UNIVERSAL GLOBAL HUB INC. - Quarter Report: 2017 March (Form 10-Q)

Form 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

X .

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to____________

Commission File Number: 000-54758

The Enviromart Companies, Inc.

(Exact name of issuer as specified in its charter)


Delaware		45-5529607
(State or Other Jurisdiction of		(I.R.S. Employer I.D. No.)
incorporation or organization)

160 Summit Ave

Montvale, NJ 07645

(Address of Principal Executive Offices)

201-782-0889

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No .

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X . No .

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes X . No .

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

The number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date:


Class		Outstanding as of May 12, 2017
Common Capital Voting Stock, $0.0001 par value per share		50,061,775

FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, Financial Statements and Notes to Financial Statements contain forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations and financial conditions. All forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or intended.


PART I - FINANCIAL STATEMENTS

Item 1. Financial Statements.

Condensed Balance Sheets as of March 31, 2017 (Unaudited) and December 31, 2016	4
Condensed Statements of Operations for the three months ended March 31, 2017 and 2016 (Unaudited)	5
Condensed Statements of Cash Flows for the three months ended March 31, 2017 and 2016 (Unaudited)	6
Notes to Condensed Financial Statements (Unaudited)	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	12

Item 3. Quantitative and Qualitative Disclosures About Market Risk.	14

Item 4. Controls and Procedures.	15

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	16

Item 1A. Risk Factors	16

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	16

Item 3. Defaults upon Senior Securities	16

Item 4. Mine Safety Disclosures	16

Item 5. Other Information	16

Item 6. Exhibits	17

THE ENVIROMART COMPANIES, INC.

Condensed Balance Sheets



			March 31,		December 31,
			2017		2016
			(Unaudited)
	ASSETS

Current Assets
Cash		$	90	$	100

Total Current Assets			90		100

TOTAL ASSETS		$	90	$	100

	LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities
	Accounts payable	$	4,612	$	-
Total Current Liabilities			4,612		-

Commitments and Contingencies			-		-

Stockholders’ Equity (Deficit)
	Preferred stock, $0.0001 par value, 5,000,000 shares authorized; none issued and outstanding		-		-
	Common stock, $0.0001 par value, 250,000,000 shares authorized; 49,861,775 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively		4,986		4,986
	Common stock to be issued, 200,000 shares issuable at March 31, 2017 and December 31, 2016, respectively		20		20
	Additional paid-in capital		1,031,487		1,027,291
	Accumulated deficit		(1,041,015)		(1,032,197)
Total Stockholders’ Equity (Deficit)			(4,522)		100

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)		$	90	$	100

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

THE ENVIROMART COMPANIES, INC.

Condensed Statements of Operations

(Unaudited)


		For the Three Months Ended
		March 31,
		2017		2016

Sales – Net	$	-	$	-

Operating Expenses
General and Administrative		8,818		23,418

Net Loss from Continuing Operations		(8,818)		(23,418)

Net Loss from Discontinued Operations		-		(95,523)

Net Loss	$	(8,818)	$	(118,941)

Net Loss per share of common stock (basic and diluted) continuing operations	$	-	$	-

Net Loss per share of common stock (basic and diluted) discontinued operations	$	-	$	-

Net Loss per share of common stock (basic and diluted)	$	-	$	-

Weighted average number of shares outstanding – basic and diluted		49,861,775		49,957,737

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

THE ENVIROMART COMPANIES, INC.

Condensed Statements of Cash Flows

(Unaudited)


		For the Three Months Ended
		March 31,
		2017		2016

Cash Flows from Operating Activities
Net Loss	$	(8,818)	$	(118,941)
Adjustments to reconcile net loss to net cash
used in operating activities:
Loss from discontinued operations		-		95,523
Expenses paid by shareholders		4,196		-
Increase in accounts payable and accrued expenses		4,612		-
Net cash used in continuing operating activities		(10)		(23,418)
Net cash used in discontinued operating activities		-		(5,646)
Net cash used in operating activities		(10)		(29,064)

Cash Flows from Investing Activities		-		-

Cash Flows from Financing Activities
Issuance of common stock for cash		-		10,000
Net cash provided by continuing financing activities		-		10,000
Net cash provided by discontinued financing activities		-		2,432
Net cash provided by financing activities		-		12,432

Decrease in Cash and Cash equivalents		(10)		(16,632)

Cash and Cash Equivalents--Beginning of Period		100		16,743
Cash and Cash Equivalents--End of Period	$	90	$	111

Supplemental Disclosures
Cash paid for Interest	$	-	$	31,172

Non-Cash Investing and Financing Activities
Subscription payable	$	-	$	200

The accompanying notes are an integral part of these condensed financial statements

THE ENVIROMART COMPANIES, INC.

