DATED JULY 9. 2001
EZEE RIDER CORP.
1,000,000 SHARES OF COMMON STOCK
We are offering 1,000,000 shares of common stock for sale to the public. Prior
to this offering, there has been no public market for the shares of our common
stock. See "Plan of Distribution." The shares of common stock are offered by us,
through Platinum Investments Corporation. Platinum Investments is not required
to sell any specific number or dollar amount of shares but will use its best
efforts to sell the maximum number of shares offered. See "Plan of Distribution"
which explains in detail the terms and conditions of this offering. This
offering of shares will terminate on the earlier of the date all of the shares
offered are subscribed for or October 7, 2001. Please note that in the event
that all of the shares being offered have not been sold by October 7, 2001, we
may extend the offering for up to an additional 90 days.
There is no minimum offering and no escrow. Therefore any funds received from a
purchaser will be available to us as received and need not be refunded to the
purchaser. There is no minimum amount which must be purchased by a subscriber.
----------------------
There is currently no market for our shares and no market may ever develop for
our shares. We intend to apply for a listing of our common stock on the OTC
Bulletin Board after the effective date of this prospectus.
----------------------
This investment involves a high degree of risk. You should purchase shares only
if you can afford a complete loss. See "risk factors" beginning on page 4 of
this prospectus.
----------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
----------------------
This prospectus is not an offer to sell these securities and it is not an offer
to buy these securities in any state where the offer or sale is not permitted.
Shares Offered
------------------------ ------------------- ------------------- --------------------
Underwriting Proceeds To EZEE
Discounts And Rider Corp. (1)
Price To Public Commissions
------------------------ ------------------- ------------------- --------------------
------------------------ ------------------- ------------------- --------------------
Per Share $ 0.50 $ 0.04 $ 0.46
------------------------ ------------------- ------------------- --------------------
------------------------ ------------------- ------------------- --------------------
Total Offering $ 500,000 $ 40,000 $ 460,000
------------------------ ------------------- ------------------- --------------------
(1) Proceeds to EZEE Rider: These amounts do not reflect the deduction of
expenses of this offering, estimated at $60,000.
EZEE Rider Corp.
2541 Monroe Avenue, Suite 301,
Rochester NY, 14618
(716) 244-1840
The date of this prospectus is July 9, 2001
Page 1
TABLE OF CONTENTS
Prospectus Summary 3
Risk Factors 3 - 6
Special Note Regarding Forward-Looking Statements 6
Dilution 7
Dividend Policy 8
Use Of Proceeds 8
Summary Financial Data 9
Plan Of Operations 9 - 10
Description Of Business 10 - 14
Description Of Property 14
Management Of EZEE Rider Corp. 15
Directors And Executive Compensation 16
Security Ownership Of Certain Beneficial Owners And Management 16 - 17
Interest Of Management And Others In Certain Transactions 17
Description Of Securities 17
Plan Of Distribution 18
Method Of Subscribing 19
Expiration Date 19
Right To Reject 19
No Escrow 19
Transfer Agent 19
SEC Position On Indemnification 19
Legal Matters 20
Experts 20
Available Information 20
Reports To Stockholders 20
Financial Statements 21
Dealer Prospectus Delivery Obligation 35
Page 2
Prospectus Summary
Our Company
EZEE Rider Corp. is a corporation that was organized under the laws of the State
of Delaware on July 12, 2000. EZEE Rider was formed for the purpose of becoming
a transportation freight amalgamator of small motor carriers with our only
office located in Rochester, New York.
We intend to evolve our business to amalgamate the transport capacity of
numerous small common and contract general commodities motor freight carriers in
the 48 contiguous United States.
The Offering
Securities offered 1,000,000 shares of common stock at $0.50 per share
Securities outstanding prior to offering 960,000 shares of common stock (as of July 9, 2001)
Securities outstanding subsequent to offering, 1,960,000 shares of common stock
assuming all common stock is sold
Use of Proceeds Estimated at $400,000 net of offering expenses, assuming all
securities offered are sold. (The securities are being offered
on a "best efforts" basis and, consequently, if we do not sell
all of the shares being offered, we will receive less than
$400,000.) To be used for marketing, furniture and equipment,
acquisitions and development of franchises, and working capital.
Risk Factors
Investing in our securities involves a high degree of risk. You should consider
carefully the information under the caption "Risk Factors" in deciding whether
to purchase the securities offered under this prospectus.
Risk Factors
You should carefully consider the risks described below and all other
information contained in this prospectus before making an investment decision.
We do not have a history of operations; if we are unsuccessful your investment
will be worthless.
We have no operating history and have not proved we can operate successfully. If
we fail, your investment in our common stock will become worthless.
EZEE Rider is in its start-up phase and has no operating history, and we
presently do not have sufficient liquid assets to finance our anticipated
funding needs and obligations. If fundraising activities are not successfully
completed, we may not be able to meet our obligations as they become due and,
accordingly, may not be able to continue our business operations as presently
anticipated. This means that we do not have sufficient capital resources to
operate in a manner similar to other companies in our industry. The risk to you,
should you purchase common stock in this offering, is that if we do not raise
sufficient capital and do not continue operations, it is likely the amount for
which you could sell your common stock purchased in this offering will be lower
than the amount you paid for it, or your investment may become worthless.
Page 3
If we are unable to sell all of the shares being offered, we may not be able to
fully implement our business plan.
If we sell 25% of the shares being offered, our estimated net proceeds would be
$73,000. Of that amount, $15,000 is allocated for marketing and sales and
$10,000 is allocated for acquisitions and franchise development (see "Use of
Proceeds"). Below the success level of 25% in this offering, our ability to
complete acquisitions could be impaired due to a lack of available cash and our
ability to develop franchises could also be limited. As a consequence, revenues
and cash flow may not materialize and your investment may become worthless.
We are dependent upon our officers and directors, who have a limited amount of
time to devote to implementing our business plan, and if we lose their services
we may not be able to continue operations.
We rely on our president, Mr. Morris Diamond, and our secretary, Ms. Shirley
Diamond. Since we have no other employees, if we lose their services, we will
cease operations causing your investment to be worthless.
We depend upon the continued services of our two executive officers. Since we
have no other executive officers and no capital with which to attract others at
this time, the loss of their services could cause EZEE Rider to go dormant or to
close down, which would cause the value of your common stock purchased in this
offering to become worthless.
Initially, Mr. and Ms. Diamond will not spend full time on the activities of
EZEE Rider since their current activities would take up some of their time. They
can devote more and more time to the activities of EZEE Rider as time goes on.
Initially, they expect to spend approximately one day per week and increase that
weekly time as our activities increase. Mr. Diamond is prepared to devote
himself full time to the success of our plan of business as the growth potential
develops.
We do not currently maintain "key-man" life insurance on our executive officers,
and there is no contract in place assuring their services for any length of
time.
Our executive officers have no industry experience and may not be successful in
implementing our business plan.
Our officers have no experience in operating a trucking company and the
limitations imposed by the absence of other experienced staff could cause EZEE
Rider to fail in its business.
We rely on our officers to start and operate EZEE Rider even though we have no
commitments for trucking contracts or franchisee commitments and may not be able
to generate such contracts or commitments in the future. If we are unable to
generate such contracts or commitments, the value of your investment may decline
or become totally worthless.
We may experience problems associated with rapid business growth and expansion
which could strain our available resources.
We expect to expend significant time and effort in expanding our business,
including the potential for acquiring other businesses. This growth may place a
significant strain on our resources. We cannot be certain that our systems,
procedures and controls will be adequate to support our operations as they
expand. Any future growth will also impose significant additional
responsibilities on members of our management, including the need to identify,
recruit and integrate new senior level managers and executives. We cannot be
certain that we can identify and retain such additional managers and executives.
As a result, we cannot assure you that we will be able to expand our business or
manage any future growth effectively and profitably.
We may be adversely affected by motor fuel price escalations which could
increase our operating costs.
When we enter into trucking contracts, we may do so at fixed rates. If fuel
costs rise in the market in general, that could mean we could encounter the
situation where the upward movement of fuel prices would result in lower or
negative profitability. This could cause the value of your investment to
decline.
Page 4
If we utilize independent contractors and the applicable taxing authorities
challenge our classification of such persons as independent contractors our
personnel costs may increase.
Federal and state authorities have from time to time asserted that independent
contractors in the transportation industry are employees rather than independent
contractors. Where independent contractors are used, federal and state
authorities could challenge this position. Furthermore, laws, including tax
laws, and interpretations of various laws, may change. If we were required to
pay for and administer added benefits to independent contractors, our operating
costs could substantially increase.
