“Prior to the cosmic creation, only I exist, and no phenomena exist, either gross, subtle or primordial. After creation, only I exist in everything, and after annihilation, only I remain eternally.” (Lord Krishna, Caitanya caritamrta Adi 1.53)
There are two manifestations of existences, spiritual and material. The spiritual manifestation exists eternally and thus there is no creation or dissolution of the spiritual manifestation.
The “cosmic creation” refers to the universes in the material world. Before the creation of the universes, only Lord Krishna is existing in the material world in the form of Maha Vishnu. The cosmic creation begins when Maha Vishnu exhales and millions of universes come out from His body pores.
Question: Now one may say that based on the Bhagavad-Gita 2.12, we are souls and all souls are eternal, so it is contradictory to say only Lord Krishna existed?
Answer: Before the creation of the universes, the souls are existing in the body of Maha Vinshu and Bhagavad-Gita 15.7 states that all souls are part of Lord Krishna. Thus, when Lord Krishna states only He existed, this includes all His parts, all the souls. Before the cosmic creation the souls are existing, but they have no material bodies and thus their consciousness is unmanifested.
“Before the creation of this cosmic manifestation, I alone existed with My specific spiritual potencies. Consciousness was then unmanifested, just as one’s consciousness is unmanifested during the time of sleep.” (Shrimad-Bhagavatam 6.4.47)
“I exist in everything” – Lord Krishna is present in every atom and also in the heart of all living beings (souls within material bodies) as the supersoul.
After the annihilation of the universes, when Maha Vishnu inhales. All the souls who are left in the material world, go back into the body of Maha Vishnu. Then in the next exhalation of Maha Vinshu, all the shells of universes come out from His body pores, and another creation begins.