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EX-31.1 - Novus Robotics Inc.v208229_ex31-1.htm
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

 
FORM 10-Q
 
(Mark One)
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the quarterly period ended November 30, 2010 
 
or
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the transition period from _______________ to _______________. 
 
Commission File No. 000-53006
 
ECOLAND INTERNATIONAL, INC.
(Exact name of issuer as specified in its charter)
 
Nevada
20-3061959
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
4909 W. Joshua Blvd., Suite 1059, Chandler, Arizona
85226
(Address of principal executive offices)
(Zip Code)
   
Registrant’s telephone number, including area code: (602) 882-8771
 
Indicate by check mark if the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No ¨
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ¨
Accelerated filer ¨
   
Non-accelerated filer ¨ (Do not check if a smaller reporting company)
Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ¨ No x
 
Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of   November 30, 2010:  88,650,000 shares of common stock, with a par value of $.001 per share.

 
 

 
 
PART I
Financial Information
 
Item 1.
Financial Statements.
 
ECOLAND INTERNATIONAL, INCORPORATED
FINANCIAL STATEMENTS
November 30, 2010
 
Page Intentionally Left Blank
 
 
 

 
 
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets

   
November 30,
   
May 31,
 
   
2010
   
2010
 
   
(Unaudited)
   
(Unaudited)
 
             
ASSETS
           
CURRENT ASSETS
           
             
Cash
  $ 1,395     $ 38  
Accounts receivable
    11,414       3,508  
Inventory
    1,924       3,705  
                 
Total current assets
    14,733       7,251  
                 
TOTAL ASSETS
  $ 14,733     $ 7,251  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
CURRENT LIABILITIES
               
                 
Accounts payable and accrued liabilities
  $ 76,201     $ 71,502  
Notes payable
    291,063       242,198  
Notes payable - related parties
    231,363       161,560  
                 
Total current liabilities
    598,627       475,260  
                 
STOCKHOLDERS' EQUITY (DEFICIT)
               
                 
Series A, Preferred stock; 100 shares authorized, at $0.001 per share, -0- shares issued and outstanding
    -       -  
Series B, Preferred stock; 1,000,000 shares authorized, at $0.001 per share, -0- shares issued and outstanding
    -       -  
Common stock; 500,000,000 shares authorized, at $0.001 par value, 88,650,000 and 78,650,000 shares issued and outstanding at November 30, 2010 and May 31, 2010, respectively
    88,650       78,650  
Additional paid-in capital
    256,850       166,850  
Subscription Receivable
    (100,000 )     0  
Accumulated other comprehensive loss
    (15,562 )     (3,674 )
Deficit accumulated during the development stage
    (813,832 )     (709,835 )
                 
Total stockholders' deficit
    (583,894 )     (468,009 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ 14,733     $ 7,251  

The accompanying notes are an integral part of these consolidated financial statements.
 
 

 

 
ECOLAND INTERNATIONAL, INC.
(Formerly Guano Distributors, Inc.)
( A Development Stage Company)
Consolidated Statements of Operations

                           
From inception
 
                           
on April 15,
 
   
For the Three Months Ended
   
For the Six Months Ended
   
2005 Through
 
   
November 30,
   
November 30,
   
November 30,
 
   
2010
   
2009
   
2010
   
2009
   
2010
 
                               
REVENUES
  $ 11,786     $ 4,528     $ 11,786     $ 4,528     $ 76,072  
                                         
COST OF GOODS SOLD
    6,427       - 2,365       6,427       2,366       53,825  
                                         
GROSS PROFIT
    5,359       2,163       5,359       2,162       22,247  
                                         
EXPENSES
                                       
                                         
Depreciation and amortization
    -       -       -       -       935  
General and administrative
    38,443       36,857       88,412       72,523       671,514  
                                         
Total Expenses
    38,443       36,857       88,412       72,523       672,449  
                                         
LOSS FROM OPERATIONS
    (33,084 )     (34,694 )     (83,053 )     (70,361 )     (650,202 )
                                         
OTHER INCOME (EXPENSES)
                                       
                                         
Foreign Currency Adjustment
    (420 )     791       -       1,153       3,605  
Interest expense
    (11,140 )     (7,023 )     (20,944 )     (13,602 )     (167,235 )
                                         
Total Other Expenses
    (11,560 )     (6,232 )     (20,944 )     (12,449 )     (163,630 )
                                         
NET LOSS
  $ (44,644 )   $ (40,926 )   $ (103,997 )   $ (82,810 )   $ (813,832 )
                                         
COMPREHENSIVE LOSS
                                       
Foreign Currency Adjustment
    (5,066 )     (7,779 )     (11,888 )     (11,553 )     (15,562 )
NET COMPREHENSIVE LOSS
    (49,710 )     (48,705 )     (115,885 )     (94,363 )     (829,394 )
                                         
BASIC LOSS PER SHARE
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
                                         
WEIGHTED AVERAGE NUMBER OF SHARES OUSTANDING - BASIC
    88,650,000       44,650,000       86,397,253       44,650,000          

The accompanying notes are an integral part of these consolidated financial statements.
 
