UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended: September 30, 2010
or
For the transition period from ____________ to _____________
Commission File Number: 333-148 546
ELEMENTAL PROTECTIVE COATINGS CORP.
(Exact name of registrant as specified in its charter)
(305) 428-2653
(Registrant's telephone number, including area code)
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 x No ¨
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Nevada 20-8248213
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
Water Park Place, 20 Bay Street
Toronto, ON, Canada M5J 2N8
(Address of principal executive offices) (Zip Code)
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “ large accelerated filer,” “ accelerated filer” and “ smaller reporting company” in Rule 12b-2 of the Exchange Act.:
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes x No ¨
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
(Class)
(Outstanding as at September 30th, 2010)
Large accelerated filer ¨
Accelerated filer ¨
Non-accelerated filer ¨
Smaller reporting company x
Common Stock, $0.001 par value 56,300,000 shares
Elemental Protective Coating Corp.
(formerly DBL Senior Care, Inc.)
(a Development Stage Company)
Index to Financial Statements
| Part I - Financial Information | | 3 |
| Item 1 - Financial Statements | | 3 |
| Balance Sheets | | |
| (Balance Sheets as of September 30, 2010 and December 31, 2009) | | |
| Statements of Operations | | |
| (Statements of Operations for the three and nine months ended September 30, 2010 and 2009 and the period of January 17, 2007 (Inception) to September 30, 2010) |
| Statements of Cash Flows | | |
| (Statements of Cash Flows for the nine months ended September 30, 2010 and 2009 and the period of January 17, 2007 (Inception) to September 30, 2010) |
| Notes to the Unaudited Financial Statements | | 6 |
| For the Three and Nine Months Ended September 30, 2010 and 2009 and the Period of January 17, 2007 (Inception) to September 30, 2010 |
| Note 1 - Basis of Presentation | | |
| Note 2 - Condensed Financial Statements | | |
| Note 3 - Going Concern | | |
| Note 4 - History and Organization of the Company | | |
| Note 5 - Accounting Policies | | |
| Use of Estimates | | |
| Recently Issued Accounting Pronouncements | | |
| Note 6 - Subsequent Events | | |
| Item 1A - Risk Factors | | 8 |
| Item 2 - Management’s Discussion and Analysis | | 8 |
| Plan of Operation | | |
| Financial Condition | | |
| Item 3 - Market Risk Disclosures | | 9 |
| Item 4 - Controls | | 9 |
| Part II - Other Information | | 9 |
| Item 1 - Legal Proceedings | | 9 |
| Item 2a - Unregistered Sales of Equity Securities | | 9 |
| Item 2b - Stockholder Matters | | 9 |
| Item 2c - Issuer repurchases | | 9 |
| Item 3 - Defaults Upon Senior Securities | | 9 |
| Item 4 - Results of Security Holder Vote | | 9 |
| Item 5 - Other Information | | 9 |
| Item 6 - Exhibits | | 9 |
| Signatures | | 10 |
| Certifications | | |
| CEO Certification | | |
| CFO Certification | | |
| CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
| CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |
Part I - Financial Information
Item 1 - Financial Statements
Balance Sheets
(Balance Sheets as of September 30, 2010 and December 31, 2009)
ELEMENTAL PROTECTIVE COATING CORP.
(formerly DBL SENIOR CARE, INC.)
(A Development Stage Company)
Balance Sheets
| | | September 30, 2010 | | | December 31, 2009 | |
| | | (Unaudited) | | | | |
| ASSETS | | | | | | |
| | | | | | | |
| Current assets | | | | | | |
| Cash | | $ | - | | | $ | 37 | |
| Total current assets | | | - | | | | 37 | |
| | | | | | | | | |
| Intangible assets | | | - | | | | 4,970,833 | |
| | | | | | | | | |
| Total assets | | $ | - | | | $ | 4,970,870 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | | | | | |
| | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 11,332 | | | $ | 8,430 | |
| Related party payable | | | 5,324 | | | | - | |
| Wages payable | | | 105,000 | | | | - | |
| Notes payable | | | 6,000 | | | | 6,000 | |
| Total current liabilities | | | 127,656 | | | | 14,430 | |
| | | | | | | | | |
| Convertible note payable | | | - | | | | 5,000,000 | |
| Accrued interest | | | - | | | | 34,521 | |
| | | | | | | | | |
| Total liabilities | | | 127,656 | | | | 5,048,951 | |
| | | | | | | | | |
| Stockholders' deficit | | | | | | | | |
| Preferred stock, $.001 par value; 5,000,000 shares authorized, no shares issued or outstanding | | | - | | | | - | |
| Common stock, $.001 par value; 275,000,000 shares authorized; 13,300,000 issued and outstanding at September 30, 2010 and December 31, 2009 | | | 13,300 | | | | 13,300 | |
| Additional paid in capital | | | 78,010 | | | | 78,010 | |
| Deficit accumulated during the development stage | | | (218,966 | ) | | | (169,391 | ) |
| Total stockholders' deficit | | | (127,656 | ) | | | (78,081 | ) |
| | | | | | | | | |
| Total liabilities and stockholders' deficit | | $ | - | | | $ | 4,970,870 | |
See accompanying notes to financial statements
Statements of Operations
(Statements of Operations for the three and nine months ended September 30, 2010 and 2009 and the period of January 17, 2007 (Inception) to September 30, 2010)
ELEMENTAL PROTECTIVE COATING CORP.