Notes to Condensed Financial Statements

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

The Enviromart Companies, Inc. and subsidiary (the “Company”), formerly known as Environmental Science and Technologies, Inc., was incorporated under the laws of the State of Delaware on June 18, 2012. On June 21, 2013, the Company completed an acquisition of intangible assets comprised of intellectual property and trademarks from its former Chief Executive Officer. In conjunction with the acquisition of the intangible assets, the Company commenced operations.

As of January 2, 2015, the Company’s business was operated through its wholly-owned subsidiary, EnviroPack Technologies, Inc. Effective on or about January 15, 2015, the Company changed its name to The Enviromart Companies, and the Company’s wholly-owned subsidiary, EnviroPack Technologies, Inc., changed its name to Enviromart Industries, Inc. The Company’s other wholly owned subsidiaries are currently inactive.

On March 21, 2016, the Company entered into a Stock Purchase and Sale Agreement with Michael R. Rosa, founder and a significant shareholder, and Enviromart Industries, Inc., its sole operating subsidiary, pursuant to which the Company agreed to transfer to Mr. Rosa all the issued and outstanding capital stock of Enviromart Industries, Inc.

In consideration for the transfer of the operating subsidiary to Mr. Rosa, he surrendered to us all 13,657,500 shares of the Company’s common stock then owned by him, which shares were returned to the status of authorized and unissued shares. In addition, Mr. Rosa and Enviromart Industries, Inc. agreed to assume and discharge any and all of the Company’s liabilities existing as the closing date, of which there was none, as all of the Company’s operations have been conducted through Enviromart Industries, Inc. (its sole operating subsidiary). The Company accounted for the transaction as a “split-off” per the guidance of ASC 845-10-30-12.

The above described purchase and sale transaction closed on July 21, 2016, effective April 1, 2016, and was approved by a majority of the Company’s shareholders by written consent on May 4, 2016. As a result of the completion of the purchase and sale transaction, the Company’s operating business has been discontinued, and it is focusing on seeking to acquire an operating business with strong growth potential.

Accordingly, the Company now has only minimal assets and liabilities. Its operations are focused on seeking to acquire an operating business with strong growth potential. From and after the sale, unless and until the Company completes an acquisition, its expenses are expected to consist solely of legal, accounting and compliance costs, including those related to complying with reporting obligations under the Securities and Exchange act of 1934.

NOTE 2. BASIS OF PRESENTATION

Basis of Presentation

The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

These Financial Statements should be read in conjunction with the December 31, 2016 audited financial statements filed with the SEC on April 14, 2017.

THE ENVIROMART COMPANIES, INC.

Notes to Condensed Financial Statements

NOTE 3. GOING CONCERN

During the three months ended March 31, 2017, the Company has been unable to generate cash flows sufficient to support its operations and has been dependent on capital contributions made by a significant stockholder. In addition to negative cash flow from operations, the Company has experienced recurring net losses, and has an accumulated deficit of $1,041,015 as of March 31, 2017. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from any future operations or that funds will be available from external sources such as debt or equity financings or other potential sources. If the Company is unable to raise capital from external sources when required, there would be a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders. The Company is now seeking an operating company with which to merge or acquire. There is no assurance, however, that the Company will achieve its objectives or goals.

NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP 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 unaudited consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Enviromart Industries, Inc. (f/k/a EnviroPack Technologies, Inc.), which was consolidated through March 31, 2016 and the results of its operations are shown as discontinued operations. All inter-company accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents.

Concentration of Risk

Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company has in the past occasionally maintained amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining all deposits in high quality financial institutions.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized. As of March 31, 2017, all deferred tax assets continue to be fully reserved.

THE ENVIROMART COMPANIES, INC.

Notes to Condensed Financial Statements

Basic and Diluted Earnings (Loss) Per Share

Basic earnings per share is based on the weighted average number of common shares outstanding. Diluted earnings per share is based on the weighted average number of common shares outstanding and dilutive common stock equivalents. Basic earnings per share is computed by dividing net income/loss available to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Weighted average number of shares used to calculate basic and diluted loss per share is considered the same as the effect of dilutive shares is anti-dilutive for all periods presented. As of March 31, 2017 and, 2016, there were no common stock equivalents, not included in dilutive earnings per share as their effect is anti-dilutive.

