ELCR Electric Car Company Inc (CE)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

[   ]  TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT

For the transition period from ___________ to _____________

Commission File Number 333-45678

ELECTRIC CAR COMPANY, INC.

(Exact name of small business issuer as specified in its charter)

DELAWARE	333 -142704	20-8317658
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)	(COMMISSION FILE NO.)	(IRS EMPLOYEE IDENTIFICATION NO.)

1903 North Barnes Ave

Springfield Mo. 65803

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

417-866-6565

(ISSUER TELEPHONE NUMBER)

CLASSIC COSTUME COMPANY, INC.

 (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) during the past 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 check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (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 [ ] No[x]

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes[x] No [ ]

The number of shares of Common Stock of the issuer outstanding as of June 30, 2009 was 14,365,168 .

 

Transitional Small Business Disclosure Format (check one): Yes [  ] No [X]

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Purpose of This Amendment

We are amending our Form 10-Q for the period ended June 30, 2009 to (i) correct our disclosure of the number of shares authorized, (ii) to correct our commission file number reported on our Form 10-Q’s cover page, (iii) to correct the presentation of short term notes and to reflect warrant’s issued in connection with the financing omitted through oversight, (iv) to enhance certain disclosures, (v) correct typographical errors, and (vi) correct the description of certain advances made.

  

ELECTRIC CAR COMPANY, INC. AND SUBSIDIARY (Formerly Classic Costume Company. Inc. and Subsidiary)

 

		Page Number
PART 1 – Financial Information
Item 1 – Unaudited Financial Information:
Consolidated Balance Sheets as of June 30, 2009 (Unaudited) and December 31, 2008			3
Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2009 and 2008 (Unaudited)			4
Consolidated Statement of Changes in Stockholders’ Equity (Deficit) (Unaudited)			5
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008 (Unaudited)			6
Notes to Unaudited Financial Statements			7-13
Item 2 - Management’s Discussion and Analysis or Plan of Operation			14-15
Item 3 - Quantitative and Qualitative Disclosures About Market Risk			15
Item 4T - Controls and Procedures			15
PART II - Other Information (Items 1-6)			16

 

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  ELECTRIC CAR COMPANY, INC. AND SUBSIDIARY (Formerly Classic Costume Company, Inc and Subsidiary)

CONSOLIDATED BALANCE SHEETS

					June 30,		December 31,
							2009				2008
ASSETS				(Unaudited)		(Audited)
Current Assets
	Cash						$		1,205		$		-
	Accounts receivable			-		-
	Inventory						-				-
	Assets from discontinued operations			-		8,363
Total Current Assets			1,205		8,363
Furniture and Equipment, net			-		-
Other Assets							216,273				2,195
TOTAL ASSETS							$	217,478		$	10,558
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
	Accounts payable and accrued expenses			$	31,759		$	20,000
	Notes payable, short term						148,360				-
	Other current liabilities						82,539				37,039
Total Current Liabilities							262,658				57,039
Note Payable							-				-
TOTAL LIABILITIES							262,658				57,039
COMMITMENTS AND CONTINGENCIES
Shareholder's Equity (Deficit)
	Preferred stock, $0.001 par value, 5 million shares authorized:
	No shares issued and outstanding at
	June 30, 2009 and December 31, 2008, respectively
	Common stock, $0.001 par value, 200 million shares authorized:		14,365		12,957
	14,365,168 and 12,957,117 issued and outstanding at
	June 30, 2009 and December 31, 2008, respectively
	Additional paid-in-capital						687,176				642,399
	Accumulated deficit			(873,576)		(701,837)
Total Shareholders' Equity (Deficit)			(45,180)		(46,481)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)		$	217,478		$	10,558

 The accompanying notes to consolidated financial statements

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ELECTRIC CAR COMPANY, INC. AND SUBSIDIARY (Formerly Classic Costume Company, Inc and Subsidiary)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