 
 

 

 
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Deficit

               
Additional
   
Stock
         
Accumulated
       
   
Preferred Stock
   
Common Stock
   
Paid-In
   
Subscriptions
   
Accumulated
   
Other Comp-
   
Total Stock-
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
Receivable
   
Deficit
   
rehensive Income
   
holders defict
 
Inception April 15, 2005
    -       -       -       -       -       -       -       -       -  
                                                                         
Common shares issued for services at $0.001 per share
    -       -       20,000,000       20,000               -       -       -       20,000  
Formation of sub
                                    15                               15  
Net loss May 31, 2005
    -       -                                       (29,128 )             (29,128 )
Balance, May 31, 2005
                    20,000,000       20,000       15       -       (29,128 )     -       (9,113 )
                                                                         
Common shares issued for services at $0.001 per share
    -       -       20,000,000       20,000       -       -       -       -       20,000  
Common shares issued for cash at $0.02 per share
    -       -       4,000,000       4,000       76,000       (20,000 )     -       -       60,000  
Common shares issued for services at $0.02 per share
    -       -       650,000       650       12,350       -       -       -       13,000  
Net loss for the year ended
                                                    (88,433 )     -       (88,433 )
May 31, 2006
                                                                       
Balance, May 31, 2006
                    44,650,000       44,650       88,365       (20,000 )     (117,561 )     -       (4,546 )
                                                                         
Receipt of cash on subscriptions receivable
    -       -       -       -       -       20,000       -       -       20,000  
Net loss for the year ended
                                                                       
May 31, 2007
    -       -       -       -       -       -       (157,774 )     -       (157,774 )
                                                                         
Balance, May 31, 2007
                    44,650,000       44,650       88,365       -       (275,335 )     -       (142,320 )
                                                                         
Services contributed by officers and directors
    -       -       -       -       2,485       -       -       -       2,485  
Net loss for the year ended
                                                                       
May 31, 2008
    -       -       -       -       -       -       (76,171 )     -       (76,171 )
                                                                         
Balance, May 31, 2008
    -       -       44,650,000     $ 44,650     $ 90,850     $ -     $ (351,506 )   $ -     $ (216,006 )
Foreign exchange adjustments
                                                            1,496       1,496  
Net loss for the year ended
                                                                       
May 31, 2009
    -       -       -       -       -       -       (114,151 )     -       (114,151 )
                                                                         
Balance, May 31, 2009
    -       -       44,650,000     $ 44,650     $ 90,850     $ -     $ (465,657 )   $ 1,496     $ (328,661 )
                                                                         
Common shares issued for Notes Payable at $0.005 per share
    -       -       18,000,000       18,000       72,000       -       -       -       90,000  
Common shares issued for services at $0.002 per share
    -       -       4,000,000       4,000       4,000       -       -       -       8,000  
Common shares issued for services at $0.001 per share
    -       -       12,000,000       12,000       -       -       -       -       12,000  
Foreign exchange adjustments
                                                            (5,170 )     (5,170 )
Net loss for the year ended
                                                                       
May 31, 2010
    -       -       -       -       -       -       (244,178 )     -       (244,178 )
                                                                         
Balance, May 31, 2010
    -       -       78,650,000       78,650       166,850       -       (709,835 )     (3,674 )     (468,009 )
                                                                         
Common shares issued for cash at $0.01 per share
    -       -       10,000,000       10,000       90,000       (100,000 )     -       -       -  
Foreign exchange adjustments
                                                            (11,888 )     (11,888 )
Net loss for the Quarter ended
                                                                       
November 31, 2010
    -       -       -       -       -       -       (103,997 )     -       (103,997 )
                                                                         
Balance, November 30, 2010
    -       -       88,650,000       88,650       256,850       (100,000 )     (813,832 )     (15,562 )     (583,894 )

The accompanying notes are an integral part of these consolidated financial statements.
 
