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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934
For Period ended March 31, 2006
Commission File Number: 021-75387
ECO DEPOT, INC.
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(Exact Name of Issuer as Specified in Its Charter)
Nevada 5090 06-1742208
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State of Incorporation Primary Standard Industrial I.R.S. Employer
Classification Code Number Identification No.
2311 West 16th, #83
Spokane, Washington 99224
(509) 482-1154
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(Address and Telephone Number of Issuer's Principal Executive Offices)
Nadine Sullivan - President
2311 West 16th, #83
Spokane, Washington 99224
(509) 482-1154
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(Name, Address, and Telephone Number of Agent for Service)
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 x No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock at the latest practicable date. As of May 10, 2006, the registrant
had 6,075,000 shares of common stock, $0.001 par value, issued and outstanding.
PART I - FINANCIAL INFORMATION 3
Item 1. Financial Statements - Unaudited 3
Balance Sheet as of March 31, 2006. 3
Statements of Operations 4
Statement of Stockholders' Equity 5
Statements of Cash Flows. 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 11
Item 3. Controls and Procedures 12
PART II - OTHER INFORMATION 12
Item 1. Legal Proceedings. 12
Item 2. Changes in Securities and Use of Proceeds. 12
Item 3. Defaults Upon Senior Securities. 12
Item 4. Submission of Matters to a Vote of Security Holders. 12
Item 5. Other Information. 12
Item 6. Exhibit and Reports on Form 8-K 12
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
ECO DEPOT, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
(Unaudited)
March 31,
2006
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ASSETS
CURRENT ASSETS
Cash $ 16,449
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Total current assets $ 16,449
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Total assets $ 16,449
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 1,650
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Total current liabilities $ 1,650
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STOCKHOLDERS' EQUITY
Common stock, 75,000,000 shares authorized
with $0.001 par value
Issued and outstanding
6,075,000 common shares at March 31, 2006 $ 6,075
Common stock receivable (400)
Additional paid-in capital 23,675
Accumulated deficit during development stage (14,551)
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Total stockholders' equity $ 14,799
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$ 16,449
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The accompanying notes are an integral part of these financial statements.
3
ECO DEPOT, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
For the three For the three November 2, 2004
months ended months ended (inception) to
March 31, March 31, March 31,
2006 2005 2006
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GENERAL AND
ADMINISTRATIVE EXPENSES $ 9,739 $ - $ 14,551
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OPERATING LOSS $ (9,379) $ - $ (14,551)
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NET LOSS FOR THE PERIOD $ (9,379) $ - $ (14,551)
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BASIC LOSS PER COMMON SHARE $ (0.00) $ (0.00)
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WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 5,758,333 933,333
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The accompanying notes are an integral part of these financial statements.
4
ECO DEPOT, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM NOVEMBER 2, 2004 (INCEPTION) TO MARCH 31, 2006
(Unaudited)
Deficit
Common Stock Accumulated
----------------------- Additional During
Number of Paid In Development
shares Amount Capital Stage Total
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Balance, inception November 2, 2004 - $ - $ - $ - $ -
Net loss, December 31, 2004 - - - (766) (766)
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Balance, December 31, 2004 - - - $ (766) $ (766)
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Common stock issued for cash
at $0.001 per share March 10, 2005 4,000,000 4,000 - - 4,000
Common stock issued for cash at
$0.01 per share June 22, 2005 1,575,000 1,575 14,175 - 15,750
Net loss, December 31, 2005 - - - (4,046) (4,046)
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Balance, December 31, 2005 5,575,000 $ 5,575 $ 14,175 $ (4,812) $ 14,938
Common stock issued for cash at
$0.02 per share February 27, 2006 500,000 500 9,500 - 9,600
Net loss, March 31, 2006 - - - (9,739) (9,739)
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Balance, March 31, 2006 6,075,000 6,075 23,675 (14,551) 14,799
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The accompanying notes are an integral part of these financial statements.
