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 September 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
November 1, 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
September 30, 2001 December 31, 2000
(Unaudited)
-----------------------------------------
Assets
Cash $ 1,914 $ 1,821
- -
------------------- -------------------
Total Assets $ 1,914 $ 1,821
=================== ===================
Liabilities and Shareholder's Equity
Accounts Payable $ 1,500 $ 1,500
Taxes Payable
- 150
Shareholder Loan
6,285 -
------------------- -------------------
Liabilities
7,785 1,650
------------------- -------------------
Common Stock
960 960
Paid In Capital
8,640 8,640
Deficit Accumulated in the Development Stage
(15,471) (9,429)
------------------- -------------------
Shareholder's Equity
(5,871) 171
------------------- -------------------
- -
------------------- -------------------
Total Liabilities and Shareholder's Equity $ 1,914 $ 1,821
=================== ===================
The accompanying Notes to Financial Statements are an integral part of these
financial statements.
Page 1
EZEE Rider Corp. - A Development Stage Company
Statements of Operations
For the Three For the Three For the Nine For the Period
Months Ended Months Ended Months Ended since Inception
September 30, 2001 September 30, 2000 September 30, 2001 (July 12, 2000)
(Unaudited) (Unaudited) (Unaudited) to September
30, 2001
(Unaudited)
Revenue $ - $ - $ - $ -
----------------- ----------------- ----------------- -----------------
Expenses
Legal and Accounting Expense
630 1,400 5,176 14,176
Miscellaneous Expenses
39 13 867 1,145
Franchise Taxes
- 100 - 150
----------------- ----------------- ----------------- -----------------
Total Expenses
669 1,513 6,043 15,471
----------------- ----------------- ----------------- -----------------
Net Loss $ (669) $ (1,513) $ (6,043) $ (15,471)
================= ================= ================= =================
Average Shares of Common Stock Outstanding
960,000 490,000 960,000 866,000
================= ================= ================= =================
(Loss) per Common Share $ (0.00) $ (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
(Uses) / Sources of Cash For the Three For the Three For the Nine For the Period
Months Ended Months Ended Months Ended since Inception
September 30, September 30, 2000 September 30, (July 12, 2000)
2001 (Unaudited) (Unaudited) 2001 (Unaudited) to September
30, 2001
(Unaudited)
Operating Cash Flow
(Loss) for period $ (669) $ (1,513) $ (6,043) $ (15,471)
Less- Accounts Payable
- 1,413 - 1,500
Less- Franchise Taxes Payable
- 100 (150) -
------------------ ------------------ ----------------- -----------------
Net Cash Used By Operations
(669) - (6,193) (13,971)
------------------ ------------------ ----------------- -----------------
Financing
Shareholder Loan
630 6,285 6,285
Sale of Common Stock
- 7,800 - 9,600
------------------ ------------------ ----------------- -----------------
Net Cash From Financing
630 7,800 6,285 15,885
------------------ ------------------ ----------------- -----------------
Change in Cash
(39) 7,800 92 1,914
Cash - Beginning
1,953 - 1,821 -
------------------ ------------------ ----------------- -----------------
Cash - Ending $ 1,914 $ 7,800 $ 1,914 $ 1,914
================== ================== ================= =================
Cash Paid for Interest $ - $ - $ - $ -
================== ================== ================= =================
Cash Paid for Income Taxes $ - $ - $ - $ -
================== ================== ================= =================
The accompanying Notes to Financial Statements are an integral part of these
financial statements.
Page 3
EZEE Rider Corp. -- A Development Stage Company
Notes To Financial Statements
September 30, 2001
1. Interim Financial Presentation
The accompanying unaudited, condensed, balance sheet as of September 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, 2000)
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 nine months ended September 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 $8,085 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
March 26, 2001 $ 2,000
April 25,2001 1,000
May 3, 2001 1,500
May 31, 2001 200
June 13, 2001 955
July 27, 2001 1,800
September 21, 2001 630
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Total shareholder loans $ 8,085
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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. On October 7, 2001, the Company extended the
offering for an additional 90 day period and, as of the date of this
filing, none of the shares covered by the registration statement has been
sold to the public.
Page 4
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 and, on October 7, 2001, we extended the
offering for an additional 90 day period. 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:
Page 5
- 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.
To date we have not sold any of our stock in the offering. Below the
success level of 25% in this offering, our ability to execute our business
plan could be impaired due to a lack of available cash and our ability to
continue our business could be adversely impacted.
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 nine months ended September 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 nine months ended September 30, 2001, our cash
position remained relatively constant. During the three and nine months
ended September 30, 2001, we had no revenues and our net loss was $669 and
$6,043, respectively. Our ability to pay ongoing expenses was met by loans
from our principal shareholder.
Southward Investments LLC (the principal shareholder) has loaned us $8,085,
which is to be repaid from the proceeds of our offering.
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. On October 7, 2001, we extended the offering for an additional
90 day period.
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 September 30, 2001, we had incurred $15,775 in expenses in
connection with the offering. Those expenses include the following:
Legal $12,230
Accounting 2,500
Filing fees 1,045
-----------------
Total $15,775
=================
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.
Page 8
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Dated: November 13, 2001
EZEE Rider Corp.
By: /s/ Morris Diamond
Morris Diamond
President (Principal Financial and
Accounting Officer)
Page 9