EVCARCO in 2008, Mr. Prous founded and ran Ace Plus, Inc. From 2001 to 2006, Mr. Prous served as COO of ONPRO, Inc. Mr. Prous has also been the COO of Auto Solutions, Inc. He started his career at Accurate Auto Group, where he served as vice president from 1995-1999.
 
Board Composition
 
Our Bylaws provide that the Board of Directors shall consist of one or more members, but not more than nine, and that our shareholders shall determine the number of directors at each regular meeting. Each director serves for a term that expires at the next regular meeting of the shareholders or until his successor is elected and qualified.
 
Committees of the Board of Directors
 
Due to our size, limited operating history and financial conditions we do not presently have a separately constituted audit committee, compensation committee, nominating committee, executive committee or any other committees of our Board of Directors. Our entire Board of Directors acts as our audit committee and handles matters related to compensation and nominations of directors. We do not have an audit committee “financial expert.”
 
Potential Conflicts of Interest
 
Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executives or directors.
 
Director Independence
 
We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of “independent directors.” Our determination of independence of directors is made using the definition of “independent director” contained in Rule 4200(a)(15) of the Marketplace Rules of the NASDAQ Stock Market (“NASDAQ”), even though such definitions do not currently apply to us because, we are not listed on NASDAQ. We have determined that none of our directors currently meet the definition of “independent” as within the meaning of such rules as a result of their current positions as our executive officers.
 
Significant Employees
 
We have no significant employees other than the executive officers described above.
 
Family Relationships
 
There are no familial relationships among any of our officers and directors.
 
Involvement in Certain Legal Proceedings
 
No director, person nominated to become a director, executive officer, promoter or control person of our company has, during the last five years: (i) been convicted in or is currently subject to a pending a criminal proceeding (excluding traffic violations and other minor offenses); (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to any federal or state securities or banking or commodities laws including, without limitation, in any way limiting involvement in any business activity, or finding any violation with respect to such law, nor (iii) any bankruptcy petition been filed by or against the business of which such person was an executive officer or a general partner, whether at the time of the bankruptcy or for the two years prior thereto.
 
 

 
20

 

MANAGEMENT - continued
 
Stockholder Communications with the Board
 
We have not implemented a formal policy or procedure by which our stockholders can communicate directly with our Board of Directors or make nominations to the Board of Directors. Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the Board of Directors or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. We believe that we are responsive to stockholder communications, and therefore have not considered it necessary to adopt a formal process for stockholder communications with our Board. During the upcoming year, our Board will continue to monitor whether it would be appropriate to adopt such a process.
 
Code of Ethics
 
As of the date of this Registration Statement, we had not adopted a Code of Ethics, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
 
EXECUTIVE COMPENSATION
 
Summary Compensation Table
 
The following table sets forth information with respect to compensation paid by us to our officers and directors for the fiscal years ended December 31, 2009 and 2008.
 
                               
Non-Equity
   
Non-qualified
             
                               
Incentive
   
Deferred
   
All
       
Name and
                 
Stock
   
Option
   
Plan
   
Comp.
   
Other
       
Principal
     
Salary
   
Bonus
   
Awards
   
Awards
   
Comp.
   
Earnings
   
Comp.
   
Total
 
Position
 
Year
 
($)
   
($)
   
($)
   
($)
   
($)
   
($)
   
($)
   
($)
 
Dale Long,
                                                   
President, CEO
 
2009
   
125,400
     
-
     
-
     
-
     
-
     
-
     
-
     
125,400
 
and Director
 
2008
   
2,000
     
-
     
-
     
-
     
-
     
-
     
-
     
2,000
 
Nikolay Frolov,
                                                                   
CFO, Treasurer
 
2009
   
48,000
     
-
     
-
     
-
     
-
     
-
     
-
     
48,000
 
and Director
 
2008
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Scott O'Neal,
                                                                   
COO, Secretary
 
2009
   
120,200
     
-
     
-
     
-
     
-
     
-
     
-
     
120,200
 
VP and Director
 
2008
   
2,000
     
-
     
-
     
-
     
-
     
-
     
-
     
2,000
 
Edouard Prous,
                                                                   
CTO, VP and
 
2009
   
110,770
     
-
     
-
     
-
     
-
     
-
     
-
     
110,770
 
Director
 
2008
   
2,000
     
-
     
-
     
-
     
-
     
-
     
-
     
2,000
 
 
Amounts of compensation for 2009, reported in the table above, represent accrued compensation. The manner and timing of payments of the accrued compensation will depend on the future financial conditions of the Company.
 
Refer to the Notes to Financial Statements for more information.
 
Outstanding Equity Awards
 
On June 1, 2010, we adopted our 2010 Employees/Consultants Stock Compensation Plan (the “Plan”).  The Plan authorizes our Board of Directors to issue up to 6,000,000 shares of our common stock or options to certain qualified employees and/or consultants in accordance with the terms of the Plan. No individual grants of stock options or other equity incentive awards have been made to any executive officer or any director since our inception; however, on June 24, 2010, we issued 6,000,000 shares to a consultant for services rendered to us.
 
Employment Contracts, Termination of Employment, Change-in-Control Arrangements
 
We have not entered into any employment or other contracts or arrangements with our executive officers. There are no compensation plans or arrangements, including payments to be made by us, with respect to our officers, directors or consultants that would result from the resignation, retirement or any other termination of such directors, officers or consultants from us. There are no arrangements for directors, officers, employees or consultants that would result from a change-in-control.

 
21

 

EXECUTIVE COMPENSATION  - continued
 
Compensation of Directors
 
We have no formal plan for compensating our directors for their services in their capacity as directors. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our Board of Directors. The Board of Directors may award special remuneration to any director undertaking any special services on behalf of EVCARCO other than services ordinarily required of a director.
 
The following table summarizes all compensation awarded to, earned by or paid to our directors for all services rendered in all capacities to us for the fiscal years ended December 31, 2009 and 2008.
 
       
Fees
               
Non-Equity
   
Non-qualified
             
       
Earned
               
Incentive
   
Deferred
   
All
       
Name and
     
or Cash
   
Stock
   
Option
   
Plan
   
Comp.
   
Other
       
Principal
     
Paid
   
Awards
   
Awards
   
Comp.
   
Earnings
   
Comp.
   
Total
 
Position
 
Year
 
($)
   
($)
   
($)
   
($)
   
($)
   
($)
   
($)
 
Dale Long,
                                             
President, CEO
 
2009
   
0-
     
0-
     
0-
     
0-
     
0-
     
0-
     
0-
 
and Director
 
2008
   
0-
     
0-
     
0-
     
0-
     
0-
     
0-
     
0-
 
Nikolay Frolov,
                                                           
CFO, Treasurer
 
2009
   
0-
     
0-
     
0-
     
0-
     
0-
     
0-
     
0-
 
and Director
 
2008
   
0-
     
0-
     
0-
     
0-
     
0-
     
0-
     
0-
 
Scott O'Neal,
                                                           
COO, Secretary
 
2009
   
0-
     
0-
     
0-
     
0-
     
0-
     
0-
     
0-
 
VP and Director
 
2008
   
0-
     
0-
     
0-
     
0-
     
0-
     
0-
     
0-
 
Edouard Prous,
                                                           
CTO, VP and
 
2009
   
0-
     
0-
     
0-
     
0-
     
0-
     
0-
     
0-
 
Director
 
2008
   
0-
     
0-
     
            0-
     
             0-
     
             0-
     
             0-
     
             0-
 
 
 
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
Other than the stock transactions discussed below, EVCARCO, Inc has not entered into any transaction nor are there any proposed transactions in which any director, executive officer, shareholder of the company or any member of the immediate family of any of the foregoing had or is to have a direct or indirect material interest.
 
Mr. Dale Long, Mr. Scott O’Neal, Mr. Edouard Prous, as officers and members of our Board of Directors, each purchased by subscription 15,000,000 shares of common stock from EVCARCO, Inc. on October 15, 2008 for $5,000, each. Mr. Nikolay Frolov, as officer and member of our Board of Directors, also purchased by subscription 1,500,000 shares of common stock from EVCARCO, Inc. on October 15, 2008 for $500, and 6,000,000 shares of common stock on October 27, 2009, for $2,000.
 
PRINCIPAL STOCKHOLDERS
 
The following table sets forth information regarding the beneficial ownership of our common stock as of December 31, 2009 for (1) each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock; (2) each of our executive officers; (3) each of our directors; and (4) all of our executive officers and directors as a group.
 
We have determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws, and the address for each person listed in the table is c/o EVCARCO Inc., 7703 Sand Street, Fort Worth, Texas 76118.
 
The percentage ownership information shown in the table below is calculated based on 61,125,500 shares of our common stock issued and outstanding as of December 31, 2009. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock.

 
22

 

PRINCIPAL STOCKHOLDERS - continued
 
       
Amount and Nature
       
Title of
     
of Beneficial
       
Class
 
Name of Beneficial Owner
 
Ownership
   
Percentage
 
Common
 
Dale Long,
   
14,963,500
     
24.48
%
Stock
 
President, Chief Executive Officer and Director
               
Common
 
Nikolay Frolov
   
7,495,000
     
12.26
%
Stock
 
Chief Financial Officer, Treasurer and Director
               
Common
 
Scott O'Neal
   
14,968,700
     
24.49
%
Stock
 
Chief Operating Officer, Secretary, Vice President and Director
               
Common
 
Edouard Prous
   
14,982,300
     
24.51
%
Stock
 
Chief Technical Officer, Vice President and Director
               
                     
   
All Officers and Directors as a Group
   
52,409,500
     
85.74
%
                     
   
Total  shares outstanding
   
61,125,500
         
 
We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change in control of our Company.
 