					Three Months Ended		Six Months Ended
					June 30,							June 30,
					2009		2008		2009		2008
Revenue:
	Product sales				$	229,500		$		386		$	229,500		$	386
	Service revenue		-		-		-		-
	Less returns and allowances				-			-				-			-
		Net revenue			229,500			386				229,500			386
Cost of Goods Sold					211,500			81				211,500			81
Gross Profit					18,000			305				18,000			305
Operating Costs and Expenses:
	Selling and marketing		29,514		-		29,514		-
	General and administrative				63,148			4,180				68,428			24,335
	Other income and expenses		83,434		-		83,434		-
		Total operating costs and expenses		176,096		4,181		181,376		24,335
Loss from continuing operations		(158,096)		(3,876)		(163,376)		(24,030)
Discontinued operations net of tax:
	Income (loss) from operations				-			-				-			(25)
	Loss on disposal of subsidiary		-		-		(8,363)		-
		Total loss from discontinued operations		-		-		(8,363)		(25)
Income (Loss) Before Taxes		(158,096)		(3,876)		(171,739)		(24,055)
Income Tax Provision (Benefit)		-		-		-		-
Net Income (Loss)			$	(158,096)		$	(3,876)		$	(171,739)		$	(24,055)
Basic and Diluted Earnings (Loss) per Share:
Weighted average shares		13,606,987		12,957,117		13,283,847		12,957,117
Earnings (Loss) per share					$	(0.012)		$	(0.00)		$	(0.013)		$	(0.00)

 

 The accompanying notes to consolidated financial statements

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ELECTRIC CAR COMPANY, INC. AND SUBSIDIARY (Formerly Classic Costume Company, Inc and Subsidiary)

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 (UNAUDITED)

						Six Months Ended
						June 30,
						2009		2008
Cash Flows from Operating Activities:
	Net Income (Loss)					$		(171,739)		$	(24,055)
	Adjustments to reconcile net income to net
	cash used in operating activities:
		Depreciation and amortization			75,215		-
		Impairment of intangible				2,195				155
		Shares issued for services			46,185
	Changes in operating assets and liabilities:
		Accounts receivable			2,500		-
		Inventory				5,788				(187)
		Prepaid expenses and other current assets			-		-
		Accounts payable and accrued expenses				11,759				1,000
		Other current liabilities			37,137		22,975
			Net cash (used in) provided by continuing operating activities			9,039		(113)
			Loss from discontinued operations			8,363		25
			Net cash (used in) provided by operating activities			17,402		(88)
Cash Flows from Investing Activities:
	Purchase of furniture and equipment			-		(105)
	Investment and advances					(206,273)				2,815
	Security deposits			(10,000)		(2,505)
			Net cash provided by (used in) investing activities			(216,273)		205
Cash Flows from Financing Activities:
	Proceeds from notes			200,000		-
	Issuance costs					-				-
			Net cash provided by financing activities			200,000		-
Increase (decrease) in cash						1,129				117
Cash, Beginning of Period			75		278
Cash, End of Period			$	1,205		$	396
Supplemental Information:
	Cash paid for interest					$	-		$	-
	Cash paid for taxes			$	-		$	-

 

 The accompanying notes to consolidated financial statements

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ELECTRIC CAR COMPANY, INC. AND SUBSIDIARY (Formerly Classic Costume Company, Inc and Subsidiary)

   CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND THE YEAR ENDED DECEMBER 31, 2008

																Total
					Preferred Stock					Common Stock								Accumulated			Shareholders'
				Shares		Amount		Shares		Amount		APIC		Deficit		Equity
December 31, 2007		-		$	-		12,957,117		$	12,957		$	634,899		$	(641,406)		$	6,450
	Capital contribution		-		-		-		-		7,500		-		7,500
	Net income (loss) and comprehensive income (loss)
			2008 Net Income (Loss)		-		-			-		-			-			(60,431)			(60,431)
December 31, 2008					-		-		12,957,117		12,957		642,399		(701,837)		(46,481)
		Shares issued for services								1,408,051		1,408			44,777						46,185
		Warrants issued													126,855						126,855
		Net income and comprehensive income
		2009 Net Income (Loss)		-		-		-		-		-		(171,739)		(171,739)
June 30, 2009 (Unaudited)		-		$	-		14,365,168		14,365		814,031		(873,576)		(45,180)

 The accompanying notes to consolidated financial statements

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Electric Car Company, Inc and Subsidiary (Formerly Classic Costume Company, Inc. and Subsidiary)

