UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A1

  X .

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

For the quarterly period ended June 30, 2014

      .

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

For the transition period from ____________ to____________

Commission File Number: 000-54758

Environmental Science and Technologies, Inc.

(Exact name of issuer as specified in its charter)

Delaware		45-5529607
(State or Other Jurisdiction of incorporation or organization)		(I.R.S. Employer I.D. No.)

4 Wilder Dr., #7

Plaistow, NH 03865

(Address of Principal Executive Offices)

603-378-0809

(Registrant’s Telephone Number, Including Area Code)

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

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  X . No      .

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

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

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APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

The number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date:

Class		Outstanding as of August 14, 2014
Common Capital Voting Stock, $0.0001 par value per share		34,971,400 shares

FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, Financial Statements and Notes to Financial Statements contain forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations and financial conditions. All forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or intended.

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Explanatory Note

The Registrant is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, which was originally filed on August 19, 2014 (the “Form 10-Q”). The purpose of this Amendment No. 1 is to restate certain financial information for the three and six months ended June 30, 2014, in order to account for the final results of the audit for the year ended December 31, 2013. The entire Form 10-Q has been modified to conform and account for all transactions and subsequent events through the date of this revised filing.

For ease of reference, this Amendment No. 1 reflects the following restatements which were necessary as a result of completion of the audit for the year ended December 31, 2013:

·

Cash was overstated by approximately $9,000

·

Accounts receivable was overstated by approximately $14,000

·

Net fixed assets were overstated by approximately $51,000

·

Prepaid expenses were understated by approximately $9,000

·

Accounts payable and accrued expenses were understated by approximately $72,000

·

Due to related party was overstated by approximately $9,000

·

Stockholders’ deficit was overstated by approximately $127,000

·

Losses for the three and six months ended June 30, 2014 were overstated and understated by approximately $45,000 and $4,000, respectively

This Amendment No. 1 amends the entire Form 10-Q to adjust for the restatements mentioned above as well as the related subsequent events which gave rise to some of the adjustments.

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PART I - FINANCIAL STATEMENTS

PART II - OTHER INFORMATION

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ENVIRONMENTAL SCIENCE AND TECHNOLOGIES, INC.

Consolidated Balance Sheets

		As of June 30, 2014		As of December 31, 2013
		(Unaudited and Restated)
ASSETS
Current Assets
Cash	$	26,477	$	9,680
Accounts receivable		119,176		30,876
Accounts receivable - related party		25,495		134,688
Inventory		103,318		37,587
Prepaid Expenses		9,463		600
Total Current Assets		283,929		213,431
Non-Current Assets
Equipment, net		67,136		70,796
TOTAL ASSETS	$	351,065	$	284,227
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Bank Overdraft	$	13	$	-
Accounts payable and accrued expenses		751.611		484,146
Convertible notes and interest payable		152,082		151,274
Note payable		8,700		-
Due to Officer		98,268		-
Due to related party		15,000		15,000
Total Current Liabilities		1,025,674		650,420
Stockholders' Deficit
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; none issued and outstanding		-		-
Common stock, $0.0001 par value, 250,000,000 shares authorized; 28,501,429 and 27,171,429 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively		2,850		2,717
Common stock to be issued, 130,000 and 515,000 shares at June 30, 2014 and December 31, 2013, respectively		13		51
Additional paid-in capital		497,982		403,575
Accumulated deficit		(1,175,454)		(772,536)
Total Stockholders' Deficit		(674,609)		(366,193)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	351,065	$	284,227

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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ENVIRONMENTAL SCIENCE AND TECHNOLOGIES, INC.

Consolidated Statements of Operations

(Unaudited)

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
		(Restated)				(Restated)
Sales
Packaging solutions	$	108,915	$	-	$	138,989	$	-
Absorbent products		27,366		-		150,751		-
Related Party Revenue		133,502		-		296,858		-
Total sales		269,783		-		586,598		-
Cost of goods sold
Packaging solutions		158,726		-		272,245		-
Absorbent products		22,612		-		131,298		-
Shipping - net		12,924		-		18,272		-
Total cost of goods sold		194,262		-		421,815		-
Gross profit		75,521		-		164,783		-
Operating Expenses
General and Administrative		204,654		206,752		543,844		208,676
Loss from operations		(129,133)		(206,752)		(379,061)		(208,676)
Other expense
Penalties and Interest		(472)				(16,418)
Interest expense		(3,740)		-		(7,439)		-
Total other expense		(4,212)		-		(23,857)		-
Net loss	$	(133,345)	$	(206,752)	$	(402,918)	$	(208,676)
Basic and diluted loss per share	$	(0.00)	$	(0.01)	$	(0.01)	$	(0.01)
Weighted average number of shares outstanding - basic and diluted		28,582,679		18,396,782		28,158,929		14,221,587

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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ENVIRONMENTAL SCIENCE AND TECHNOLOGIES, INC.

Consolidated Statements of Cash Flows

(Unaudited)

		For the Six Months Ended
		June 30,
		2014		2013
		(Restated)
Cash Flows from Operating Activities
Net loss	$	(402,918)	$	(208,676)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		13,153		-
Stock-based compensation		94,500		-
Expenses paid by officer		98,268
Changes in operating assets and liabilities:
Accounts receivable		20,893		-
Inventory		(65,731)		-
Prepaid expenses and other current assets		(8,863)		(435)
Accounts payable and accrued expenses		268,273		80,217
Net cash used in operating activities		17,577		(128,894)
Cash Flows from Investing Activities
Purchase of equipment		(793)		-
Net cash used in investing activities		(793)		-
Cash Flows from Financing Activities
Proceeds from (Repayment of) Bank Overdraft		13		-
Proceeds from related party		-		1,924
Capital contribution by officer		-		500
Issuance of common stock for cash		-		175,093
Issuance of common stock for cash--related parties		-		35,705
Net cash provided by financing activities		13		213,222
Increase in Cash and Cash Equivalents		16,797		84,328
Cash and Cash Equivalents--Beginning of Period		9,680		-
Cash and Cash Equivalents--End of Period	$	26,477	$	84,328
Non-Cash Investing and Financing Activities
Common stock issued for consultants	$	19,500	$	-
Subscriptions payable	$	(38)	$	-
Note for purchase of equipment	$	8,700	$	-

The accompanying notes are an integral part of these unaudited consolidated financial statements

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ENVIRONMENTAL SCIENCE AND TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Environmental Science and Technologies, Inc. and subsidiaries (the “Company”), formerly known as APEX 5, Inc., was incorporated under the laws of the State of Delaware on June 18, 2012. On June 21, 2013, the Company completed an acquisition of intangible assets comprised of intellectual property and trademarks from its Chief Executive Officer. In conjunction with the acquisition of the intangible assets, the Company commenced operations. As of June 30, 2013 the Company had more than nominal operations and no longer considered itself to be a “shell company” within the meaning of applicable securities laws. In particular, as of such date, the Company had raised capital, hired employees, leased space, engaged consultants and advisors, conducted extensive sales and marketing related activities (both domestically and internationally), negotiated vendor and supplier relationships and engaged seller’s representatives. Moreover, the Company has, since June 30, 2013, realized material revenues from its EnviroPack and SpillCon businesses, which arose from its sales and marketing activities conducted prior to June 30, 2013. The revenues realized by the Company in July and August, 2013, evidence the magnitude and scope of the sales, marketing and other operational activities conducted by the Company prior to June 30, 2013. In addition to the foregoing, during the six months ended June 30, 2014, the Company realized approximately $587,000 in revenues. Based upon the foregoing, the Company no longer considers itself a “Development Stage Company.”

