UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________
to __________________
Commission File Number: 000-54758
ECARD INC.
(Exact name of issuer as specified in its
charter)
Delaware
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45-5529607
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(State or Other Jurisdiction of
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(I.R.S. Employer I.D. No.)
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incorporation or organization)
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6141 186
th
Street, Suite 688
Fresh Meadows, NY, 11365
(Address of Principal Executive Offices)
201-782-0889
(Registrant’s Telephone Number, Including
Area Code)
Securities registered pursuant to Section
12(g) of the Exchange Act
:
Common stock, $0.0001 par value
.
Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No ☒
Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No ☒
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 every Interactive Data File required to be submitted 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
such files).
Yes ☒ No ☐
Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s
knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. ☒
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 the 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 ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☐
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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 June 30, 2018, the registrant’s
most recently completed second fiscal quarter, the aggregate market value of the common stock held by non-affiliates of the registrant
was approximately $21,785,181, based upon the closing price of the registrant’s common stock as reported on the OTC market
on such date. Because there is no active trading market for the Company’s common stock, the Company does not believe that
the quoted price of its common stock is indicative of the actual value of such stock.
As of March 21, 2019, there were 49,511,775
shares, $0.0001 par value, of common stock outstanding.
TABLE OF CONTENTS
FORWARD LOOKING STATEMENTS
This report includes forward-looking statements.
These forward-looking statements are often identified by words such as “may,” “will,” “should,”
“could,” “would,” “expect,” “intend,” “plan,” “anticipate,”
“believe,” “estimate,” “project,” “predict,” “potential” and similar
expressions. These statements are only predictions and involve estimates, assumptions and uncertainties that could cause actual
results to differ materially from those expressed. You should not place any undue reliance on these forward-looking statements.
You should be aware that our actual results
could differ materially from those contained in forward-looking statements due to a number of factors, includi
ng
our ability to:
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execute
our business plan, namely identifying profitable acquisition opportunities, given our
limited financial resources
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generate
sufficient cash flow from our planned operations or other sources to fund our working
capital needs, pending completion of an acquisition;
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The
forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities
laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on
which the s
tatement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact
of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements. References in this report to the “Company,” “we,”
“our,” and “us” refer to the registrant, ECARD INC.
PART I
ITEM 1. Business
Our Company
ECARD INC (the “Company” or
“we” or “us”) formerly known as the Enviromart Companies, Inc., was incorporated under the laws of the
State of Delaware on June 18, 2012. On June 21, 2013, the Company completed an acquisition of intangible assets comprised of intellectual
property and trademarks from its former Chief Executive Officer. In conjunction with the acquisition of the intangible assets,
the Company commenced operations.
As of 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, Inc. and the Company’s wholly-owned subsidiary, EnviroPack Technologies,
Inc., changed its name to Enviromart Industries, Inc. (“Enviromart Industries”). The Company’s other wholly owned
subsidiaries are currently inactive.
On October 23, 2017, the Company, changed
its name to “ECARD INC.”.
Sale of Operating Business
On February 16, 2016, The Rushcap Group,
Inc. (“Rushcap”), an affiliate of Mark Shefts (then a significant shareholder of the Company), 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 21, 2016, the Company entered
into a Stock Purchase and Sale Agreement with Michael R. Rosa, our founder and a significant shareholder of the Company, and Enviromart
Industries, Inc., the Company’s sole operating subsidiary, pursuant to which the Company agreed to transfer to Mr. Rosa all
the issued and outstanding capital stock of Enviromart Industries, Inc.
On March 17, 2016, our Board approved the
sale of our sole operating subsidiary, Enviromart Industries, to Michael R. Rosa, our founder and a significant shareholder of
the Company, as contemplated by that certain Agreement among the Company, 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, our sole operating subsidiary, pursuant to which we
transferred to Mr. Rosa all the issued and outstanding capital stock of Enviromart Industries.
