Evcarco (EVCA) 10-Q 2010 Q2 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2010

o 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 333-158293

EVCARCO, INC.

(Exact name of registrant as specified in its charter)

Nevada	5012	26-3526039
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification No.)

7703 Sand Street

 Fort Worth, Texas 76118

(Address of principal executive offices) (Zip Code)

(817) 595-0710

(Registrant’s telephone number, including area code)

Not applicable

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

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.   x Yes    o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   o Yes     o No

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.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  o 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: As of August 16, 2010, there were 77,330,500 shares of Common Stock, $0.001 par value.

1

EVCARCO, INC.

TABLE OF CONTENTS

	Index	Page Number
PART I	FINANCIAL INFORMATION
ITEM 1.	Financial Statements	F-1
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	4
ITEM 4.	Controls and Procedures	4
PART II	OTHER INFORMATION
ITEM 1.	Legal Proceedings	5
ITEM 1A.	Risk Factors	5
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5
ITEM 3.	Defaults Upon Senior Securities	5
ITEM 4.	(Removed and Reserved)	5
ITEM 5.	Other Information	5
ITEM 6.	Exhibits	6
SIGNATURES		6

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

EVCARCO, INC.

INDEX TO FINANCIAL STATEMENTS

Financial Statements
Balance Sheets as of June 30, 2010 (Unaudited) and December 31, 2009	F-2
Statements of Operations for the Three and Six Months Ended June 30, 2010 and 2009 (Unaudited), and  from Inception (October 14, 2008) to June 30, 2010 (Unaudited)	F-3
Statement of Stockholders' Equity/(Deficit) from Inception (October 14, 2008) through June 30, 2010 (Unaudited)	F-4
Statements of Cash Flows for the Six Months Ended June 30, 2010 and 2009 (Unaudited), and from Inception (October 14, 2008) to June 30, 2010 (Unaudited)	F-5
Notes to Financial Statements	F-6 to F-8

F-1

EVCARCO, Inc.
(A Development Stage Company)
Balance Sheets
	Jun. 30, 2010			Dec. 31, 2009
	(Unaudited)
ASSETS
Current assets
Cash	$	7,235		$	48,634
Accounts receivable		4,113			-
Inventory (see Note 4)		180,233			10,546
Other receivables		19,900			4,213
Prepaid expenses (see Note 5)		1,026,265			136,667
Total current assets		1,237,746			200,060
Property and equipment, net		35,925			5,721
Other assets		33,376			3,252
TOTAL ASSETS	$	1,307,047		$	209,033
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
Current liabilities
Accounts payable	$	118,692		$	18,739
Accrued expenses		52,440			30,726
Accrued interest (related parties)		2,080			334
Other payables		38,000			6,308
Note payable (see Note 6)		81,638			88,910
Convertible note payable (see Note 7)		38,444			-
Loans payable (related parties) (see Note 8)		471,689			271,280
Total current liabilities		802,983			416,297
Total liabilities		802,983			416,297
Commitments and contingencies
Stockholders' equity/(deficit) (see Note 11)
15,000,000 shares Series A Special Preferred Convertible
Stock Authorized at $0.001/par value, none issued		-			-
180,000,000 shares Common Stock
Authorized at $0.001/par value
71,830,500 and 61,125,500 shares
issued and outstanding, respectively		71,831			61,126
Additional paid-in capital		2,959,660			891,964
Deficit accumulated during development stage		(2,527,427	)		(1,160,354	)
Total stockholders' equity/(deficit)		504,064			(207,264	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)	$	1,307,047		$	209,033
				��
The accompanying footnotes are an integral part of these financial statements.