 
 

 

 
ECOLAND INTERNATIONAL, INC.
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows

               
From inception
 
               
on April 15,
 
   
For the 6 Months Ending
   
2005 Through
 
   
November 30.
   
November 30,
 
 
 
2010
   
2009
   
2010
 
                   
CASH FLOWS FROM OPERATING ACTIVITIES
                       
                         
Net loss
  $ (103,997 )   $ (82,810 )   $ (813,832 )
Adjustments to reconcile net loss to net cash used by operating activities:
                       
Depreciation and amortization
    -       -       1,525  
Common stock issued for notes payable
    -       -       90,000  
Common stock issued for Services
    -       -       73,000  
Services contributed by officer
                    2,485  
Accrued services by officers and directors
    69,803       69,802       231,363  
Changes in operating assets and liabilities
                       
Increase in accounts receivable
    (7,906 )     989       (11,414 )
Decrease in inventory
    1,781       (1,316 )     (1,924 )
Increase in accounts payable and accrued expenses
    4,699       3,405       76,201  
                         
Net cash used by operating activities
    (35,620 )     (9,930 )     (352,596 )
                         
CASH FLOWS FROM INVESTING ACTIVITIES
                       
                         
Purchase of fixed assets
    -       -       (1,525 )
                         
Net cash used by investing activities
    -       -       (1,525 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
                         
Commmon stock issued for cash
    -       -       80,015  
Proceeds from issuance of notes payable
    48,865       24,690       291,063  
                         
Net cash provided by financing activities
    48,865       24,690       371,078  
                         
EFFECT OF EXHANGE RATE CHANGES ON CASH
    (11,888 )     (11,553 )     (15,562 )
                         
NET INCREASE IN CASH
    13,245       14,760       16,957  
                         
CASH AT BEGINNING OF PERIOD
    38       162       -  
                         
CASH AT END OF PERIOD
  $ 1,395     $ 3,369     $ 1,395  
                         
SUPPLIMENTAL INFORMATION
                       
                         
Cash paid for:
                       
                         
Income taxes
  $ -     $ -     $ -  
                         
Interest
  $ -     $ -     $ -  

The accompanying notes are an integral part of these consolidated financial statements.

 
 

 
 
ECOLAND INTERNATIONAL, INC.
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization of Business

The Company began operations on April 15, 2005 through Guano Distributors, Pty. The Company was then incorporated in the State of Nevada on June 24, 2005 as Guano Distributors, Inc. which Guano Distributors Pty, was consolidated as a wholly owned subsidiary. The Company changed its name to Ecoland International, Inc. on June 24, 2006. In May 2006, the Company amended its Articles of Incorporation to increase the authorized common stock to 500,000,000 shares and 50,000,000 of “blank check” preferred shares. In May 2005 the Company acquired certain distribution rights from Sociaf, LDA an Angolan company, pertaining to Dry Bar Cave Bat Guano. On July 2010 the Company designation term to a portion of the authorized preferred shares, see Note 5 for detail.

The Company is currently in the process of formulating business and strategic plans to process, package and market the guano worldwide from the deposits in Angola and Mozambique.

The Company has not achieved significant revenues and is a development stage company in accordance with FASB ASC 915 “Development Stage Entities.”
 
Basis of presentation
 
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to development stage enterprises, and are expressed in U.S. dollars. The Company’s fiscal year end is May 31. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the three and six months ended November 30, 2010 are not necessarily indicative of the results that may be expected for the year ending May 31, 2011. Please note the Company intends to amend the Form 10K due to SEC correspondence related to the revocation of licences of our former auditor.  As such the May 31, 2010 financial may not be relied upon.
 
 Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reporting amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates.

Fair Value of Financial Instruments

Fair value estimates are based upon certain market assumptions and pertinent information available to management as of November 30, 2010. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and payables. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.


 
ECOLAND INTERNATIONAL, INC.
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements

Cash equivalents

The Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

Foreign Currency Adjustment

The financial position and results of operations of the Company’s foreign subsidiary, Guano Distributors, Inc., is measured using the foreign subsidiary’s local currency as the functional currency.  Revenues and expenses of the subsidiary have been translated into U.S. dollars at average exchange rates prevailing during the period.  Assets and liabilities have been translated at the rates of exchange on the balance sheet date.  The resulting translation gain and loss adjustments are recorded as a separate component of stockholders’ equity, unless there is a sale or complete liquidation of the underlying foreign investments. 

