Attached files
| file | filename |
|---|---|
| EX-1 - EAST COAST DIVERSIFIED CORP | ecdc_ex1.htm |
| EX-5 - EAST COAST DIVERSIFIED CORP | ecdc_ex5.htm |
| EX-2 - EAST COAST DIVERSIFIED CORP | ecdc_ex2.htm |
| EX-7 - EAST COAST DIVERSIFIED CORP | ecdc_ex7.htm |
| EX-3 - EAST COAST DIVERSIFIED CORP | ecdc_ex3.htm |
| EX-9 - EAST COAST DIVERSIFIED CORP | ecdc_ex9.htm |
| EX-8 - EAST COAST DIVERSIFIED CORP | ecdc_ex8.htm |
| EX-4 - EAST COAST DIVERSIFIED CORP | ecdc_ex4.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
report (date of earliest event reported): January 15, 2010
EAST
COAST DIVERSIFIED CORPORATION
(Exact Name of Registrant as Specified
in its Charter)
Commission
file number: 0-50356
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Nevada
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55-0840109
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|
(State
of Incorporation)
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(I.R.S.
Employer Identification No.)
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|
120
Interstate North Parkway SE, Suite 445 Atlanta, Ga.
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30339
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|
(Address
of Principal Executive Offices)
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(ZIP
Code)
|
Registrant's
Telephone Number, Including Area Code: (770) 953-4184
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
|
FORWARD
LOOKING STATEMENTS
This
current report contains forward-looking statements as that term is defined in
the Private Securities Litigation Reform Act of 1995. These statements relate to
future events or our future results of operation or future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as “may”, “should”, “intends”, “expects”, “plans”,
“anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue”
or the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks in the section entitled “Risk Factors” in
this current report, which may cause our or our industry’s actual results,
levels of activity or performance to be materially different from any future
results, levels of activity or performance expressed or implied by these
forward-looking statements.
Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity or
performance. You should not place undue reliance on these statements, which
speak only as of the date that they were made. These cautionary statements
should be considered with any written or oral forward-looking statements that we
may issue in the future. Except as required by applicable law, including the
securities laws of the United States, we do not intend to update any of the
forward-looking statements to conform these statements to reflect actual
results, later events or circumstances or to reflect the occurrence of
unanticipated events.
In
this report, unless otherwise specified, all dollar amounts are expressed in
United States dollars and all references to “common shares” refer to the common
shares in our capital stock.
§1
– Registrant’s Business & Operations
On
December 18, 2009, the Company's principal shareholders, Frank Rovito, Aaron
Goldstein and Green Energy Partners, LLC ( the "Sellers") and entered
into a Securities Purchase Agreement (the “ Agreement
”) ) with Kayode Aladesuyi (the “ Buyer ”)
pursuant to which Sellers, owners of record and beneficially an aggregate of
7,029,950 shares of Common Stock, par value $0.001 per share (“ Common Stock
”) of East Coast Diversified Corporation, a Nevada corporation (the “
Company
”), agreed to sell and transfer to the Buyer Sellers 7,029,950
shares of Common Stock ( the " Sellers’ Shares ”) for total
consideration of Three Hundred Thousand ($300,000.00) Dollars. The
Agreement also provides that the Company will enter into a share exchange
agreement with EarthSearch Communications International, Inc.
On
January 15, 2010, East Coast Diversified Corp. (the "Company") and EarthSearch
Communications International, Inc. ("EarthSearch") executed a Share Exchange
Agreement (the “ Agreement
”) pursuant to which the Company agreed to issue 35,000,000 (Thirty Five
Million)restricted shares to the shareholders of EarthSearch. The Agreement is
subject to closing conditions and the parties expect the closing to take place
on or around February 20, 2010. EarthSearch offers a portfolio of GPS devices,
RFID interrogators, integrated GPS/RFID technologies and Tag designs. These
solutions help businesses worldwide to increase asset management, provide safety
and security, increase productivity, and deliver real-time visibility of the
supply chain through automation.
On April
2, 2010 EarthSearch Communications International, Inc consummated all
obligations under the private stock purchase agreement dated December 18 2009
and the share Exchange Agreement dated January 15, 2010. In accordance with the
terms and provisions of the Purchase Agreement, the Company acquired one hundred
percent of the assets of EarthSearch Communications International
Inc. The Purchase Agreement closed on April 2, 2010. As a result of
the Purchase Agreement transaction, our principal business became the business
of EarthSearch communications international Inc., which is more fully described
herein
§2
– Financial Information
Item
2.01 Completion of
Acquisition of Disposition of Assets
The
information set forth above in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by this reference. The Purchase Agreement was accounted for
as a recapitalization wherein EarthSearch is considered the acquirer for
accounting and financial reporting purposes. The assets and liabilities of the
ECDC have been brought forward at their book value. As a result of the Purchase
Agreement, our principal business became the business of EarthSearch which is
more fully described below.
2
FORM
10 DISCLOSURE
As
disclosed elsewhere in this report, we acquired 100% of the assets and
liabilities of EARTHSEARCH. Item 2.01(f) of Form 8-K states that if the
registrant was a shell company like we were immediately before the transaction
disclosed under Item 2.01, then the registrant must disclose the information
that would be required if the registrant were filing a general form for
registration of securities on Form 10.
Accordingly,
we are providing the following information that would be included in a Form 10
if we were to file a Form 10. Please note that the information provided below
relates to the post Asset Purchase Agreement entity, except that information
relating to periods prior to the date of the transaction relates to the
pre-transaction company, unless otherwise specifically indicated.
The
foregoing Items enumerated 1 through 14 are enumerated utilizing the Item number
designation of Form 10 and intended to satisfy and relate such information
required by Item 2.01(f) for Form 8-K.
Item
1. BUSINESS
Historical
East
Coast Diversified Corp. (the "Company") was incorporated under the laws of the
State of Delaware on May 27, 1994 under the name Plantastic Corp. The Company
was formed for the purpose of purchasing and operating a tree farm and nursery.
The Company was unsuccessful in this venture and in March 1997, the Company
amended its articles of incorporation, reorganized its capital structure and
changed its name to Viva Golf, USA Corp. The Company then acquired the assets of
Viva Golf, USA Corp., a Delaware corporation, which consisted of a golf
equipment marketing plan and other related assets. The Company unsuccessfully
engaged in the business of golf club manufacturing and marketing and ceased
those operations in 1998. In June 2003, the Company changed its name to East
Coast Diversified Corp. from Lifekeepers International, Inc. and changed its
domicile to Nevada.