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 - Description of Business

Electric Car Company, Inc. (“ELCR”, “Classic” or “We” or “the Company”) was formed as a Delaware corporation on December 29, 2006 to produce and market our unique line of historical costumes and reenactment clothing lines through our website with the registered domain name of WorldWideRelics.Com.   On January 7, 2007, we issued an aggregate of 10,000,000 shares of common stock, valued at $0.05 per share, to E. Todd Owens for professional services rendered amounting to $500,000.  The issuance of these shares and the related expenses are reflected in the accompanying financial statements as of December 31, 2006.  On January 17, 2007, in consideration for 100% of the outstanding shares of World Wide Relics, Inc. (“WWR”) (a Nevada corporation formed on January 8, 2005), We issued 201,000 shares of common stock and a promissory note for $30,000 that was subsequently forgiven.  The accompanying financial statements include the operations of WWR.  During June 2007 the Company raised a total of $30,150, representing 603,000 shares, in a public offering.

As explained in Note 5, on February 5, 2009, the Company’s Board of Directors resolved to spin-off its wholly owned subsidiary, World Wide Relics, Inc., a Nevada corporation, to shareholders of record on November 1, 2008 (the “Record Date”).  Shareholders as of the Record Date shall receive one share of World Wide Relics, Inc. for each two shares held in the Company on the Record Date.  The spin-off is to be effectuated with the filing of a Registration Statement on Form S-1 with the Securities and Exchange Commission.  To date, management has been unable to effect the transaction, and is reviewing its previous decision.

In April 2009, we began to execute a new business plan wherein, the Company began operations as a marketer and distributor of automobiles. small buses, specialty vehicles, limousines and custom vehicles.

In October 2009, we change our name from Classic Costume Company, Inc. to Electric Car Company, Inc.

 

Note 2 - Summary of Significant Accounting Policies

Terms and Definitions

Company

Electric Car Company Inc. and Subsidiary (Formerly Classic Costume Company, Inc.)

AICPA

American Institute of Certified Public Accountants

APB

Accounting Principles Board

ARB

Accounting Review Board

EITF

Emerging Issues Task Force

FASB

Financial Accounting Standards Board

FIFO

First-in, First-out

FINRA

Financial Industry Regulatory Authority

FSP

FASB Staff Position

GAAP (US)

Generally Accepted Accounting Principals as applied in the United States

SAB

Staff Accounting Bulletin

SEC

Securities Exchange Commission

SFAS or FAS

Statement of Financial Accounting Standards

Q208

Three months ended June 30, 2008

Q209

Three months ended June 30, 2009

PTD08

Six months ended June 30, 2008

PTD09

Six months ended June 30, 2009

YTD08

Year ended December 31, 2008

Basis of Presentation

The interim financial information as of June 30, 2009 and for the six months period ended June 30, 2009 and 2008 has been prepared without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures made are adequate to provide for fair presentation. These financial statements should be read in conjunction with the financial statements and the notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2008, previously filed with the SEC.

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Electric Car Company, Inc and Subsidiary (Formerly Classic Costume Company, Inc. and Subsidiary)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 - Summary of Significant Accounting Policies (continued)

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of our financial position as of June 30, 2009, results of operations for the six months ended June 30, 2009 and 2008, and cash flows for the six months ended June 30, 2009 and 2008, have been made. The results of operations for the six months ended June 30, 2009 are not necessarily indicative of the operating results that may be expected for the full fiscal year or any future periods.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with a maturity of three months or less, when purchased, to be cash equivalents.

Accounts Receivable

Accounts receivable are reported at net realizable value. The Company has establishes an allowance for doubtful accounts based on factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written-off when it is determined that the amounts are uncollectible. At both June 30, 2009 and December 31, 2008, the allowance for doubtful accounts was $0 respectively.

Inventories

Inventories are stated at the lower of cost or market.  Cost is determined using the FIFO method.  To ensure inventories are carried at the lower of cost or market, the Company periodically evaluates the carrying value of its inventories.  The Company also periodically performs an evaluation of inventory for excess and obsolete items.  Such evaluations are based on management’s judgment and use of estimates.  Such estimates incorporate inventory quantities on-hand, aging of the inventory, sales forecasts for particular product groupings, planned dispositions of product lines and overall industry trends.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets (primarily three to five years). Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life. Costs of maintenance and repairs are charged to expense as incurred.

