UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3 to
FORM 10-K/A
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 2009
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ____________
Commission file number 0-53810
EZJR, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 20-0667864
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(State of incorporation) (I.R.S. Employer ID No.)
2235 E. Flamingo, Suite 114, Las Vegas, NV 89119
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(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (702) 631-4251
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No
Indicate by checkmark whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [ ] No [X]
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
[ ] Large accelerated filer [ ] Accelerated filer
[ ] Non-accelerated filer [X] Smaller reporting company
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes[ ] No [X]
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was last sold, or the average bid and asked price of such common equity,
as of the last business day of the registrant's most recently completed second
fiscal quarter:
The Registrant's stock is listed on the Grey Sheets, where no trades have
taken place.
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date:
As of September 17, 2010, there were 10,873,750 shares of the issuers Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
Explanatory Note
----------------
We are filing this Amendment No. 3 on Form 10-K/A for the year ended June 30,
2009 to amend the Form 10-K/A filed with the U. S. Securities and Exchange
Commission on May 27, 2010 and amended on July 27, 2010. We are filing this
amendment for the purpose of providing corrected information concerning our
Controls and Procedures under Item 9A. We also want to clarify that the
original Form 10-K was not filed by the registrant who filed this amended
Form 10.
Unless otherwise expressly stated, this Amendment No. 3 does not reflect events
occurring after the filing of the original Form 10-K, or modify or update in
any way disclosures contained in the original Form 10-K.
INDEX
Title Page
ITEM 1. BUSINESS 5
ITEM 2. PROPERTIES 21
ITEM 3. LEGAL PROCEEDINGS 21
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 21
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 22
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 23
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 27
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 28
ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES 28
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 32
ITEM 11. EXECUTIVE COMPENSATION 35
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, 37
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 38
AND DIRECTOR INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 39
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 40
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FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements other than
statements of historical fact are "forward-looking statements" for purposes
of federal and state securities laws, including, but not limited to, any
projections of earnings, revenue or other financial items; any statements of
the plans, strategies and objections of management for future operations; any
statements concerning proposed new services or developments; any statements
regarding future economic conditions or performance; any statements or
belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words "may," "could," "estimate,"
"intend," "continue," "believe," "expect" or "anticipate" or other similar
words. These forward-looking statements present our estimates and assumptions
only as of the date of this report. Accordingly, readers are cautioned not to
place undue reliance on forward-looking statements, which speak only as of
the dates on which they are made. We do not undertake to update forward-
looking statements to reflect the impact of circumstances or events that
arise after the dates they are made. You should, however, consult further
disclosures we make in future filings of our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Although we believe that the expectations reflected in any of our forward-
looking statements are reasonable, actual results could differ materially
from those projected or assumed in any of our forward-looking statements. Our
future financial condition and results of operations, as well as any forward-
looking statements, are subject to change and inherent risks and
uncertainties. The factors impacting these risks and uncertainties include,
but are not limited to:
o inability to raise additional financing for working capital;
o inability to locate new medical devices and integrate these products into
our organization;
o deterioration in general or regional economic, market and political
conditions;
o the fact that our accounting policies and methods are fundamental to how
we report our financial condition and results of operations, and they may
require management to make estimates about matters that are inherently
uncertain;
o adverse state or federal legislation or regulation that increases the costs
of compliance, or adverse findings by a regulator with respect to existing
operations;
o changes in U.S. GAAP or in the legal, regulatory and legislative
environments in the markets in which we operate;
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o inability to efficiently manage our operations;
o inability to achieve future operating results;
o our ability to recruit and hire key employees;
o the inability of management to effectively implement our strategies and
business plans; and
o the other risks and uncertainties detailed in this report.
In this form 10-K references to "EZJR", "the Company", "we," "us," and "our"
refer to EZJR, Inc.
AVAILABLE INFORMATION
We file annual, quarterly and special reports and other information with the
SEC. You can read these SEC filings and reports over the Internet at the
SEC's website at www.sec.gov. You can also obtain copies of the documents at
prescribed rates by writing to the Public Reference Section of the SEC at 100
F Street, NE, Washington, DC 20549 on official business days between the
hours of 10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for
further information on the operations of the public reference facilities. We
will provide a copy of our annual report to security holders, including
audited financial statements, at no charge upon receipt of a written
request to us at EZJR, Inc., 3415 Ocatillo Mesa Way, North Las Vegas,
NV 89031.
4
PART I
ITEM 1. BUSINESS
History and Organization
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EZJR, Inc., was organized by the filing of Articles of Incorporation
with the Secretary of State of the State of Nevada on December 30, 2005.
On July 25, 2008, EZJR, Inc., a Nevada corporation and IVPSA Corporation,
entered into an Acquisition Agreement and Plan of Merger. Immediately after
the acquisition was consummated, the two major shareholders of the Company,
in a private transaction, paid the original EZJR founder $4,000 for all of
his stock in EZJR. Upon the execution of private transaction to purchase
this stock, all of the original founder's shares in EZJR were returned to the
corporate treasury, without consideration and cancelled on the corporate
books.
Pursuant to Rule 12g-3(g) of the General Rules and Regulations of the
securities and Exchange Commission, IVP is the successor issuer to EZJR for
reporting purposes under the Securities Exchange Act of 1934, as amended (the
"Act"). The purpose of this transaction was for IVP to succeed to the
registration status of EZJR under the Exchange Act pursuant to Rule 12g-3.