On April
2, 2010 EarthSearch consummated all obligations under the private stock purchase
agreement dated Decmber18 2009 and the shares Exchange Agreement dated January
15, 2010. In accordance with the terms and provisions of the Purchase Agreement,
the Company acquired one hundred percent of the assets of EarthSearch
communications international Inc. The Purchase Agreement closed on
April 2, 2010. As a result of the Purchase Agreement transaction, our principal
business became the business of EarthSearch communications international Inc.,
which is more fully described herein
Overview
EarthSearch
Communications is a privately held corporation based in Atlanta, Georgia,
USA. The company has created the world’s first integration of RFID and GPS
technology. EarthSearch is an international provider of supply management
solutions offering real-time visibility in the supply chain with integrated
RFID/GPS and other telemetry products. For more information, please visit us at
www.earthsearch.us
Products
EarthSearch
is an international provider of Global Positioning Systems (GPS) and telemetric
devices, applications and solutions for both consumer and commercial
markets. EarthSearch developed and created devices which feature the
world’s first wireless communication between RFID and GPS technologies. These
devices provide real-time visibility of assets and goods in transit as well
providing specialized security applications for sea ports, shipyards, and power
and energy plants. As of April 2, 2010, we have 19 full time Employees and have
2 consultants that work with us on part-time basis.
EarthSearch
GPS devices offer trucking fleet owners a suite of security, safety and
convenience features for both consumer and commercial fleets. EarthSearch
offerings such as AutoSearchGPS™, AutoSearchRFID and HALO are vehicle and supply
chain management solutions. The products are designed to be easily
installed into any type of vehicle, including automobiles, construction
equipment, trucks, buses and other mobile machinery. Customers can use these
proprietary devices to address their specific needs, such as substantially the
reducing the risk of assets being lost, stolen or misrouted; managing a
commercial vehicle or a fleet; and precisely track the location of their goods,
inventory, and/or vehicles in real-time.
Additionally,
EarthSearch has developed BusSafe - the first school bus security solution with
integrated GPS/RFID technology.
This unique solution is designed to provide real-time visibility and
security of students traveling on scheduled school bus routes. This
unprecedented technology monitors the real-time status of students as they enter
and exit school buses.
3
BusSafe
can provide real-time alerts to parents and schools when a student gets on the
bus or off the bus. Alerts are sent should a student exit at the
wrong bus stop, or should a student fail to get on or off the bus at a
scheduled location. The BusSafe system provides real-time notification to
parents with hand-held devices, such as smart phones.
Patents and Other
Proprietary Properties
In 2007
EarthSearch filed and was issued a patent for the technology below:
The
remote access patented software allows for the wireless management of
vehicles. This includes remotely operating vehicle components such as
the ignition and the AC/Heating system, while remotely managing in-vehicle
components such as alarm systems, camera, disabling the engine as well as
providing location capabilities from a handheld device
In August
2009 we applied for a Business Process Patent for the world’s first integration
of RFID and GPS in a fleet tracking solution:
The
resulting product is the iGPS. iGPS is the world’s first
vehicle tracking device with an embedded RF Module. iGPS provides the
ability to perform the dual functions of an RFID solution by communicating
directly with RF Tags while also creating a wireless gateway between mobile RFID
solution and a backend server to function as a fleet management
solution.
The
business process patent is based on embedded firmware which leverages
intelligence within the GPS device. It is this on-board logic which
allows iGPS to make decisions based upon specific RFID tag activities, including
providing enhanced security against theft of goods in transit.
In
addition to the listed patent and applications, EarthSearch owns proprietary
Intellectual Property rights to the following software:
GTIS – Global Transit ID Services
solution: A key component of our licensing program, GTIS is the only
web-based application that allows for the management of integrated GPS/RFID at
hardware level. It is a necessary application for the management of
assets in transit. (See attached licensees solution under testing)
QuickTrack- Our proprietary
enterprise resource management software. QuickTrack was designed by our software
division, ES Technology, as a complete solution for the management of a
telemetry business:
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· Sales
processing
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· Installer
module
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· Dealer
module activation
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· Automated
service
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· Billing
module
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· Payment
module
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· Customer
support
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· Reports
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· Inventory
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· Credit
Card processing
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In
markets where a licensee is developing a new business, we offer QuickTrack as
part of the licensing package.
The
following are Trademarks are owned by EarthSearch:
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·
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iGPS – as a product
name
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·
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HALO – as a product
name
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·
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AutoSearchGPS
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·
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AutoSearchRFID
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·
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MobileMANAGER
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·
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TrailerTRACK
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4
The
following are service marks owned by EarthSearch:
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·
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“Moving
Beyond GPS”
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·
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“Security
in Motion”
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·
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“Always
in Control”
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Recent
Accomplishments:
|
·
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Executed
Vendor Agreement with Wal-Mart (Will introduce HALO, teen diving product
in 2010)
|
|
·
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Completed
testing of iGPS for British Police, S. Wales. Price negotiation
underway.
|
Market: The FBI reported that
in 2007 more than $30 Billion dollars worth of goods were stolen in while in
transit. Euro Watch reported the problem as a 10 Billion Euro problem for the
same year. The problem of asset stolen in transit is valued at more than $50
Billion US dollars globally.
According
to IDTechEX, a market research firm:
“The next ten years will see a rapid
gain in market share of mainstream printed and Chipless RFID tags. The numbers
sold globally will rise from $40 million in 2009 to $624 billion in 2019”
- Raghu Das, Development
Manager IDTechEx.
EarthSearch
believes the growth rate will be significantly higher when our integrated
GPS/RFID technology becomes a mainstream solution.
Recent
research by IBM validates the belief.
“70% of 400 supply chain managers
who participated in the research were dissatisfied with the current stage of
technology and their inability to have real-time visibility of the supply
chain”. - Karen Butner, IBM Global
Services
Presently,
EarthSearch products offer the only solution available globally to resolve this
problem by providing real-time visibility of assets.
Revenue: EarthSearch
anticipates generating an average of $15,000,000 per year over the next 5 years
through incremental growth of subscription fees and equipment sales. The need to
provide security for assets in transit and to create visibility into events
occurring in real-time will drive long-term sale and success of the company’s
products.
Sales: Revenue will be
generated from equipment sales and long term subscription service agreement
with clients based on the use of the Company’s proprietary software, “Global
Transit ID Services Solution” (GTIS), and monitoring services using GPRS
and RF communication networks
Business
Strategy:
Provide
a Global Turnkey Solution to Independent Distributor and Licensee
Network
EarthSearch
intends to market its product and services to an existing global network of RFID
and GPS distributors to leverage our integrated solution and to offer real-time
visibility and security of assets beyond the warehouse.
