UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2018

 

☐   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

 

ECARD 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.)

 

160 Summit Ave Montvale, NJ 07645

(Address of Principal Executive Offices)

 

201-782-0889

(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 ☐

 

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 ☒   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”, “smaller reporting company” and “emerging growth 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	☒
		Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

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

 

The number of shares outstanding of each of the Registrant’s classes of common equity, as August 7, 2018 is:

 

Class		Outstanding as of August 7, 2018
Common Stock, $0.0001 par value per share		49,511,775

 

 

 

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.

 

  

PART I - FINANCIAL STATEMENTS		1
Item 1. Financial Statements.
	Report of Independent Registered Public Accounting Firm	2
	Balance Sheets	3
	Statements of Operations and Comprehensive Loss	4
	Statements of Cash Flows	5
	Notes to Financial Statements	6 - 9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		10
Item 3. Quantitative and Qualitative Disclosures About Market Risk.		12
Item 4. Controls and Procedures.		12
PART II - OTHER INFORMATION		13
Item 1. Legal Proceedings		13
Item 1A. Risk Factors		13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		13
Item 3. Defaults upon Senior Securities		13
Item 4. Mine Safety Disclosures		13
Item 5. Other Information		13
Item 6. Exhibits		13

 

  

ECARD INC.

 

PART I- FINANCIAL INFORMATION

 

ECARD INC.

(f/k/a/ The Enviromart Companies, Inc.)

Unaudited Condensed Financial Statements

June 30, 2018 and December 31, 2017

 

Content		Page
Report of Independent Registered Public Accounting Firm		2
Balance Sheets		3
Statements of Operations and Comprehensive Loss		4
Statements of Cash Flows		5
Notes to Financial Statements		6 - 9

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To:	The Board of Directors and Stockholders of

ECARD INC. (f/k/a/ The Enviromart Companies, Inc.)

 

Results of Review of Financial Statements

 

We have reviewed the accompanying condensed balance sheet of ECARD INC. (f/k/a/ The Enviromart Companies, Inc.) as of June 30, 2018, the related condensed statements of operations and comprehensive loss for the three and six months periods ended June 30, 2018 and the condensed statements of cash flows for the six month periods ended June 30, 2018, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

 

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the balance sheet of the Company as of December 31, 2017, and the related statements of operations, comprehensive loss, changes in shareholders’ equity and cash flows for the year then ended (not presented herein), and in our report dated April 2, 2018, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed balance sheet as of December 31, 2017 is fairly stated in all material respects in relation to the financial statements from which it has been derived.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company had incurred substantial losses during the period, and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plan in regards to these matters are described in Note 3. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Review Results

 

These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

 

WWC, P.C.

Certified Public Accountants

 

San Mateo, CA

August 13, 2018

 

 

ECARD INC.

(f/k/a The Enviromart Companies, Inc.)

Unaudited Condensed Balance Sheets

June 30, 2018 and December 31, 2017

 

		June 30,				December 31,
		2018				2017
		(unaudited)
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Accounts payable			15				-
Due to related parties			59,774				47,344
Accrued Liability			3,000				-
Total Current Liabilities			62,789				47,344
Total Liabilities			62,789				47,344
Stockholders’ Deficiency
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; 49,511,775 and 49,511,775 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively			4,951				4,951
Additional paid-in capital			1,059,873				1,059,873
Accumulated deficit			(1,127,613	)			(1,112,168	)
Total Stockholders’ Deficiency			(62,789	)			(47,344	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY		$	-			$	-

 

See accompanying notes to the financial statements

 

 

ECARD INC.

(f/k/a The Enviromart Companies, Inc.)

Unaudited Condensed Statements of Operations and Comprehensive Loss

For the Three and Six Months ended June 30, 2018 and 2017

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2018				2017				2018				2017
Sales - Net		$	-			$	-			$	-			$	-
Operating expenses
General and administrative			7,694				18,168				15,445				26,986
Loss from operations			(7,694	)			(18,168	)			(15,445	)			(26,986	)
Other income (expense)			-				-				-				-
Income tax			-				-				-				-
Net loss		$	(7,694	)		$	(18,168	)		$	(15,445	)		$	(26,986	)
Net Loss per share of common stock  – basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted average number of shares outstanding – basic and diluted			49,511,775				49,976,061				49,511,775				49,919,234

 

See accompanying notes to the financial statements

 

 

ECARD INC.