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 were returned to the status of authorized and unissued shares. In addition, Mr. Rosa and Enviromart Industries
agreed to assume and discharge any and all of the Company’s liabilities existing as the closing date, of which there was
none, as all of the Company’s operations have been conducted through Enviromart Industries (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. As a result of the completion of the purchase and sale transaction, the Company’s operating business
has been discontinued, and it is focusing on seeking to acquire an operating business with strong growth potential.
On October 5, 2017, the Company entered
into a Stock Purchase Agreement (the “Eastone SPA”) with Eastone Equities, LLC, a New York limited liability company
(“Eastone Equities”) and certain selling stockholders (the “Sellers”), pursuant to which Eastone Equities
acquired 44,566,412 shares of common stock of the Company (the “Shares”) from Sellers for an aggregate purchase price
of $295,000. The transaction contemplated by the Eastone SPA closed on October 9, 2017. The Shares represented approximately 90%
of issued and outstanding shares of common of the Company. The transaction resulted in a change in control of the Company. Effective
as of October 23, 2017, the Company changed its name to “ECARD INC.”
Following the closing of the transactions
set forth in the Eastone SPA, the Company now has only minimal assets and liabilities. Its operations are focused on seeking to
acquire an 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.
We are now considered a blank check company.
The SEC defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section
3 (a)(51) of the Exchange Act, and that has no specific business plan or purpose, or has indicated that its business plan is to
merge with an unidentified company or companies.” Under SEC Rule 12b-2 under the Securities Act of 1933, as amended (the “Securities
Act”), we also qualify as a “shell company,” because we have no or nominal assets (other than cash) and no or nominal
operations. Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check”
companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in
our securities, either debt or equity, until we have successfully concluded a business combination. We intend to comply with the
periodic reporting requirements of the Exchange Act for so long as we are subject to those requirements.
Our current business plan is to attempt
to identify and negotiate with a business target for the merger of that entity with and into the Company. In certain instances,
a target company may wish to become a subsidiary of the Company or may wish to contribute or sell assets to the Company rather
than to merge. No assurances can be given that the Company will be successful in identifying or negotiating with any target company.
We seek to provide a method for a foreign or domestic private company to become a reporting or public company whose securities
are qualified for trading in the United States secondary markets.
A business combination with a target company
normally will involve the transfer to the target company of the majority of the issued and outstanding common stock of the Company,
and the substitution by the target company of its own management and Board. No assurances can be given that the Company will be
able to enter into a business combination, or, if the Company does enter into such a business combination, no assurances can be
given as to the terms of a business combination, or as to the nature of the target company.
Employees
The Company’s only employees at the
present time are its officers and directors, who will devote as much time as the Board determines is necessary to carry out the
affairs of the Company.
Available Information
The public may read and copy any materials
we file with the Securities and Exchange Commission (“SEC”), including our Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K, and all amendments to the foregoing, at the SEC’s Public Reference Room at 100
F St., NE, Washington, DC 20549, on official business days during the hours of 10 AM to 3 PM. The public may obtain information
on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov)
that contains periodic and current reports, proxy and information statements, and other information regarding the Company and other
issuers that file electronically with the SEC.
ITEM 1A. Risk Factors
Smaller reporting companies are not required to provide the
information required by this Item 1A.
ITEM 1B. Unresolved Staff Comments
None.
ITEM 2. Properties
We currently maintain our corporate offices at 6141 186
th
Street, Suite 688, Fresh Meadows, NY, 11365.
We do not pay rent for this space because
we are sharing this office space with our friend. There is no lease agreement and compensation for the office space is not required.
We believe that this space will be sufficient until we start generating revenues and need to hire employees.
ITEM 3. Legal Proceedings
There are no pending legal proceedings
to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially
of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a
material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
ITEM 4. Mine Safety Disclosures
Not applicable.
PART II
ITEM 5: Market for Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is quoted in the OTC market
(OTCPINK) under the symbol “ECRD”. The following table sets forth the high and low sales prices as reported on the
OTC market. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent
actual transactions.