5
Offer
Comprehensive and Affordable Subscription-Based Solutions
Domestically
EarthSearch will offer low cost supply chain solutions which will provide
real-time visibility solution for goods in transit to service companies,
manufacturers, shippers, and the like.
Pursue
Co-Branding, Licensing and Other Strategic Relationships
Management
is offering co-branding and licensing opportunities to major, strategic partners
such as SITA and Inova Technology, Odin Technology, Advanced ID – Brazil,
TagStone – Dubai, DecTag, UK, and E-smart- Singapore.
Management: The Management
team comprises of a focused group with experience in business development,
marketing, technology and commercial skills. The group possesses a history of
successful accomplishments in business, technology and finance.
Competition: There are
numerous companies globally offering GPS and RFID products. There are also a
number of other companies offering RTLS (Real-time Location Services) using
software to communicate information to a back end server for analysis of
information collected from GPS/RFID hardware. The information provided by
competing services is considered “almost accurate.”
The key
differentiator is that EarthSearch is the only company presently able to provide
critical asset information in real-time. A delay can be crucial,
especially if the asset in question is in peril. EarthSearch offer the only
products in the world that offer real-time solutions with visibility of events,
assets and inventory.
Direct
Sales
Our sales
team will also target medium to large fleet companies through telemarketing and
direct mail campaigns. This effort will be supported by a more aggressive direct
sales campaign to be implemented by the marketing team. We are launching several
on-line marketing campaigns. We are registered with various on-line retailers to
carry our products for direct sales opportunities.
E-marketing
Campaign
We have
secured the services of an e-marketing company to position our product to reach
end users searching for similar products on-line. We have registered
and bid our products for strong position on some of the most popular search
engines.
Direct
e-mail and e-ad campaigns have been created to make customers aware of our
products and its superiority or competitive advantages. Our e-ads are very
focused with clearly defined messages and calls to action.
On-line
retail
We are
registered with multiple on-line retailers to help enhance our sales opportunity
and to build brand awareness.
Some of
the on-line retailers with which we are now registered include:
|
·
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Wal-Mart.com
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·
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Buy.com
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·
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E-Bay
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Big
box retailers
Our
business development division recently submitted registration information to
Wal-Mart, K-Mart, Best Buy and a few other regional retailers to carry our
product in their stores. We strongly believe we will succeed in this
endeavors in 2010.
We
recently executed a vendor agreement with Wal-Mart and expect to accomplish
similar goals with other retailers.
6
E-commerce
We
completed and launched our e-commerce website, RoadNUT.com. We will launch
e-commerce pages for all of our other product in 2010. In addition to the
on-line retailers that will now offer our products, our e-ads and on-line email
or e-marketing campaigns are designed to drive end users to our e-commerce
site.
Our
e-commerce is directly linked to most of our on-line retail partners for
fulfillment purposes.
Direct
mail campaign
We will
support our promotional and public relations campaigns with direct mail
campaigns to specific target audiences such as parents with teenage
drivers. Our products offer some unique features that can be targeted
to specific target audiences. The silent alarm on our device is
highly attractive to female customers who are generally security
conscious.
One of
the advantages we bring to the market place is ability to customize application
to end users. Fleet management operators are particularly interested
in customized applications and we will aggressively market this capability to
large and medium size fleet operators.
Promotion
and sponsorship program
We will
partner with Atlanta radio station B98.5 to launch a teen awareness program
called “Parents deserve a break”. It will allow us to put forward a
compelling case before millions of parents to discuss teen drivers and safety
issues. Our cell phone and wireless vehicle management application fits in well
with the lifestyle of this audience and gives a greater degree of control over
teenage driving habits. The HALO device offers an unprecedented in-vehicle audio
guidance system that cautions when a driver is not wearing a seat belt, is
speeding or erratic driving behavior is detected.
Public
relations
Historically,
we have been very successful in our public relations campaigns. We
have had coverage in numerous magazines, on-line publishers as well as several
newspapers including the New York Times, the Atlanta Journal -Constitution, the
San Francisco Chronicle and a number of San Antonio, TX newspapers.
We
launched an aggressive PR campaign that has placed us solidly on the global
market and is generating significant interest in our product and
services.
Advertisement
We
launched our first advertising campaign in September of 2007 with the Mazda beta
test. A highly successful campaign, it brought us the interest of
APCO for a licensing relationship, while the sales of products at the selected
dealerships encouraged Mazda to offer expansion of the program.
While we
did not have adequate resources to continue or increase the advertising on a
larger scale, the immediate impact of the two month campaign was encouraging and
we look forward to further opportunities to take our story to a national
audience.
Licensing
Programs
The
establishment of our business development division is a critical part of our
plan to accomplish our financial objectives for 2010. We have
completed the development of a licensing program both for domestic and
international partners. In 2009 we executed licensing agreements with
several companies and have several more deals pending (see section “Projects
On-Going”).
We will
aggressively expand our global licensing efforts in 2010. We intend
to do this via media campaigns, e-marketing and establishing relations with
numerous on-line global sourcing outlets that will introduce us to new markets
and participation in various domestic and international trade
shows.
We bring
a unique and turnkey solution to support our licensees to become
successful.
The
EarthSearch Licensing program is based on a global server network that supports
all of our operations. We converted our hosting solution to Amazon Cloud which
gives us 100% redundancy globally – 24/7/365.
We
partnered with Google to have access to current global map data.
7
Our
product portfolio will offer our licensees a highly competitive advantage in
their local market as we offer them the unprecedented combination of the two
most critical technologies in the world (GPS and RFID). Our solution
allows licensees to deliver efficiency gains in logistics and supply chain
investment while delivering true real-time visibility and automation of supply
chain operations.
With a
global operating system in place, our systems are available in some of the
world’s most popular languages, English, French, Spanish and
Portuguese. We intend to aggressively market licensing opportunity to
a world market.
Our
Products
AutoSearchRFID – World’s first
integration of GPD and RFID
 |
Providing security for goods and assets in transit: |
Bus Safe - BusSafe provides real-time
information of K-12 students’ safe pick up or drop off.
 |
Information is delivered to parents handheld device and to reduce the possibility of child abductions. (We recently submitted proposal to Google Venture to use ad supported revenue strategy to deliver solution free to all schools in the country) |
AutoSearchGPS - Small business
Fleet management solution
 |
Low cost and affordable |
MobileMANAGER -
Advanced Logistic and Fleet Management Solution
 |
Offers
Satellite and GSM communications including 2-way text and voice
communications.