We do not have any issued and outstanding securities that are convertible into common stock. Other than the shares covered by the registration statement of which this prospectus is a part, we have not registered any shares for sale by security holders under the Securities Act. None of our stockholders are entitled to registration rights.
 
DESCRIPTION OF CAPITAL STOCK
Common Stock
 
Our authorized capital stock consists of 180,000,000 shares of common stock, par value $0.001 per share.
 
The holders of our common stock:
 
 
Have equal ratable rights to dividends from funds legally available therefore, when, as and if declared by our Board of Directors;
 
 
Are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;
 
 
Do not have pre-emptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and
 
 
Are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.
 
The shares of common stock are not subject to any future call or assessment and all have equal voting rights. There are no special rights or restrictions of any nature attached to any of the common shares and they all rank at equal rate or “ pari passu,” each with the other, as to all benefits, which might accrue to the holders of the common shares. All registered stockholders are entitled to receive a notice of any general annual meeting to be convened by our Board of Directors.
 
At any general meeting, subject to the restrictions on joint registered owners of common shares, on a showing of hands every stockholder who is present in person and entitled to vote has one vote, and on a poll every stockholder has one vote for each shares of common stock of which he is the registered owner and may exercise such vote either in person or by proxy. To the knowledge of our management, at the date hereof, our officers and directors are the only persons to exercise control, directly or indirectly, over more than 10% of our outstanding common shares. See “Security Ownership of Certain Beneficial Owners and Management.”
 
We refer you to our Articles of Incorporation and Bylaws, copies of which were filed with the registration statement of which this prospectus is a part, and to the applicable statutes of the State of Nevada for a more complete description of the rights and liabilities of holders of our securities.
 

 
23

 

DESCRIPTION OF CAPITAL STOCK - continued
 
As of July 22, 2010, there were 72,330,500 shares of our common stock issued and outstanding.
  
Preferred Stock
 
Our Articles of Incorporation authorize the issuance of 15,000,000 shares of preferred stock with a par value of $0.001 per share. The terms of the preferred shares are at the discretion of the board of directors. Currently no preferred shares are issued and outstanding and have the following rights, preferences and privileges:
 
Ranking: Our Class A Preferred Stock (“Class A Stock”) ranks, as to dividends and upon liquidation, senior and prior to our comn stock, par value $0.001 per share (the “Common Stock”) and to all other classes or class of stock issued by the Issuer, except as otherwise approved by the affirmative vote or consent of the holders of a majority of the shares of outstanding Class A Stock.
 
Liquidation Rights. With respect to rights on liquidation, the Class A Stock shall rank senior and prior to our Common Stock and to all other classes or series of stock issued by CCII, except as otherwise approved by the affirmative vote or consent of the holders of at least a majority of outstanding Class A Stock.
 
Voting.  The Class A Stockholders shall be entitled to four (4) votes for each share of Class A Stock held on any matters requiring a shareholder vote of CCII.
 
Conversion.  Any Class A Stockholder shall have the right, at any time from the date of issuance, to convert any or all of its Class A Stock into 4 shares of fully paid and non-assessable shares of Common Stock for each share of Class A Stock so converted.
 
 Options, Warrants and Rights
 
There are no outstanding options, warrants, or rights to purchase any of our securities.
 
Non-cumulative Voting
 
Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in such event, the holders of the remaining shares will not be able to elect any of our directors.
 
 Cash Dividends
 
As of the date of this prospectus, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of our Board of Directors and will depend upon our earnings, if any, our capital requirements and financial position, our general economic and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, into our business.
  
Transfer Agent
 
We have appointed the following transfer agent for our shares of common and preferred stock:
 
Olde Monmouth Stock Transfer Phone: (732) 872-2727 Fax: (732) 872-2728. The transfer agent is responsible for all record-keeping and administrative functions in connection with our issued and outstanding common stock.
 
SHARES ELIGIBLE FOR FUTURE SALE
 
Upon completion of this offering, based on our outstanding shares as of July 22, 2010, we will have outstanding an aggregate of 133,555,500 shares of our common stock. Of these shares, upon effectiveness of the registration statement of which this prospectus forms a part, the 61,225,000 shares covered hereby will be freely transferable without restriction or further registration under the Securities Act.
 
The 55,357,730 restricted shares of common stock to be outstanding after this offering are owned by our executive officers and directors, known as our “affiliates,” and other shareholders, and may not be resold in the public market except in compliance with the registration requirements of the Securities Act or under an exemption under Rule 144 of the Securities Act.
  
Rule 144
 
In general, under Rule 144 as currently in effect, a person who is not one of our affiliates and who is not deemed to have been one of our affiliates at any time during the three months preceding a sale and who has beneficially owned shares of our common stock that are deemed restricted securities for at least six months would be entitled after such six-month holding period to sell the common stock held by such person, subject to the continued availability of current public information about us (which current public information requirement is eliminated after a one-year holding period).

 
24

 

SHARES ELIGIBLE FOR FUTURE SALE - continued
 
A person who is one of our affiliates, or has been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned shares of our common stock that are deemed restricted securities for at least six months would be entitled after such six-month holding period to sell his or her securities, provided that he or she sells an amount that does not exceed 1% of the number of shares of our common stock then outstanding, or 1,335,555 shares immediately after this offering (or, if our common stock is listed on a national securities exchange, the average weekly trading volume of the shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale), subject to the continued availability of current public information about us, compliance with certain manner of sale provisions, and the filing of a Form 144 notice of sale if the sale is for an amount in excess of 5,000 shares or for an aggregate sale price of more than $50,000 in a three-month period.
 
Rule 144 is not available for resale of restricted securities of shell companies or former shell companies until one year elapses from the time that such company is no longer considered a shell company.
 
UNDERWRITING
 
We are not engaging an underwriter to assist us in this offering. This offering is being made solely through our officers and directors. Pursuant to Rule 3a4-1, our officers and directors are not considered to be acting as brokers as a result of their participation in this Offering.  At the time of this Offering, each officer and director participating in this offering:
 
 
1.
Is not subject to a statutory disqualification, as that term is defined in section 3(a)(39) of the Act, at the time of his participation; and
 
2.
Is not compensated in connection with his participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities; and
 
3.
Is not at the time of his participation an associated person of a broker or dealer; and
 
4.
Meets the conditions of paragraph (a)4(ii) of Rule 3a-1.
 
LEGAL MATTERS
 
We know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest. Our address for service of process in Nevada is Nevada Agency and Trust Company, 50 West Liberty Street, Reno, Nevada 89501.
 
EXPERTS
 
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis or had, or is to receive, in connection with the offering, a substantial interest, directly or indirectly, in the Company, nor was any such person connected with the Company as a promoter, managing or principal underwriter, voting trustee, director, officer or employee.
 
Our financial statements for the period from October 14, 2008 (inception) to December 31, 2009, included in this prospectus have been audited by Seale and Beers, CPAs, as set forth in their report included in this prospectus.
 
LEGAL REPRESENTATION
 
The validity of the issuance of the common stock offered hereby will be passed upon for us by The O’Neal Law Firm. P.C., included in the opinion letter filed as an exhibit to the Registration Statement of which this prospectus is a part.
 
WHERE YOU CAN FIND MORE INFORMATION
 
In accordance with the Securities Act of 1933, we are filing with the SEC a registration statement on Form S-1, of which this prospectus is a part, covering the securities being offering in this offering. As permitted by rules and regulations of the SEC, this prospectus does not contain all of the information set forth in the registration statement. For further information regarding both our Company and the securities in this offering, we refer you to the registration statement, including all exhibits and schedules, which you may inspect without charge at the public reference facilities of the SEC’s Washington, D.C. office, 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10am and 3pm, and on the SEC Internet site at http:\\www.sec.gov. Information regarding the operation of the public reference rooms may be obtained by calling the SEC at 1-800-SEC-0330. 
 
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to our directors, officers or persons controlling us, we have been advised that it is the Securities and Exchange Commission’s opinion that such indemnification is against public policy as expressed in such act and is, therefore, unenforceable.

 
25

 

 
 
Item 1. Financial Statements
 
EVCARCO, INC.
 