FISCAL YEAR 2018
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HIGH
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LOW
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First Quarter
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$
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1.5
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$
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0.25
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Second Quarter
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$
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1.00
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$
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0.35
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Third Quarter
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$
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0.75
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$
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0.35
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Fourth Quarter
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$
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0.75
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$
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0.22
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FISCAL YEAR 2017
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HIGH
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LOW
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First Quarter
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$
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0.25
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$
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0.25
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Second Quarter
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$
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0.25
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$
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0.25
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Third Quarter
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$
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0.25
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$
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0.12
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Fourth Quarter
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$
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0.45
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$
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0.12
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Our common stock last opened at $0.3560 on
March 21, 2019. However, currently, there is no active public trading market for our shares.
The sale of “restricted securities”
(common stock) pursuant to Rule 144 of the SEC by members of management or any other person to whom any such securities may be
issued in the future may have a substantial adverse impact on any such public market. For information regarding the requirements
for re-sales under Rule 144, see the heading “Rule 144” below.
Holders
As of March 21, 2019 we had approximately
68 shareholders of record. We believe that additional beneficial owners of our common stock hold shares in street name.
Dividends
We have not declared any cash dividends
with respect to our common stock and do not intend to declare dividends in the foreseeable future. Our future dividend policy cannot
be ascertained with any certainty, and unless and until we complete any acquisition, reorganization or merger, no such policy will
be formulated. There are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our securities.
Securities Authorized for Issuance under
Equity Compensation Plans
None; not applicable.
Recent Sales of Unregistered Securities
None.
Purchase of Equity Securities by the Issuer and Affiliated
Purchasers.
None.
Use of Proceeds of Registered Securities;
Use of Proceeds from Registered Securities
Not applicable.
ITEM 6: Selected Financial Data
Not applicable to a smaller reporting company.
ITEM 7: Management’s Discussion
and Analysis of Financial Condition and Results of Operations.
Forward-looking Statements
Statements made in this Annual Report which
are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations,
financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability
to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,”
“could,” “should,” “expects,” “projects,” “anticipates,” “believes,”
“estimates,” “plans,” “intends,” “targets” or similar expressions.
Forward-looking statements involve inherent
risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ
materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions,
nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or
regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles,
policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental,
regulatory and technical factors affecting our current or potential business and related matters.
Accordingly, results actually achieved
may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are
made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events
or circumstances occurring after the date of such statements.
Overview
On June 21, 2013, the Company completed
the acquisition of certain assets from Michael R. Rosa, its chief executive officer, and commenced business operations. Since completing
the acquisition, the Company has raised capital, hired employees, leased space, engaged consultants and advisors, conducted extensive
sales and marketing related activities both domestically and internationally, negotiated vendor relationships and engaged seller’s
representatives.
As of 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, 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
into 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 Annual Report
on Form 10-K 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 year ended December 31, 2018, we had net loss of $34,807
as compared to a net loss of $79,971 for the year ended December 31, 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.
General and Administrative Expenses
General and administrative expenses were
$34,807 for the year ended December 31, 2018 as compared to $79,071 for the year ended December 31, 2017. General and administrative
expenses consist primarily of professional fees.
Loss from Continuing Operations
Loss from continuing operations was $34,807
during the year ended December 31, 2018, as compared to $79,071 during the year ended December 31, 2017. This decrease was primarily
attributable to a decrease in professional fees for the year ended December 31, 2018.
Recent Developments
None.
Liquidity and Capital Resources
As of December 31, 2018, the Company had
minimal cash.
As disclosed elsewhere in this Annual Report
on Form 10-K, 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 the selling shareholders transferred
to Eastone 44,566,412 shares of our issued and outstanding common stock 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, effective as of October 23, 2017.
As a result of the 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 Annual Report on Form 10-K, 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
The Company incurred losses from continuing
operations of $34,807 and $79,971 for the years ended December 31, 2018 and 2017, respectively, and had working capital deficit
of $82,151 at December 31, 2018. In addition, the Company had no net cash flows from operating activities for the year ended December
31, 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 operations or that funds will be available from external
sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability
to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail
or cease operations and would, therefore, have 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.
ITEM 7A: Quantitative and Qualitative
Disclosures about Market Risk
Disclosure in response to this item is not required of a smaller
reporting company.