As of January 2, 2015, the Company’s business is operated through its wholly-owned subsidiary, EnviroPack Technologies, Inc. Effective on or about January 15, 2015, the Company changed its name to The Enviromart Companies, and the Company’s wholly-owned subsidiary, EnviroPack Technologies, Inc., changed its name to Enviromart Industries, Inc. The Company’s wholly owned subsidiary, Remote Aerial Detection Systems, Inc., was intended to be an, intelligence, surveillance, and reconnaissance (ISR) reseller of dedicated mission specific non-aerial ISR and aerial ISR aircraft, platforms for the oil and gas industry, as well as government agencies. RADS has not realized any revenue and is currently inactive.

The Company is a provider of United Nations/Department of Transportation (“UN/DOT”) certified environmental waste packaging solutions, environmental spill response and control products (primarily absorbent products), and sell consumer and commercial spill control products for the hazardous and bio-hazardous waste clean-up markets.

NOTE 2. BASIS OF PRESENTATION AND RESTATEMENT

Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

The Company, through June 30, 2013, had not earned revenue from operations. Accordingly, the Company’s activities through the quarter ended June 30, 2013, were accounted for as those of a “Development Stage Company” in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic No. 915, “Accounting and Reporting by Development Stage Enterprises” (“FASB”). Among the disclosures required by ASC 915 were that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations and cash flows disclosed activity since the date of the Company’s inception.

Since June 30, 2013, the Company has realized approximately $1,108,000 in revenues, and therefore no longer considers itself a “Development Stage Company.”

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Restatement

The Company’s consolidated balance sheet at June 30, 2014, its consolidated statement of comprehensive income (loss) for the three and six months ended June 30, 2014 and its consolidated statement of cash flows for the three and six months ended June 30, 2014 have been restated to account the final results of the audit for the year ended December 31, 2013 and for penalties and interest assessed during the fourth quarter of 2014 as a result of being delinquent in the payment of payroll taxes from July 1, 2013 through June 30, 2014. Total assets decreased by approximately $65,000 and total liabilities increased by approximately $63,000 as of June 30, 2014. The net loss for the six-month period ended June 30, 2014 increased by approximately $4,000 and the net loss for the three months ended June 30, 2013 increased by approximately $45,000.

NOTE 3. GOING CONCERN

During the six months ended June 30, 2014, although the Company has generated revenue, thus far it has been unable to generate cash flows sufficient to support its operations and has been dependent on debt and equity financing. In addition to negative cash flow from operations, the Company has experienced recurring net losses, and has an accumulated deficit of $1,175,454 as of June 30, 2014. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP 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 unaudited consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Remote Aerial Detection Systems, Inc., EnviroPack Technologies, Inc., SpillCon Solutions, Inc, and SorbTech Manufacturing, Inc. All inter-company accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents.

Accounts Receivable

In the normal course of business, the Company extends credit to customers that satisfy defined credit criteria. Accounts receivable is recorded at carrying value, which approximates fair value, and is presented in the Company's unaudited consolidated balance sheets net of any allowance for doubtful accounts. As of June 30, 2014, an allowance for doubtful accounts had not been deemed necessary, and therefore, not recorded.

Inventory

The Company’s inventory is stated at the lower of cost or estimated realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out (“FIFO”) method. The Company continuously evaluates the composition of its inventory, assessing slow-turning product. Estimated realizable value of inventory is determined based on an analysis of historical sales trends of our individual products, the impact of market trends and economic conditions, and a forecast of future demand, giving consideration to the value of current orders in-house relating to the future sales of inventory. Estimates may differ from actual results due to quantity, quality, and mix of products in inventory, customer demand, and market conditions. The Company’s historical estimates of these costs and any provisions have not differed materially from actual results. Any reserves for inventory shrinkage, representing the risk of physical loss of inventory, are adjusted based upon physical inventory counts. As of June 30, 2014, an inventory reserve of $7,193 has been recorded.

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Concentration of Risk

Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining all deposits in high quality financial institutions.

For the six months ended June 30, 2014, one customer represented 51% of our total revenue and one customer represented 17% of our total revenue. Thus, two of our customers represented an aggregate of 68% of our total revenue. The loss of either of these customers would have a material adverse effect on our business.

Machinery and Equipment

Equipment is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method based upon the estimated useful life of depreciable assets, which is three years for machinery and equipment.

Long-lived Assets

Machinery and equipment, along with other long-lived assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be recoverable, or are less than their fair value. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying value, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering external market participant assumptions. Assets to be disposed of and for which there is a committed plan of disposal are reported at the lower of carrying value or fair value less costs to sell.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. As of June 30, 2014, all deferred tax assets continue to be fully reserved.

Basic Earnings (Loss) Per Share

Basic EPS is based on the weighted average number of common shares outstanding. Diluted EPS is based on the weighted average number of common shares outstanding and dilutive common stock equivalents. Basic EPS is computed by dividing net income/loss available to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Weighted average number of shares used to calculate basic and diluted loss per share is considered the same as the effect of dilutive shares is anti-dilutive for all periods presented. As of June 30, 2014, there were 1,200,000 common stock equivalents related to outstanding convertible notes that were not included in the dilutive earnings per share calculation as their effect is anti-dilutive.

Revenue Recognition

Revenue is recognized across all segments of the business when there is persuasive evidence of an arrangement, delivery has occurred, price has been fixed or is determinable, and collectability is reasonably assured. Revenue is recognized at the time title passes and risk of loss is transferred to customers.

Sales Reserves and Uncollectible Accounts

A significant area of judgment affecting reported revenue and net income is estimating sales reserves, which represent that portion of gross revenues not expected to be realized. In particular, revenue is reduced by estimates of returns, discounts, markdowns, and operational chargebacks. In determining estimates of returns, discounts, markdowns and operational chargebacks, management analyzes current economic and market conditions. We review and refine these estimates on a quarterly basis. As of June 30, 2014, a sales reserve had not been deemed necessary, and therefore, not recorded.