EZJR, a reporting company was not engaged in any business. It was
incorporated for the purpose of becoming a fully reporting company and
subsequently finding a merger candidate. IVP's sole director and officer
became the sole director and officer of the surviving corporation. The sole
director and officer of EZJR resigned. Pursuant to the Acquisition Agreement
and Plan of Merger the Registrant did not change its corporate name following
the merger. The name of the Registrant remains EZJR, Inc. A copy of the
Merger Agreement and Certificate of Merger are incorporated by reference (See
Current Report on Form 8-K filed on July 28, 2008, with the U. S. Securities
and Exchange Commission.)
Our Business
- ------------
EZJR, Inc. is a development stage medical device company which plans to
produce medical devices, utilizing the services contract manufacturing
facilities. EZJR does not have the resources to conduct any required
clinical trails to obtain FDA approval. Therefore, EZJR plans to outsource
this task to third parties who have the facilities to conduct any required
clinical trials. EZJR also plans to subcontract the manufacturing and
production process of any future medical device to a FDA approved contract
manufacturing facility which can produce sterile medical devices under Good
Manufacturing Practices. The company plans to distribute its product(s) into
the marketplace through medical supply wholesalers, hospitals and health
maintenance organizations.
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Exclusive Option Agreement
- --------------------------
EZJR entered into an "Exclusive Option Agreement" with the Cleveland Clinic,
Cleveland, Ohio, on March 15, 2007 to investigate and conduct due diligence
with respect to the commercial viability of the licensable technology prior to
executing a formal License Agreement. The technology consists of a central
line catheter with the ability to access the jugular bulb. The jugular bulb
is part of the internal jugular vein that collects the blood from the brain,
from the superficial parts of the face, and from the neck. This catheter was
invented by a physician at the Cleveland Clinic. The Company paid the
Cleveland Clinic, a nonrefundable fee of $46,000 for this exclusive option
agreement. The agreement terminated in March, 2009. EZJR has not renewed
this option agreement or entered into any licensing agreement with the
Cleveland Clinic. EZJR has been unable to find a contract manufacturer who
can handle the technical design of this proposed catheter.
Central line catheter product
- -----------------------------
Most patients in the neuro critical care setting as well as patients
undergoing neurovascular procedures receive a central line catheter. Jugular
bulb oxygen saturation monitoring is a well established method used in
neurosurgical intensive care, particularly in context of head injury.
Jugular Bulb Saturation measures the efficiency of oxygen use by the brain.
Currently, catheters for measuring jugular venous oxygen saturation are
inserted into the jugular vein in a cephalad (toward the head) direction, with
an catheter accessing the jugular bulb. The cephalad method is complex,
time-consuming and could lead to complications. Traditionally,
anesthesiologists and critical care physicians use caudad (toward the feet)
catheter insertion to access the central venous system. The fear of
complications with introducing a catheter towards the brain has discouraged
the clinicians in using this monitoring method.
A potential benefit that might be achieved after the development of this
catheter will provide anesthesiologists a method for double catheterization
(inserting both caudad and cephalad catheters) all within one catheter. In
other words, this design provides for one catheter to monitor a patient's
vital signs, as compared to using two catheters for the same meansurements.
This proposed catheter will give access to the blood exiting the brain,
which can help the anesthesiologist monitor brain metabolism and its
byproducts. Such information is important to neuro-critical care units and
intracranial vascular surgical procedures. This method has also been
suggested for monitoring the brain in cardiac surgical procedures.
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Prototype Development
- ---------------------
EZJR has yet to find a contract manufacturer who can build a working
prototype of this catheter. In order to continue with this project, EZJR
needs a working prototype that can be readily duplicated by a contract
manufacturer at a reasonable price. In November, 2007, EZJR signed a
purchase order with Interplex Medical LLC of Midford, OH, to help the Company
develop this working prototype. The terms of the purchase order require that
EZJR pays up to $25,000 for the development of a prototype catheter. Their
engineers were unable to successfully build this prototype. If a working
prototype cannot be built, there would be no reason to proceed in attempting
to bring this medical device to the market.
The difficulty in building a double catheterization prototype of this catheter
rests in its design. It is a catheter within a catheter. The catheter inside
the larger catheter must make a 180 degree turn without crimping its opening
to server its purpose. In other words, blood must be able to pass within the
inner catheter without any blockage, after the inner catheter has made a 180
turn. We have been unable to produce a working catheter which successfully
meets these design specifications.
Existing or Probable Government Regulations
- -------------------------------------------
An investigational device exemption ("IDE") allows the investigational device
to be used in a clinical study in order to collect safety and effectiveness
data required to support a Premarket Approval ("PMA") application or a
Premarket Notification submission to Food and Drug Administration ("FDA").
Clinical studies are most often conducted to support a PMA. Investigational
use also includes clinical evaluation of certain modifications or new
intended uses of legally marketed devices. All clinical evaluations of
investigational devices, unless exempt, must have an approved IDE before the
study is initiated. Clinical evaluation of devices that have not been
cleared for marketing requires:
o an IDE approved by an institutional review board (IRB). If the study
involves a significant risk device, the IDE must also be approved by
FDA;
o informed consent from all patients;
o labeling for investigational use only
o monitoring of the study and;
o required records and reports.
In order to conduct a significant risk device study, EZJR must:
o submit a complete IDE application to FDA for review and obtain FDA
approval of the IDE;
o submit the investigational plan and report of prior investigations
and to the IRB at each institution where the investigation is to be
conducted for review and approval; and
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o select qualified investigators, provide them with all necessary
information on the investigational plan and report of prior
investigations, and obtain signed investigator agreements from them.