We may not have adequate insurance coverage and may be forced to cease
operations if there is a significant claim against us.
We anticipate that drivers may be involved in accidents from time to time. We
currently carry no liability insurance. However, as operations commence, we will
seek to obtain coverage of $1,000,000 for each accident (subject to applicable
deductibles) with umbrella coverage up to $25 million. We cannot guarantee that
claims against us will not exceed the amount of coverage. Were there to be an
adverse trend in the frequency or severity of accidents, liability claims or
workers' compensation claims against us, or unfavorable resolutions of those
claims, our operating results could be materially adversely affected.
Significant increases in insurance costs could reduce our profitability.
We must comply with governmental regulations and licensing requirements which
restrict our ability to implement our business plan.
Our intended operations will be subject to federal, state and international laws
and regulations, including the regulations of the Federal Trade Commission as
well as similar authorities in individual states, in connection with the offer,
sale and termination of franchises and the regulation of the
franchisor/franchisee relationship. As of the date of this prospectus, we have
not prepared any materials for the offer and sale of franchises. Generally, the
materials consist of a franchise agreement and a disclosure document which is
similar to this prospectus. Once we prepare those materials, we will have to
submit them to the applicable authorities for review and we will not be able to
offer or sell franchises until authorized by the applicable authorities. From
time to time, we may be required to update our materials and may be unable to
offer or sell franchises until the applicable authorities have reviewed the
revised materials and authorized us to continue sales. Such delays could affect
our ability to offer and sell franchises. In addition, we may be subject to
capitalization, bonding, escrow and impoundment requirements in connection with
the offer and sale of franchises. These requirements could severely limit our
ability to offer and sell franchises.
We do not expect nor have we encountered any material effect from the discharge
of materials, communications from environmental agencies, or capital
expenditures for environmental control facilities. We do not intend to store any
quantities of oils and fluids. However, EZEE Rider or its franchisees may become
subject to various federal, state and local environmental laws and regulations
dealing with the transportation, storage, presence, use, disposal and handling
of hazardous materials and hazardous wastes. If any such substances were
improperly transported, released or improperly stored on any of EZEE Rider's
property or the property of any franchisee, including leased properties, or if
we were found to be in violation of applicable environmental laws and
regulations, we could be responsible for clean-up costs, property damage and
fines or other penalties, any one of which could have a material adverse effect
on our financial condition and results of operations.
Our delivery operations are expected to be subject to various state, local and
federal regulations that in many instances require permits and licenses. Our
failure to maintain required permits or licenses or to comply with these laws
and regulations could subject us to substantial fines or could lead to the
revocation of our authority to conduct certain of our operations.
Page 5
If we are unable to attact and retain qualified drivers, we may be forced to
cease operations.
Competition for drivers is intense within the trucking industry. We may
experience difficulty attracting and retaining qualified drivers and
owner-operators because of a lack of financial resources to offer the most
competitive salaries to qualified drivers. This would result in a reduced level
of service and our ability to obtain new business. We may incur significant
expenses in recruiting, marketing and training new employees. The effect would
be increased costs, lower profits, and a likely decrease in the value of your
investment.
We may be subject to union representation of employees which could increase our
personnel costs.
We intend to be a non-union organization, however, unions such as the
International Brotherhood of Teamsters and its locals have traditionally been
active in the U.S. trucking industry. We anticipate that if we have any
employees they may be subject to union organization efforts from time to time,
and we could be subject to future unionization efforts as our operations expand.
Unionization of any of our workforce could result in higher employee
compensation and working condition demands that could increase our operating
costs or constrain our operating flexibility. Work interruptions may be
threatened which could cause cessation of operations with a corresponding
adverse financial impact.
There is a lack of a public market for our common shares which limits your
ability to resell your shares.
There has been no public market for our common shares. We cannot assure you that
an active trading market will develop or be sustained after this offering. You
may not be able to resell your shares at or above the initial public offering
price. The initial public offering price has been determined arbitrarily and may
not be indicative of the market price for our common shares after this offering.
The "penny stock" rules may restrict your ability to resell your shares.
If a market develops for our common stock, our common stock would, most likely,
be subject to rules promulgated by the SEC relating to "penny stocks," which
apply to non-NASDAQ companies whose stock trades at less than $5.00 per share or
whose tangible net worth is less than $2,000,000. These rules require brokers
who sell "penny stocks" to persons other than established customers and
"accredited investors" to complete certain documentation, make suitability
inquiries of investors, and provide investors with certain information
concerning the risks of trading in the security. These rules may discourage or
restrict the ability of brokers to sell our common stock and may affect the
secondary market for the common stock.
Special Note Regarding Forward-Looking Statements
This prospectus contains forward-looking statements. These forward-looking
statements are not historical facts but rather are based on current
expectations, estimates and projections about our industry, our beliefs and our
assumptions. Words such as "anticipates", "expects", "intends", "plans",
"believes", "seeks" and "estimates", and variations of these words and similar
expressions, are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond our control, are
difficult to predict and could cause actual results to differ materially from
those expressed, implied or forecasted in the forward-looking statements. In
addition, the forward-looking events discussed in this prospectus might not
occur. These risks and uncertainties include, among others, those described in
"Risk Factors" and elsewhere in this prospectus. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect our
management's view only as of the date of this prospectus. Except as required by
law, we undertake no obligation to update any forward-looking statement, whether
as a result of new information, future events or otherwise.
Page 6
Dilution
If you purchase the common stock, you will experience an immediate and
substantial dilution in the pro forma net tangible book value of the common
stock from the initial offering price.
"Dilution" represents the difference between the public offering price per share
of common stock and the adjusted pro forma net tangible book value per share of
common stock immediately after the completion of this offering. Dilution arises
mainly from an arbitrary decision by EZEE Rider about the offering price per
share of common stock. In this offering, the level of dilution will be increased
as a result of EZEE Rider's low net tangible book value before this offering.
The following table illustrates the anticipated dilution of a new investor's
equity in a share of common stock at different amounts of success with this
offering, based on our net tangible book value at March 31, 2001:
- ----------------------------------------------------------------------- -------------- ------------- ---------------
25% Sold 50% Sold 100% Sold
- ----------------------------------------------------------------------- -------------- ------------- ---------------
- ----------------------------------------------------------------------- -------------- ------------- ---------------
Offering price per share of common stock $ 0.50 $ 0.50 $ 0.50
- ----------------------------------------------------------------------- -------------- ------------- ---------------
- ----------------------------------------------------------------------- -------------- ------------- ---------------
Net tangible book value per common share before offering $ (0.00) $ (0.00) $ (0.00)
- ----------------------------------------------------------------------- -------------- ------------- ---------------
- ----------------------------------------------------------------------- -------------- ------------- ---------------
Increase per share attributable to new investors $ 0.15 $ 0.22 $ 0.31
- ----------------------------------------------------------------------- -------------- ------------- ---------------
- ----------------------------------------------------------------------- -------------- ------------- ---------------
Pro forma net tangible book value per common share after offering $ 0.15 $ 0.22 $ 0.31
- ----------------------------------------------------------------------- -------------- ------------- ---------------
- ----------------------------------------------------------------------- -------------- ------------- ---------------
Dilution per common share to new investors $ 0.36 $ 0.28 $ 0.19
- ----------------------------------------------------------------------- -------------- ------------- ---------------
- ----------------------------------------------------------------------- -------------- ------------- ---------------
Percentage dilution 71% 56% 39%
- ----------------------------------------------------------------------- -------------- ------------- ---------------
The following table sets forth, as of March 31, 2000, after giving effect to the
sale of 25%, 50%, and 100% of the offering, a comparison of the respective
investment and equity of the current shareholders and investors purchasing
shares in this offering.