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Cost of Goods Sold and Selling Expenses

Cost of goods sold includes the expenses incurred to acquire and produce inventory for sale, including product costs, freight-in, and any import costs, as well as changes in reserves for shrinkage and inventory realizability. Any costs of selling merchandise, including those associated with preparing the merchandise for sale, such as picking, packing, warehousing, and order charges (“handling costs”), are included in general and administrative fees.

Stock-Based Compensation

The Company expenses all stock-based payments to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures.

Convertible Notes

The Company records a discount to convertible notes for the intrinsic value of conversion options embedded in debt instruments, as appropriate. Debt discounts under these arrangements are amortized to noncash interest expense using the effective interest rate method over the term of the related debt to their date of maturity.

If a security or instrument becomes convertible only upon the occurrence of a future event outside the control of the Company, or, is convertible from inception, but contains conversion terms that change upon the occurrence of a future event, then any contingent beneficial conversion feature is measured and recognized when the triggering event occurs and contingency has been resolved.

Recent Accounting Guidance

In July 2012, the FASB issued revised guidance surrounding testing indefinite-lived intangible assets for impairment as Accounting Standards Update (“ASU”) No. 2012 – 02, “Testing Indefinite-Lived Intangible Assets for Impairment” (“ASU 2012 – 02”). ASU 2012 – 02 simplifies the testing of indefinite-lived intangible assets for impairment by providing entities with the option of performing a qualitative assessment to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value. The results of such assessment may be used as a basis for determining whether it is necessary to perform the quantitative impairment test required under ASC topic 350, “Intangibles — Goodwill and Other” (“ASC 350”). The application of ASU 2012 – 02 did not have an impact on the Company's consolidated financial statements.

ASU 2013 – 11, “Income Taxes (Topic 740) – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” was issued in July, 2013. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company does not expect adoption of this ASU to have a material impact on its financial statements.

NOTE 5. INVENTORY

Inventory consisted of finished goods and raw materials amounting to $70,324 and $40,187, respectively, as of June 30, 2014 and $26,579 and $18,201, respectively, as of December 31, 2013. The Company had an inventory reserve of $7,193 as of June 30, 2014 and December 31, 2013.

NOTE 6. EQUIPMENT

Equipment, net consisted of the following as of June 30, 2014 and December 31, 2013:

		June 30, 2014		December 31, 2013
Machinery and equipment	$	87,749	$	78,256
Less: accumulated depreciation		(20,613)		(7,460)
Equipment, net	$	67,136	$	70,796

The Company recorded depreciation expense of $6,587 and $13,153 for the three and six months ended June 30, 2014, respectively.

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NOTE 7. CONVERTIBLE NOTES

During August, 2013, the Company issued convertible promissory notes to accredited investors in the principal amounts of $100,000 and $50,000. These notes bear interest at a rate of 10% per annum and have a one year term. The $100,000 note is convertible into shares of common stock at the rate of $0.125 per share. The convertible note in the principal amount of $100,000 was amended in July 2014 to extend its maturity date to July 15, 2015 and to make it non-interest bearing. The convertible note in the principal amount of $50,000 was amended in September 2014 (effective July 31, 2014) to extend its maturity date to September 10, 2015, reduce the conversion rate of the note from $0.125 to $0.05 per share, allow the note holder to elect to receive stock in lieu of cash for his interest and issue the note holder 100,000 shares of common stock in consideration of this agreement upon execution. On January 21, 2015, the Company and the holders of these notes agreed to reduce the conversion price of the notes to $.025 per share, in consideration for which the holders agreed to extend the maturity date of the notes for an additional one year period (until July 15, 2016 in the case of the $100,000 notes and September 16, 2016 in the case of the $50,000 note). In addition, on January 21, 2015, the Company issued its CEO (who is a significant shareholder) a convertible note in the principal amount of $100,000, in partial satisfaction of amounts he previously advanced to pay Company expenses. The Note is convertible into common stock at the rate of $.025 per share. The repayment of the principal amount of this note was also extended one year until July 2016.

See Note 11 Related Party Transactions for disclosure concerning amounts owed to our CEO. See also Note 13 – Subsequent Events.

At the time of issuance the Company assessed the conversion feature to determine if it contained a beneficial conversion feature (BCF) as per ASC 470. The Company determined it did not have a BCF since the conversion price was greater than the market price of the common stock on the date of issuance.

As of June 30, 2014 the Company owed principal of $150,000 and accrued interest of $2,082 related to the convertible promissory notes (not including amounts owed to the CEO, which amounts were unsecured advances as of such date).

NOTE 8. NOTES PAYABLE

During March, 2014, the Company issued a promissory note in the principal amount of $8,700 for the purchase of equipment. This note bears no interest and matures on March 5, 2015. As of June 30, 2014, the Company owed principal of $8,700 related to this note.

NOTE 9. LEASES

The Company leases its primary facility in Plaistow, New Hampshire for $7,500 per month from an entity owned beneficially by the Company’s CEO and significant shareholder. The lease commenced on May 1, 2013 and expires on April 30, 2015. See Note 10 – Related Party Transactions.

The Company’s future minimum lease payments are as follows:

2014-remainder		45,000
2015		30,000
Total	$	75,000

NOTE 10. INTANGIBLE ASSETS

On June 21, 2013, the Company issued an aggregate of 3,250,000 shares of its common stock to an officer of the Company for the purchase of intellectual property and trademarks. Given that the officer owned more than 50% of the Company’s stock at the time the transaction consummated, it was deemed to be between entities under common control. Accordingly, the asset is required to be recorded at historical cost. As such, the asset was valued at $-0- since the officer had not incurred any cost in creation of the intellectual property or trademarks. Had the officer owned less than 50% of the Company’s stock, the asset would have been recognized at fair value, which is $0.10 per share or $325,000. See Notes 11 and 12.

On September 23, 2013, the Company issued an aggregate of 350,000 shares of its common stock and agreed to pay $25,000 in ten equal monthly installments to a third party for the purchase of intellectual property, patents and unregistered trademarks at a price of $0.10 per share resulting in an aggregate purchase price of $60,000.

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On December 31, 2013, the Company evaluated the carrying value of the intangible assets as it related to the likelihood that their full value would be received. Based on the evaluation, the Company determined that the value of the assets should be permanently impaired as the trademarks are unregistered and the patents were either expired or would be expiring within the next 12 months.

The Company realized a charge of $60,000 related to the impairment of these assets.

NOTE 11. RELATED PARTY TRANSACTIONS

On March 6, 2013, an officer of the Company contributed $500 to the Company. The amount was considered a contribution to capital.