(f/k/a The Enviromart Companies, Inc.)

Unaudited Condensed Statements of Cash Flows

For the Six Months ended June 30, 2018 and 2017

 

		For the Six Months Ended June 30,
		2018				2017
Cash Flows from Operating Activities
Net loss		$	(15,445	)		$	(26,986	)
Adjustments to reconcile net loss to net cash used in operating activities:
Expenses paid by shareholders			12,430				27,211
Increase in prepaid expenses			-				(250	)
Increase in accounts payable and accrued expenses			3,015				25
Net cash used in operating activities			-				-
Decrease in Cash and Cash equivalents			-				-
Cash and Cash Equivalents—Beginning of Period			-				100
Cash and Cash Equivalents—End of Period		$	-			$	100
Supplemental Disclosures
Cash paid for interest		$	-			$	-
Cash paid for taxes		$	-			$	-
Non-Cash Investing and Financing Activities
Issuance of issuable shares		$	-			$	200

 

See accompanying notes to the financial statements

 

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

ECARD INC. (the “Company”), formerly known as The Enviromart Companies, Inc. until October 23, 2017, and formerly known as Environmental Science and Technologies, Inc. until October 19, 2017, 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 former Chief Executive Officer. In conjunction with the acquisition of the intangible assets, the Company commenced operations.

 

On October 5, 2017, the Company entered into a Stock Purchase Agreement (the “SPA”) with Eastone Equities, LLC, a New York limited liability company (the “Purchaser”) and certain selling stockholders, pursuant to which the Purchaser acquired 44,566,412 shares of common stock of the Company from Sellers for an aggregate purchase price of $295,000. The transaction contemplated in the SPA closed on October 9, 2017. The Shares represent approximately 90% of the issued and outstanding shares of common stock of the Company. The transaction resulted in a change in control of the Company.

 

On October 23, 2017, the Company, with the unanimous approval of its board of directors by written consent in lieu of a meeting, filed a with the Secretary of State of Delaware. As a result, the Company changed its name to “ECARD INC.”, effective as of October 23, 2017.

 

On July 6, 2018, the Company made a submission with FINRA and requested a change of ticker symbol from “EVRT” to “ECRD”. The Company’s common stock is currently quoted on the OTC market (OTCPINK), under the symbol “ECRD”.

 

Currently, the Company only possesses minimal assets and liabilities, and does not have any substantial business operations; accordingly, there were no significant revenues or positive cash flows for the six months ended June 30, 2018. Management’s efforts are focused on seeking out a new and profitable operating business with strong growth potential. From and after the sale, unless and until the Company completes an acquisition, its expenses are expected to consist solely of legal, accounting and compliance costs, including those related to complying with reporting obligations under the Securities and Exchange act of 1934.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying financial statements of the Company have been prepared using the accrual basis of accounting and 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 periods presented herein have been reflected.

 

The condensed financial statements of the Company as of and for the six months ended June 30, 2018 and 2017 are unaudited. In the opinion of management, all adjustments (including normal recurring adjustments) have been made that are necessary to present fairly the financial position of the Company as of June 30, 2018, the results of its operations for the three and six months ended June 30, 2018 and 2017, and its cash flows for the six months ended June 30, 2018 and 2017. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for a full fiscal year. The condensed balance sheet at December 31, 2017 has been derived from the Company's audited financial statements included in the Form 10-K for the year ended December 31, 2017.

 

The statements and related notes have been prepared pursuant to the rules and regulations of the SEC. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the financial statements and other information included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the SEC.

 

 

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.

  

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.

 

Concentration of Risk

 

Deposits made at financial institutions in the United States are subject to federally depository insurance maximum; deposits in excess of the amount are subject to concentrations of credit risk of the financial institution; however, Management believe that financial institutions located in the US are unlikely to become insolvent.

 

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.

 

Basic and Diluted Earnings (Loss) Per Share

 

Basic earnings per share is based on the weighted average number of common shares outstanding. Diluted earnings per share is based on the weighted average number of common shares outstanding and dilutive common stock equivalents. Basic earnings per share 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. There were no potentially dilutive or anti-dilutive securities during the six months ended June 30, 2018.

