Item 1.
BUSINESS
ECC was founded in 2000 as a sole proprietorship doing business under the name “Educons.” It went through several changes in legal form before being incorporated as a C corporation under the laws of the State of Nevada on July 7, 2010. The day-to-day operations of the Company did not change as a result of any change in legal structure. Incorporation is a legal concept that has no impact on an entity’s day-to-day operating activities. It impacts the legal protection for the entity’s owners and changes the tax structure but does not change how the business does its day-to-day business.
ECC is incorporated in Nevada and its operations are based in Switzerland. We are not aware of any laws or regulations in Switzerland that impact the way in which our business as a service provider operates differently than similar laws and regulations in the United States.
ECC has provided seminars to employees of companies, principally pharmaceutical companies, in Switzerland, Germany, France and Italy. We plan on providing seminars in the United States. The seminars are designed to help people who are managers, marketers or sales people at all levels to learn how to deal with people more effectively. The seminars involve business relationship management, customer relationship management and time management. The emphasis is to have each individual understand their own personality and motivations and then to understand the inner personality and motivations of the people with whom they are dealing so as to be more effective. Seminars last from one to three days and are given in French, German and Italian. If seminars are given in the United States, they will be given in English.
Dr. Jean-Claude E. Gehret is licensed by STRUCTOGRAM and uses the STRUCTOGRAM method for his seminars. The STRUCTOGRAM Training System or Biostructural Analysis was developed by implementing knowledge obtained from brain research. The Biostructural Analysis method was developed by the anthropologist Rolf W. Schirm, based on the work of brain researcher Dr. Paul D. MacLean. The analysis is focused on identifying and defining typical, genetic personality traits or behaviorism in the genetic human biostructure that present a clear link with three core sections of the brain (brain stem, Diencephalon, and Cerebrum). Human interaction is influenced by these unchangeable, genetic structures, as well as by changeable, learned traits. In business, this training helps individuals to harmonize their unchangeable basic structure and acquired personality conducts to effectively interact with others which a decisive basis for long lasting success. More precisely, the goals of these seminars are to get each participant to:
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Know themselves, including objectively to identify their strengths and weaknesses;
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Understand others, including their needs, strengths and weaknesses; and
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Gain insights about the motivation and preference of clients, customers or subordinates.
Biostructural Analysis was developed from a number of researchers including Professor Paul D. MacLean who has written that the human brain consists of three sections differing in the various functions they have to fulfill. These three vastly differing portions of the brain have, nevertheless, to work together and communicate with each other. While doing this, however, each portion of the brain keeps to its own specific “rules of the game.” Human behavior evolves from the interplay of these three elements.
This is the brain according to Professor Paul D. Maclean
The brain stem
Is the part of the brain, storing years of experience, seat of instincts and feeling for life.
The limbic system
Is the part of the brain that handles emotionsl.
The neocortex
Is the part of the brain of rational thinking, planned action and foresight.
The Biostructural Analysis training system, known as Structogram, was developed in Switzerland. It is based on the principle that these three areas of the brain are responsible for the way we relate to ourselves, others and the world around. They are in constant use, and we all have varying amounts of each depending on our own individuality and uniqueness.
For purposes of instruction and ease of explanation and easy visual understanding at seminars, a different color is assigned to each of these three areas. Generally the colors RED, GREEN and BLUE are used.
Each brain area, or color, is responsible for distinct characteristics in all of us. It is by using this analysis system and process, as well as the understanding of each seminar participant’s own combination of these colors, that allows them to discover and understand their own unique character and reveal what their own True Colors really are.
At the seminars we use a series of evolved questions, which are designed to stimulate one or other of the three brain areas, to assist participants to understand their own biological -structure and the degree and influence that each area exerts in their daily lives.
We summarize each seminar participant’s responses to these evolved questions in order to gauge what dominance and relationship exists among these three areas. It is this percentage or use of each brain area that determines each person’s basic character and ultimately what we call “our true colors.” The summaries of each participant’s responses are placed on circles that contain the three colors in the percentages indicated by the responses. Here are a few of the typical definitions of the likely result of one of the three colors dominating a person’s character:
RED
Impatient, bossy, assertive, decisive, energetic, direct, dynamic, lively, competitive.
GREEN
Relaxed, caring, empathetic, easygoing, talkative, sociable, kind, friendly, laid back.
BLUE
Distant, sensible, organized, reserved, factual, serious, private, pedantic, likes detail in everything.
The larger the percentage of any color, or brain part, that a participant uses, the more influenced that person will be by that part’s dominance. It is also possible to find persons with a totally balanced profile of all three colors, which makes them very difficult to read or understand at times. We also find people with dual dominance colors.
Based on these analyses, seminar participants get an understanding of themselves. The remainder of the seminar is designed to help participant learn how to use this knowledge to their benefit.
For example, if the seminar was being given to sales people, sales success has three causes and, therefore, also three assumptions:
Harmony between personality and method of sale
The assumption in this case is self-knowledge. Only when you know your own strengths, weakness and limits, will you be able to consciously choose the correct sale methods and techniques.
Suiting the customer’s characteristic features provided this doesn’t compromise the authenticity of the salesman
In this case the assumption is understanding others. The ‘automatic’ consequence of self-knowledge and understanding others is the optimization of social competence and interaction.
Specific knowledge of the product
The assumption in this case is knowledge of the product that puts the product features in touch with the individual motives and needs of the customer.
A simplified example of our seminar approach follows:
Sales - pharmaceutical industry
Starting situation:
Products are becoming more and more exchangeable, cost pressure is increasing. At the same time many products are becoming more complex and thus require more explaining. These are the problems the pharmaceutical industry is suffering under.
At the same time doctors, who are also facing increasing competition, are reducing consulting dialogues with pharmaceutical companies. Pharmaceutical representatives have fewer opportunities and less time to convince doctors of their products.
Solution with our Training System:
With our training approach, the pharmaceutical representative knows his/her strengths weaknesses and limits. The representative knows what kind of affect he/she has on others and which sales methods are in line with his/her own biostructure.
The pharmaceutical representative recognizes the individual biostructure of the doctor and can respond accordingly, insofar as it suits his/her own authenticity. This is the only way to gain the doctor’s trust.
The representative knows that because of doctors’ individual buying motives, the same product must be sold in different ways: in the relational and operational level (behavior) as well as in the subject level (argumentation).
Example argumentation - painkiller
Specific strength of the product:
Rapid onset of action
GREEN
A buying motive for the doctor with dominant brain stem is, for example, to avoid pain:
Argument/Benefit: Patient need not suffer unnecessarily
RED
A buying motive for the doctor with dominant diencephalon brain is, for example, performance:
Argument/Benefit: Fast results (“next please”)
BLUE
A buying motive for the doctor with dominant cerebrum is, for example, insight:
Argument/Benefit: Sensible pain therapy thanks to selective effectivity
With the our Training System the pharmaceutical representative is, based on his/her social competence, able to build up a trusting relationship with the doctor. An argumentation tailored to the doctor’s individual biostructure (and with that to his/her individual buying motives) leads to sales success.
