UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended ~~June~~September 30, 2012

o 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: 000-53978

EVCARCO, INC.

(Exact name of registrant as specified in its charter)

Nevada	5012	26-3526039
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification No.)

7703 Sand Street

Fort Worth, Texas 76118

(Address of principal executive offices) (Zip Code)

(817) 595-0710

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

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. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data 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). x Yes o No

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	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). o Yes x No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of ~~August~~December 2114, 2012, there were 11 74,~~080~~626,~~322~~970 shares of Common Stock, $0.001 par value; and 8,000,000 shares of Class B Convertible Preferred Stock, $0.001 par value.

EVCARCO, INC.

TABLE OF CONTENTS

	Index	Page Number

PART I	FINANCIAL INFORMATION

ITEM 1.	Financial Statements	F-1

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	4

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	6

ITEM 4.	Controls and Procedures	6

PART II	OTHER INFORMATION

ITEM 1.	Legal Proceedings	7

ITEM 1A.	Risk Factors	7

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7

ITEM 3.	Defaults Upon Senior Securities	7

ITEM 4.	Mine Safety Disclosures	7

ITEM 5.	Other Information	7

ITEM 6.	Exhibits	8

SIGNATURES		8

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EVCARCO, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements
Consolidated Condensed Financial Statements
Consolidated Balance Sheets as of June 30, 2012 (Unaudited) and December 31, 2011	F-2
Consolidated Condensed Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011	F-2
Consolidated Statements of Operations for the Three and the Six Months Ended June 30, 2012 and 2011 (Unaudited)	F-3
Consolidated Condensed Statements of Operations for the Three and the Nine Months Ended September 30, 2012 and 2011 (Unaudited)	F-3
Consolidated Statement of Stockholders' Deficit for the Six Months Ended June 30, 2012 (Unaudited)	F-4
Consolidated Statement of Stockholders' Deficit for the Nine Months Ended September 30, 2012 (Unaudited)	F-4 to F-5
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011 (Unaudited)	F-5
Consolidated Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 (Unaudited)	F-6
Condensed Notes to Consolidated Financial Statements	F-67 to F-1215

F-1

EVCARCO, Inc. and Subsidiary
Consolidated Balance Sheets
	June 30, 2012			December 31, 2011
	September 30, 2012			December 31, 2011
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	14,~~491~~109		$	26,046
Accounts Receivable		3928,~~950~~801			-
Inventory		~~131~~111,~~348~~508			165,778
Other receivables		1419,~~777~~177			21,045
Prepaid expenses		-3,333			1,188
Total current assets		~~200~~176,~~566~~928			214,057
Property and equipment		~~621~~616,~~702~~028			32,807
Accumulated depreciation		(4087,~~980~~602	)		(13,470	)
Property and equipment, net		~~580~~528,~~722~~426			19,337
Other assets		512,~~424~~435			2,288
TOTAL ASSETS	$	~~786~~717,~~712~~789		$	235,682
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	~~857~~912,~~839~~818		$	606,527
Accrued expenses		1715,~~008,485~~329			197,070
Accrued interest (related parties)		64,~~417~~992			14,978
Deferred rent		21,726			-
Straight line rent		19,690			-
Other payables		911,~~323~~021			4,247
Convertible notes payable		~~244~~1,~~589~~182,597			346,530
Loans payable to shareholders		~~540~~129,~~238~~788			710,633
Total current liabilities		2,~~688~~976,~~617~~235			1,879,985
Commitments and contingencies
Stockholders' deficit
15,000,000 shares Class A Convertible Preferred Stock
Authorized at $0.001/par value ($1.00 liquidation preference),
no shares issued and outstanding		-			-
75,000,000 shares Class B Convertible Preferred Stock
Authorized at $0.001/par value ($5.00 liquidation preference),
8,000,000 and 1,500,000 shares issued and outstanding, respectively		8,000			1,500
900,000,000 shares Common Stock
Authorized at $0.001/par value
9,580,322 and 1,336,930 shares
42,208,894 and 1,336,930 shares
issued and outstanding, respectively		942,~~580~~210			1,337
Additional paid-in capital		45,~~692~~310,~~530~~295			4,332,266
Accumulated deficit		(67,~~612~~618,~~015~~951	)		(5,979,406	)
Total Stockholders' Deficit		(12,~~901~~258,~~905~~446	)		(1,644,303	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	~~786~~717,~~712~~789		$	235,682
The accompanying footnotes are an integral part of these financial statements.
The accompanying footnotes are an integral part of these consolidated financial statements.

F-2

EVCARCO, Inc. and Subsidiary
Consolidated Statements of Operations
		For the Three Months Ended						For the Nine Months Ended			~~For the Six Months Ended~~
		Jun. 30, 2012			Jun. 30, 2011			Jun. 30, 2012			Jun. 30, 2011
		Sep. 30, 2012			Sep. 30, 2011			Sep. 30, 2012			Sep. 30, 2011
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues		$	~~210~~241,~~674~~412		$	~~230~~120,~~695~~745		$	~~520~~761,~~412~~824		$	~~349~~469,~~095~~840
	Total Revenues		~~210~~241,~~674~~412			~~230~~120,~~695~~745			~~520~~761,~~412~~824			~~349~~469,~~095~~840
Cost of goods sold			~~185~~214,~~155~~911			~~211~~111,~~836~~823			~~465~~680,~~590~~501			~~327~~439,~~388~~211
	Gross Profit		2526,~~519~~501			188,~~859~~922			5481,~~822~~323			2130,~~707~~629
Sales and marketing expenses			21,~~614~~139			51,~~297~~634			56,~~099~~238			1617,~~093~~726
General and administrative expenses			~~327~~415,~~454~~927			~~466~~290,~~950~~076			~~581~~997,~~621~~548			1,~~151~~441,~~032~~072
Depreciation and amortization			2249,~~107~~422			1,~~826~~846			2373,~~677~~099			35,~~633~~479
	Total Operating Expenses		~~352~~466,~~175~~488			~~474~~293,~~073~~556			~~610~~1,~~397~~076,885			1,~~170~~464,~~758~~277
	Operating Loss		(~~326~~439,~~656~~987	)		(~~455~~284,~~214~~634	)		(~~555~~995,~~575~~562	)		(1,~~149~~433,~~051~~648	)
Other income/(loss)
Interest income			-			-			-			37
Loss on asset disposition, net			(675	)		-			(675	)		-
Interest expense (related parties)			(5,899	)		(7,123	)		(12,505	)		(14,184	)
Loss on debt default			(32,750	)					(32,750	)
Interest expense			(24,556	)		(57,323	)		(64,529	)		(86,251	)
Interest expense (related parties)			(715	)		(6,881	)		(13,220	)		(21,065	)
	Total Other Loss		(30,455	)		(64,446	)		(77,034	)		(100,398	)
Interest expense			(532,809	)		(83,864	)		(597,338	)		(170,115	)
	Loss before income taxes		(357,111	)		(519,660	)		(632,609	)		(1,249,449	)
	Total Other Loss		(566,949	)		(90,745	)		(643,983	)		(191,180	)
	Loss before income taxes		(1,006,936	)		(375,379	)		(1,639,545	)		(1,624,828	)
Income tax (expense) benefit			-			-			-			-
	Net loss	$	(~~357~~1,~~111~~006,936	)	$	(~~519~~375,~~660~~379	)	$	(~~632~~1,~~609~~639,545	)	$	(1,~~249~~624,~~449~~828	)
Basic and diluted loss per share		$	(0.05	)	$	(21.0520	)	$	(0.1317	)	$	(56.6948	)
Weighted average number of			718,~~037~~867,~~302~~877			~~253~~312,~~329~~298			49,~~771~~504,~~220~~404			~~219~~250,~~647~~870
common shares outstanding
common shares outstanding - basic and diluted
The accompanying footnotes are an integral part of these financial statements.
The accompanying footnotes are an integral part of these consolidated financial statements.

