ITEM 1. FINANCIAL STATEMENTS
ECARD INC.
Financial Statements
June 30, 2019 and December 31, 2018
Content
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Page
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Report of Independent Registered Public Accounting Firm
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2
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Unaudited Condensed Balance Sheets
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3
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Unaudited Condensed Statements of Operations
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4
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Unaudited Condensed Statements of Cash Flows
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6
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Notes to Financial Statements
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7 - 9
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REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
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To:
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The Board of Directors and Stockholders of
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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
ECARD INC.
Condensed Balance Sheets
June 30, 2019 and December 31, 2018
(Unaudited)
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June 30,
2019
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December 31,
2018
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(Unaudited)
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LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
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Accounts payable
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14,211
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4,238
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Due to related parties
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80,017
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70,195
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Accrued liabilities
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3,020
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7,718
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Current liabilities
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97,248
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82,151
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Total liabilities
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97,248
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82,151
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Commitments and contingencies
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Stockholders’ deficiency
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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, $0.0001 par value, 250,000,000 shares authorized; 49,511,775 and 49,511,775 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
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4,951
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4,951
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Additional paid-in capital
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1,059,873
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1,059,873
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Accumulated deficit
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(1,162,072
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)
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(1,112,168
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)
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Total Stockholders’ deficiency
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(97,248
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)
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(82,151
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
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$
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-
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$
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-
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See accompanying notes to the financial statements
ECARD INC.
Condensed Statements of Operations
For the three and six months ended June
30, 2019 and 2018
(Unaudited)
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Three Months Ended
June 30,
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Six Months Ended
June 30,
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2019
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2018
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2019
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2018
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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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$
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-
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Operating expenses
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General and administrative
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7,472
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7,694
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15,097
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15,445
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Loss from operations
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(7,472
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(7,694
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(15,097
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(15,445
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Other income (expense)
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-
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-
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-
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-
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Income tax
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-
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-
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-
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-
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Net loss
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$
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(7,472
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$
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(7,694
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$
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(15,097
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$
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(15,445
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Net Loss per share of common
stock – basic and diluted
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$
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(0.00
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$
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(0.00
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$
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(0.00
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$
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(0.00
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Weighted average number of shares outstanding – basic and diluted
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49,511,775
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49,511,775
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49,511,775
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49,511,775
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See accompanying notes to these financial statements
ECARD INC.
Statements of Stockholders’ Deficiency
For the six months ended June 30, 2019 and
2018
(Unaudited)
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For the six months ended June 30, 2018
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Common Stock Issued
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Additional
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No. of
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Par
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Paid in
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Accumulated
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Shares
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Value
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Capital
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Deficit
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Total
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Balance at December 31, 2017
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49,511,775
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$
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4,951
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$
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1,059,873
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$
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(1,112,168
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$
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(47,344
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Net loss
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-
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-
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-
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$
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(15,445
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$
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(15,445
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)
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Balance at June 30, 2018
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49,511,775
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$
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4,951
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$
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1,059,873
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(1,127,613
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(62,789
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For the six months ended June 30, 2019
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Common Stock Issued
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Additional
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No. of
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Par
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Paid in
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Accumulated
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Shares
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Value
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Capital
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Deficit
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Total
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Balance at December 31, 2018
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49,511,775
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$
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4,951
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$
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1,059,873
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$
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(1,146,975
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$
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(82,151
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Net loss
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-
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-
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-
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$
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(15,097
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$
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(15,097
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Balance at June 30, 2019
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49,511,775
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$
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4,951
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$
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1,059,873
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(1,162,072
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(97,248
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ECARD INC.
Condensed Statements of Cash Flows
For the six months ended June 30, 2019 and
2018
(Unaudited)
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For
the Six Months Ended
June 30,
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2019
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2018
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Cash Flows from Operating Activities
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Net loss
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$
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(15,097
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$
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(15,445
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Adjustments to reconcile net loss to net cash used in operating activities:
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Expenses paid by shareholders
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9,822
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12,430
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Increase in accounts payable and accrued expenses
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5,275
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3,015
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Net cash used in operating activities
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-
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-
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Decrease in Cash and Cash equivalents
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-
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-
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Cash and Cash Equivalents—Beginning of Period
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-
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-
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Cash and Cash Equivalents—End of Period
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$
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-
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$
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-
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Supplemental Disclosures
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Cash paid for interest
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$
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-
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$
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-
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Cash paid for taxes
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$
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-
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$
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-
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Non-Cash Investing and Financing Activities
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Issuance of issuable shares
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$
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-
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$
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-
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See accompanying notes to these financial statements
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.
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.
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.
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.
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.
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.