Our seminars are designed for sales people of all levels, including call center employees, and managers. Each seminar is modified to meet the needs of participants. Management seminars tend to emphasize time management while call center seminars tend to emphasize methods of calming down irate customers calling with complaints.
Our seminars encompass a range of management topics:
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Effective Communications
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Leadership management
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Rhetoric and presentation technique
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Stress Management
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Time Management
Fees for seminars are negotiated and are based on things like the amount of customization that are needed and the number of participants. Fees for conferences conducted during the two-year period ended March 31, 2013 to range from $906 to $23,596. Amounts generally are paid at the end of the seminar or shortly thereafter. Course materials are generally purchased from STRUCTOGRAM. To date fees have been billed and paid in Swiss francs. If we start providing seminars in the United States, those seminars will be billed in United States dollars.
Over the years, ECC and its predecessor entities have given its standard seminars and provided various levels of services to many companies. We also increasingly agree to participate on a cooperative basis with other seminar providers to present specific portions of seminars conducted by that provider. These providers on occasion need some of the content or language ability for a seminar program that they do not have readily available and we provide. They may not want their clients to know of their limitations. They are privately-held businesses and our agreements with them, which are generally verbal in nature and relate solely to individual seminars, generally contain nondisclosure and noncompete understandings. We continue to solicit all of the entities for whom we have provided services in the past.
Recent Marketing Efforts
Dr. Gehret recently visited the United States to provide Biostructural Analysis seminars in Seattle WA. One was at a funeral establishment to Funeral Directors and the second was to a group of hospice nurses. In organizing the seminars which were not well attended, it became apparent to ECC that, for various reasons including the economy, its type of seminars are not currently in great demand in many portions of the healthcare and funeral industries in the United States.
ECC believes that increasing demand for its seminars in the United States would require a high level of advertising resources, which ECC cannot afford at this time. Accordingly the Company is abandoning its effort to promote seminars in the United States for the foreseeable future.
Competition
Competition in our industry is intense and most of our competitors have greater financial and other resources than do we. Competition will come from a wide variety of consulting and seminar firms, including others that use STRUCTOGRAM. Many of these firms have more employees, finances and other resources and greater name recognition that do we.
We intend to compete based on the business contacts and reputation of our president as well as his ability to provide seminars in multiple languages.
In periods of down or depressed economic circumstances, the demand for seminars to train employees is reduced because companies are reducing costs. During these periods, we face significantly greater price competition.
There are no assurances that our approach will be successful.
Intellectual Property
We have no patents or trademarks.
Employees
At July 1, 2013, we had one employee, our founder and president, Dr. Jean-Claude E. Gehret, who devotes fulltime to us. Subcontractors have and can be used to assist us to assist us if necessary.
There is no written employment contract or agreement with Dr. Gehret.
Recent Development
The Company is currently in the negotiations to merge with a private company. If the merger takes place, it is likely that all of the Company’s current operations will be discontinued and all of the assets and liabilities associated with its present operations will be spun off to its President in exchange for shares of stock held by him.
Item 1A.
Item 1A.
RISK FACTORS
If any of the following risks develop into actual events, then our business, financial condition, results of operations and/or prospects could be materially adversely affected. If that happens, the market price of our common stock, if any, could decline, and investors may lose all or part of their investment.
Risks Related to the Business
1.
ECC has virtually no financial resources. Our independent registered auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.
ECC has virtually no financial resources. We have negative working capital and a cumulative net loss at March 31, 2013. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the fiscal year ended March 31, 2013 that states that this lack of resources causes substantial doubt about our ability to continue as a going concern. No assurances can be given that we will generate sufficient revenue or obtain necessary financing to continue as a going concern.
2.
ECC is and will continue to be completely dependent on the services of our founder and president, Dr. Jean-Claude E. Gehret, the loss of whose services may cause our business operations to cease, and we will need to engage and retain qualified employees and consultants to further implement our strategy.
ECC’ operations and business strategy are completely dependent upon the knowledge and business connections of Dr. Gehret. He is under no contractual obligation to remain employed by us. If he should choose to leave us for any reason or if he becomes ill and is unable to work for an extended period of time before we have hired additional personnel, our operations will likely fail. Even if we are able to find additional personnel, it is uncertain whether we could find someone who could develop our business along the lines described in this prospectus. We will fail without the services of Dr. Gehret or an appropriate replacement(s).
We intend to acquire key-man life insurance on the life of Dr. Gehret naming us as the beneficiary when and if we obtain the resources to do so and if she is insurable. We have not yet procured such insurance, and there is no guarantee that we will be able to obtain such insurance in the future. Accordingly, it is important that we are able to attract, motivate and retain highly qualified and talented personnel and independent contractors.
3.
Some of our competitors have significantly greater financial and marketing resources than do we.
Some of our competitors have significantly greater financial and marketing resources than do we. There are no assurances that our efforts to compete in the marketplace will be successful.
4.
Demand for our services decreases significantly during periods of economic downturn.
Providing staff training services to employees is generally considered to be a very discretionary cost. During economic downturns, many companies seek to lower costs. Discretionary costs like ours tend to be the first costs that are cut. As a result, demand for our services is significantly reduced. Because of that, bids for the remaining demand become significantly more competitive resulting in lower prices and profits.
5.
We are currently subject to the periodic reporting requirements of the Exchange Act that will require us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit.
Following the effective date of our registration statement (December 19, 2012), we are required to file periodic reports with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder. In order to comply with these requirements, our independent registered public accounting firm will have to review our financial statements on a quarterly basis and audit our financial statements on an annual basis. Moreover, our legal counsel will have to review and assist in the preparation of such reports. The costs charged by these professionals for such services cannot be accurately predicted at this time because factors such as the number and type of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major effect on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
In no case will the proceeds of this offering be sufficient to assist us in any way to meet any portion of these incremental costs of being public.
6.
Dr. Jean-Claude E. Gehret, our chief executive officer, chief financial officer and principal accounting officer has no significant experience managing a public company and no meaningful accounting or financial reporting education or experience and, accordingly, our ability to meet Exchange Act reporting requirements on a timely basis will be dependent to a significant degree upon others.
Dr. Jean-Claude E. Gehret has no significant experience managing a public company and no meaningful financial reporting education or experience. He is and will be heavily dependent on engaging and dealing with outside professional advisors, primarily lawyers and financial advisors/accountants who are and will not be affiliated with our independent auditors. We have no formal arrangements with professionals to help Dr. Gehret and cannot provide any assurances that we will be able to establish arrangements with professionals on terms or costs that are acceptable or affordable to us.
7.
Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the 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:
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pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
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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 Company are being made only in accordance with authorizations of management and/or directors of the Company; and
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provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
Our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.
8.
Having only two directors limits our ability to establish effective independent corporate governance procedures and increases the control of our president over operations and business decisions.
We have only two directors, one of whom is our principal executive officer and the other is his wife. Accordingly, we cannot establish board committees comprised of independent members to oversee functions like compensation or audit issues. In addition, a tie vote of board members is decided in favor of the chairman, which gives her significant control over all corporate issues, including all major decisions on operations and corporate matters such as approving business combinations.