F-3

EVCARCO, Inc. and Subsidiary
Consolidated Statement of Stockholders' Deficit
Consolidated Statement of Stockholders' Deficit - continued
					Class B Convertible				Additional
	Common stock				Preferred stock				paid-in			Accumulated
	Shares		Amount		Shares		Amount		capital			deficit			Total
Balance December 31, 2011		1,336,930	$	1,337		1,500,000	$	1,500	$	4,332,266		$	(5,979,406	)	$	(1,644,303	)
Stock issued for note conv. @ $0.0450/sh. Jan. 2012		88,889		89		-		-		3,911						4,000
Stock issued for note conv. @ $0.0250/sh. Jan. 2012		76,000		76		-		-		1,824						1,900
Stock issued for note conv. @ $0.0225/sh. Jan. 2012		216,000		216		-		-		4,644						4,860
Stock issued for note conv. @ $0.0350/sh. Jan. 2012		42,857		43		-		-		1,457						1,500
Stock issued for debt conv. @ $0.0325/sh. Jan. 2012		153,846		154		-		-		4,846						5,000
Stock issued for note conv. @ $0.0600/sh. Feb. 2012		86,667		86		-		-		5,114						5,200
Stock issued for note conv. @ $0.0225/sh. Feb. 2012		72,000		72		-		-		1,548						1,620
Stock issued for note conv. @ $0.0450/sh. Feb. 2012		22,667		22		-		-		998						1,020
Stock issued for note conv. @ $0.0500/sh. Feb. 2012		100,000		100		-		-		4,900						5,000
Stock issued for note conv. @ $0.0325/sh. Feb. 2012		400,000		400		-		-		12,600						13,000
Stock issued for note conv. @ $0.0650/sh. Feb. 2012		200,000		200		-		-		12,800						13,000
Stock issued for note conv. @ $0.0800/sh. Feb. 2012		43,750		44		-		-		3,456						3,500
Stock issued for note conv. @ $0.0500/sh. Feb. 2012		100,000		100		-		-		4,900						5,000
Stock issued for loan @ $0.0021/sh. Feb. 2012		-		-		3,500,000		3,500		3,850						7,350
Stock issued for note conv. @ $0.0650/sh. Mar. 2012		100,000		100		-		-		6,400						6,500
Stock issued for settlement Mar. 2012		36,212		36		-		-		(36	)					-
Stock issued for note conv. @ $0.0250/sh. Mar. 2012		430,000		430		-		-		10,320						10,750
Stock issued for note conv. @ $0.0325/sh. Mar. 2012		800,000		800		-		-		25,200						26,000
Stock issued for note conv. @ $0.0400/sh. Mar. 2012		85,000		85		-		-		3,315						3,400
Stock issued for note conv. @ $0.0325/sh. Apr. 2012		400,000		400		-		-		12,600						13,000
Stock issued for note conv. @ $0.0250/sh. Apr. 2012		330,000		330		-		-		7,920						8,250
Stock issued for note conv. @ $0.0400/sh. Apr. 2012		205,000		205		-		-		7,995						8,200
Stock issued for loan @ $0.0014/sh. Feb. 2012		-		-		2,000,000		2,000		800						2,800
Stock issued for note conv. @ $0.0250/sh. May 2012		320,000		320		-		-		7,680						8,000
Stock issued for note conv. @ $0.0350/sh. May 2012		200,000		200		-		-		6,800						7,000
Stock issued for settlement May 2012		5,000		5		-		-		(5	)					-
Stock issued for note conv. @ $0.0325/sh. May 2012		400,000		400		-		-		12,600						13,000
Stock issued to acquire subsidiary, May 2012		3,329,504		3,330		1,000,000		1,000		163,145						167,475
Proceeds received for shares to be issued, May 2012		-		-		-		-		2,500						2,500
Beneficial conversion features		-		-		-		-		26,182						26,182
Net loss													(632,609	)		(632,609	)
Balance March 31, 2012 (Unaudited)		9,580,322	$	9,580		8,000,000	$	8,000	$	4,692,530		$	(6,612,015	)	$	(1,901,905	)
The accompanying footnotes are an integral part of these financial statements.

Stock issued for note conv. @ $0.00009/sh. Jan. 2012	88,889	89	-	-	3,911		4,000
Stock issued for note conv. @ $0.00005/sh. Jan. 2012	76,000	76	-	-	1,824		1,900
Stock issued for note conv. @ $0.000045/sh. Jan. 2012	216,000	216	-	-	4,644		4,860
Stock issued for note conv. @ $0.00007/sh. Jan. 2012	42,857	43	-	-	1,457		1,500
Stock issued for debt conv. @ $0.000065/sh. Jan. 2012	153,846	154	-	-	4,846		5,000
Stock issued for note conv. @ $0.00012/sh. Feb. 2012	86,667	86	-	-	5,114		5,200
Stock issued for note conv. @ $0.000045/sh. Feb. 2012	72,000	72	-	-	1,548		1,620
Stock issued for note conv. @ $0.00009/sh. Feb. 2012	22,667	22	-	-	998		1,020
Stock issued for note conv. @ $0.0001/sh. Feb. 2012	100,000	100	-	-	4,900		5,000
Stock issued for note conv. @ $0.000065/sh. Feb. 2012	400,000	400	-	-	12,600		13,000
Stock issued for note conv. @ $0.00013/sh. Feb. 2012	200,000	200	-	-	12,800		13,000
Stock issued for note conv. @ $0.00016/sh. Feb. 2012	43,750	44	-	-	3,456		3,500
Stock issued for note conv. @ $0.0001/sh. Feb. 2012	100,000	100	-	-	4,900		5,000
Stock issued for loan @ $0.0021/sh. Feb. 2012	-	-	3,500,000	3,500	3,850		7,350
Stock issued for note conv. @ $0.00013/sh. Mar. 2012	100,000	100	-	-	6,400		6,500
Stock issued for settlement Mar. 2012	36,212	36	-	-	(36	)	-
Stock issued for note conv. @ $0.00005/sh. Mar. 2012	430,000	430	-	-	10,320		10,750
Stock issued for note conv. @ $0.000065/sh. Mar. 2012	800,000	800	-	-	25,200		26,000
Stock issued for note conv. @ $0.00008/sh. Mar. 2012	85,000	85	-	-	3,315		3,400
Stock issued for note conv. @ $0.000065/sh. Apr. 2012	400,000	400	-	-	12,600		13,000
Stock issued for note conv. @ $0.00005/sh. Apr. 2012	330,000	330	-	-	7,920		8,250
Stock issued for note conv. @ $0.00008/sh. Apr. 2012	205,000	205	-	-	7,995		8,200
Stock issued for loan @ $0.0021/sh. Feb. 2012	-	-	2,000,000	2,000	800		2,800
Stock issued for note conv. @ $0.00005/sh. May 2012	320,000	320	-	-	7,680		8,000
Stock issued for note conv. @ $0.00007/sh. May 2012	200,000	200	-	-	6,800		7,000
Stock issued for settlement May 2012	5,000	5	-	-	(5	)	-
Stock issued for note conv. @ $0.000065/sh. May 2012	400,000	400	-	-	12,600		13,000
Stock issued to acquire subsidiary, May 2012	3,329,504	3,330	1,000,000	1,000	163,145		167,475
Proceeds received for shares to be issued, May 2012			-	-	2,500		2,500

F-4

EVCARCO, Inc. and Subsidiary
Consolidated Statements of Cash Flows
	For the Six			For the Six
	Months Ended			Months Ended
	June 30, 2012			June 30, 2011
	(Unaudited)			(Unaudited)
Operating activities:
Net loss	$	(632,609	)	$	(1,249,449	)
Adjustments to reconcile net loss to net cash flows
used in operating activities:
Depreciation and amortization		23,677			3,633
Consulting expenses (stock)		-			363,328
Interest expense (stock)		6,166			-
Beneficial conversion feature amortization		49,107			83,880
Change in operating assets and liabilities:
Accounts receivable		(39,950	)		-
Inventory		34,430			47,300
Other receivables		6,268			5,709
Prepaid expenses		1,188			(2,970	)
Accounts payable		175,770			241,739
Accrued expenses		221,380			101,272
Accrued interest (related parties)		1,048			910
Deferred rent		2,746			-
Other payables		75			(10,049	)
Net cash flows used in operating activities		(150,704	)		(414,697	)
Financing activities:
Proceeds from convertible notes payable		32,000			165,000
Net change in loans payable (related parties)		107,149			221,447
Net cash flows provided by financing activities		139,149			386,447
Increase/(decrease) in cash and cash equivalents		(11,555	)		(28,250	)
Cash and cash equivalents at beginning of period		26,046			77,680
Cash and cash equivalents at end of period	$	14,491		$	49,430
Cash paid for:
Interest	$	402		$	1,755
Interest (related parties)	$	11,457		$	13,274
Non-cash activities:
Stock issued to acquire subsidiary	$	167,475		$	-
Stock issued for services	$	-		$	67,400
Stock issued for loans and accounts payable	$	178,850		$	470,512
Stock buyback for balance of shareholder advances	$	-		$	79,000
Debt discount from beneficial conversion feature	$	26,182		$	229,877
Reclassification of shareholder loan to accrued expenses	$	455,000		$	-
The accompanying footnotes are an integral part of these financial statements.