INDEX TO FINANCIAL STATEMENTS
 
Financial Statements
 
   
Report of Independent Registered Public Accounting Firm F-2
   
Balance Sheet - December 31, 2009 and 2008  (Restated) (Audited)
F-3
   
Statement of Operations - For the Year Ended December 31, 2009 and for the Period from Inception (October 14, 2008) Through December 31, 2008 (Restated) and 2009 (Audited)
F-4
   
Statement of Stockholders' Equity - For the Period from Inception (October 14, 2008) to December 31, 2009 (Audited)
F-5
   
Statement of Cash Flow - For the Year Ended December 31, 2009 and for the Period from Inception (October 14, 2008) Through December 31, 2008 (Restated) and 2009 (Audited)
F-6
   
Notes to Financial Statements - December 31, 2009 (Audited)
F-7 to F-14
   
Balance Sheets as of March 31, 2010 (Unaudited) and December 31, 2009
F-15
   
Statements of Operations for the Three Months Ended March 31, 2010 and 2009 (Unaudited) from Inception (October 14, 2008) to March 31, 2010 (Unaudited)
F-16
   
Statement of Stockholders' Equity from Inception (October 14, 2008) through March 31, 2010 (Unaudited)
F-17
   
Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009 (Unaudited) and from Inception (October 14, 2008) to March 31, 2010 (Unaudited)
F-18
   
Notes to Financial Statements
F-19 to F-20
 
 
 
 
 
F-1

 
 
 

SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
www.sealebeers.com
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors
EVCarCo, Inc.
(A Development Stage Company)
 
We have audited the accompanying balance sheets of EVCarCo, Inc. (A Development Stage Company) as of December 31, 2009 and 2008 (restated), and the related statements of operations, stockholders’ equity (deficit) and cash flows for the year ended December 31, 2009, from inception on October 14, 2008 through December 31, 2008 (restated), and from inception on October 14, 2008 through December 31, 2009. These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of EVCarCo, Inc. (A Development Stage Company) as of December 31, 2009 and 2008 (restated), and the related statements of operations, stockholders’ equity (deficit) and cash flows for the year ended December 31, 2009, from inception on October 14, 2008 through December 31, 2008 (restated), and from inception on October 14, 2008 through December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.
 
As discussed in Note 11 to the accompanying financial statements, the Company has restated its 2008 financial statements, which were previously audited by other independent auditors who have ceased operations.
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 8 to the financial statements, as of December 31, 2009 the Company has accumulated a deficit of $1,160,354 since inception, which raises substantial doubt about its ability to continue as a going concern.  Management’s plans concerning these matters are also described in Note 8.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
/s/ Seale and Beers, CPAs
 
Seale and Beers, CPAs
Las Vegas, Nevada
April 29, 2010
 
Except for Note 11, the date is June 16, 2010.
 
50 S. Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351
 

 
F-2

 

 
EVCARCO, Inc.
 
(A Development Stage Company)
 
Balance Sheets
 
   
             
             
   
December 31, 2009
   
December 31, 2008
 
         
(Restated)
 
ASSETS
             
Current assets
           
             
Cash
 
$
48,634
   
$
22,467
 
Inventory (see Note 3)
   
10,546
     
102,229
 
Other receivables
   
4,213
     
0
 
Prepaid expenses (see Note 4)
   
136,667
     
0
 
                 
Total current assets
   
200,060
     
124,696
 
                 
Facilities and equipment
   
7,654
     
4,018
 
Accumulated depreciation
   
(1,933
)
   
(321
)
Other assets
   
3,252
     
4,004
 
                 
                 
TOTAL ASSETS
 
$
209,033
   
$
132,397
 
                 
                 
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                 
Current liabilities
               
                 
Accounts Payable
 
$
18,739
   
$
0
 
Accrued expenses
   
30,726
     
4,369
 
Accrued interest (related parties)
   
334
     
246
 
Other payables
   
6,308
     
1,941
 
Notes payable (see Note 5)
   
88,910
     
0
 
Loans payable to shareholders (see Note 6)
   
271,280
     
44,701
 
                 
Total current liabilities
   
416,297
     
51,257
 
                 
Total liabilities
   
416,297
     
51,257
 
                 
Stockholders' equity (see Note 10)
               
                 
15,000,000 shares Series A Special Preferred Convertible
               
   Stock Authorized at $0.001/par value, none issued
   
0
     
0
 
180,000,000 shares Common Stock
               
   Authorized at $0.001/par value
               
61,125,500 and 52,530,000 shares
               
   issued and outstanding, respectively
   
61,126
     
52,530
 
Additional paid-in capital
   
891,964
     
119,670
 
Deficit accumulated during development stage (see Note 8)
   
(1,160,354
)
   
(91,060
)
                 
Total Stockholders' Equity/(Deficit)
   
(207,264
)
   
81,140
 
                 
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
 
$
209,033
   
$
132,397
 
                 
                 
The accompanying footnotes are an integral part of these financial statements.
         
 
 

 
F-3

 

 
EVCARCO, Inc.
 
(A Development Stage Company)
 
Statements of Operations
 
   
                   
         
Inception
   
Inception
 
         
(October 14, 2008)
   
(October 14, 2008)
 
         
Through
   
Through
 
   
2009
   
December 31, 2008
   
December 31, 2009
 
         
(Restated)
       
                   
Revenues
 
$
887,755
   
$
46,581
   
$
934,336
 
                         
Total Revenues
   
887,755
     
46,581
     
934,336
 
                         
Cost of goods sold
   
895,201
     
43,777
     
938,978
 
                         
Gross Profit
   
(7,446
)
   
2,804
     
(4,642
)
                         
Sales and marketing expenses
   
97,143
     
13,392
     
110,535
 
General and administrative expenses
   
849,613
     
78,491
     
928,104
 
Inventory adjustment
   
82,853
     
0
     
82,853
 
Depreciation and amortization
   
2,364
     
446
     
2,810
 
                         
Total Operating Expenses
   
1,031,973
     
92,329
     
1,124,302
 
                         
                         
Operating Profit
   
(1,039,419
)
   
(89,525
)
   
(1,128,944
)
                         
Other income/(loss)
                       
Interest income
   
195
     
94
     
289
 
Interest expense (related parties)
   
(5,114
)
   
(747
)
   
(5,861
)
Interest expense
   
(24,956
)
   
(882
)
   
(25,838
)
                         
Total Other Income/(Loss)
   
(29,875
)
   
(1,535
)
   
(31,410
)
                         
                         
Income (loss) before taxes
   
(1,069,294
)
   
(91,060
)
   
(1,160,354
)
                         
Income tax (expense) benefit
   
0
     
0
     
0
 
                         
Net income (loss)
 
$
(1,069,294
)
 
$
(91,060
)
 
$
(1,160,354
)
                         
                         
Basic (loss) / earnings per share
   
(0.02
)
   
(0.00
)
       
                         
Weighted average number of
                       
  common shares outstanding
   
54,717,104
     
52,246,329
         
                         
                         
                         
                         
                         
                         
                         
                         
                         
                         
The accompanying footnotes are an integral part of these financial statements.
         
 

 
F-4

 

 
EVCARCO, Inc.
 
(A Development Stage Company)
 
Statement of Stockholders' Equity
 
Inception (October 14, 2008) Through December 31, 2009
 
                               
                               
                               
                     
Deficit
       
                     
accumulated
       
               
Additional
   
during the
       
   
Common stock
   
paid-in
   
development
       
   
Shares
   
Amount
   
capital
   
stage
   
Total
 
                               
                               
Founders' stock issued @ $0.0003/sh. Oct. 2008
   
46,500,000
   
$
46,500
   
$
(31,000
)
 
$
-
   
$
15,500
 
Stock issued for services @ $0.0003/sh. Oct. 2008
   
5,100,000
     
5,100
     
(3,400
)
           
1,700
 
Stock issued for cash @ $0.1667/sh. Oct. 2008
   
306,000
     
306
     
50,694
             
51,000
 
Stock issued for cash @ $0.1667/sh. Nov. 2008
   
612,000
     
612
     
101,388
             
102,000
 
Stock issued for cash @ $0.1667/sh. Dec. 2008
   
12,000
     
12
     
1,988
             
2,000
 
                                         
Net income (loss)
                           
(91,060
)
   
(91,060
)
                                         
                                         
Balance December 31, 2008 (Restated)
   
52,530,000
   
$
52,530
   
$
119,670
   
$
(91,060
)
 
$
81,140
 
                                         
                                         
                                         
Stock issued for cash @ $0.1667/sh. Jan. 2009
   
123,000
     
123
     
20,377
             
20,500
 
Stock issued for services @ $0.1667/sh. Feb. 2009
   
6,000
     
6
     
994
             
1,000
 
Stock issued for property @ $0.19/sh. Jul. 2009
   
1,406,000
     
1,406
     
265,734
             
267,140
 
Stock issued for cash @ $0.50/sh. Jul. 2009
   
1,500
     
2
     
748
             
750
 
Stock issued for services @ $0.50/sh. Jul. 2009
   
600,000
     
600
     
299,400
             
300,000
 
Founders' stock issued @ $0.0003/sh. Oct. 2009
   
6,000,000
     
6,000
     
(4,000
)
           
2,000
 
Stock issued for loan @ $0.1667/sh. Oct. 2009
   
120,000
     
120
     
19,880
             
20,000
 
Stock issued for services @ $0.50/sh. Oct. 2009
   
90,000
     
90
     
44,910
             
45,000
 
Stock issued for cash @ $0.50/sh. Oct. 2009
   
105,000
     
105
     
52,395
             
52,500
 
Stock issued for cash @ $0.50/sh. Nov. 2009
   
14,000
     
14
     
6,986
             
7,000
 
Stock issued for cash @ $0.50/sh. Dec. 2009
   
130,000
     
130
     
64,870
             
65,000
 
                                         
Net income (loss)
                           
(1,069,294
)
   
(1,069,294
)
                                         
                                         
Balance December 31, 2009
   
61,125,500
   
$
61,126
   
$
891,964
   
$
(1,160,354
)
 
$
(207,264
)
                                         
                                         
                                         
                                         
                                         
                                         
                                         
                                         
                                         
                                         
                                         
The accompanying footnotes are an integral part of these financial statements.
                 
 
 
 
F-5

 
 
 
EVCARCO, Inc.
 