From the Company’s inception date (June 18, 2012) through June 30, 2013, a former officer of the Company paid $2,924 of the Company’s expenses. The related liability was released by the former officer and settled in full during the quarter ended June 30, 2013. The settlement was considered a contribution to capital.

The Company leases its facility, which consists of 10,000 square feet of office and warehouse space located in Plaistow, New Hampshire for $7,500 per month from an entity owned beneficially by the Company’s CEO, who is a significant shareholder. The lease is a gross lease under which the landlord pays all taxes, maintenance and repairs, and insurance. The lease commenced on May 1, 2013 and expires on April 30, 2015. As of March 31, 2014, $11,000 is owed to the landlord under this agreement.

During May 2013, the Company entered into an arrangement with Enco Industries, Inc. (“Enco”), a company that is controlled by the Company’s CEO and significant shareholder, under which Enco provided administrative and support related services, including warehouse personnel, to the Company for a fixed price of $15,000 per month. This agreement was terminated in December, 2013. During the three months ended March 31, 2014, no costs were incurred under this agreement. In the normal course of business, the Company also sells materials to this related party. During the three months ended March 31, 2014, the Company sold $161,356 worth of materials in arms-length transactions to this related party. As of March 31, 2014, the Company was due $81,856 related to these sales.

During the three months ended June 30, 2013, the Company’s board of directors authorized the issuance of an aggregate of 11,221,429 founders’ shares, at a price of $0.0001 per share, being the par value per share. Of the 11,221,429 founders’ shares, 2,921,429 shares were authorized for issuance to individuals who are not considered related parties. The aggregate purchase price was $1,123. See Note 12 - Stockholders’ Equity.

On June 21, 2013, the Company issued an aggregate of 3,250,000 shares of its common stock to its CEO for the purchase of intellectual property and trademarks. Given that the officer owned more than 50% of the Company’s stock at the time, the asset is required to be recorded at historical cost. As such, the asset was valued at $-0- since the officer had not incurred any cost in creation of the intellectual property or trademarks. Had the officer owned less than 50% of the Company’s stock, the asset would have been recognized at fair value, which is $0.10 per share or $325,000. See 12 – Stockholders’ Equity.

As of June 30, 2014, $10,000 of the $25,000 cash portion of the consideration paid for the purchase of intellectual property had been paid. The remaining $15,000 is included on the consolidated balance sheet as a due to related party because the seller of the intellectual property was hired as an employee of the Company subsequent to the effectiveness of the transaction.

During the six months ended June 30, 2014, the Company's CEO paid $98,268 in expenses of the Company through the use of his personal funds and personal credit cards. This balance is reflected in the account captioned “Due to Officer.”

NOTE 12. STOCKHOLDERS’ EQUITY

Founders’ Shares

During the three months ended June 30, 2013, the Company’s board of directors authorized the issuance of an aggregate of 11,221,429 founders’ shares, at a price of $0.0001 per share, being the par value per share. The aggregate purchase price was $1,123.

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Private Offering

During May, 2013, the Company sold 2,100,000 shares of its common stock to accredited investors, at a price of $0.10 per share, in connection with a private placement of the Company’s common stock for proceeds totaling $210,000.

In addition, in September, 2013 the Company sold 100,000 shares of its common stock to an accredited investor, at a price of $0.25 per share, in connection with a private placement of the Company’s common stock for proceeds totaling $25,000.

Common Stock Issued for the Purchase of Assets

On July 29, 2013, the Company issued an aggregate of 3,250,000 shares of its common stock to an officer of the Company for the purchase of intellectual property and trademarks. Given that the officer owned more than 50% of the Company’s stock at the time, the asset is required to be recorded at historical cost. As such, the asset was valued at $-0- since the officer had not incurred any cost in creation of the intellectual property or trademarks. Had the officer owned less than 50% of the Company’s stock, the asset would have been recognized at fair value, which is $0.10 per share or $325,000.

On September 30, 2013, the Company agreed to issue an aggregate of 350,000 shares of its common stock and agreed to pay $25,000 in cash to a third party for the purchase of intellectual property, patents and unregistered trademarks at a price of $0.10 per share. The aggregate purchase price was $60,000.

Stock-Based Compensation

On July 22, 2013, the Company issued 100,000 shares of its common shares to a consultant as a retainer for services to be provided. The shares were valued at $10,000 or $0.10 per share. The consultant received an additional 25,000 shares for services on August 1, 2013 and 32,500 shares on September 1, October 1, November 1 and December 1, 2013. These shares were valued at $15,500 or $0.10 per share. As of December 31, 2013, 65,000 shares had not yet been issued. During the six months ended June 30, 2014, the consultant received 195,000 shares for his services. These shares were valued at $19,500 or $0.10 per share. The consultant was scheduled to receive an additional 32,500 shares per month for services, for so long as he remains a consultant to the Company. As of June 30, 2014, 130,000 shares had not yet been issued. See Note 13 Subsequent Events.

On July 31, 2013, a consultant received 60,000 shares of the Company’s common stock for services, valued at $6,000 or $0.10 per share.

On July 31, 2013, an employee received 350,000 shares of the Company’s common stock as compensation for services. The shares were valued at $35,000 or $0.10 per share.

In January, 2014, the Company issued an aggregate of 750,000 shares of common stock to Network 1 Financial Securities LLC (“Network 1”) and its designees as compensation for services to be rendered in connection with a placement agent agreement entered into with Network One. These shares were valued at $0.10 per share.

NOTE 13. SUBSEQUENT EVENTS

On July 12, 2014, the Company sold 3,000,000 shares of its common stock to a single accredited investor, at a price of $0.002 per share, in connection with a private placement of the Company’s common stock for gross proceeds totaling $6,000.

From June 30, 2014 through December 31, 2014, the Company's CEO paid $41,077 in expenses of the Company through the use of his personal funds and personal credit cards.

On July 14, 2014, the Company and its CEO, Michael R. Rosa, entered into an agreement with Mark Shefts under which:

(1)

Mr. Shefts: (i) agreed to provide management advisory services to the Company for a period of one year, for $1,000 per month, (ii) made a $125,000 equity investment into the Company, in exchange for 10 million shares of the Company’s common stock, (iii) agreed to extend the maturity date of his convertible promissory note in the principal amount of $100,000 until July 15, 2015 and made the note non-interest bearing, and (iv) has the option of becoming CEO and a member of the board of the Company;

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(2)

The Company agreed to issue to Mr. Shefts or his designee 10 million shares of its common stock, in consideration for the $125,000 investment;

(3)

Mr. Shefts and the Company’s CEO agreed to endeavor for a specified time to appoint a mutually agreeable person to act as a director of the Company. In the event that Mr. Shefts and the Company’s CEO are unable to agree on a third director, Mr. Shefts would have the right to appoint the third director;

(4)

Michael R Rosa, CEO of the Company, surrendered approximately 6,692,500 shares of the Registrant’s common stock to the treasury, which have been restored to the status of authorized but unissued shares; and

(5)

Mr. Rosa has agreed to accept a promissory note in the amount of $98,268 for amounts he has advanced on behalf of the Company. This note was to be non-interest bearing and mature July 15, 2015.