Once an IDE application is approved, the following requirements must be met
in order to conduct the investigation in compliance with the IDE regulation:
o Labeling - The device must be labeled in accordance with the labeling
provisions of the IDE regulation and must bear the statement "CAUTION
Investigational Device. Limited by Federal (or United States) law to
investigational use."
o Distribution - Investigational devices can only be distributed to
qualified investigators.
o Informed Consent - Each subject must be provided with and sign an
informed consent form before being enrolled in the study.
o Monitoring - All investigations must be properly monitored to protect
the human subjects and assure compliance with approved protocols.
o Commercialization, promotion, and misrepresentation of an
investigational device and prolongation of the study are prohibited.
o Records and Reports - Sponsors and investigators are required to
maintain specified records and make reports to investigators, IRBs,
and FDA.
EZJR Funding Requirements
- -------------------------
EZJR does not have the required capital or funding to complete this initial
project. Management anticipates EZJR will require at least $500,000 to
complete to perform the required FDA studies and produce inventory. The
Company has yet to source this funding.
The Company has been seeking funding from a number of sources, but has yet
to secure any funding, especially during this current economic downturn.
Management continues to seek different funding sources in order to initiate
its business plan. The downturn in the economy has limited our sources of
financing. Management continues to seek financing with no success. If the
Company is unable to obtain capital to finance its plan of operations or
identify alternative capital, it may need to curtail, limit or cease our
existing operations.
Future funding could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or
amortization of expenses related to goodwill and other intangible assets, which
could materially adversely affect the Company's business, results of
operations and financial condition. Any future acquisitions of other
businesses, technologies, services or product(s) might require the Company to
obtain additional equity or debt financing, which might not be available on
terms favorable to the Company, or at all, and such financing, if available,
might be dilutive.
8
Competition
- -----------
The medical device industry is highly competitive. Factors contributing to
the industry's increasingly competitive market include regulatory changes,
product substitution, technological advances, and the entrance of new
competitors.
Most all of EZJR's competitors have significantly greater financial,
marketing, other resources, and larger customer bases than EZJR has and are
more financially leveraged. As a result, these competitors may be able to
adapt changes in customer requirements more quickly; introduce new and more
innovative products more quickly; better adapt to downturns in the economy or
other decreases in sales; better withstand pressure for cancelled services,
take advantage of acquisition and other opportunities more readily; devote
greater resources to the marketing and sale of their products; and adapt more
aggressive pricing policies. All of which may contribute to intensifying
competition and may affect EZJR's future revenue growth.
Patent, Trademark, License and Franchise Restrictions and Contractual
Obligations and Concessions
- ---------------------------------------------------------------------
We currently have no pending or provisional patents or trademark
applications.
Research and Development Activities and Costs
- ---------------------------------------------
The majority of EZJR expenses involved the costs related to the research and
development of the central line catheter. These costs included entering into
two option contracts ($46,000), with the Cleveland Clinic, and paying for
catheter development costs (approximately $17,000).
Compliance With Environmental Laws
- ----------------------------------
We are not aware of any environmental laws that have been enacted, nor are we
aware of any such laws being contemplated for the future, that impact issues
specific to our business. In our industry, environmental laws are anticipated
to apply directly to the owners and operators of companies. They do not apply
to companies or individuals providing consulting services, unless they have
been engaged to consult on environmental matters. We are not planning to
provide environmental consulting services.
9
Employees
- ---------
We have no employees at the present time. Our sole officer and director
is responsible for all planning, developing and operational duties and
will continue to do so throughout the early stages of our growth.
He devotes 5-10 hours per week of his time to EZJR's business. All
functions including development, strategy, negotiations and clerical work is
being provided by the sole officer/director on a voluntary basis, without
compensation.
We have no intention of hiring employees until the business has been
successfully launched and we have sufficient, reliable revenue from our
operations. Our officer and director is planning to do whatever work is
required until our business to the point of having positive cash flow. We do
not expect to hire any employees during through 2010.
Item 1A. Risk Factors.
1. SINCE EZJR IS A DEVELOPMENT STAGE MEDICAL DEVICE COMPANY, EZJR HAS
GENERATED NO REVENUES, AND THERE ARE NO ASSURANCES THAT ITS BUSINESS PLAN
WILL BE SUCCESSFUL.
EZJR expects to incur operating losses in future periods as EZJR incurs
significant expenses associated with the initial startup of its business.
Further, there are no assurances that EZJR will be successful in realizing
revenues or in achieving or sustaining positive cash flow at any time in the
future. Any such failure could result in the possible closure of EZJR's
business or force the Company to seek additional capital through loans or
additional sales of the Company's equity securities to continue business
operations, which would dilute the value of any shares owned by the Company's
shareholders.
2. IF EZJR'S BUSINESS PLAN IS NOT SUCCESSFUL, EZJR MAY NOT BE ABLE TO
CONTINUE OPERATIONS AS A GOING CONCERN AND ITS STOCKHOLDERS MAY LOSE THEIR
ENTIRE INVESTMENT IN EZJR.
As discussed in the Notes to the Financial Statements included in this
Current Report, at June 30, 2009, EZJR had a working capital deficit of
$(480). EZJR had a net loss of approximately $(78,381) from its inception
to June 30, 2009.
These factors raise substantial doubt that EZJR will be able to continue
operations as a going concern, and EZJR's independent auditors included an
explanatory paragraph regarding this uncertainty in their report on the
financial statements for the period from inception to June 30, 2009. EZJR's
ability to continue as a going concern is dependent upon generating cash flow
sufficient to fund operations and reducing operating expenses. EZJR's
business plan may not be successful in addressing these issues. If EZJR
cannot continue as a going concern, its stockholders may lose their entire
investment in EZJR.