(A Development Stage Company)
 
Statements of Cash Flows
 
   
         
Inception
   
Inception
 
         
(October 14, 2008)
   
(October 14, 2008)
 
         
Through
   
Through
 
   
2009
   
December 31, 2008
   
December 31, 2009
 
         
(Restated)
       
Operating activities:
                 
                   
Net income (loss)
 
$
(1,069,294
)
 
$
(91,060
)
 
$
(1,160,354
)
Adjustments to reconcile net loss to net cash flows
                       
provided by operating activities:
                       
Depreciation and amortization
   
2,364
     
446
     
2,810
 
Consulting expenses (stock)
   
209,333
     
1,700
     
211,033
 
                         
Change in operating assets and liabilities:
                       
Inventory
   
91,683
     
(102,229
)
   
(10,546
)
Other receivables
   
(4,213
)
   
-
     
(4,213
)
Other assets
   
-
     
(4,129
)
   
(4,129
)
Accounts payable
   
18,739
     
-
     
18,739
 
Accrued expenses
   
26,357
     
4,369
     
30,726
 
Accrued interest (related parties)
   
88
     
246
     
334
 
Other payables
   
4,367
     
1,941
     
6,308
 
                         
Net cash flows provided by (used in) operating activities
   
(720,576
)
   
(188,716
)
   
(909,292
)
                         
                         
Investing activities:
                       
                         
Purchase of facilities and equipment
   
(3,636
)
   
(4,018
)
   
(7,654
)
                         
Net cash flows provided by (used in) investing activities
   
(3,636
)
   
(4,018
)
   
(7,654
)
                         
                         
Financing activities:
                       
Proceeds from loans payable
   
88,910
     
-
     
88,910
 
Proceeds from loans payable (related parties)
   
226,579
     
44,701
     
271,280
 
Issuance of common stock
   
434,890
     
170,500
     
605,390
 
                         
Net cash flows provided by (used in) financing activities
   
750,379
     
215,201
     
965,580
 
                         
Increase (decrease) in cash and cash equivalents
   
26,167
     
22,467
     
48,634
 
                         
Cash at beginning of period
   
22,467
     
0
     
0
 
                         
Cash at end of period
 
$
48,634
   
$
22,467
   
$
48,634
 
                         
                         
Cash paid for:
                       
                         
Interest
 
$
24,956
   
$
882
   
$
25,838
 
Interest (related parties)
   
5,026
     
501
     
5,527
 
                         
Non-cash activities:
                       
                         
Stock issued for property
 
$
267,140
   
$
-
   
$
267,140
 
Stock issued for services
   
346,000
     
1,700
     
347,700
 
Srock issued for loans
   
20,000
     
-
     
20,000
 
                         
The accompanying footnotes are an integral part of these financial statements.
         
 
 

 
F-6

 
EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009

NOTE 1.   ORGANIZATION AND DESCRIPTION OF BUSINESS
 
EVCARCO, Inc. (“The Company”) was incorporated under the laws of the State of Nevada on October 14, 2008.  The Company sells “green” automobiles, offering the latest technology electric vehicles, pre-owned vehicles converted to various green technologies, and a comprehensive financial package to complement their sales.  The Company is in the development stage, having only begun operations recently.
 
 
NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
a.  Basis of Presentation
 
The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.  The Company operates on calendar basis.
 
b.  Basic and Diluted Earnings per Share
 
Basic net loss per share amount is computed by dividing the net loss by the weighted average number of common shares outstanding.  Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.
 
c.  Cash Equivalents
 
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  There are no restrictions on Company’s cash.  At December 31, 2009 balances in Company’s cash accounts did not exceed federally insured limits.
 
d.  Inventories
 
Inventories of cars and parts are located at the Company’s Fort Worth office and are valued at the lower of cost (specific identification method) or market.
 
e.  Facilities and Equipment
 
Facilities and equipment are recorded at cost.  Depreciation is charged on the straight-line basis for buildings, furniture and equipment over the estimated useful lives of the assets.  Leasehold improvements are amortized on a straight-line basis over the term of the lease, or the life of the improvements, whichever is shorter.  Maintenance and repairs are charged to expense as incurred.  Major improvements are capitalized.
 
f.  Revenue Recognition
 
The Company’s revenue consists of vehicle sales and is recognized only when all of the following criteria have been met:
 
 
(i)
Persuasive evidence for an agreement exists;
 
(ii)
Delivery has occurred;
 
(iii)
The fee is fixed or determinable; and
 
(iv)
Collectability is reasonably assured.
 
 
 
 


 
F-7

 
EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009
 
NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
 
g.  Warranties
 
The Company does not warranty the vehicles it sells and has no contingency after the sale.  New vehicles carry manufacturers’ warranty.  Warranty for pre-owned vehicles can be arranged through a third party provider.
 
h.  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 reporting period. Actual results could differ from those estimates.
 
i.  Income Taxes
 
A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards.
 
Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
 
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
 
j.  Concentration of Credit Risk
 
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash deposits. This cash is on deposit with a large federally insured bank. The Company has not experienced any losses in cash balances and does not believe it is exposed to any significant credit risk on cash and cash equivalents.
 
k.  Recent Accounting Pronouncements
 
Below is a listing of the most recent accounting standards and their effect on the Company.
 
In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-15 (ASU 2010-15), Financial Services-Insurance (Topic 944): How Investments held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments-a consensus of the FASB Emerging Issues Task Force.  The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2010.  Early adoption is permitted.  The amendments in this Update should be applied retrospectively to all prior periods upon the date of adoption.  The Company does not expect the provisions of ASU 2010-15 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-14 (ASU 2010-14), Accounting for Extractive Activities – Oil & Gas - Amendments to Paragraph 932-10-S99-1 (SEC Update).  The Amendments are designed to modernize and update the oil and gas disclosure requirements to align them with current practices and changes in technology. The Company does not expect the provisions of ASU 2010-14 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-13 (ASU 2010-13), Compensation-Stock Compensation (topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades - a consensus of the FASB Emerging Issues Task Force.  The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010.  Earlier application is permitted.  The Company does not expect the provisions of ASU 2010-13 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
 
 
 
 


 
F-8

 
EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009
 
NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
 
k.  Recent Accounting Pronouncements - continued
 
In April 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-12 (ASU 2010-12), Income Taxes (Topic 740): Accounting for Certain Tax Effects of the 2010 Health Care Reform Acts.  After consultation with the FASB, the SEC stated that it “would not object to a registrant incorporating the effects of the Health Care and Education Reconciliation Act of 2010 when accounting for the Patient Protection and Affordable Care Act”. The Company does not expect the provisions of ASU 2010-12 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.  The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010.  Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update.  The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-10 (ASU 2010-10), Consolidation (Topic 810): Amendments for Certain Investment Funds.  The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for Interim periods within that first reporting period. Early application is not permitted.  The Company does not expect the provisions of ASU 2010-10 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-09 (ASU 2010-09), Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements.  All of the amendments in this Update are effective upon issuance of the final Update, except for the use of the issued date for conduit debt obligors. That amendment is effective for interim or annual periods ending after June 15, 2010.  The Company does not expect the provisions of ASU 2010-09 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In February 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-08 (ASU 2010-08), Technical Corrections to Various Topics.  The amendments are effective for the first reporting period (including interim periods) beginning after issuance (February 2, 2010), except for certain amendments.  The amendments to the guidance on accounting for income taxes in a reorganization (Subtopic 852-740) should be applied to reorganizations for which the date of the reorganization is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.  For those reorganizations reflected in interim financial statements issued before the amendments in this Update are effective, retrospective application is required.  The clarifications of the guidance on the embedded derivates and hedging (Subtopic 815-15) are effective for fiscal years beginning after December 15, 2009, and should be applied to existing contracts (hybrid instruments) containing embedded derivative features at the date of adoption.  The Company does not expect the provisions of ASU 2010-08 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-07 (ASU 2010-07), Not-for-Profit Entities (Topic 958): Not-for-Profit Entities: Mergers and Acquisitions.  This amendment to Topic 958 has occurred as a result of the issuance of FAS 164.  The Company does not expect the provisions of ASU 2010-07 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.  This amendment to Topic 820 has improved disclosures about fair value measurements on the basis of input received from the users of financial statements.  This is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements.  Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  Early adoption is permitted.  The Company does not expect the provisions of ASU 2010-06 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
 
 


 
F-9

 
EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009
 
NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
 
k.  Recent Accounting Pronouncements - continued
 
In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-05 (ASU 2010-05), Compensation – Stock Compensation (Topic 718).  This standard codifies EITF Topic D-110 Escrowed Share Arrangements and the Presumption of Compensation.
 
In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics—Technical Corrections to SEC Paragraphs.
 