The Agreement also provides that if the Board of Directors should at any time determine to discontinue the business operations of the Company, then, subject to compliance with applicable laws, the Company will transfer to Michael R. Rosa its discontinued operating businesses, in exchange for his surrendering to the Company all shares of common stock of the Company owned or controlled by him.

In connection with the foregoing transaction, the Company, on July 14, 2014, sold to Mark Shefts (an accredited investor) 10,000,000 shares of its common stock, for aggregate consideration of $125,000 (a per-share price of $.0125).

In August, 2014, the Company entered into an agreement with a consultant to provide accounting services. Under this agreement, the consultant is compensated for his services at a rate of $75 per hour for the first 20 hours per week, then 1,000 shares per hour for every hour, or partial hour, thereafter. These shares are valued at $0.0125 per share. Through December 31, 2014, the Company had issued 54,000 and owed an additional 141,000 shares under this agreement. This agreement was terminated as of December 31, 2014. Effective as of January 2, 2015, the consultant became the Company’s CFO.

On or about August 12, 2014, we received a Notice of Debarment from the US Defense Logistics Agency (“DLA”) (the “Notice”). The Notice (i) prevents us from bidding on new government contracts and (ii) precludes the renewal of any existing contract that is otherwise renewable. The Notice was issued to us because our CEO (who is also a significant shareholder of our company) is affiliated with a company that is alleged to have sold products to the DLA that did not conform to the applicable contract. The DLA has not alleged any wrongdoing whatsoever with respect to our company or its contracts with the DLA.

As a result of the Notice, we are not able to bid on any new US government contracts that might otherwise be of interest to us, unless and until the Notice is withdrawn or rescinded as a result of our negotiations with the government or through an adjudication on the merits.

On November 3, 2014, the Company filed a letter with DLA opposing the proposed notice of debarment which notice was based on the Company’s affiliation with the other company. DLA has not yet acted upon the matter.

Currently, there are no government contracts on which we are interested in bidding. During each of the six month periods ended December 31, 2013 and June 30, 2014, we realized approximately $100,000 in revenues from government contracts. These contracts have been substantially fulfilled.

If we are unable to have the Notice rescinded/terminated, we will not be able to bid on future US government contracts, in which case there could be an adverse effect on our revenues and profitability, unless we are able to replace the resulting revenue loss. We intend to vigorously pursue rescission/termination of the Notice.

The convertible note in the principal amount of $100,000 held by Shefts Family LP, a significant shareholder, was amended in July 2014 to extend its maturity date to July 15, 2015 and to make it non-interest bearing. The convertible note in the principal amount of $50,000 was amended in September 2014 (effective July 31, 2014) to extend its maturity date to September 10, 2015, reduce the conversion rate of the note from $0.125 to $0.05 per share, allow the note holder to elect to receive stock in lieu of cash for his interest and issue the note holder 100,000 shares of common stock in consideration of this agreement upon execution. On January 21, 2015, the Company and the holders of these notes agreed to reduce the conversion price of the notes to $.025 per share, in consideration for which the holders agreed to extend the maturity date of the notes for an additional one year period (until July 15, 2016 in the case of the $100,000 notes and September 16, 2016 in the case of the $50,000 note).

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In addition, on January 21, 2015, the Company issued its CEO (who is a significant shareholder) a convertible note in the principal amount of $100,000, in partial satisfaction of amounts he previously advanced to pay Company expenses. The Note is convertible into common stock at the rate of $.025 per share. The repayment of the principal amount of this note was also extended one year until July 2016.

On September 26, 2014, the Company entered into an agreement with Rushcap Group, Inc., a significant shareholder, to provide to the Company a revolving line of credit to purchase inventory. The maximum borrowing amount under this agreement is $300,000. Interest is charged at a rate of 3.5% per advance for the first 30 day period or portion thereof, then 1.5% per 30 day period or portion thereof until paid with a maximum borrowing term of 120 days per advance. Payments are due within 30 days of the Company receiving payment from the customer for invoices which are funded under this agreement. As of January 26, 2015, $250,000 in advances have been received under this agreement.

As of June 30, 2014, the company was delinquent with respect to the payment of IRS Payroll Taxes for the period July 1, 2013 through June 30, 2014 in the amount of $119,079. As of January 26, 2015, the Company owed an aggregate of $153,601, including $34,522 in penalties and interest related to these delinquencies. The Company believes that it will be able to secure a waiver of penalties in the aggregate approximate amount of $31,000, leaving the Company with a payroll tax liability (including interest) of approximately $122,000. The company expects to pay this amount out in installments over a three year period (approximately $3,500 per month). Since June 30, 2014, the Company has been current in the payment of its payroll taxes.

On January 12, 2015, the Company approved an amendment to its certificate of incorporation to change its name to “The Enviromart Companies.” The Company’s wholly owned subsidiary, EnviroPack Technologies, Inc., also approved, on January 12, 2015, an amendment to its certificate of incorporation to change its name to “Enviromart Industries, Inc.” Effective as of January 2, 2015, all of the Company’s business will be conducted through Enviromart Industries, Inc., its wholly owned subsidiary (f/k/a EnviroPack Technologies, Inc.). The Company expects these amendments to be effective on or about January 15, 2015.

On January 22, 2015, we sold an aggregate of 1,848,871 shares of our common stock to two accredited investors at a price per share of $.002, for aggregate consideration of $3,697.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-looking Statements

Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Overview

On June 21, 2013, the Company completed the acquisition of certain assets from Michael R. Rosa, its chief executive officer, and commenced business operations. Since completing the acquisition, the Company has raised capital, hired employees, leased space, engaged consultants and advisors, conducted extensive sales and marketing related activities both domestically and internationally, negotiated vendor relationships and engaged seller’s representatives. As of June 30, 2013 the Company had more than nominal operations and no longer considered itself to be a “shell company” within the meaning of applicable securities laws. The Company has, since June 30, 2013, realized revenues from its EnviroPack and SpillCon businesses. The Company’s business had, through December 31, 2014, been operated through four wholly-owned subsidiaries, each of which is a Delaware corporation: Remote Aerial Detection Systems, Inc. (“RADS”), EnviroPack Technologies, Inc., SpillCon Solutions, Inc. and SorbTech Manufacturing, Inc. RADS has not realized and revenue and is currently inactive.