ITEM 8: Financial Statements and Supplementary Data
The consolidated financial statements of the Company are included
in this Annual Report on Form 10-K beginning on page F-1, which are incorporated herein by reference.
ITEM 9: Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
ITEM 9A: Controls and Procedures
Disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed
or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules
and forms adopted by the Securities and Exchange Commission, and that such information is accumulated and communicated to management,
including the president and secretary, to allow timely decisions regarding required disclosures.
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 Annual Report, our disclosure controls and procedures were not effective,
based on having insufficient resources to establish an effective control and procedures environment during 2018. 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 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.
Management’s Annual Report on
Internal Control over Financial Reporting
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective
can provide only reasonable assurance of achieving their control objectives.
Our President evaluated the effectiveness
of our internal control over financial reporting as of December 31, 2018. In making this assessment, our management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated
Framework (2013). Based on this evaluation, our President concluded that, as of December 31, 2018, our internal control over financial
reporting were not effective, based on having insufficient resources to establish an effective control environment during 2018.
Attestation Report of the Registered
Public Accounting Firm
This Annual Report does not include an
attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules
of the Security and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.
Changes in Internal Control over Financial
Reporting
During the year covered by this report,
there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act)
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B: Other Information
None.
PART III
ITEM 10: Directors, Executive Officers, and Corporate Governance
Directors and Executive Officers
NAME
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AGE
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POSITION(S)
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Wayne Tsao
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38
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Director, Chairman, Chief Executive Officer and President
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Charlene Cheng
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40
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Director, Chief Financial Officer
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Mr. Wayne Tsao, age 38, has extensive experience
in the Financial Industry. From 2013 to 2015, he worked in Provider Relation Department of Centerlight Healthcare System. In 2012,
Mr. Tsao worked for First Data Corporation, one of the largest credit card processing acquirers in the U.S. In 2015, Mr. Tsao served
as the COO of Vergepay, a startup company that he has been worked with since its inception. While served as the COO of Vergepay,
Mr. Tsao also worked for Sigue Corporation, a money transfer, remittance, and bill payment services provider. Mr. Tsao obtained
his Bachelor of Arts in Psychology from State University of New York at Stony Brook. Mr. Tsao does not have any family relationship
with any director or executive officer of the Company and has not been involved in any transaction with the Company during the
past two years that would require disclosure under Item 404(a) of Regulation S-K.
Ms. Charlene Cheng, age40, is a veteran in
the Financial Industry. She currently serves as the Chief Financial Officer of Eastone Capital LLC, a full service real estate
investment company. From 2007 to 2014, she was a senior associate of Deloitte Financial Advisory Services. From 2005 to 2007,
she was the Asset Manager of Related Management. Ms. Cheng obtained her Bachelor of Art in Economics from National Tsing Hua University
and her Master of Business Administration from Case Western Reserve University. Ms. Cheng does not have any family relationship
with any director or executive officer of the Company and has not been involved in any transaction with the Company during the
past two years that would require disclosure under Item 404(a) of Regulation S-K.
Significant Employees
We do not have significant employees who are not our executive
officers or directors.
Family Relationships
There are no family relationships between
our officers and directors.
Involvement in Certain Legal Proceedings
During the past 10 years, to our knowledge,
except as described below, none of our present or former directors, executive officers or persons nominated to become directors
or executive officers has been the subject of any of the following:
(1) A petition under the federal bankruptcy
laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court
for the business or property of such person, or any partnership in which he was a general partner at or within two (2) years before
the time of such filing, or any corporation or business association of which he was an executive officer at or within two (2) years
before the time of such filing;
(2) Such person was convicted in a criminal
proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) Such person was the subject of any
order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining him or her from, or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant,
introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other
person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment
adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company,
bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with
such activity;
(ii) Engaging in any type of business practice;
or
(iii) Engaging in any activity in connection
with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws
or Federal commodities laws;
(4) Such person was the subject of any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending
or otherwise limiting for more than sixty (60) days the right of such person to engage in any activity described in paragraph (3)(i)
above, or to be associated with persons engaged in any such activity;
(5) Such person was found by a court of
competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in
such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated;
(6) Such person was found by a court of
competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities
law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated;
(7) Such person was the subject of, or
a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended
or vacated, relating to an alleged violation of:
(i) Any federal or state securities or
commodities law or regulation; or
(ii) Any law or regulation respecting financial
institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or
restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
(iii) Any law or regulation prohibiting
mail or wire fraud or fraud in connection with any business entity; or
(8) Such person was the subject of, or
a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined
in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity
Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority
over its members or persons associated with a member.
