Company Quick10K Filing
Quick10K
Ecard
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
AITB AIT Therapeutics 42
RSKIA George Risk Industries 41
SFHI Sports Field Holdings 3
FRLI Frelii 0
PRSI Portsmouth Square 0
MMEX MMEX Resources 0
AGUSA AG Acquisition Group 0
GMES G-Mes Holdings 0
ARS Aleris 0
INNO Innocap 0
ECRD 2019-06-30
Part I - Financial Information
Item 1. Financial Statements
Note 1. Organization and Description of Business
Note 2. Summary of Significant Accounting Policies
Note 3. Going Concern
Note 4. Related Party Transactions
Note 5. Stockholders' Equity
Note 6. Commitments and Contingencies
Note 7. Subsequent Events
Item 2. Management Discussion and Analysis of Financial Condition and Results of Operation
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 f10q0619ex31-1_ecard.htm
EX-31.2 f10q0619ex31-2_ecard.htm
EX-32.1 f10q0619ex32-1_ecard.htm
EX-32.2 f10q0619ex32-2_ecard.htm

Ecard Earnings 2019-06-30

ECRD 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 f10q0619_ecardinc.htm QUARTERLY REPORT

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

Mark One

 

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

 

For the quarterly period ended June 30, 2019

 

or

 

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

 

For the transition period from ______ to _______

 

COMMISSION FILE NO. 000-54758

 

ECARD INC.
(Exact name of registrant as specified in its charter)

  

Delaware    45-5529607
(State or other jurisdiction 
of incorporation)
   (IRS Employer 
Identification No.)
     

6141 186th Street, Suite 688

Fresh Meadows, NY

   11365
(Address of principal executive offices)    (Zip Code)

  

201-782-0889

(Telephone number of principal executive offices)

 

 N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
N/A        

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted every Interactive Data 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, smaller reporting company, or an emerging growth company. See definitions 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 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 ☐

  

As of August 6, 2019, there were 49,511,775 shares of common stock, $0.0001 par value outstanding.

 

 

 

 

 

 

TABLE OF CONTENTS

Index to Form 10-Q

 

 

PART I.    
     
ITEM 1. Financial Statements (unaudited) 1
     
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 13
     
PART II.    
     
ITEM 1. Legal Proceedings 14
     
ITEM 1A. Risk Factors 14
     
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 14
     
ITEM 3. Defaults Upon Senior Securities. 14
     
ITEM 4. Mine Safety Disclosures. 14
     
ITEM 5. Other Information. 14
     
ITEM 6. Exhibits 14
     
Signatures   15

 

i

 

  

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. Forward-looking statements may appear throughout this report and other documents we file with the Securities and Exchange Commission (SEC), including without limitation, the following sections: Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q.

 

Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "may," "could," "will likely result," and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

 

ii

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

ECARD INC.

Financial Statements

June 30, 2019 and December 31, 2018

  

Content   Page
     
Report of Independent Registered Public Accounting Firm   2
     
Unaudited Condensed Balance Sheets   3
     
Unaudited Condensed Statements of Operations   4
     
Unaudited Condensed Statements of Cash Flows   6
     
Notes to Financial Statements   7 - 9

  

1

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To:The Board of Directors and Stockholders of

ECARD INC.

 

Results of Review of Financial Statements

 

We have reviewed the accompanying condensed balance sheet of ECARD INC. as of June 30, 2019, the related condensed statements of operations for the three and six month periods ended June 30, 2019 and 2018, and the condensed statements of cash flows for the six month periods ended June 30, 2019 and 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, 2018, 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 21, 2019, 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, 2018 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 regarding 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 6, 2019

 

 

2

 

 

ECARD INC.

Condensed Balance Sheets

June 30, 2019 and December 31, 2018

(Unaudited)

 

  

June 30,

2019

   December 31,
2018
 
   (Unaudited)     
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY          
           
Accounts payable   14,211    4,238 
Due to related parties   80,017    70,195 
Accrued liabilities   3,020    7,718 
Current liabilities   97,248    82,151 
           
Total liabilities   97,248    82,151 
           
Commitments and contingencies          
           
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, 2019 and December 31, 2018, respectively   4,951    4,951 
Additional paid-in capital   1,059,873    1,059,873 
Accumulated deficit   (1,162,072)   (1,112,168)
Total Stockholders’ deficiency   (97,248)   (82,151)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY  $-   $- 

 

See accompanying notes to the financial statements

 

3

 

 

ECARD INC.