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is provided primarily by the straight-line method over the estimated useful lives of the related assets of five years.
 
Net Income Per Share

FASB ASC 260, “Earnings per Share”, requires dual presentation of basic and diluted earnings or loss per share (“EPS”) for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution; diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Basic loss per share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect is to reduce a loss or increase earnings per share. The Company had no potential common stock instruments which would result in a diluted loss per share. Therefore, diluted loss per share is equivalent to basic loss per share.

Revenue recognition

Revenue from product sales is recognized when shipped, FOB shipping point and accepted by the customer without right of return. Shipping and handling charges billed to customers are included in net sales, and shipping and handling costs incurred by the Company are included in cost of goods sold.

Concentrations

For the six months period ended November 30, 2010 and 2009, two customers accounted for 99% of sales.  As of November 30, 2010 and 2009, two customers accounted for 99% of the accounts receivable balance.


 
ECOLAND INTERNATIONAL, INC.
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements

Advertising

The Company has incurred no advertising costs since inception. At such time the Company commences advertising activities; such costs will be expensed as incurred.

Recently Issued Accounting Pronouncements
 
In April 2010, the FASB issued ASU No. 2010-17, "Revenue Recognition - Milestone Method (Topic 605): Milestone Method of Revenue Recognition" (codified within ASC 605 - Revenue Recognition). ASU 2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. ASU 2010-17 is effective for interim and annual periods beginning after June 15, 2010. The adoption of ASU 2010-17 is not expected to have any material impact on our consolidated financial position, results of operations or cash flows.
 
In May 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The amendments in this Update are effective as of the announcement date of March 18, 2010. The Company does not expect the provisions of ASU 2010-19 to have a material effect on the Company's consolidated financial position, results of operations or cash flows of the Company.
 
NOTE 2 -GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. At November 30, 2010, the Company has accumulated losses of $813,832 since its inception and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1) financing current operations with funds obtained through equity offerings, and (2) planning and streamlining distribution operations with respect to the Company’s Angolan guano supply. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome.
  

 
ECOLAND INTERNATIONAL, INC.
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements

NOTE 3 - NOTES PAYABLE

At November 30, 2010 the Company had notes payable and accrued interest totaling $291,063. Included in this amount are four separate notes payable to unrelated entities totaling $133,519. The notes are due on demand and accrue interest at a rate of 8.0% per annum.  Also included under our wholly owned subsidiary are notes payables due to four unrelated entities totaling $157,544.  The notes are unsecured, due on demand and accrue interest at a rate of 10.5% per annum.  Interest expense for the three and six month ended November 30, 2010 was $7,375 and $12,718, respectively. The interest expense for three and six months ended November 30, 2009 was $4,953 and $9,453, respectively.

NOTE 4 - NOTES PAYABLE - RELATED PARTIES

At November 30, 2010, the Company had notes payable and accrued interest of $231,363. These notes are payable to the officer and director of the Company. Each note is due on demand and accrues interest at a rate ranging from 8.0% to 10.5% per annum.  Interest expense for the three and six month ended November 30, 2010 was $3,765 and $8,226. respectively. The interest expense for three and six months ended November 30, 2009 was $2,070 and $4,149, respectively.

Note 5 – CAPITAL STRUCTURE
 
As of November 30, 2010, the company’s capital structure consisted of common shares and Series A and B preferred shares.
 
There were 500,000,000 common shares authorized with a par value of $0.001 and 88,650,000 and 44,650,000 shares outstanding as of November 30, 2010 and May 31, 2010 respectively.
 
On July 27, 2010, the Company created 100 Series A preferred shares with a par value of $0.001. No Series A shares were issued during the period.  Each share of Series A Preferred Stock is convertible on a one-for-one basis into common stock and has all of the voting rights that the holders of our common stock have.  In addition, the holders of a majority of the shares of Series A Preferred Stock represented at a duly called special or annual meeting of such shareholders or by an action by written consent for that purpose shall be entitled to elect three (3) directors (the “Series A Directors”).  The holders of the Series A Preferred Stock may waive their rights to elect such three (3) directors at any time and assign such right to the board of directors to elect such directors; and (b) the holders of a majority of the shares of common stock represented at a duly called special or annual meeting of such shareholders or by an action by written consent for that purpose shall be entitled to elect two (2) directors. As of November 30, 2010, there were no outstanding Series A preferred shares.