25% Of Offering Sold
- --------------------- --------------------------------- ---- ----------------------------------- -- ------------------
Shares Purchased Total Consideration
- --------------------- --------------------------------- ---- ----------------------------------- -- ------------------
- --------------------- ------------------ ------------------ ------------------
Number Percent Amount Percent Average Price
Per Share
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Existing 960,000 79% $ 9,600 7% $ 0.01
shareholders
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
New investors 250,000 21% $ 125,000 93% $ 0.50
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Total 1,210,000 100% $ 134,600 100%
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
50% Of Offering Sold
- --------------------- --------------------------------- ---- ----------------------------------- -- ------------------
Shares Purchased Total Consideration
- --------------------- --------------------------------- ---- ----------------------------------- -- ------------------
- --------------------- ------------------ ------------------ ------------------
Number Percent Amount Percent Average Price
Per Share
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Existing 960,000 66% $ 9,600 4% $ 0.01
shareholders
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
New investors 500,000 34% $ 250,000 96% $ 0.50
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Total 1,460,000 100% $ 259,600 100%
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
100% Of Offering Sold
- --------------------- --------------------------------- ---- ----------------------------------- -- ------------------
Shares Purchased Total Consideration
- --------------------- --------------------------------- ---- ----------------------------------- -- ------------------
- --------------------- ------------------ ------------------ ------------------
Number Percent Amount Percent Average Price
Per Share
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Existing 960,000 49% $ 9,600 2% $ 0.01
shareholders
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
New investors 1,000,000 51% $ 500,000 98% $ 0.50
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Total 1,960,000 100% $ 509,600 100%
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Page 7
Dividend Policy
To date, we have not declared or paid any dividends on our common stock. We do
not intend to declare or pay any dividends on our common stock in the
foreseeable future, but rather to retain any earnings to finance the growth of
our business. Any future determination to pay dividends will be at the
discretion of our board of directors and will depend on our results of
operations, financial condition, contractual and legal restrictions and other
factors it deems relevant.
Use Of Proceeds
If we sell all of the shares being offered, our net proceeds are estimated to be
$400,000 after expenses of $60,000 and an 8% selling commission on all of the
shares. Our net proceeds are as follows:
Level of
Success in this Offering:
- -------------------------------------------------------------- ----------------- ----------------- ----------------
25% 50% 100%
- -------------------------------------------------------------- ----------------- ----------------- ----------------
- -------------------------------------------------------------- ----------------- ----------------- ----------------
Proceeds from Offering $ 125,000 $ 250,000 $ 500,000
Less - Broker-Dealer Commissions (10,000) (20,000)
(40,000)
Less - Expenses of Offering (42,000) (53,000)
(60,000)
- -------------------------------------------------------------- ----------------- ----------------- ----------------
- -------------------------------------------------------------- ----------------- ----------------- ----------------
Net Proceeds $ 73,000 $ 177,000 $ 400,000
============================================================== ================= ================= ================
We intend to use the net proceeds to support our anticipated growth over the
next twelve months. We expect to experience negative cash flow from operations
for at least the next six months.
We expect that our cash requirements will exist principally in the following
areas and, based upon the level of success we achieve in this offering, we
anticipate using the proceeds from this offering as follows:
Level of
Success in this Offering:
- -------------------------------------------------------------- ----------------- ----------------- ----------------
25% 50% 100%
- -------------------------------------------------------------- ----------------- ----------------- ----------------
- -------------------------------------------------------------- ----------------- ----------------- ----------------
Marketing and Sales $ 15,000 $ 30,000 $ 60,000
Office Space 10,000 12,500
15,000
Computer Equipment and Software 17,500 20,000
25,000
Acquisitions and Franchise Development 10,000 80,000
210,000
Working Capital 20,500 34,500
90,000
- -------------------------------------------------------------- ----------------- ----------------- ----------------
- -------------------------------------------------------------- ----------------- ----------------- ----------------
Total $ 73,000 $ 177,000 $ 400,000
============================================================== ================= ================= ================
The amount and timing of any of the above expenses will depend on various
factors, including rates of business growth, specific technology, capital
equipment and other requirements imposed by our customers and opportunities
presented to us.
Our total capital requirements over the next several years are likely to be
substantially more than the anticipated offering proceeds. However, assuming
that we are able to sell all of the shares of stock we are offering, we believe
the net proceeds of this offering will be sufficient to fund our operations for
at least the next twelve months. Any changes in proposed expenditures will be
made at the discretion of EZEE Rider's board of directors.
Pending such uses, we intend to invest the proceeds from this offering in short
term, investment-grade, and interest bearing securities.
Page 8
Summary Financial Data
The following table sets forth certain of our summary financial information.
This information should be read in conjunction with the financial statements and
notes thereto appearing elsewhere in this prospectus. Interim results may not be
indicative of the results of operations to be expected for a full fiscal year.
December 31, 2000 March 31, 2001
(Unaudited)
- ----------------------------- ----------------------------------------- --------------------- ------------------
- ----------------------------- ----------------------------------------- --------------------- ------------------
Balance Sheet: Working Capital $171 $(1,934)
Total Assets $1,821 $1,566
Total Liabilities $1,650 $3,500
Stockholders' Equity $171 $(1,934)
- ----------------------------- ----------------------------------------- --------------------- ------------------
- ----------------------------- ----------------------------------------- --------------------- ------------------
From Inception
From Inception (July 12, 2000)
(July 12, 2000) to to March 31, 2001
December 31, 2000 (Unaudited)
- ----------------------------- ----------------------------------------- --------------------- ------------------
- ----------------------------- ----------------------------------------- --------------------- ------------------
Statement of Operations: Revenue $ - $ -
Operating Expense $ - $ -
Operating Income (Loss) $ - $ -
Other Expenses $9,429 $11,534
Net Income (Loss) $(9,429) $(11,534)
- ----------------------------- ----------------------------------------- --------------------- ------------------
Plan Of Operations
Following is our plan of operations based upon the amount of capital we raise in
this offering. See "Use of Proceeds". We intend to engage in the business of
amalgamating the transportation capacity of small motor carriers. See
"Description of Business". In order to operate, we must have capital to fund the
marketing and infrastructure (computer equipment, office space, and general
overhead) necessary to originate contracts with small motor carriers as a means
to amalgamate the transportation capacity collectively at their disposal.
Assuming we raise 25% of the total amount in this offering, we believe we will
be able to finance our planned operations without having to raise any additional
cash in the next four to five months. If we only raise 25% of the total amount
in this offering, our growth will be slow since we will be limited in our
ability to develop the necessary infrastructure and pay salaries until such time
as we are generating and collecting revenue from transportation contracts. No
such contracts are in place as of the date of this prospectus. If we are
successful in selling 25% of the securities offered, we intend to limit our
infrastructure spending to the purchase of a computer system but little or no
implementation of software (including the capability to network any computer
operations), other administrative support functions, and the development and
execution of a limited sales marketing plan. In addition, our ability to
efficiently amalgamate operations around common operational processes will be
limited. The limitations on the ability to purchase computer applications would
likely have an impact on our ability to communicate operational data, including
scheduling and dispatch information, as well as the ability to meet our motor
fuel tax reporting requirements to various state agencies. The lack of computer
applications would mean that the communication of operational data would take
place by using oral discussion and transmission of facsimile copies or regular
mail of manually prepared documents. These factors could limit our scope of
operations and our rate of growth. We may also be limited in our ability to
procure accident insurance at the desired level, which would limit operations as
coverage would only be obtainable for three to five vehicles.
Assuming we raise 50% of the total amount in this offering, we believe we will
be able to finance our planned operations for nine to ten months without having
to raise additional cash. If we only raise 50% of the total amount in this
offering, our growth will be less rapid than if all of the common stock were to
be sold. In addition to purchasing a computer, we expect to implement basic
software to create an intranet communication and control system to be used among
our affiliated providers (company-owned and franchised) to monitor and control
the operations, scheduling, reporting,
Page 9
compliance, billing, collection and other operational aspects of the business. A
more developed sales and marketing plan can be developed, and more funds would
be available to begin amalgamating the transportation capacity of small motor
carriers. Funds would be expected to provide coverage for up to ten vehicles
Assuming we raise the total amount in this offering, we believe we will be able
to finance our planned operations without having to raise any additional cash in
the next 12 months. With the net cash proceeds from this offering, we intend to
purchase sufficient hardware and software unique to servicing transportation
contracts to enable execution of our business plan, and use a substantial
portion of the funds raised to initiate and maintain professional marketing and
execute our plan of growing through franchises and acquisitions.
Description Of Business
General
EZEE Rider Corp. is a corporation that was organized under the laws of the State
of Delaware in July 2000. We were formed for the purpose of becoming a
transportation freight amalgamator for the hauling of freight by small motor
carriers with our sole office located in Rochester, New York.
We intend to evolve our business to amalgamate the transport capacity of
numerous small common and contract general commodities motor freight carriers in
the 48 contiguous United States.
Plan Of Operation
Our plan of operation for the twelve months following the commencement of this
offering will be to amalgamate the transportation services of small to
medium-size, privately owned, locally operated, moving and storage companies. To
achieve this objective, we will pursue a dual strategy of purchasing and
franchising (co-branding) services with such entities.
In the case of purchases, our intention is to issue shares of our stock in
connection with the business combination. However, we anticipate that, due to
the implementation of changes to existing operations of target companies, we are
planning to be able to support additional working capital requirements for up to
an additional 180 days. Over time, it would be our goal to reduce working
capital demands and restore this one-time increase of working capital to, or
below, pre-acquisition levels for target companies. The actual amount of the
additional working capital requirements would depend on the financial condition
and operating characteristics of the target company.