Condensed Statements of Operations

For the three and six months ended June 30, 2019 and 2018

(Unaudited)

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2019   2018   2019   2018 
                 
Sales - Net  $-   $-   $-   $- 
                     
Operating expenses                    
General and administrative   7,472    7,694    15,097    15,445 
                     
Loss from operations   (7,472)   (7,694)   (15,097)   (15,445)
                     
Other income (expense)   -    -    -    - 
                     
Income tax   -    -    -    - 
                     
Net loss  $(7,472)  $(7,694)  $(15,097)  $(15,445)
                     

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    49,511,775    49,511,775    49,511,775 

 

See accompanying notes to these financial statements

 

4

 

 

ECARD INC.

Statements of Stockholders’ Deficiency

For the six months ended June 30, 2019 and 2018

(Unaudited)

 

   For the six months ended June 30, 2018 
   Common Stock Issued   Additional         
   No. of   Par   Paid in   Accumulated     
   Shares   Value   Capital   Deficit   Total 
Balance at December 31, 2017   49,511,775   $4,951   $1,059,873   $(1,112,168)  $(47,344)
Net loss   -    -    -   $(15,445)  $(15,445)
Balance at June 30, 2018   49,511,775   $4,951   $1,059,873    (1,127,613)   (62,789)

  

   For the six months ended June 30, 2019 
   Common Stock Issued   Additional         
   No. of   Par   Paid in   Accumulated     
   Shares   Value   Capital   Deficit   Total 
Balance at December 31, 2018   49,511,775   $4,951   $1,059,873   $(1,146,975)  $(82,151)
Net loss   -    -    -   $(15,097)  $(15,097)
Balance at June 30, 2019   49,511,775   $4,951   $1,059,873    (1,162,072)   (97,248)

  

5

 

 

ECARD INC.

Condensed Statements of Cash Flows

For the six months ended June 30, 2019 and 2018

(Unaudited)

 

  

For the Six Months Ended
June 30,

 
   2019   2018 
         
Cash Flows from Operating Activities        
Net loss  $(15,097)  $(15,445)
Adjustments to reconcile net loss to net cash used in operating activities:          
Expenses paid by shareholders   9,822    12,430 
Increase in accounts payable and accrued expenses   5,275    3,015 
Net cash used in operating activities   -    - 
           
Decrease in Cash and Cash equivalents   -    - 
           
Cash and Cash Equivalents—Beginning of Period   -    - 
Cash and Cash Equivalents—End of Period  $-   $- 
           
Supplemental Disclosures          
Cash paid for interest  $-   $- 
Cash paid for taxes  $-   $- 
           
Non-Cash Investing and Financing Activities          
    Issuance of issuable shares  $-   $- 

 

See accompanying notes to these financial statements

 

6

 

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

ECARD INC. (the “Company”), formerly known as The Enviromart Companies, Inc. until October 23, 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 acquired 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.

 

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 Certificate of Amendment (the “Second Certificate of Amendment”) with the Secretary of State of Delaware. As a result of the Second Certificate of Amendment, the Company changed its name to “ECARD INC.”, effective as of October 23, 2017.

 

Currently, the Company only possesses minimal assets and liabilities, and did not have any substantial business operations; accordingly, there were no significant revenues or positive cash flows for the three months ended June 30, 2019. 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 three months ended June 30, 2019 and 2018 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, 2019, the results of its operations for the three and six months ended June 30, 2019 and 2018, and its cash flows for the six months ended June 30, 2019 and 2018. 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, 2018 has been derived from the Company’s audited financial statements included in the Form 10-K for the year ended December 31, 2018.

 

The statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (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, 2018, 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.

 

7

 

 

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, 2019, and 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

 

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 3. GOING CONCERN

 

During the six months ended June 30, 2019, the Company has been unable to generate cash flows sufficient to support its operations and has been dependent on capital contributions 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 $1,162,072, and working capital deficit of $97,248 as of June 30, 2019.  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.

 

8

 

 

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, 2019, the Company’s shareholder paid expenses on behalf of the Company in the amount of $9,821. This amount has been recorded as amount due to related party. As of June 30, 2019 and December 31, 2018, the outstanding balance was $80,017 and $70,195, respectively. The balance is unsecured, non-interest bearing, and due on demand with no specified repayment schedule.

 

NOTE 5. STOCKHOLDERS’ EQUITY

 

Shares issued and outstanding

 

As of June 30, 2019 and December 31, 2018, there were 49,511,775 and 49,511,775 shares issued and outstanding, respectively.

 

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. 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 Securities and Exchange Commission and has determined that were no material subsequent events that came to management’s attention that required disclosure.

 

9

 

 

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

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 January 2, 2015, the Company’s business was operated through its wholly-owned subsidiary, Enviro Pack Technologies, Inc. Effective on or about January 15, 2015, the Company changed its name to The Enviromart Companies, Inc. 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, has changed its name to “ECARD INC.”, effective as of October 23, 2017, pursuant to the filing of the Second Certificate of Amendment with the Secretary of State of Delaware.