In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-03 (ASU 2010-03), Extractive Activities—Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures.  This amendment to Topic 932 has improved the reserve estimation and disclosure requirements by (1) updating the reserve estimation requirements for changes in practice and technology that have occurred over the last several decades and (2) expanding the disclosure requirements for equity method investments.  This is effective for annual reporting periods ending on or after December 31, 2009.  However, an entity that becomes subject to the disclosures because of the change to the definition oil- and gas- producing activities may elect to provide those disclosures in annual periods beginning after December 31, 2009.  Early adoption is not permitted.  The Company does not expect the provisions of ASU 2010-03 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In December 2009, the FASB issued Accounting Standards Update 2009-17, Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities.  This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 167. (See FAS 167 effective date below)
 
In December 2009, the FASB issued Accounting Standards Update 2009-16, Transfers and Servicing (Topic 860): Accounting for Transfers of Financial Assets.  This Accounting Standards Update amends the FASB Accounting Standards Codification for Statement 166. (See FAS 166 effective date below)
 
In October 2009, the FASB issued Accounting Standards Update 2009-15, Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing.  (See EITF 09-1 effective date below)
 
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements.  Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010.  Early adoption is permitted. The Company does not expect the provisions of ASU 2009-13 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In July 2009, the FASB ratified the consensus reached by EITF (Emerging Issues Task Force) issued EITF No. 09-1, (ASC Topic 470) “Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance” (“EITF 09-1”).  EITF 09-1 is effective for fiscal years that beginning on or after December 15, 2009 and requires retrospective application for all arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009.   Share-lending arrangements that have been terminated as a result of counterparty default prior to December 15, 2009, but for which the entity has not reached a final settlement as of December 15, 2009 are within the scope.  Effective for share-lending arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009.  The Company does not expect the provisions of EITF 09-1 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In June 2009, the FASB issued SFAS No. 167 (ASC Topic 810), “Amendments to FASB Interpretation No. 46(R) (“SFAS 167”).   SFAS 167 amends the consolidation guidance applicable to variable interest entities. The provisions of SFAS 167 significantly affect the overall consolidation analysis under FASB Interpretation No. 46(R).  SFAS 167 is effective as of the beginning of the first fiscal year that begins after November 15, 2009. SFAS 167 will be effective for the Company beginning in 2010. The Company does not expect the provisions of SFAS 167 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
 
 


 
F-10

 
EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009
 
NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
 
k.  Recent Accounting Pronouncements - continued
 
In June 2009, the FASB issued SFAS No. 166, (ASC Topic 860) “Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). SFAS 166 is effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009. The Company does not expect the provisions of SFAS 166 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In April 2009, the FASB issued SFAS No. 164, (ASC Topic 810) “Not-for-Profit Entities: Mergers and Acquisitions – including an amendment of FASB Statement No. 142” (“SFAS 164”). SFAS 164 is effective for mergers occurring on or after the beginning of an initial reporting period beginning on or after December 15, 2009 and acquisitions occurring on or after the beginning of the first annual reporting period beginning on or after December 15, 2009. The Company does not expect the provisions of SFAS 164 to have a material effect on the financial position, results of operations or cash flows of the Company.
 
In June 2009, the Securities and Exchange Commission’s Office of the Chief Accountant and Division of Corporation Finance announced the release of Staff Accounting Bulletin (SAB) No. 112. This staff accounting bulletin amends or rescinds portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and Securities and Exchange Commission rules and regulations. Specifically, the staff is updating the Series in order to bring existing guidance into conformity with recent pronouncements by the Financial Accounting Standards Board, namely, Statement of Financial Accounting Standards No. 141 (revised 2007) (ASC Topic 805), Business Combinations, and Statement of Financial Accounting Standards No. 160 (ASC Topic 810), Non-controlling Interests in Consolidated Financial Statements. The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the Federal securities laws.
 
In September 2008, the FASB issued exposure drafts that eliminate qualifying special purpose entities from the guidance of SFAS No. 140 (ASC Topic 860), “Accounting for Transfers and Servicing of Financial  Assets and  Extinguishments of Liabilities,” and  FASB  Interpretation 46 (ASC Topic 810) (revised December 2003), “Consolidation of  Variable  Interest Entities − an interpretation of ARB  No. 51 (ASC Topic 810),” as well as other modifications.  While the proposed revised pronouncements have not been finalized and the proposals are subject to further public comment, the Company anticipates the changes will not have a significant impact on the Company’s financial statements.  The changes would be effective March 1, 2010, on a prospective basis.
 
The Company does not expect any recent accounting pronouncements to have a material impact on its financial statements.
 
 
NOTE 3.  INVENTORY
 
At each year end, respectively, the Company had the following inventory:
 
   
Dec. 31, 2009
   
Dec. 31, 2008
 
             
New vehicles
 
$
0
   
$
47,729
 
Pre-owned vehicles
   
3,550
     
54,500
 
Other items
   
6,996
     
0
 
                 
Total inventory
 
$
10,546
   
$
102,229
 
 
At the end of 2009 we have made a decision to impair inventory in the amount of $82,853.  $37,976 is mark down of inventory to market.  $44,877 of the impairment relates to five SMART cars, that were not received under the contract to exchange cash and stock for thirty five pre-owned vehicles.  The contract is essentially settled and completed, and the Company will not be able to recover those cars.
 
 
 


 
F-11

 
EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009
 
NOTE 4.  PREPAID EXPENSES
 
As of December 31, 2009, balance of prepaid expenses was $136,667, which represented the unearned portion of stock compensation issued under consulting agreements.
 
 
NOTE 5.  NOTES PAYABLE
 
During 2009, the Company received $150,000 of advances and made $61,090 of principal repayments to RGTK, an unrelated entity.   The note is unsecured, due upon demand and accrues interest at the end of each month on the then outstanding balance at the rate of 36% per annum.  As of December 31, 2009, principal balance of note was $88,910.  Interest paid during the same period was $17,110.
 
 
NOTE 6.  RELATED PARTY TRANSACTIONS
 
For the year ended December 31, 2009, the Company accrued $404,170 in salaries payable to its four officers and major shareholders.   For the period ended December 31, 2008, the accrued amount was $6,000.
 
As of December 31, 2009 and December 31, 2008, the balances of shareholder notes were $271,280 and $44,701, respectively.  The balances included accrued salaries, along with various advances to and from the Company.  The notes are unsecured, due upon demand and accrue interest at the end of each month on the then outstanding balance at the rate of 5.00% per annum.  Accrued interest payable on the notes at each respective year end was $334 and $246.  Interest paid during the same periods was $5,114 and $747, respectively.
 
 
NOTE 7.  OPERATING SEGMENTS
 
During the period from inception through December 31, 2009 the Company operated as a single business segment.
 
 
NOTE 8.  GOING CONCERN
 
The accompanying financial statements are presented on a going concern basis.  During the period from inception through December 31, 2009 the Company has generated an accumulated deficit of $1,160,354.  This condition raises substantial doubt about the Company’s ability to continue as a going concern.
 
Since the end of 2009 fiscal year, the Company has received $363,000 in new investment funds.  These funds have improved Company’s financial position and ability to execute its business plan.
 
 
 
 


 
F-12

 
EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009
 
NOTE 9.  INCOME TAXES
 
For the years ended December 31, 2009, and December 31, 2008, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded.  In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets.  At December 31, 2009, the Company had approximately $812,338 of new operating loss.
 
Significant components of the Company’s deferred tax assets and liabilities were as follows:
 
   
Dec. 31, 2009
   
Dec. 31, 2008
 
             
Deferred tax assets:
           
   Intangible assets
 
$
4,176
   
$
4,478
 
   Syndication costs
   
8,500
     
8,500
 
   Accrued liabilities
   
148,436
     
-
 
   Sec. 179 deduction
   
2,181
     
-
 
   Net operating loss carryforwards
   
276,195
     
16,778
 
                 
      Total deferred tax assets
   
439,488
     
29,756
 
                 
Deferred tax liabilities:
               
   Prepaid expenses
   
(46,467
)
   
-
 
   Facilities and equipment
   
(1,538
)
   
(838
)
                 
      Total deferred tax liabilities
   
(48,005
)
   
(838
)
                 
Net deferred tax assets before valuation allowance
   
 391,483
     
 28,918
 
Less: Valuation allowance
   
(391,483
)
   
(28,918
)
Net deferred tax assets
 
$
-
   
$
-
 
 
Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income.  As the achievement of required future taxable income is uncertain, the Company has recorded a valuation allowance for the full amount of the deferred tax asset related to the net operating loss carry forward.
 
 
NOTE 10.  STOCKHOLDERS’ EQUITY
 
At inception on October 14, 2008, the Company issued 46,500,000 shares of common stock to founders for a cash consideration of $15,500.
 
Between the inception of October 14, 2008 through December 31, 2008, the Company issued 930,000 shares of common stock to various investors for a cash consideration of $155,500.
 
Between the inception on October 14, 2008 through December 31, 2008, the Company issued 5,100,000 shares of common stock for professional services.
 
Effective April 29, 2009 the Company filed an amendment with the Nevada Secretary of State to increase authorized shares of common stock from 25,000,000 to 60,000,000; and to authorize Series A special preferred convertible stock in the amount of 15,000,000 shares at $0.001 par value.
 
On July 10, 2009 the Company effectuated a 3-for-1 forward stock split of its issued and outstanding common stock.  All amounts of shares reflected on these financial statements are on post-split basis.
 
 
 


 
F-13

 
EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2009
 
NOTE 10.  STOCKHOLDERS’ EQUITY - continued
 
On July 14, 2009, the Company issued 1,406,000 shares of common stock for property, in the form of pre-owned vehicles.
 
On October 27, 2009, the Company issued 6,000,000 shares of common stock to founders for a cash consideration of $2,000.
 
On October 27, 2009, the Company issued 120,000 shares of common stock to settle a note payable in the amount of $20,000.
 
During 2009, the Company issued 373,500 shares of common stock to various investors for a cash consideration of $145,750.
 
During 2009, the Company issued 696,000 shares of common stock for professional services.
 