In the case of franchises, we will charge a fee based on the value of the
services provided to the franchisee, which are expected to be less than the
current level of expenses for the franchisees, based on the benefits of
leveraging economies of scale.
In either case, our goal will be to ultimately create a national identity as a
motor carrier and to consolidate fragmented and cost-inefficient transportation
capacity in order to optimize profit margins associated with the services
provided by small motor carriers. Whether purchased or franchised, transporters
will all operate under our "EZEE Rider" identity.
In the case of purchased operations, we intend to recognize revenues upon
delivery of the related freight.
In the case of franchises, initial franchise application fee revenue from
prospective franchisees would be recognized as income when the underlying
transporter begins operations under the terms of the franchise agreement. Fees
for ongoing franchise-related services would be recognized as income when the
related underlying costs are charged to expense.
Although these strategies have been formulated, they have not yet been reduced
to a formal set of written procedures.
Management believes that amalgamating freight capacity is an attractive option
to traditional marketing by a fragmented industry comprising small motor
carriers. We believe the benefits of our contracts include:
Page 10
- - Use of equipment: The process of amalgamating the freight capacity of small
motor carriers should provide for a greater and more balanced utilization
factor in the use of the transportation equipment. The increased efficiency
of the equipment use and the decreased need for standby transportation
capacity should increase the utilization factor and create the opportunity
for rate reductions and increased profitability. Standby capacity refers to
the amount of transportation capacity that is excess to normal operations.
This standby capacity is created primarily to service peak or other
abnormal demands for transportation. Typically, unaffiliated small motor
carriers do not coordinate their transportation loading requirements to
provide mutual backup in such situations; rather they individually schedule
and dispatch freight, which creates excessive standby capacity to service
the peak demands. Accordingly, the use of computer based software
applications to improve scheduling and dispatch of all of the amalgamated
motor carriers on a coordinated basis is expected to improve the
utilization factor.
- - Conservation of capital: Decreasing the need for standby transport capacity
among small fragmented motor carriers should decrease the related capital
commitments; accordingly, less money is tied-up in equipment costs and is
available to be employed elsewhere resulting in lower prices charged to
customers.
- - Increased utilization leading to more stable cash flow: We believe
balancing the utilization of the transportation equipment should also
result in an improved capability to predict and manage the cash flow
related to the equipment use and create additional opportunity for
significant rate reductions and increased profitability. This is because
cash flow derives from scheduling and dispatch with high load factors. For
example, a load dispatched from New York to Philadelphia with an empty
return, as might be the case with an independent motor carrier, could be
converted to a load in both directions in the case where the same motor
carrier were part of the amalgamated motor carriers having the benefits of
operation as we envision them.
Servicing the trucking contracts involves establishing a freight transportation
schedule, dispatching trucks, coordinating delivery, collecting the payments,
and settling with the freight carrier. The main objectives in this area are to
ensure the efficient scheduling and transport of goods and materials and to
insure payments are collected on time. Accordingly, the capacity to service
trucking contracts efficiently on a large scale is software driven. The primary
costs of software development and implementation are incurred during the initial
phases of our business plan.
We intend to develop a computer system available exclusively to franchisees and
affiliates to monitor and control the operations, scheduling, reporting,
compliance, billing, collection, settlement and other operational aspects of the
business. There are industry specific applications already available which can
be implemented to accomplish these goals, however, we anticipate the need for
some peripheral development of networked capability among all participating
motor carriers and to provide real-time updates of key data. The cost of the
computer equipment and the implementation is shown under "Use of Proceeds". We
intend to utilize outside assistance to develop this system.
As we have recently been organized, there exists no historical operating
performance and no track record of freight amalgamation on our part.
Acquistions And Franchises
Each of the small motor carriers which we would amalgamate would be a licensed
carrier with the U. S. Department of Transportation in various states and our
business would be dependent their upon maintaining such operating authority.
Since we will cross state lines, we must register with the Interstate Commerce
Commission ("ICC") to obtain interstate authority, and all motor carriers
operating in interstate commerce must have a USDOT number. (This includes all
interstate private, exempt, for hire and passenger motor carriers.) A new motor
carrier must apply within 90 days after beginning operations. We have not yet
applied for our interstate authority or USDOT number.
There are other permits and authority filings which need to be obtained for a
motor carrier to travel inter-state. The extent of these permits and filings
depend on the specific states in which we will seek to be registered and the
loads that we will carry. These permits and authority filings include prorated
license plates, fuel tax permits, permits for oversized or overweight vehicles,
permits for the transportation of hazardous materials and, in some states,
inspections of diesel engines.
Page 11
The prototype small motor carrier envisioned for our program is typically an
independent trucking company with fewer than 10 trucks and 50 employees.
Exclusive of the capital cost of the trucks, the estimated cost required to
operate such an organization is from $4.0 to $7.0 million, annually. We believe
as much as $800,000 of such cost is related to indirect administrative cost. We
believe elimination, or sharp reduction, of such costs can create the potential
for improvement of profitability. To realize these cost savings, we will invest
between $15,000 and $25,000 of the proceeds from this offering in computer
equipment and software to create an intranet communication and control system to
be used among our affiliated providers (company-owned and franchised) to monitor
and control the operations, scheduling, reporting, compliance, billing,
collection and other operational aspects of the business.
As our franchise program (described above) evolves, management anticipates
royalty rates will range from 6% to 7.5% of gross revenues and an initial
franchise fee of $25,000. In addition, the franchisee would be required to
participate in an advertising program, 15% of which would be paid into the
national advertising fund and 85% spent locally. We anticipate the standard
franchise agreement to have an initial term of ten years and provide for
five-year renewal options.
We are also considering a program under which qualified franchisees would be
eligible to have their royalty rate reduced if they satisfy certain criteria.
Under this approach, franchisees are provided with an incentive to purchase
additional franchises. Any franchisee who has successfully operated under our
program for at least one year would be charged a reduced initial franchise fee
for subsequent franchises, provided certain conditions are met.
Upon non-renewal and transfer of a franchise, EZEE Rider would have the first
right to purchase the operating assets. The decision to make the purchase would
be made solely at management's discretion and would not be a contractual
obligation.
We are also considering the feasibility of master franchise agreements to
develop broader regional markets at a more aggressive pace. If implemented, the
master franchisee would pay a license fee and would be required to develop EZEE
Rider transportation centers in accordance with an agreed upon schedule within
the defined area.
Market
Management believes consolidation in the trucking industry allows for low
barriers of entry. Principally, the market for contracts among fragmented motor
carriers is broad. We believe there are thousands of small providers of freight
and brokerage services nationwide. The size of these organizations ranges from
individual agents and representatives to full service freight brokers. We also
believe the small fragmented motor carriers are having the most difficulty with
infrastructure issues such as load dispatching, licensing, billing, collection,
and other administrative services.
We will initially transact business in the western portion of the State of New
York. That area is our initial market area because that is where our president,
Morris Diamond, has most of his contacts and where we believe it will be most
cost efficient to develop freight contracts.
The pricing structure for transportation services provided by the trucking
industry has been deregulated and has become much more widely competitive in the
recent past as more and more small motor carriers have commenced operations. The
result is a very fragmented industry because there are a large number of
companies, both big and small, which service different segments of the market.
Some specialize in particular products, for example, automobiles or refrigerated
goods. Any company with funds can set up an operation to provide transport, but
we believe the keys are:
- - being able to attract desirable transportation contracts and determine that
the transport services align well with the hauling capability of the motor
carrier and the geographical area offering the greatest opportunity for a
high utilization rate of the transport capacity; and
- - delivering transport services so that a profit is made.
Page 12
Marketing
We intend to initially market our business concept to small motor carriers
through existing relationships with our President. Next, we intend to utilize a
marketing campaign to broaden the scope of services and generate additional new
business.
We intend to engage a marketing consultant to assist us with initiatives to
advertise and market our services. The coverage could include print (primarily
newspapers and trade journals), radio, television, internet, direct mail and
telemarketing. The choice as to which of these media to utilize has not been
decided and will be evaluated with the consultant based on the level of success
of this offering.
As we grow, our marketing is planned to be through a centralized management team
that will market, document, and service the transportation contracts. Through
centralization, efficiencies and consistency in delivery of services can be
achieved.
Our marketing objectives for companies we acquire or for franchisees are to
create identity, increase sales, and enhance customers' experiences and
retention.
