EZRAIDER CO. Forward-Looking Statements
Except for historical information, this report 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. Such forward-looking
statements involve risks and uncertainties, including, among other things,
statements regarding our business strategy, future revenues and anticipated
costs and expenses. Such forward-looking statements include, among others,
those statements including the words "expects," "anticipates," "intends,"
"believes" and similar language. Our actual results may differ significantly
from those projected in the forward-looking statements. Factors that might
cause or contribute to such differences include, but are not limited to, those
discussed herein. You should carefully review the risks described herein and in
other documents we file from time to time with the
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
Basis of Presentation
The following discussion highlights our results of operations and the principal
factors that have affected our financial condition as well as our liquidity and
capital resources for the periods described and provides information that
management believes is relevant for an assessment and understanding of the
statements of financial condition and results of operations presented herein.
The following discussion and analysis are based on our unaudited financial
statements contained in this Quarterly Report on Form 10-Q ("Quarterly Report"),
which we have prepared in accordance with
The audited financial statements for our fiscal year ended
All references in this Form 10-Q to the "Company," "we," "us," or "our," are to
General Overview
We were organized in the
On
Recent Developments
Issuance of Secured Promissory Note
On
Pursuant to the Loan Agreement, the Borrowers issued the Company a Promissory
Note, in the principal amount of
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As further inducement for the Company to enter into the Loan Agreement and make
the Loan to the Borrowers, the Borrowers executed and delivered to the Company a
Pledge and Security Agreement (the "Pledge Agreement"), pursuant to which
Upon the closing of the Merger (as further described below), the total
outstanding amount due to the Company by the Borrowers under the Note, was
deemed to be forgiven and the Note was cancelled. In connection with the
cancellation of the Note, the first priority security interest of the Company in
the
Name Change
On
In connection with the Name Change, the Company submitted to the
Merger
On
Pursuant to the Merger, we acquired the business of EZ Global. EZ Global
operates through its wholly-owned subsidiary, EZ Raider, which currently imports
electric-powered, tactical manned vehicles, known "EZ Raider vehicles," from D.S
Raider. Pursuant to the Distribution Agreement, dated
At the closing of the Merger, all 10,687,430 shares of common stock of EZ Global were exchanged for 28,550,000 shares of our Common Stock, and issued to the shareholders of EZ Global, on a pro rata basis.
The Merger will be treated as a recapitalization of the Company for financial
accounting purposes. EZ Global will be considered the acquirer for accounting
purposes, and our historical financial statements before the Merger will be
replaced with the historical financial statements of EZ Global in all future
filings with the
The Merger is intended to be treated as a tax-free reorganization under Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended.
Share Cancellation
In connection with the Merger, immediately prior to the closing of the Merger,
our majority shareholder,
Private Placement Offering
Concurrently with the closing of the Merger, we consummated a private placement
offering (the "Offering"), in which we sold 1,320,000 shares of our Common Stock
at a purchase price of
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The net proceeds from the Offering, in the amount of
Changes to the Board of Directors and Executive Officers
As of the effectiveness of the Merger,
Results of Operations
Three-Month Period Ended
Revenues and Other Income
During the three-month periods ended
Operating Expenses
Operating expenses, consisting primarily of general and administrative expenses
(including professional fees and consulting fees - related party) totaled
Interest Income
Interest income increased by
Interest Expense
During the three-month periods ended
Net Loss
As a result of the foregoing, we incurred a net loss of
Six-Month Period Ended
Revenues and Other Income
During the six-month periods ended
Operating Expenses
Operating expenses, consisting primarily of general and administrative expenses
(including professional fees and consulting fees - related party) totaled
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Interest Income
Interest income increased by
Interest Expense
Interest expense increased by
Net Loss
As a result of the foregoing, we incurred a net loss of
Liquidity and Capital Resources
As of the date of this Quarterly Report, we had yet to generate any revenues from our business operations.
On
On
As of
Concurrently with the closing of the Merger, and in contemplation of the Merger,
we consummated the Offering, in which we sold 1,320,000 shares of our Common
Stock at a purchase price of
We currently have no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.
Our sole director and officer has made no commitments written or oral, with respect to providing a source of liquidity in the form of cash advances, loans and/or financial guarantees.
We anticipate needing between
We have a history of operating losses and negative cash flow. These conditions raise substantial doubt about our ability to meet all of our obligations over the twelve months following the filing of this Quarterly Report. Management has evaluated these conditions and concluded that current plans will alleviate this concern.
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The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities for the six months endedAugust 31, 2021 and 2020: For the six For the six months ended months endedAugust 31, 2021 August 31, 2020 (Unaudited) (Unaudited)
-
Net Cash Provided by Financing Activities
-
For the six months ended
For the six months ended
Net cash used in our investing activities were
Our financing activities resulted in a cash inflow of
As reflected in the accompanying condensed consolidated unaudited financial
statements, the Company used cash in operations of
Going Concern
These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.
As reflected in the accompanying unaudited consolidated financial statements,
for the six months ended
? Net loss of$214,501 ; and ? Net cash used in operations was$196,895 .
Additionally, at
? Accumulated deficit of$788,456 ; ? Stockholders' equity of$2,002,510 ; and ? Working capital of$2,510 .
The Company has cash on hand of
The Company has incurred significant losses since its inception. There can be no
assurance that profitable operations will ever be achieved, or if achieved,
could be sustained on a continuing basis. In making this assessment we performed
a comprehensive analysis of our current circumstances including: our financial
position, our cash flows and cash usage forecasts for the six months ending
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During the six months ended
However, there is no assurance that the Company will be able to raise additional funds through the sale of its securities during the twelve months subsequent to the date these condensed consolidated financial statements are issued.
If the Company does not obtain additional capital, the Company will be required to reduce the scope of its business development activities or cease operations. The Company continues to explore obtaining additional capital financing and the Company is closely monitoring its cash balances, cash needs, and expense levels.
These factors create substantial doubt about the Company's ability to continue as a going concern within the twelve-month period subsequent to the date that these consolidated financial statements are issued. The condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
Management's strategic plans include the following:
? Pursuing additional capital raising opportunities;
? Investing in the development and growth of EZ Global's electric vehicles
business;
? Identifying and pursuing additional acquisitions, including the acquisition of
D.S Raider; and
? Identifying unique market opportunities that represent potential positive
short-term cash flow.
Critical Accounting Policies and Estimates
Our financial statements and accompanying notes have been prepared in accordance with GAAP applied on a consistent basis. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Off-Balance Sheet Arrangements
We have never entered into any off-balance sheet financing arrangements and have not formed any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.
Contractual Obligations
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
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