 
NOTE 11.  RESTATED FINANCIAL STATEMENTS
 
The Company has restated its financial statements for the period from Inception (October 14, 2008) through December 31, 2008.  In conjunction with the PCAOB revocation of the registration of its prior auditor, the Company had its financials re-audited, and determined, that several adjustments were necessary.  The financials were restated to reflect the purchase of initial shares by the founders, which was originally recorded as compensation; addition of amortization of prepaid expenses, which was omitted; expensing of professional fees, that were originally capitalized; and correction of valuation of consulting services in exchange for stock.  The following is a comparison of the summarized financial statements of the Company before and after the restatement (adjusted for July of 2009 3-for-1 stock split):
 
   
Inception (October 14, 2008)
Through December 31, 2008
 
   
Original
   
Restated
   
Change
 
BALANCE SHEET
                 
Current assets
 
$
124,696
   
$
124,696
   
$
-
 
Property and equipment, net
   
3,697
     
3,697
     
-
 
Other assets
   
29,129
     
4,004
     
(25,125
)
Total Assets
   
157,522
     
132,397
     
(25,125
)
                         
Total liabilities
   
66,923
     
51,257
     
(15,666
)
Common stock
   
930
     
52,530
     
51,600
 
Paid in capital
   
154,070
     
119,670
     
(34,400
)
Accumulated deficit
   
(64,401
)
   
(91,060
)
   
(26,659
)
Total stockholders’ equity
   
90,599
     
81,140
     
(9,459
)
Total liabilities and stockholders' equity
 
$
157,522
   
$
132,397
   
$
(25,125
)
                         
STATEMENT OF OPERATIONS
                       
Loss from operations
 
$
(62,700
)
 
$
(89,525
)
 
$
(26,825
)
Total other income/(loss)
   
(1,701
)
   
(1,535
)
   
166
 
Net loss
 
$
(64,401
)
 
$
(91,060
)
 
$
(26,659
)
Net loss per share
   
(0.10
)
   
(0.00
)
       
                         
STATEMENT OF CASH FLOWS
                       
Operating activities
 
$
(182,309
)
 
$
(188,716
)
 
$
(6,407
)
Investing activities
   
(4,018
)
   
(4,018
)
   
-
 
Financing activities
   
208,794
     
215,201
     
6,407
 
Cash
 
$
22,467
   
$
22,467
   
$
-
 
 
 
NOTE 12.  SUBSEQUENT EVENTS
 
During January and February of 2010, the Company issued 204,000 shares of common stock to various investors for a cash consideration of $63,000
 
During March of 2010, the Company issued 2,800,000 shares of common stock for professional services, including 50,000 shares as prepayment of services for April of 2010.
 
In March of 2010, the Company received $100,000 under a contract to purchase 500,000 shares of common stock.  As of March 31, 2010, the shares have not yet been issued.
 
In March of 2010, the Company received $200,000 under a contract to purchase 1,000,000 shares of common stock.  As of March 31, 2010, the shares have not yet been issued.
 
In March of 2010, the Company signed a five year contract to lease 18,500 sq. ft. building at 6124 Denton Dr., in Dallas, TX, at initial monthly rate of $17,333.  The property will house the corporate office as well as a new dealership location, in addition to the Company’s current location in Fort Worth, TX.  The lease will commence in April of 2010.  The Company will have an option of terminating the lease at any time during the term, without any significant financial consequences.

 
F-14

 

EVCARCO, Inc.
 
(A Development Stage Company)
 
Balance Sheets
 
   
             
   
March 31, 2010
   
December 31, 2009
 
   
(Unaudited)
       
ASSETS
 
             
Current assets
           
             
Cash
 
$
87,977
   
$
48,634
 
Inventory (see Note 3)
   
188,106
     
10,546
 
Other receivables
   
19,900
     
4,213
 
Prepaid expenses (see Note 4)
   
1,141,444
     
136,667
 
                 
Total current assets
   
1,437,427
     
200,060
 
                 
Property and equipment, net
   
31,050
     
5,721
 
Other assets
   
33,564
     
3,252
 
                 
                 
TOTAL ASSETS
 
$
1,502,041
   
$
209,033
 
                 
                 
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY/DEFICIT
 
                 
Current liabilities
               
                 
Accounts payable
 
$
86,058
   
$
18,739
 
Accrued expenses
   
42,691
     
30,726
 
Accrued interest (related parties)
   
449
     
334
 
Other payables
   
39,942
     
6,308
 
Notes payable (see Note 5)
   
88,910
     
88,910
 
Loans payable (related parties) (see Note 6)
   
355,204
     
271,280
 
                 
Total current liabilities
   
613,254
     
416,297
 
                 
Total liabilities
   
613,254
     
416,297
 
                 
Commitments and contingencies (see Note 10)
               
                 
Stockholders' equity/(deficit) (see Note 9)
               
                 
15,000,000 shares Series A Special Preferred Convertible
               
   Stock Authorized at $0.001/par value, none issued
   
-
     
-
 
180,000,000 shares Common Stock
               
   Authorized at $0.001/par value
               
   64,129,500, 61,125,500 and 52,659,000 shares
               
   issued and outstanding, respectively
   
64,130
     
61,126
 
Additional paid-in capital
   
2,543,960
     
891,964
 
Deficit accumulated during development stage (see Note 8)
   
(1,719,303
)
   
(1,160,354
)
                 
Total stockholders' equity/(deficit)
   
888,787
     
(207,264
)
                 
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/DEFICIT
 
$
1,502,041
   
$
209,033
 
                 
                 
                 
The accompanying footnotes are an integral part of these financial statements.
 
 
 
 
 
 
F-15

 
 
 
EVCARCO, Inc.
 
(A Development Stage Company)
 
Statements of Operations
 
   
                     
                 
Inception
 
     
For the Three
   
For the Three
   
(October 14, 2008)
 
     
Months Ended
   
Months Ended
   
Through
 
     
March 31, 2010
   
March 31, 2009
   
March 31, 2010
 
     
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                     
                     
Revenues
   
$
148,263
   
$
74,880
   
$
1,082,599
 
                           
 
Total revenues
   
148,263
     
74,880
     
1,082,599
 
                           
Cost of goods sold
   
147,593
     
88,076
     
1,086,571
 
                           
 
Gross profit
   
670
     
(13,196
)
   
(3,972
)
                           
Sales and marketing expenses
   
52,735
     
12,163
     
163,270
 
General and administrative expenses
   
465,694
     
144,361
     
1,393,798
 
Inventory adjustment
   
27,800
     
-
     
110,653
 
Depreciation and amortization
   
969
     
541
     
3,779
 
                           
 
Total Operating expenses
   
547,198
     
157,065
     
1,671,500
 
                           
                           
 
Operating loss
   
(546,528
)
   
(170,261
)
   
(1,675,472
)
                           
Other income/(loss)
                       
   Interest income
   
21
     
192
     
310
 
   Interest expense (related parties)
   
(2,843
)
   
(359
)
   
(8,704
)
   Interest expense
   
(9,599
)
   
(1,308
)
   
(35,437
)
                           
 
Total Other loss
   
(12,421
)
   
(1,475
)
   
(43,831
)
                           
                           
 
Loss before taxes
   
(558,949
)
   
(171,736
)
   
(1,719,303
)
                           
Income tax (expense) benefit
   
-
     
-
     
-
 
                           
 
Net loss
 
$
(558,949
)
 
$
(171,736
)
 
$
(1,719,303
)
                           
                           
Basic and diluted loss per share
   
(0.01
)
   
(0.00
)
       
                           
Weighted average number of
                       
   common shares outstanding - basic and diluted
   
62,312,300
     
52,618,333
         
                           
                           
                           
                           
                           
                           
                           
                           
                           
The accompanying footnotes are an integral part of these financial statements.
 
 
 
 
 
F-16

 
 
 
(A Development Stage Company)
 
Statement of Stockholders' Equity
 
Inception (October 14, 2008) Through March 31, 2010
 
                               
                     
Deficit
       
                     
accumulated
       
               
Additional
   
during the
       
   
Common stock
   
paid-in
   
development
       
   
Shares
   
Amount
   
capital
   
stage
   
Total
 
                               
Founders' stock issued @ $0.0003/sh. Oct. 2008
   
46,500,000
   
$
46,500
   
$
(31,000
)
 
$
-
   
$
15,500
 
Stock issued for services @ $0.0003/sh. Oct. 2008
   
5,100,000
     
5,100
     
(3,400
)
           
1,700
 
Stock issued for cash @ $0.1667/sh. Oct. 2008
   
306,000
     
306
     
50,694
             
51,000
 
Stock issued for cash @ $0.1667/sh. Nov. 2008
   
612,000
     
612
     
101,388
             
102,000
 
Stock issued for cash @ $0.1667/sh. Dec. 2008
   
12,000
     
12
     
1,988
             
2,000
 
                                         
Net loss
                           
(91,060
)
   
(91,060
)
                                         
                                         
Balance December 31, 2008
   
52,530,000
   
$
52,530
   
$
119,670
   
$
(91,060
)
 
$
81,140
 
                                         
                                         
Stock issued for cash @ $0.1667/sh. Jan. 2009
   
123,000
     
123
     
20,377
             
20,500
 
Stock issued for services @ $0.1667/sh. Feb. 2009
   
6,000
     
6
     
994
             
1,000
 
Stock issued for property @ $0.19/sh. Jul. 2009
   
1,406,000
     
1,406
     
265,734
             
267,140
 
Stock issued for cash @ $0.50/sh. Jul. 2009
   
1,500
     
2
     
748
             
750
 
Stock issued for services @ $0.50/sh. Jul. 2009
   
600,000
     
600
     
299,400
             
300,000
 
Founders' stock issued @ $0.0003/sh. Oct. 2009
   
6,000,000
     
6,000
     
(4,000
)
           