Competition
The transportation industry is highly competitive. EZEE Rider will be in direct
competition with other motor freight carriers, including many companies that are
significantly larger than EZEE Rider. Direct competitors range from small
independent carriers to large nationally based motor carriers. Management
believes the principal competitive factors in the markets intended to be
serviced are location, name recognition, reputation, quality of service and
price. We intend to compete with these other carriers by attempting to provide
better and more timely service, and by targeting major shippers situated in
underserved territories. Our approach is to provide a competitive service at
lower prices.
Government Regulation
Our intended operations will be subject to federal, state and international laws
and regulations, including the regulations of the Federal Trade Commission as
well as similar authorities in individual states, in connection with the offer,
sale and termination of franchises and the regulation of the
franchisor/franchisee relationship. Generally, the sale of franchises requires
the preparation of a disclosure document, similar to a prospectus. Prior to the
offer or sale of the franchise, some states require that the disclosure document
be filed with the applicable state authority for review. In addition, some
states may require that we meet minimum capitalization requirements. At this
stage we do not know what those requirements, if any, will be. If we do not meet
the capitalization requirements, we may be required to post a bond. If we are
unable to post such a bond, we will not be able offer franchises in those
states. Some states require persons offering franchises to hold the franchise
fee in escrow or an impoundment until the franchisor's obligations have been
satisfied under the franchise agreement. If our capitalization is such that we
cannot afford to place the franchise fee in escrow or impoundment we will not be
able to offer franchises in those states.
Some states require filing of amendments to franchise documents in the event
there is a material change from the disclosure contained in such documents. If
we are required to file amended documents, we may not be able to offer or sell
franchises during the review period. Such delays could affect our ability to
offer and sell franchises.
In addition to filing disclosure documents in connection with the offer and sale
of franchises, we may be required to register selling agents.
The offer and sale of franchises may also be subject to the business opportunity
laws of certain states. If our franchise operations are subject to such laws, we
may be required to file disclosure documents with the applicable state agencies.
At this time, we are not sure how these laws will affect our operations, but any
such filing requirements may limit our ability to offer and sell franchises, in
which case, we may not be able to fulfill our business plan.
Page 13
We do not expect nor have we encountered any material effect from the discharge
of materials, compliance with rules and regulations of environmental agencies,
or capital expenditures for environmental control facilities. We do not intend
to store any quantities of oils and fluids. However, EZEE Rider or its
franchisees may become subject to various federal, state and local environmental
laws and regulations dealing with the transportation, storage, presence, use,
disposal and handling of hazardous materials and hazardous wastes. If any such
substances were improperly transported, released or stored on any of EZEE
Rider's property or the property of any franchisee, including leased properties,
or if we were found to be in violation of applicable environmental laws and
regulations, we could be responsible for clean-up costs, property damage and
fines or other penalties, any one of which could have a substantial negative
effect on our financial condition and results of operations.
Our trucking operations are expected to be subject to various state, local and
federal regulations that in many instances require permits and licenses. The
Interstate Commerce Commission regulates freight rates, the issuance of
operating permits, the authority to establish routes and types of commodities.
The Department of Transportation regulates safety and hazardous materials
issues.
All motor carriers operating in interstate or foreign commerce must have a USDOT
number. A new motor carrier must apply within 90 days after beginning
operations. There are also many other permits and authority filings for a motor
carrier to travel inter-state. The specific states of registration and the loads
being transported will ultimately determine what permits and filings will be
required.
We currently do not have any of these permits and licenses, and we have no
applications pending. The timing and extent of our application for these permits
and licenses will be governed by the nature of operations of the trucking
companies that are the target of our acquisition and franchise initiatives.
Multi-state fuel tax reporting is also required, generally on a quarterly basis.
The basis of the tax stems from trip information relative to the loads being
transported. Our failure to maintain required permits or licenses or to comply
with these laws and regulations could subject us to substantial fines or could
lead to the revocation of our authority to conduct certain of our operations.
Employees
EZEE Rider does not currently have any employees, consultants or independent
contractors. We expect to hire personnel as necessary for sales and marketing,
administration and operations. Following an acquisition of a trucking company,
we may operate with some independent contractors in operations.
We intend to be a non-union organization, however, should any segment of the
employee base of acquired or franchisee companies be represented in a collective
bargaining process, work interruptions may be threatened which could cause
cessation of operations with a corresponding adverse financial impact.
Where independent contractors are used, federal and state authorities could
challenge this position contending we are required to pay for and administer
added benefits to independent contractors.
Description Of Property
As of the date of this prospectus, we have no properties and have no agreements
to acquire any properties. We currently use the offices of Mr. Diamond, 2541
Monroe Avenue, Suite 304, Rochester, NY 14618, at no cost to EZEE Rider. Mr.
Diamond has agreed to continue this arrangement until we begin operations.
When operations commence, our need for office space will likely increase and we
intend to lease such space as needed. A portion of the proceeds from this
offering have been allocated to leasing office space once operations are
commenced (see "Use of Proceeds").
Page 14
Management Of EZEE Rider Corp.
The directors and officers of EZEE Rider, their ages, addresses and principal
positions are as shown in the following table. The term of office for directors
and officers continues until their successor is elected or appointed, and
qualifies.
Name and address Address Age Position with EZEE Rider
- ---------------- ------- --- ------------------------
Morris Diamond Business: 80 President and Director from
2541 Monroe Avenue-Suite 301 July 12, 2000 to date.
Rochester, NY 14618
Residence:
105 Southern Parkway
Rochester, NY 14618
Ms. Shirley Diamond Business: 77 Secretary and Director from
2541 Monroe Avenue-Suite 301 November15, 2000 to date.
Rochester, NY 14618 Residence:
105 Southern Parkway
Rochester, NY 14618
Mr. Martin L. Osber Business and Residence: 60 Director, from November 15,
221 Chartwell Court 2000 to date.
Rochester, NY 14618
Ms Shirley Diamond and Mr. Morris Diamond may be deemed to be "promoters" and
"control persons" of EZEE Rider, as that term in defined in the Securities Act
of 1933.
Morris Diamond has served as the President and a Director since the formation of
EZEE Rider in July 2000. He is also the Chief Operating Officer of Southward
Investments, LLC, a major shareholder - see "Principal Shareholders". Southward
Investments, LLC provides capital to small development stage enterprises through
equity investment and conventional lending arrangements. In calendar year 1999,
Southward Investments, LLC had annual income of approximately $400,000.
Southward Investments, LLC has no employees.
For the past five years, Mr. Diamond has been a self-employed business
consultant, acting as a sole proprietor, extensively involved in business
formation, mergers and acquisitions.
He has attended four years of college level courses at the Rochester Institute
of Technology, located in Rochester, New York. Mr. Diamond does not have an
undergraduate degree.
Initially, Mr. Diamond will not spend full time on the activities of EZEE Rider
since his current activities take up some of his time. These activities include
the financial and management consulting responsibilities he performs at this
time. He can devote more and more time to the activities of EZEE Rider as time
goes on since his financial and management consulting activities can be cut
back. Initially, he expects to spend 10 hours per week on the activities of EZEE
Rider and increase that weekly time as our activities increase. Mr. Diamond is
prepared to devote himself full time to the success of our plan of business as
the growth potential develops.
Mr. Diamond is the husband of Ms. Shirley Diamond.
Ms. Shirley Diamond has been the President of Tramdot Development Corporation, a
privately held company, for the past twenty years. Her responsibilities include
day to day oversight of Tramdot's operations. In the past, Tramdot Development
Corporation has constructed and operated shopping centers. Such shopping centers
have since been sold. Tramdot Development Corporation currently owns and
operates a commercial warehouse.
Ms. Diamond is the wife of Mr. Morris Diamond.
Mr. Martin L. Osber has over 35 years of small business management and
consulting experience with emphasis in the
Page 15
fields of new business development, tax auditing and planning, and financial
negotiation. For the past ten years, he has worked as a self-employed
consultant. As a sole proprietor, Mr. Osber has provided accounting, financial
planning, and business consulting services to small to medium-sized companies.
Directors And Executive Compensation
Our officers and directors have received no compensation and we have no
employment contracts with any of our officers and directors.
As of the date of this prospectus, there are no plans to pay any remuneration to
our officers and directors. However, officers and directors may be reimbursed
for out-of-pocket expenses. When we have funds and/or revenue from operations,
the board of directors will determine any remuneration at that time. No
remuneration is allocated to be paid from the proceeds of this offering.