5
ECO DEPOT, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
November 2,
2004
For three For three to
months ended months ended (inception)
March 31, March 31, March 31,
2006 2005 2006
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CASH FLOWS USED IN
OPERATING ACTIVITIES
Net loss for the period $ (9,739) $ - $(14,551)
Adjustment to reconcile net
loss to net cash from
operating activities:
Accounts payable 1,014 - 1,650
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NET CASH USED IN
OPERATING ACTIVITIES $ (8,725) $ - $(12,901)
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CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds on sale of common stock 9,600 4,000 29,350
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NET CASH PROVIDED BY
FINANCING ACTIVITIES $ 9,600 $ - $ 29,350
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INCREASE IN CASH $ 875 $ 4,000 $ 16,449
CASH, BEGINNING OF PERIOD 15,574 - -
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CASH, END OF PERIOD $ 16,449 $ 4,000 $ 16,449
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Supplemental Information
Interest paid $ - $ - $ -
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Income taxes paid $ - $ - $ -
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The accompanying notes are an integral part of these financial statements.
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ECO DEPOT, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006
(Unaudited)
Note 1. Nature of Business and Significant Accounting Policies
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Nature of business
Eco Depot, Inc. ("Company") was organized November 2, 2004 under the laws of the
State of Nevada. The Company currently has limited operations and, in accordance
with Statement of Financial Accounting Standard (SFAS) No. 7, "Accounting and
Reporting by Development Stage Enterprises," is considered a Development Stage
Enterprise.
The Company is in the business of developing an Internet e-commerce website that
will sell a full line of environmentally friendly goods, energy efficient
building and construction materials and sustainable home products. Eco Depot
will not manufacture any equipment or goods, but will resell "green products"
from various manufacturers.
A summary of the Company's significant accounting policies is as follows:
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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash
For the Statements of Cash Flows, all highly liquid investments with maturity of
three months or less are considered to be cash equivalents. There were no cash
equivalents as of March 31, 2006.
Revenue Recognition
The Company is engaged in the sale of environmentally friendly goods, etc.
through a website on the internet. The Company recognizes the revenue at the
time of shipping of the product when responsibility of the product is
transferred to the purchaser and payment has been accepted or assured. The
Company does not carry a physical inventory. Instead, the product sold is drop
shipped directly from the supplier to the customer. In this capacity, the
Company is acting as an agent for the supplier and under EITF 99-19 "Reporting
Revenue Gross as a Principal versus Net as an Agent" recognizes transactions on
the net basis.
Income taxes
Income taxes are provided for using the liability method of accounting in
accordance with SFAS No. 109 "Accounting for Income Taxes." A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting. Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax basis. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. Deferred tax assets and liabilities are adjusted for the effect of
changes in tax laws and rates on the date of enactment.
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ECO DEPOT, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006
(Unaudited)
Recent Accounting Pronouncements
In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of APB No. 20 and FASB Statement No. 3" ("SFAS No.
154"). SFAS No. 154 requires retrospective application to prior periods'
financial statements of a voluntary change in accounting principle unless it is
impracticable. APB Opinion No. 20 "Accounting Changes," previously required that
most voluntary changes in accounting principle be recognized by including in net
income of the period of the change the cumulative effect of changing to the new
accounting principle. This statement is effective for our Company as of January
1, 2006. The Company does not believe that the adoption of SFAS No. 154 will
have a material impact on our financial statements.
In November 2005, the FASB issued FASB Staff Position FAS 115-1 and FAS 124-1,
"The Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments" ("FSP 115-1"), which provides guidance on determining when
investments in certain debt and equity securities are considered impaired,
whether that impairment is other-than-temporary, and on measuring such
impairment loss. FSP 115-1 also includes accounting considerations subsequent to
the recognition of an other-than temporary impairment and requires certain
disclosures about unrealized losses that have not been recognized as
other-than-temporary impairments. FSP 115-1 is required to be applied to
reporting periods beginning after December 15, 2005. We do not expect the
adoption of FSP 115-1 will have a material impact on our financial condition or
results of operations.
In February 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 155, "Accounting for Certain Hybrid Financial Instruments--an Amendment of
FASB Statements No. 133 and 140" ("SFAS No. 155"). SFAS No. 155 allows financial
instruments that contain an embedded derivative and that otherwise would require
bifurcation to be accounted for as a whole on a fair value basis, at the
holders' election. SFAS No. 155 also clarifies and amends certain other
provisions of SFAS No. 133 and SFAS No. 140. This statement is effective for all
financial instruments acquired or issued in fiscal years beginning after
September 15, 2006. We do not expect that the adoption of SFAS No. 155 will have
a material impact on our financial condition or results of operations.