  

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. Rushcap reserved the right to discontinue the funding prior to March 31, 2016, if it so determined. The discontinuation of funding will have a material adverse effect on our business, financial condition and results of operation, as we did not believe that we would be able to timely secure funding to replace the discontinued Inventory Financing.

 

In light of the discontinuation of funding, our Board spent approximately one month assessing the operating company’s current business and funding prospects, including whether to transfer the operating subsidiary to Michael R. Rosa, our founder and a significant shareholder, in accordance with that certain Agreement between the Company, Mr. Rosa and Mr. Shefts, dated July 14, 2014 (“Break-up Agreement”). The Break-up Agreement was disclosed in the Company’s Current Report on Form 8-K filed July 18, 2014, which is incorporated herein by this reference.

 

Our Board concluded that the discontinuation of funding would have a material adverse effect on our business, financial condition and results of operation, as it did not believe that it would be able to timely secure funding to replace the discontinued Inventory Financing.

 

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, we entered into a Stock Purchase and Sale Agreement with Michael R. Rosa and Enviromart Industries, Inc., our sole operating subsidiary, pursuant to which we transferred 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, he 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 Companies former 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 have been conducted through Enviromart Industries, Inc. (its sole operating subsidiary).

 

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 and all offices held by him.

 

On October 5, 2017, the Company entered the SPA with 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 common stocks of the Company. The transaction has resulted in a change in control of the Company.

 

10

 

 

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”.

 

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 quarter ended June 30, 2019, we had net loss of $7,472 as compared to a net loss of $7,694 for the year ended June 30, 2018. 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.

 

General and Administrative Expenses

 

General and administrative expenses were $7,472 for the quarter ended June 30, 2019 as compared to $7,694 for the quarter ended June 30, 2018. General and administrative expenses consist primarily of professional fees.

 

Recent Developments

 

None.

 

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:

 

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, 2019, all deferred tax assets continue to be fully reserved.

 

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Liquidity and Capital Resources

 

As of June 30, 2019, the Company had minimal cash.

 

As disclosed elsewhere in the Report, on October 5, 2017, we entered into a SPA with Eastone Equities, LLC. (“Eastone”) and certain selling stockholders listed in the Exhibit A of the SPA, 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, Mr. Wayne Tsao was appointed as the Company’s Chief Executive Officer, President and the Chairman of the Board, and Ms. 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 change of control, the Company with new management team is focusing on seeking to acquire an operating business with strong growth potential.

 

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. 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. Also, as noted above, we have issued stock in exchange for office space and all other services needed to maintain the company as a public company with respect to calendar year 2017.

 

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, 2019, 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 $1,162,072 as of June 30, 2019. 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 SK.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

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ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Control and Procedures

 

Under the supervision and with the participation of our management, including our president 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 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, based on having insufficient resources to establish an effective control and procedures environment during the first quarter of 2019. Although we do have a subcontracted outside accountant, there is not enough personnel to establish proper controls and procedures with checks and balances at this time.

 

A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. We believe our disclosure on controls and procedures are designed to provide reasonable assurance of achieving their objectives and our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective.

 

Changes in Internal Controls over Financial Reporting

 

There have been no changes in the Company’s internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

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PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

ITEM 1A. RISK FACTORS.

 

Not applicable to a smaller reporting company.

 

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

 

There were no issuance of options or shares, registered or not, during three-month period ended June 30, 2019.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

No senior securities were issued and outstanding during the three-month period ended June 30, 2019.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable to our Company.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

Exhibit 
Number
  Description
3.1*   Certificate of Incorporation, as amended (Incorporated by reference to the Form 10-Q, Exhibit 3.1, filed on January 23, 2015)
     
3.2*   Bylaws (Incorporated by reference to the Form 10, Exhibit 3.2, filed on July 9, 2012)
     
4.1*   Specimen Stock Certificate (Incorporated by reference to the Form 10, Exhibit 4.1, filed on July 9, 2012)
     
31.1**   Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).
     
31.2**   Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
     
32.1***   Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
     
32.2***   Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
     
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema
101.CAL   XBRL Taxonomy Extension Calculation Linkbase
101.DEF   XBRL Taxonomy Extension Definition Linkbase
101.LAB   XBRL Taxonomy Extension Label Linkbase
101.PRE   XBRL Taxonomy Extension Presentation Linkbase

 

* Previously filed
** Filed herewith
*** In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act.

 

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SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

 

  ECARD, INC.
   
Dated: August 6, 2019 By: /s/ Wayne Tsao
    Wayne Tsao
    Chairman, President and CEO

 

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