Attached files
| file | filename |
|---|---|
| 8-K - EAST COAST DIVERSIFIED CORPORATION - EAST COAST DIVERSIFIED CORP | ecdc_8k-011510.htm |
| 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 |
EARTHSEARCH
COMMUNICATIONS, INC.
AUDITED
FINANCIAL STATEMENTS
FOR
THE YEARS ENDED
DECEMBER
31, 2009 AND 2008
Contents
| Report of registered independent auditor | 1 | |
| Financial statements | ||
|
Balance
sheets
|
2-3
|
|
|
Statements
of operations
|
4
|
|
|
Statements
of changes in stockholders’ deficit
|
5
|
|
|
Statements
of cash flows
|
6-7
|
|
|
Notes
to financial statements
|
8-13
|
Report
of Registered Independent Auditor
To the
Stockholders
EarthSearch
Communications, Inc.
Atlanta,
Georgia
We have
audited the accompanying balance sheets of EarthSearch Communications, Inc. as
of December 31, 2009 and 2008, and the related statements of operations, changes
in stockholders’ deficit, and cash flows for the years then ended. These
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We
conducted our audit in accordance with generally accepted auditing standards in
the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our
opinion the financial statements referred to above present fairly, in all
material respects, the financial positions of EarthSearch Communications, Inc.
as of December 31, 2009 and 2008, and the results of its operations, changes in
stockholders’ deficit, and cash flows for the years then ended for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.
The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 4 to the
consolidated financial statements, the Company has suffered recurring losses
from operations, and is dependent upon shareholders to provide sufficient
working capital to maintain continuity. These circumstances create substantial
doubt about the Company’s ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
KBL,
LLP
KBL,
LLP
Certified
Public Accountants and Advisors
February
26, 2010
|
110
Wall Street, 11th Floor, New York, NY 10005
|
212.785.9700 |
1
EARTHSEARCH
COMMUNICATIONS, INC.
BALANCE
SHEETS
DECEMBER
31, 2009 AND 2008
|
2009
|
2008
|
|||||||
| Assets | ||||||||
| Current assets | ||||||||
|
Cash
and cash equivalents
|
$ | 766 | $ | 28 | ||||
|
Accounts
receivable (net of
allowance for doubtful accounts of $260,577 and
$195,112 respectively)
|
2,259 | - | ||||||
|
Prepaid
expenses
|
5,000 | |||||||
|
Supplier advances
|
29,576 | 37,890 | ||||||
|
Total
current assets
|
37,601 | 37,918 | ||||||
|
Property
and equipment
|
||||||||
|
Machinery
and equipment
|
26,611 | 25,756 | ||||||
|
Furniture
and fixtures
|
22,806 | 22,806 | ||||||
|
Equipment
to be placed in service
|
50,007 | 60,247 | ||||||
| 99,424 | 108,809 | |||||||
|
Less:
accumulated depreciation
|
43,400 | 26,795 | ||||||
|
Net
property and equipment
|
56,024 | 82,014 | ||||||
|
Other
assets
|
||||||||
|
Capitalized
research and development costs (net of accumulated
amortization of $367,210 and $64,794)
|
273,458 | 422,103 | ||||||
|
Investment
in East Coast Diversified Corporation
|
100,000 | - | ||||||
|
Security
deposits
|
4,521 | 4,521 | ||||||
|
Total
other assets
|
377,979 | 426,624 | ||||||
|
Total
assets
|
$ | 471,604 | $ | 546,556 | ||||
See
registered independent auditors’ report and the notes to the financial
statements.
2
EARTHSEARCH
COMMUNICATIONS, INC.
BALANCE
SHEETS
DECEMBER
31, 2009 AND 2008
|
2009
|
2008
|
|||||||
|
Liabilities
and Stockholders’ Deficit
|
||||||||
| Current liabilities | ||||||||
|
Bank
overdraft
|
$ | 5,207 | $ | 8,837 | ||||
|
Accounts and accrued expenses
payable
|
655,494 | 655,620 | ||||||
|
Payroll and payroll taxes
payable
|
1,123,410 | 779,683 | ||||||
|
Loans payable
|
1,279,136 | 946,311 | ||||||
|
Total
current liabilities
|
3,063,247 | 2,390,451 | ||||||
|
Total
liabilities
|
3,063,247 | 2,390,451 | ||||||
|
Stockholders’
deficit
|
||||||||
|
Common
stock (200, 000, 000
shares $. 01 par value authorized, 136,064,233 and
75,774,233 shares issued and outstanding,
respectively)
|
1,360,642 | 757,742 | ||||||
|
Additional
paid-in capital
|
4,946,622 | 4,824,045 | ||||||
|
Accumulated
deficit
|
(8,898,907 | ) | (7,425,682 | ) | ||||
|
Total
stockholders’ deficit
|
(2,591,643 | ) | (1,843,895 | ) | ||||
|
Total
liabilities and stockholders’ deficit
|
$ | 471,604 | $ | 546,556 | ||||
See
registered independent auditors’ report and the notes to the financial
statements.