In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets--an Amendment of FASB Statement No. 140" ("SFAS No. 156"). SFAS
No. 156 provides guidance on the accounting for servicing assets and liabilities
when an entity undertakes an obligation to service a financial asset by entering
into a servicing contract. This statement is effective for all transactions in
fiscal years beginning after September 15, 2006. We do not expect that the
adoption of SFAS will have a material impact on the financial conditions or
results of operations.
Going Concern
The Company's financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. Currently, the Company does not have significant cash or
other material assets, nor does it have operations or a source of revenue
sufficient to cover its operation costs which raises substantial doubt about its
ability to continue as a going concern. The Company will be dependent upon the
raising of additional capital through the placement of our common stock in order
to continue with the business plan. There can be no assurance that the Company
will be successful in raising the capital it requires through the sale of its
common stock in order to continue as a going concern.
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ECO DEPOT, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006
(Unaudited)
Note 2. Stockholders' Equity
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Common stock
The authorized common stock of the Company consists of 75,000,000 shares with
par value of $0.001.
On March 10, 2005, the Company authorized and issued 4,000,000 shares of $0.001
par value common stock at par in consideration of $4,000 in cash to the officer
of the Company.
On June 22, 2005, the Company authorized and issued 1,575,000 common stock of
the Company in consideration of $15,750 in cash to the officer of the Company.
On January 6, 2006, the Company approved a private placement of Common Stock in
accordance with laws of the State of Washington. The placement was to sell
through a purchase agreement up to 10,000,000 new shares at $0.02 per share and
1,575,000 shares of common stock to be sold by selling shareholders. The
offering closed on April 6, 2006. The Company sold 500,000 shares for $10,000,
issuing the shares to twenty-seven (27) shareholders in on February 27, 2006.
Common stock receivable is recorded for $400 received in April 2006 for stock
issued in February.
Net loss per common share
Net loss per share is calculated in accordance with SFAS No. 128, "Earnings Per
Share." The weighted-average number of common shares outstanding during each
period is used to compute basic loss per share. Diluted loss per share is
computed using the weighted averaged number of shares and dilutive potential
common shares outstanding. Dilutive potential common shares are additional
common shares assumed to be exercised.
Basic net loss per common share is based on the weighted average number of
shares of common stock outstanding of 5,758,333 for the period ended March 31,
2006 and 933,333 for the period ending March 31, 2006. As of March 31, 2006 the
Company had no dilutive potential common shares.
Note 3. Income Taxes
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We did not provide any current or deferred U.S. federal income tax provision or
benefit for any of the periods presented because we have experienced operating
losses since inception. We provided a full valuation allowance on the net
deferred tax asset, consisting of net operating loss carryforwards, because
management has determined that it is more likely than not that we will not earn
income sufficient to realize the deferred tax assets during the carryforward
period. The Company anticipates operating losses in 2006 to be fully allowed for
and does not have a deferred tax liability or asset at March 31, 2006.
The components of the Company's deferred tax asset as of March 31, 2006 are as
follows:
2006
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Net operating loss carryforward $ 3,409
Valuation allowance (3,409)
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Net deferred tax asset $ 0
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A reconciliation of income taxes computed at the statutory rate to the income
tax amount recorded is as follows:
2006 2005 Since Inception
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Tax at statutory rate (35%) $ 3,409 $ 0 $ 5,093
Increase in valuation allowance (3,409) 0 (5,093)
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Net deferred tax asset $ 0 $ 0 $ 0
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The net federal operating loss carry forward will expire in 2023 through 2024.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
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ECO DEPOT, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006
(Unaudited)
Note 4. Related Party Transactions
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The Company neither owns nor leases any real or personal property. The officers
of the corporation provide office services without charge. Such costs are
immaterial to the financial statements and accordingly, have not been reflected
therein. The officer and director for the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interest. The Company has not formulated a policy for the resolution of
such conflicts. The loss of the services of its officer or director may have a
negative impact on the further development of the business.
Note 5. Warrants and Options
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There are no warrants or options outstanding to acquire any additional shares of
common stock of the Company.