Consolidated Statement of Stockholders' Deficit - continued

EVCARCO, Inc. and Subsidiary
Consolidated Statement of Stockholders' Deficit

					Class B Convertible				Additional
	Common stock				Preferred stock				paid-in			Accumulated
	Shares		Amount		Shares		Amount		capital			deficit			Total

Stock issued for Public Relations Services @ $0.02/sh. July 2012		500,000		500						9,500						10,000

Stock issued for note conv. @ $0.005/sh. July 2012		500,000		500						2,000						2,500
Stock issued for note conv. @ $0.005/sh. August 2012		500,000		500						2,000						2,500

Stock issued for note conv. @ $0.002/sh. August 2012		500,000		500						500						1,000

Stock issued for note conv. @ $0.001/sh. August 2012		500,000		500						-						500
Stock issued for note conv. @ $0.00105 sh. August 2012		500,000		500						25						525
Stock issued for note conv. @ $0.001/sh. August 2012		500,000		500						-						500

Stock issued for note conv. @ $0.0014/sh. September 2012		535,714		536						214						750
Stock issued for note conv. @ $0.001/sh. September 2012		500,000		500						-						500

Stock issued for Accrued Wages payment @ $0.0021/sh. September 6, 2012		11,904,762		11,905						13,095						25,000
Stock issued for Accrued Wages payment @ $0.0021/sh. September 2012		11,904,762		11,905						13,095						25,000
Stock issued for note conv. @ $0.001/sh. September 2012		1,800,000		1,800						(400	)					1,400
Stock issued for note conv. @ $0.001/sh. September 2012		1,400,000		1,400						-						1,400
Stock issued for note conv. @ $0.0012/sh. September 2012		541,667		542						108						650

Stock issued for note conv. @ $0.0012/sh. September 2012		541,667		542						108						650
Beneficial conversion features										603,702						603,702

Net loss													(1,639,545	)		(1,639,545	)


Balance September 30, 2012 (Unaudited)		42,208,894	$	42,210		8,000,000	$	8,000	$	5,310,295		$	(7,618,951	)	$	(2,258,446	)







The accompanying footnotes are an integral part of these consolidated financial statements.

F-5

EVCARCO, Inc. and Subsidiary
Consolidated Statements of Cash Flows


	For the nine			For the nine
	months ended			months ended
	September 30, 2012			September 30, 2011
	(Unaudited)			(Unaudited)

Operating activities:

Net loss	$	(1,639,545	)	$	(1,624,828	)
Adjustments to reconcile net loss to net cash flows
used in operating activities:
Depreciation and amortization		73,099			5,479
Consulting expenses (stock)		-			386,653
Interest expense (stock)		8,235			3,800
Beneficial conversion feature amortization		567,985			162,469
Loss on asset dispositions		675			-
Loss on debt default		32,750			-

Change in operating assets and liabilities:
Accounts receivable		(28,801	)		-
Inventory		54,270			43,650
Other receivables		1,868			1,809
Prepaid expenses		7,855			(2,079	)
Other assets		(4,812	)		-
Accounts payable		228,173			331,738
Accrued expenses		374,700			142,345
Accrued interest (related parties)		(13,956	)		3,977
Straight line rent		710			-
Other payables		1,774			(24,260	)

Net cash flows used in operating activities		(335,020	)		(569,247	)


Financing activities:
Proceeds from convertible notes payable		102,000			200,000
Net change in loans payable (related parties)		221,083			308,944

Net cash flows provided by financing activities		323,083			508,944

Increase/(decrease) in cash and cash equivalents		(11,937	)		(60,303	)

Cash and cash equivalents at beginning of period		26,046			77,680

Cash and cash equivalents at end of period	$	14,109		$	17,377


Cash paid for:

Interest	$	402		$	2,000
Interest (related parties)	$	11,457		$	17,088

Non-cash activities:

Stock issued to acquire subsidiary	$	167,475		$	-
Stock issued for services	$	10,000		$	81,600
Stock issued for loans and accounts payable	$	191,725		$	580,412
Stock buyback for balance of shareholder advances	$	-		$	79,000
Debt discount from beneficial conversion feature	$	603,702		$	252,254
Stock issued for wages	$	50,000		$	-
Reclass of shareholder loans to convertible notes	$	906,774		$	-

The accompanying footnotes are an integral part of these consolidated financial statements.

F-6

EVCARCO, INC. AND SUBSIDIARY

Unaudited Condensed Notes to Consolidated Financial Statements

~~June~~For the three and nine months ended September 30, 2012 and 2011

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

EVCARCO, Inc. (“The Company”) was incorporated under the laws of the State of Nevada on October 14, 2008. The Company sells “green” automobiles, offering the latest technology electric vehicles, pre-owned vehicles converted to various green technologies and other pre-owned vehicles.

The Third Stone Corporation (“The Subsidiary”), a wholly owned subsidiary of EVCARCO, Inc., was incorporated in the State of Wyoming on September 27, 2011. The Subsidiary is currently producing consumer software applications in sports, social media, finance and home automation sectors.

NOTE 2. BASIS OF PRESENTATION

The consolidated financial statements are unaudited. As permitted under the Securities and Exchange Commission (“SEC”) requirements for interim reporting, certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. We believe that these ~~consolidated~~ financial statements include all necessary and recurring adjustments for the fair presentation of the interim period results. These consolidated financial statements should be read in conjunction with the financial statements and related notes included in our annual report on Form 10-K for the fiscal year ended December 31, 2011. The results of operations for the ~~six~~nine months ended ~~June~~September 30, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012.

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 the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Subsequent actual results may differ from those estimates.

On June 12, 2012, the Company effectuated a 1-for-500 reverse stock split of its issued and outstanding common stock. All amounts of shares reflected on these consolidated financial statements are on post ~~reverse~~ -split basis.

NOTE 3. ACQUISITION

Acquisition of Third Stone Corporation

~~The following table summarizes the values of the assets acquired and liabilities assumed at the acquisition date.~~F-7

Property and equipment, net	$	30,538
Deposits		3,136
Total identifiable assets acquired		33,674
Total current liabilities		(420,724	)
Net identifiable assets acquired		(387,050	)
Internally developed software		554,525
Net assets acquired	$	167,475

F-6

EVCARCO, INC. AND SUBSIDIARY

Unaudited Condensed Notes to Consolidated Financial Statements

~~June~~For the three and nine months ended September 30, 2012 and 2011

NOTE 3. ACQUISITION - continued

~~The~~Acquisition table below presents pro forma consolidated income statement information as if the Subsidiary had been included in our consolidated results for the entire periods reflected. The pro forma information has been prepared using the purchase method of ~~accounting, giving effect to The~~ Third Stone Corporation ~~acquisition~~- as if the acquisition had been completed on September 27, 2011 (date of incorporation for the Subsidiary). The pro forma information is not necessarily indicative of our results of operations had the merger been completed on the above date, nor is it necessarily indicative on our future results. The pro forma information includes adjustments to record the assets and liabilities of the Subsidiary at their respective fair values based on available information.continued

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2012			2011			2012			2011
Revenues	$	210,875		$	230,695		$	522,657		$	349,095
Operating loss		(400,745	)		(455,214	)		(880,580	)		(1,149,051	)
Net loss		(434,489	)		(519,660	)		(961,881	)		(1,249,449	)

The following table summarizes the values of the assets acquired and liabilities assumed at the acquisition date.

Pro forma revenues reflect combined Company and Subsidiary. Pro forma operating and net losses reflect combined Company and Subsidiary, with the following pro forma adjustment: depreciation on the Subsidiary’s internally developed software has been eliminated.