3
EARTHSEARCH
COMMUNICATIONS, INC.
STATEMENT
OF OPERATIONS
FOR
THE YEARS ENDED
DECEMBER
31, 2009 AND 2008
|
2009
|
2008
|
|||||||
|
Revenue
|
$ | 147,193 | $ | 1,037,739 | ||||
|
Cost
of revenue
|
263,605 | 603,665 | ||||||
|
Gross
margin
|
(116,412 | ) | 434,074 | |||||
|
Selling, general and administrative
expenses
|
1,294,606 | 1,602,792 | ||||||
|
Loss
from operations
|
(1,411,018 | ) | (1,168,718 | ) | ||||
|
Other income
(expense)
|
||||||||
|
Other
income
|
- | 635 | ||||||
|
Interest
expense
|
(50,027 | ) | (43,780 | ) | ||||
|
Loss
on disposal of assets
|
(12,180 | ) | (4,620 | ) | ||||
|
Total
other income (expense)
|
(62,207 | ) | (47,765 | ) | ||||
|
Net
loss
|
$ | (1,473,225 | ) | $ | (1,216,483 | ) | ||
See
registered independent auditors’ report and the notes to the financial
statements.
4
EARTHSEARCH
COMMUNICATIONS, INC.
STATEMENT
OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR
THE YEARS ENDED
DECEMBER
31, 2009 AND 2008
|
December
31, 2009
|
|
Common
stock
|
Additional
paid-in
capital
|
Accumulated
deficit
|
Total
stockholders’
deficit
|
|||||||||||||
|
Balance,
beginning of year
|
$ | 757,742 | $ | 4,824,045 | $ | (7,425,682 | ) | $ | (1,843,895 | ) | ||||||
|
Common
shares issued for cash
|
528,900 | 122,577 | 651,477 | |||||||||||||
|
Common
shares issued for services
|
74,000 | 74,000 | ||||||||||||||
|
Net
loss
|
(1,473,225 | ) | (1,473,225 | ) | ||||||||||||
| Balance, end of year | $ |
1,360,642
|
$ | 4,946,622 | $ | (8,898,907 | ) | $ | (2,591,643 | ) | ||||||
December
31, 2008
|
Common
stock
|
Additional
paid-in
capital
|
Accumulated
deficit
|
Total
stockholders’
deficit
|
|||||||||||||
|
Balance,
beginning of year
|
$ | 551,386 | $ | 4,354,700 | $ | (6,209,199 | ) | $ | (1,303,113 | ) | ||||||
|
Common
shares issued for cash
|
206,356 | 469,345 | 675,701 | |||||||||||||
|
Net
loss
|
(1,216,483 | ) | (1,216,483 | ) | ||||||||||||
|
Balance,
end of year
|
$ | 757,742 | $ | 4,824,045 | $ | (7,425,682 | ) | $ | (1,843,895 | ) | ||||||
See
registered independent auditors’ report and the notes to the financial
statements.
5
EARTHSEARCH
COMMUNICATIONS, INC.
STATEMENT
OF CASH FLOWS
FOR
THE YEAR ENDED
DECEMBER
31, 2009
|
Cash
flows from operating activities
|
||||
|
Net
loss
|
$ | (1,473,225 | ) | |
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||
|
Common
stock issued for services
|
74,000 | |||
|
Depreciation
and amortization
|
220,887 | |||
|
Bad
debt expense
|
66,587 | |||
|
Loss
on disposal of assets
|
12,180 | |||
|
Changes
in operating assets and liabilities:
|
||||
|
Increase
in accounts receivable
|
(68,846 | ) | ||
|
Increase
in prepaid expenses
|
(5,000 | ) | ||
|
Decrease
in supplier advances
|
8,314 | |||
|
Decrease
in bank overdraft
|
(3,629 | ) | ||
|
Decrease
in accounts and accrued expenses payable
|
(126 | ) | ||
|
Increase
in payroll and payroll taxes payable
|
343,728 | |||
|
Net
cash used in operating activities
|
(825,130 | ) | ||
|
Cash
flows from investing activities
|
||||
|
Capital
expenditures
|
(2,795 | ) | ||
|
Investment
in East Coast Diversified Corporation
|
(100,000 | ) | ||
|
Capitalized
research and development costs
|
(55,639 | ) | ||
|
Net
cash used in investing activities
|
(158,434 | ) | ||
|
Cash
flows from financing activities
|
||||
|
Proceeds
from the sale of common stock
|
651,477 | |||
|
Net
increase in loans payable
|
332,825 | |||
|
Net
cash provided by financing activities
|
984,302 | |||
|
Increase
in cash and cash equivalents
|
738 | |||
|
Cash
and cash equivalents, beginning of year
|
28 | |||
|
Cash
and cash equivalents, end of year
|
$ | 766 | ||
|
Supplementary
disclosures of cash flow information
|
||||
|
Cash paid during the year for:
|
||||
|
Income
taxes
|
$ | -- | ||
|
Interest expense
|
3,280 | |||
See
registered independent auditors’ report and the notes to the financial
statements.