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THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES SUCH AS THE DEPENDENCE OF THE COMPANY ON AND THE ADEQUACY OF CASH
FLOWS. THESE FORWARD-LOOKING STATEMENTS AND OTHER STATEMENTS MADE ELSEWHERE IN
THIS REPORT ARE MADE IN RELIANCE ON THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995.
Item 2. Plan of Operations
There have been no operating revenues since inception. Eco Depot, Inc. was
incorporated on November 2, 2004. The Company's mailing address is 2311 West
16th, #83, Spokane, Washington 99224. The telephone number of our principal
executive office is (509) 482-1154. The fax number is (509) 921-5605. Eco Depot
is a development stage company that plans to sell a full line of environmentally
friendly goods, specifically "green products" energy efficient building and
construction materials, and sustainable home products. Eco Depot will not
manufacture any equipment or goods, but will resell environmentally friendly
products from various manufacturers.
The environmental industry as defined by Organization for Economic Co-operation
and Development ("OECD") and Eurostat (1999) is comprised of three main sectors:
1.) Pollution Management;
2.) Resources Management;
3.) Cleaner Technologies and Products.
In general, the pollution management sector includes air pollution, waste water
treatment, and waste management products, systems and services. Resource
management sector includes potable water treatment and distribution, recycled
material, renewable energy plants, and nature protection activities. Cleaner
technologies and products sector generally includes efficient products that are
designed to decrease material inputs, improve product quality, reduce energy
consumption, minimize waste, reduce emission during use, or some combination of
these.
Eco Depot, Inc. plans to continue to develop and market an e-commerce enabled
website which will attract prospective industrial clientele, businesses,
municipalities and individual customers seeking cleaner technologies and
products.
Liquidity and Capital Resources
As of March 31, 2005 the Company had $16,449 of cash available. The Company has
current liabilities of $1,650, which are the result of costs incurred during the
development of the corporation for this period. Since its inception (November 2,
2004), the Company has incurred total losses of $14,551 during the development
stage of the corporation. If the Company is unable to develop its website and
generate profits within the next three to six months it will be required to
raise additional proceeds through the sale of its common stock or in the
alternative borrow funds in order to continue as a going concern. Investors must
be aware that management cannot provide any assurance that the Company will be
able to raise sufficient funds via either of these means, if the Company is so
required to do so.
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Off-Balance Sheet Arrangements
As of the date of this Quarterly Report, the Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company's financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors. The
term "off-balance sheet arrangement" generally means any transaction, agreement
or other contractual arrangement to which an entity unconsolidated with the
Company is a party, under which the Company has (i) any obligation arising under
a guarantee contract, derivative instrument or variable interest; or (ii) a
retained or contingent interest in assets transferred to such entity or similar
arrangement that serves as credit, liquidity or market risk support for such
assets.
Product Research and Development
The Company does not anticipate any costs or expenses to be incurred for product
research and development within the next twelve months.
There are no employees of the Company, excluding the current President, Nadine
Sullivan, of the corporation.
Item 3. Controls and Procedures
Regulations under the Securities Exchange Act of 1934 require public companies
to maintain "disclosure controls and procedures," which are defined to mean a
company's controls and other procedures that are designed to ensure that
information required to be disclosed in the reports that it files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the Commission's rules and forms.
The Company's Chief Executive Officer, based on his evaluation of the Company's
disclosure controls and procedures within 90 days before the filing date of this
report, concluded that the Company's disclosure and procedures were effective
for this purpose.
Changes In Internal Controls.
There were no significant changes in the Company's internal controls or, to the
Company's knowledge, in other factors that could significantly affect these
controls subsequent to the date of their evaluation.
PART II - OTHER INFORMATION
Item 1. Not applicable.
Item 2. Not applicable.
Item 3. Not applicable.
Item 4. Not applicable.
Item 5. Not applicable.
Item 6. Not applicable.
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Exhibit Number Description
31.1 Section 302 Certification of Chief Executive Officer and
Chief Financial Officer
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act
of 2002
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Eco Depot, Inc.
Dated: May 12, 2006 /s/ Nadine Sullivan
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Chief Executive Officer and
Chief Financial Officer
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