As of January 2, 2015, the Company’s business is operated through its wholly-owned subsidiary, EnviroPack Technologies, Inc. Effective on or about January 15, 2015, the Company changed its name to The Enviromart Companies, and the Company’s wholly-owned subsidiary, EnviroPack Technologies, Inc., changed its name to Enviromart Industries, Inc. The Company’s wholly owned subsidiary, Remote Aerial Detection Systems, Inc., was intended to be an, intelligence, surveillance, and reconnaissance (ISR) reseller of dedicated mission specific non-aerial ISR and aerial ISR aircraft, platforms for the oil and gas industry, as well as government agencies. RADS has not realized any revenue and is currently inactive.

The Company is a provider of United Nations/Department of Transportation (“UN/DOT”) certified environmental waste packaging solutions, environmental spill response and control products (primarily absorbent products), and sell consumer and commercial spill control products for the hazardous and bio-hazardous waste clean-up markets.

The Company, through June 30, 2013, had not earned revenue from operations. Accordingly, previously, the Company’s activities had been accounted for as those of a “Development Stage Company” as set forth in Financial Accounting Standards Board (‘FASB”) Accounting Standards Codification (“ASC”) 915. Among the disclosures required by ASC 915 are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations, stockholders’ equity and cash flows disclose activity since the date of the Company’s inception. Since June 30, 2013, the Company has realized approximately $1,108,000 in revenues, and therefore no longer considers itself a “Development Stage Company.”

As the Company only established its business operations on June 21, 2013 (and was a shell company prior to such date), the Company has no meaningful historical business operations, with which to compare the current calendar year period. Since the Company has no comparable historical business operations, the following discussion omits discussion of income from continuing operations, expenses and other matters related to “results of operations,” as well as information relating to the statement of cash flows, as the Company does not believe that analysis of this information would be meaningful to investors.

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Recent Developments

During the year ended December 31, 2014, the Company's CEO paid $138,989 in expenses of the Company through the use of his personal funds and personal credit cards. See Below.

On July 12, 2014, the Company sold 3,000,000 shares of its common stock to a single accredited investor for gross proceeds of $6,000 (a per share price of $.002).

From June 30, 2014 through July 14, 2014, a consultant who is affiliated with a significant shareholder received 32,500 for services per an agreement dated July 22, 2013. These shares were valued at $3,250, or $0.10 per share. This agreement was terminated on July 14, 2014.

On July 14, 2014, the Company and its CEO, Michael R. Rosa, entered into an agreement with Mark Shefts, as follows:

(1)

Mr. Shefts: (i) agreed to provide management advisory services to the Company for a period of one year, for $1000 per month, (ii) made a $125,000 equity investment into the Company, in exchange for 10 million shares of the Registrant’s common stock, (iii) agreed to extend the maturity date of his convertible promissory note in the principal amount of $100,000 until July 15, 2015 and make the note non-interest bearing, and (iv) has the option of becoming CEO and a member of the board of the Company;

(2)

The Company agreed issue to Mr. Shefts or his designee 10 million shares of its common stock, in consideration for the $125,000 investment;

(3)

Mr. Shefts and the Company’s CEO agreed to endeavor for a specified of time to appoint a mutually agreeable person to act as a director of the Company. In the event that Mr. Shefts and the Company’s CEO are unable to agree on a third director, Mr. Shefts would have the right to appoint the third director;

(4)

Michael R Rosa, CEO of the Company, surrendered approximately 6,692,500 shares of the Registrant’s common stock to the treasury, to be restored to the status of authorized but unissued shares; and

(5)

Mr. Rosa agreed to accept a promissory note in the amount of $98,268 for amounts he has advanced on behalf of the Company through June 30, 2014. This note is non-interest bearing and matures July 15, 2015.

The Agreement also provides that if the Board of Directors should at any time determine to discontinue the business operations of the Company, then, subject to compliance with applicable laws, the Company will transfer to Michael R. Rosa its discontinued operating businesses, in exchange for his surrendering to the Company all shares of common stock of the Company owned or controlled by him.

In connection with the foregoing transaction, the Company, on July 14, 2014, sold to Rushcap Group, Inc. (Mark Shefts’ designee) (an accredited investor) 10,000,000 shares of its common stock, for aggregate consideration of $125,000 (a per-share price of $.0125).

Except as disclosed herein, we are not a party to any pending legal proceeding and. to the knowledge of our management, no federal, state or local governmental agency is presently contemplating any proceeding against us.

On or about August 12, 2014, we received a Notice of Debarment from the US Defense Logistics Agency (“DLA”) (the “Notice”). The Notice (i) prevents us from bidding on new government contracts and (ii) precludes the renewal of any existing contract that is otherwise renewable. The Notice was issued to us because our CEO (who is also a significant shareholder of our company) is affiliated with a company that is alleged to have sold products to the DLA that did not conform to the applicable contract. The DLA has not alleged any wrongdoing whatsoever with respect to our company or its contracts with the DLA.

As a result of the Notice, we are not able to bid on any new US government contracts that might otherwise be of interest to us, unless and until the Notice is withdrawn or rescinded as a result of our negotiations with the government or through an adjudication on the merits.

Currently, there are no government contracts on which we are interested in bidding. During each of the quarterly periods ended December 31, 2013 and September 30, 2014, we realized approximately $100,000 in revenues from government contracts. These contracts have been substantially fulfilled.

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On November 3, 2014, the Company filed a letter with DLA opposing the proposed notice of debarment which is based on the Company’s affiliation with the other company. DLA has not yet acted upon the matter.

If we are unable to have the Notice rescinded/terminated, we will not be able to bid on future US government contracts, in which case there could be an adverse effect on our revenues and profitability, unless we are able to replace the resulting revenue loss. We intend to vigorously pursue rescission/termination of the Notice.

In September 26, 2014, the Company entered into an agreement with Rushcap Group, Inc. (controlled by Mark Shefts (a significant shareholder)) to provide a revolving line of credit to purchase inventory to the Company. The maximum borrowing amount under this agreement is $300,000. Interest is charged at a rate of 3.5% per advance for the first 30 day period or portion thereof, then 1.5% per 30 day period or portion thereof until paid with a maximum borrowing term of 120 days per advance. Payments are due within 30 days of the Company receiving payment from the customer for invoices which are funded under this agreement. Through January 26, 2015, $250,000 had been advanced to the company under this agreement (currently outstanding).

