Note
1.
Nature
of Business and Significant Accounting Policies
Nature
of business
Eco
Depot, Inc. (“Company”) was organized November 2, 2004 under the laws of the
State of Washington. The Company currently has limited operations
and, in accordance with Statement of Financial Accounting Standard (SFAS)
No. 7,
“
Accounting and Reporting by Development Stage Enterprises
,” is
considered a Development Stage Enterprise.
The
Company is in the business of developing an Internet e-commerce website
that
will sell a full line of environmentally friendly goods, energy efficient
building and construction materials and sustainable home products. Eco
Depot
will not manufacture any equipment or goods, but will resell “green products”
from various manufacturers.
Unaudited
Interim Financial Statements
The
accompanying unaudited interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for
interim
financial information and with the instructions to Form 10-QSB of Regulation
S-B. They do not include all information and footnotes required by
United States generally accepted accounting principles for complete financial
statements. However, except as disclosed herein, there has been no
material changes in the information disclosed in the notes to the financial
statements for the year ended December 31, 2006 included in the Company’s Annual
Report on Form 10-KSB filed with the Securities and Exchange
Commission. The interim unaudited financial statements should be read
in conjunction with those financial statements included in the Form 10-KSB.
In
the opinion of Management, all adjustments considered necessary for a fair
presentation, consisting solely of normal recurring adjustments, have been
made.
Operating results for the nine months ended September 30, 2007 are not
necessarily indicative of the results that may be expected for the year
ending
December 31, 2007.
A
summary of the Company’s significant accounting policies is as
follows
:
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
Cash
For
the
Statements of Cash Flows, all highly liquid investments with maturity of
three
months or less are considered to be cash equivalents. There were no
cash equivalents as of September 30, 2007.
Revenue
Recognition
The
Company is engaged in the sale of environmentally friendly goods, etc.
through a
website on the internet. The Company recognizes the revenue at the
time of shipping of the product when responsibility of the product is
transferred to the purchaser and payment has been accepted or
assured. The Company does not carry a physical
inventory. Instead, the product sold is drop shipped directly from
the supplier to the customer. In this capacity, the Company is acting
as an agent for the supplier and under EITF 99-19 “
Reporting Revenue Gross
as a Principal versus Net as an Agent”
recognizes transactions on the net
basis.
Income
taxes
Income
taxes are provided for using the liability method of accounting in accordance
with SFAS No. 109
“Accounting for Income Taxes.”
A deferred tax asset
or liability is recorded for all temporary differences between financial
and tax
reporting. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax
basis. 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 effect of changes in tax laws
and
rates on the date of enactment.
ECO
DEPOT, INC.
(A
Development Stage Enterprise)
NOTES
TO FINANCIAL STATEMENTS
September
30, 2007
(unaudited)
In
July
2006, the Financial Accounting Standards Board (FASB) issued Interpretation
No.
48,
“Accounting for Uncertainty in Income Taxes - an Interpretation of
FASB
Statement No. 109”
(FIN 48). FIN 48 is intended to clarify the
accounting for uncertainty in income taxes recognized in a company’s financial
statements and prescribes the recognition and measurement of a tax position
taken or expected to be taken in a tax return. FIN 48 also provides
guidance on de-recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition.
Under
FIN
48, evaluation of a tax position is a two-step process. The first step is
to determine whether it is more-likely-than-not that a tax position will
be
sustained upon examination, including the resolution of any related appeals
or
litigation based on the technical merits of that position. The second step
is to measure a tax position that meets the more-likely-than-not threshold
to
determine the amount of benefit to be recognized in the financial
statements. A tax position is measured at the largest amount of benefit
that is greater than 50 percent likely of being realized upon ultimate
settlement.
Tax
positions that previously failed to meet the more-likely-than-not recognition
threshold should be recognized in the first subsequent period in which
the
threshold is met. Previously recognized tax positions that no longer meet
the more-likely-than-not criteria should be de-recognized in the first
subsequent financial reporting period in which the threshold is no longer
met.
The
adoption of FIN 48 at January 1, 2007 did not have a material effect on
the
Company’s financial position.
Recent
Accounting Pronouncements
In
February 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 159,
“The Fair
Value Option for Financial Assets and Financial Liabilities”
(“SFAS
No. 159”). SFAS No. 159 provides the option to report certain
financial assets and liabilities at fair value, with the intent to mitigate
volatility in financial reporting that can occur when related assets and
liabilities are recorded on different bases. This statement is effective
for us
beginning January 1, 2008. We do not expect SFAS No. 159 to have a
material impact on our consolidated financial statements.