 

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. The Company did not earn revenues during the six months ended June 30, 2018.

 

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.

 

 

Recently Issued Financial Accounting Standards

 

In February 2018, the FASB issued ASU No. 2018-02, “Income Statement — Reporting Comprehensive Income (Topic 220) — Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU permits a reporting entity to reclassify the income tax effects of Tax Legislation on items within accumulated other comprehensive income to retained earnings.

 

In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815) — Targeted Improvements to Accounting for Hedging Activities.” The ASU amends certain rules for hedging relationships, expands the types of strategies that are eligible for hedge accounting treatment to more closely align the results of hedge accounting with risk management activities and amends disclosure requirements related to fair value and net investment hedges.

 

In February 2017, the FASB issued ASU No. 2017-05, “Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) — Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The ASU clarifies the scope of guidance applicable to sales of nonfinancial assets and also provides guidance on accounting for partial sales of such assets.

 

In January 2017, the Financial Accounting Standard Board (“FASB”) issued guidance, which simplifies the accounting for goodwill impairment. The updated guidance eliminates Step 2 of the impairment test, which requires entities to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value.

 

In January 2017, the FASB issued guidance, which amended the existing accounting standards for business combinations. The amendments clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

 

The Company does not believe that the adoption of the above recently issued accounting pronouncements financial will have material impact to the company’s financial condition, results of operations, or cash flows.

 

NOTE 3. GOING CONCERN

 

During the six months ended June 30, 2018, the Company has been unable to generate cash flows sufficient to support its operations and has been dependent on capital contributions from prior controlling shareholders, and related party advances from the current controlling shareholder. In addition, the Company has experienced recurring net losses, and has an accumulated deficit of $1,127,613 and working capital deficit of $62,789 as of June 30, 2018.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

 

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from any future operations or that funds will be available from external sources such as debt or equity financings or other potential sources.  If the Company is unable to raise capital from external sources when required, there would be a material adverse effect on its business.  Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders. Management is now seeking an operating company with which to merge or acquire. In the foreseeable future, the Company will rely on related parties such as its controlling shareholder, to provide advances to funds general corporate purposes and any potential acquisitions of profitable investments. There is no assurance, however, that the Company will achieve its objectives or goals.

 

 

NOTE 4. RELATED PARTY TRANSACTIONS

 

During the six months ended June 30, 2018, the Company’s controlling shareholder paid expenses on behalf of the Company in the amount of $12,430. This amount has been recorded as amount due to related party. As of June 30, 2018 and December 31, 2017, the outstanding balance was $59,774 and $47,344, respectively. The balance is unsecured, non-interest bearing, and due on demand with no specified repayment schedule.

 

NOTE 5. STOCKHOLDERS’ EQUITY

 

Private Offering

 

On May 9, 2017, the Company issued 200,000 shares of common stock related to stock purchase agreements dated December 31, 2015 and January 31, 2016.

 

Cancellation of Shares

 

On October 6, 2017, two shareholders submitted three certificates for cancellation. The shares cancelled totaled 550,000.

 

NOTE 6. COMMITMENTS AND CONTINGENCIES

 

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

 

NOTE 7. INCOME TAXES

 

The Company is subject to U.S. federal tax laws. The company incurred operating losses As of June 30, 2018 and December 31, 2017. At the time of this report, management has not determined when it would generate taxable profits; accordingly, management has not recognized additional deferred tax assets for the year ended December 31, 2017 and for the six-month ended June 30, 2018.

 

The Company recorded and paid annual minimum state franchise tax which has been expensed to its result of operations for the year ended December 31, 2017.

 

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law. The Company has considered the accounting impact of the effects of the Act including a reduction in the corporate tax rate from 34% to 21% among other changes.

 

 

NOTE 8. SUBSEQUENT EVENTS

 

The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.

 

The Company has evaluated subsequent events through the date the financial statements were issued and up to the time of filing with the SEC and has determined that were no material subsequent events that came to management’s attention that required disclosure.

 

 

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 then 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.

 

On January 2, 2015, the Company’s business was 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.