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.
On or about August 12, 2014, we received
a Notice of Debarment from the US Defense Logistics Agency (“DLA”) (the “Notice”). The Notice (i) prevents
us from bidding on new government contracts and (ii) precludes the renewal of any existing contract that is otherwise renewable.
The Notice was issued to us because our then CEO (who was also a significant shareholder of our company) is affiliated with a company
that is alleged to have sold products to the DLA that did not conform to the applicable contract. The DLA has not alleged any wrongdoing
whatsoever with respect to our company or its contracts with the DLA.
On November 3, 2014, the Company filed
a letter with DLA opposing the proposed notice of debarment based on the alleged affiliation with the other company.
We have since received notification from
the DLA stating that our appeal was reviewed and denied. As a result, we are not able to bid on any new US government contracts
that might otherwise be of interest to us. Currently, we do not plan to bid on any new US government contracts.
Compliance with Section 16(a) of the Exchange Act
The common stock of the Company is registered under the Exchange
Act, and therefore, the officers, directors and holders of more than 10% of our outstanding shares are subject to the provisions
of Section 16(a) which requires them to file with the SEC initial reports of ownership and reports of changes in ownership of common
stock and our other equity securities. Officers, directors and greater than 10% beneficial owners are required by SEC regulations
to furnish us with copies of all Section 16(a) reports they file. Based solely upon review of the copies of such forms furnished
to us during the fiscal year ended December 31, 2018, there were no untimely filings of Section 16(a) reports.
Board Committees
The Company currently has not established
any committees of the Board of Directors. Our Board of Directors may designate from among its members an executive committee and
one or more other committees in the future. We do not have a nominating committee or a nominating committee charter. Further, we
do not have a policy with regard to the consideration of any director candidates recommended by security holders. To date, other
than as described above, no security holders have made any such recommendations. The entire Board of Directors performs all functions
that would otherwise be performed by committees. Given the present size of our board, it is not practical for us to have committees.
If we are able to grow our business and increase our operations, we intend to expand the size of our board and allocate responsibilities
accordingly.
Code of Ethics
As of yet, we have not adopted a corporate
code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller,
or persons performing similar functions.
Nominating Committee
We have not established a Nominating Committee
because, given that we presently have only one director and one executive officer, we believe that we are able to effectively manage
the issues normally considered by a Nominating Committee.
If we do establish a Nominating Committee,
we will disclose this change to our procedures in recommending nominees to our Board.
Audit Committee
We have not established an Audit Committee
because, given that we presently have only one director and one executive officer, we believe that we are able to effectively manage
the issues normally considered by an Audit Committee.
ITEM 11: Executive Compensation
No current or prior officer or director has received any remuneration
or compensation from the Company in the past fiscal year, nor has any member of the Company’s management been granted any
option or stock appreciation right. Accordingly, no tables relating to such items have been included within this Item 11. None
of our employees is subject to a written employment agreement nor has any officer received a cash salary since our founding. The
Company has no agreement or understanding, express or implied, with any director, officer or principal stockholder, or their affiliates
or associates, regarding compensation in the form of salary, bonuses, stocks, options, warrants or any other form of remuneration,
for services performed on behalf of the Company. Nor are there compensatory plans or arrangements, including payments to any officer
in relation to resignation, retirement, or other termination of employment, or any change in control of the Company, or a change
in the officer’s responsibilities following a change in control of the Company.