Revenue Recognition

Revenue is recognized across all segments of the business when there is persuasive evidence of an arrangement, delivery has occurred, price has been fixed or is determinable, and collectability is reasonably assured. Revenue is recognized at the time title passes and risk of loss is transferred to customers.

Discontinued Operations

Per the guidance at ASU 2014-10, the Company has presented discontinued operations related to the transfer of the former operating subsidiary (see Note 8) in the period in which either the discontinued operation has been disposed of or classified as held for sale.

Stock-Based Compensation

The Company expenses all stock-based payments to employees and non-employee directors based on the grant date fair value of the awards over the requisite service period, adjusted for estimated forfeitures.

Recently Issued Financial Accounting Standards

Management believes the impact of recently issued standards and updates, which are not yet effective, will not have a material impact on the Company’s financial position, results of operations or cash flows upon adoption.

NOTE 5. RELATED PARTY TRANSACTIONS

On March 21, 2016, the Company entered into a Stock Purchase and Sale Agreement with Michael R. Rosa, founder and then a significant shareholder, and Enviromart Industries, Inc., its sole operating subsidiary, pursuant to which the Company agreed to transfer to Mr. Rosa all the issued and outstanding capital stock of Enviromart Industries, Inc.

In consideration for the transfer of the operating subsidiary to Mr. Rosa, he surrendered to us all 13,657,500 shares which he controlled, which shares were returned to the status of authorized and unissued shares. In addition, Mr. Rosa and Enviromart Industries, Inc. have assumed and discharged any and all of the Company’s liabilities existing as the closing date, of which there were none, as all of the Company’s operations had been conducted through Enviromart Industries, Inc. (its sole operating subsidiary).

During the quarter ended March 31, 2017, a significant stockholder paid expenses on behalf of the Company in the amount of $4,196. This amount has been recorded as additional paid-in capital.

THE ENVIROMART COMPANIES, INC.

Notes to Condensed Financial Statements

NOTE 6. STOCKHOLDERS’ EQUITY

Private Offering

During January, 2016, the Company issued 2,000,000 shares to accredited investors related to their stock purchase agreements dated December 31, 2015.

On January 31, 2016, the Company agreed to sell 100,000 units, with each unit consisting of one share of our common stock and a warrant to purchase ½ shares of common stock at a price of $0.25, to an accredited investor for gross proceeds of $10,000 (a per unit price of $.10). As of March 31, 2016 the Company granted this accredited investor 100,000 warrants related to his unit purchase transactions. Under the terms of the Stock Purchase and Sale Agreement, these warrants were terminated.

NOTE 7. COMMITMENTS AND CONTINGENCIES

Except as disclosed herein, we are not a party to any pending legal proceeding. To the knowledge of our management, except as disclosed herein, no federal, state or local governmental agency is presently contemplating any proceeding against us.

NOTE 8. DISCONTINUED OPERATIONS

On February 16, 2016, The Rushcap Group, Inc. (“Rushcap”), an affiliate of Mark Shefts (then a significant shareholder), notified us that, effective March 31, 2016, it was discontinuing its funding of our wholly owned subsidiary under the Inventory Financing Agreement dated June 19, 2015. Rushcap reserved the right to discontinue the funding prior to March 31, 2016, if it so determined. The discontinuation of funding was expected to have a material adverse effect on our business, financial condition and results of operation, as we did not believe that we would be able to timely secure funding to replace the discontinued Inventory Financing.

In light of the discontinuation of funding, our Board of Directors spent approximately one month assessing the operating company’s current business and funding prospects, including whether to transfer the operating subsidiary to Michael R. Rosa, our founder and a significant shareholder, in accordance with that certain Agreement between the Company, Mr. Rosa and Mr. Shefts, dated July 14, 2014 (“Break-up Agreement”). The Break-up Agreement was disclosed in the Company’s Current Report on Form 8-K filed July 18, 2014, which is incorporated herein by this reference.

Our Board of Directors concluded that the discontinuation of funding would have a material adverse effect on our business, financial condition and results of operation, as it did not believe that it would be able to timely secure funding to replace the discontinued Inventory Financing.