2,000
 
Stock issued for loan @ $0.1667/sh. Oct. 2009
   
120,000
     
120
     
19,880
             
20,000
 
Stock issued for services @ $0.50/sh. Oct. 2009
   
90,000
     
90
     
44,910
             
45,000
 
Stock issued for cash @ $0.50/sh. Oct. 2009
   
105,000
     
105
     
52,395
             
52,500
 
Stock issued for cash @ $0.50/sh. Nov. 2009
   
14,000
     
14
     
6,986
             
7,000
 
Stock issued for cash @ $0.50/sh. Dec. 2009
   
130,000
     
130
     
64,870
             
65,000
 
                                         
Net loss
                           
(1,069,294
)
   
(1,069,294
)
                                         
                                         
Balance December 31, 2009
   
61,125,500
   
$
61,126
   
$
891,964
   
$
(1,160,354
)
 
$
(207,264
)
                                         
                                         
Stock issued for cash @ $0.25/sh. Jan. 2010
   
40,000
     
40
     
9,960
             
10,000
 
Stock issued for cash @ $0.50/sh. Feb. 2010
   
64,000
     
64
     
31,936
             
32,000
 
Stock issued for cash @ $0.21/sh. Feb. 2010
   
100,000
     
100
     
20,900
             
21,000
 
Stock issued for services @ $0.45/sh. Feb. 2010
   
2,600,000
     
2,600
     
1,167,400
             
1,170,000
 
Stock issued for services @ $0.25/sh. Mar. 2010
   
200,000
     
200
     
49,800
             
50,000
 
Proceeds received for shares to be issued
                   
372,000
             
372,000
 
                                         
Net loss
                           
(558,949
)
   
(558,949
)
                                         
                                         
Balance March 31, 2010 (Unaudited)
   
64,129,500
   
$
64,130
   
$
2,543,960
   
$
(1,719,303
)
 
$
888,787
 
                                         
                                         
                                         
                                         
                                         
The accompanying footnotes are an integral part of these financial statements.
   
 
 
 
 
 
 
F-17

 
 
 
EVCARCO, Inc.
 
(A Development Stage Company)
 
Statements of Cash Flows
 
   
               
Inception
 
   
For the Three
   
For the Three
   
(October 14, 2008)
 
   
Months Ended
   
Months Ended
   
Through
 
   
March 31, 2010
   
March 31, 2009
   
March 31, 2010
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                   
Cash flows from operating activities:
                 
                   
Net loss
 
$
(558,949
)
 
$
(171,736
)
 
$
(1,719,303
)
Adjustments to reconcile net loss to net cash
                       
provided by (used in) operating activities:
                       
Depreciation and amortization
   
969
     
541
     
3,779
 
Consulting expenses (stock)
   
220,780
     
1,000
     
431,813
 
                         
Change in operating assets and liabilities:
                       
Inventory
   
(177,560
)
   
75,089
     
(188,106
)
Other receivables
   
(15,687
)
   
-
     
(19,900
)
Prepaid expenses
   
(5,557
)
   
-
     
(5,557
)
Other assets
   
(30,500
)
   
-
     
(34,629
)
Accounts payable
   
67,319
     
1,966
     
86,058
 
Accrued expenses
   
11,965
     
44
     
42,691
 
Accrued interest (related parties)
   
115
     
(152
)
   
449
 
Other payables
   
33,634
     
(1,764
)
   
39,942
 
                         
Net cash used in operating activities
   
(453,471
)
   
(95,012
)
   
(1,362,763
)
                         
                         
Cash flows from investing activities:
                       
                         
Purchase of property and equipment
   
(25,329
)
   
(2,069
)
   
(32,983
)
                         
Net cash used in investing activities
   
(25,329
)
   
(2,069
)
   
(32,983
)
                         
                         
Cash flows from financing activities:
                       
Proceeds from notes payable
   
-
     
-
     
88,910
 
Net change in loans payable (related parties)
   
83,924
     
81,560
     
355,204
 
Issuance of common stock
   
63,000
     
20,500
     
668,390
 
Proceeds from common stock not yet issued
   
372,000
     
-
     
372,000
 
                         
Net cash flows provided by financing activities
   
518,924
     
102,060
     
1,484,504
 
                         
Increase in cash and cash equivalents
   
40,124
     
4,979
     
88,758
 
                         
Cash at beginning of period
   
48,634
     
22,467
     
-
 
                         
Cash at end of period
 
$
88,758
   
$
27,446
   
$
88,758
 
                         
                         
Cash paid for:
                       
                         
Interest
 
$
4,681
   
$
1,308
   
$
30,519
 
Interest (related parties)
   
2,728
     
511
     
8,255
 
                         
Non-cash activities:
                       
                         
Stock issued for property
 
$
-
   
$
-
   
$
267,140
 
Stock issued for services
   
1,220,000
     
1,000
     
1,567,700
 
Stock issued for loans
   
-
     
-
     
20,000
 
               
The accompanying footnotes are an integral part of these financial statements.
 
 
 
 
 
F-18

EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2010
 

NOTE 1.   ORGANIZATION AND DESCRIPTION OF BUSINESS
 
EVCARCO, Inc. (“The Company”) was incorporated under the laws of the State of Nevada on October 14, 2008.  The Company sells “green” automobiles, offering the latest technology electric vehicles, pre-owned vehicles converted to various green technologies, and a comprehensive financial package to complement the sales.  The Company is in the development stage, having only begun operations recently.
 
 
NOTE 2.   FAIR VALUE OF FINANCIAL INSTRUMENTS
 
Carrying amounts of certain of our financial instruments, including other receivables, accounts payable, and other payables approximate fair value due to their short maturities. Carrying value of notes payable and loans payable to related parties approximate fair values as they bear market rates of interest. None of our financial instruments are held for trading purposes.
 
 
NOTE 3.  INVENTORY
 
At each quarter end, respectively, the Company had the following inventory:
 
   
Mar. 31, 2010
   
Dec. 31, 2009
 
             
New vehicles
 
$
79,270
   
$
-
 
Pre-owned vehicles
   
101,840
     
3,550
 
Other items
   
6,996
     
6,996
 
                 
Total inventory
 
$
188,106
   
$
10,546
 
 
During the first quarter of 2010, the Company had additional impairment relating to the vehicles that were devalued at the end of 2009.  The impairment, in the amount of $27,800, is reflected as Inventory Adjustment on the Statements of Operations.
 
At the end of 2009 we made a decision to impair inventory in the amount of $82,853.  $37,976 was a mark down of inventory to market.  $44,877 of the impairment related to five SMART cars, that were not received under the contract to exchange cash and stock for thirty five pre-owned vehicles.  The contract is essentially settled and completed, and the Company will not be able to recover those cars.
 
 
NOTE 4.  PREPAID EXPENSES
 
As of March 31, 2010, the balance of prepaid expenses was $1,141,444.  $5,557 represented payroll expenses for April 2010.  $1,135,887 was the unearned portion of stock compensation issued under consulting agreements.
 
As of December 31, 2009, balance of prepaid expenses was $136,667, which represented the unearned portion of stock compensation issued under consulting agreements.
 
 
NOTE 5.  NOTES PAYABLE
 
During 2009, the Company received $150,000 of advances and made $61,090 of principal repayments to RGTK, an unrelated entity.   The note is unsecured, due upon demand and accrues interest at the end of each month on the then outstanding balance at the rate of 36% per annum.  As of March 31, 2010 and December 31, 2009, the principal balance of the note was $88,910.  During the first quarter of 2010 $7,918 of interest was accrued under the note, $3,000 of which was paid.
 
 
NOTE 6.  RELATED PARTY TRANSACTIONS
 
For the three months ended March 31, 2010 and 2009, the Company accrued $110,000 and $100,000, respectively, in salaries payable to its four officers and major shareholders.  For the period since inception (October 14, 2008) through March 31, 2010, the Company accrued $514,170.
 
As of March 31, 2010 and December 31, 2009, the balances of shareholder notes were $355,204 and $271,280, respectively.  The balances included accrued salaries, along with various advances to and from the Company.  The notes are unsecured, due upon demand and accrue interest at the end of each month on the then outstanding balance at the rate of 5.00% per annum.  
 

 
 
F-19

EVCARCO, INC.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2010
 
NOTE 7.  OPERATING SEGMENTS
 
During the period from inception through March 31, 2010 the Company operated as a single business segment.
 
 
NOTE 8.  GOING CONCERN
 
The Company has sustained operating losses since inception and had an accumulated deficit of approximately $1.7 million as of March 31, 2010. This deficit has been funded primarily through stock issuances, debt and cash generated from operations.
 
The Company will need additional capital to continue to maintain and expand its operations and will endeavor to raise funds through the issuance of stock and debt, and revenues from operations, but despite our efforts we may not generate revenues from operations or obtain sufficient capital on acceptable terms, if at all. If the Company cannot obtain such capital or generate such operating revenues it would have an adverse impact on our financial position and results of operations and ability to continue as a going concern. The Company’s operating capital and capital expenditure requirements will vary based on a number of factors, including the level of sales and marketing activities for our services and products and there can be no assurance that additional private or public financings, including debt or equity financing, will be available as needed, or, if available, on terms favorable to us. To the extent we use debt financing, if available, we will have to pay interest and the Company may have to agree to restrictive covenants that could impose limitations on our operating flexibility. If the Company cannot successfully obtain additional future funding it may jeopardize our ability to continue our business and operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  These financial statements have been prepared on a going concern basis, and do not reflect any adjustments if the Company is unable to continue as a going concern.
 