ITEM 12: Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters
Security Ownership of Certain Beneficial
Owners
The following table sets forth the ownership
by (i) any person known to us to be the beneficial owner of more than five percent (5%) of any of our outstanding voting securities
and (ii) members of our management as of December 31, 2018. Beneficial ownership is determined in accordance with the rules of
the SEC and generally includes voting or investment power with respect to securities. The persons named in the table below have
sole voting power and investment power with respect to all shares of common stock shown as beneficially owned by them. The percentage
of beneficial ownership is based upon 49,511,775 shares of common stock outstanding at that date.
Beneficial Owners
Name and Address of
Beneficial Owner
|
|
Title of
Class
|
|
Amount and Nature of
Beneficial Ownership
|
|
Percent of Class
|
|
Eastone Equities LLC
|
|
Common Stock
|
|
|
44,566,412
|
|
|
Direct (1)
|
|
|
90
|
%
|
(1)
|
Held of record by Kevin Wai Yam Yu, who is the sole manager and member.
|
SEC Rule 13d-3 generally provides that
beneficial owners of securities include any person who, directly or indirectly, has or shares voting power and/or investment power
with respect to such securities, and any person who has the right to acquire beneficial ownership of such security within 60 days.
Any securities not outstanding which are subject to such options, warrants or conversion privileges exercisable within 60 days
are treated as outstanding for the purpose of computing the percentage of outstanding securities owned by that person. Such securities
are not treated as outstanding for the purpose of computing the percentage of the class owned by any other person. At the present
time there are no outstanding options or warrants.
Changes in Control
None.
Securities Authorized for Issuance under Equity Compensation
Plans
None.
ITEM 13: Certain Relationships and Related Party Transactions,
and Directors Independence
Transactions with Related Persons
During the year ended December 31, 2018,
the Company’s current controlling shareholder paid expenses on behalf of the Company in the amount of $22,850. This amount
has been recorded as amount due to related party. As of December 31, 2018, and 2017, the outstanding balance was $70,195 and $47,344,
respectively. The balance is unsecured, non-interest bearing, and due on demand with no specified repayment schedule.
Promoters and Certain Control Persons
See the heading “Transactions with
Related Persons” above.
Director Independence
Currently, we have no independent directors
serving on our Board of Directors.
ITEM 14: Principal Accounting Fees
and Services
The following table shows the fees that
were billed for the audit and other services for 2018 and 2017.
|
|
2018
|
|
|
2017
|
|
Audit Fees
|
|
$
|
16,000
|
|
|
$
|
34,405
|
|
Audit-Related Fees
|
|
|
-
|
|
|
|
-
|
|
Tax Fees
|
|
|
-
|
|
|
|
-
|
|
All Other Fees
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
16,000
|
|
|
$
|
34,405
|
|
Audit Fees
— This category
includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form
10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements
for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of,
the audit or the review of Interim financial statements.
Audit-Related Fees
—
This category consists of assurance and related services by the independent registered public accounting firm that is reasonably
related to the performance of the audit or review of our financial statements and is not reported above under “Audit Fees.”
The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and
Exchange Commission and other accounting consulting.
Tax Fees
— This category
consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice.
The services for the fees disclosed under this category include tax return preparation and technical tax advice.
All Other Fees
— This category consists of
fees for other miscellaneous items.
Our Board of Directors has adopted a procedure
for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board
approves the engagement letter with respect to audit and review services. Other fees are subject to pre-approval by the Board,
or, in the period between meetings, by a designated member of Board. Any such approval by the designated member is disclosed
to the entire Board at the next meeting. The audit fees that were paid to the auditors with respect to 2018 were pre-approved by
the entire Board of Directors.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
|
(1)
|
All financial statements
|
Content
|
|
Page
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
F-3
|
|
|
|
Balance Sheets
|
|
F-4
|
|
|
|
Statements of Operations
|
|
F-5
|
|
|
|
Statements of Stockholders’ Deficiency
|
|
F-6
|
|
|
|
Statements of Cash Flows
|
|
F-7
|
|
|
|
Notes to Financial Statements
|
|
F-8 – F-11
|
ECARD INC.