6
EARTHSEARCH
COMMUNICATIONS, INC.
STATEMENT
OF CASH FLOWS
FOR
THE YEAR ENDED
DECEMBER
31, 2008
|
Cash
flows from operating activities
|
||||
|
Net
loss
|
$ | (1,216,483 | ) | |
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||
|
Depreciation
and amortization
|
143,314 | |||
|
Bad
debt expense
|
331,634 | |||
|
Loss
on disposal of assets
|
4,620 | |||
|
Changes
in operating assets and liabilities:
|
||||
|
Increase
in security deposits
|
(3,321 | ) | ||
|
Increase
in accounts receivable
|
(130,134 | ) | ||
|
Increase
in supplier advances
|
(37,890 | ) | ||
|
Increase
in bank overdraft
|
8,836 | |||
|
Increase
in accounts and accrued expenses payable
|
290,904 | |||
|
Increase
in payroll and payroll taxes payable
|
188,581 | |||
|
Net
cash used in operating activities
|
(419,939 | ) | ||
|
Cash
flows from investing activities
|
||||
|
Capital
expenditures
|
(67,649 | ) | ||
|
Capitalized
research and development costs
|
(388,764 | ) | ||
|
--
|
||||
|
Net
cash used in investing activities
|
(456,413 | ) | ||
|
Cash
flows from financing activities
|
||||
|
Proceeds
from the sale of common stock
|
675,701 | |||
|
Net
increase in loans payable
|
171,148 | |||
|
Net
cash provided by financing activities
|
846,849 | |||
|
Decrease
in cash and cash equivalents
|
(29,503 | ) | ||
|
Cash
and cash equivalents, beginning of year
|
29,531 | |||
|
Cash
and cash equivalents, end of year
|
$ | 28 | ||
| Supplementary disclosures of cash flow information | ||||
|
Cash paid during the year for:
|
||||
|
Income taxes
|
$ | -- | ||
|
Interest expense
|
3,280 | |||
See registered independent auditors’ report and the notes to the financial statements.
7
EARTHSEARCH
COMMUNICATIONS, INC.
NOTES
TO THE FINANCIAL STATEMENTS
Organization
EarthSearch
Communications, Inc. (“The Company”) was founded in November 2003 as a Georgia
corporation. The Company is an early stage research and development company with
specialization in GPS and RFID technology. The management announced the
completion of the development of GPS devices embedded with RFID modules which
represents its core technology and products. It has filed provisional business
process patent application with the U. S. trademark office, and has commenced
sales and commercialization of the technology which it expect will result in
revenue that will allow it to sustain its current operation and get to a
profitable status.
The
company launched sales operations in 2008 but subsequently withdrew sales and
commercial resources from the market mid-2008 and 2009 due to the negative
economic and market conditions.
The
operations of its former wholly owned subsidiary EarthSearch Localizacao de
Veiculos, Ltda were discontinued during 2007.
Accounting
basis
The
Company uses the accrual basis of accounting for financial statement reporting.
Revenue is generated from monthly subscription fees charged by the Company to
its customers for the use of its GPS applications. Accordingly, revenues are
recognized monthly. Expenses are realized when the obligation is
incurred.
Cash
equivalents
The
Company considers certificates of deposit and other highly liquid investments
purchased with maturities of ninety days or less to be cash
equivalents.
Allowance
for bad debts
The
Company made allowance for bad debts in the amount of $260,577 and $195,112 respectively for the
years ended December 31, 2009 and 2008 due to uncertainty from the customers who
defaulted due to the bad economy
Deferred
revenue
Deferred
revenue represents advanced for distribution, licensing, and subscription fees
received that will be recognized as revenue in future periods.
