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EXCEL - IDEA: XBRL DOCUMENT - Novus Robotics Inc. | Financial_Report.xls |
EX-32 - Novus Robotics Inc. | ecit10qex321.htm |
EX-31 - Novus Robotics Inc. | ecit10qex311.htm |
EX-32 - Novus Robotics Inc. | ecit10qex322.htm |
EX-31 - Novus Robotics Inc. | ecit10qex312.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 August 31, 2011
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 | (I.R.S. Employer Identification No.) | |
organization) |
14 The Link, Morningside, | 2196 | |
Sandton, Johannesburg, Gauteng, Rep. South Africa. |
||
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (27-11) 918-0198 |
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 August 31, 2011: 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
August 31, 2011
Page Intentionally Left Blank
ECOLAND INTERNATIONAL, INC. AND SUBSIDIARIES
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets
August 31, | May 31, | |||||||
2011 | 2011 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 6,544 | $ | 5,706 | ||||
Accounts receivable | 3,495 | - | ||||||
Inventory | 382 | - | ||||||
Total current assets | 10,421 | 5,706 | ||||||
TOTAL ASSETS | $ | 10,421 | $ | 5,706 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 25,617 | $ | 43,448 | ||||
Notes payable | 260,045 | 258,832 | ||||||
Notes payable - related parties | 330,989 | 298,266 | ||||||
Total current liabilities | 616,651 | 600,546 | ||||||
TOTAL LIABILITIES | 616,651 | 600,546 | ||||||
STOCKHOLDERS' 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 88,650,000 shares issued and outstanding at August 31, 2011 and May 31, 2011, respectively | 88,650 | 88,650 | ||||||
Additional paid-in capital | 316,850 | 316,850 | ||||||
Subscription Receivable | - | (30,000 | ) | |||||
Accumulated other comprehensive loss Foreign currency translation adjustment | (12,990 | ) | (19,330 | ) | ||||
Deficit accumulated during the development stage | (998,740 | ) | (951,010 | ) | ||||
Total stockholders' deficit | (606,230 | ) | (594,840 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 10,421 | $ | 5,706 | ||||
- | - |
The accompanying notes are an integral part of these consolidated financial statements.
ECOLAND INTERNATIONAL, INC. AND SUBSIDIARIES
(Formerly Guano Distributors, Inc.)
( A Development Stage Company)
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
From inception | ||||||||||||
on April 15, | ||||||||||||
For the Three Months Ended | 2005 Through | |||||||||||
August 31, | August 31, | |||||||||||
2011 | 2010 | 2011 | ||||||||||
REVENUES | $ | 3,376 | $ | - | $ | 80,075 | ||||||
COST OF GOODS SOLD | 2,056 | - | 56,239 | |||||||||
GROSS PROFIT | 1,320 | - | 23,836 | |||||||||
EXPENSES | ||||||||||||
Depreciation and amortization | - | - | 935 | |||||||||
General and administrative | 37,070 | 49,969 | 819,721 | |||||||||
Total expenses | 37,070 | 49,969 | 820,656 | |||||||||
LOSS FROM OPERATIONS | (35,750 | ) | (49,969 | ) | (796,820 | ) | ||||||
OTHER EXPENSES | ||||||||||||
Interest expense | (11,980 | ) | (9,383 | ) | (201,920 | ) | ||||||
Total other expenses | (11,980 | ) | (9,383 | ) | (201,920 | ) | ||||||
NET LOSS | $ | (47,730 | ) | $ | (59,352 | ) | $ | (998,740 | ) | |||
COMPREHENSIVE LOSS | ||||||||||||
Foreign currency adjustment | 6,340 | (6,823 | ) | (12,990 | ) | |||||||
NET COMPREHENSIVE LOSS | (41,390 | ) | (66,175 | ) | (1,011,730 | ) | ||||||
BASIC LOSS PER SHARE | $ | - | $ | - | ||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUSTANDING | 88,650,000 | 62,710,274 |
The accompanying notes are an integral part of these consolidated financial statements.