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3. EZJR EXPECTS LOSSES IN THE FUTURE BECAUSE EZJR HAS NO REVENUE.
EZJR has generated no revenues, management expects losses over the next
twelve (12) months since there are no revenues to offset the expenses
associated in executing EZJR's business plan. EZJR cannot guarantee that it
will ever be successful in generating revenues in the future. EZJR
recognizes that if the Company is unable to generate revenues, it will not be
able to earn profits or continue operations as a going concern. There is no
history upon which to base any assumption as to the likelihood that the
Company will prove successful, and EZJR can provide selling shareholders with
no assurance that it will generate any operating revenues or ever achieve
profitable operations.
4. SINCE EZJR'S OFFICER DOES NOT DEVOTE HIS FULL TIME TO THE COMPANY, HIS
OTHER ACTIVITIES COULD SLOW DOWN EZJR'S OPERATIONS.
T J Jesky, the sole officer of EZJR does not devote all of his time to the
Company's operations. He is semi-retired and devotes his time to his family
and personal activities. Therefore, it is possible that a conflict of
interest with regard to his time may arise based on his involvement in other
activities. His other activities will prevent him from devoting full-time to
EZJR's operations which could slow EZJR's operations and may reduce its
financial results because of the slow down in operations.
The President and Director of the company, currently devotes approximately 5-
10 hours per week to company matters. The responsibility of developing the
company's business, and fulfilling the reporting requirements of a public
company all fall upon Mr. Jesky. Mr. Jesky was the former President of Eaton
Laboratories, the Company that spun off IVPSA Corporation. EZJR has not
formulated a plan to resolve any possible conflict of interest with his other
business activities. Mr. Jesky intends to limit his role in his other
activities and devote more of his time to EZJR after the Company attains a
sufficient level of revenue and is able to provide sufficient officers'
salaries per its business plan. In the event he is unable to fulfill any
aspect of his duties to the company, EZJR may experience a shortfall or
complete lack of sales resulting in little or no profits and eventual closure
of the business.
5. EZJR'S SOLE OFFICER, MR. T J JESKY, HAS NO PRIOR EXPERIENCE IN RUNNING A
MEDICAL DEVICE COMPANY.
EZJR's sole executive officer has no experience in operating a medical
device company. Mr. Jesky did serve as President of Eaton Laboratories from
February 2, 2000 (inception) until March 2007. Due to his lack of experience
in running a medical device company, the executive officer may make wrong
decisions and choices regarding key decisions on behalf of the Company.
Consequently, EZJR may suffer irreparable harm due to management's lack of
experience in this industry.
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6. IF EZJR IS UNABLE TO OBTAIN ADDITIONAL FUNDING, ITS BUSINESS OPERATIONS
WILL BE HARMED. EVEN IF EZJR DOES OBTAIN ADDITIONAL FINANCING ITS THEN
EXISTING SHAREHOLDERS MAY SUFFER SUBSTANTIAL DILUTION.
As of June 30, 2009, EZJR had no working cash nor equivalents. EZJR needs at
least five hundred dollars ($500,000) in order to obtain FDA (Food and Drug
Administration) approval to market its potential medical device. EZJR
determined that $500,000 is needed for: 1) engineering design and
specifications of the medical device; 2) production of the medical device; 3)
FDA application process; 4) conducting the necessary FDA studies; and 5)
producing a working inventory of the medical device.
The company has yet to find sourcing for this endeavor. The Company has
initial plans to develop a catheter medical device. The regulatory
requirements of the FDA will be capital intensive, this project will also
require a larger working capital basis to maintain adequate inventories of
the approved product. This need for additional funds will be derived from
future stock offerings. These future offerings could significantly dilute
the value of any previous investor's investment. If and when FDA approval
can be obtained for this product, the Company will be required to produce
product for distribution. The company anticipates that its budge for
$500,000 will include retail inventory of the medical device.
There are no guarantees given that the Company will be able to find the
necessary financing or the necessary financing will be available, if required
or if available, will be on terms and conditions satisfactory to management.
The above outlined capital problems which could significantly affect the
value of any Common Shares and could result in the loss of an investor's
entire investment.
7. EZJR MAY NOT BE ABLE TO RAISE SUFFICIENT CAPITAL OR GENERATE ADEQUATE
REVENUE TO MEET ITS OBLIGATIONS AND FUND ITS OPERATING EXPENSES.
Failure to raise adequate capital and generate adequate sales revenues to
meet EZJR's obligations and develop and sustain its operations could result
in reducing or ceasing EZJR's operations. Additionally, even if EZJR does
raise sufficient capital and generate revenues to support its operating
expenses, there can be no assurances that the revenue will be sufficient to
enable EZJR to develop business to a level where it will generate profits and
cash flows from operations. These matters raise substantial doubt about
EZJR's ability to continue as a going concern. EZJR's independent auditors
currently included an explanatory paragraph in their report on the financial
statements regarding concerns about EZJR's ability to continue as a going
concern.
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8. EZJR MAY NOT BE ABLE TO COMPETE WITH LARGER MEDICAL DEVICE COMPANIES, THE
MAJORITY OF WHOM HAVE GREATER RESOURCES AND EXPERIENCE THAN EZJR DOES.
The Company has no way of knowing that other companies may be working on
bringing the same medical device into the market. In order to obtain FDA
approval to market a medical device, it can take from twelve (12) to
eighteen (18) months to obtain approval from the FDA. And, there is no way
to know if someone else has submitted similar paperwork beforehand.