8
EARTHSEARCH
COMMUNICATIONS, INC.
NOTES
TO THE FINANCIAL STATEMENTS
Fixed
assets
Fixed
assets are stated at cost. Depreciation expense is computed principally by the
straight-line method over the following estimated useful lives of the
assets:
|
|
Estimated
|
|
Description
|
useful life
|
|
Furniture
and fixtures
|
7
years
|
|
Equipment
|
5
years
|
|
Leasehold
improvements
|
Life
of lease
|
Equipment
to be placed in service will be depreciated once the equipment is placed in
service.
Income
taxes
The
Company follows FASB Accounting Standards Codification No 740, Income Taxes.
Deferred tax assets or liabilities are recorded to reflect the future tax
consequences of temporary differences between the financial reporting basis of
assets and liabilities and their tax basis at each year-end. These amounts are
adjusted, as appropriate, to reflect enacted changes in tax rates expected to be
in effect when the temporary differences reverse.
The
Company records deferred tax assets and liabilities based on the differences
between the financial statement and tax bases of assets and liabilities and on
operating loss carryforwards using enacted tax rates in effect for the year in
which the differences are expected to reverse. A valuation allowance is provided
when it is more likely than not that some portion or all of a deferred tax asset
will not be realized.
Research
and development costs
Costs
incurred internally in researching and developing a computer software product is
charged to expense until technological feasibility has been established for the
product. Once technological feasibility is established, all software costs are
capitalized until the product is available for general release to customers.
Judgment is required in determining when technological feasibility of a product
is established. We have determined that technological feasibility for our
software products is reached after all high-risk development issues have been
resolved through coding and testing. Generally, this occurs shortly before the
products are released to manufacturing which occurred in January 2007. The
amortization of these costs is included in cost of revenue over the estimated
life of the products, which is estimated to be 3 years.
The
Company capitalized $55,639 and $388,764 of research and development costs
respectively in 2009 and 2008, and recorded $204,283 and $130,216 of
amortization expense on these costs respectively for the years ended December
31, 2009, and 2008. The company had expensed $2,060,984 of research and
development expenditures from inception to December 31, 2006.
9
EARTHSEARCH
COMMUNICATIONS, INC.
NOTES
TO THE FINANCIAL STATEMENTS
NOTE
1 - INCOME TAXES
The
Company incurred no federal income tax expense for the years ended December 31,
2009 and 2008. As of December 31, 2009 the Company has a net operating loss
carryover of $8,898,907 to offset future net income. Due to uncertainty
surrounding the realization of the favorable tax attributes in future tax
returns, the Company has placed a full valuation allowance against its net
deferred tax asset. At such time as it is determined that it is more likely than
not that the deferred tax asset is realizable, the valuation allowance will be
reduced.
Temporary
differences between the recognition of certain expense items for income tax
purposes and financial reporting purposes are as follows:
|
2009
|
2008
|
|||||||
|
Deferred
tax asset:
|
||||||||
|
Net
operating loss carryforward
|
$ | 3,025,628 | $ | 2,524,732 | ||||
|
Valuation
allowance
|
3,025,628 | 2,524,732 | ||||||
|
Net
deferred tax asset
|
$ | -- | $ | -- | ||||
The
Company incurred no federal or state income tax expense for the years ended
December 31, 2009 and 2008, and utilized no tax carryforward losses. The Company
has a net operating loss carryover of $8,898,907 to offset future income tax.
The net operating losses expire as follows:
| December 31, |
2024
|
$ | 1,152,418 | ||
|
2025
|
1,917,800 | ||||
|
2026
|
1,663,944 | ||||
|
2027
|
1,475,037 | ||||
|
2028
|
1,216,483 | ||||
|
2029
|
1,473,225 |
See
registered independent auditors’ report .
10
EARTHSEARCH
COMMUNICATIONS, INC.
NOTES
TO THE FINANCIAL STATEMENTS
NOTE 2 – LOANS
PAYABLE
Loans
payable are as follows:
|
December
31, 2009
|
||||
|
|
||||
|
Unsecured
$450,000 note payable to Azfar Haque, which bears interest at 9% per annum
and was originally due June 15, 2008. The note is current in default.