ECOLAND INTERNATIONAL, INC. AND SUBSIDIARIES
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Consolidated Statement of Stockholders' Deficit
Accumulated | ||||||||||||||||||||||||||||||||||||
Additional | Stock | Deficit during | Accumulated | |||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid-In | Subscriptions | Development | Other Comp- | Total Stock- | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Receivable | Stage | 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 May 31, 2006 | (88,433 | ) | - | (88,433 | ) | |||||||||||||||||||||||||||||||
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 | 5,148 | 5,148 | ||||||||||||||||||||||||||||||||||
Net loss for the year ended May 31, 2009 | - | - | - | - | - | - | (104,107 | ) | - | (104,107 | ) | |||||||||||||||||||||||||
Balance, May 31, 2009 | - | - | 44,650,000 | 44,650 | 90,850 | - | (455,613 | ) | 5,148 | (314,965 | ) | |||||||||||||||||||||||||
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 $0.005 per share | - | - | 4,000,000 | 4,000 | 16,000 | - | - | - | 20,000 | |||||||||||||||||||||||||||
Common shares issued for services at $0.005 per share | - | - | 12,000,000 | 12,000 | 48,000 | - | - | - | 60,000 | |||||||||||||||||||||||||||
Foreign exchange adjustments | (5,270 | ) | (5,270 | ) | ||||||||||||||||||||||||||||||||
Net loss for the year ended May 31, 2010 | - | - | - | - | - | - | (293,130 | ) | - | (293,130 | ) | |||||||||||||||||||||||||
Balance, May 31, 2010 | - | - | 78,650,000 | 78,650 | 226,850 | - | (748,743 | ) | (122 | ) | (443,365 | ) | ||||||||||||||||||||||||
Common shares issued for cash at $0.01 per share | - | - | 10,000,000 | 10,000 | 90,000 | (30,000 | ) | - | - | 70,000 | ||||||||||||||||||||||||||
Foreign exchange adjustments | (19,208 | ) | (19,208 | ) | ||||||||||||||||||||||||||||||||
Net loss for the year ended | ||||||||||||||||||||||||||||||||||||
May 31, 2011 | - | - | - | - | - | - | (202,267 | ) | - | (202,267 | ) | |||||||||||||||||||||||||
Balance, May 31,2011 | - | - | 88,650,000 | 88,650 | 316,850 | (30,000 | ) | (951,010 | ) | (19,330 | ) | (594,840 | ) | |||||||||||||||||||||||
Cash from subscriptions receivable | 30,000 | 30,000 | ||||||||||||||||||||||||||||||||||
Foreign exchange adjustments | - | - | - | - | - | - | 6,340 | 6,340 | ||||||||||||||||||||||||||||
Net loss for the year ended | ||||||||||||||||||||||||||||||||||||
August 31, 2011 | - | - | - | - | - | - | (47,730 | ) | - | (47,730 | ) | |||||||||||||||||||||||||
Balance, August 31, 2011 (unaudited) | $ | 88,650,000 | $ | 88,650 | $ | 316,850 | $ | - | $ | (998,740 | ) | $ | (12,990 | ) | $ | (606,230 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
ECOLAND INTERNATIONAL, INC. AND SUBSIDIARIES
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
From inception | ||||||||||||
on April 15, | ||||||||||||
For the 3 Months Ending | 2005 Through | |||||||||||
August, 31 | August, 31 | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | 2011 | 2010 | 2011 | |||||||||
Net loss | $ | (47,730 | ) | $ | (59,352 | ) | $ | (998,740 | ) | |||
Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||||||
Depreciation and amortization | - | - | 1,525 | |||||||||
Common stock issued for services | - | - | 133,000 | |||||||||
Services contributed by officer | - | - | 2,485 | |||||||||
Changes in operating assets and liabilities | ||||||||||||
Increase in accounts receivable | (3,495 | ) | 3,508 | (3,495 | ) | |||||||
Increase in inventory | (382 | ) | (123 | ) | (382 | ) | ||||||
Decrease in accounts payable and accrued expenses | (17,831 | ) | 17,164 | 25,617 | ||||||||
Accrued services by officers and directors | 33,936 | 33,071 | 332,202 | |||||||||
Net cash used by operating activities | (35,502 | ) | (5,732 | ) | (507,788 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Purchase of fixed assets | - | - | (1,525 | ) | ||||||||
Net cash used by investing activities | - | - | (1,525 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Common stock issued for cash | 30,000 | - | 180,015 | |||||||||
Proceeds from issuance of notes payable | - | 12,500 | 348,832 | |||||||||
Net cash provided by financing activities | 30,000 | 12,500 | 528,847 | |||||||||
NET INCREASE IN CASH | (5,502 | ) | 6,768 | 19,534 | ||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 6,340 | (6,823 | ) | (12,990 | ) | |||||||
CASH AT BEGINNING OF PERIOD | 5,706 | 38 | - | |||||||||
CASH AT END OF PERIOD | $ | 6,544 | $ | (17 | ) | $ | 6,544 | |||||
SUPPLIMENTAL INFORMATION | ||||||||||||
Cash paid for: | ||||||||||||
Income taxes | $ | - | $ | - | $ | - | ||||||
Interest | $ | - | $ | - | $ | - | ||||||
Non cash activities: | ||||||||||||
Common stock issued for notes payable | $ | - | $ | 90,000 | $ | 90,000 |
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 designated terms 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. These financials statements should be read in conjunction with the financial statement included in the Company’s Annual Report filed with the SEC on form 10K for the fiscal year ended May 31, 2011. 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 months ended August 31, 2011 are not necessarily indicative of the results that may be expected for the year ending May 31, 2012.