Therefore, there is always a possibility that similar medical device may
enter the market before EZJR's licensed product.
Many of the Company's competitors are significantly larger and have
substantially greater financial, distribution, marketing and other resources
and have achieved better recognition for their brand names for product lines
or certain products than the Company. There is no assurance that the Company
will be able to compete successfully against present or future competitors or
that competitive pressures faced by the Company will not have a material
adverse effect on the Company.
9. IF EZJR RECEIVES REGULATORY APPROVAL EZJR WILL ALSO BE SUBJECT TO ONGOING
FDA OBLIGATION AND CONTINUED REGULATORY REVIEW.
Any regulatory approvals that EZJR receives for its products may also be
subject to limitations on the indicated uses for which the product may be
marketed or contain requirements for potentially costly post-marketing
follow-up studies. In addition EZJR or its third party manufacturers may be
required to undergo a pre-approval inspection of manufacturing facilities by
the FDA and foreign authorities before obtaining marketing approval and will
be subject to periodic inspection by the FDA and corresponding foreign
regulatory authorities under reciprocal agreements with the FDA. Such
inspections may result in compliance issues that could prevent or delay
marketing approval or require the expenditure of money or other resources to
correct noncompliance.
If a regulatory agency discovers previously unknown problems with a product,
such as adverse events of unanticipated severity or frequency, or problems
with the facility where the product is manufactured, a regulatory agency may
impose restrictions on that product, EZJR's collaborators, or EZJR, including
requiring withdrawal of the product from the market. EZJR's product
candidates will also be subject to ongoing FDA requirements for the labeling,
packaging, storage, advertising, promotion, record-keeping, and submission of
safety and other post-market information on the drug. If EZJR's product
candidates fail to comply with applicable regulatory requirements, a
regulatory agency may:
o issue warning letters;
o impose civil or criminal penalties;
o withdraw regulatory approval;
o suspend any ongoing clinical trials;
o refuse to approve pending applications or supplements to approved
applications filed by EZJR or EZJR's collaborators;
o impose restrictions on operations, including costly new
manufacturing requirements; or
o seize or detain products or require a product recall.
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If EZJR fails to comply with applicable domestic regulatory requirements,
EZJR may be subject to fines, suspension or withdrawal of regulatory
approvals, product recalls, seizure of products, operating restrictions, and
criminal prosecution.
10. EZJR FACES THE RISK OF NOT BEING ABLE TO COMPLY WITH EACH OF THE STEPS
IN THE FDA PRE-MARKETING APPROVAL PROCESS.
If EZJR is successful in raising the required funds to develop its first
medical device, there are no assurances that the Company can comply with the
required steps in the FDA pre-marketing approval process. This includes
compiling studies accepted by FDA to their satisfaction. Failure to do so,
would result in compiling new studies at an added expense to the Company.
The Company may not have the required funds to repeat FDA compliance studies.
This would mean EZJR would either need to seek more funding or close its
business operations.
11. THE FDA APPROVAL PROCESS CAN BE VERY LENGTHY AND UNCERTAIN
Upon the completion of the required testing, analysis of the testing, and
producing an actual manufacturing lot of the product, the Company will be
ready to submit an Application to the FDA for their review and comment. EZJR
expects this process could take eleven months after EZJR obtains funding,
just to produce the required data for a Submission Application. Once the
Application is received by the FDA, they have 180 days to respond to an
Application. At that time, based on the data provide, they will most likely
comment on the Application in that they will require clarification or more
data. The Company expects the FDA approval process to last between 10-12
months. If the FDA requires additional data following the review of EZJR's
Application, this will require additional expense and loss of time to bring
its product to the market. There exists an uncertainty on how long the
actual FDA approval process will taken, as they may require additional
information. This uncertainty can adversely effect when EZJR can bring the
final product to the marketplace.
14
12. TO BE SUCCESSFUL, MEDICAL DEVICE(S) MUST BE ACCEPTED BY HEALTH CARE
PROFESSIONALS, WHO CAN BE VERY SLOW TO ADOPT OR UNRECEPTIVE TO NEW
TECHNOLOGIES AND PRODUCTS.
EZJR's future medical devices, if approved for marketing, may not achieve
market acceptance since hospitals, physicians, patients or the medical
community in general may decide to not accept and utilize these products.
The product candidates that EZJR is attempting to develop represent
substantial departures from established treatment methods and will compete
with a number of more conventional drugs and therapies manufactured and
marketed by major medical device companies. The degree of market acceptance
of any of our developed products will depend on a number of factors,
including:
o the establishment and demonstration to the medical community of the
clinical efficacy and safety of EZJR's product candidates;
o the ability to create products that are superior to alternatives
currently on the market, including in terms of pricing and
cost-effectiveness, relative convenience, and ease of
administration;
o the prevalence and severity of adverse side effects; and
o the ability to establish in the medical community the potential
advantage of EZJR's medical device over alternative medical
devices.
If the health care community does not accept EZJR's products for any of the
foregoing reasons, EZJR's revenues from the sale of any approved product
would be significantly reduced.
13. IF EZJR IS UNABLE TO OBTAIN AND MAINTAIN PATENT AND OTHER INTELLECTUAL
PROPERTY OWNERSHIP RIGHTS RELATING TO THE DEVELOPMENT MEDICAL DEVICES, THEN
THE COMPANY MAY NOT BE ABLE TO SELL ANY MEDICAL DEVICES, WHICH WOULD HAVE A
MATERIAL ADVERSE IMPACT ON EZJR'S RESULTS OF OPERATIONS AND THE PRICE OF THE
COMPANY'S COMMON STOCK.