(formerly DBL SENIOR CARE, INC.)
(A Development Stage Company)
Statement of Operations (unaudited)
| | | | | | | | | For the period from | |
| | | | | | | | | January 17, 2007 | |
| | | Three months ended September 30, | | | Nine months ended September 30, | | | (inception) to | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | | | September 30, 2010 | |
| | | | | | | | | | | | | | | | |
| Revenue | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | | | | | | | | | |
| Amortization | | | - | | | | - | | | | 86,806 | | | | - | | | | 115,973 | |
| General and administrative | | | 619 | | | | 3,194 | | | | 1,005 | | | | 11,282 | | | | 11,499 | |
| Officer compensation | | | 105,000 | | | | - | | | | 105,000 | | | | - | | | | 105,000 | |
| Professional fees | | | 6,258 | | | | - | | | | 7,258 | | | | - | | | | 57,508 | |
| Total operating expenses | | | 111,877 | | | | 3,194 | | | | 200,069 | | | | 11,282 | | | | 289,980 | |
| | | | | | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | | | | | |
| Other income | | | - | | | | - | | | | - | | | | - | | | | 41 | |
| Extraordinary gain | | | - | | | | - | | | | 253,634 | | | | - | | | | 253,634 | |
| Interest expense | | | - | | | | - | | | | (103,140 | ) | | | - | | | | (137,661 | ) |
| Total other income (expense) | | | - | | | | - | | | | 150,494 | | | | - | | | | 116,014 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net loss | | $ | (111,877 | ) | | $ | (3,194 | ) | | $ | (49,575 | ) | | $ | (11,282 | ) | | $ | (173,966 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Basic and diluted loss per common share | | $ | (0.01 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding | | | 13,300,000 | | | | 56,300,000 | | | | 13,300,000 | | | | 56,300,000 | | | | | |
See accompanying notes to financial statements
Statements of Cash Flows
(Statements of Cash Flows for the nine months ended September 30, 2010 and 2009 and the period of January 17, 2007 (Inception) to September 30, 2010)
ELEMENTAL PROTECTIVE COATING CORP.
(formerly DBL SENIOR CARE, INC.)
(A Development Stage Company)
Statements of Cash Flows (unaudited)
| | | | | | | | | For the period of | |
| | | | | | | | | January 17, 2007 | |
| | | Nine months ended September 30, | | | (inception) to | |
| | | 2010 | | | 2009 | | | September 30, 2010 | |
| Cash flows from operating activities | | | | | | | | | |
| Net loss | | $ | (49,575 | ) | | $ | (11,282 | ) | | $ | (173,966 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities | | | | | | | | | | | | |
| Amortization expense | | | 86,806 | | | | - | | | | 115,973 | |
| Extraordinary gain | | | (253,634 | ) | | | - | | | | (253,634 | ) |
| Interest on convertible note | | | 103,140 | | | | - | | | | 137,661 | |
| Changes in operating assets and liabilities | | | | | | | | | | | | |
| Accounts payable and accrued liabilities | | | 2,902 | | | | 7,500 | | | | 11,332 | |
| Wages payable | | | 105,000 | | | | - | | | | 105,000 | |
| Net cash used in operating activities | | | (5,361 | ) | | | (3,782 | ) | | | (57,634 | ) |
| | | | | | | | | | | | | |
| Net cash used in investing activities | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| Cash flows from financing activities | | | | | | | | | | | | |
| Proceeds from related party loans | | | 5,324 | | | | - | | | | 5,324 | |
| Proceeds from note payable | | | - | | | | 3,710 | | | | 6,000 | |
| Contributed capital | | | - | | | | 100 | | | | 10,010 | |
| Proceeds from sale of stock | | | - | | | | - | | | | 36,500 | |
| Payment on cancelled shares | | | - | | | | - | | | | (200 | ) |
| Net cash provided by financing activities | | | 5,324 | | | | 3,810 | | | | 57,634 | |
| | | | | | | | | | | | | |
| (Decrease) increase in cash | | | (37 | ) | | | 28 | | | | - | |
| Cash at beginning of period | | | 37 | | | | 33 | | | | - | |
| Cash at end of period | | $ | - | | | $ | 61 | | | $ | - | |
| | | | | | | | | | | | | |
| Supplemental Cash Flow Information: | | | | | | | | | | | | |
| Cash paid for interest | | $ | - | | | $ | - | | | $ | - | |
| Cash paid for income taxes | | $ | - | | | $ | - | | | $ | - | |
See accompanying notes to financial statements
Notes to the Unaudited Financial Statements
For the Three and Nine Months Ended September 30, 2010 and 2009 and the Period of January 17, 2007 (Inception) to September 30, 2010
The accompanying notes are an integral part of these financial statements.