F-2

EVCARCO, Inc.
(A Development Stage Company)
Statements of Operations
													Inception
													(Oct. 14, 2008)
	For the Three Months Ended						For the Six Months Ended						Through
	Jun. 30, 2010			Jun. 30, 2009			Jun. 30, 2010			Jun. 30, 2009			Jun. 30, 2010
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues	$	229,908		$	249,570		$	378,170		$	324,450		$	1,312,506
Total Revenues		229,908			249,570			378,170			324,450			1,312,506
Cost of goods sold		223,114			238,806			370,707			326,882			1,309,685
Gross Profit/(Loss)		6,794			10,764			7,463			(2,432	)		2,821
Sales and marketing expenses		26,934			7,100			79,669			19,263			190,204
General and administrative expenses		769,492			131,482			1,235,285			275,842			2,163,389
Inventory adjustment		-			-			27,800			-			110,653
Depreciation and amortization		1,896			598			2,865			1,140			5,675
Total Operating Expenses		798,322			139,180			1,345,619			296,245			2,469,921
Operating Loss		(791,528	)		(128,416	)		(1,338,156	)		(298,677	)		(2,467,100	)
Other income/(loss)
Interest income		16			-			37			192			326
Interest expense (related parties)		(4,976	)		(1,132	)		(7,819	)		(1,491	)		(13,680	)
Interest expense		(11,536	)		(2,540	)		(21,135	)		(3,848	)		(46,973	)
Total Other Loss		(16,496	)		(3,672	)		(28,917	)		(5,147	)		(60,327	)
Loss Before Taxes		(808,024	)		(132,088	)		(1,367,073	)		(303,824	)		(2,527,427	)
Income tax (expense) benefit		-			-			-			-			-
Net Loss	$	(808,024	)	$	(132,088	)	$	(1,367,073	)	$	(303,824	)	$	(2,527,427	)
									��
Basic and diluted loss per share	$	(0.01	)	$	(0.00	)	$	(0.02	)	$	(0.01	)
Weighted average number of
common shares outstanding		64,832,214			52,659,000			63,579,218			52,638,779
The accompanying footnotes are an integral part of these financial statements.

F-3

EVCARCO, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity/(Deficit)
Inception (October 14, 2008) Through June 30, 2010
								Deficit
								accumulated
					Additional			during the
	Common stock				paid-in			development
	Shares		Amount		capital			stage			Total
Founders' stock issued @ $0.0003/sh. Oct. 2008		46,500,000	$	46,500	$	(31,000	)	$	-		$	15,500
Stock issued for services @ $0.0003/sh. Oct. 2008		5,100,000		5,100		(3,400	)					1,700
Stock issued for cash @ $0.1667/sh. Oct. 2008		306,000		306		50,694						51,000
Stock issued for cash @ $0.1667/sh. Nov. 2008		612,000		612		101,388						102,000
Stock issued for cash @ $0.1667/sh. Dec. 2008		12,000		12		1,988						2,000
Net loss									(91,060	)		(91,060	)
Balance December 31, 2008		52,530,000	$	52,530	$	119,670		$	(91,060	)	$	81,140
Stock issued for cash @ $0.1667/sh. Jan. 2009		123,000		123		20,377						20,500
Stock issued for services @ $0.1667/sh. Feb. 2009		6,000		6		994						1,000
Stock issued for property @ $0.19/sh. Jul. 2009		1,406,000		1,406		265,734						267,140
Stock issued for cash @ $0.50/sh. Jul. 2009		1,500		2		748						750
Stock issued for services @ $0.50/sh. Jul. 2009		600,000		600		299,400						300,000
Founders' stock issued @ $0.0003/sh. Oct. 2009		6,000,000		6,000		(4,000	)					2,000
Stock issued for loan @ $0.1667/sh. Oct. 2009		120,000		120		19,880						20,000
Stock issued for services @ $0.50/sh. Oct. 2009		90,000		90		44,910						45,000
Stock issued for cash @ $0.50/sh. Oct. 2009		105,000		105		52,395						52,500
Stock issued for cash @ $0.50/sh. Nov. 2009		14,000		14		6,986						7,000
Stock issued for cash @ $0.50/sh. Dec. 2009		130,000		130		64,870						65,000
Net loss									(1,069,294	)		(1,069,294	)
Balance December 31, 2009		61,125,500	$	61,126	$	891,964		$	(1,160,354	)	$	(207,264	)
Stock issued for cash @ $0.25/sh. Jan. 2010		40,000		40		9,960						10,000
Stock issued for cash @ $0.50/sh. Feb. 2010		64,000		64		31,936						32,000
Stock issued for cash @ $0.21/sh. Feb. 2010		100,000		100		20,900						21,000
Stock issued for services @ $0.45/sh. Feb. 2010		2,600,000		2,600		1,167,400						1,170,000
Stock issued for services @ $0.25/sh. Mar. 2010		200,000		200		49,800						50,000
Proceeds received for shares to be issued Jan.-Mar.						300,000						300,000
Proceeds received for shares to be issued Apr. 2010						80,000						80,000
Stock issued for cash @ $0.50/sh. Jun. 2010		14,000		14		6,986						7,000
Stock issued for cash @ $0.50/sh. Jun. 2010		60,000		60		29,940						30,000
Stock issued for cash @ $0.21/sh. Jun. 2010		200,000		200		41,800						42,000
Stock issued for services @ $0.06/sh. Jun. 2010		1,000,000		1,000		54,000						55,000
Stock issued for services @ $0.04/sh. Jun. 2010		6,427,000		6,427		250,723						257,150
Beneficial conversion feature						24,251						24,251
Net loss									(1,367,073	)		(1,367,073	)
Balance June 30, 2010 (Unaudited)		71,830,500	$	71,831	$	2,959,660		$	(2,527,427	)	$	504,064
The accompanying footnotes are an integral part of these financial statements.