Customizable
canned message handlers.
|
8
MobileMANAGER
– Installed in a freightliner
HALO - The most
advanced Teen driver safety device
 |
In-vehicle audio assistance
provides new driver guidance and driving habit alerts.
iGPS - Intelligent
GPS, Offers the first wireless communication between GPS and
RFID
|
 |
The
World’s first GPS device with embedded RF module. (Patent
pending)
|
9
Item
1A. RISK
FACTORS.
The
limited history of our business makes it difficult to evaluate an investment in
our Company.
Due to
the early stage of our development, limited financial and other historical data
is available for investors to evaluate whether we will be able to fulfill our
business strategy and plans, including whether we will be able to achieve sales
growth or meet our sales objectives. Further, financial and other
limitations May force us to modify, alter, or significantly delay the
implementation of such plans. Our anticipated investments include,
but are not limited to, information systems, sales and marketing, research and
development, distribution and fulfillment, customer support, and administrative
infrastructure. We May incur substantial losses in the future, making
it extremely difficult to implement our business plans and strategies and
sustain our then current level of operations. Furthermore, no
assurances can be given that our strategy will result in an improvement in
operating results or that our operations will become profitable.
We
have a working capital deficit, we May not be able to finance our operating
needs and our auditors’ report expressed substantial doubt as to our ability to
continue as a going concern.
Our
current liabilities are currently greater than our current assets. Our ability
to meet our operating needs depends in large part on our ability to secure third
party financing. We cannot provide any assurances that we will be able to obtain
financing. In connection with their audit report on our consolidated financial
statements as of December 31, 2006, our independent certified public accountants
expressed substantial doubt about our ability to continue as a going concern as
such continuance is dependent upon our ability to raise sufficient
capital.
Our
business model is unproven and May ultimately prove to be commercially
unviable.
Because
of our limited history of operations, we are unable to predict whether our
business model will prove to be viable, whether the actual demand we anticipate
for our products and services will materialize, whether demand for our products
and services will materialize at the prices we expect to charge, or whether
current or future revenue streams and/or pricing levels will be
sustainable. There can be no assurances we will be able to achieve or
sustain such revenue streams and/or pricing levels, the results of which could
have a material, adverse effect on our business, financial condition, and
results of operations. Our ability to generate future revenues will
depend on a number of factors, many of which are beyond our control, including,
among other things, the risks described herein. Our likelihood of
success must be considered in light of the problems, expenses, complications,
delays, and disruptions typically encountered in forming a new management team,
hiring and training new employees, expanding into new markets, application of
GPS, telematics and wireless technology still in its infancy, and the
competitive environment in which we intend to operate.
We
will require significant additional capital to fulfill our business plan, and
our failure to raise additional capital will have a material, adverse effect on
our business, financial condition, and results of operations.
The
development of our sales and marketing capabilities, product and service
offerings, and business in general requires significant capital. The
amount of our future capital requirements depends primarily on the rate of
client growth, the rate and extent of our current expansion plans, and results
of operations. There can be no assurances that unexpected
circumstances (including failure to achieve anticipated cash flow) will not
arise, requiring us to delay or abandon our development plans or seek additional
financing. There can also be no assurance that additional financing
will be available when needed or, that it will be available on commercially
acceptable terms. If we are not able to obtain additional capital on
acceptable terms, there is a risk that investors could lose their entire
investment. Moreover, additional equity financing, if obtained, could
result in substantial dilution to investors in our Common Stock, and the terms
of such additional equity financing May include liquidation and dividend
preferences over the Common Stock, as well as superior voting rights and other
advantages in comparison to the holders of and investors in our Common
Stock.
We
are dependent on Kayode Aladesuyi. Our failure to retain Mr.
Aladesuyi and/or attract new highly qualified members to our Company’s
management team would adversely affect our ability to either remain in operation
or continue to grow.
Our
success to date has largely been attributable to the skills and efforts of
Kayode Aladesuyi, our founder, Chief Executive Officer and
President. Continued growth and profitability will depend on our
ability to strengthen our leadership infrastructure by recruiting and retaining
qualified, experienced executive personnel. Competition in our
industry for executive-level personnel is fierce, and there can be no assurance
that we will be able to hire and retain other highly skilled executive
employees, or that we can do so on economically feasible or desirable
terms. The loss of Mr. Aladesuyi or our inability to hire and retain
other such executives would have a material, adverse effect on our business,
financial condition, and results of operations. In addition, the
other members of our management team do not have substantial, if any, experience
in the telematics industry.
10
If
we are not successful in the continued development, introduction, or timely
manufacture of new products, demand for our products and services could decrease
substantially.
We expect
that a significant portion of our future revenue will be derived from sales of
newly introduced products and services. The market for our products
and services is characterized by rapidly changing technology, evolving industry
standards, and changes in customer needs. Specifically, the GPS,
telematics, and wireless industries are experiencing significant technological
change and advancement, and the industry in which we operate May coalesce in
support of one or more particular advanced technologies that our Company does
not possess. If we fail to modify or improve our products and
services in response to changes in technology, industry standards or customer
needs, our products and services could rapidly become less competitive or
obsolete. We must continue to make significant investments in
research and development in order to continue to develop new products, enhance
existing products, and achieve market acceptance for such
products. However, there can be no assurance that development stage
products will be successfully completed or, if developed, will achieve
significant customer acceptance.
If we are
unable to successfully develop and introduce competitive new products and
services, and enhance our existing products and services, our future results of
operations would be adversely affected. Our pursuit of necessary
technology May require substantial time and expense, and we May need to license
new technologies to respond to technological change. These licenses
May not be available on desirable or acceptable terms. Development and
manufacturing schedules for technology products are difficult to predict, and
there can be no assurance that we will achieve timely initial customer shipments
of new products. The timely availability of these products in volume
and their acceptance by customers are important to our future
success. We May experience delays in shipping certain of our products
and, whether due to manufacturing delays, lack of market acceptance, delays in
regulatory approval, or otherwise, they could have a material adverse effect on
our business, financial condition, and results of operations.
We
will derive a significant portion of our revenues from sales outside the United
States, and numerous factors related to international business activities will
subject us to risks that could, among other things, affect the demand for our
products, negatively affecting our business, financial condition, or results of
operations.
Part of
our strategy will involve the pursuit of growth opportunities in a number of
foreign markets. If we are not able to maintain or increase
international market demand for our products, services, and technologies, then
we May not be able to achieve our financial goals.