(f/k/a/ The Enviromart Companies, Inc.)
Financial Statements
As of and for the years ended December 31, 2018
and 2017
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
|
To:
|
The Board of Directors and Stockholders of
|
ECARD INC. (f/k/a/ The Enviromart Companies,
Inc.)
Opinion on the Financial Statements
We have audited the accompanying balance
sheets of ECARD INC. (the Company) as of December 31, 2018 and 2017, and the related statements of operations, stockholders’
deficiency, and cash flows for each of the two years in the period ended December 31, 2018, and the related notes (collectively
referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each
of the two years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United
States of America.
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 year, 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 Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based
on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (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 audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required
to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
WWC, P.C.
Certified Public Accountants
San Mateo, CA
March 21, 2019
We have served as the Company’s auditor
since November 2, 2017
ECARD INC.
Balance Sheets
December 31, 2018 and 2017
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
4,238
|
|
|
|
-
|
|
Due to related parties
|
|
|
70,195
|
|
|
|
47,344
|
|
Accrued liabilities
|
|
|
7,718
|
|
|
|
-
|
|
Current liabilities
|
|
|
82,151
|
|
|
|
47,344
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
82,151
|
|
|
|
47,344
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ deficiency
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; none issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.0001 par value, 250,000,000 shares authorized; 49,511,775 and 49,511,775 shares issued and outstanding at December 31, 2018 and 2017, respectively
|
|
|
4,951
|
|
|
|
4,951
|
|
Additional paid-in capital
|
|
|
1,059,873
|
|
|
|
1,059,873
|
|
Accumulated deficit
|
|
|
(1,146,975
|
)
|
|
|
(1,112,168
|
)
|
Total Stockholders’ deficiency
|
|
|
(82,151
|
)
|
|
|
(47,344
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
|
|
$
|
-
|
|
|
$
|
-
|
|
See accompanying notes to the financial
statements
ECARD INC.
Statements of Operations
For the Years ended December 31, 2018 and
2017
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
Sales - Net
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
General and Administrative
|
|
|
34,807
|
|
|
|
79,071
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(34,807
|
)
|
|
|
(79,071
|
)
|
|
|
|
|
|
|
|
|
|
Other Income (expense)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Income tax
|
|
|
-
|
|
|
|
900
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(34,807
|
)
|
|
$
|
(79,971
|
)
|
|
|
|
|
|
|
|
|
|
Net loss per share of common stock (basic and diluted)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding – basic and diluted
|
|
|
49,511,775
|
|
|
|
49,869,568
|
|
See accompanying notes to these financial
statements
ECARD INC.
Statements of Stockholders’ Deficiency
For the Years ended December 31, 2018 and
2017
|
|
Common Stock Issued
|
|
|
Common Stock to be Issued
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
No. of
|
|
|
Par
|
|
|
No. of
|
|
|
Par
|
|
|
Paid in
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
|
Shares
|
|
|
Value
|
|
|
Capital
|
|
|
Deficit
|
|
|
Total
|
|
Balance at January 1, 2017
|
|
|
49,861,775
|
|
|
$
|
4,986
|
|
|
|
200,000
|
|
|
$
|
20
|
|
|
$
|
1,027,291
|
|
|
$
|
(1,032,197
|
)
|
|
$
|
100
|
|
Issuance of shares for subscriptions in prior years
|
|
|
200,000
|
|
|
|
20
|
|
|
|
(200,000
|
)
|
|
|
(20
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancellation of shares
|
|
|
(550,000
|
)
|
|
|
(55
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
55
|
|
|
|
-
|
|
|
|
-
|
|
Expenses paid by former shareholders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
32,527
|
|
|
|
-
|
|
|
|
32,527
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(79,971
|
)
|
|
|
(79,971
|
)
|
Balance at December 31, 2017
|
|
|
49,511,775
|
|
|
$
|
4,951
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
1,059,873
|
|
|
$
|
(1,112,168
|
)
|
|
$
|
(47,344
|
)
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(34,807
|
)
|
|
|
(34,807
|
)
|
Balance at December 31, 2018
|
|
|
49,511,775
|
|
|
$
|
4,951
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
1,059,873
|
|
|
$
|
(1,146,975
|
)
|
|
$
|
(82,151
|
)
|
See accompanying notes to these financial
statements
ECARD INC.