F-4

EVCARCO, Inc.
(A Development Stage Company)
Statements of Cash Flows
							Inception
	For the Six			For the Six			(Oct. 14, 2008)
	Months Ended			Months Ended			Through
	Jun. 30, 2010			Jun. 30, 2009			Jun. 30, 2010
	(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net loss	$	(1,367,073	)	$	(303,824	)	$	(2,527,427	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization		2,865			1,140			5,675
Consulting expenses (stock)		652,722			1,000			863,755
Beneficial conversion feature amortization		2,695			-			2,695
Change in operating assets and liabilities:
Accounts receivable		(4,113	)		-			(4,113	)
Inventory		(169,687	)		49,090			(180,233	)
Other receivables		(15,687	)		-			(19,900	)
Prepaid expenses		(10,170	)		-			(10,170	)
Other assets		(30,500	)		-			(34,629	)
Accounts payable		99,953			4,966			118,692
Accrued expenses		21,714			6,834			52,440
Accrued interest (related parties)		1,746			545			2,080
Other payables		31,692			(1,764	)		38,000
Net cash used in operating activities		(783,843	)		(242,013	)		(1,693,135	)
Cash flows from investing activities:
Purchase of property and equipment		(32,693	)		(2,069	)		(40,347	)
Net cash used in investing activities		(32,693	)		(2,069	)		(40,347	)
Cash flows from financing activities:
Net change in notes payable		(7,272	)		40,513			81,638
Net change in loans payable (related parties)		200,409			163,969			471,689
Issuance of common stock		142,000			20,500			747,390
Issuance of convertible debt		60,000			-			60,000
Proceeds from common stock not yet issued		380,000			-			380,000
Net cash flows provided by financing activities		775,137			224,982			1,740,717
Increase/(decrease) in cash		(41,399	)		(19,100	)		7,235
Cash at beginning of period		48,634			22,467			-
Cash at end of period	$	7,235		$	3,367		$	7,235
Cash paid for:
Interest	$	17,494		$	3,848		$	46,026
Interest (related parties)	$	6,073		$	946		$	11,600
Non-cash activities:
Stock issued for property	$	-		$	-		$	267,140
Stock issued for prepaid services	$	1,532,150		$	1,000		$	1,879,850
Stock issued for loans	$	-		$	-		$	20,000
Debt discount from beneficial conversion feature	$	24,251		$	-		$	24,251
The accompanying footnotes are an integral part of these financial statements.

F-5

EVCARCO, INC.

(A Development Stage Company)

Notes to Financial Statements

June 30, 2010

NOTE 1.   ORGANIZATION AND DESCRIPTION OF BUSINESS

EVCARCO, Inc. (“The Company”) was incorporated under the laws of the State of Nevada on October 14, 2008.  The Company sells “green” automobiles, offering the latest technology electric vehicles, pre-owned vehicles converted to various green technologies, and a comprehensive financial package to complement the sales.  The Company is in the development stage, having only begun operations recently.

NOTE 2.   BASIS OF PRESENTATION

The Financial Statements are unaudited. As permitted under the Securities and Exchange Commission (“SEC”) requirements for interim reporting, 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 omitted. We believe that these financial statements include all necessary and recurring adjustments for the fair presentation of the interim period results. These financial statements should be read in conjunction with the Financial Statements and related notes included in our annual report on Form 10-K for the fiscal year ended December 31, 2009. The results of operations for the three and six months ended June 30, 2010 are not necessarily indicative of the results to be expected for the year ending December 31, 2010.

Certain reclassifications to the 2009 Financial Statements have been made to conform to the 2010 presentation.

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 the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Subsequent actual results may differ from those estimates.

NOTE 3.   FAIR VALUE OF FINANCIAL INSTRUMENTS

Carrying amounts of certain of our financial instruments, including accounts receivable, other receivables, accounts payable, and other payables approximate fair value due to their short maturities. Carrying value of note payable and convertible note payable approximate fair values as they bear market rates of interest. None of our financial instruments are held for trading purposes.