Stock Based Compensation

We account for the grant of stock options and restricted stock awards in accordance with SFAS 123R, “Share-Based Payment, an Amendment of FASB Statement No. 123 ” . SFAS 123R requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation.

Recoverability of Long-Lived Assets

The Company reviews the recoverability of its long-lived assets on a periodic basis whenever events and changes in circumstances have occurred which may indicate a possible impairment.  The assessment for potential impairment is based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future cash flows from its operations on an undiscounted basis.  If such assets are determined to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets.  Property and equipment to be disposed of by sale is carried at the lower of the then current carrying value or fair value less estimated costs to sell.  Intangible assets with indefinite useful lives are tested for impairment annually or more frequently if an event indicates that the asset might be impaired.  In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets” , the fair value of these intangible assets is determined based on a discounted cash flow methodology.

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Electric Car Company, Inc and Subsidiary (Formerly Classic Costume Company, Inc. and Subsidiary)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 - Summary of Significant Accounting Policies (continued)

Revenue Recognition

The  Company  follows  the  guidance  of  SAB 104 for revenue  recognition.  In general, the Company records revenue when persuasive evidence of an arrangement  exists,  services have been  rendered,  the sales price to the customer is fixed or determinable, and collectability is reasonably assured.

Revenues from services are recognized when the services are performed, evidence of an arrangement exists, the fee is fixed and determinable and collectability is probable. In circumstances when these criteria are not met, revenue recognition is deferred until resolution occurs.

Income Taxes

The Company accounts for income taxes under SFAS 109, “Accounting for Income Taxes” . SFAS 109 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax loss carry-forwards. SFAS 109 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. 

Earnings (Loss) Per Share of Common Stock

The Company presents basic earnings (loss) per share and, if appropriate, diluted earnings per share in accordance with SFAS 128 , “Earnings Per Share” . Under SFAS 128 basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of shares outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the weighted-average number of common share equivalents during the period. There were no unexpired options or warrants to purchase shares of common stock at June 30, 2009.

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheet for cash, accounts receivable and payable approximate fair value based on the short-term maturity of these instruments.

Intangible Assets

The Company accounts for intangible assets in accordance with the provisions of SFAS 142, “Goodwill and Other Intangible Assets,” which requires intangible assets with indefinite useful lives not be amortized, but be tested for impairment annually or whenever indicators or impairments arise.  Intangible assets that have finite lives continue to be amortized over their estimated useful lives.  Our intangible asset consists of a trademark on the Company’s name and its website.  As a result of the divestiture of World Wide Relics, Inc., the Company wrote off the value of its trade mark.

 

Shipping and Handling Costs

The Company accounts for shipping and handling costs as a component of “Cost of Sales.”

 

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Electric Car Company, Inc and Subsidiary (Formerly Classic Costume Company, Inc. and Subsidiary)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 - Summary of Significant Accounting Policies (continued)

 

Recent Issued Accounting Standards

Recent accounting pronouncements that the Company has adopted or that will be required to adopt in the future are summarized below.

Amendments to the Impairment Guidance of EITF 99-20

In January 2009, the FASB issued FSP EITF 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No. 99-20" . This FSP amends the impairment guidance in EITF 99-20, “Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets,” to achieve more consistent determination of whether an other-than-temporary impairment has occurred. The FSP also retains and emphasizes the objective of an other than temporary impairment assessment and the related disclosure requirements in FASB 115, “ Accounting for Certain Investments in Debt and Equity Securities”, and other related guidance. This Issue is effective for interim and annual reporting periods ending after December 15, 2008, and shall be applied prospectively. Retrospective application to a prior interim or annual reporting period is not permitted. The adoption of FSP EITF 99-20-1 did not have a material effect on the Company’s consolidated financial statements.

Recognition and Presentation of Other-Than-Temporary Impairments

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments" . The objective of an other-than-temporary impairment analysis under existing GAAP is to determine whether the holder of an investment in a debt or equity security for which changes in fair value are not regularly recognized in earnings (such as securities classified as held-to-maturity or available-for-sale) should recognize a loss in earnings when the investment is impaired. An investment is impaired if the fair value of the investment is less than its amortized cost basis. FSP FAS 115-2 and FAS 124-2 is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. Earlier adoption for periods ending before March 15, 2009, is not permitted.  The implementation of FSP FAS 115-2 and FAS 124-2 did not have a material impact on the Company’s financial position and results of operations.

Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies

In April 2009 the FASB issued FASB FSP 141(R)-1, “ Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies” .  FSP 141(R)-1 amends the provisions in SFAS 141(R) for the initial recognition and measurement, subsequent measurement and accounting, and disclosures for assets and liabilities arising from contingencies in business combinations. This FASB Staff Position eliminates the distinction between contractual and non-contractual contingencies, including the initial recognition and measurement criteria in SFAS 141(R) and instead carries forward most of the provisions in SFAS 141 for acquired contingencies. FSP 141(R)-1 is effective for contingent assets and contingent liabilities acquired in business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. FSP 141(R)-1 had no impact on our financial position or results of operations and financial condition, since we have not had any business combinations closing on or after the January 1, 2009 effective date.

Interim Disclosures about Fair Value of Financial Instruments

On April 9, 2009, FASB issued FSP 107-1 and APB 28-1, “ Interim Disclosures about Fair Value of Financial Instruments ”. FSP 107-1 amends SFAS 107, “ Disclosures about Fair Value of Financial Instruments” to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB 28, “ Interim Financial Reporting ”, to require those disclosures in summarized financial information at interim reporting periods. FSP 107-1 will be effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009.

Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly

On April 9, 2009, FASB issued FSP 157-4, “ Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly ”. FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. In addition, FSP 157-4 includes guidance on identifying circumstances that indicate a transaction is not orderly. Further, this FSP emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. FSP 157-4 will be effective for interim and annual reporting periods ending after June 15, 2009, and will be applied prospectively. Early adoption is permitted.  

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Electric Car Company, Inc and Subsidiary (Formerly Classic Costume Company, Inc. and Subsidiary)

Notes to Consolidated Financial Statements

(Unaudited)

Note 2 - Summary of Significant Accounting Policies (continued)

Subsequent Events

In May 2009, the FASB issued SFAS 165, “Subsequent Events”. This Statement establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued.  It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date and is effective for interim and annual periods ending after June 15, 2009.  The adoption of SFAS 165 is not expected to have a material impact on the Company’s financial statements.

Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing

In June 2009, the FASB issued FSP EITF 09-1, “Accounting for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance or Other Financing” . This Issue is effective for fiscal years beginning on or after December 15, 2009, and interim periods within those fiscal years for arrangements outstanding as of the beginning of those fiscal years. Share lending arrangements that have been terminated as a result of counterparty default prior to the effective date of this Issue but for which the entity has not reached a final settlement as of the effective date are within the scope of this Issue. This Issue requires retrospective application for all arrangements outstanding as of the beginning of fiscal years beginning on or after December 15, 2009. This Issue is effective for arrangements entered into on or after the beginning of the first reporting period that begins on or after June 15, 2009. Early adoption is not permitted. The implementation of this standard will not have a material impact on the Company's consolidated financial position and results of operations.

Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles

In June 2009, the FASB issued SFAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” .  SFAS 168 will become the single source of authoritative nongovernmental GAAP (US), superseding existing FASB, AICPA, EITF, and related accounting literature.  SFAS 168 reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure.  Also included is relevant Securities and Exchange Commission guidance organized using the same topical structure in separate sections.  SFAS 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009.  This statement will have an impact on the Company’s financial statements since all future references to authoritative accounting literature will be references in accordance with SFAS 168.

Management does not believe that any recently issued, but not effective accounting pronouncements if currently adopted would have a material effect on the accompanying consolidated financial statements.

 

 

  Note 3 - Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has a limited operating history and currently is without any revenues or earnings from operations. Additionally, the Company’s ongoing expenses, primarily registration, legal accounting costs, have been paid through funds advanced to it by certain shareholders. The Company intends to resolve its liquidity problems through pursuing a merger or combination with a profitable third party, obtaining additional financing or locating investors. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 4 - Equity Transactions

The Company was incorporated on December 29, 2006. Upon incorporation, the Company had authority to issue the following:

Preferred Stock - 5,000,000 $.001 par value shares.

Common Stock - 50,000,000 $.001 par value shares.