EZJR currently does not own any right, title or interest in any patent
application for any medical device. If in the future EZJR does file a patent
application, there are no assurances that it will not be successfully
challenged or circumvented by competitors or others. EZJR has no assurance
that the United States Patent and Trademark Office will issue the Patent or
that the scope of any claims granted in an issued patent will provide broad
protection or a competitive advantage to us. If the Patent fails to issue in
sufficient scope or at all, or if the patent issues but EZJR fails to
maintain and enforce EZJR's rights in the issued patent, or if EZJR fails to
maintain and protect its rights in other intellectual property, including
know-how, trade secrets and trademarks, such failures, individually and in
the aggregate, could have a material adverse effect upon EZJR's business
prospects, financial condition and results of operations. If such patents
issue, they will be presumed valid, but there is no assurance that they will
not be successfully challenged or circumvented by competitors or others.
15
EZJR also relies upon trade secrets and other unpatented proprietary
technology. No assurance can be given that the Company can meaningfully
protect its rights with regard to such unpatented proprietary technology or
that competitors will not duplicate or independently develop substantially
equivalent technology.
14. THE REIMBURSEMENT STATUS OF NEWLY APPROVED HEALTHCARE PRODUCTS AND
TREATMENTS IS NO ESTABLISHED AND FAILURE TO OBTAIN ADEQUATE REIMBURSEMENT
COULD LIMIT EZJR'S ABILITY TO MARKET ANY PRODUCTS THE COMPANY MAY DEVELOP.
EZJR's ability to commercialize its product candidates in domestic markets
successfully will depend in part on the extent to which governmental
authorities, private health insurers, managed care programs, and other
organizations establish appropriate coverage and reimbursement levels for the
cost of EZJR's products and related treatments. There is significant
uncertainty related to the reimbursement of newly approved medical devices.
Third party payors are increasingly attempting to contain healthcare costs
and challenging the prices charged for medical products and services, both by
limiting coverage and by reducing the level of reimbursement for medical
devices. For example, the trend toward managed health care in the United
States, which could significantly influence the purchase of health care
services and products, as well as legislative proposals to reform health care
or reduce government insurance programs, may result in lower prices for the
product candidates or exclusion of any product candidates from coverage and
reimbursement programs. If third parties fail to provide adequate
reimbursement for EZJR's products, consumers and health care providers may
choose not to use EZJR's products, which could significantly reduce EZJR's
revenues from the sale of any approved product and prevent EZJR from
realizing an acceptable return on the Company's investment in product
development.
15. EZJR HAS NO COMMERCIAL PRODUCTION CAPABILITY AND EZJR MAY ENCOUNTER
PRODUCTION PROBLEMS OR DELAYS, WHICH COULD RESULT IN LOWER REVENUES.
To date, EZJR has not produced any products. To achieve anticipated customer
demand levels EZJR will need to find suppliers who can contract manufacturer
the products for the Company and provide the Company with adequate levels of
inventory. EZJR's contract manufacturers may not be able to maintain
acceptable quality standards. If EZJR cannot achieve the required level and
quality of production, the Company may need to outsource production or rely
on licensing and other arrangements with third parties. EZJR may not be able
to successfully outsource its production or enter into licensing or other
arrangements under acceptable terms with these third parties, which could
adversely affect its business. EZJR's inability to identify potential
manufacturers, or to enter into or maintain agreements with them on
acceptable terms, could delay or prevent the commercialization of its
products, which would adversely affect its ability to generate revenues and
could prevent the Company from achieving or maintaining profitability. In
addition reliance on third-party manufacturers could reduce EZJR's gross
margins and expose the Company to the risks inherent in relying on others.
EZJR may also encounter problems with production yields, shortages of
qualified personnel, production costs, and the development of advanced
manufacturing techniques and process controls.
16
16. EZJR WILL BE REQUIRED TO COMPLY WITH GOOD MANUFACTURING REQUIREMENTS,
AND ITS FAILURE TO DO SO MAY SUBJECT THE COMPANY TO FINES AND OTHER
PENALTIES.
EZJR, or its other third party manufacturers of its products must comply with
current good manufacturing practice, or cGMP, requirements demanded by
customers and enforced by the FDA through its facilities inspection program.
These requirements include quality control, quality assurance, and the
maintenance of records and documentation. EZJR, its collaborators, or other
third party manufacturers of EZJR's products may be unable to comply with
these cGMP requirements and with other FDA, state, and foreign regulatory
requirements. These requirements may change over time and EZJR, or third
party manufacturers, may be unable to comply with the revised requirements.
A failure to comply with these requirements may result in fines and civil
penalties, suspension of production, suspension or delay in product approval,
product seizure or recall, or withdrawal of product approval. If the safety
of any quantities supplied by third-parties is compromised due to their
failure to adhere to applicable laws or for other reasons, EZJR may not be
able to obtain regulatory approval for, or successfully commercialize,
product candidates that the Company may develop.
17. EZJR MAY INCUR SUBSTANTIAL LIABILITIES FROM ANY PRODUCT LIABILITY
CLAIMS, INCLUDING CLAIMS MADE AGAINST THIRD PARTIES EZJR HAS AGREED TO
INDEMNIFY.
EZJR faces an inherent risk of product liability exposure related to the
testing of its product candidates in human clinical trials, and will face an
even greater risk if the Company sells its product candidates commercially.