In many
foreign markets, barriers to entry are created by long-standing relationships
between potential customers and their local providers and protective
regulations, including local content and service requirements. In
addition, the pursuit of international growth opportunities require significant
efforts for an extended period before substantial revenues from these markets
are realized. Our business could be adversely affected by a variety
of uncontrollable and changing factors, including:
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·
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Unexpected
changes in legal or regulatory
requirements;
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·
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Difficulty
in protecting our intellectual property rights in a particular foreign
jurisdiction;
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·
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Cultural
differences in the conduct of
business;
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·
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Difficulty
in attracting qualified personnel and managing foreign
activities;
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·
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Recessions
in foreign economies;
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·
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Longer
payment cycles for and greater difficulties collecting accounts
receivable;
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·
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Export
controls, tariffs, and other trade protection
measures;
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·
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Fluctuations
in currency exchange rates;
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·
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Nationalization,
expropriation, and limitations on repatriation of
cash;
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·
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Social,
economic, and political
instability;
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·
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Natural
disasters, acts of terrorism, and
war;
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·
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Taxation;
and
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·
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Changes
in laws and policies affecting trade, foreign investment, and
loans.
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11
We rely on third-party RFID device we
integrated with our product. The loss or inability to maintain
licenses for such third-party could materially, negatively impact our
business.
We
currently rely upon certain software licensed from third-parties, including
software that is integrated with our internally developed software and used to
perform key functions. Certain of these licenses, including our
license with Google, are for limited terms and can be renewed only by mutual
consent. In addition, these licenses may be terminated if we breach
the terms of the license and fail to cure the breach within a specified period
of time. There can be no assurance that such licenses will be
available to us on commercially reasonable terms, if at all. The loss
of or inability to maintain or obtain licenses on such third-party software
could result in the discontinuation of, or delays or reductions in, product
shipments unless and until equivalent technology is identified, licensed, and
integrated with our software. Any such discontinuation, delay, or
reduction would harm our business, results of operations, and financial
condition.
In
addition, the third-party licenses that we may need to acquire in the future may
not be exclusive, and there can be no assurance that our competitors will not
obtain similar licenses and utilize such technology in competition with
us. There can be no assurance that the vendors of certain technology
that we may need to utilize in our products will be able to provide such
technology in the form we require, nor can there be any assurance that we will
be able to modify our own products to adapt to changes in such
technology. In addition, there can be no assurance that financial or
other difficulties that may be experienced by such third-party vendors will not
have a material adverse effect upon the technologies that May be incorporated
into our products, or that, if such technologies become unavailable, we will be
able to find suitable alternatives if we in fact need them. The loss
of, or inability to maintain or obtain, any such software licenses could
potentially result in shipment delays or reductions until equivalent software
can be developed, identified, licensed and integrated, and could harm our
business, operating results, and financial condition if we ultimately need to
rely on such software.
If
we do not correctly anticipate demand for our products, we May not be able to
secure sufficient quantities or cost-effective production of our products, or we
could have costly excess production or inventories.
We expect
that it will become more difficult to forecast demand as we introduce and
support multiple products and as competition in the market for our products
intensifies. Significant unanticipated fluctuations in demand could
cause the following problems in our operations:
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·
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If
demand increases beyond what we forecast, we would have to rapidly
increase production. We would depend on suppliers to provide
additional volumes of components, and those suppliers might not be able to
increase production rapidly enough to meet unexpected
demand.
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·
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Rapid
increases in production levels to meet unanticipated demand could result
in higher costs for manufacturing and supply of components and other
expenses. These higher costs could lower our profit
margins. Further, if production is increased rapidly,
manufacturing quality could decline, which May also lower our profit
margins.
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·
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If
forecasted demand does not develop, we could have excess production
resulting in higher inventories of finished products and components, which
would use cash and could lead to write-offs of some or all of the excess
inventories. Lower than forecasted demand could also result in
excess manufacturing capacity at our facilities, which could result in
lower margins.
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Our
sales and gross margins for our products May fluctuate or erode.
Our sales
and gross margins for our products May fluctuate from quarter to quarter due to
a number of factors, including product mix, competition, and unit
volumes. In particular, the average selling prices of a specific
product tend to decrease over that product’s life. To offset such
decreases, we intend to rely primarily on obtaining yield improvements and
corresponding cost reductions in the manufacture of existing products and on
introducing new products that incorporate advanced features and, therefore, can
be sold at higher average selling prices. However, there can be no
assurance that we will be able to obtain any such yield improvements, or cost
reductions, or introduce any such new products in the future. To the
extent that such cost reductions and new product introductions do not occur in a
timely manner or our products do not achieve market acceptance, our business,
financial condition, and results of operations could be materially, adversely
affected.
We
May not be able to protect our intellectual property rights against piracy or
the infringement of our patents by third-parties due to the declining legal
protection given to intellectual property.
Preventing
unauthorized use or infringement of our intellectual property rights is
difficult. Piracy of our software represents a potential loss of
significant revenue. While this would adversely affect our revenue
from the United States market, the impact on revenue from abroad is more
significant, particularly in countries where laws are less protective of
intellectual property rights. Similarly, the absence of harmonized
patent laws makes it more difficult to ensure consistent respect for patent
rights. Moreover, future legal changes could make defending our
intellectual property rights even more challenging. Continued
enforcement efforts of our intellectual property rights May not affect revenue
positively, and revenue could be adversely affected by reductions in the legal
protection for intellectual property rights for software developers or by
compliance with additional legal obligations impacting the intellectual property
rights of software developers.
12
The
loss of any member of our senior management team or a significant number of our
managers could have a material adverse effect on our ability to manage our
business.
Our
operations depend heavily on the skills and efforts of our senior management
team, our President and Chief Executive Officer. We will rely substantially on
the experience of the management of our subsidiaries with regard to day-to-day
operations. We face intense competition for qualified personnel, and many of our
competitors have greater resources than we have to hire qualified personnel. The
loss of any member of our senior management team or a significant number of
managers could have a material adverse effect on our ability to manage our
business.
Insurance
We
currently maintain $2,000,000 dollars of property and business liability
insurance from Essex insurance company. However, we intend to acquire and
maintain insurance appropriate to our new activities in the near future on such
terms that management shall deem to be commercially reasonable.
Employees/Consultants
Where
You Can Get Additional Information
We file
annual, quarterly and current reports, proxy statements and other information
with the SEC. You may read and copy our reports or other filings made with the
SEC at the SEC’s Public Reference Room, located at 100 F Street, N.W.,
Washington, DC 20549. You can obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these
reports and other filings electronically on the SEC’s web site, www.sec.gov
.
The Company’s stock price may be volatile .