Until we have a larger board of directors that would include some independent members, if ever, there will be limited oversight of our president’s decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.
9.
Dr. Jean-Claude E. Gehret, our president, has made all decisions concerning his compensation. These decisions may not be in the best interests of other investors.
There is no employment contract with Dr. Jean-Claude E. Gehret at this time. Nor are there any agreements for compensation in the future. Dr. Gehret’s compensation has not been fixed or based on any percentage calculations. He has made all decisions determining the amount and timing of his compensation. He will continue making decisions about the timing and amount of his compensation until, if ever, we have a sufficient number of directors to establish a compensation committee of the board of directors. Dr. Gehret’s decisions about his compensation may not be in the best interests of other shareholders.
10.
We operate in foreign countries so our reported financial results are impacted by variations in foreign currency exchange rates.
Our operations are currently in foreign countries. Historically, our billings and payments have been denominated in Swiss francs. As a result, our reported financial results are and will be significantly impacted by variations in the exchange rates between the US dollar and the Swiss franc.
Risks Related to Our Common Stock
11.
Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares of our common stock.
We have no committed source of financing. Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized (74,000,000 shares) but unissued (47,800,000 shares). In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders may further dilute common stock book value, and that dilution may be material.
12.
The interests of shareholders may be hurt because we can issue shares of our common stock to individuals or entities that support existing management with such issuances serving to enhance existing management’s ability to maintain control of our Company.
Our president will own a significant majority of outstanding shares after the completion of the offering. In addition, our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued common shares. Such issuances may be issued to parties or entities committed to supporting existing management and the interests of existing management which may not be the same as the interests of other shareholders. Although transactions, other than those described in this prospectus, are not currently being contemplated or discussed, our ability to issue shares without shareholder approval serves to enhance existing management’s ability to maintain control of our Company or participate in other transactions, including entering into possible business combinations, without the support of other shareholders.
13.
Our chief executive officer controls all corporate activities and can approve all transactions, including mergers, without the approval of other shareholders.
Our chief executive officer has a sufficient number of shares to control all corporate activities and can approve transactions, including possible mergers, issuance of shares and her compensation level, without the approval of other shareholders. Her decisions may not be in the best interests of other shareholders.
14.
Because company’s headquarters are located outside of the United States, U.S. investors may experience difficulties in attempting to effect service of process and to enforce judgments based upon U.S. Federal Securities Laws against the company and its non U.S. resident officer and director.
Although we are organized under the laws of State of Nevada, Dr. Jean-Claude E. Gehret, our sole officer and director is not a U.S. citizen or resident, and our headquarters are located in Switzerland. Consequently, it may be difficult for investors to effect service of process on him and to enforce judgments obtained in United States courts against him based on the civil liability provisions of the United States securities laws. Since a substantial portion of our assets will be located in Switzerland it may be difficult or impossible for U.S. investors to collect a judgment against us. Any judgment obtained in the United States against us may not be enforceable in the United States.
15.
Our articles of incorporation provide for indemnification of officers and directors at our expense and limit their liability that may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and/or directors.
Our Articles of Incorporation at Article XI provide for indemnification as follows: "No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer: (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law; or (ii) the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of an Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation of the personal liability of a director or officer of the Corporation for acts or omissions prior to such repeal or modification."
We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with our activities, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is likely to materially reduce the market and price for our shares, if such a market ever develops.
16.
Currently, any established public market will ever develop or that our common stock will be quoted for trading and, even if quoted, it is likely to be subject to significant price fluctuations.
There is and has never been any established trading market for our common stock, and there is currently no established public market whatsoever for our securities. A trading symbol has been granted (ECCO) which enables the shares of our common stock to be quoted on the OTCBB maintained by FINRA. There can be no assurances as to whether:
(i)
any market for our shares will develop;
(ii)
the prices at which our common stock will trade; or
(iii)
the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.
Because of the anticipated low price of the securities being registered, many brokerage firms may not be willing to effect transactions in these securities. Purchasers of our securities should be aware that any market that develops in our stock will be subject to the penny stock restrictions.
17.
Our shares may not become eligible to be traded electronically which would result in brokerage firms being unwilling to trade them.
We will then try, through a broker-dealer and its clearing firm, to become eligible with the Depository Trust Company ("DTC") to permit our shares to trade electronically. If an issuer is not “DTC-eligible,” then its shares cannot be electronically transferred between brokerage accounts, which, based on the realities of the marketplace as it exists today (especially the OTCBB), means that shares of a company will not be traded (technically the shares can be traded manually between accounts, but this takes days and is not a realistic option for companies relying on broker dealers for stock transactions - like all companies on the OTCBB. What this boils down to is that while DTC-eligibility is not a requirement to trade on the OTCBB, it is a necessity to process trades on the OTCBB if a company’s stock is going to trade with any volume. There are no assurances that our shares will ever become DTC-eligible or, if they do, how long it will take.
18.
Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions pertaining to low priced stocks that will create a lack of liquidity and make trading difficult or impossible.
Our shares will be considered a “penny stock.” Rule 3a51-1 of the Exchange Act establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions which are not available to us. This classification will severely and adversely affects any market liquidity for our common stock.
19.
The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.
Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:
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Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
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Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
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"Boiler room" practices involving high pressure sales tactics and unrealistic price projections by sales persons;
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Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
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Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.
20.
Any trading market that may develop may be restricted by virtue of state securities “Blue Sky” laws that prohibit trading absent compliance with individual state laws. These restrictions may make it difficult or impossible to sell shares in those states.
There is currently no established public market for our common stock, and there can be no assurance that any established public market will develop in the foreseeable future. Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as “Blue Sky” laws. Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions. Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. These restrictions prohibit the secondary trading of our common stock. We currently do not intend to and may not be able to qualify securities for resale in at least 17 states which do not offer manual exemptions (or may offer manual exemptions but may not to offer one to us if we are considered to be a shell company at the time of application) and require shares to be qualified before they can be resold by our shareholders. Accordingly, investors should consider the secondary market for our securities to be a limited one. See also “Plan of Distribution-State Securities-Blue Sky Laws.”
21.
Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and with the ability to affect adversely stockholder voting power and perpetuate their control over us.
Our articles of incorporation allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors also has the authority to issue preferred stock without further stockholder approval, including large blocks of preferred stock. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.
22.
The ability of our president to control our business may limit or eliminate minority shareholders’ ability to influence corporate affairs.
Our president and his wife beneficially own an aggregate of approximately 95.4% of our outstanding common stock. Because of their beneficial stock ownership, our president may be in a position to continue to elect our board of directors, decide all matters requiring stockholder approval, including potential mergers or business changes, and determine our policies. The interests of our president may differ from the interests of other shareholders with respect to the issuance of shares, business transactions with or sales to other companies, selection of officers and directors and other business decisions. The minority shareholders would have no way of overriding decisions made by our president. This level of control may also have an adverse impact on the market value of our shares because our president may institute or undertake transactions, policies or programs that may result in losses, may not take any steps to increase our visibility in the financial community and/or may sell sufficient numbers of shares to significantly decrease our price per share.