Statements of Cash Flows
For the Years ended December 31, 2018 and
2017
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
Net loss
|
|
$
|
(34,807
|
)
|
|
$
|
(79,971
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Expenses paid by former shareholder
|
|
|
-
|
|
|
|
32,527
|
|
Expenses paid by current shareholder
|
|
|
22,850
|
|
|
|
47,344
|
|
Increase in accounts payable and accrued expenses
|
|
|
11,956
|
|
|
|
-
|
|
Net cash used in operating activities
|
|
|
-
|
|
|
|
(100
|
)
|
|
|
|
|
|
|
|
|
|
Decrease in Cash and Cash equivalents
|
|
|
-
|
|
|
|
(100
|
)
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents—Beginning of Period
|
|
|
-
|
|
|
|
100
|
|
Cash and Cash Equivalents—End of Period
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
-
|
|
|
$
|
-
|
|
Cash paid for taxes
|
|
$
|
-
|
|
|
$
|
900
|
|
See accompanying notes to these financial
statements
ECARD INC.
Notes to 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 year ended December 31, 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.
Use of Estimates and Assumptions
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.
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.
ECARD INC.
Notes to Financial Statements
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 years
ended December 31, 2018, and 2017.
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 revenue during the year ended December 31, 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.
ECARD INC.
Notes to Financial Statements
NOTE 3. GOING CONCERN
During the year ended December 31, 2018,
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 $1,146,975, and working capital deficit of $82,151 as of December
31, 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 year ended December 31, 2018,
the Company’s current controlling shareholder paid expenses on behalf of the Company in the amount of $22,850. This amount
has been recorded as amount due to related party. As of December 31, 2018 and 2017, the outstanding balance was $70,195 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 shares totaled 550,000.
Shares issued and outstanding
As of December 31, 2018 and 2017, 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.
ECARD INC.
Notes to Financial Statements
NOTE 7. INCOME TAXES
The Company is subject to U.S. federal
income tax laws. The company incurred operating loses in the 2018 and 2017. In 2017, the Company had not previously recorded deferred
tax assets based on net operating losses. In 2018, the Company continued to incur net operating losses; however, at the time of
this report, management has not determined when it would generate taxable profits; accordingly, management has not recognized deferred
tax assets for the year ended December 31, 2018.
The Company recorded annual minimum state
franchise tax which has been expensed to its result of operations for the year ended December 31, 2018.
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 during the year ended December 31, 2018 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 Securities and Exchange Commission and has determined
that were no material subsequent events that came to management’s attention that required disclosure.
|
(2)
|
Financial Statement Schedules
|
All financial statement schedules have
been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of
the schedule, or because the information required is included in the consolidated financial statements and notes thereto included
in this Annual Report on Form 10-K.
Exhibit No.
|
|
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)
|
|
|
|
10.1*
|
|
Stock Purchase and Sale between Registrant, Enviromart Industries, Inc. and Michael R. Rosa, dated March 21, 2016 (Incorporated by reference to the Form 10-K, Exhibit 10.11, filed on April 14, 2016)
|
|
|
|
31.1**
|
|
Certification of Chief Executive Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002
|
|
|
|
31.2**
|
|
Certification of Chief Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002
|
|
|
|
32.1***
|
|
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2***
|
|
Certification of Chief
Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase
|
|
***
|
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-K 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.
|
Item 16. Form 10–K Summary
None.
SIGNATURES
Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
ECARD, INC.
|
|
|
Date: March 21, 2019
|
By:
|
/s/
Wayne Tsao
|
|
|
|
Wayne Tsao
|
|
|
Title:
|
Chairman, President and CEO
|
|
|
|
|
Date: March 21, 2019
|
By:
|
/s/
Charlene Cheng
|
|
|
|
Charlene Cheng
|
|
|
Title:
|
Chief Financial Officer
|
17