The
market price of the Company’s common stock is likely to be highly volatile and
could fluctuate widely in price in response to various factors, many of which
are beyond the Company’s control, including the following:
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new
products and services by the Company or its
competitors;
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additions
or departures of key personnel;
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the
Company’s ability to execute its business plan;
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operating
results that fall below expectations;
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loss
of any strategic relationship;
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industry
developments;
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economic
and other external factors; and
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period-to-period
fluctuations in the Company’s financial
results.
|
In
addition, the securities markets have from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. These market fluctuations may also materially and
adversely affect the market price of the Company’s common stock.
There is currently no liquid trading
market for the Company’s common stock and the Company cannot ensure that one
will ever develop or be sustaine .
The
Company’s common stock is currently approved for quotation on the OTC Bulletin
Board trading under the symbol ECDC.OB. However, there is limited trading
activity and not currently a liquid trading market. There is no assurance
as to when or whether a liquid trading market will develop, and if such a market
does develop, there is no assurance that it will be maintained.
Furthermore, for companies whose securities are quoted on the
Over-The-Counter Bulletin Board maintained by the Financial Industry Regulatory
Authority (the “OTCBB”), it is more difficult (1) to obtain accurate quotations,
(2) to obtain coverage for significant news events because major wire services
generally do not publish press releases about such companies, and (3) to obtain
needed capital. As a result, purchasers of the Company’s common stock may
have difficulty selling their shares in the public market, and the market price
may be subject to significant volatility.
13
The Company’s common stock is
currently deemed to be “penny stock”, which makes it more difficult for
investors to sell their shares .
The
Company’s common stock is currently subject to the “penny stock” rules adopted
under section 15(g) of the Exchange Act. The penny stock rules apply to
companies whose common stock is not listed on the NASDAQ Stock Market or other
national securities exchange and trades at less than $5.00 per share or that
have tangible net worth of less than $5,000,000 ($2,000,000 if the company has
been operating for three or more years). These rules require, among other
things, that brokers who trade penny stock to persons other than “established
customers” complete certain documentation, make suitability inquiries of
investors and provide investors with certain information concerning trading in
the security, including a risk disclosure document and quote information under
certain circumstances. Many brokers have decided not to trade penny stocks
because of the requirements of the penny stock rules and, as a result, the
number of broker-dealers willing to act as market makers in such securities is
limited. If the Company remains subject to the penny stock rules for any
significant period, it could have an adverse effect on the market, if any, for
the Company’s securities. If the Company’s securities are subject to the penny
stock rules, investors will find it more difficult to dispose of the Company’s
securities.
ITEM 1B. Unresolved Staff
Comments
None.
ITEM 2. PROPERTIES
Our
principal executive office is located at 120 Interstate North Parkway SE, Suite
445 Atlanta, Ga. Our telephone number is (770) 953-4184. We are currently
leasing generic office space on 3 year tern basis for $5,400 per month this
lease ends April 2011. This space is utilized for office purposes and it is
our belief that the space is adequate for our immediate needs. Additional space
may be required as we expand our business activities. We do not foresee any
significant difficulties in obtaining any required additional
facilities.
ITEM 3. LEGAL
PROCEEDINGS
We are
not presently a party to any litigation or threatened litigation.
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 currently quoted on the OTC Bulletin Board. Our common stock has
been quoted on the OTC Bulletin Board since August 6, 2003 under the symbol
“ECDC.OB.” Because we are quoted on the OTC Bulletin Board, our
securities may be less liquid, receive less coverage by security analysts and
news media, and generate lower prices than might otherwise be obtained if they
were listed on a national securities exchange.
Our
authorized capital stock consists of 75,000,000 shares of common stock, par
value $0.001per share. The holders of our common stock:
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*
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have
equal ratable rights to dividends from funds legally available if and when
declared by our board of directors;
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|
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*
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are
entitled to share ratably in all of our assets available for distribution
to holders of common stock upon liquidation, dissolution or winding up of
our affairs;
|
|
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*
|
do
not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights; and
|
|
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*
|
are
entitled to one non-cumulative vote per share on all matters on which
stockholders may vote.
|
We refer
you to our Articles of Incorporation, Bylaws and the applicable statutes of the
State of Nevada for a more complete description of the rights and liabilities of
holders of our securities.
Non-cumulative
Voting
Holders
of shares of our common stock do not have cumulative voting rights, which means
that the holders of more than 50% of the outstanding shares, voting for the
election of directors, can elect all of the directors to be elected, if they so
choose, and, in that event, the holders of the remaining shares will not be able
to elect any of our directors.
The
following table sets forth the high and low bid quotations for our common stock
as reported on the OTC Bulletin Board for the periods indicated.
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2009
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High
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Low
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||||||
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Second
Quarter
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0.20 | 0.07 | ||||||
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2010
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||||||||
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Third
Quarter
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0.15 | 2.25 |
14
Information
for the periods referenced above has been furnished by the OTC Bulletin Board.
The quotations furnished by the OTC Bulletin Board reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not reflect actual
transactions.
We have
never declared or paid any cash dividends on our common stock nor do we intend
to do so in the foreseeable future. Any future determination to pay cash
dividends will be at the discretion of our board of directors and will depend
upon our financial condition, operating results, capital requirements, any
applicable contractual restrictions and such other factors as our board of
directors deems relevant.
Trading
Information
The
Company’s common stock is currently approved for quotation on the OTCBB under
the symbol “ECDC.OB,” but there is currently no liquid trading market for the
Company’s common stock. The information for our transfer agent is as
follows:
Atlantic
Stock Transfer Agent
7130
Nob Hill Road
Tamarac,
FL 33321
Phone
(954) 726-4954
Holders
As of
March 26th,
2010 we had 231 stockholders of record.
Section
15(g) of the Securities Exchange Act of 1934
Our
company’s shares are covered by Section 15(g) of the Securities Exchange Act of
1934, as amended that imposes additional sales practice requirements on
broker/dealers who sell such securities to persons other than established
customers and accredited investors (generally institutions with assets in excess
of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouses). For
transactions covered by the Rule, the broker/dealer must make a special
suitability determination for the purchase and have received the purchaser’s
written agreement to the transaction prior to the sale. Consequently, the Rule
may affect the ability of broker/dealers to sell our securities and also may
affect your ability to sell your shares in the secondary market.
Section
15(g) also imposes additional sales practice requirements on broker/dealers who
sell penny securities. These rules require a one page summary of certain
essential items. The items include the risk of investing in penny stocks in both
public offerings and secondary marketing; terms important to in understanding of
the function of the penny stock market, such as “bid” and “offer” quotes, a
dealers “spread” and broker/dealer compensation; the broker/dealer compensation,
the broker/dealers duties to its customers, including the disclosures required
by any other penny stock disclosure rules; the customers rights and remedies in
causes of fraud in penny stock transactions; and, the NASD’s toll free telephone
number and the central number of the North American Administrators Association,
for information on the disciplinary history of broker/dealers and their
associated persons.