On January 7, 2007, the Company issued an aggregate of 10,000,000 shares of common stock, valued at $0.05 per share, to E. Todd Owens for professional services. The issuance of these shares is reflected in the Company’s financial statements as of December 31, 2006.  In January 2007 the Company issued 2,354,117 common shares valued at $0.05 to its lawyers, Sichenzia Ross Friedman Ference LLP, for legal services rendered.  In June 2007 the Company issued 603,000 shares in a public offering of shares at $.05 per share.

In April 2009, the Company filed with the Secretary of the State of Delaware to increase the authorized capital of the Corporation to be 205,000,000 (Two Hundred Five Million), consisting of 200,000,000 (Two Hundred Million) shares of common stock, par value of $0.001 and 5,000,000 (Five Million) shares of preferred stock, par value of $0.001 per shares.

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Electric Car Company, Inc and Subsidiary (Formerly Classic Costume Company, Inc. and Subsidiary)

Notes to Consolidated Financial Statements

(Unaudited)

Note 4 - Equity Transactions (Continued)

In May 2009, the Company issued 1,408,051 restricted common shares to a consultant for assistance provided in securing additional capital resources.  The Company recognized an expense in the quarter of $46,185 or $0.0328 per share, which management considers its fair value based on a previous private transaction of similar restricted shares.

Note 5 – Acquisition and Divestiture of Subsidiary

On January 17, 2007, the Company executed and consummated a Stock Purchase Agreement with the sole shareholders of World Wide Relics, Inc. where the Company acquired all of the issued and outstanding capital stock of World Wide Relics, Inc. In consideration for the stock of the Company issued to the former shareholder of the acquired subsidiary 201,000 shares of the Company’s common stock and a promissory note for $30,000 bearing interest at the rate of seven percent (7%), due March 31, 2008.  The note payable was forgiven by its holder on December 10, 2007.

The following table summarizes the estimated fair values of the assets and liabilities assumed at the date of acquisition:

 

Purchase price		$	40,050
Total assets			(5,292
Total liabilities			17,735
Identifiable intangible assets		$	52,493

As of December 31, 2007, the Company determined that the intangible asset associated with the acquisition of World Wide Relics, Inc. was impaired; accordingly, the unamortized balance of $41,968 was written off.  Further, the Seller of World Wide Relics, Inc. agreed to cancel the purchase note of $30,000 and an advance from shareholder of $11,130.  Such amounts were netted against the impairment.

On February 5, 2009, the Board of Directors of the Registrant resolved to spin-off the Registrant’s wholly owned subsidiary, World Wide Relics, Inc., a Nevada corporation, to shareholders of record on November 1, 2008 (the “Record Date”).  Shareholders as of the Record Date shall receive one share of World Wide Relics, Inc. for each two shares held in the Registrant on the Record Date.  The spin off is to be effectuated with the filing of a Registration Statement on Form S-1 with the Securities and Exchange Commission.

Note 6 – Other Assets

Other assets consisted of the following at June 30, 2009 and December 31, 2008:

		2009			2008
Advances to Imperial Body and Design, Inc.	$	206,273		$	-
Security deposits		10,000			2,195
Total other assets	$	216,273		$	2,195

The Company advanced $206,273 to Imperial Body and Design, Inc. (“IBD”) to supplement their working capital and facilitate parts and material acquisitions.  The Company’s intention was to acquire vehicles from them, once the vehicle assembly was completed.  However, subsequent to June 30, 2009, IBD substantially ceased its operations and was evicted from its primary operating facilities by its landlord.  In order to satisfy its obligation to the Company, IBD arranged to transfer certain intangible assets, such as its web site and customer lists, to the Company.  The Company has accepted the transfer of intangible assets and has recorded the transaction in July 2009.

The Company also deposited $10,000 with Imperial Coach Builders as a deposit on a chassis for future delivery.  