23.
A substantial portion of our presently issued and outstanding common shares are restricted under rule 144 of the Securities Act, as amended. When the restriction on any or all of these shares is lifted, and the shares are sold in the open market, the price of our common stock could be adversely affected.
A substantial portion of the presently outstanding shares of common stock (25,000,000 shares) are "restricted securities" as defined under Rule 144 promulgated under the Securities Act and may only be sold pursuant to an effective registration statement or an exemption from registration, if available. Rule 144 provides in essence that a person who is not an affiliate and has held restricted securities for a prescribed period of at least six months if purchased from a reporting issuer or 12 months (as is the case herein) if purchased from a non-reporting Company, may, under certain conditions, sell all or any of his/her shares without volume limitation, in brokerage transactions. Affiliates, however, may not sell shares in excess of 1% of the Company’s outstanding common stock each three months. As a result of revisions to Rule 144 which became effective on February 15, 2008, there is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who has not been an officer, director or control person for at least 90 consecutive days) after the restricted securities have been held by the owner for the aforementioned prescribed period of time. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.
All 25,000,000 outstanding restricted shares of our common stock are owned by our president (24,000,000) and a director (1,000,000) and may be sold subject to the limitations of Rule 144.
24.
We do not expect to pay cash dividends in the foreseeable future.
We have never paid cash dividends on our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.
25.
Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protection against interested director transactions, conflicts of interest and similar matters.
The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.
Because none of our directors are independent directors, we do not currently have independent audit or compensation committees. As a result, these directors have the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations.
We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.
26.
You may have limited access to information regarding our business because our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.
The Company is subject to the 15(d) reporting requirements according to the Securities Exchange Act of 1934. The Company is required to file the necessary reports in the fiscal year that the registration statement is declared effective. After that fiscal year and provided the Company has less than 300 shareholders and has not filed a registration statement on Form 8A (which we have no current plans to file), the Company is not required to file these reports. If the reports are not filed, investors will have reduced visibility as to the Company and its financial condition. In addition, as a filer subject to Section 15(d) of the Exchange Act, the Company is not required to prepare proxy or information statements; our common stock will not be subject to the protection of the going private regulations; the company will be subject to only limited portions of the tender offer rules; our officers, directors, and more than ten percent shareholders are not required to file beneficial ownership reports about their holdings in our company; that these persons will not be subject to the short-swing profit recovery provisions of the Exchange Act; and that more than five percent holders of classes of your equity securities will not be required to report information about their ownership positions in the securities.
Previously, a company with more than 500 shareholders of record and $10 million in assets had to register under the Exchange Act. However, the JOBS Act raises the minimum shareholder threshold from 500 to either 2,000 persons or 500 persons who are not "accredited investors" (or 2,000 persons in the case of banks and bank holding companies). The JOBS Act excludes securities received by employees pursuant to employee stock incentive plans for purposes of calculating the shareholder threshold. This means that access to information regarding our business and operations will be limited.
27.
If our stock becomes quoted on the OTCBB, we could subsequently be removed from the OTCBB if we fail to remain current with our financial reporting requirements.
Companies trading on the OTCBB must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTCBB. If we become quoted on the OTCBB, but we fail to remain current in our reporting requirements, we would be removed from the OTCBB. As a result, the market liquidity of our securities could be severely adversely affected by limiting the ability of broker-dealers to trade our securities and the ability of stockholders to sell their securities in the secondary market.
28.
Our financial statements may not be comparable to those of companies that comply with new or revised accounting standards.
We have elected to take advantage of the benefits of the extended transition period that Section 107 of the JOBS Act provides an emerging growth company, as provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Our financial statements may, therefore, not be comparable to those of companies that comply with such new or revised accounting standards. . We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
29.
Our status as an “emerging growth company” under the JOBS ACT OF 2012 may make it more difficult to raise capital when we need to do it.
Because of the exemptions from various reporting requirements provided to us as an “emerging growth company” and because we will have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.
30.
We will incur increased costs and demands upon management as a result of complying with the laws and regulations that affect public companies, which could materially adversely affect our results of operations, financial condition, business and prospects.
As a public company and particularly after we cease to be an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules implemented by the SEC and NASDAQ. In addition, our management team will also have to adapt to the requirements of being a public company. We expect that compliance with these rules and regulations will substantially increase our legal and financial compliance costs and will make some activities more time-consuming and costly.
The increased costs associated with operating as a public company will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material adverse effect on our results of operations, financial condition, business and prospects.
However, for as long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.”
31.
We will not be required to comply with certain provisions of the Sarbanes-Oxley Act for as long as we remain an “emerging growth company.”
We are not currently required to comply with the SEC rules that implement Sections 302 and 404 of the Sarbanes-Oxley Act, and are therefore not required to make a formal assessment of the effectiveness of our internal controls over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with certain of these rules, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting. Though we will be required to disclose changes made in our internal control procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth company” as defined in the JOBS Act.
Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth company.” At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.
32.
Reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
As an “emerging growth company” , we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
For all of the foregoing reasons and others set forth herein, an investment in the Company’s securities in any market which may develop in the future involves a high degree of risk. Any person considering an investment in such securities should be aware of these and other risk factors set forth in this Form 10-K.
Item 1B.
Item 1B.
UNRESOLVED STAFF COMMENTS
The Company has received comments from the Staff concerning its delinquent filings. The Company is now attempting to become current in all of its filings.
Item 2.
Item 2.
PROPERTIES
Our office and mailing address is Im Aeschfeld 12, CH-4147 Aesch, Switzerland. The space is provided to us by Dr. Gehret. Dr. Gehret incurs no incremental costs as a result of our using the space. Therefore, he does not charge us for its use. There is no written lease agreement.
Item 3.
Item 3.
LEGAL PROCEEDINGS
We are not party to any pending, or to our knowledge, threatened litigation of any type.
Item 4.
Item 4.
MINE SAFETY DISCLOSURES
N/A
Part II
Item 5.
Item 5.
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES
We became subject to Securities Exchange Act Reporting Requirements in December 2012.
As of July 1, 2013, there is no and has never been any established trading market for our common stock, and there is currently no established public market whatsoever for our securities. We have a trading symbol (“ECCO”), but there can be no assurances as to whether:
·
any market for our shares will develop in the foreseeable future if at all;
·
the prices at which our common stock will trade; or
·
the extent to which investor interest in us will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.
Transfer of our common stock may also be restricted under the securities or blue sky laws of certain states and foreign jurisdictions. Consequently, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time.
We have never paid any cash dividends on shares of our common stock and do not anticipate that we will pay dividends in the foreseeable future. We intend to apply any earnings to fund the development of our business. The purchase of shares of common stock is inappropriate for investors seeking current or near term income.
As of the close of business on July 1, 2013, there were 14 stockholders of record of our common stock, and 26,200,000 shares were issued and outstanding.
No underwriter participated in the issuance of our shares, and no underwriting discounts or commissions were paid to anyone.
We have never paid any cash dividends on shares of our common stock and do not anticipate that we will pay dividends in the foreseeable future. We intend to apply any earnings to fund the development of our business. The purchase of shares of common stock is inappropriate for investors seeking current or near term income.