On July 27, 2010, the Company created 1,000,000 Series B preferred shares with a par value of $0.001. No Series B shares were issued during the period. The Series B Preferred Stock shall vote or act by written consent together with the common stock and not as a separate class.  Each share of Series B Preferred Stock shall have that number of votes equal to five thousand (5,000) shares of common stock at any special or annual meeting of the stockholders of the Company and in any act by written consent in lieu of any special or annual meeting of the stockholders of the Company.  In the case the Company shall at any time subdivide (by any share split, share dividend or otherwise) its outstanding shares of common stock into a greater number of shares, the number of shares of common stock of which are equal in voting power to each share of Series B Preferred Stock, as in effect immediately prior to such subdivision, shall be proportionately increased and, conversely, in case the outstanding common stock shall be combined into a smaller number of shares, the number of shares of common stock of which are equal in voting power to each share of Series B Preferred Stock, as in effect immediately prior to such combination, shall be proportionately reduced. As of November 30, 2010, there were no outstanding Series B preferred shares.
 

 
ECOLAND INTERNATIONAL, INC.
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements

On July 12, 2010, the Company entered into subscription agreements with two unrelated entities to purchase shares of the Company’s common stock at $0.01 per share.  The Company has issued a total of 10,000,000 shares and has recorded a subscription receivable for the funds receivable.

Note 6 – SUBSEQUENT EVENTS

On December 28, 2010, the Company received $53,000 of the $100,000 receivable under the subscription receivable balance.
 
 
 

 
 
Item 2.
Management's Discussion And Analysis Or Plan Of Operation.
 
Cautionary Statement Concerning Forward-Looking Statements
 
This report on Form 10-Q contains forward-looking statements, including, without limitation, statements concerning our possible or assumed future results of operations.  These statements are preceded by, followed by or include the words “believes,” “could,” “expects,” “intends” “anticipates,” or similar expressions.  Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including: our ability to continue as a going concern, adverse economic changes affecting markets we serve; competition in our markets and industry segments; our timing and the profitability of entering new markets; greater than expected costs, or difficulties related to our integration of the businesses we may acquire and other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings.  Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations.  We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.
 
The discussion and financial statements contained herein are for the three and six months ended November 30, 2010 and the three and six months ended November 30, 2009. The following discussion should be read in conjunction with our financial statements and the notes thereto included herewith.
 
Three Months Period Ended November 30, 2010 as Compared to Three Months Ended November 30, 2009.
 
Results of Operations
 
Net Revenue
 
During the three months ended November 30, 2010, we generated $11,786 in sales revenues, as compared to $4,528 for the three-month period ended November 30, 2009.  Net revenues continue to fluctuate as Ecoland seeks to establish a customer base that can provide suitable volumes of business.  To date we have concentrated on establishing the viability of the market for guano as a fertilizer and now seek to find distributors capable of handling a higher volume of sales.    The Company continues to market the Guano and to search for established distributors in the United Kingdom, Europe and U.S.A. The higher level of sales are due to a timing difference as there were no sales in the first quarter.
 
Cost of Sales
 
Cost of sales for the three-month period ended November 30, 2010 was $6,427, compared to $2,365 for the three-month period ended November 30, 2009.
 
Gross Profit
 
The gross profit for the three-month period ended November 30, 2010, was $5,359, compared to $2,163 for the three-month period ended November 30, 2009.  
 
 
 

 
 
General, Administrative and Selling Expenses
 
We incurred general and administrative costs of $38,443 for the three-month period ended November 30, 2010 as compared to $36,857 for the three-month period ended November 30, 200.  General and administrative expenses in the current period are marginally higher than  the same quarter last year.
 
Net Income (Loss)
 
We had a loss before taxes of $44,644 for the three month period ended November 30, 2010, as compared to a loss before taxes of $40,926 for the three month period ended November 30, 2009.  The loss before taxes in the period ending November 30, 2010 was impacted by an interest expense of $11,140 compared to $7,023 for the three-month period ended November 30, 2009. The interest expense has increased in line with the increased borrowings of the Company.

Basic and Diluted Income (Loss) Per Share
 
Our basic (loss per share for the three month period ended November 30, 2010 was $(0.00), compared a loss per share of ($0.00) during the corresponding period ended November 30, 2009.
 
Six Months Period Ended November 30, 2010 as Compared to Six Months Ended November 30, 2009.
 