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Electric Car Company, Inc and Subsidiary (Formerly Classic Costume Company, Inc. and Subsidiary)

Notes to Consolidated Financial Statements

(Unaudited)

Note 7 – Notes Payable, Short Term

Notes payable, short term consisted of the following at June 30, 2009 and December 31, 2008:

		2009			2008
The Joseph Rosen Foundation, Inc. 20% note	$	200,000		$	-
Less: Unamortized Debt Discount		(51,640	)		-
Total notes payable, short term	$	148,360		$	-

The Joseph Rosen Foundation, Inc. 20% note dated April 16, 2009 was issued to provide working capital for the Company.  The note is secured and accrues interest at 20%, which is payable at maturity on August 16, 2009.  The note is currently in default and is being renegotiated.  The note is guaranteed by an officer of the Company.   The note also provided for the issuance of 400,000 warrants at a strike price of $0.30, which are valid for 5 years.  The warrants are restricted and can not be exercised before April 15, 2010.  The warrants were valued at $126,856 at the grant date, based on the Black-Scholes-Merton model.  Accordingly, the Company has recorded the value of the warrants issued as debt discount and amortized the discount over the life the note, which resulted in $75,215 of additional interest expense in the quarter and $51,640 of unamortized debt discount remaining.

Note 8 – Other Current Liabilities

Other current liabilities consisted of the following at June 30, 2009 and December 31, 2008:

		2009			2008
Advances from shareholders	$	37,039		$	37,039
Customer deposits		45,500			-
Total other assets	$	82,539		$	37,039

Note 9 – Subsequent Events

Forward Split of Common Shares

On July 1, 2009, the shares of common stock currently issued was split forward at a ratio of seven (7) new shares for each one (1) old share, with the par value remaining at $.001 per share.

Acquisition of Subsidiaries

On August 24, 2009, the Company announced the acquisitions of Imperial Coachworks, Inc. and Plug-In Motors, Inc. as wholly owned subsidiaries revealing Company’s new business model to be a leading provider of “Pure Electric” technologies for the Custom Livery, Fleet and Government transportation markets.  However, on October 13, 2009 the Company choose to allow its acquisition agreement with Mr. Kurt Neutgens to expire without a closing.  Accordingly, the acquisition of Plug-In Motors has been terminated.

·

Imperial Coachworks, Inc . and its subsidiary, Imperial Coach Builders, is a limousine and specialty vehicle manufacturing company that operates out of a 60,000 square foot manufacturing facility in Springfield, Missouri. Imperial is one of only nine limousine manufacturers operating under a QVM (Qualified Vehicle Modifier) Agreement with Ford Motors. The Company also has relationships with General Motors and Chrysler Corporation. Imperial is able to utilize the expertise of the supplier for superior engineering design, warranty support to its customers, rebates for chassis purchases and a source of marketing funds. Imperial’s design team also has a tremendous amount of experience in the creation and restoration of custom and classic automobiles. The company has designed and built a line of Ford Model T Roadsters to add to its other custom cars. These vehicles are true to the era of the custom hot rod, but are built utilizing modern technology in each of the engineering components. For more information visit the web site: www.limoland.com

Name Change

Effective October 23, 2009 Classic Costume Company, Inc. (OTC.BB: CCUC ), a business development, marketing and manufacturing conglomerate received notification from FINRA (Financial Industry Regulatory Authority) that the Company will trade under the name ELECTRIC CAR COMPANY, INC . and will trade under the new symbol, (OTC.BB: ELCR ). The new CUSIP number is 28486A101.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD LOOKING STATEMENTS

Management’s Discussion and Analysis contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as well as historical information. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that the expectations reflected in these forward-looking statements will prove to be correct. Forward-looking statements include those that use forward-looking terminology, such as the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “project,” “plan,” “will,” “shall,” “should,” and similar expressions, including when used in the negative. Although we believe that the expectations reflected in these forward-looking statements are reasonable and achievable, these statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Current shareholders and prospective investors are cautioned that any forward-looking statements are not guarantees of future performance. Such forward-looking statements by their nature involve substantial risks and uncertainties, certain of which are beyond our control, and actual results for future periods could differ materially from those discussed in this report, depending on a variety of important factors, among which are our ability to implement our business strategy, our ability to compete with major established companies, the acceptance of our products in our target markets, the outcome of litigation, our ability to attract and retain qualified personnel, our ability to obtain financing, our ability to continue as a going concern, and other risks described from time to time in our filings with the Securities and Exchange Commission. Forward-looking statements contained in this report speak only as of the date of this report. Future events and actual results could differ materially from the forward-looking statements. You should read this report completely and with the understanding that actual future results may be materially different from what management expects. We will not update forward-looking statements even though its situation may change in the future.

 

INTRODUCTION

 

The following discussion and analysis summarizes the significant factors affecting: (i) our results of operations for the six months period ended June 30, 2009; and (ii) financial liquidity and capital resources.  This discussion and analysis should be read in conjunction with our financial statements and notes included in our most recent Form 10-KSB. 