Property and equipment, net	$	30,538
Deposits		3,136
Total identifiable assets acquired		33,674
Total current liabilities		(420,724	)
Net identifiable assets acquired		(387,050	)
Internally developed software		554,525
Net assets acquired		167,475

The table below presents pro forma consolidated income statement information as if the Subsidiary had been included in our consolidated results for the entire periods reflected. The pro forma information has been prepared using the purchase method of accounting, giving effect to The Third Stone Corporation acquisition is if the acquisition had been completed on September 27, 2011 (date of incorporation for the Subsidiary). The pro forma information is not necessarily indicative of our results of operations had the merger been completed on the above date, nor is it necessarily indicative on our future results. The pro forma information includes adjustments to record the assets and liabilities of the Subsidiary at their respective fair values based on available information.

	For the three months ended September 30,						For the nine months ended September 30,
	2012			2011			2012			2011
Revenues	$	241,412		$	120,745		$	764,069		$	469,840
Operating loss		(439,987	)		(284,634	)		(1,396,690	)		(1,433,648	)
Net loss		(1,006,936	)		(375,379	)		(2,044,940	)		(1,624,828	)

Pro forma revenues reflect combined Company and Subsidiary. Pro forma operating and net losses reflect combined Company and Subsidiary, with the following pro forma adjustment: amortization on the Subsidiary’s internally developed software has been added.

Deposit on Equity Investment in American Rodsmith

On July 3, 2012, EVCARCO, Inc. entered into a stock purchase agreement to acquire 75% of the outstanding common shares of American Rodsmiths, Inc., a Texas corporation in exchange for $850,000, combination of cash, stock and loan. As of the date of this report, the acquisition has not been completed. As of September 30, 2012, the Company has made an initial payment $7,011 towards the total amount.

F-8

EVCARCO, INC. AND SUBSIDIARY

Unaudited Condensed Notes to Consolidated Financial Statements

For the three and nine months ended September 30, 2012 and 2011

NOTE 4. FAIR VALUE OF FINANCIAL INSTRUMENTS

Carrying amounts of certain of our financial instruments, including other receivables, accounts payable, accrued expenses, and other payables approximate fair value due to their short maturities. Carrying value of convertible notes payable approximate fair values as they approximate market rates of interest. None of our financial instruments are held for trading purposes.

NOTE 5. INVENTORY

At each period end, respectively, the Company had the following inventory:

	Jun. 30, 2012		Dec. 31, 2011
	September 30, 2012		December 31, 2011
New vehicles	$	52,500	$	52,500
Pre-owned vehicles		4929,~~720~~880		84,150
Other items		29,128		29,128
Total inventory	$	~~131~~111,~~348~~508	$	165,778

NOTE 6. PREPAID EXPENSES

As of ~~June~~September 30, 2012, the balance included prepaid investor relations of $3,333 and as of December 31, 2011, ~~balances~~the balance of prepaid insurance expense ~~were~~was $~~0 and $~~1,188. As of September 30, ~~respectively.~~2012, the amount in prepaid expense represented the unearned portion of stock compensation issued under a consulting agreement, determined as follows:

F-7

Nature of Services	Term of Contract		Number of Shares Issued				Fair Value Assigned				Expensed				Unearned Portion
Investor Relations	08/01/12 - 10/31/12			500,000			$	10,000			$	6,667			$	3,333

EVCARCO, INC. AND SUBSIDIARY

Condensed Notes to Consolidated Financial Statements

June 30, 2012

NOTE 7. CONVERTIBLE NOTES PAYABLE

On August 25, 2010, the Company issued a convertible promissory note in the amount of $35,000, bearing interest at a rate of 34.29% per annum. The note was unsecured and matured on February 24, 2011. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 40% discount to the market price, at the point of conversion. The Company recorded $23,333 related to the deemed beneficial conversion feature of this note, all of which has been amortized as of maturity date. On February 27, 2011, $32,400 of the principal outstanding under the note was converted into 36,000 shares of common stock of the Company. As of ~~June~~September 30, 2012 and December 31, 2011, both, principal balance of note was $2,600.

On May 24, 2011, the Company issued a convertible note payable in the amount of $310,000, for the compensation accrued to Mr. O’Neal, former COO and Director, to the date of his resignation on May 15, 2011. The note matured on February 28, 2012; carries 5% interest; and contains conversion rights at 35% discount to then current market price, as defined in the agreement. The Company recorded $124,385 related to the deemed beneficial conversion feature of this note, all of which has been amortized as of maturity date. During November and December of 2011, $2,540 of principal and $8,780 of accrued interest, outstanding under the note, was converted into 200,000 shares of common stock of the Company. Between January and March of 2012, $85,258 of principal and $3,392 of accrued interest, outstanding under the note, was converted into 2,516,667 shares of common stock of the Company. Between April and June of 2012, $40,776 of principal and $1,474 of accrued interest, outstanding under the note, was converted into 1,450,000 shares of common stock of the Company. As of June 30, 2012 and December 31, 2011, the principal balance was $182,095 and $307,460, respectively. As of the same dates, balance of interest accrued under the note was $917 and $670, respectively.F-9

On May 27, 2011, the Company issued a convertible promissory note in the amount of $32,500, bearing interest at a rate of 8% per annum. The note is unsecured and matured on February 16, 2012. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 39% discount to the market price, at the point of conversion. The Company recorded $20,779 related to the deemed beneficial conversion feature of this note, all of which has been amortized as of maturity date. In December of 2011, $8,000 of the principal balance outstanding under the note was converted into 126,191 shares of common stock of the Company. Between January and March of 2012, $17,600 of the principal balance outstanding under the note was converted into 347,163 shares of common stock of the Company. In April of 2012, $6,900 of the principal and $1,300 of accrued interest outstanding under the note was converted into 205,000 shares of common stock of the Company. As of June 30, 2012 and December 31, 2011, the principal balance was $0 and $24,500, respectively.

On November 1, 2011, the Company issued a convertible promissory note in the amount of $20,000, bearing interest at a rate of 5% per annum. The note is unsecured and matures on August 31, 2012. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 35% discount to the market price, at the point of conversion. The Company recorded $10,769 related to the deemed beneficial conversion feature of this note, of which $3,590 has been amortized to interest expense in the accompanying statements of operations for the three months ended June 30, 2012. As of June 30, 2012, the principal remained unchanged. As of June 30, 2012, balance of interest accrued under the Note was $672.

F-8

EVCARCO, INC. AND SUBSIDIARY

Unaudited Condensed Notes to Consolidated Financial Statements

~~June~~For the three and nine months ended September 30, 2012 and 2011

NOTE 7. CONVERTIBLE NOTES PAYABLE - continued

On ~~April~~May 1524, ~~2012~~2011, the Company ~~signed~~issued a convertible note ~~agreement.~~payable ~~Under~~in the ~~agreement~~amount of $310,000, for the ~~Company~~compensation ~~can~~accrued ~~borrow~~to upMr. toO’Neal, ~~$100~~former COO and Director,~~000,~~ atto ~~discretion~~the date of ~~the~~his ~~Holder~~resignation on May 15, 2011. The note ismatured ~~bearing~~on February 28, 2012; carries 5% interest; atand acontains ~~rate~~conversion ofrights 24at 35% ~~per~~discount ~~annum~~to then current market price, as defined in the agreement. The ItCompany isrecorded ~~unsecured~~$124,385 ~~and~~related ~~matures~~to onthe ~~January~~deemed 15beneficial conversion feature of this note, ~~2013~~all of which has been amortized as of maturity date. ~~The~~During ~~entire~~November and December of 2011, $2,540 of principal and $8,780 of accrued interest, onoutstanding under the note, ~~are~~was ~~convertible~~converted into 200,000 shares of common stock of the Company. Between atJanuary aand ~~45%~~March ~~discount~~of to2012, ~~the~~$85,258 ~~market~~of ~~price~~principal and $3,392 atof accrued interest, outstanding under the ~~point~~note, was converted into 2,516,667 shares of ~~conversion~~common stock of the Company. ~~During~~Between April and ~~May~~June of 2012, ~~the~~$40,776 ~~Company~~of ~~received~~principal and $321,~~000~~474 inof ~~advances~~accrued interest, outstanding under the note., ~~The~~was ~~Company~~converted ~~recorded~~into ~~$26~~1,~~182~~450,000 ~~related~~shares toof ~~the~~common ~~deemed~~stock ~~beneficial~~of ~~conversion~~the ~~feature~~Company. ofBetween ~~this~~July ~~note,~~and September of ~~which~~2012, $710,~~273~~825 ~~has~~of ~~been~~principal, ~~amortized~~outstanding tounder ~~interest~~the ~~expense~~note, inwas ~~the~~converted ~~accompanying~~into ~~statements~~6,700,000 shares of ~~operations~~common ~~for~~stock of the ~~three~~Company. ~~months~~As ~~ended~~of ~~June~~September 30, 2012~~. As~~ ofand ~~June~~December 3031, ~~2012~~2011, the principal ~~remained~~balance ~~unchanged~~was $176,271 and $307,460, respectively. As of ~~June~~the ~~30,~~same ~~2012~~dates, balance of interest accrued under the ~~Note~~note was $12,~~302~~959 and $670, respectively.