The Company has never repurchased any of its equity securities.
Item 6
Item 6
SELECTED FINANCIAL DATA
We are considered to be a smaller reporting company, as defined by Rule 229.10(f)(1), and, therefore, are not required to provide the information required by this Item.
Item 7.
Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operations
We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
·
have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
·
comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
·
submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and
·
disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
Business Plan
Circumstances, including economic conditions affecting Europe in general and our clients in particular, do not permit us to provide milestones or timetables that are likely to be realistic. Given our lack of resources, our plan for the foreseeable future is to continue contacting, by telephone and email, individual contacts at companies known to us or individuals referred to us to discuss the possibility and benefits of conducting seminars. We also increasingly agree to participate on a cooperative basis with other seminar providers to present specific portions of seminars conducted by that provider. These providers on occasion need some of the content or language ability for a seminar program that they do not have readily available and we provide. They may not want their clients to know of their limitations. They are privately-held businesses and our agreements with them, which are generally verbal in nature and relate solely to individual seminars, generally contain nondisclosure and noncompete understandings.
We will offer to design or customize seminars to meet the needs of any potential client expressing needs. Our contacts will be principally by telephone and email. In operating in this manner, we will keep our variable cash costs, consisting of phonecalls and emails, extremely low so that we can continue to operate without obtaining any inflows of capital. Salaries are only paid when seminar fees are received. The costs of materials needed for the seminars will be paid from the proceeds of each seminar. Using this approach, we can maintain our business at any level of revenue. If seminar activity increases, we will then develop more expensive marketing materials and brochures. Doing so will be linked entirely to revenue increases or capital inflows. We cannot predict if and when that will happen.
If revenues increase significantly or if we identify a source of capital, we will seek new customers more aggressively with more printed marketing materials and personal in-house calls on selected customers. The ongoing downturn of the economies in Europe has resulted in us commencing efforts to establish new business opportunities in the United States and Canada. We cannot predict the timing or likelihood of any of these approaches being successful.
Recent Marketing Efforts
Dr. Gehret recently visited the United States to provide Biostructural Analysis seminars in Seattle WA. One was at a funeral establishment to Funeral Directors and the second was to a group of hospice nurses. In organizing the seminars which were not well attended, it became apparent to ECC that, for various reasons including the economy, its type of seminars are not currently in great demand in many portions of the healthcare and funeral industries in the United States.
ECC believes that increasing demand for its seminars in the United States would require a high level of advertising resources, which ECC cannot afford at this time. Accordingly the Company is abandoning its effort to promote seminars in the United States for the foreseeable future.
Recent Development
The Company is currently in the negotiations to merge with a private company. If the merger takes place, it is likely that all of the Company’s current operations will be discontinued and all of the assets and liabilities associated with its present operations will be spun off to its President in exchange for shares of stock held by him.
Operations
The results of our operations for the fiscal years ended March 31, 2013 and 2012 were:
Our method of seeking seminars, calling business contacts and other leads provided by business contacts did not change from fiscal 2012 to 2013. In both periods, we believe that the economic conditions in Europe adversely impacted the demand for discretionary company expenses such as employee seminars.
All compensation was paid to Dr. Gehret. The amounts include reimbursement to him for travel costs, seminar supplies and books and use of telephone and computers.
Substantially all general and administrative costs were professional and consulting fees. We issued 1,200,000 registered shares of our common stock in January 2013 to satisfy expenses of $12,000 incurred in 2012.
Other
As a corporate policy, we will not incur any cash obligations that we cannot satisfy with known resources, of which there are currently none except as described in “Liquidity” below and/or elsewhere in this prospectus. We believe that the perception that many people, including potential customers and business associates, have of a public company make it more likely that they will be more likely to engage a public company for services or accept restricted securities from a public company as consideration for indebtedness to them than they would from a private company. We have not performed any studies of this matter. Our conclusion is based on our own observations. However, there can be no assurances that we will be successful in any of those efforts even if we are a public entity. Additionally, issuance of restricted shares would necessarily dilute the percentage of ownership interest of our stockholders.
Liquidity
ECC will pay all costs relating to its offering that became effective on December 19, 2012. These costs are estimated, based on discussions with our lawyer, at $45,000. This amount will become due and payable if and when we receive DTC approval and be paid as and when necessary and required or otherwise accrued on the books and records of ECC until we are able to pay the full amount due either from revenues or loans from our president. Absent sufficient revenues to pay these amounts within six months of the date of this prospectus, our president has agreed to sign a personal promissory note due and payable to counsel upon terms negotiated at the time of note issuance. The promissory note will eliminate unpaid liabilities on the Company’s books equal to the face amount of the personal promissory note. Our outside counsel, who will be owed the most significant amount of fees, is aware of the uncertainties facing the Company and is also aware that we have no other immediate sources of sort or long-term funding that would be more likely to come through if needed.
Private capital, if sought, will be sought from former business associates of our founder or private investors referred to us by those business associates. To date, we have not sought any funding source and have not authorized any person or entity to seek out funding on our behalf. If a market for our shares ever develops, of which there can be no assurances, we may attempt to use restricted shares of our common stock to compensate employees/consultants and independent contractors wherever possible. The prices that will be used will be determined during negotiations and may or may not be at perceived market values.
We believe that operations will generate sufficient cash to continue operations for the next 12 months from the date of this prospectus at the level that they have been provided that our costs of being a public company remain equal to or below the maximum estimate provided below.
We have embarked upon an effort to become a public company and, by doing so, have incurred and will continue to incur additional significant expenses for legal, accounting and related services. Once we become a public entity, subject to the reporting requirements of the Exchange Act of '34, we will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements, if required. We estimate, based on verbal discussions with consultants, accountants and lawyers, that these costs may range up to $50,000 per year for the next few years. In the next one to two fiscal years, we will take every step possible to minimize these costs. Our president worked for many years with law firms and an accounting firm. He has known and worked with many professionals who are knowledgeable in the area of public company obligations. Although we have no formal commitments, we believe that some of these professionals may assist our president for very reasonable costs. We also hope to be able to use our status as a public company to increase our ability to use noncash means of settling obligations and compensate independent contractors who provide professional and other services to us, although there can be no assurances that we will be successful in any of those efforts. We will reduce the compensation levels paid to management if there is insufficient cash generated from operations to satisfy these costs.