We are a start-up company with a limited operating history. We were initially formed in December 2006 and on January 17, 2007 we acquired World Wide Relics, Inc. World Wide Relics, Inc. was initially formed in January 2005. As explained previously, the Board of Directors decided on February 5, 2009, that it was in the best interests of the Company to spin-off World Wide Relics, Inc., its wholly owned subsidiary, and for the Company to pursue other opportunities. In April 2009, we began to execute a new business plan wherein, the Company began operations as a marketer and distributor of automobiles. small buses, specialty vehicles, limousines and custom vehicle.   Currently, we are seeking capital and automotive related business opportunities, but there can be no assurance that such opportunities will be identified, capitalized upon, or result in any profits.

 

Our financial statements are prepared in accordance with U.S. generally accepted accounting principles and we have expensed all development expenses related to the establishment of the company.

 

CRITICAL ACCOUNTING POLICIES

A summary of significant accounting policies is included in Note 2 of the unaudited financial statements included in this Annual Report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Our financial statements and accompanying notes are prepared in accordance with GAAP. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies.

 

RESULTS OF OPERATIONS

Six Months Ended June 30, 2009 compared to Six Months Ended June 30, 2008.   

During the quarter the Company began operations as a marketer and distributor of electric autos, and utility vehicles. The Company generated $229,500 in revenue from such activity resulting in gross profit of $18,000.  Total expenses incurred in continuing operations were $181,376 resulting in net loss from continuing operations of $163,376.  The Company also incurred a loss from discontinued operations of $8,363 resulting in a net loss of $171,739.

Three Months Ended June 30, 2009 compared to Three Months Ended June 30, 2008.

During the quarter the Company began operations as a marketer and distributor of electric autos, and utility vehicles. The Company generated $229,500 in revenue from such activity resulting in gross profit of $18,000.  Total expenses incurred in continuing operations were $176,096 and resulting in net loss from continuing operations of $158,096 and no loss from discontinued operations.

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Liquidity and Capital Resources

 

As of June 30, 2009, our cash on hand  and total current assets were $1,205 and total current liabilities amounted to $262,658. As of June 30, 2009 a total stockholders’ deficit was ($45,180). Until the company achieves a net positive cash flow from operations, we are dependent on Officers of the Company to advance us sufficient funds to continue operations.  We may seek additional capital to fund potential costs associated with expansion and/or acquisitions. We believe that future funding may be obtained from public or private offerings of equity securities, debt or convertible debt securities or other sources. Stockholders should assume that any additional funding will likely be dilutive.  Accordingly, our officers, directors and other affiliates are not legally bound to provide funding to us. Because of our limited operations, if our officers and directors do not pay for our expenses, we will be forced to obtain funding. We currently do not have any arrangements to obtain additional financing from other sources. In view of our limited operating history, our ability to obtain additional funds is limited. Additional financing may only be available, if at all, upon terms which may not be commercially advantageous to us.  

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

ITEM 4T. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, Mr. Spaniak, who serves as both the Chief Executive Officer and Chief Financial Officer (the “Officer”), conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based upon this evaluation, the Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms.

In addition, no change in our internal control over financial reporting occurred during the six months period ended June 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II:  OTHER INFORMATION

 

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 1A.  RISK FACTORS.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

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

None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

 

ITEM 5.    OTHER INFORMATION

None.

 

ITEM 6.  EXHIBITS

The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:

 

Exhibit No.		Exhibit
3.1		Articles of Incorporation (1)
3.2		Bylaws (1)
31.1		Rule 13a-14(a)/15d-14(a) certification of Certificate of Chief Executive Officer *
31.2		Rule 13a-14(a)/15d-14(a) certification of Certificate of Chief Financial Officer *
32.1		Section 1350 Certification of Principal Executive Officer. *
32.2		Section 1350 Certification of Principal Financial Officer. *

———————

*filed herewith

 

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SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	ELECTRIC CAR COMPANY, INC.
November 13, 2009	By:	/s/ Gary Spaniak
		Gary Spaniak
		Chief Executive Officer, President, Secretary, Chief Financial Officer, Treasurer, Principal Accounting Officer and Director

 

  

 

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