On March 21, 2016, we entered into a Stock Purchase and Sale Agreement with Michael R. Rosa and Enviromart Industries, Inc., our sole operating subsidiary, pursuant to which we transferred to Mr. Rosa all the issued and outstanding capital stock of Enviromart Industries, Inc.

In consideration for the transfer of the operating subsidiary to Mr. Rosa, he surrendered to us all 13,657,500 shares of the Company’s common stock then owned by him, which shares have been returned to the status of authorized and unissued shares. In addition, Mr. Rosa and Enviromart Industries, Inc. agreed to assume and discharge any and all of the Company’s liabilities existing as the closing date, of which there were none, as all of the Company’s operations had been conducted through Enviromart Industries, Inc. (its sole operating subsidiary).

The above described purchase and sale transaction closed on July 21, 2016, effective April 1, 2016, and was approved by a majority of the Company’s shareholders by written consent on May 4, 2016.

As a result of the completion of the purchase and sale transaction, the Company’s operating business has been discontinued, and it is focusing on seeking to acquire an operating business with strong growth potential.

THE ENVIROMART COMPANIES, INC.

Notes to Condensed Financial Statements

The loss from discontinued operations presented in the statement of operations for the three months ended March 31, 2016 consisted of the following:


		Three Months Ended
		March 31, 2016
Revenue	$	538,629
Cost of goods sold		339,914
Gross profit		198,715
Operating Expenses		(263,066)
Other Expenses		(31,172)
Loss from Discontinued Operations	$	(95,523)

NOTE 9. SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial statements were issued and up to the time of filing with the Securities and Exchange Commission.

On May 9, 2017 the Company issued 200,000 shares of common stock related to stock purchase agreements dated December 31, 2015 and January 31, 2006.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-looking Statements

Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Overview

On June 21, 2013, the Company completed the acquisition of certain assets from Michael R. Rosa, its then chief executive officer, and commenced business operations. Since completing the acquisition, the Company has raised capital, hired employees, leased space, engaged consultants and advisors, conducted extensive sales and marketing related activities both domestically and internationally, negotiated vendor relationships and engaged seller’s representatives.

Sale of Operating Business

On March 17, 2016, our Board of Directors approved the sale of our sole operating subsidiary, Enviromart Industries, Inc., to Michael R. Rosa, our founder and a significant shareholder, as contemplated by that certain Agreement between us, Mr. Rosa and Mark Shefts, dated July 14, 2014 (“Break-up Agreement”). The Break-up Agreement was originally disclosed in our Current Report on Form 8-K filed July 18, 2014, which is incorporated herein by this reference.

On March 21, 2016, we entered into a Stock Purchase and Sale Agreement with Michael R. Rosa and Enviromart Industries, Inc., our sole operating subsidiary, pursuant to which we will transferred to Mr. Rosa all the issued and outstanding capital stock of Enviromart Industries, Inc.

In consideration for the transfer of the operating subsidiary to Mr. Rosa, he surrendered to us all 13,657,500 shares of the Company’s common stock then owned by him, which shares have been returned to the status of authorized and unissued shares. In addition, Mr. Rosa and Enviromart Industries, Inc. (the Companies former operating subsidiary) agreed to assume and discharge any and all of the Company’s liabilities existing as the closing date, of which there were none, as all of the Company’s operations have been conducted through Enviromart Industries, Inc. (its sole operating subsidiary).

The above described purchase and sale transaction closed on July 21, 2016, effective April 1, 2016, and was approved by a majority of the Company’s shareholders by written consent on May 4, 2016. Upon consummation of the purchase and sale transaction, the Company’s operating business has been discontinued, and it will focus on seeking to acquire an operating business with strong growth potential.

Upon the closing of the purchase and sale transaction, Mr. George Adyns resigned from our board of directors and all offices held by him.

All of the disclosures in this Quarterly Report on Form 10-Q must be viewed in light of the disposition of our sole operating subsidiary, as our operating business has been discontinued, and the value of our company is now dependent upon our ability to locate and consummate the acquisition of an operating business with strong growth potential.

Results of Operations

For the three months ended March 31, 2017, we had net loss of approximately $8,800 as compared to a net loss of approximately $119,000 for the three months ended March 31, 2016. The decrease in loss was due primarily to the change in our business since the transfer of our former operating subsidiary (see Note 8). Unless and until the Company completes the acquisition of an operating business, the Company’s expenses are expected to consist of the legal, accounting and administrative costs of maintaining a public company.