ITEM
7. Management's
Discussion And Analysis Of Financial Condition & Results of
Operations.
Management
Discussion and Analysis
There are
clear trends in the direction of the logistics, telemetry industries; our goal
is to take bold steps that would establish us as a leader in our
industry. One of the bold steps we have taken is to develop the first
integrated GPS device with embedded RFID module. A true solution
which offers continuous visibility across the supply chain.
Research
and information from industry leaders validates our business and product
strategies.
“We believe that the RFID and GPS and
telemetry industry will experience significant growth over the next 5 years.
“The next ten years
will see a rapid gain in market share of mainstream printed and Chipless RFID
tags. The numbers sold globally will rise from $40 million in 2009 to $624
billion in 2019” - Raghu Das, Development Manager
IDTechEx
A
recent research by Karen Butner from IBM global services division validates our
disagreement. While RTLS product provides can provide information in
real time using GPRS network, its implementation or accuracy of information is
considerably subject to human execution. The report published by Karen Butner
discovered that 70% of 400 supply chain managers who participated in the
research were dissatisfied with the current stage of technology and their
inability to have real-time visibility of the supply chain.
15
The
tagging of pallets and cases as demanded by retailers (mostly in the US) will
use approximately 225 million RFID labels in 2009, but we see take off in retail
outside mandates, such as from Marks & Spencer and American Apparel, where
200 million tags will be used on apparel in 2009. RFID in the form of tickets
used for transit will demand 350 million tags in 2009. The tagging of animals
(such as pigs and sheep) is now substantial as it becomes a legal requirement in
many more territories, with 105 million tags being used for this sector in 2009.
This is happening in regions such as China and Australasia. In total, 2.35
billion tags will be sold in 2009 versus 1.97 billion in 2008.
To
achieve a leadership position in the logistics space, we intend to pursue the
following strategies:
Offer
Comprehensive and Affordable Subscription-Based Solutions. Ownership of the, LogiBoxx,
LogiBoxx RF™ and HALO devices and software applications gives us distinct
advantages over the vast majority of location-tracking companies that license
their devices from a limited number of OEMs. Most significantly, our ability to
control the costs of manufacturing the device and avoid up-front or ongoing
licensing or royalty payments to OEMs permits us to offer our customers our
devices at low costs in exchange for a two-year subscription plan, similar to
the business model used by many wireless service providers and satellite
television companies.
Provide a Global
Turnkey Solution to An Independent Distributor and Licensee Network. The combination of offering
the LogiBoxx, LogiBoxx RF™ and HALO devices at limited or low cost to the end
user together with the management tools embedded in the QuickTrack™ operating
platform allows us to offer a turnkey solution to independent distributors
seeking low cost entry into a viable business opportunity. We believe that our
international approach to deliver turnkey solution globally positions us to
rapidly and inexpensively license, manage and distribute our products globally
through an independent distributor network with minimal incremental
cost.
Increase
penetration in existing markets and expand into additional international
markets. The challenges posed by assets in transit are a global one and
to which we have developed the only viable real time
solution. Licensing and our solution globally and creating network of
resellers is going to be a key strategy in our plan to expand operation
globally.
Pursue
Co-Branding, Licensing and Other Strategic Relationships. Our ownership of
the critical components of the LogiBoxx™ device affords us the flexibility to
co-brand or license our technology to larger, well-capitalized strategic
partners, such as automobile and construction equipment manufacturers and
dealers, who in turn can distribute the product to their end-user customers with
their own branded solution “Powered by EarthSearch.” We
can also customize the web-based QuickTrack™ interface and the LogiBoxx™,
LogiBoxx RF, HALO and RoadNUT device features for our fleet management customers
that have unique needs based on the nature of their businesses.
Continue to
Develop Proprietary Technologies and Value Added Services. Our
research and development division, EarthSearch Technologies, continues to
enhance the Logiboxx™, HALO and RoadNUT devices and develop new GPS and
telematic technologies. We previously manage telemetry technology development,
application hosting and platform integration for different markets out of Brazil
at a significantly reduced cost to the Company. The recent launch of
“GATIS” Global asset Tracking and Identification System which integrates GPS and
RFID data in single web based platform is demonstration of our commitment to
continue to develop relevant solution for our customers.
Strategic
Acquisitions. We intend to accelerate growth by looking at some of our
competitors who offer similar but complete solution or who may rely on third
party products or technology. The GPS and logistics space has significant number
of providers who are simply resellers, a good number of these companies have
significant number of customers in their portfolio which could help us
accelerate both our growth and market share.
Consumer
Products. Our teenage driver safety device “HALO” demonstrates our
intention to enter the consumer electronic market aggressively over the next
year. We recently executed a vendor agreement with Wal-Mart and intend to pursue
similar agreements with other national and regional retailer to help accelerate
our success in the consumer market as we begin to deliver product to the market
in second quarter 2010.
Plan
of Operation and Funding
Existing
working capital, cash flow from operations, further advances from the bank, as
well as debt instruments or stock subscriptions are expected to be adequate to
fund our operations over the next twelve months.
In
connection with our business plan, management anticipates that administrative
expenses will increase over the next twelve months. Additional issuances of
equity or convertible debt securities may be required which will result in
dilution to our current shareholders. Furthermore, such securities might have
rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business opportunities, which could
significantly and materially restrict our business operations.
16
Material
Commitments
We do not
have any material commitments for the fiscal years ended December 31,
2009.
Off
Balance Sheet Arrangements
We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors.
Going
Concern
The
independent auditors' reports accompanying our December 31, 2009 and December
2008 financial statements, prepared before and without consideration of the
effect of the acquisition of the assets of EARTHSEARCH Holdings, LLC, contains
an explanatory paragraph expressing substantial doubt about our ability to
continue as a going concern. The financial statements have been prepared
"assuming that we will continue as a going concern," which contemplates that we
will realize our assets and satisfy our liabilities and commitments in the
ordinary course of business.
Recent
Accounting Pronouncements
Effective
June 30, 2009, the FASB issued a new accounting standard related to the
disclosure requirements of the fair value of the financial instruments. This
standard expands the disclosure requirements of fair value (including the
methods and significant assumptions used to estimate fair value) of certain
financial instruments to interim period financial statements that were
previously only required to be disclosed in financial statements for annual
periods.