NOTE 4.  INVENTORY

At each period end, respectively, the Company had the following inventory:

	Jun. 30, 2010		Dec. 31, 2009
New vehicles	$	111,042	$	-
Pre-owned vehicles		62,195		3,550
Other items		6,996		6,996
Total inventory	$	180,233	$	10,546

During the first quarter of 2010, the Company had additional impairment relating to the vehicles that were devalued at the end of 2009.  The impairment, in the amount of $27,800, is reflected as inventory adjustment on the statements of operations.

At the end of 2009 we had made a decision to impair inventory in the amount of $82,853.  $37,976 was a mark down of inventory to market.  $44,877 of the impairment related to five SMART cars, that were not received under the contract to exchange cash and stock for thirty five pre-owned vehicles.  The contract is essentially settled and completed, and the Company will not be able to recover those cars.

F-6

EVCARCO, INC.

(A Development Stage Company)

Notes to Financial Statements

June 30, 2010

NOTE 5.  PREPAID EXPENSES

As of June 30, 2010, the balance of prepaid expenses was $1,026,265.  $10,170 represented advertising expenses for August of 2010.  $1,016,095 was the unearned portion of stock compensation issued under consulting agreements.

As of December 31, 2009, balance of prepaid expenses was $136,667, which represented the unearned portion of stock compensation issued under consulting agreements.

NOTE 6.  NOTES PAYABLE

From June of 2009, through June of 2010, the Company received $150,000 of advances and made $68,362 of principal repayments to RGTK, an unrelated entity.   The note is unsecured, due upon demand and accrues interest at the end of each month on the then outstanding balance at the rate of 36% per annum.  As of June 30, 2010 and December 31, 2009, the principal balances of the note were $81,638 and $88,910; accrued interest $644 and $0, respectively.  During the first six months of 2010, $16,372 of interest was accrued under the note, $15,728 of which was paid.

NOTE 7.  CONVERTIBLE NOTES PAYABLE

On June 7, 2010, the Company issued a convertible promissory note in the amount of $60,000, bearing interest at a rate of 8% per annum. The note is unsecured and matures on March 2, 2011. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price. The Company recorded $24,251 related to the deemed beneficial conversion feature of this note, which $2,695 has been amortized to interest expense in the accompanying statement of operations as of June 30, 2010.

NOTE 8.  RELATED PARTY TRANSACTIONS

For the six months ended June 30, 2010 and 2009, the Company accrued $219,000 and $190,870, respectively, in salaries payable to its four officers and major shareholders.  For the period since inception (October 14, 2008) through June 30, 2010, the Company accrued $623,170.

As of June 30, 2010 and December 31, 2009, the balances of shareholder notes were $471,689 and $271,280, respectively.  The balances included accrued salaries, along with various advances to and from the Company.  The notes are unsecured, due upon demand and accrue interest at the end of each month on the then outstanding balance at the rate of 5.00% per annum.  Accrued interest payable on the notes at each respective quarter end was $2,080 and $334.  Interest paid during the corresponding six month periods was $6,073 and $946, respectively.  These notes payable do not approximate fair value, as they are with related parties, and do not bear market rates of interest.

NOTE 9.  OPERATING SEGMENTS

During the period from inception through June 30, 2010 the Company operated as a single business segment.

F-7

EVCARCO, INC.

(A Development Stage Company)

Notes to Financial Statements

June 30, 2010

NOTE 10.  GOING CONCERN

The Company has sustained operating losses since inception and had an accumulated deficit of approximately $2.5 million as of June 30, 2010. This deficit has been funded primarily through stock issuances, debt and cash generated from operations.

The Company will need additional capital to continue to maintain and expand its operations and will endeavor to raise funds through the issuance of stock and debt, and revenues from operations, but despite our efforts we may not generate revenues from operations or obtain sufficient capital on acceptable terms, if at all. If the Company cannot obtain such capital or generate such operating revenues it would have an adverse impact on our financial position and results of operations and ability to continue as a going concern. The Company’s operating capital and capital expenditure requirements will vary based on a number of factors, including the level of sales and marketing activities for our services and products and there can be no assurance that additional private or public financings, including debt or equity financing, will b e available as needed, or, if available, on terms favorable to us. To the extent we use debt financing, if available, we will have to pay interest and the Company may have to agree to restrictive covenants that could impose limitations on our operating flexibility. If the Company cannot successfully obtain additional future funding it may jeopardize our ability to continue our business and operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  These financial statements have been prepared on a going concern basis, and do not reflect any adjustments if the Company is unable to continue as a going concern.