The convertible note in the principal amount of $100,000 was amended in July 2014 to extend its maturity date to July 15, 2015 and to make it non-interest bearing. The convertible note in the principal amount of $50,000 was amended in September 2014 (effective July 31, 2014) to extend its maturity date to September 10, 2015, reduce the conversion rate of the note from $0.125 to $0.05 per share, allow the note holder to elect to receive stock in lieu of cash for his interest and issue the note holder 100,000 shares of common stock in consideration of this agreement upon execution. On January 21, 2015, the Company and the holders of these notes agreed to reduce the conversion price of the notes to $.025 per share, in consideration for which the holders agreed to extend the maturity date of the notes for an additional one year period (until July 15, 2016 in the case of the $100,000 notes and September 16, 2016 in the case of the $50,000 note). In addition, on January 21, 2015, the Company issued its CEO (who is a significant shareholder) a convertible note in the principal amount of $100,000, in partial satisfaction of amounts he previously advanced to pay Company expenses. The Note is convertible into common stock at the rate of $.025 per share. The repayment of the principal amount of this note was also extended one year until July 2016.

On January 12, 2015, the Company approved an amendment to its certificate of incorporation to change its name to “The Enviromart Companies.” The Company’s wholly owned subsidiary, EnviroPack Technologies, Inc., also approved, on January 12, 2015, an amendment to its certificate of incorporation to change its name to “Enviromart Industries, Inc.” Effective as of January 2, 2015, all of the Company’s business will be conducted through Enviromart Industries, Inc., its wholly owned subsidiary (f/k/a EnviroPack Technologies, Inc.). The Company expects these amendments to be effective on or about January 15, 2015.

On January 22, 2015, we sold an aggregate of 1,848,871 shares of our common stock to two accredited investors at a price per share of $.002, for aggregate consideration of $3,697.

Critical Accounting Policies and Significant Judgments and Estimates

The Securities and Exchange Commission (“SEC”) issued disclosure guidance for “critical accounting policies.” The SEC defines “critical accounting policies” as those that require the application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

Our significant accounting policies are described below. We anticipate that the following accounting policies will require the application of our most difficult, subjective or complex judgments:

Basis of Presentation

The Company, through June 30, 2013, had not earned revenue from operations. Accordingly, through the quarter ended June 30, 2013, the Company’s activities were accounted for as those of a “Development Stage Company” as set forth in FASB ASC 915. Among the disclosures required by ASC 915 are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations, stockholders’ equity and cash flows disclose activity since the date of the Company’s inception.

Since completing the acquisitions on June 21, 2013, the Company has raised capital, hired employees, leased space, engaged consultants and advisors, conducted extensive sales and marketing related activities both domestically and internationally, negotiated vendor relationships and engaged seller’s representatives. The Company has, since June 30, 2013, realized approximately $1,108,000 in revenues, primarily from its EnviroPack and SpillCon businesses. Accordingly, the Company no longer considered itself to be a development stage company during the quarter ended June 30, 2014.

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Accounts Receivable

In the normal course of business, the Company extends credit to customers that satisfy defined credit criteria. Accounts receivable is recorded at carrying value, which approximates fair value, and is presented in the Company's unaudited consolidated balance sheets net of any allowance for doubtful accounts. As of June 30, 2014, an allowance for doubtful accounts had not been deemed necessary, and therefore, not recorded.

Inventory

The Company’s inventory is stated at the lower of cost or estimated realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out (“FIFO”) method. The Company continuously evaluates the composition of its inventory, assessing slow-turning product. Estimated realizable value of inventory is determined based on an analysis of historical sales trends of our individual products, the impact of market trends and economic conditions, and a forecast of future demand, giving consideration to the value of current orders in-house relating to the future sales of inventory. Estimates may differ from actual results due to quantity, quality, and mix of products in inventory, customer demand, and market conditions. The Company’s historical estimates of these costs and any provisions have not differed materially from actual results. Any reserves for inventory shrinkage, representing the risk of physical loss of inventory, are adjusted based upon physical inventory counts. As of June 30, 2014, an inventory reserve of $7,193 has been recorded.

Concentration of Risk

Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining all deposits in high quality financial institutions.

For the six months ended June 30, 2014, one customer represented 51% of our total revenue and one customer represented 17% of our total revenue. Thus, two of our customers represented an aggregate of 68% of our total revenue. The loss of either of these customers would have a material adverse effect on our business.

Machinery and Equipment

Equipment is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method based upon the estimated useful life of depreciable assets, which is three years for machinery and equipment.

Long-lived Assets

Machinery and equipment, along with other long-lived assets, are evaluated for impairment periodically whenever events or changes in circumstances indicate that their related carrying values may not be recoverable, or are less than their fair value. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and its eventual disposition. To the extent that estimated future undiscounted net cash flows attributable to the asset are less than the carrying value, an impairment loss is recognized equal to the difference between the carrying value of such asset and its fair value, considering external market participant assumptions. Assets to be disposed of and for which there is a committed plan of disposal are reported at the lower of carrying value or fair value less costs to sell.

Income Taxes

Income taxes are provided in accordance with FASB ASC 740 “Accounting for Income Taxes”. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. 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. There were no current or deferred income tax expenses or benefits, as the Company did not having any material operations for the period ended December 31, 2012. As of June 30, 2014, all deferred tax assets continue to be fully reserved.

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Revenue Recognition

Revenue is recognized across all segments of the business when there is persuasive evidence of an arrangement, delivery has occurred, price has been fixed or is determinable, and collectability is reasonably assured. Revenue is recognized at the time title passes and risk of loss is transferred to customers.

Sales Reserves and Uncollectible Accounts

A significant area of judgment affecting reported revenue and net income is estimating sales reserves, which represent that portion of gross revenues not expected to be realized. In particular, wholesale revenue is reduced by estimates of returns, discounts, markdowns, and operational chargebacks. In determining estimates of returns, discounts, markdowns and operational chargebacks, management analyzes current economic and market conditions. We review and refine these estimates on a quarterly basis. As of June 30, 2014, a sales reserve had not been deemed necessary, and therefore, not recorded.

Liquidity and Capital Resources

Currently, we have only minimal operating capital. Accordingly, we have an immediate and urgent need for additional capital to fund our business operations. Although the $250,000 in inventory financing we received through January 26, 2015, is helping to fund limited sales, the lack of operating capital is nevertheless adversely affecting our ability to purchase needed product inventory and consequently is interfering with our ability to maximize our sales revenue. We are currently in the process of attempting to raise additional capital through the sale of equity and/or debt securities. Sales of additional equity securities (or securities convertible into equity securities) will dilute the percentage ownership interest of existing stockholders in the Company.

To date we have realized only limited operating revenues. We are, however, incurring significant costs and expenses in connection with the establishment of our business, implementation of our business plan and ongoing compliance costs associated with being a public company. However, we experienced positive cash flows from operations. During the six months ended June 30, 2014, our operating activities used approximately $22,000 in cash (about $4,000 per month). This is because we were able to fund our operating losses through increased accounts payable and accrued expenses, as well as advances form our CEO. Funding our business through increased accounts payable and accrued expenses is not a sustainable way to fund our operating activities. We need to raise additional cash immediately in order to fund our business operations and implement our business plan. As a result, we have an immediate and urgent need for additional funds.