On May 27, 2011, the Company issued a convertible promissory note in the amount of $32,500, bearing interest at a rate of 8% per annum. The note is unsecured and matured on February 16, 2012. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 39% discount to the market price, at the point of conversion. The Company recorded $20,779 related to the deemed beneficial conversion feature of this note, all of which has been amortized as of maturity date. In December of 2011, $8,000 of the principal balance outstanding under the note was converted into 126,191 shares of common stock of the Company. Between January and March of 2012, $17,600 of the principal balance outstanding under the note was converted into 347,163 shares of common stock of the Company. In April of 2012, $6,900 of the principal and $1,300 of accrued interest outstanding under the note was converted into 205,000 shares of common stock of the Company. As of September 30, 2012 and December 31, 2011, the principal balance was $0 and $24,500, respectively.

On July 26, 2011, the Company issued a convertible promissory note in the amount of $35,000, bearing interest at a rate of 8% per annum. The note is unsecured and matured on April 17, 2012. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 39% discount to the market price, at the point of conversion. The Company recorded $22,377 related to the deemed beneficial conversion feature of this note, all of which has been amortized as of the maturity date of the note. In May of 2012, $7,000 of the principal balance outstanding under the note was converted into 200,000 shares of common stock of the Company. On August 16, 2012 the Company defaulted on the note and recorded a debt default penalty of $14,000, pursuant to the same conversion terms as stated above. Accordingly, the Company recorded $8,951 related to the deemed beneficial conversion feature of this penalty, of which $8,951 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012. In September of 2012, $2,050 of the principal balance outstanding under the note was converted into 1,619,048 shares of common stock of the Company. As of September 30, 2012 and December 31, 2011, the principal balance was $39,950 and $35,000, respectively.

On November 1, 2011, the Company issued a convertible promissory note in the amount of $20,000, bearing interest at a rate of 5% per annum. The note is unsecured and matures on August 31, 2012. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 35% discount to the market price, at the point of conversion. The Company recorded $10,769 related to the deemed beneficial conversion feature of this note, all of which has been fully amortized as of the maturity date of the note. As of September 30, 2012, the principal remained unchanged. As of September 30, 2012, balance of interest accrued under the Note was $928.

F-10

EVCARCO, INC. AND SUBSIDIARY

Unaudited Condensed Notes to Consolidated Financial Statements

For the three and nine months ended September 30, 2012 and 2011

NOTE 7. CONVERTIBLE NOTES PAYABLE - continued

On April 15, 2012, the Company signed a convertible note agreement. Under the agreement, the Company can borrow up to $100,000, at discretion of the Holder. The note is bearing interest at a rate of 24% per annum. It is unsecured and matures on January 15, 2013. The entire principal and accrued interest on the note are convertible into common stock of the Company at a 45% discount to the market price, at the point of conversion. During April and May of 2012, the Company received $32,000 in advances under the note. The Company recorded $26,182 related to the deemed beneficial conversion feature of this note, of which $8,664 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012. As of September 30, 2012, the principal remained unchanged. As of September 30, 2012, balance of interest accrued under the Note was $3,265.

On July 13, 2012, the Company issued a convertible promissory note in the amount of $37,500, bearing interest at a rate of 8% per annum. The note is unsecured and will mature on April 17, 2013. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 58% discount to the market price, at the point of conversion. The Company recorded $27,155 related to the deemed beneficial conversion feature of this note, of which $7,717 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012. On August 16, 2012 the Company defaulted on the note and recorded a debt default penalty of $18,750, pursuant to the same conversion terms as stated above. Accordingly, the Company recorded $13,578 related to the deemed beneficial conversion feature of this penalty, of which $2,504 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012. As of September 30, 2012, all of the principal balance of $56,250 was outstanding.

On September 19, 2012, the Company issued a convertible promissory note in the amount of $27,500, bearing interest at a rate of 8% per annum. The note is unsecured and will mature on June 21, 2013. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 41% discount to the market price, at the point of conversion. The Company recorded $39,573 related to the deemed beneficial conversion feature of this note, of which $1,583 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012. As of September 30, 2012, all of the principal balance of $27,500 was outstanding.

NOTE 8. RELATED PARTY TRANSACTIONS

For the three months ended ~~June~~September 30, 2012 and 2011, the Company accrued $75163,~~000~~403 inand ~~salaries payable to its officers. For the period from May 24, 2012 (the acquisition date) to June 30, 2012, the Subsidiary accrued~~ $49120,~~451~~000 in salaries payable to its officers.

On March 27, 2012, Mr. Edouard Prous resigned from the Board of Directors and his position of Chief Technical Officer. Compensation accrued to Mr. Prous during his employment, in the amount of $455,000, will remain in place, and continue to accrue interest of 5% per year, and is convertible into common stock of the Company at a variable conversion price, with 35% discount to the market price, at the point of conversion, in according to the original agreement. The Company recorded $245,000 related to the deemed beneficial conversion feature of this note, all of which has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012. As he is no longer considered an insider, the balance owed, which was previously included in the balance of shareholder notes, is now reported as part of the ~~accrued~~convertible ~~expenses~~notes payable on the accompanying consolidated balance sheet as of ~~June~~ September 30, 2012. Accrued interest payable on the note at September 30, 2012 was $11,778.

As of June 30, 2012 and December 31, 2011, the balances of note payable to Mr. Frolov, CFO, and then Director and major shareholder, were $415,294 and $328,243, respectively. The balances included accrued salary, along with various advances to and from the Company. The note is unsecured, due upon demand and accrues interest at the end of each month on then outstanding balance at the rate of 5.00% per annum. Accrued interest payable on the note at June 30, 2012, and December 31, 2011, was $1,426 and $3,674, respectively. Interest paid during the three months ended June 30, 2012 and 2011, was $5,228 and $1,549, respectively. This note payable does not approximate fair value, as it is with related party, and does not bear market rates of interest.F-11

~~As of June 30~~EVCARCO, ~~2012, the balance of note payable to Mr~~INC. ~~Speck,~~AND Executive VP, who became Director and major shareholder in August of 2012, was $124,943. The balance includes various advances made to the Subsidiary. The note is unsecured, due upon demand and accrues interest at the end of each month on then outstanding balance at the rate of 8% per annum. Accrued interest payable on the note at June 30, 2012 was $4,992.SUBSIDIARY

Unaudited Condensed Notes to Consolidated Financial Statements

For the three and nine months ended September 30, 2012 and 2011

NOTE 8. RELATED PARTY TRANSACTIONS - continued

As of September 30, 2012 and December 31, 2011, the balances of note payable to Mr. Frolov, our past CFO, and then Director and major shareholder, were $451,774 and $328,243, respectively. The balances included accrued salary, along with various advances to and from the Company. The note is unsecured, due upon demand and accrues interest at the end of each month on then outstanding balance at the rate of 5% per annum. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 35% discount to the market price, at the point of conversion. The Company recorded $243,263 related to the deemed beneficial conversion feature of this note, all of which has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012. Accrued interest payable on the note at September 30, 2012, and December 31, 2011, was $4,464 and $3,674, respectively. As he is no longer considered an insider, the balance owed, which was previously included in the balance of shareholder notes, is now reported as part of the convertible notes payable on the accompanying consolidated balance sheet as of September 30, 2012.