In
March
2007, the Emerging Issues Task Force (“EITF”) reached a consensus on EITF Issue
No. 06-10,
“Accounting for Deferred Compensation and Postretirement
Benefit Aspects of Collateral Assignment Split-Dollar Life Insurance
Arrangements”
(“EITF 06-10”). EITF 06-10 provides that an employer should
recognize a liability for the postretirement benefit related to collateral
assignment split-dollar life insurance arrangements in accordance with
either
SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than
Pensions,” or APB No. 12 “Omnibus Opinion.” Entities should recognize the
effects of applying EITF 06-10 through either (i) a change in accounting
principle through a cumulative-effect adjustment to retained earnings or
to
other components of equity or net assets in the statement of financial
position
as of the beginning of the year of adoption or (ii) a change in accounting
principle through retrospective application to all prior periods. The provisions
of EITF 06-10 are effective as of January 1, 2008 and are not expected to
have a material impact on our consolidated financial statements.
Going
Concern
The
Company’s financial statements are prepared in accordance with generally
accepted accounting principles applicable to a going concern. This
contemplates the realization of assets and the liquidation of liabilities
in the
normal course of business. Currently, the Company does not have
significant cash or other material assets, nor does it have operations
or a
source of revenue sufficient to cover its operation costs which raises
substantial doubt about its ability to continue as a going
concern. The Company will be dependent upon the raising of additional
capital through the placement of our common stock in order to continue
with the
business plan. There can be no assurance that the Company will be successful
in
raising the capital it requires through the sale of its common stock in
order to
continue as a going concern.
ECO
DEPOT, INC.
(A
Development Stage Enterprise)
NOTES
TO FINANCIAL STATEMENTS
September
30, 2007
(unaudited)
Note
2. Stockholders’ Equity
Common
stock
The
authorized common stock of the Company consists of 75,000,000 shares with
par
value of $0.001. As at September 30, 2007, the Company has not granted
any stock
options or warrants and has not recorded any stock-based
compensation.
On
March
10, 2005, the Company authorized and issued 4,000,000 shares of $0.001
par value
common stock at par in consideration of $4,000 in cash to the officer of
the
Company.
On
June
22, 2005, the Company authorized and issued 1,575,000 common stock of the
Company in consideration of $15,750 in cash to the officer of the
Company.
On
January 6, 2006, the Company approved a private placement of Common Stock
in
accordance with laws of the State of Washington. The placement
was to sell through a purchase agreement up to 10,000,000 new shares at
$0.02
per share and 1,575,000 shares of common stock to be sold by selling
shareholders. The offering closed on April 6, 2006. The
Company sold 500,000 shares for $10,000, issuing the shares to twenty-seven
(27)
shareholders in on February 27, 2006.
Net
loss per common share
Net
loss
per share is calculated in accordance with SFAS No. 128, “
Earnings Per
Share.
” The weighted-average number of common shares outstanding
during each period is used to compute basic loss per share. Diluted
loss per share is computed using the weighted averaged number of shares
and
dilutive potential common shares outstanding. Dilutive potential
common shares are additional common shares assumed to be exercised.
Basic
net
loss per common share is based on the weighted average number of shares
of
common stock outstanding of 6,075,000 for the three and nine month period
ended
September 30, 2007 and 6,075,000 and 5,968,773 for the three and nine months
ending September 30, 2006, respectively. As of September 30, 2007 the
Company had no dilutive potential common shares.
We
did
not provide any current or deferred U.S. federal income tax provision or
benefit
for any of the periods presented because we have experienced operating
losses
since inception. We provided a full valuation allowance on the net deferred
tax
asset, consisting of net operating loss carryforwards, because management
has
determined that it is more likely than not that we will not earn income
sufficient to realize the deferred tax assets during the carryforward
period. The Company anticipates operating losses in 2006 to be fully
allowed for and does not have a deferred tax liability or asset at September
30,
2007.
The
net
federal operating loss carry forward will expire in 2023 through
2027. This carry forward may be limited upon the consummation of a
business combination under IRC Section 381.
Note
4. Related Party Transactions
The
Company neither owns nor leases any real or personal property. The
officers of the corporation provide office services without
charge. Such costs are immaterial to the financial statements and
accordingly, have not been reflected therein. The officer and
director for the Company are involved in other business activities and
may, in
the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face
a
conflict in selecting between the Company and their other business
interest. The Company has not formulated a policy for the resolution
of such conflicts. The loss of the services of its officer or
director may have a negative impact on the further development of the
business.
ECO
DEPOT, INC.
(A
Development Stage Enterprise)
NOTES
TO FINANCIAL STATEMENTS
September
30, 2007
(unaudited)
As
of
September 30, 2007 and December 31, 2006, the Company owed a shareholder
of the
Company $64,928 and $14,965, respectively, for advances to the Company.
The
amounts payable are unsecured, non-interest bearing with no set terms of
repayment.