Accrued interest is equal to $72,305.
|
$ | 522,305 | ||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to Frank
Russo, a Director in the Company.
|
476,206 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to
Edward Eppel.
|
126,400 | |||
|
|
||||
|
Unsecured
$80,000 note payable to Rainmaker Global, Inc. which bears interest
at 30% per annum and was originally due December 31, 2009. The note
is current in default. Accrued interest is equal to
$6,125.
|
86,125 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to
Charms Investment.
|
25,000 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to
Leonard Marella.
|
20,000 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to Steve
Palmer.
|
8,000 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to Syed
Ahmed.
|
7,000 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to Alina
Farooq.
|
3,500 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to
Andrea Rocha, Company Chief Financial Officer and President’s
wife
|
2,600 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to Kayode
Aladesuyi, Company Chief Executive Officer and President and
significant Company shareholder.
|
2,000 | |||
|
|
$ | 1,279,136 | ||
The
Company accrued $46,625 in interest expense on the above loans.
See registered independent auditors’
report .
11
EARTHSEARCH
COMMUNICATIONS, INC.
NOTES
TO THE FINANCIAL STATEMENTS
NOTE 2 – LOANS PAYABLE
Loans
payable are as follows:
December 31,
2008
|
Unsecured
$450,000 note payable to Azfar Haque, which bears interest at 9% per annum
and was originally due June 15, 2008. The note is current in default.
Accrued interest is equal to $31,805.
|
$ | 481,805 | ||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to Frank
Russo, a Director in the Company.
|
443,406 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to Steve
Palmer.
|
8,000 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to Syed
Ahmed.
|
7,000 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to Alina
Farooq.
|
3,500 | |||
|
|
||||
|
Unsecured
non-interest bearing note payable due on demand by Company to
Andrea Rocha, Company Chief Financial Officer and President’s
wife
|
2,600 | |||
|
|
$ | 946,311 |
The
Company accrued $40,500 in interest expense on the above loans.
NOTE 4 - GOING
CONCERN
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company has suffered recurring losses from
operations, and is dependent upon the sale of equity securities to provide
sufficient working capital to maintain continuity. These circumstances create
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
The
Company has incurred net losses of $1,473,225 and $1,216,483 respectively for
the years ended December 31, 2009 and 2008, and, as of December 31, 2009, had
incurred cumulative losses since inception of $8,898,907.
The
Company’s existence in the current and prior periods has been dependent upon a)
advances from related parties and other individuals and b) obtaining additional
capital and financing. The financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going
concern.
See
registered independent auditors’ report .
12
EARTHSEARCH
COMMUNICATIONS, INC.
NOTES
TO THE FINANCIAL STATEMENTS
NOTE
5 – OPERATING LEASE
During
2007 the Company conducted its operations in office space located in Marietta,
Georgia. In the second half of 2007 there was a fire. As a result of the
inconvenience caused by the fire the Company paid rent only for the first seven
months of 2007. In March, 2008 the Company moved its offices to new
facilities.
The
future minimum lease payments are as follows:
|
December
31,
|
2010 | $ | 54,252 | ||
|
|
2011
|
$ | 22,605 |
Rent
expense was $ 65,119 and $36,463 respectively for the years ended December 31,
2009 and 2008.
NOTE
6 – INVESTMENT IN EAST COAST DIVERSIFIED CORPORATION
On
December 18, 2009, the principal shareholders (the “Sellers”) of East Coast
Diversified Corporation (“ECDC”) entered into a Securities Purchase Agreement
(the “Agreement”) with Kayode Aladesuyi (the “Buyer”), the President of the
Company, 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 ECDC, agreed to sell and transfer Sellers' 7,029,950 shares
of Common Stock (the "Sellers’ Shares”) to the Buyer for total consideration of
Three Hundred Thousand ($300,000) Dollars. The Agreement also provides that the
Company will enter into a share exchange agreement with the
Company.
On
January 15, 2010, ECDC and the Company executed a Share Exchange Agreement
pursuant to which ECDC agreed to issue 35 million restricted shares to
the
shareholders
of the Company. In connection with this transaction the Company incurred
$100,000 as of December 31, 2009 towards the final purchase price of the
transaction. The final closing was concluded and is effective April 2, 2010. The
board of ECDC passed a resolution electing the board and management of the
Company and effectively resigned from the board of ECDC.
NOTE
7 – SUBSEQUENT EVENTS
On
January 15, 2010, ECDC and the Company executed a Share Exchange
Agreement
pursuant to which East Coast Diversified Corporation (“ECDC”) agreed to issue 35
million restricted shares to the shareholders of the Company in connection with
a Securities Purchase Agreement (see Note 6). In connection with this
transaction the Company incurred $100,000 as of December 31, 2009 towards the
final purchase price of the transaction. The final closing was concluded and is
effective April 2, 2010. The board of ECDC passed a resolution electing the
board and management of the Company and effectively resigned from the board of
ECDC.
See
registered independent auditors’ report .
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