As of September 30, 2012, the balance of note payable to Mr. Speck, Executive VP, who became Director and major shareholder in August of 2012, was $129,788. The balance includes various advances made to the Subsidiary. The note is unsecured, due upon demand and accrues interest at the end of each month on then outstanding balance at the rate of 8% per annum. Accrued interest payable on the note at September 30, 2012 was $4,992.

NOTE 9. OPERATING SEGMENTS

EVCARCO, Inc. and Subsidiary operate two business segments: auto dealership and software, under separate legal entities. The tables below set forth financial information by segment. The software business was acquired on May 23, 2012, and its results below reflect information for the period from May 24, 2012 to ~~June~~September 30, 2012.

F-9

	Auto Dealership		Software		Total
Three Months Ended September 30, 2012
Revenues	$	760,668	$	1,156	$	761,824
Cost of goods sold		680,501		-		680,501
Sales and marketing expenses		4,750		1,488		6,238
Depreciation and amortization		23,284		49,815		73,099

As of September 30, 2012
Total current assets	$	176,748	$	180	$	176,928
Property and equipment, net		12,876		515,550		528,426

F-12

EVCARCO, INC. AND SUBSIDIARY

Unaudited Condensed Notes to Consolidated Financial Statements

~~June~~For the three and nine months ended September 30, 2012 and 2011

NOTE 9. OPERATING SEGMENTS - continued

	Auto Dealership		Software		Total
Three Months Ended June 30, 2012
Revenues	$	210,322	$	352	$	210,674
Cost of goods sold		185,155		-		185,155
Sales and marketing expenses		1,335		1,279		2,614
Depreciation and amortization		1,570		20,537		22,107
As of June 30, 2012
Total current assets	$	200,520	$	46	$	200,566
Property and equipment, net		16,197		564,525		580,722

NOTE 10. GOING CONCERN

The consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated entity had negative working capital of $2,~~488~~799,~~051~~307 and an accumulated deficit of $67,~~612~~618,~~015~~951 at ~~June~~September 30, 2012. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts, or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

The Company has primarily funded its operations through the net proceeds received from the Company's issuance of stock and convertible debt. The Company plans to issue additional equity and/or debt to fund its future operations.

Based on the Company’s current liquidity position, the Company will need to raise additional capital through debt or equity funding within the next twelve months. There is no assurance that any such financing will be available on acceptable terms or at all. Should continuing funding requirements not be met, the Company’s operations may cease to exist.

NOTE 11. CONVERTIBLE PREFERRED STOCK

Effective April 29, 2009 the Company filed an amendment with the Nevada Secretary of State to authorize Class A convertible preferred stock in the amount of 15,000,000 shares at $0.001 par value. Class A shares have no dividend rights, except as may be declared by the Board of Directors in its sole discretion. Class A stock is ranked senior and prior to the Corporation’s common stock as to dividends and upon liquidation. Class A shares have liquidation rights of $1 per share, and are entitled to 4 votes each, on any matters requiring shareholders’ vote. 125 shares of Class A stock can be converted into 1 share of common stock at any time, upon demand from of the holder.

Effective February 11, 2011 the Company filed an amendment with the Nevada Secretary of State to authorize Class B convertible preferred stock in the amount of 20,000,000 shares at $0.001 par value. Class B shares have no dividend rights, except as may be declared by the Board of Directors in its sole discretion. Class B stock is ranked senior and prior to the Corporation’s Class A convertible preferred stock and to the Corporation’s common stock as to dividends and upon liquidation. Class B shares have liquidation rights of $5 per share, and are entitled to 1,000 votes each, on any matters requiring shareholders’ vote. 50 shares of Class B stock can be converted into 1 share of common stock at any time, upon demand from of the holder.

~~F-10~~Effective November 30, 2011 the Company filed an amendment with the Nevada Secretary of State to increase authorized shares of Class B convertible preferred stock from 20,000,000 to 980,000,000.

On February 22, 2012, the Company issued 3,500,000 shares of Class B convertible preferred stock to a former officer and director for $7,350 in partial satisfaction of the loan payable to such former officer and director. The number of Class B shares was determined by applying a discount, for the lack of marketability and liquidity, of approximately 30% to the market price of common stock, divided by fifty, which represents conversion rights of a Class B share into common stock.

F-13

EVCARCO, INC. AND SUBSIDIARY

Unaudited Condensed Notes to Consolidated Financial Statements

~~June~~For the three and nine months ended September 30, 2012 and 2011

NOTE 11. CONVERTIBLE PREFERRED STOCK - continued

~~Effective~~On ~~November~~April 3020, ~~2011~~2012, the Company ~~filed~~issued an2,000,000 ~~amendment~~shares ~~with~~of ~~the~~Class ~~Nevada~~B ~~Secretary~~convertible preferred stock to a former officer and director for $2,800 in partial satisfaction of ~~State~~the loan payable to ~~increase~~such ~~authorized~~former ~~shares~~officer and director. The number of Class B ~~convertible~~shares ~~preferred~~was ~~stock~~determined ~~from~~by 20applying a discount,~~000~~ for the lack of marketability and liquidity,~~000~~ of approximately 30% to ~~980~~the market price of common stock,~~000~~ divided by fifty,~~000~~ which represents conversion rights of a Class B share into common stock.

On February 22, 2012, the Company issued 3,500,000 shares of Class B convertible preferred stock to an officer and director for $7,350 in partial satisfaction of the loan payable to such officer and director. The number of Class B shares was determined by applying a discount, for the lack of marketability and liquidity, of approximately 30% to the market price of common stock, divided by fifty, which represents conversion rights of a Class B share into common stock.

On April 20, 2012, the Company issued 2,000,000 shares of Class B convertible preferred stock to an officer and director for $2,800 in partial satisfaction of the loan payable to such officer and director. The number of Class B shares was determined by applying a discount, for the lack of marketability and liquidity, of approximately 30% to the market price of common stock, divided by fifty, which represents conversion rights of a Class B share into common stock.

On May 23, 2012, the Company issued 1,000,000 shares of Class B convertible preferred stock in exchange for 100% of issued and outstanding preferred stock of the Third Stone Corporation.

Effective June 12, 2012 the Company filed an amendment with the Nevada Secretary of State to decrease authorized shares of Class B convertible preferred stock from 980,000,000 to 75,000,000.

On August 7, 2012, Mr. Walter Speck, Executive VP, acquired controlling interest in the Company by purchasing 7,000,000 shares of the Class B convertible preferred stock from Mr. Nikolay Frolov, former CFO of the Company.

NOTE 12. COMMON STOCK

On January 25, 2012, the Company issued 153,846 shares of common stock in satisfaction of $5,000 owed under a consulting agreement. The number of shares was computed based on agreed upon discount to market price of the shares at the time of the conversion.

Between January and ~~June~~September of 2012, the Company issued 310,~~966~~666,667 shares of common stock in partial satisfaction of outstanding balance under the convertible note payable, originated on May 24, 2011, in the total amount of $~~130~~141,~~900~~725, which included $4,866 of interest. The number of shares was computed based on agreed upon discount to market price of the shares at the time of the conversion.

Between January and April of 2012, the Company issued 552,163 shares of common stock in complete satisfaction of principal balance outstanding under the convertible note payable, originated on May 27, 2011, in the amount of $25,800, which included $1,300 of interest. The number of shares was computed based on agreed upon discount to market price of the shares at the time of the conversion.

InBetween May and September of 2012, the Company issued ~~200~~1,~~000~~819,048 shares of common stock in partial satisfaction of principal balance outstanding under the convertible note payable, originated on July 26, 2011, in the amount of $79,~~000~~050. The number of shares was computed based on agreed upon discount to market price of the shares at the time of the conversion.

~~In March and May of 2012, the Company issued 41,212 shares of common stock for a negotiated settlement relating to several private purchases of our stock in late 2010 and early 2011.~~F-14

On May 23, 2012, the Company issued 3,329,504 shares of common stock in exchange for 100% of issued and outstanding common stock of the Third Stone Corporation.

F-11

EVCARCO, INC. AND SUBSIDIARY

Unaudited Condensed Notes to Consolidated Financial Statements

~~June~~For the three and nine months ended September 30, 2012 and 2011

NOTE 12. COMMON STOCK - continued

OnIn ~~June~~March ~~12,~~and May of 2012, the Company ~~effectuated~~issued a41,212 ~~1-for-500~~shares ~~reverse~~of common stock ~~split~~for ofa ~~its~~negotiated ~~issued~~settlement ~~and~~relating ~~outstanding~~to ~~common~~several ~~stock. All~~private ~~amounts~~purchases of ~~shares~~our ~~reflected~~stock onin ~~these~~late ~~consolidated~~2010 ~~financial~~and ~~statements~~early ~~are on post reverse split basis~~2011.

