REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To:
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The Board of Directors and Stockholders of
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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
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June 30,
|
|
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December 31,
|
|
|
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2018
|
|
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2017
|
|
|
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(unaudited)
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|
|
|
|
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
|
|
|
|
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Accounts payable
|
|
|
15
|
|
|
|
-
|
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Due to related parties
|
|
|
59,774
|
|
|
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47,344
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Accrued Liability
|
|
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3,000
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|
|
|
-
|
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Total Current Liabilities
|
|
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62,789
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|
|
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47,344
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|
|
|
|
|
|
|
|
|
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Total Liabilities
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|
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62,789
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|
|
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47,344
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|
|
|
|
|
|
|
|
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Stockholders’ Deficiency
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|
|
|
|
|
|
|
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Preferred stock, $0.0001 par value, 5,000,000 shares authorized; none issued and outstanding
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|
-
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|
|
-
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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
|
|
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4,951
|
|
|
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4,951
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Additional paid-in capital
|
|
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1,059,873
|
|
|
|
1,059,873
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Accumulated deficit
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|
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(1,127,613
|
)
|
|
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(1,112,168
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)
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Total Stockholders’ Deficiency
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|
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(62,789
|
)
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|
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(47,344
|
)
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|
|
|
|
|
|
|
|
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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
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|
Three Months Ended
June 30,
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|
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Six Months Ended
June 30,
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|
|
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2018
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|
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2017
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|
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2018
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|
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2017
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|
|
|
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|
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|
|
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Sales - Net
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$
|
-
|
|
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$
|
-
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|
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$
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-
|
|
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$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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General and administrative
|
|
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7,694
|
|
|
|
18,168
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|
|
|
15,445
|
|
|
|
26,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Loss from operations
|
|
|
(7,694
|
)
|
|
|
(18,168
|
)
|
|
|
(15,445
|
)
|
|
|
(26,986
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Income tax
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net loss
|
|
$
|
(7,694
|
)
|
|
$
|
(18,168
|
)
|
|
$
|
(15,445
|
)
|
|
$
|
(26,986
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net Loss per share of common stock – basic and diluted
|
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$
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(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – basic and diluted
|
|
|
49,511,775
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|
|
|
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,
|
|
|
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2018
|
|
|
2017
|
|
|
|
|
|
|
|
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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
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|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
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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.