Security Ownership Of Certain Beneficial Owners And Management
The following table lists the persons who, at the date hereof, own of record or
beneficially, directly or indirectly, more than 5% of the outstanding Common
Stock of EZEE Rider, and all our officers and directors:
Amount owned
Name of Owner Address before offering Percent(1)
------------- ------- --------------- ----------
Mr. Morris Diamond(2,3,4) 2541 Monroe Avenue-Suite 301 710,000 74.0%
Rochester, NY 14618
Ms. Shirley Diamond(2,3,4) 2541 Monroe Avenue-Suite 301 710,000 74.0%
Rochester, NY 14618
Mr. Martin L. Osber 221 Chartwell Court 20,000 2.1%
Rochester, NY 14618
All Officers and Directors as a 730,000 76.0%
group (3 persons)
Southward Investments, LLC. (3) 2541 Monroe Avenue 360,000 37.5%
Suite 301
Rochester, NY 14618
Michael Diamond (5) Business: 50,000 5.2%
P.O. Box 31525
Seattle, WA 98103 Residence:
3242 80th Avenue SE
Mercer Island, WA 98040
Rachelle Sukenik (5) Business and Residence: 50,000 5.2%
46 Moriah
NOF Ayalon, D.N Shimshon
Israel 99784
Suzanne Luxenberg (6) Business and Residence: 50,000 5.2%
20 Castlebar Road
Rochester, NY 14610
Chabad Center 1027 South Winton Road 50,000 5.2%
Rochester, NY 14618
ORA Academy 600 East Avenue 50,000 5.2%
Rochester, NY 14617
(1) Based on 960,000 shares of common stock outstanding on July 9, 2001.
Page 16
(2) Includes benefical ownership of 320,000 shares of common stock, shown both
for Morris and Shirley Diamond, comprised of children, grandchildren and
in-laws, as follows:
Rachelle Sukenik 50,000 Michael Diamond 50,000
Stephanie Luxenberg 20,000 Suzanne Luxenberg 50,000
Mahalia Diamond 20,000 Jessica Diamond 20,000
Yosef Sukenik 20,000 Shraga Sukenik 20,000
David Sukenik 20,000 Shira Hershoff 20,000
Alice Safier 30,000
(3) Includes 360,000 shares held by Southward Investments, LLC. Mr. Diamond is
the Chief Operating Officer of Southward Investments, LLC.
(4) Includes 30,000 shares held by Tramdot Development Corporation. Ms. Diamond
is the President of Tramdot Development Corporation.
(5) Owner is a child of Morris and Shirley Diamond.
(6) Owner is a grandchild of Morris and Shirley Diamond.
Interest Of Management And Others In Certain Transactions
As of the date of this prospectus, there have been no transactions and there are
no proposed transactions, whether direct or indirect, with any of the following:
- - a director or officer of EZEE Rider; - any principal security holder; - any
promoter of EZEE Rider; or - any relative or spouse, or relative of such spouse,
of the above referenced persons.
Description Of Securities
EZEE Rider is authorized to issue of up to 20,000,000 common shares, $.001 par
value per share. There are no other classes of stock. The following summary does
not purport to be complete. You may wish to refer to our articles of
incorporation and bylaws, copies of which are available for inspection. None of
the holders of our capital stock has preemptive rights or a right to cumulative
voting.
As of July 9, 2001, there were 960,000 shares of common stock issued and
outstanding. The board of directors may issue additional shares of common stock
without the consent of the common stockholders.
Voting Rights. Each outstanding share of common stock is entitled to one vote.
The common stockholders do not have cumulative voting rights, which means that
the holders of more than 50% of such outstanding shares voting for the election
of directors can elect all of the directors to be elected, if they so choose.
No Preemptive Rights. Holders of common stock are not entitled to any preemptive
rights.
Dividends And Distributions. Holders of common stock are entitled to receive
such dividends as may be declared by the directors out of funds legally
available for dividends and to share pro-rata in any distributions to holders of
common stock upon liquidation or otherwise. However, we have never paid cash
dividends on our common stock, and do not expect to pay such dividends in the
foreseeable future.
Capitalization. The following table sets forth our capitalization as of March
31, 2001. Our capitalization is presented on an actual basis and on a pro forma
basis to give effect to net proceeds from the sale of 25%, 50%, and 100% of the
number of shares (1,000,000) we plan to sell in this offering.
Page 17
- ------------------------------------------ ------------------ ---------------- ----------------- -----------------
Assuming 25% Assuming 50% of Assuming 100%
Actual as of of Offering Offering of Offering
Stockholders' equity March 31, 2000
- ------------------------------------------ ------------------ ---------------- ----------------- -----------------
Common Stock, $0.001 par value; $ 960 $ 1,210 $ 1,460 $ 1,960
20,000,000 shares authorized
Additional Paid In Capital 8,640 81,390 185,140
407,640
Deficit Accumulated in the (11,534) (11,534) (11,534)
Development Period (11,534)
- ------------------------------------------ ------------------ ---------------- ----------------- -----------------
- ------------------------------------------ ------------------ ---------------- ----------------- -----------------
Total Stockholders' Equity $ (1,934) $ 71,066 $ 175,066 $ 398,066
========================================== ================== ================ ================= =================
Plan Of Distribution
The shares offered hereby are being offered on a "best efforts" basis by
Platinum Investments Corporation as a non-exclusive selling agent for EZEE
Rider. No other selling agents have been retained or are intended to be retained
at the present time.
Platinum Investments Corporation was formed in early 2001. The principals of
Platinum Investments Corporation are Mr. Dominic Antonucci and Mr. Richard
Dercop. Previously Mr. Antonucci was the Branch Manager of First Equities
Corporation in Rochester NY and before that a retail trader for American First
Capital and Travis Morgan Securities. His experience includes retail brokerage,
investment banking and trading of securities. Previously, Mr. Dercop was with
Thomas White Securities and before that with Sunpoint Securities and other
brokerage firms as a retail trader. His experience principally consists of
offering retail brokerage services.
There are no relationships between EZEE Rider (or any of its officers and
directors) and Platinum Investments Corporation (or any of its officers and
directors).
Platinum Investments Corporation will receive a selling commission equal to 8%
of the initial public offering price ($0.04 per share) for all shares sold by
Platinum Investments Corporation.
All proceeds from the sale of the shares will be transmitted by noon of the next
business day following receipt thereof to EZEE Rider.
Prior to this offering, there has been no public market for the shares. The
price at which the our securities are being offered has been arbitrarily
determined by EZEE Rider Corp. There is no inherent relationship between the
offering price and the our assets, book value, net worth, or any other economic
or recognized criteria of value. The offering price of $0.50 per Share was
determined by EZEE Rider Corp. after considering, among other factors, the total
amount of capital required to conduct the proposed business of the Company, the
price per share which might be expected to be acceptable to subscribers, and
dilution to be experienced by subscribers.
Prior to this offering, Platinum Investments Corporation has not assisted EZEE
Rider in the offer or sale of any securities. We intend for the shares to only
be offered and sold in the State of New York.
We may provide Platinum Investments Corporation with a list of persons whom we
believe may be interested in purchasing shares in this offering. Platinum
Investments may sell a portion of the shares to any such person if he resides in
a state where the shares can be sold and where Platinum Investments can sell the
shares. Platinum Investments Corporation is not obligated to sell any shares to
any such person and will do so only to the extent that such sales would not be
inconsistent with the public distribution of the shares. We are unaware of any
person, including any affiliate, who intends to finance any portion of the
purchase price of the shares to be acquired in this offering. It is not intended
that the proceeds from this offering will be used, directly or indirectly, to
enable anyone to purchase shares.
Page 18
Method Of Subscribing
You may subscribe by completing and delivering our form of subscription
agreement to Platinum Investments Corporation. The subscription price of $0.50
per share must be paid by check, bank draft, or postal or express money order
payable in United States dollars to the order of EZEE RIDER CORP. Certificates
for shares of common stock subscribed for will be issued as soon as practicable
after termination of the offering. There is no minimum amount which must be
purchased by a subscriber.
Expiration Date
The subscription offer will expire October 7, 2001 or on such earlier date as we
shall determine in our discretion. In the event that all of the shares being
offered are not sold by October 7, 2001, we may extend the offering for up to an
additional 90 days.
Right To Reject
We reserve the right to reject any subscription in our sole discretion and to
withdraw this offer at any time prior to our acceptance of the subscriptions
received, if acceptance of a subscription would result in the violation of any
laws to which we are subject. In the case where we reject any subscription, the
subscriber will be notified by mail and the subscriber's money will be returned
no more than three business days following our receipt of the signed
subscription agreement and subscriber's funds.
No Escrow
We have not established an escrow account and we are employing the funds as they
are being raised. This offering is not subject to any minimum subscription
level, and therefore any funds received from a purchaser are available to us and
need not be refunded to the purchaser.