NOTE 11.  STOCKHOLDERS’ EQUITY

Effective April 29, 2009, the Company filed an amendment with the Nevada Secretary of State to increase authorized shares of common stock from 25,000,000 to 60,000,000; and to authorize Series A special preferred convertible stock in the amount of 15,000,000 shares at $0.001 par value.

On July 10, 2009, the Company effectuated a 3-for-1 forward stock split of its issued and outstanding common stock.  All amounts of shares reflected on these financial statements are on a post-split basis.

During the first six months of 2010, the Company received $380,000 of investment funds for shares of common stock to be issued.

NOTE 12.  SUBSEQUENT EVENTS

On July 16, 2010, the Company issued 500,000 shares of common stock for professional services.

On July 27, 2010, the Company issued 1,000,000 shares of common stock for professional services.

On July 30, 2010, the Company issued 4,000,000 shares of common stock for professional services.

F-8

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains statements which, to the extent they do not recite historical fact, constitute "forward looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements by the use of words like "may," "will," "could," "should," "project," "believe," "anticipate," "expect," "plan," "estimate," "forecast," "potential," "intend," "continue," and variations of these words or comparable words. Forward looking statements do not guarantee future performance and involve risks and uncertainties. Actual results may differ substantially from the results that the forward looking statements suggest for various reasons, including those discussed under the caption "Risks Related to Our Business" in our Annual Report on Form 10-K. These forward looking statements are made only as of the date of this report. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. This discussion should be read together with the financial statements and other financial information included in this Form 10-Q.

The following discussion contains forward-looking statements that are subject to significant risks and uncertainties. There are several important factors that could cause actual results to differ materially from historical results and percentages and results anticipated by the forward-looking statements. The Company has sought to identify the most significant risks to its business, but cannot predict whether or to what extent any of such risks may be realized nor can there be any assurance that the Company has identified all possible risks that might arise. Investors should carefully consider all of such risks before making an investment decision with respect to the Company's stock.

Overview

EVCARCO, Inc. is a development stage company that was incorporated on October 14, 2008 in the State of Nevada.  We have begun our business operations and we currently have minimal revenue and no significant assets, as a result, we face substantial liquidity risk and uncertainty, near-term and otherwise, which threatens our ability to continue.  EVCARCO, Inc has never declared bankruptcy, has never been in receivership, and has never been involved in any illegal action or proceedings.

Since becoming incorporated, EVCARCO, Inc. has not made any significant purchases or sale of assets, nor has it been involved in any mergers, acquisitions or consolidations. EVCARCO, Inc is not a blank check registrant as that term is defined in Rule 419(a) (2) of Regulation C of the Securities Act of 1933, since it has a specific business plan or purpose.

Neither EVCARCO, Inc nor its officers, directors, promoters, or affiliates has had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements, or understandings with any representatives of the owners of any business or company regarding the  possibility of an acquisition or merger.

Plan of Operation

Over the next twelve months, we will concentrate on the following six areas to grow our operations:

·           Capital and Funding – Seek to obtain capital from all available sources.

·           Advertising and Marketing – Work with TKMG, LLC to develop brand identity, marketing materials, and our web site. Utilize all available marketing venues and public relations opportunities to promote the Company and its products.

·           Sales – Grow sales to 45-50 new cars, and 125-175 pre-owned cars per quarter.

·           Product Development – Continue to work with existing manufacturers and new manufacturers.

·           Franchise Development – Begin marketing the EVCARCO franchise concept and licensing of Company’s Trademarks, with the short term objective of securing several territories and establishing five to ten Dealer Development Candidates during 2010. Several candidates in various states have already been identified for dealer development.

·           Product Research and Development – Continue working on identifying and testing products and vehicles from U.S. companies, as well as foreign manufacturers, which can provide cleaner, safer, faster, and more economical forms of transportation, by utilizing the latest developments in the alternative fuel area.

Maintaining an adequate inventory of automobiles requires significant capital.  Given the Company’s liquidity limitations its inventory levels may be adversely impacted.

3

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued

Operating Environment

The Company continues to operate in a tough economic climate, tight equity and credit markets, which caused significant decline in automobile sales and put many dealers out of business.  This challenging operating environment also presents tremendous opportunity for our concept: decrease in competition, rise of fuel prices, consumers becoming more cost conscious, and environmental issues gaining a lot of traction, are making our products a lot more attractive alternative to traditional transportation solutions.