There are no current plans to seek private investment. We do not have any current plans to raise funds through the sale of securities except as set forth herein. We hope to be able to use our status as a public company to enable us to use non-cash means of settling obligations and compensate persons and/or firms providing services to us, although there can be no assurances that we will be successful in any of those efforts. We believe that the perception that many people have of a public company make it more likely that they will accept restricted securities from a public company as consideration for indebtedness to them than they would from a private company. We have not performed any studies of this matter. Our conclusion is based on our own beliefs. Issuing shares of our common stock to such persons instead of paying cash to them may increase our chances to establish and expand our business. Having shares of our common stock may also give persons a greater feeling of identity with us which may result in referrals. However, these actions, if successful, will result in dilution of the ownership interests of existing shareholders, may further dilute common stock book value, and that dilution may be material. Such issuances may also serve to enhance existing management’s ability to maintain control of ECC because the shares may be issued to parties or entities committed to supporting existing management. ECC may offer shares of its common stock to settle a portion of the professional fees incurred in connection with its registration statement. No negotiations have taken place with any professional and no assurances can be made as to the likelihood that any professional will accept shares in settlement of obligations due them. Our independent registered public accounting firm cannot accept shares of ECC common stock to settle obligations due to them. There are no other significant actual or potential liabilities at December 31, 2012.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may, therefore, not be comparable to those of companies that comply with such new or revised accounting standards.
Critical Accounting Policies
The preparation of financial statements and related notes requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements.
Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. There are no critical policies or decisions that rely on judgments that are based on assumptions about matters that are highly uncertain at the time the estimate is made. Note 2 to the financial statements, included elsewhere in this Annual Report on Form 10K, sets forth a summary of the significant accounting policies and methods used in the preparation of our financial statements.
Seasonality
We have not noted a significant seasonal impact in our business (or businesses like ours) although having just commenced operations it is too early to tell.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K, obligations under any guarantee contracts or contingent obligations. We also have no other commitments, other than the costs of being a public company that will increase our operating costs or cash requirements in the future.
Item 7A.
Item 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
Item 8.
Item 8.
FINANCIAL STATEMENTS
Our financial statements as of March 31, 2013 and 2012 and the fiscal years then ended start on page 35.
Item 9.
Item 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
(a) Dismissal of PMB Helin Donovan, LLP
On June 10, 2013 the Board of Directors of E C Consulting International, Inc. dismissed PMB Helin Donovan, LLP (“PMB”) as its independent registered public accounting firm.
The report of PMB on the Company’s financial statements for the years ended March 31, 2012 and 2011 did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or modified as to audit scope or accounting principles. During the period of PMB’s engagement as the Company’s independent registered public accounting firm through June 10, 2013 (the “Engagement Period”), there were no disagreements as defined in Item 304 of Regulation S-K with PMB on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PMB, would have caused it to make reference in connection with any opinion to the subject matter of the disagreement. Further, during the Engagement Period, there were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).
(b) Engagement of L.L. Bradford & Company, LLC.
On June 10, 2013, the Board of Directors of E C Consulting International, Inc. appointed L.L. Bradford & Company, LLC. (“LLB”), an independent registered public accounting firm which is registered with, and governed by the rules of, the Public Company Accounting Oversight Board, as our independent registered public accounting firm. During our two most recent fiscal years through June 10, 2013, neither us nor anyone on our behalf consulted LLB regarding either (1) the application of accounting principles to a specified transaction regarding us, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements; or (2) any matter regarding us that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions to Item 304 of Regulation S-K) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K).
Item 9A.
Item 9A.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer (the same person), has evaluated the effectiveness of the Company’s “disclosure controls and procedures”, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective in timely alerting them to the material information relating to the Company required to be included in the Company’s periodic SEC filings. In addition, no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fourth quarter of our fiscal year ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting
Our internal control over financial reporting 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 Company;
·
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
·
that our receipts and expenditures are being made only in accordance with authorizations of the Company's management and directors; and
·
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Evaluation of Disclosure Controls and Procedures
The Company’s management is responsible for establishing and maintaining effective internal control over financial reporting. The Company’s 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 GAAP. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company assets that could have a material effect on the financial statements.
Internal control over financial reporting, no matter how well designed, has inherent limitations. Because of such inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2013, based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. After conducting the assessment, management determined that, as of March 31, 2013, the Company’s internal control over financial reporting is effective, based on those criteria.
This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company's internal control over financial reporting(as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9B
Item 9B
OTHER INFORMATION
No event occurred during the fourth quarter of the fiscal year ended March 31, 2013 that would have required disclosure in a report on Form 8-K.
PART III
Item 10.
Item 10.
DIRECTORS, EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE
Board of Directors
Our management consists of:
Dr. Jean-Claude E. Gehret - was head of animal health research chemistry at Ciba Geigy Animal Health in Basel, Switzerland from 1978 to 2000. Since 2000, Dr. Gehret has provided training to employees and executives of pharmaceutical companies in the areas of business management, interpersonal relationship management, and sales. Dr. Gehret used sole proprietorship entities under the name Educons, which were the predecessors to ECC prior to incorporation, for the training programs until July 2010 at which time ECC was incorporated. (The name Educons was and is used by quite a few others necessitating a name change at the time of incorporation.) Dr. Gehret received his master of science degree from the University of Basel in Chemistry in 1970 and his PhD in organic chemistry from the University of Geneva in 1975. He also has post-doctoral training at UCLA, the University of Pittsburgh, and the University of California at Berkeley. Dr. Gehret holds joint citizenship in Switzerland and Argentina. He is fluent in German, English and French.
Danielle J. Gehret - became secretary and director at the time that the Company was incorporated as a Nevada corporation in July 2010. Previously she assisted Dr. Gehret in some of his preparations for seminars with Educons. She has been a biology and French language teacher at Sekundarschule Reinach in Reinach, Switzerland since 1995. She has a master’s degree from the University of Basel in Zoology and Microbiology. Her undergraduate degree is also in the bioological sciences from the University of Basel. She is the wife of Dr. Jean-Claude E. Gehret.
We believe that Dr. and Ms. Gehret each have strong qualifications to be officers and directors. Dr. Gehret has been involved in the industry for many years and has a great many business contacts. Mrs. Gehret is multi-lingual and familiar with the industry.
The OTCBB on which we plan to have our shares of common stock quoted does not currently have any director independence requirements.
No member of management will be required by us to work on a full time basis. Accordingly, certain conflicts of interest may arise between us and our officer(s) and director(s) in that they may have other business interests in the future to which they devote their attention, and they may be expected to continue to do so although management time must also be devoted to our business. As a result, conflicts of interest may arise that can be resolved only through their exercise of such judgment as is consistent with each officer's understanding of his/her fiduciary duties to us.
Currently we have only one officer and two directors (one of whom is the same person), who are related to each other, and will seek to add additional officer(s) and/or director(s) as and when the proper personnel are located and terms of employment are mutually negotiated and agreed, and we have sufficient capital resources and cash flow to make such offers.
Code of Business Conduct and Ethics
In April 2012 we adopted a Code of Ethics and Business Conduct which is applicable to our future employees and which also includes a Code of Ethics for our chief executive and principal financial officers and any persons performing similar functions. A code of ethics is a written standard designed to deter wrongdoing and to promote:
·
honest and ethical conduct,
·
full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements,
·
compliance with applicable laws, rules and regulations,
·
the prompt reporting violation of the code, and
·
accountability for adherence to the code.
A copy of our Code of Business Conduct and Ethics has been filed with the Securities and Exchange Commission as Exhibit 14.1 to our Registration Statement of which this prospectus is a part.