Principles of Consolidation
These interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Ecoland International, Inc. and Guano Distributors, Ltd. All intercompany balances and transactions have been eliminated in consolidation.
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.
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 – CONTINUED
Fair Value of Financial Instruments
Fair value estimates are based upon certain market assumptions and pertinent information available to management as of August 31, 2011. 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.
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, which is South Africa Rand (ZAR) 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.
Inventory
Inventories consist of raw materials, packaging supplies and finished goods and are valued at the lower of cost (first-in, first-out (FIFO) method) or market
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.
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 – CONTINUED
Net Income Per Share – Continued
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 three month period ended August 31, 2011 one customer accounted for 100% of sales. As of August 31, 2011, one customer accounted for 100% of the accounts receivable balance.
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
The Company has evaluated the recent accounting pronouncements through ASU 2011-09 and believes that none of them will have a material financial impact on the Company’s financial statements.
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 August 31, 2011, the Company has accumulated losses of $998,740 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.
ECOLAND INTERNATIONAL, INC.
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
NOTE 2 -GOING CONCERN - CONTINUED
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.
NOTE 3 - NOTES PAYABLE
At August 31, 2011 the Company had notes payable and accrued interest totaling $260,045. Included in this amount are four separate unsecured notes payable to unrelated entities totaling $146,901. 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 $113,144. The notes are unsecured, due on demand and accrue interest at a rate of 10.5% per annum. Interest expense for the three months ended August 31, 2011 was $5,671. The interest expense for three months ended August 31, 2010 was $6,007.
NOTE 4 - NOTES PAYABLE - RELATED PARTIES
At August 31, 2011, the Company had unsecured notes payable and accrued interest of $330,989. 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 months ended August 31, 2011 was $6,309. The interest expense for three months ended August 31, 2010 was $3,797. Accrued expenses relating to Directors Compensation are included in the balances of the notes payable – related parties and these unpaid expenses are subject to interest charges ranging from 8.0% - 10.5% per annum as applicable for each note payable.
NOTE 5 – STOCKHOLDERS’ DEFICIT
As of August 31, 2011, 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 shares outstanding as of August 31, 2011 and May 31, 2011.
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 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 August 31, 2011, there were no outstanding Series A preferred shares.
ECOLAND INTERNATIONAL, INC.
(Formerly Guano Distributors, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
NOTE 5 – STOCKHOLDERS’ DEFICIT - CONTINUED
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 August 31, 2011, there were no outstanding Series B preferred shares.
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 to be receivable.
As of August 31, 2011 the subscription receivable had been received in full.
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; 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 months ended August 31, 2011 and August 31, 2010. The following discussion should be read in conjunction with our financial statements and the notes thereto included herewith.
Three Months Period Ended August 31, 2011 as Compared to Three Months Ended August 31, 2010.
Results of Operations
Net Revenue
During the three-months ended August 31, 2011, we generated $3,376 in sales revenues, as compared to $0 for the three-month period ended August 31, 2010. 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 Company is hampered in generating revenues through sales and marketing by a lack of adequate funding.
Cost of Sales
Cost of sales for the three-month period ended August 31, 2011was $2,056, compared to $0 for the three-month period ended August 31, 2010.
Gross Profit
The gross profit for the three-month period ended August 31, 2011, was $1,320, compared to $0 for the three-month period ended August 31, 2010.
General, Administrative and Selling Expenses
We incurred general and administrative costs of $37,070 for the three-month period ended August 31, 2011 as compared to an expense of $49,969 for the three-month period ended August 31, 2010. The decrease can be attributed to reduced legal and professional fees associated with listing the Company on the OTCBB.
Net Income (Loss)
We had a net loss of $47,730 for the three-month period ended August 31, 2011, as compared to a net loss of $59,352 for the three-month period ended August 31, 2010. The net loss in the period ending August 31, 2011 was impacted by interest expense of $11,980 compared to $9,383 for the three-month period ended August 31, 2010. 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 August 31, 2011 was $(0.00), compared a loss per share of ($0.00) during the corresponding period ended August 31, 2010.
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 $616,651in current liabilities. Additionally, we estimate that we will need approximately $1,000,000 to expand operations through the end of the fiscal year 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 August 31, 2011.
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. |
We maintain a system of disclosure controls and procedures that are designed to provide reasonable assurance that information, which is required to be timely disclosed, is accumulated and communicated to management in a timely fashion. In designing and evaluating such controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management is necessarily required to use judgment in evaluating controls and procedures.
In the ordinary course of business, we review our system of internal control over financial reporting and make changes to our systems and processes to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems and automating manual processes.
An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures was performed as of the end of the period covered by this report. This evaluation was performed under the supervision of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.
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, 2011 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: October 12, 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 Financial Officer and Director |
October 12, 2011 |