 

On October 23, 2017, the Company, with the unanimous approval of its Board by written consent in lieu of a meeting, changed its name to “ECARD INC.”, effective as of October 23, 2017, pursuant to the filing of a Certificate of Amendment with the Secretary of State of Delaware.

 

On July 6, 2018, the Company made a submission with FINRA and requested a change of ticker symbol from “EVRT” to “ECRD”. The Company’s common stock is currently quoted on the OTC market (OTCPINK), under the symbol “ECRD”.

 

Sale of Operating Business

 

On February 16, 2016, The Rushcap Group, Inc. (“Rushcap”), an affiliate of Mark Shefts (then a significant shareholder), notified us that, effective March 31, 2016, it was discontinuing its funding of our wholly owned subsidiary under the Inventory Financing Agreement dated June 19, 2015.

 

On March 17, 2016, our Board approved the sale of our sole operating subsidiary, Enviromart Industries, Inc., to Michael R. Rosa, our founder and a significant shareholder, as contemplated by that certain agreement between us, Mr. Rosa and Mark Shefts, dated July 14, 2014 (“Break-up Agreement”). The Break-up Agreement was originally disclosed in our Current Report on Form 8-K filed July 18, 2014, which is incorporated herein by this reference.

 

On March 21, 2016, the Company entered into a Stock Purchase and Sale Agreement with Michael R. Rosa and Enviromart Industries, Inc., pursuant to which the Company agreed to transfer to Mr. Rosa all the issued and outstanding capital stock of Enviromart Industries, Inc.

 

In consideration for the transfer of the operating subsidiary to Mr. Rosa, Mr. Rosa surrendered to us all 13,657,500 shares of the Company’s common stock then owned by him, which shares have been returned to the status of authorized and unissued shares. In addition, Mr. Rosa and Enviromart Industries, Inc. (the Company’s former sole operating subsidiary) agreed to assume and discharge any and all of the Company’s liabilities existing as the closing date, of which there were none, as all of the Company’s operations had been conducted through Enviromart Industries, Inc.

 

 

The above described purchase and sale transaction closed on July 21, 2016, effective April 1, 2016, and was approved by a majority of the Company’s shareholders by written consent on May 4, 2016. Upon consummation of the purchase and sale transaction, the Company’s operating business has been discontinued, and it will focus on seeking to acquire an operating business with strong growth potential.

 

Upon the closing of the purchase and sale transaction, Mr. George Adyns resigned from our board of directors and all offices held by him.

 

On October 5, 2017, the Company entered into a stock purchase agreement with Eastone Equities LLC (“Eastone Equities”) and certain selling stockholders, pursuant to which Eastone Equities acquired 44,566,412 shares of common stock of the Company from Sellers for an aggregate purchase price of $295,000. The transaction contemplated in the SPA closed on October 9, 2017. The Shares represent approximately 90% of issued and outstanding shares of common stock of the Company. The transaction resulted in a change in control of the Company.

 

All of the disclosures in this Quarterly Report on Form 10-Q must be viewed in light of the disposition of our sole operating subsidiary, as our operating business has been discontinued, and the value of our company is now dependent upon our ability to locate and consummate the acquisition of an operating business with strong growth potential.

 

Results of Operations

 

For the three months ended June 30, 2018, we had a net loss of approximately $7,694 as compared to a net loss of approximately $18,168 for the three months ended June 30, 2017. The decrease in loss was due primarily to decrease in operating expenses through better budget control. This loss is not expected to recur in subsequent periods. Unless and until the Company completes the acquisition of an operating business, the Company’s expenses are expected to consist of the legal, accounting and administrative costs of maintaining a public company.

 

Recent Developments

 

On July 6, 2018, the Company made a submission with FINRA and requested a change of ticker symbol from “EVRT” to “ECRD”. The Company’s common stock is currently quoted on the OTC market (OTCPINK), under the symbol “ECRD”.

 

Critical Accounting Policies and Significant Judgments and Estimates

 

The 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:

 

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.

 

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. As of June 30, 2018, all deferred tax assets continue to be fully reserved.

 

Liquidity and Capital Resources

 

As of June 30, 2018, the Company had minimal cash.