 
NOTE 9.  STOCKHOLDERS’ EQUITY
 
Effective April 29, 2009, the Company filed an amendment with the Nevada Secretary of State to increase authorized shares of common stock from 25,000,000 to 60,000,000; and to authorize Series A special preferred convertible stock in the amount of 15,000,000 shares at $0.001 par value.
 
On July 10, 2009, the Company effectuated a 3-for-1 forward stock split of its issued and outstanding common stock.  All amounts of shares reflected on these financial statements are on post-split basis.
 
During the first quarter of 2010, the Company received $372,000 of cash for shares of common stock to be issued.
 
 
NOTE 10.  COMMITMENTS AND CONTINGENCIES
 
In March of 2010, the Company signed a five year contract to lease 18,500 sq. ft. building at 6124 Denton Dr., in Dallas, Texas, at initial monthly rate of $17,333.  The property will house the corporate office as well as a new dealership location, in addition to the Company’s current location in Fort Worth, Texas.  The lease commenced on May 1, 2010.  The Company will have an option of terminating the lease at any time during the term, without any significant financial consequences.
 

 
 
F-20

 

Dealer Prospectus Delivery Obligation
 
Until 90 days from the effective date of this Registration Statement, all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
 
You should rely only on the information contained in this prospectus. We have not authorized any dealer, salesperson or other person to give you different information. This prospectus does not constitute an offer to sell nor are they seeking an offer to buy the securities referred to in this prospectus in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus and the documents incorporated by reference are correct only as of the date shown on the cover page of these documents, regardless of the time of the delivery of these documents or any sale of the securities referred to in this prospectus.
 
EVCARCO, INC.
 
61,225,000
 Shares
 of
 Common Stock
 

 
PROSPECTUS
 

 
July __, 2010
 

 
26

 

PART II
 
INFORMATION NOT REQUIRED IN PROSPECTUS
 
Other Expenses of Issuance and Distribution
 
The following table sets forth the expenses in connection with the issuance and distribution of the securities being registered hereby. All such expenses will be borne by the registrant.
 
Name of Expense
 
Amount
 
Securities and Exchange Commission registration fee
 
$
200
 
Transfer Agent Fees
 
$
1,000
 
Legal, accounting fees and expenses (1)
 
$
16,300
 
Edgar filing, printing and engraving fees (1)
 
$
1,500
 
Total (1)
 
$
19,000
 
 
 
(1) Estimated.
 
 Indemnification of Directors and Officers
 
Our officers and directors are indemnified as provided by the Nevada Revised Statutes and by our Bylaws.
 
Under the Nevada Revised Statutes, director immunity from liability to a company or its stockholders for monetary liabilities applies automatically unless it is specifically limited by a company’s Articles of Incorporation. Our Articles of Incorporation do not specifically limit our directors’ immunity. Excepted from that immunity are: (a) a willful failure to deal fairly with the company or its stockholders in connection with a matter in which the director has a material conflict of interest; (b) a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful; (c) a transaction from which the director derived an improper personal profit; and (d) willful misconduct.
 
Our Bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding, or part thereof, initiated by such person unless such indemnification: (a) is expressly required to be made by law, (b) the proceeding was authorized by our Board of Directors, (c) is provided by us, in our sole discretion, pursuant to the powers vested in us under Nevada law or (d) is required to be made pursuant to the Bylaws.
 
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and control persons pursuant to the foregoing provisions or otherwise, we have been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy, and is, therefore, unenforceable.
 
Recent Sales of Unregistered Securities
 
The following sets forth information regarding all sales of our unregistered securities after March 31, 2010.  All of these shares were exempt from registration under the Securities Act by reason of Section 4(2) of the Securities Act, or Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution of the securities, and appropriate legends were affixed to the share certificates issued in such transactions. We relied on information from purchasers that they were accredited investors and/or such investors were provided adequate information and were otherwise determined to be suitable.  In all cases, there was no public solicitation. The issuances of the securities described below were affected without the involvement of underwriters.
 
 
 
27

 
 
INFORMATION NOT REQUIRED IN PROSPECTUS - continued
 
               
Exemption
   
               
from
 
Terms of
Date
             
regulation
 
conversion
Sold
 
Amount
 
Securities Sold
 
Consideration *
 
claimed
 
Or exercise
01/14/10
   
     20,000
 
Common Stock
 
Cash - $10,000
 
 Sec. 4(2)/Reg. D
 
None
03/05/10
   
   200,000
 
Common Stock
 
Cash - $42,000
 
 Sec. 4(2)/ Reg. D
 
None
03/05/10
   
     20,000
 
Common Stock
 
Cash - $10,000
 
 Sec, 4(2)/Reg. D
 
None
03/08/10
   
     20,000
 
Common Stock
 
Cash - $10,000
 
 Sec. 4(2)/Reg. D
 
None
04/01/10
   
     10,000
 
Common Stock
 
Cash - $  5,000
 
 Sec. 4(2)/Reg. D
 
None
04/30/10
   
     50,000
 
Common Stock
 
Services
 
 Sec. 4(2)/Reg. D
 
None
05/20/10
   
       4,000
 
Common Stock
 
Cash - $  2,000
 
 Sec. 4(2)/Reg. D
 
None
05/31/10
   
   177,000
 
Common Stock
 
Services
 
 Sec. 4(2)/Reg. D
 
None
06/14/10
   
1,000,000
 
Common Stock
 
Services
 
 Sec. 4(2)/Reg. D
 
None
06/24/10
   
   200,000
 
Common Stock
 
Services
 
Sec. 4(2)/ Reg. D
 
None
07/16/10
   
   500,000
 
Common Stock
 
Services
 
 Sec. 4(2)/Reg. D
 
None
 
* For per share price, see Statement of Stockholders’ Equity.  No commissions or discounts were paid.
 
During March and April of 2010, the Company received $380,000 in investment funds, for which the shares of common stock have not yet been issued, and are not listed above.
 
Exhibits and Financial Statement Schedules
 
(a) Exhibits:
 
The following exhibits are filed as part of this registration statement:
 
Exhibit Number
Description
   
3.1
Articles of Incorporation of Registrant (1)
3.2
Amendment to Articles of Incorporation (2)
3.3
Certificate of Designation (2)
3.4
Amended and Restated Bylaws of the Registrant (3)
3.5
Certificate of Change (4)
3.6
Certificate of Correction (5)
10.5
Consulting Services Agreement Dated May 14, 2010 between the Company and Richard Griffiths (6)
23.1* Consent of Independent Registered Public Accounting Firm
      
1. Incorporated by reference to Exhibit with the same number in the Company’s Registration Statement on Form S-1 as filed with the SEC on March 30, 2009.
2. Incorporated by reference to Exhibits with the same number in the Company’s Registration Statement on Form S-1/A as filed with the SEC on May 1, 2009.
3. Incorporated by reference to Exhibit with the same number in the Company’s Registration Statement on Form POS AM as filed with the SEC on September 28, 2009.
4.  Incorporated by reference to Exhibit with the same number in the Company’s Registration Statement on Form S-8 as filed with the SEC on June 22, 2010.
5. Incorporated by reference to Exhibit 3.1 in the Company’s Current Report on Form 8-K filed June 18, 2010.
6. Incorporated by reference to Exhibit 10.5 of Company’s Current Report on Form 8-K, file May 17, 2010.
* Filed herewith
 
 
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Undertakings
 
The undersigned Registrant hereby undertakes:
 
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
 
 
(a) 
To include any prospectus required by Section 10(a) (3) of the Securities Act of 1933;
 
 
(b)
To reflect in the prospectus any facts or events arising after the effective date of this registration statement, or most recent post-effective amendment, which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; and
 
 
(c)
To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in the registration statement.
 
That, for the purpose of determining any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the Offering of such securities at that time shall be deemed to be the initial bona fide Offering thereof.
 
To remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the Offering.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions described above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
 
In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
 
Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
 
 
 
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Signatures
 
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement, as amended, to be signed on its behalf by the undersigned, thereunto duly authorized, in Fort Worth, Texas on August 23 , 2010.
 
 
EVCARCO, INC.
 
       
 
By:
/s/ Dale Long
 
   
Name: Dale Long 
 
   
Title: President and Director 
 
   
 (Principal Executive Officer
 
 
       
 
By:
/s/ Nikolay Frolov
 
   
Name: Nikolay Frolov
 
   
Title: Treasurer and Director 
 
   
 (Principal Financial Officer and Principal Accounting Officer)
 
 
 
Pursuant to the requirements of the Securities Act of 1933, this registration statement, as amended, has been signed by the following persons in the capacities and on the dates indicated.
 
Signature
 
Title
 
Date
         
/s/ Dale Long
 
President and Director
(Principal Executive Officer)
 
August 23 , 2010
     Dale Long
   
         
/s/ Nikolay Frolov
 
Chief Financial Officer  and Director
 
August 23 , 2010
      Nikolay Frolov
 
 (Principal Financial and Accounting Officer)
   
         
/s/ Scott O’Neal
 
Chief Operating Officer, Vice President,
 
August 23 , 2010
     Scott O’Neal
 
Secretary and Director
   
         
/s/ Edouardo Prous
 
Vice President and Director
 
August 23 , 2010
     Edouardo Prous
       
 
 
 
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