Operating Results

Since inception through June 30, 2010, we have generated revenues of $1,312,506 and incurred cumulative net losses of $2,527,427.

For the quarterly periods ended June 30, 2010 and 2009, gross revenues were $229,908 and $249,570, gross profit was $6,794 and $10,764, respectively. Net losses for the same quarterly periods were $808,024 and $132,088, each of them including approximately $100,000 of accrued compensation to the officers and major shareholders of the Company.

For the six months periods ended June 30, 2010 and 2009, gross revenues were $378,170 and $324,450, gross profit/(loss) was $7,463 and ($2,432), respectively. Net losses for the same periods were $1,367,073 and $303,824, each of them including approximately $219,000 and $191,000, respectively, of accrued compensation to the officers and major shareholders of the Company.

Amounts for revenues and gross margins reflect sporadic operations of the development stage company, affected by limited financial resources. The trend in losses reflects the rise in business activity and increasing efforts in realizing the Company’s business plan and starting normal business operations.  Major areas of increasing expenditures include: legal and professional fees relating to compliance and reporting; consulting services (mainly paid for by stock issuances) relating to marketing, business development, investor and public relationships; travel and related expenses.

Liquidity and Capital Resources

At the end of the current quarter, the Company had no significant cash reserves or other liquid assets. We anticipate that trading of our common stock on the OTCBB will resume shortly, and that the shares will be accepted by DTC, for electronic exchange, in the very near future.  Both of which will increase our ability to raise capital and borrow funds.

Meeting future liquidity needs will require sales of dealership franchises, as well as income from new and pre-owned auto sales and service. We estimate it will take an estimated $165,000 per Company dealership location in addition to a line of credit of $1.2 million for floor plans at each location. This means as a company in an early stage of development, our ability to proceed with our plan of operation will continually be a function of our ability to raise sufficient capital to continue our operations.

Other Items and Conditions

As of June 30, 2010, the Company had $802,983 of current liabilities outstanding. The Company has no off balance sheet arrangements, or significant obligations under any contracts.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

The term “disclosure controls and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, or the Exchange Act. This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2010. Based on that evaluation, the Company’s management, incl uding the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2010. During the quarter ended on June 30, 2010, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party against us. None of our directors, officers or affiliates are (i) a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings that have been threatened against us.

ITEM 1A.  RISK FACTORS

Not required.

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

Information regarding sales in the second quarter of 2010:

					Exemption
					from	Terms of
Date					regulation	conversion
Sold	Amount		Securities Sold	Consideration *	claimed **	or exercise
06/14/10		1,000,000	Common Stock	Services	Reg. D	None
06/14/10		4,000	Common Stock	Cash - $2,000	Reg. D	None
06/24/10		427,000	Common Stock	Services	Reg. D	None
06/24/10		270,000	Common Stock	Cash - $77,000	Reg. D	None

* For per share price, see Statement of Stockholders’ Equity.  No commissions or discounts were paid.

** The company relied on information from purchasers that they were accredited investors and/or such investors were provided adequate information and were otherwise determined to be suitable.  In all cases, there was no public solicitation.

During the period from January through April of 2010, the Company received $380,000 in investment funds, for which the shares of common stock have not yet been issued, and are not listed above.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  (REMOVED AND RESERVED)

None.

ITEM 5.  OTHER INFORMATION

On May 13, 2010, the Company registered its Common Stock, $0.001 Par Value, pursuant to Section 12(g) of the Securities Exchange Act of 1934, by filing Form 8-A.

Effective May 24, 2010, the quotation of the Company’s stock under the symbol “EVCA” was reinstated on OTC Bulletin Board.

On July 27, 2010, the Company filed a Registration Statement under the Securities Act of 1933 for its Common stock, $0.001 Par Value, by filing Form S-1.  The registration will not be effective until declared by the Securities and Exchange Commission.

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ITEM 6.  EXHIBITS

Exhibit Number	Exhibit
31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14(a) under the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) under the Securities Exchange Act of 1934.
32	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C., Section 1350.

SIGNATURES

Pursuant to the requirements 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.

	EVCARCO, INC.
Date: August 18, 2010	By:	/s/  Dale Long
		Dale Long
		President and Principal Executive Officer

Date: August 18, 2010	By:	/s/  Nikolay Frolov
		Nikolay Frolov
		Chief Financial Officer (Principal Financial and Accounting Officer)

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