Transfer Agent
We will serve as our own transfer agent and registrar for the common stock until
such time as our registration on Form SB-1 is effective and then we intend to
retain American Registrar & Transfer Co., P.O. Box 1798, Salt Lake City, UT
84110.
Sec Position On Indemnification
Our bylaws provide that each officer and director of EZEE Rider shall be
indemnified by EZEE Rider against all costs and expenses actually and
necessarily incurred by him or her in connection with the defense of any action,
suit or proceeding in which he or she may be involved or to which he or she may
be made a party by reason of his or her being or having been such director or
officer, except in relation to matters as to which he or she has been finally
adjudged in such action, suit or proceeding to be liable for negligence or
misconduct in the performance of duty.
The indemnification provisions of our bylaws diminish the potential rights of
action which might otherwise be available to shareholders by affording
indemnification against most damages and settlement amounts paid by a director
in connection with any shareholders derivative action. However, there are no
provisions limiting the right of a shareholder to enjoin a director from taking
actions in breach of his fiduciary duty, or to cause EZEE Rider to rescind
actions already taken, although as a practical matter courts may be unwilling to
grant such equitable remedies in circumstances in which such actions have
already been taken. Also, because EZEE Rider does not presently have directors'
liability insurance and because there is no assurance that we will procure such
insurance or that if such insurance is procured it will provide coverage to the
extent directors would be indemnified under the provisions, we may be forced to
bear a portion or all of the cost of the director's claims for indemnification
under such provisions. If we are forced to bear the costs for indemnification,
the value of our stock may be adversely affected. In the opinion of the
Securities and Exchange Commission, indemnification for liabilities arising
under the Securities Act of 1933 is contrary to public policy and, therefore, is
unenforceable.
Page 19
Legal Matters
Certain matters relating to the legality of the Common Stock offered hereby will
be passed upon for us by Dill Dill Carr Stonbraker & Hutchings, P.C., 455
Sherman Street, Suite 300, Denver, CO 80231
Experts
The financial statements as of December 31, 2000, and for the fiscal period from
inception (July 12, 2000), of EZEE Rider included in this Prospectus have been
audited by Daniel J. Baier, CPA, P.C., independent certified public accountant,
as set forth in his report. The financial statements have been included in
reliance upon the authority of him as an expert in accounting and auditing.
Available Information
EZEE Rider has not previously been subject to the reporting requirements of the
Securities and Exchange Commission. We have filed with the Commission a
registration statement on Form SB-1 under the Securities Act with respect to the
Securities offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits and
schedules thereto. For further information with respect to us and our
securities, you should review the registration statement and the exhibits and
schedules thereto. Statements made in this prospectus regarding the contents of
any contract or document filed as an exhibit to the registration statement are
not necessarily complete. You should review the copy of such contract or
document so filed.
You can inspect the registration statement and the exhibits and the schedules
thereto filed with the commission, without charge, at the office of the
Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549. You
can also obtain copies of these materials from the public reference section of
the commission at 450 Fifth Street, NW, Washington, D.C. 20549, at prescribed
rates. You can obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The Commission maintains a web site on the
Internet that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the Commission at
HTTP://WWW.SEC.GOV.
Reports To Stockholders
As a result of filing the registration statement, we will become subject to the
reporting requirements of the Exchange Act, and will be required to file
periodic reports and other information with the Commission. We will furnish our
shareholders with annual reports containing audited financial statements
certified by independent public accountants following the end of each fiscal
year, and quarterly reports containing unaudited financial information for the
first three quarters of each fiscal year following the end of such fiscal
quarter.
Page 20
Financial Statements Page
Audited Financial Statements at December 31, 2000:
Report of Independent Certified Public Accountant 22
Balance Sheet at December 31, 2000 23
Statement of Loss from Inception (July 12, 2000) to December 31, 2000 24
Statement of Cash Flows from Inception (July 12, 2000) to December 31, 2000 25
Statement of Shareholders' Equity from Inception (July 12, 2000) to December 31, 2000 26
Footnotes to Financial Statements December 31, 2000 27 - 29
Unaudited Financial Statements at March 31, 2001:
Balance Sheet at March 31, 2001 30
Statement of Loss from Inception (July 12, 2000) to March 31, 2001 31
Statement of Cash Flows from Inception (July 12, 2000) to March 31, 2001 32
Statement of Shareholders' Equity from Inception (July 12, 2000) to March 31, 2001 33
Footnotes to Unaudited Financial Statements March 31, 2001 34
Page 21
2541 Monroe Avenue o Suite 304
Rochester, New York 14618
Daniel J. Baier, CPA, P.C. (716) 271-4550
Certified Public Accountant o Business and Financial Advisory Services
To the Shareholders of EZEE Rider Corp.
I have audited the accompanying balance sheet of EZEE Rider Corp. as
of December 31, 2000, and the related statements of loss, cash flows
and shareholders' equity for the period since inception (July 12,
2000) then ended. These financial statements are the responsibility
of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. I believe
that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of EZEE
Rider Corp. as of December 31, 2000, and the results of its
operations and its cash flows for the period since inception ended
December 31, 2000 in conformity with generally accepted accounting
principles.
/S/ DANIEL J. BAIER
----------------------------
Daniel J. Baier, CPA, P.C.
Rochester, New York
March 13, 2001
Page 22
EZEE Rider Corp. - A Development Stage Company
Balance Sheet
December 31, 2000
Assets
Cash $ 1,821
-------------------
Total Assets $ 1,821
===================
Liabilities and Shareholder's Equity
Accounts Payable $ 1,500
Taxes Payable 150
-------------------
Liabilities 1,650
-------------------
Common Stock - $.001 Par Value - 20,000,000 Shares Authorized - 960
960,000 Shares Outstanding
Paid In Capital 8,640
Deficit Accumulated In The Development Stage (9,429)
-------------------
Shareholder's Equity 171
-------------------
Total Liabilities and Shareholder's Equity $ 1,821
===================
See Accompanying Footnotes to Financial Statements
Page 23
EZEE Rider Corp. - A Development Stage Company
Statement of Loss
from Inception (July 12, 2000)
to December 31, 2000
Revenue $ -
------------------
Operating Expenses
Legal and Accounting Expense 9,000
Miscellaneous Expenses 279
Franchise Taxes 150
------------------
Total Operating Expenses 9,429
------------------
Net Loss $ (9,429)
==================
Average Shares of Common Stock Outstanding 725,000
==================
(Loss) per Common Share $ (0.01)
==================
See Accompanying Footnotes to Financial Statements
Page 24
EZEE Rider Corp. - A Development Stage Company
Statement of Cash Flows
from Inception (July 12, 2000)
to December 31, 2000
(Uses) /
Sources of Cash
Operating Cash Flow
(Loss) for period $ (9,429)
Less- Accounts Payable 1,500
Less- Franchise Taxes Payable 150
------------------
Net Cash Used By Operations (7,779)
------------------
Financing
Sale of Common Stock 9,600
------------------
Net Cash From Financing 9,600
------------------
Increase In Cash
Cash - Beginning
-
------------------
Cash - Ending $ 1,821
==================
Cash Paid for Interest
-
==================
Cash Paid for Income Taxes
-
==================
See Accompanying Footnotes to Financial Statements
Page 25
EZEE Rider Corp. - A Development Stage Company
Statement of Shareholders' Equity
from Inception (July 12, 2000) to
December 31, 2000
Deficit
Accumulated In
The Development
Number of Common Stock Paid In Stage
Shares Capital Total
Balance at Inception (July 12, 2000)
Sale of Common Stock 960,000 $ 960 $ 8,640 $ 9,600
Deficit for the period from Inception $ (9,429) (9,429)
to December 31, 2000
--------------------------------------------------------------------------
Balance at December 31, 2000 960,000 $ 960 $ 8,640 $ (9,429) $ 171
==========================================================================
See Accompanying Footnotes to Financial Statements
Page 26
EZEE Rider Corp. - A Development Stage Company
Footnotes to Financial Statements
December 31, 2000
Note 1 - Organization And Summary Of Significant Accounting Policies
Organization:
EZEE Rider Corp. was formed for the purpose of becoming a
transportation freight amalgamator arranging for the hauling
freight by other small motor carriers with its sole office located
in Rochester, New York. EZEE Rider's fiscal year ends on December
31.
EZEE Rider intends to evolve its business to amalgamate the
transport capacity of numerous small common and contract general
commodities motor freight carriers in the 48 contiguous United
States. EZEE Rider presently does not intend to operate its own
tractors and trailers.