Board of Directors
All directors hold office until the completion of their term of office, which is not longer than one year, or until their successors have been elected. Both directors’ terms of office expire on March 31, 2013. All officers are appointed annually by the board of directors and, subject to existing employment agreements (of which there are currently none) and serve at the discretion of the board. Currently, directors receive no compensation for their role as directors but may receive compensation for their role as officers.
As long as we have an even number of directors, tie votes on issues are resolved in favor of the chairman’s vote.
Involvement in Certain Legal Proceedings
Except as described below, during the past ten years, no present director, executive officer or person nominated to become a director or an executive officer of ECC:
1.
had a petition under the federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he/she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he/she was an executive officer at or within two years before the time of such filing;
2.
was convicted in a criminal proceeding or subject to a pending criminal proceeding (excluding traffic violations and other similar minor offenses);
3.
was subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him/her from or otherwise limiting his/her involvement in any of the following activities:
i.
acting as a futures commission merchant, introducing broker, commodity trading advisor commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii.
engaging in any type of business practice; or
iii.
engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; or
4.
was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of an federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3) (i), above, or to be associated with persons engaged in any such activity; or
5.
was found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and for which the judgment has not been reversed, suspended or vacated.
Committees of the Board of Directors
Concurrent with having sufficient members and resources, if ever, the ECC board of directors will establish an audit committee and a compensation committee. We believe that we will need a minimum of five directors to have effective committee systems. The audit committee will review the results and scope of the audit and other services provided by the independent auditors and review and evaluate the system of internal controls. The compensation committee will manage any stock option plan we may establish and review and recommend compensation arrangements for the officers. No final determination has yet been made as to the memberships of these committees or when we will have sufficient members to establish committees. See “Executive Compensation” hereinafter.
All directors will be reimbursed by ECC for any expenses incurred in attending directors' meetings provided that ECC has the resources to pay these fees. ECC will consider applying for officers and directors liability insurance at such time when it has the resources to do so.
Item 11.
Item 11.
EXECUTIVE COMPENSATION
The following table shows, for the fiscal years ended March 31, 2013 and 2012, compensation awarded to or paid to, or earned by, our Chief Executive Officer (the “Named Executive Officer”).
There is no formal employment arrangement with Dr. Gehret at this time. Dr. Gehret’s compensation has not been fixed or based on any percentage calculations. All compensation has been paid in cash. The amount and timing of compensation payments was based solely on the amount of cash available to pay compensation after other expenses had been paid. The amounts paid are what makes up All Other Compensation in the Table above and is so included because it is not part of a regular or consistent payment plan for salary but is only paid at the time and amount that cash is available.
Dr. Gehret will make all decisions determining the amount and timing of his compensation and, for the immediate future, will receive the level of compensation each month that permits us to meet our obligations. Dr. Gehret’s compensation amounts will be formalized if and when his annual compensation exceeds $150,000.
Grants of Plan-Based Awards Table
None of our named executive officers received any grants of stock, option awards or other plan-based awards. The Company has never issued these types of awards.
Options Exercised and Stock Vested Table
None of our named executive officers has ever been granted or exercised any stock options,
Outstanding Equity Awards at Fiscal Year-End Table
No equity award arrangements have ever been awarded or granted by the Company.
Item 12.
Item 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of July 1, 2013 we had 26,200,000 shares of common stock outstanding which are held by 14 shareholders. The chart below sets forth the ownership, or claimed ownership, of certain individuals and entities. This chart discloses those persons known by the board of directors to have, or claim to have, beneficial ownership of more than 5% of the outstanding shares of our common stock as of July 1, 2013; of all directors and executive officers of ECC; and of our directors and officers as a group.
Shareholder Matters
As a Nevada corporation, we are subject to the Nevada Revised Statutes ("NRS" or "Nevada law"). Certain provisions of Nevada law create rights that might be deemed material to our shareholders. Other provisions might delay or make more difficult acquisitions of our stock or changes in our control or might also have the effect of preventing changes in our management or might make it more difficult to accomplish transactions that some of our shareholders may believe to be in their best interests.
Directors' Duties - Section 78.138 of the Nevada law allows our directors and officers, in exercising their powers to further our interests, to consider the interests of our employees, suppliers, creditors and customers. They can also consider the economy of the state and the nation, the interests of the community and of society and our long-term and short-term interests and shareholders, including the possibility that these interests may be best served by our continued independence. Our directors may resist a change or potential change in control if they, by a majority vote of a quorum, determine that the change or potential change is opposed to or not in our best interest. Our board of directors may consider these interests or have reasonable grounds to believe that, within a reasonable time, any debt which might be created as a result of the change in control would cause our assets to be less than our liabilities, render us insolvent, or cause us to file for bankruptcy protection
Amendments to Bylaws - Our articles of incorporation provide that the power to adopt, alter, amend, or repeal our bylaws is vested exclusively with the board of directors. In exercising this discretion, our board of directors could conceivably alter our bylaws in ways that would affect the rights of our shareholders and the ability of any shareholder or group to effect a change in our control; however, the board would not have the right to do so in a way that would violate law or the applicable terms of our articles of incorporation.
Item 13.
Item 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The sole promoter of ECC is Dr. Gehret, our chief executive officer, president and chief financial officer.
Our office and mailing address is Im Aeschfeld 12, CH-4147 Aesch, Switzerland. The space is provided to us by Dr. Gehret. Dr. Gehret incurs no incremental costs as a result of our using the space. Therefore, he does not charge us for its use. There is no written lease agreement.
The compensation paid to Dr. Gehret covers expenses for supplies, travel and the use of telephones and computers.
In November 2011, Danielle J. Gehret provided us with noninterest-bearing loan of $10,000 which was repaid in full in January 2012.
ECC entered into an agreement whereby Dr. Gehret will, if liabilities associated with our offering are not paid within six months of the date of our prospectus, sign a personal promissory note due and payable to counsel upon terms negotiated at the time of note issuance. The promissory note will eliminate unpaid liabilities on the Company’s books equal to the face amount of the personal promissory note.
Director Independence
For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. Accordingly, we do not have an independent director as of September 30, 2010.
Item 14.
Item 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees: Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided in connection with statutory and regulatory filings. We paid PMB Helin Donovan, LLP $8,300 during the year ended March 31, 2013 in connection with their audit of our financial statements for the years ended March 31, 2011 and 2010.
Tax Services Fees: Tax fees consist of fees billed for professional services for tax compliance. These services include assistance regarding federal, state, and local tax compliance. Tax fees were not incurred during the fiscal year ended January 31, 2013.
All Other Fees: Other fees, which were not incurred, would include fees for products and services other than the services reported above.
PART IV
Item 15.
Item 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a.
Exhibits
31.1
Certification of Chief Executive Officer
31.2
Certification of Chief Executive Officer
b.
Financial Statement Schedules
None
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
E C Consulting International, Inc.
/s/ Dr. Jean-Claude E. Gehret
By: Dr. Jean-Claude E. Gehret,
Chief Executive Officer
Date: July 1, 2013
E C CONSULTING INTERNATIONAL, INC.
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
To the Board of Directors
E C Consulting International, Inc.