On May 23, 2012, the Company issued 3,329,504 shares of common stock in exchange for 100% of issued and outstanding common stock of the Third Stone Corporation.

On June 12, 2012, the Company effectuated a 1-for-500 reverse stock split of its issued and outstanding common stock. All amounts of shares reflected on these financial statements are on post-split basis.

On June 12, 2012, the Company filed an amendment with the Nevada Secretary of State to increase authorized shares of common stock from 10,000,000 to 900,000,000.

On July 25, 2012, the Company issued 500,000 shares of common stock in satisfaction of $10,000 owed under a consulting agreement. The number of shares was computed based on agreed upon the market price of the shares at the time of the issuance.

On September 6, 2012, the Company issued 23,809,524 shares of common stock in satisfaction of $50,000 owed for accrued wages to our President and our Chief Executive Officer. The number of shares was computed based on agreed upon the market price of the shares at the time of the issuance.

NOTE 13. SUBSEQUENT EVENTS

OnManagement ~~July~~has 3,evaluated ~~2012,~~subsequent ~~EVCARCO,~~events ~~Inc.~~after ~~entered~~the ~~into~~balance asheet ~~stock~~date, ~~purchase~~through ~~agreement~~the toissuance ~~acquire 75%~~ of the ~~outstanding~~financial ~~common~~statements, ~~shares~~for ofappropriate ~~American~~accounting ~~Rodsmiths,~~and ~~Inc~~disclosure., aThe ~~Texas~~Company ~~corporation~~has indetermined ~~exchange~~that ~~for~~there ~~$850,000,~~were ~~combination~~no ofsuch ~~cash,~~events ~~stock~~that ~~and~~warrant ~~loan. As~~disclosure ofor ~~the~~recognition ~~date~~in ofthe ~~this~~financial ~~report~~statements, ~~the~~except ~~acquisition~~for ~~has~~the ~~not been completed.~~below:

OnStock July 31, 2012, the Company issued a convertible promissory note in the amount of $37,500, bearing interest at a rate of 8% per annum. The note is unsecured and matures on April 17, 2013. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 42% discount to the market price, at the point of conversion.Conversions

OnBetween ~~August~~October 7,and November of 2012, ~~Mr.~~the ~~Walter~~Company ~~Speck,~~issued ~~Executive VP~~10,618,308 ~~acquired~~shares ~~controlling~~of ~~interest~~common stock in partial satisfaction of principal balance outstanding under the ~~Company~~convertible bynote ~~purchasing~~payable, 7originated on May 24,~~000~~ 2011,~~000~~ ~~shares~~in the amount of ~~the~~$6,900. ~~Class~~The Bnumber ~~convertible~~of ~~preferred~~shares ~~stock~~was ~~from~~computed ~~Mr.~~based ~~Nikolay~~on ~~Frolov,~~agreed ~~CFO~~upon discount to market price of the ~~Company~~shares at the time of the conversion.

F-In November 2012, the Company issued 3,281,250 shares of common stock in partial satisfaction of principal balance outstanding under the convertible note payable, originated on July 12, 2011, in the amount of $4,150. The number of shares was computed based on agreed upon discount to market price of the shares at the time of the conversion.

On November 13, 2012, the Company issued 37,037,036 shares of common stock in satisfaction of $100,000 owed for accrued wages to our President and our Chief Executive Officer. The number of shares was computed based on agreed upon the market price of the shares at the time of the issuance.

F-15

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

This Quarterly Report on Form 10-Q contains statements which, to the extent they do not recite historical fact, constitute "forward looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements by the use of words like "may”, "will”, "could”, "should”, "project”, "believe”, "anticipate”, "expect”, "plan”, "estimate”, "forecast”, "potential”, "intend”, "continue”, and variations of these words or comparable words. Forward looking statements do not guarantee future performance and involve risks and uncertainties. Actual results may differ substantially from the results that the forward looking statements suggest for various reasons, including those discussed under the caption "Risks Related to Our Business" in our Annual Report on Form 10-K. These forward looking statements are made only as of the date of this report. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. This discussion should be read together with the consolidated financial statements and other financial information included in this Form 10-Q.

The following discussion contains forward-looking statements that are subject to significant risks and uncertainties. There are several important factors that could cause actual results to differ materially from historical results and percentages and results anticipated by the forward-looking statements. The Company has sought to identify the most significant risks to its business, but cannot predict whether or to what extent any of such risks may be realized nor can there be any assurance that the Company has identified all possible risks that might arise. Investors should carefully consider all of such risks before making an investment decision with respect to the Company's stock.

Overview

EVCARCO, Inc. was incorporated on October 14, 2008 in the State of Nevada. We have begun our business operations, and we currently have minimal revenue and no significant assets, as a result, we face substantial liquidity risk and uncertainty, near-term and otherwise, which threatens our ability to continue. EVCARCO, Inc. has never declared bankruptcy, has never been in receivership, and has never been involved in any illegal action or proceedings.

Since becoming incorporated, EVCARCO, Inc. has not made any significant purchases or sale of assets. EVCARCO, Inc. is not a blank check registrant as that term is defined in Rule 419(a) (2) of Regulation C of the Securities Act of 1933, since it has a specific business plan or purpose.

On May 23, 2012 (“the acquisition date”), the Company acquired 100% of the outstanding common and preferred shares of The Third Stone Corporation in exchange for 3,329,504 shares of its common stock and 1,000,000 shares of Class B Convertible preferred stock, valued at $167,475 based on the closing share price on May 23, 2012. The Third Stone Corporation (“The Subsidiary”) was incorporated in the State of Wyoming on September 27, 2011. The Subsidiary is currently producing consumer software applications in sports, social media, finance and home automation sectors. The results of the Subsidiary’s operations have been included in the consolidated financial statements since the acquisition date. In connection with acquisition, the Board made some changes to the management team: Mr. Gary Easterwood was appointed as President and Chief Executive Officer, Mr. Mack Sanders became Chief Operating Officer, and Mr. Walter Speck was appointed as an Executive Vice President.

On June 12, 2012, the Company effectuated a 1-for-500 reverse stock split of its issued and outstanding common stock. All amounts of shares reflected in this report and on the accompanying consolidated financial statements are on post-split basis. On the same day, the Company increased its authorized common stock to 900,000,000 shares, and ~~decrease~~decreased its authorized Class B Convertible preferred stock to 75,000,000 shares.

On August 7, 2012, Mr. Water Speck acquired a controlling interest in the Company by purchasing 7,000,000 shares of Class B Convertible preferred stock from Mr. Nikolay Frolov, CFO and Director. Mr. Speck became Chairman of the Board of the Company, Mr. Easterwood was appointed Director, and Mr. Frolov resigned from the Board.

Our independent auditors have expressed doubt about our ability to continue as a going concern, indicating the possibility that we may not be able to continue to operate. No adjustment has been made in the ~~accompanying~~ consolidated accompanying financial statements to the amounts and classification of assets and liabilities which could result should we be unable to continue as a going concern.

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

Plan of Operation

Over the next twelve months, we will concentrate on the following areas to grow our operations:

·	Capital and Funding – Seek to obtain capital from all available sources.

·	Advertising and Marketing – Utilize all available marketing venues and public relations opportunities to promote the Company and its products.

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

·	Sales – Grow sales to 15-20 new cars, and 80-100 pre-owned cars per quarter. Get the software sales and app revenues to the level of $20,000 - $30,000 per month.

· Product Research and Development – Continue working on identifying and testing products and vehicles from U.S. companies, as well as foreign manufacturers, which can provide cleaner, safer, faster, and more economical forms of transportation, by utilizing the latest developments in the alternative fuel area. Finalize development of several significant software projects and begin their distribution through variety of sales channels. Continue developing mobile apps relating to both ~~our~~out automotive and software business.

·	Franchise Development – Begin marketing the EVCARCO franchise concept and licensing of Company’s Trademarks, with the short term objective of securing several territories and establishing one to three Dealer Development Candidates during 2012.

