UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2001
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________to___________
Commission file number 333-50472
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EZEE RIDER CORP.
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(Exact name of small business issuer as specified in its charter)
Delaware 16-1591048
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2541 Monroe Avenue, Suite 301, Rochester, NY 14618
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(Address of principal executive offices)
(716) 244-1840
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(Issuer's telephone number)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 960,000 shares of common stock, as of
August 20, 2001.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
EZEE Rider Corp. - A Development Stage Company
Balance Sheets
June 30, 2001
(Unaudited) December 31, 2000
Assets
Cash $ 1,952 $ 1,821
------------------- -------------------
Total Assets $ 1,952 $ 1,821
=================== ===================
Liabilities and Shareholder's Equity
Accounts Payable $ 1,500 $ 1,500
Taxes Payable 150
-
Shareholder Loan
5,655 -
------------------- -------------------
Liabilities
7,155 1,650
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Common Stock
960 960
Paid In Capital
8,640 8,640
Deficit Accumulated in the Development Stage
(14,803) (9,429)
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Shareholder's Equity
(5,203) 171
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Total Liabilities and Shareholder's Equity $ 1,952 $ 1,821
=================== ===================
The accompanying Notes to Financial Statements are an integral
part of these financial statements.
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EZEE Rider Corp. - A Development Stage Company
Statements of Operations
For the Period
For the Three For the Six Months since Inception
Months Ended June Ended June 30, (July 12, 2000)
30, 2001 2001 to June 30,
(Unaudited) (Unaudited) 2001 (Unaudited)
----------- ----------- -----------
Revenue $ - $ - $ -
------------------ ------------------ -----------------
Expenses
Legal and Accounting Expense 3,030 4,546 13,546
Miscellaneous Expenses 239 828 1,107
Franchise Taxes - - 150
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Total Expenses 3,269 5,374 14,803
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Net Loss $ (3,269) $ (5,374) $(14,803)
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Average Shares of Common Stock Outstanding 960,000 960,000 842,500
================== ================== =================
(Loss) per Common Share $ (0.00) $ (0.01) $ (0.02)
================== ================== =================
The accompanying Notes to Financial Statements are an integral
part of these financial statements.
Page 2
EZEE Rider Corp. - A Development Stage Company
Statements of Cash Flows
For the Period
For the Three For the Six since Inception
Months Ended June Months Ended June (July 12, 2000)
30, 2001 30, 2001 to June 30, 2001
(Uses) / Sources of Cash (Unaudited) (Unaudited) (Unaudited)
------------------------- ----------- ----------- -----------
Operating Cash Flow
(Loss) for period $ (3,269) $ (5,374) $(14,803)
Less- Accounts Payable 1,500
- -
Less- Franchise Taxes Payable (150) -
-
----------------- ----------------- ------------------
Net Cash Used By Operations (3,269) (5,524) (13,303)
----------------- ----------------- ------------------
Financing
Shareholder Loan 3,655 5,655 5,655
Sale of Common Stock 9,600
- -
----------------- ----------------- ------------------
Net Cash From Financing 3,655 5,655 15,255
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Increase In Cash 386 131 1,952
Cash - Beginning 1,566 1,821 -
----------------- ----------------- ------------------
Cash - Ending $ 1,952 $ 1,952 $ 1,952
================= ================= ==================
Cash Paid for Interest $ - $ - $ -
================= ================= ==================
Cash Paid for Income Taxes $ - $ - $ -
================= ================= ==================
The accompanying Notes to Financial Statements are an integral
part of these financial statements.
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EZEE Rider Corp. - A Development Stage Company
Notes To Financial Statements
June 30, 2001
1. Interim Financial Presentation
The accompanying unaudited, condensed, balance sheet as of June 30, 2001
and statements of operations and cash flows for the three and six month
periods then ended and for the period since inception (July 12, 200) have
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, 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 statements included in the Company's Registration
Statement on Form SB-1, Amendment No. 4.
The results of operations for the three and six months ended June 30, 2001
are not necessarily indicative of the operating results to be expected for
the full fiscal year ending on December 31, 2001.
2. Shareholder Loans
Southward Investments LLC (the principal shareholder) has loaned EZEE Rider
Corporation $7,455 as shown in the table below. The terms of each of the
loans include interest at 7.5% on the unpaid balance and repayment by
December 31, 2001.