Development Stage Operations:
EZEE Rider is in its start-up phase and has no operating history.
From inception (July 12, 2000) to December 31, 2000, EZEE Rider
has not recognized any revenue; also, EZEE Rider has not
capitalized any costs associated with its start-up.
Estimates:
Management uses estimates and assumptions in preparing financial
statements. These estimates and assumptions affect the reported
amounts of assets and liabilities, and the reported revenues and
expenses. Actual results could differ from those estimates.
Comprehensive Net Income/Loss:
EZEE Rider's financial statements reflect no items comprising
other comprehensive income or loss as prescribed by Statement of
Financial Accounting Standard ("SFAS") No. 130 - Reporting
Comprehensive Income. Accordingly, the loss shown in the Statement
of Loss is equivalent to the comprehensive net loss.
Loss Per Common Share:
EZEE Rider's basic and diluted loss per share are substantially
equivalent and are computed by dividing the net loss for the
period by the average number of common shares outstanding for the
period.
Revenue Recognition:
EZEE Rider has not recognized any revenue as it is in the early
stage of its start-up of operations.
Cash:
Cash consists of cash on deposit at a financial institution.
Page 27
Note 2 - Development Stage Operations
EZEE Rider is in its start-up phase and has no operating history.
EZEE Rider's business is subject to most of the risks inherent in
the establishment of a new business enterprise. The likelihood of
success of EZEE Rider must be considered in light of the expenses,
difficulties, delays and unanticipated challenges encountered in
connection with the formation of a new business, raising operating
and development capital, and the marketing of a new product.
EZEE Rider presently does not have sufficient liquid assets to
finance its anticipated funding needs and obligations. If
fundraising activities are not successfully completed, EZEE Rider
may not be able to meet its obligations as they become due and,
accordingly, may not be able to continue its business operations
as presently anticipated.
Note 3 - Related Parties
There are no related party transactions except for the issuance of
common stock to the President of EZEE Rider (see Note 4).
Note 4 - Common Stock
EZEE Rider has a single class of Common Stock with a par value of
$0.001 per share. There are 20 million shares authorized, and at
December 31, 2000, 960,000 shares were issued and outstanding.
Of the total 960,000 shares of stock issued, 710,000 shares have
been issued to or are attributable to the President of EZEE Rider.
The shares of stock were issued without registration in reliance
on an exemption in federal securities laws that permits issuance
of stock up to $1 million without registration of the securities.
Note 5 - Income Taxes
Income taxes consist solely of state franchise taxes payable.
EZEE Rider has not recognized any provision for the tax benefits
associated with its loss from inception to December 31, 2000. Such
loss may be carried forward for tax-return purposes. However, EZEE
Rider is unable to predict the nature, timing and extent of
near-term profitability; accordingly EZEE Rider presently intends
to recognize such carryforward benefits when realized.
There are no items comprising deferred income taxes.
Page 28
A reconciliation of the effective tax rate versus the statutory
tax rate is as follows:
Net Loss $9,429
==============
==============
Tax benefit at statutory rate (15%) $1,414
Unrecorded tax benefit (see above) (1,414)
--------------
--------------
Tax benefit recorded in financial statements
$ -
==============
Page 29
EZEE Rider Corp. - A Development Stage Company
Unaudited Balance Sheet
March 31, 2001
Assets
Cash $ 1,566
--------------
Total Assets $ 1,566
==============
Liabilities and Shareholder's Equity
Accounts Payable $ 1,500
Shareholder Loan 2,000
--------------
--------------
Liabilities 3,500
--------------
Common Stock - $.001 Par Value - 20,000,000 Shares Authorized 960
- 960,000 Shares Outstanding
Paid In Capital 8,640
Deficit Accumulated in the Development Stage
(11,534)
--------------
Shareholder's Equity (1,934)
--------------
--------------
Total Liabilities and Shareholder's Equity $ 1,566
==============
See Accompanying Footnotes
Page 30
EZEE Rider Corp. - A Development Stage Company
Unaudited Statement of Loss
from Inception (July 12, 2000)
to March 31, 2001
For the Period
since Inception For the Three
(July 12, 2000) to Months Ended March
March 31, 2001 31, 2001
Revenue $ - $ -
------------------------------------------
Operating Expenses
Legal and Accounting Expense 10,516 1,516
Miscellaneous Expenses 868 589
Franchise Taxes 150 -
------------------------------------------
Total Operating Expenses 11,534 2,105
------------------------------------------
Net Loss $ (11,534) $ (2,105)
==========================================
Average Shares of Common Stock Outstanding 803,333 960,000
==========================================
(Loss) per Common Share $ (0.01) $ (0.00)
==========================================
See Accompanying Footnotes
Page 31
EZEE Rider Corp. - A Development Stage Company
Unaudited Statement of Cash Flows
from Inception (July 12, 2000)
to March 31, 2001
For the Period
since Inception For the Three
(July 12, 2000) to Months Ended March
March 31, 2001 31, 2001
(Uses) / Sources of Cash
Operating Cash Flow
(Loss) for period $ (11,534) $ (2,105)
Less- Accounts Payable 1,500
Less- Franchise Taxes Payable (150)
-----------------------------------------
Net Cash Used By Operations (10,034) (2,255)
-----------------------------------------
Financing
Shareholder Loan 2,000 2,000
Sale of Common Stock 9,600
-----------------------------------------
Net Cash From Financing 11,600 2,000
-----------------------------------------
Increase In Cash 1,566 (255)
Cash - Beginning 1,821
-
-----------------------------------------
Cash - Ending $ 1,566 $ 1,566
=========================================
Cash Paid for Interest $ - $ -
=========================================
Cash Paid for Income Taxes $ - $ -
=========================================
See Accompanying Footnotes
Page 32
EZEE Rider Corp. - A Development Stage Company
Unaudited Statement of Shareholders' Equity
from Inception (July 12, 2000) to
March 31, 2001
Number of Common Stock Paid In Deficit Total
Shares Capital Accumulated
In The
Development
Stage
Balance at Inception (July 12, 2000)
Sale of Common Stock $ 96 $ 9,504 $ 9,600
960,000
Deficit for the period from $ (9,429)
Inception to December 31, 2000 (9,429)
--------------------------------------------------------------------------
Balance at December 31, 2000
960,000 96 9,504 (9,429) 171
--------------------------------------------------------------------------
Deficit for the period from January 1, (2,105) (2,105)
2001 to March 31, 2001
--------------------------------------------------------------------------
Balance at March 31, 2001 $ 96 $ 9,504 $ (1,934)
960,000 (11,534)
==========================================================================
See Accompanying Footnotes
Page 33
EZEE Rider Corp. - A Development Stage Company
Footnotes to Unaudited Financial Statements
March 31, 2001
1. Interim Financial Statements
The accompanying unaudited, condensed financial statements for the three
month period ended March 31, 2001 has been prepared in accordance with the
instructions for SEC Form 10-QSB and, accordingly, do not include all
disclosures required by generally accepted accounting principles for
complete financial statements.
.
In the opinion of management of EZEE Rider Corporation, all adjustments,
consisting of normal recurring accruals considered necessary for a fair
presentation, have been included.
Interim unaudited financial results should be read in conjunction with the
audited financial for the period since inception to December 31, 2000.
The results of operations for the three months ended March 31, 2001are not
necessarily indicative of the operating results to be expected for the
fiscal year ending on December 31, 2001.
2. Shareholder Loans
On March 26, 2001, Southward Investments LLC (the principal shareholder)
loaned EZEE Rider Corporation $2,000. The terms of the loan include
interest at 7.5% on the unpaid balance and repayment by December 31, 2001.
On April 25, 2001, Southward Investments LLC (the principal shareholder)
loaned EZEE Rider Corporation an additional $1,000. The terms of the loan
also include interest at 7.5% on the unpaid balance and repayment by
December 31, 2001.
3. Subsequent Event
As described in Note 2, on April 25, 2001, Southward Investments LLC (the
principal shareholder) loaned EZEE Rider Corporation an additional $1,000.
Page 34
[OUTSIDE BACK COVER PAGE]
No dealer, salesman or any other person has been authorized to give any
quotation or to make any representations in connection with the offering
described herein, other than those contained in this Prospectus. If given or
made, such other information or representation, must not be relied upon as
having been authorized by EZEE Rider Corp. or by any Underwriter. This
Prospectus does not constitute an offer to sell, or a solicitation of an otter
to buy any securities offered hereby in any jurisdiction to any person to whom
it is unlawful to make such an offer or solicitation in such jurisdiction.
Dealer Prospectus Delivery Obligation
Until October 7, 2001, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
Page 35