 

As disclosed elsewhere in the Report, on October 5, 2017, we entered into a stock purchase agreement (“SPA”) with Eastone Equities, LLC. (“Eastone”) and certain selling stockholders listed on Exhibit A to that agreement, pursuant to which we transferred to Eastone 44,566,412 shares of our issued and outstanding shares for a purchase price of $295,000. The transaction contemplated in the SPA closed on October 9, 2017 (the “Closing”) and resulted in a change of control.

 

 

Simultaneously with the Closing, Ms. Wayne Tsao was appointed as the Company’s Chief Executive Officer, President and the Chairman of the Board, and Mr. Charlene Cheng was appointed as the Chief Financial Officer and a director of the Board, all became effective on October 23, 2017.

 

As a result of the closing of the SPA and the resulting change of control of the Company, the Company and its new management team is focusing on seeking to acquire an operating business with strong growth potential.

 

The value of the Company is now dependent upon management’s ability to locate and consummate the acquisition of an operating business with strong growth potential. As of the date of filing of this Report, we have minimal cash. However, prior to completing an acquisition, our expenses will consist primarily of compliance costs associated with being a public company, and we expect these compliance costs to be substantially less than they have been historically, at least until we complete an acquisition transaction.

 

If we need to raise additional funds, we intend to do so through equity and/or debt financing.

 

Going Concern Consideration

 

During the six months ended June 30, 2018, the Company has been unable to generate cash flows sufficient to support its operations and has been dependent on capital contributions made by a significant stockholder. In addition, the Company has experienced recurring net losses, and has an accumulated deficit of $1,127,613 as of June 30, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from any future operations or that funds will be available from external sources such as debt or equity financings or other potential sources. If the Company is unable to raise capital from external sources when required, there would be a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders. The Company is now seeking an operating company with which to merge or acquire. There is no assurance, however, that the Company will achieve its objectives or goals.

 

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) or 15d-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 CFO, to allow timely decisions regarding required disclosures.

 

Under the supervision and with the participation of our management, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our president and treasurer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were not effective.

 

Changes in Internal Control over Financial Reporting

 

None.

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS 

 

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

 

ITEM 1A. RISK FACTORS 

 

Not required. 

 

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

 

None. 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 

 

None. 

 

ITEM 4. MINE SAFETY DISCLOSURES 

 

Not applicable. 

 

ITEM 5. OTHER INFORMATION 

 

None 

 

ITEM 6. EXHIBITS 

 

Incorporated by Reference

Exhibit

Exhibit Description

Filed Herewith

Form

Period Ending

Exhibit

Filing Date

3.1

Certificate of Incorporation, as amended

10-Q

3.1

01/23/2015

3.2

By-Laws

10

3.2

07/09/2012

4.1

Specimen Stock Certificate

10

4.1

07/09/2012

10.6

Agreement between Mark Shefts, registrant and Michael Rosa dated July 14, 2014

10-Q

09/30/2014

10.6

11/19/2014

10.7

Amended and Restated Promissory Note with Rushcap Group effective May 29, 2015

10-Q

06/30/2015

10.7

08/14/2015

10.8

Amended and Restated Purchase Order Financing Agreement with Rushcap Group effective May 29, 2015

10-Q

06/30/2015

10.8

08/14/2015

10.9

First Amended and Restated Convertible Note with Shefts Family LP dated January 21, 2015

10-Q

03/31/2014

10.9

01/23/2015

10.10

Convertible Note with Michael R. Rosa dated January 21, 2015

10-Q

03/31/2014

10.10

01/23/2015

10.11

Stock Purchase and Sale between Registrant, Enviromart Industries, Inc. and Michael R. Rosa, dated March 21, 2016

10-K

12/31/2015

10.11

04/14/2016

10.12

Stock Purchase and Sale between Registrant, The Enviromart Companies, Inc., Eastone Equities, LLC and certain Selling Shareholders dated October 5, 2017

8-K

12/31/2017

10.1

10/13/2017

31.1

Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

X

31.2

Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

X

32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

X

32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **

X

101.INS

XBRL Instance Document

X

101.SCH

XBRL Taxonomy Extension Schema Document

X

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

X

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

X

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document

X

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

X

 

** Furnished, not filed

 

 

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.

 

	ECARD, INC.
	By:	/s/ Wayne Tsao
		Name: Wayne Tsao
		Title: CEO
		Dated: August 14, 2018

 

 

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