Aesch, Switzerland
We have audited the accompanying balance sheet of E C Consulting International, Inc. (“the Company”) as of March 31, 2013 and 2012, and the related statements of operations, stockholders’ equity, and cash flows for the fiscal 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 audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of E C Consulting International, Inc. as of March 31, 2013 and 2012, and the results of its operations and cash flows for the fiscal year then ended, in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming that E C Consulting International, Inc. will continue as a going concern. As discussed in Note 3 to the financial statements, E C Consulting International, Inc. has minimal cash flow from operations and had accumulated deficits at March 31, 2013 which raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning this matter are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ L. L. Bradford & Company, LLC
L. L. Bradford & Company, LLC
Houston,TX
July 1, 2013
E C CONSULTING INTERNATIONAL, INC.
BALANCE SHEETS
MARCH 31, 2013 AND 2012
See accompanying notes to the financial statements.
E C CONSULTING INTERNATIONAL, INC.
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE FISCAL YEARS ENDED MARCH 31, 2013 AND 2012
See accompanying notes to the financial statements.
E C CONSULTING INTERNATIONAL, INC.
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE FISCAL YEARS ENDED MARCH 31, 2013 AND 2012
See accompanying notes to the financial statements.
E C CONSULTING INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED MARCH 31, 2013 AND 2012
See accompanying notes to the financial statements.
E C CONSULTING INTERNATIONAL, INC.
Notes to the Financial Statements
March 31, 2013 and 2012
NOTE 1 - ORGANIZATION
E C Consulting International, Inc. (the “Company” or “ECC”) was founded in 2000 as a sole proprietorship doing business under the name “Educons.” It went through several changes in legal form before being incorporated as a C corporation under the laws of the State of Nevada on July 7, 2010. The day-to-day operations of the Company did not change as a result of the changes in legal structure.
The Company has provided seminars to employees of companies, principally pharmaceutical companies, in Switzerland, Germany, France and Italy. It plans on providing seminars in the United States. The seminars are designed to help people who are managers, marketers or sales people at all levels to learn how to deal with people more effectively.
The transaction in which the sole proprietorship became an incorporated entity in the State of Nevada has been accounted for in a manner similar to a recapitalization for financial accounting purposes. The accompanying financial statements have been prepared as if the transaction had occurred on the first day of the first period (April 1, 2010) included in the financial statements, and all operating data represents an ongoing continuation of the Company’s operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a fiscal year ending on March 31.
Cash Equivalents
For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
Stock-based Compensation
The Company will follow Accounting Standards Codification (ASC) 718-10, Stock Compensation, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not adopted a stock option plan and has not granted any stock options.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260.
Foreign Currency Translation
Billings and collections of receivables have been denominated in Swiss francs.
The financial statements of the Company’s foreign operations are translated from Swiss francs into U.S. dollars. Assets and liabilities are translated at current exchange rates as of the balance sheet date, equity accounts at historical exchange rates, while revenue and expense accounts are translated at the average rates in effect during the year. Translation adjustments are not included in determining net income, but are included in accumulated other comprehensive income (loss).
Earnings (Loss) per Share
Net loss per common share is computed pursuant to ASC 260-10-45. Basic and diluted net income per common share has been calculated by dividing the net income for the period by the basic and diluted weighted average number of common shares outstanding assuming that the Company incorporated as of the beginning of the first period presented. There were no dilutive shares outstanding as of March 31, 2013 or 2012.
Income Taxes
The Company operated as a Swiss sole proprietorship until July 2010. No provision for income taxes assuming the Company had been taxed as a C corporation for federal and state income tax purposes has been presented because the Company did not have pretax income in any period presented.
Going forward income taxes will be provided in accordance with ASC 740, Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
No provision was made for Federal or foreign income tax.
Revenue Recognition
The Company follows ASC 605-10-S99-1 for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
Subsequent Events
The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company evaluates subsequent events from the date of the balance sheet through the date when the financial statements are issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them with the SEC on the EDGAR system.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
In June 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 amends ASC Topic 220, Comprehensive Income, to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. The guidance requires entities to report the components of comprehensive income in either a single, continuous statement or two separate but consecutive statements. The guidance will impact the presentation, but not amounts, of the Company’s translations gains and losses and become effective for the Company’s fiscal year ended March 31, 2013. The Company believes that the guidance will not have a material impact on the Company’s financial statements.
The Company is an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of the benefits of this extended transition period.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying financial statements, the Company had an accumulated deficit at March 31, 2013 and had no source of debt or equity financing.
While the Company is attempting to generate additional revenues, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management believes that the actions presently being taken to increase the number of seminars given, which includes attempting to break into the market in the United States, has a realistic chance of succeeding. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing.
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 - NOTE PAYABLE
During the fiscal year ended March 31, 2013, the Company received several loans aggregating $14,477 from an unaffiliated entity. The loan bears interest at 5% per annum and is due on or before December 31, 2013.
NOTE 5 - INCOME TAX
The Company files its U.S. income tax return on the cash basis of accounting. At March 31, 2013, it had a net operating loss carry forward in the amount of approximately $49,000 which will expire in the tax year ending March 31, 2032.
The net operating loss has created a deferred tax benefit in the amount of approximately $8,200 which has been offset by a valuation allowance in the same amount as there is no assurance that the tax benefit will be realized.
Timing differences representing accrued expenses of approximately $7,800 have not been deducted to arrive at federal taxable income.
NOTE 6 - SHARE CAPITAL
The Company is authorized to issue 74,000,000 shares of common stock and 1,000,000 shares of preferred stock. At the time of incorporation in Nevada, the Company issued 24,000,000 shares of its common stock to its President in exchange for the business of Educons and for costs and services incurred upon incorporation in July 2010 and issued 1,000,000 shares to its other director for services rendered. These services were valued at their par value of $24,000 and $1,000, respectively.
On January 4, 2013, the Company issued 1,200,000 registered shares of its common stock to satisfy $12,000 of accrued business services. After this issuance there were 26,200,000 shares of common stock outstanding.
NOTE 7 - CONCENTRATION OF RISK
The Company has given limited numbers of seminars in 2013 and 2012. Each seminar constitutes a material percentage of annual revenues.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. The Company's office is provided to it by its President who incurs no incremental costs as a result of the Company using the space. Therefore, he does not charge for its use. His compensation is assumed to cover use of the office and equipment. There is no written lease agreement, and no obligation for him to continue this arrangement.
The compensation paid to the Company’s President covers expenses for supplies and travel.
ECC entered into an agreement whereby Dr. Gehret will be lending funds to us if necessary to cover our registration/offering expenses provided that he has the resources to do so if and when the funds are needed. No amounts were outstanding under this agreement as of March 31, 2013 or 2012.
NOTE 8 - SUBSEQUENT EVENTS
In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events from April 1, 2013 through July 1, 2013, the date of issuance of the audited financial statements and has determined it does not have any material subsequent events to disclose except that it is in the negotiations to merge with a private company. If the merger takes place, it is likely that all of the Company’s current operations will be discontinued and all of the assets and liabilities associated with its present operations will be spun off to its President in exchange for shares of stock held by him.