An individual may bring a liability claim against the Company if one of its
product candidates causes, or merely appears to have caused, an adverse
effect or injury. These risks will exist even for products developed that
may be cleared for commercial sale. If EZJR cannot successfully defend
itself against any product liability claims, EZJR may incur substantial
liabilities. Regardless of merit or eventual outcome, liability claims may
result in any one or a combination of the following:
o injury to EZJR's reputation;
o withdrawal of clinical trial participants;
o costs of related litigation;
o substantial monetary awards to patients or other claimants;
o decreased demand for EZJR's product candidates;
o loss of revenues; and
o the inability to commercialize EZJR's product candidates.
17
EZJR intends to secure limited product liability insurance coverage, but the
Company may not be able to obtain such insurance on acceptable terms with
adequate coverage, or at reasonable or affordable costs. The amount of
insurance coverage EZJR obtains may not be adequate to protect the Company
from all liabilities. EZJR may not have sufficient resources to pay for any
liabilities resulting from a claim beyond the limit of, or excluded from, its
insurance coverage.
18. EZJR'S SOLE OFFICER/DIRECTOR AND LARGEST SHAREHOLDER OWN A CONTROLLING
INTEREST IN EZJR'S VOTING STOCK AND SELLING SHAREHOLDERS WILL NOT HAVE ANY
VOICE IN THE COMPANY'S MANAGEMENT, WHICH COULD RESULT IN DECISIONS ADVERSE TO
EZJR'S GENERAL SHAREHOLDERS.
EZJR's sole officer/director and its second largest stockholder, in the
aggregate, beneficially own approximately or have the right to vote
approximately 68.9% of EZJR's outstanding common stock. As a result, these
two stockholders, acting together, will have the ability to control
substantially all matters submitted to EZJR's stockholders for approval
including:
a) election of EZJR's board of directors;
b) removal of any of EZJR's directors;
c) amendment of EZJR's Articles of Incorporation or bylaws; and
d) adoption of measures that could delay or prevent a change in control or
impede a merger, takeover or other business combination involving us.
18
As a result of their ownership and positions, these two individuals have the
ability to influence all matters requiring shareholder approval, including
the election of directors and approval of significant corporate transactions.
In addition, the future prospect of sales of significant amounts of shares
held by EZJR's director and executive officer could affect the market price
of its common stock if the marketplace does not orderly adjust to the
increase in shares in the market and the value of shareholder investment in
the company may decrease. Management's stock ownership may discourage a
potential acquirer from making a tender offer or otherwise attempting to
obtain control of EZJR, which in turn could reduce the stock price or prevent
the stockholders from realizing a premium over the stock price.
RISKS RELATING TO EZJR'S COMMON SHARES
-------------------------------------
19. EZJR MAY, IN THE FUTURE, ISSUE ADDITIONAL COMMON SHARES, WHICH WOULD
REDUCE SELLING SHAREHOLDERS' PERCENT OF OWNERSHIP AND MAY DILUTE EZJR'S SHARE
VALUE.
The future issuance of common stock may result in substantial dilution in the
percentage of EZJR's common stock held by EZJR's then existing shareholders.
EZJR may value any common stock issued in the future on an arbitrary basis.
The issuance of common stock for future services or acquisitions or other
corporate actions may have the effect of diluting the value of the shares
held by EZJR's selling shareholders, and might have an adverse effect on any
trading market for EZJR's common stock.
20. EZJR'S COMMON SHARES ARE SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC
AND THE TRADING MARKET IN EZJR'S SECURITIES IS LIMITED, WHICH MAKES
TRANSACTIONS IN EZJR'S STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN
INVESTMENT IN EZJR'S STOCK.
The U. S. Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes relevant to
us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions.
For any transaction involving a penny stock, unless exempt, the rules
require: (a) that a broker or dealer approve a person's account for
transactions in penny stocks; and (b) the broker or dealer receive from the
investor a written agreement to the transaction, setting forth the identity
and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must: (a) obtain financial information and investment
experience objectives of the person; and (b) make a reasonable determination
that the transactions in penny stocks are suitable for that person and the
person has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
19
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating to the
penny stock market, which, in highlight form: (a) sets forth the basis on
which the broker or dealer made the suitability determination; and (b) that
the broker or dealer received a signed, written agreement from the investor
prior to the transaction. Generally, brokers may be less willing to execute
transactions in securities subject to the "penny stock" rules. This may make
it more difficult for selling shareholders to dispose of EZJR's Common shares
and cause a decline in the market value of EZJR's stock.
Disclosure also has to be made about the risks of investing in penny stocks
in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in
penny stocks.
21. ALTHOUGH OUR STOCK IS LISTED ON THE OTC-BB, A TRADING MARKET HAS NOT
DEVELOP, PURCHASERS OF OUR SECURITIES MAY HAVE DIFFICULTY SELLING THEIR SHARES.
There is currently no active trading market in our securities and there are no
assurances that a market may develop or, if developed, may not be sustained.
If no market is ever developed for our common stock, it will be difficult for
you to sell any shares in our Company. In such a case, you may find that you
are unable to achieve any benefit from your investment or liquidate your shares
without considerable delay, if at all.
22. BECAUSE EZJR DOES NOT INTEND TO PAY ANY CASH DIVIDENDS ON ITS COMMON
STOCK, THE COMPANY'S STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON
THEIR SHARES UNLESS THEY SELL THEM.
EZJR intends to retain any future earnings to finance the development and
expansion of its business. EZJR does not anticipate paying any cash
dividends on its common stock in the foreseeable future. Unless EZJR pays
dividends, its stockholders will not be able to receive a return on their
shares unless they sell them. There is no assurance that stockholders will
be able to sell shares when desired.