Recent Developments

None

Critical Accounting Policies and Significant Judgments and Estimates

The Securities and Exchange Commission (“SEC”) issued disclosure guidance for “critical accounting policies.” The SEC defines “critical accounting policies” as those that require the application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

Our significant accounting policies are described below. We anticipate that the following accounting policies will require the application of our most difficult, subjective or complex judgments:

Concentration of Risk

Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. Our cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining all deposits in high quality financial institutions.

Income Taxes

Income taxes are provided in accordance with FASB ASC 740 “Accounting for 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 of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. As of March 31, 2017, all deferred tax assets continue to be fully reserved.

Revenue Recognition

Liquidity and Capital Resources

Currently, we have minimal cash. During 2016, we have issued stock in exchange for office space and all other services needed to maintain the company as a public company with respect to calendar year 2016.

As disclosed elsewhere in the Report, on March 21, 2016, we entered into a Stock Purchase and Sale Agreement with Michael R. Rosa and Enviromart Industries, Inc., our sole operating subsidiary, pursuant to which we transferred to Mr. Rosa all the issued and outstanding capital stock of Enviromart Industries, Inc.

In consideration for the transfer of the operating subsidiary to Mr. Rosa, he surrendered to us all 13,657,500 shares of the Company’s common stock owned by him, which shares have been returned to the status of authorized and unissued shares. In addition, Mr. Rosa and Enviromart Industries, Inc. agreed to assume and discharge any and all of the Company’s liabilities existing as the closing date, of which there were none, as all of the Company’s operations have been conducted through Enviromart Industries, Inc. (its sole operating subsidiary).

The above described purchase and sale transaction closed on July 21, 2016, effective April 1, 2016, and was approved by a majority of the Company’s shareholders by written consent on May 4, 2016. As a result of the closing of the purchase and sale transaction, the Company’s operating business has been discontinued, and is focusing on seeking to acquire an operating business with strong growth potential.

The value of our company is now dependent upon our ability to locate and consummate the acquisition of an operating business with strong growth potential. As of the date of filing of this Report, we have minimal cash. However, prior to completing an acquisition, our expenses will consist primarily of compliance costs associated with being a public company, and we expect these compliance costs to be substantially less than they have been historically, at least until we complete an acquisition transaction. Also, as noted above, we have issued stock in exchange for office space and all other services needed to maintain the company as a public company with respect to calendar year 2016.

If we need to raise additional funds, we intend to do so through equity and/or debt financing.

Going Concern Consideration

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements as defined in Item 303(a) (4) (ii) of the SEC’s Regulation S-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in rules and forms adopted by the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including the CEO and CFO, to allow timely decisions regarding required disclosures.

Under the supervision and with the participation of our management, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our Chairman concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were not effective.

Changes in Internal Control over Financial Reporting

None

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

Not required.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

N/A

ITEM 6. EXHIBITS


		Incorporated by Reference
Exhibit	Exhibit Description	Filed Herewith	Form	Period Ending	Exhibit	Filing Date
31.1	Certificate of Incorporation, as amended		10-Q		31.1	01/23/2015

31.2	By-Laws		10		31.2	07/09/2012

4.1	Specimen Stock Certificate		10		4.1	07/09/2012

10.6	Agreement between Mark Shefts, registrant and Michael Rosa dated July 14, 2014		10-Q	09/30/2014	10.6	11/19/2014

10.7	Amended and Restated Promissory Note with Rushcap Group effective May 29, 2015		10-Q	06/30/2015	10.7	08/14/2015

10.8	Amended and Restated Purchase Order Financing Agreement with Rushcap Group effective May 29, 2015		10-Q	06/30/2015	10.8	08/14/2015

10.9	First Amended and Restated Convertible Note with Shefts Family LP dated January 21, 2015		10-Q	03/31/2014	10.9	01/23/2015

10.10	Convertible Note with Michael R. Rosa dated January 21, 2015		10-Q	03/31/2014	10.10	01/23/2015

10.11	Stock Purchase and Sale between Registrant, Enviromart Industries, Inc. and Michael R. Rosa, dated March 21, 2016		10-K	12/31/2015	10.11	04/14/2016

31 **	Certification of the Principal Executive and Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended	X

32	Certification of the Principal Executive and Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X

** Furnished, not filed

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

The Enviromart Companies, Inc.

By: /s/ Laurence H. King

Name: Laurence H. King

Title: Chairman of the Board

Dated: May 12, 2017