At June 30, 2014, we had a working capital deficiency of approximately $741,000, compared to a working capital deficiency of approximately $419,000 at December 31, 2013.The $322,000 increase in our working capital deficiency was due primarily to a $288,000 increase in accounts payable and accrued expenses, a $98,000 increase in due to officer (related to Company expenses paid directly by our CEO and major shareholder) and a $110,000 decrease in accounts receivable – related party partially offset by a $65,000 increase in inventory and a $88,000 increase in accounts receivable.

In order to remedy this liquidity deficiency, we need to raise additional capital immediately, and ultimately we will need to generate substantial positive operating cash flows. Our internal sources of funds will consist of cash flows from operations, but not until we begin to realize substantial revenues from the sale of products. As previously stated, as of the date of filing of this quarterly report, we have only limited revenues, and our operations are generating negative cash flows, and thus adversely affecting our liquidity. We intend to raise additional funds through equity and/or debt financing. In addition, we expect that our operations will continue to generate increasing revenues during the first half of 2015, which should improve our liquidity deficiency. If we are unable to raise additional funds in the near term, we will not be able to implement our business plan, and it is unlikely that we will be able to continue as a going concern.

Subject to the availability of funds, which we currently do not have, we expect to incur approximately $250,000 in capital expenditures over the next 12 months. The purpose of these capital expenditures will be for the installation of a cellulose blending system, along with an industrial sewing machine center for use in a customized cutting and sewing operation, and specific testing equipment for a research and development lab for the SpillCon product line, along with other equipment modifications. We also intend to continue the development of our Environmart.com B2B website.

We expect to fund these capital expenditures through a combination of cash flows from operations (but not until we realize further significant revenue growth) and proceeds from equity/debt financing. If we are unable to generate positive cash flows from operations, and/or raise additional funds (either through debt or equity or a combination thereof), we will be unable to fund our capital expenditures, in which case, there could be an adverse effect on our business and results of operations.

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Since March, 2013, we have raised an aggregate of approximately $515,000 from the sale of shares of common stock and convertible promissory notes. We expect to raise additional funds in the near term from the further equity and/or debt offerings. Additional sales of common stock or securities convertible into common stock will reduce the percentage interest of existing stockholders in our Company.

In addition, on September 26, 2014, the Company entered into an agreement with Rushcap Group, Inc. (controlled by Mark Shefts (a significant shareholder)) to provide a revolving line of credit to purchase inventory to the Company. The maximum borrowing amount under this agreement is $300,000. Interest is charged at a rate of 3.5% per advance for the first 30 day period or portion thereof, then 1.5% per 30 day period or portion thereof until paid with a maximum borrowing term of 120 days per advance. Payments are due within 30 days of the Company receiving payment from the customer for invoices which are funded under this agreement. As of January 26, 2015, $250,000 had been advanced to the company under this agreement (currently outstanding).

Due to the previously described inventory funding, the Company has been able to significantly grow its revenue during the fourth quarter of 2014, as compared with the prior three quarters. For the nine month period ended September 30, 2014, the Company had revenues of approximately $1,018,000 (or about $113,000 per month). The Company has realized revenue of approximately $679,000 in the fourth quarter of 2014 (or about $226,000 per month). Accordingly, the Company has doubled its monthly sales revenue in the fourth quarter of 2014, as compared with the nine months ended September 30, 2014. The Company believes this level of sales can be maintained or surpassed during the next calendar year.

As of June 30, 2014, the company was delinquent with respect to the payment of IRS Payroll Taxes for the period July 1, 2013 through June 30, 2014 in the amount of $119,079. As of January 26, 2015, the Company owed an aggregate of $153,601, including $34,522 in penalties and interest related to these delinquencies. The Company believes that it will be able to secure a waiver of penalties in the aggregate approximate amount of $31,000, leaving the Company with a payroll tax liability (including interest) of approximately $122,000. The company expects to pay this amount out in installments over a three year period (approximately $3,500 per month). Since June 30, 2014, the Company has been current in the payment of its payroll taxes.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements as defined in Item 303(a) (4) (ii) of the SEC’s Regulation S-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including the CEO and controller, to allow timely decisions regarding required disclosures.

Under the supervision and with the participation of our management, including our CEO and controller, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our CEO and controller concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were not effective. We have since March 31, 2014 hired a financial controller (part time) to oversee our books and records, as well as our internal accounting function. Effective January 2, 2105, this person, who is a CPA, became our CFO.

Changes in Internal Control over Financial Reporting

Other than hiring a part time financial controller, during the fiscal quarter covered by this Quarterly Report, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Except as disclosed herein, we are not a party to any pending legal proceeding, and to the knowledge of our management, no federal, state or local governmental agency is presently contemplating any proceeding against us.

On or about August 12, 2014, we received a Notice of Debarment from the US Defense Logistics Agency (“DLA”) (the “Notice”). The Notice (i) prevents us from bidding on new government contracts and (ii) precludes the renewal of any existing contract that is otherwise renewable. The Notice was issued to us because our CEO (who is also a significant shareholder of our company) is affiliated with a company that is alleged to have sold products to the DLA that did not conform to the applicable contract. The DLA has not alleged any wrongdoing whatsoever with respect to our company or its contracts with the DLA.

As a result of the Notice, we are not able to bid on any new US government contracts that might otherwise be of interest to us, unless and until the Notice is withdrawn or rescinded as a result of our negotiations with the government or through an adjudication on the merits.

On November 3, 2014, the Company filed a letter with DLA opposing the proposed notice of debarment which was based on the Company’s affiliation with the other company. DLA has not yet acted upon the matter.

Currently, there are no government contracts on which we are interested in bidding. During each of the quarterly periods ended December 31, 2013 and September 30, 2014, we realized approximately $100,000 in revenues from government contracts. These contracts have been substantially fulfilled.

If we are unable to have the Notice rescinded/terminated, we will not be able to bid on future US government contracts, in which case there could be an adverse effect on our revenues and profitability, unless we are able to replace the resulting revenue loss. We intend to vigorously pursue rescission/termination of the Notice.

ITEM 1A. RISK FACTORS

Not required.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Previously reported in Current Reports on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

N/A

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ITEM 6. EXHIBITS

** Furnished, not filed

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Environmental Science and Technologies, Inc.

By: /s/ George R. Adyns

Name: George R. Adyns

Title: Chief Financial Officer (Principal Financial Officer)

Dated: February 11, 2015

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