Note 1 - Basis of Presentation
The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these consolidated interim financial statements be read in conjunction with the audited financial statements of the Company for the period ended December 31, 2009 and notes thereto included in the Company's annual report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of annual results.
Note 2 - Condensed Financial Statements
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2010, and for all periods presented herein, have been made.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2009 audited financial statements. The results of operations for the periods ended September 30, 2010 and 2009 are not necessarily indicative of the operating results for the full years.
Note 3 - Going Concern
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
Note 4 - History and Organization of the Company
The Company was organized on January 17, 2007 (Date of Inception) under the laws of the State of Nevada, as DBL Senior Care, Inc. The Company was authorized to issue up to 70,000,000 shares of its $0.001 par value common stock and 5,000,000 shares of its $0.001 par value preferred stock. The Company has limited operations and in accordance with FASB ASC 915-10, "Development Stage Entities," the Company is considered a development stage company.
On December 11, 2009, the Company amended its articles of incorporation to change its name from DBL Senior Care, Inc. to Elemental Protective Coatings Corp.
The former business plan of the Company was to provide personal care services to elderly, handicapped or other home-bound individuals suffering infirmity. During the year ended December 31, 2009, the board of directors changed the Company's focus toward the manufacture and sale of fire retardant products.
Note 5 - Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Net Income (Loss) per Common Share
Net income (loss) per common share is provided in accordance with FASB ASC 260-10, "Earnings per Share". Basic net income (loss) per common share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share gives effect to all dilutive potential common shares outstanding during the period. Dilutive net loss per common share excludes all potential common shares if their effect is anti-dilutive.
Recently Issued Accounting Pronouncements
Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.
Note 6 - Subsequent Events
On October 28, 2010 Gilles Trahan resigned from the Company and John Wilkes assumed all of Trahan's responsibilities.
On November 4, 2010 the Company agreed to issue 210,000,000 shares of its common stock to Lacey holdings limited, a B.V.I. corporation, in exchange for an exclusive worldwide license to utilize its proprietary “carbon credit” producing technology solutions. The shares were issued on the same day as payment of the $2,100,000 licensing fee.
On December 7, 2010, the Company signed a promissory note with a former officer for $72,247 which is the sum of salary owed plus expenses paid by the officer on behalf of the Company. Payments will be made in two installments with $40,000 being due on January 16, 2011 and $32,247 being due May 16, 2011. The note is non-interest bearing.
On December 15, 2010, upon approval of the shareholders of this corporation, the Company enacted a 9:1 reverse stock split and the Articles of Incorporation were amended and restated as follows:
ARTICLE 1. Name of the corporation: Bio-Carbon Solutions International.
Item 1A - Risk Factors
Not Applicable.
Item 2 - Management’s Discussion and Analysis
Plan of Operation
The Company intends to provide specialized advisory and value chain management services to clients who wish to participate in the carbon development market.
The Company’s participation may take place in three main forms:
| | 1) | Preparing necessary documentation and proof for registering carbon offsets specifically to meet the requirements of carbon trades from specific landholdings, working either on behalf of: |
a) landowners intent on increasing revenues from their properties, or
b) emitters intent on meeting their regulatory requirements.
2) Providing carbon monitoring services in order to ensure that our clients’ projects are compliant in their reporting to various jurisdictions where their carbon offsets are registered.
3) Financing specific projects where the Company can forward sell carbon offsets to emitters or carbon brokerage firms.
Mandatory carbon offsets are regulated through cap and trade mechanism. These are legislated regional or international arrangements where carbon emitters have the option to purchase carbon offsets from forested ecosystems to reduce their carbon footprints.
Offsets are generated from projects that are registered and accepted by authorities only after they meet a complex set of rules in terms of project baseline definition, eligibility of activities, carbon pool and sink modeling/accounting, demonstration of permanence, and strategies to manage the risk of reversal.
These rules vary from one jurisdiction to the other and are difficult to navigate for people unfamiliar with the entire value chain involved in carbon trading.
Similar to mandatory carbon offsets, voluntary carbon offsets must meet specific accounting rules in order to be credible in the marketplace.
Financial Condition
The Company begins its new business line relatively unencumbered with no appreciable plans for an increase in company expenses at this time.
Item 3 - Market Risk Disclosures
Not applicable at this time.
Item 4 - Controls
Not applicable at this time.
Part II - Other Information
Item 1 - Legal Proceedings
None.
Item 2a - Unregistered Sales of Equity Securities
Not applicable at this time.
Item 2b - Stockholder Matters
Not applicable at this time.
Item 2c - Issuer repurchases
Not applicable at this time.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Results of Security Holder Vote
Not applicable at this time.
Item 5 - Other Information
None.
Item 6 - Exhibits
None.
Signatures
In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the day of 23 December 2010.
By:/s/ John Wilkes, President and Chief Executive Officer
By:/s/ Martin Baldwin, Treasurer and Chief Financial Officer
Pursuant to the requirements of the Securities Act of l934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By:/s/ John Wilkes, Director | 23 December 2010 |
| | |
| By:/s/ Martin Baldwin, Director | 23 December 2010 |