In August
2009, the FASB issued an amendment to the accounting standards related to the
measurement of liabilities that are recognized or disclosed at fair value on a
recurring basis. This standard clarifies how a company should measure the fair
value of liabilities and that restrictions preventing the transfer of a
liability should not be considered as a factor in the measurement of liabilities
within the scope of this standard. The Company does not expect the impact of
this amendment to be material to its financial statements.
On
September 30, 2009, the FASB issued changes to the authoritative hierarchy of
GAAP. These changes establish the FASB Accounting Standards
Codification (Codification) as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in conformity with GAAP. Rules
and interpretive releases of the Securities and Exchange Commission (SEC) under
authority of federal securities laws are also sources of authoritative GAAP for
SEC registrants. The FASB will no longer issue new standards in the
form of Statements, FASB Staff Positions, or Emerging Issues Task Force
Abstracts; instead the FASB will issue Accounting Standards
Updates. Accounting Standards Updates will not be authoritative in
their own right as they will only serve to update the
Codification. These changes and the Codification itself do not change
GAAP. Other than the manner in which new accounting guidance is
referenced, the adoption of these changes had no impact on the Financial
Statements.
In
October 2009, the FASB issued an amendment to the accounting standards related
to the accounting for revenue in arrangements with multiple deliverables
including how the arrangement consideration is allocated among delivered and
undelivered items of the arrangement. Among the amendments, this standard
eliminated the use of the residual method for allocating arrangement
considerations and requires an entity to allocate the overall consideration to
each deliverable based on an estimated selling price of each individual
deliverable in the arrangement in the absence of having vendor-specific
objective evidence or other third party evidence of fair value of the
undelivered items. This standard also provides further guidance on how to
determine a separate unit of accounting in a multiple-deliverable revenue
arrangement and expands the disclosure requirements about the judgments made in
applying the estimated selling price method and how those judgments affect the
timing or amount of revenue recognition. This standard, for which the Company is
currently assessing the impact, will become effective for the Company on January
1, 2011.
In
October 2009, the FASB issued an amendment to the accounting standards related
to certain revenue arrangements that include software elements. This standard
clarifies the existing accounting guidance such that tangible products that
contain both software and non-software components that function together to
deliver the product’s essential functionality, shall be excluded from the scope
of the software revenue recognition accounting standards. Accordingly, sales of
these products may fall within the scope of other revenue recognition standards
or may now be within the scope of this standard and may require an allocation of
the arrangement consideration for each element of the arrangement. This
standard, for which the Company is currently assessing the impact, will become
effective for the Company on January 1, 2011.
17
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Market
risk represents the risk of loss that may impact our financial position, results
of operations or cash flows due to adverse changes in foreign currency and
interest rates. We have not entered into, and do not expect to enter into,
financial instruments for trading or hedging purposes.
ITEM
8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
Attached
hereto as an Exhibit, please find the Report of the Registered Independent
Auditor containing all of our current and immediate past financial statements,
along with Supplementary Data.
ITEM
9A. Controls and
Procedures
We
maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, consisting of controls and
other procedures designed to give reasonable assurance that information we are
required to disclose in the reports we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission’s rules and
forms and that such information is accumulated and communicated to management,
including our chief executive officer and our chief financial officer, to allow
timely decisions regarding such required disclosure. The Company’s chief
executive officer and chief financial officer have evaluated such disclosure
controls and procedures as of the end of the period covered by this report on
Form 8-K and have determined that such disclosure controls and procedures are
effective.
There was
no change in our internal control over financial reporting during the quarter
ended December 31, 2009 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. The Report of
Independent Registered Public Accounting Firm on Internal Control Over Financial
Reporting is also included as part of their Audit, attached hereto as an
Exhibit.
ITEM
9B. Other
Information
None.
ITEM
10. Directors,
Executive Officers and Corporate Governance.
Our Code
of Ethics -
We adopted a code of ethics. This policy will serve as guidelines in
helping employee to conduct our business in accordance with our values.
Compliance requires meeting the spirit, as well as the literal meaning, of the
law, the policies and the Values. It is expected that employee will use common
sense, good judgment, high ethical standards and integrity in all their
business
ITEM
11. EXECUTIVE
COMPENSATION.
Compensation
of Directors & Officers
The persons who served as members of our board of directors, including executive officers did not receive any compensation for services as director for the year ended December 31, 2009.
Retirement,
Resignation or Termination Plans
We
sponsor no plan, whether written or verbal, that would provide compensation or
benefits of any type to an executive upon retirement, or any plan that would
provide payment for retirement, resignation, or termination as a result of a
change in control of our Company or as a result of a change in the
responsibilities of an executive following a change in control of our
Company.
ITEM
12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGERS & RELATED STOCKHODER
MATTERS.
There
have been no Dividends of the Company.
ITEM
13. CERTAIN
RELATIONSHIP & RELATED TRANSACTIONS, & DIRECTOR
INDEPENDENCE.
Pursuant
to the terms of the Securities Purchase Agreement, which divided the shares on a
pro-rata basis to then current shareholder’s of EarthSearch, CFO Andrea Rocha
Sousa acquired control of 5,000,000 (Five Million) shares of the Company’s
issued and outstanding common stock representing approximately 3.48%. Ms.
Rocha Sousa is Director Kayode Aladesuyi’s
wife.
18
Except
for the foregoing, none of the following persons has any direct or indirect
material interest in any transaction to which we were or are a party since the
beginning of our last fiscal year, or in any proposed transaction to which we
propose to be a party:
| (A) | any of our directors or executive officers; | |
| (B) | any nominee for election as one of our directors; | |
|
(C)
|
any
person who is known by us to beneficially own, directly or indirectly,
shares carrying more than 5% of the voting rights attached to our common
stock; or
|
|
|
(D)
|
any
member of the immediate family (including spouse, parents, children,
siblings and in-laws) of any of the foregoing persons named in paragraph
(A), (B) or (C) above
|
We
anticipate reviewing all related party transactions as they are presented to us,
and we would not anticipate that such review procedures would be in writing
until such time as our Board of Directors felt it was necessary.
ITEM
14. PRINCIPAL
ACCOUNTING FEES & SERVICES
Audit Fees – The company has been charged $29,505.00 for their April 2009 Audit and $30,000.00 for their April 2008 Audit. No other fees have been billed
PART
IV
ITEM
15. Exhibits,
Financial Statements Schedules
19
SIGNATURE
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.
|
East
Coast Development Corp.
|
|||
|
Date:
April 8th,
2010
|
By:
|
/s/ Kayode
Aladesuyi
|
|
|
Kayode
Aladesuyi,
President
|
|||
20