Results of Operations
 
Net Revenue
 
During the six months ended November 30, 2010, we generated $11,786 in sales revenues, as compared to $4,528 for the six-month period ended November 30, 2009.  Net revenues continue to fluctuate as Ecoland seeks to establish a customer base that can provide suitable volumes of business.  To date we have concentrated on establishing the viability of the market for guano as a fertilizer and now seek to find distributors capable of handling a higher volume of sales.   The Company continues to market the Guano and to search for established distributors in the United Kingdom, Europe and U.S.A.
 
Cost of Sales
 
Cost of sales for the six month period ended November 30, 2010 was $6,427, compared to $2,366 for the six month period ended November 30, 2009.  
 
Gross Profit
 
The gross profit for the six-month period ended November 30, 2010, was $5,359, compared to $2,162 for the six-month period ended November 30, 2009.  The decrease in gross profit percentage can be attributed to the appreciation of the South African Rand against other currencies.

General, Administrative and Selling Expenses
 
We incurred general and administrative costs of $88,412 for the six-month period ended November 30, 2010 as compared to $72,523 for the six-month period ended November 30, 2009.  General and administrative expenses in the six month period have increased through higher employment costs and professional fees incurred in having the company listed on the OTC BB.
 
Net Income (Loss)
 
We had a loss before taxes of $103,997 for the six month period ended November 30, 2010, as compared to a loss before taxes of $82,810 for the six month period ended November 30, 2009.  The loss before taxes in the period ending November 30, 2010 was impacted by an interest expense of $20,944 compared to $13,602 for the six-month period ended November 30, 2009 reflecting a higher level of borrowings.

 
 

 
Basic and Diluted Income (Loss) Per Share
 
Our basic and diluted income (loss) per share for the six month period ended November 30, 2010 was $(0.00), compared a loss per share of ($0.00) during the corresponding period ended November 30, 2009.
 
Liquidity and Capital Resources
 
We do not currently have sufficient capital to meet our short-term cash requirements.  We will continue to need to raise additional funds to conduct our business activities in the next twelve months.  We owe approximately $598,627 in current liabilities.  Additionally, we estimate that we will need approximately $1,000,000 to expand operations through the end of the fiscal years 2012.  These operating costs include general and administrative expenses and the deployment of inventory.  We have raised funds through the sale of our common stock, although no shares were sold during the three months ended November 30, 2010.
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
 
Not applicable.
 
Item 4.
Controls and Procedures.
 
See Item 4(T) below.
 
Item 4(T).
Controls and Procedures.
 
The term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act (15 U.S.C. 78a, et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
The term internal control over financial reporting is defined as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
 
·
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;
 
·
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and
 
·
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.
 
 
 

 
 
Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of inherent limitations in all control systems, internal control over financial reporting may not prevent or detect misstatements, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the registrant have been detected.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
Evaluation of Disclosure and Controls and Procedures.  Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act.  Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.  We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  The evaluation was undertaken in consultation with our accounting personnel.  Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are currently effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.  As we develop new business or if we engage in an extraordinary transaction, we will review our disclosure controls and procedures and make sure that they remain adequate.
 
Changes in Internal Controls over Financial Reporting.  There were no changes in the internal controls over our financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
This report does not include an attestation report of the registrant’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the registrant’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the registrant to provide only management’s report in this report.
 
PART II
Other Information
 
Item 1.
Legal Proceedings.
 
None.
 
Item 1A.
Risk Factors.
 
There has been no material change to the risk factors since the year end May 31, 2010 and filed with the 10-K for that period.
 
 
 

 

 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
 
None.
 
Item 3.
Defaults Upon Senior Securities.
 
None.
 
Item 4.
Submission of Matters to a Vote of Security Holders.
 
None.
 
Item 5.
Other Information.
 
None.
 
Item 6.
Exhibits.
 
Exhibit No.
 
Identification of Exhibit
31.1*
 
Certification of David Wallace, Chief Executive Officer of Ecoland International, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
31.2*
 
Certification of David Wallace, Chief Financial Officer of Ecoland International, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
32.1*
 
Certification of David Wallace, Chief Executive Officer of Ecoland International, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
32.2*
 
Certification of David Wallace, Chief Financial Officer of Ecoland International, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
 

*      Filed Herewith
 
SIGNATURES
 
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
ECOLAND INTERNATIONAL, INC.
     
Date: January 14, 2011
   
 
By
/s/ David Wallace
   
David Wallace, Chief Executive Officer
     
 
By
/s/ David Wallace
   
David Wallace, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 
 

 
 
Signature
 
Title
 
Date
/s/ David Wallace
 
Chief Executive Officer, Chief
 
January 14, 2011
   
Financial Officer
   
   
and Director