Date Amount
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March 26, 2001 $ 2,000
April 25,2001 1,000
May 3, 2001 1,500
May 31, 2001 200
June 13, 2001 955
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Subtotal - June 30, 2001 5,655
July 27, 2001 1,800
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Total shareholder loans $ 7,455
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3. Registration of Common Stock
On July 9, 2001, the Company's registration statement for the sale of
1,000,000 shares of common stock was declared effective by the Securities
and Exchange Commission. The Company is in the initial stage of its direct
offering, and as of the date of this filing, none of the shares covered by
the registration statement has been sold to the public.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
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.
Registration Statement
On July 9, 2001, our registration statement was declared effective by the
Securities and Exchange Commission. We, through Platinum Investments
Corporation, are offering 1,000,000 shares of common stock at a price of $0.50
per share, for total gross proceeds of $500,000, with net proceeds of
approximately $460,000. As of the date of this report, no shares have been sold
in the offering.
Plan of Operations
Our plan of operation for the twelve months following the date of this report is
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:
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- - 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. 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.
In order to implement our plan of operations, 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.
We are currently undercapitalized. Our plan of operations is based upon the
amount of capital we raise in our public offering. We intend to satisfy our
liquidity needs during the foreseeable future by advances from shareholders and
through the sale of stock in the public offering. Our business plan anticipates
a minimum capitalization of $125,000 (25% of the offering amount).
Page 6
Assuming we raise 25% of the total offering amount, 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 offering amount,
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 report. 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 offering amount, 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 offering amount, 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, 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 offering amount, 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 the 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.
Results of Operations
We believe that our financial condition and results of operations included in
this report are not indicative of our future prospects. During the three and six
months ended June 30, 2001 we have been in the early stage of operations
development. Our focus has been primarily directed toward preparing our
registration statement for the sale of common stock to enable us to execute our
business plan, as described above.
During the three and six months ended June 30, 2001, our cash position remained
relatively constant. During the three and six months ended June 30, 2001, we had
no revenues and our net loss was $3,269 and $5,374, respectively. Our ability to
pay ongoing expenses was met by loans from our principal shareholder.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
Page 7
ITEM 2. CHANGES IN SECURITIES.
In November 2000, we filed a registration statement with the SEC to sell
1,000,000 shares of our common stock at $0.50 per share. Our registration
statement was declared effective by the SEC on July 9, 2001, file number
333-50472.
As of the date of this report, the offering has not commenced. We are attempting
to obtain approval from the National Association of Securities Dealers to have
our stock quoted on the Over-the-Counter Bulletin Board and intend to commence
the offering after we receive such approval. There is no assurance that our
stock will be cleared for quotation on the OTC-BB. Therefore, as of the date of
this report, none of the shares covered by the registration statement have been
sold to the public.
As of the June 30, 2001, we had incurred $13,876 in expenses in connection with
the offering. Those expenses include the following:
Legal $10,331
Accounting 2,500
Filing fees 1,045
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Total $13,876
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None of the expenses incurred in connection with the offering were, directly or
indirectly, to any of our directors or officers, their associates, any persons
owning ten percent or more of our outstanding common shares or other affiliates
of EZEE Rider. All of the expenses incurred were, directly or indirectly, to
other persons or entities. However, Southward Investments LLC (a shareholder
owning more than ten percent of our outstanding shares and controlled by an
officer and director of EZEE Rider) has loaned EZEE Rider funds to pay expenses
until proceeds of the offering are available. It is anticipated that the loan
from Southward Investments LLC will be repaid from the proceeds of the offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
Exhibit No. Identification of Exhibit
3.1 - Articles of Incorporation (1)
3.2 - By Laws (1)
11.1 - Statement re: computation of per share earnings (2)
(1) Documents included as Exhibits to Form SB-1, filed on November 22, 2000.
(2) See Part I - Financial Statements.
(b) REPORTS ON FORM 8-K.
We did not file any reports on Form 8-K during the period covered by this
report.
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SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: August 22, 2001
EZEE Rider Corp.
By: /s/ Morris Diamond
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Morris Diamond
President (Principal Financial and
Accounting Officer)
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