Maintaining an adequate inventory of automobiles requires significant capital. Given the Company’s liquidity limitations its inventory levels may be adversely impacted.

Operating Environment

The Company continues to operate in a tough economic climate, tight equity and credit markets, which caused significant decline in automobile sales and put many dealers out of business. This challenging operating environment also presents tremendous opportunity for our concept: decrease in competition, rise of fuel prices, consumers becoming more cost conscious, and environmental issues gaining a lot of traction, are making our products a lot more attractive alternative to traditional transportation solutions.

Operating Results

Limited financial resources have affected our ability to acquire inventory, and our consolidated financial statements reflect very sporadic purchasing and sales activity, which may continue until we are able to raise the sufficient capital.

For the quarterly periods ended ~~June~~September 30, 2012 and 2011, gross revenues were $~~210~~241,~~674~~412 and $~~230~~120,~~695~~745, gross profit was $2526,~~519~~501 and $188,~~859~~922, respectively. Net losses for the same quarterly periods were $~~357~~1,~~111~~006,936 and $~~519~~375,~~660~~379, including approximately $~~124~~163,~~450~~394 and $~~143~~120,~~800~~000, respectively, of accrued compensation to the officers of the Company.

For the ~~six~~nine month periods ended ~~June~~September 30, 2012 and 2011, gross revenues were $~~520~~761,~~412~~824 and $~~349~~469,~~095~~840, gross profit was $5481,~~822~~323 and $2130,~~707~~629, respectively. Net losses for the same quarterly periods were $~~632~~1,~~609~~639,545 and $1,~~249~~624,~~449~~828, including approximately $~~243~~407,~~690~~084 and $~~194~~443,~~230~~800, respectively, of accrued compensation to the officers of the Company.

As of ~~June~~September 30, 2012, the Company had assets of $~~786~~717,~~712~~789, and total liabilities of $2,~~688~~976,~~617~~235. As of December 31, 2011, the Company had assets of $235,682, and total liabilities of $1,879,985.

Amounts for revenues and gross margins reflect sporadic operations of the company affected by limited financial resources. The trend in losses reflects the rise in business activity and increasing efforts in realizing the Company’s business plan and starting normal business operations.

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

Liquidity and Capital Resources

As of ~~June~~September 30, 2012 and December 31, 2011, the Company had no significant cash reserves or other liquid assets.

As of ~~June~~September 30, 2012 and December 31, 2011, working capital deficiency amounted to $2,~~488~~799,~~051~~307 and $1,665,928, respectively.

Meeting future liquidity needs will require sales of dealership franchises, as well as income from new and pre-owned auto sales and service, and software revenues. We estimate it will take an estimated $165,000 per Company dealership location in addition to a line of credit of $1.2 million for floor plans at each location. This means that our ability to proceed with our plan of operation will continually be a function of our ability to raise sufficient capital to continue our operations.

Other Items and Conditions

As of ~~June~~September 30, 2012, the Company had $2,~~688~~976,~~617~~235 of current liabilities outstanding. That amount included approximately $~~777~~218,~~000~~186 of compensation and related taxes accrued to the officers of the Company; approximately $~~583~~176,~~000~~607 of other accrued compensation and related taxes; $~~131~~129,~~438~~788 of shareholder advances; and $~~240~~1,~~589~~182,597 of convertible debt.

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

As of December 31, 2011, the Company had $1,879,985 of current liabilities outstanding. That amount included $725,611 owed to the two officers and major shareholders of the Company (primarily for accrued compensation), and $346,530 of convertible debt.

The Company has no off balance sheet arrangements, or significant obligations under any contracts.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

~~The~~Disclosure ~~term~~Controls ~~“disclosure controls~~ and procedures” is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, or the Exchange Act. This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2012. Based on that evaluation, the Company’s management concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2012. During the quarter ended on June 30, 2012, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.Procedures

With the participation of our Chief Financial Officer and Chief Executive Officer we have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based upon such evaluation, our Chief Financial Officer and Chief Executive Officer have concluded that, as of the end of such periods, our disclosure controls and procedures were effective in ensuring that (i) information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

With the participation of our Chief Financial Officer and Chief Executive Officer, we have concluded that there were no changes to our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q (the fiscal quarter ended September 30, 2012). As we reported on a Form 8-K filed on September 17, 2012 our former Chief Financial Officer, Nikolay Frolov, was terminated on September 12, 2012, due to failure to meet fiduciary responsibilities to the corporation in his capacity as Chief Financial Officer, and we have not yet filled the position. The functions previously performed by Mr. Frolov are being performed on an interim basis by Walter Speck, Chairman of the Board and Executive Vice-President.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority against us. None of our directors, officers or affiliates are (i) a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings.

ITEM 1A. RISK FACTORS

Not required.

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

Information regarding unregistered sales not included in previous reports:

				Exemption
				from	Terms of
Date				regulation	conversion
Sold	Amount	Securities Sold	Consideration *	claimed **	or exercise
04/20/12	2,000,000	Class B Convertible Preferred Stock	Debt Conversion - $2,800	Reg. D	None
07/25/12	500,000	Common Stock	P/R Services - $10,000	Sec 4(2)	None
05/23/12	400,000	Common Stock	Debt Conversion - $13,000	Reg. D	None
07/30/12	500,000	Common Stock	Debt Conversion - $2,500	Reg. D	None
08/08/12	500,000	Common Stock	Debt Conversion - $2,500	Reg. D	None
08/15/12	500,000	Common Stock	Debt Conversion - $1,000	Reg. D	None
08/21/12	500,000	Common Stock	Debt Conversion - $500	Reg. D	None
08/27/12	500,000	Common Stock	Debt Conversion - $525	Reg. D	None
08/29/12	500,000	Common Stock	Debt Conversion - $500	Reg. D	None
09/04/12	535,714	Common Stock	Debt Conversion - $750	Reg. D	None
09/05/12	500,000	Common Stock	Debt Conversion - $500	Reg. D	None
09/06/12	23,809,524	Common Stock	Debt Conversion - $50,000	Reg. D	None
09/14/12	1,800,000	Common Stock	Debt Conversion - $1,400	Reg. D	None
09/18/12	1,400,000	Common Stock	Debt Conversion - $1,400	Reg. D	None
09/18/12	541,667	Common Stock	Debt Conversion - $650	Reg. D	None
09/21/12	541,667	Common Stock	Debt Conversion - $650	Reg. D	None
10/23/12	8,848,585	Common Stock	Debt Conversion - $5,750	Reg. D	None
10/25/12	1,769,723	Common Stock	Debt Conversion - $1,150	Reg. D	None
11/13/12	37,037,036	Common Stock	Debt Conversion - $100,000	Reg. D	None
11/21/12	531,250	Common Stock	Debt Conversion - $850	Reg. D	None
11/27/12	2,750,000	Common Stock	Debt Conversion - $3,300	Reg. D	None

* For per share price, see Statement of Stockholders’ Equity. No commissions or discounts were paid.

** The Company relied on information from purchasers that they were accredited investors and/or such investors were provided adequate information and were otherwise determined to be suitable. In all cases, there was no public solicitation.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number	Exhibit
31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14(a) under the Securities Exchange Act of 1934.

31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) under the Securities Exchange Act of 1934.

32	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C., Section 1350.

101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema Document *
101.CAL	XBRL Taxonomy Calculation Linkbase Document *
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB	XBRL Taxonomy Label Linkbase Document *
101.PRE	XBRL Taxonomy Presentation Linkbase Document *

* Pursuant to Rule 405(a)(2) of Regulation S-T, the Company will furnish the XBRL Interactive Data Files with detailed footnote tagging as Exhibit 101 in an amendment to this Form 10-Q within the permitted 30-day grace period for the first quarterly period in which detailed footnote tagging is required after the filing date of this Form 10-Q.

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 thereunto duly authorized.

	EVCARCO, INC.
Date: August 31, 2012	By:	/s/ Gary Easterwood
Date: December 18, 2012	By:	/s/ Gary Easterwood
		Gary Easterwood
		Principal Executive Officer

Date: August 31, 2012	By:	/s/ Nikolay Frolov
Date: December 18, 2012	By:	/s/ Walter Sepck
		Nikolay Frolov
		Walter Speck
		Chief Financial Officer (Principal Financial and Accounting Officer)

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