20
23. EZJR MAY ISSUE SHARES OF PREFERRED STOCK IN THE FUTURE THAT MAY ADVERSELY
IMPACT SHAREHOLDER RIGHTS AS HOLDERS OF THE COMPANY'S COMMON STOCK.
EZJR's articles of incorporation authorize the Company to issue up to
5,000,000 shares of preferred stock. Accordingly, the board of directors
will have the authority to fix and determine the relative rights and
preferences of preferred shares, as well as the authority to issue such
shares, without further stockholder approval. As a result, the board of
directors could authorize the issuance of a series of preferred stock that
would grant to holders preferred rights to its assets upon liquidation, the
right to receive dividends before dividends are declared to holders of EZJR's
common stock, and the right to the redemption of such preferred shares,
together with a premium, prior to the redemption of the common stock. To the
extent that EZJR does issue such additional shares of preferred stock, the
shareholders rights as holders of common stock could be impaired thereby,
including, without limitation, dilution of shareholder ownership interests in
EZJR. In addition, shares of preferred stock could be issued with terms
calculated to delay or prevent a change in control or make removal of
management more difficult, which may not be in the best interest as holders
of common stock.
Item 1B. Unresolved Staff Comments.
The Company has one outstanding unresolved Staff comment concerning its
Form 10-K for fiscal year ended June 30, 2008. In order to satisfactorily
address the Staff's comment, the Company plans to file a Registration
Statement on Form 10 following the submission of it annual report on Form
10-K for the fiscal year ending June 30, 2009.
Item 2. Properties.
Our corporate headquarters are located at 3415 Ocatillo Mesa Way, North Las
Vegas, NV 89031. We believe our current office space is adequate for our
immediate needs; however, as our operations expand, we may need to locate and
secure additional office space.
Item 3. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
We are not presently a party to any material litigation, nor to the knowledge
of management is any litigation threatened against us, which may materially
affect us.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company held its annual shareholder's meeting on August 11, 2009. The
shareholders re-elected the current director of the Company. At the annual
meeting, Board of Directors informed the shareholders that their independent
auditor would no longer be able to perform financial audits for the Company.
Based on the Board's recommendation, 68.9% of the Company's total issued and
outstanding shares approved Seale and Beers, CPAs as the Company's new
auditor, effective August 11, 2009. No other matters were conducted at the
annual meeting.
21
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.
(a) Market Information
EZJR, Inc. Common Stock, $0.001 par value, was traded on the OTC-Bulletin
Board, as of May 13, 2010 the Company's stock is now listed on the Grey sheets
under the symbol: EZJR.
Since the Company has been cleared for trading, through September 17, 2010,
there have been no trades of the Company's stock. There are no assurances that
a market will ever develop for the Company's stock.
(b) Holders of Common Stock
As of September 17, 2010, there were approximately 100 holders of record of
our Common Stock and 10,873,750 shares outstanding.
(c) Dividends
In the future we intend to follow a policy of retaining earnings, if any, to
finance the growth of the business and do not anticipate paying any cash
dividends in the foreseeable future. The declaration and payment of future
dividends on the Common Stock will be the sole discretion of board of
directors and will depend on our profitability and financial condition,
capital requirements, statutory and contractual restrictions, future
prospects and other factors deemed relevant.
(d) Securities Authorized for Issuance under Equity Compensation Plans
There are no outstanding grants or rights or any equity compensation plan in
place.
(e) Recent Sales of Unregistered Securities
The Company did not issue any shares during the fiscal years ended
June 30, 2009 or June 30, 2008.
(f) Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the years ended
June 30, 2009 or June 30, 2008.
Item 6. Selected Financial Data.
Not applicable.
22
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Overview of Current Operations
- ------------------------------
EZJR, Inc., was organized by the filing of Articles of Incorporation
with the Secretary of State of the State of Nevada on December 30, 2005.
EZJR, Inc. is a development stage medical device company which plans to
produce medical devices, utilizing the services contract manufacturing
facilities. EZJR does not have the resources to conduct any required
clinical trials to obtain FDA approval. Therefore, EZJR plans to outsource
this task to third parties who have the facilities to conduct any required
clinical trials. EZJR also plans to subcontract the manufacturing and
production process of any future medical device to a FDA approved contract
manufacturing facility which can produce sterile medical devices under Good
Manufacturing Practices. The company plans to distribute its product(s) into
the marketplace through medical supply wholesalers, hospitals and health
maintenance organizations.
23
Results of Operations for the year ended June 30, 2009
- ------------------------------------------------------
We earned no revenues since our inception through June 30, 2009. We do
not anticipate earning any significant revenues until such time as we can
bring to the market a medical device product. We are presently in the
development stage of our business and we can provide no assurance that we
will be successful in developing any medical device products.
For the period inception through June 30, 2009, we generated no income.
Since our inception on August 14, 2006 we experienced a net loss of
$(78,381). Our loss was attributed to organizational expenses and entering
into a exclusive option agreement for a medical device. We anticipate our
operating expenses will increase as we enhance our operations. The increase
will be attributed to professional fees to be incurred in connection with the
filing of a registration statement with the Securities Exchange Commission
under the Securities Act of 1933. We anticipate our ongoing operating
expenses will also increase once we become a reporting company under the
Securities Exchange Act of 1934.
For the fiscal year ending June 30, 2009, we experienced a net loss of
$(13,190) as compared to a net loss of $(28,761) for the same period last year.
The net loss for the year ending June 30, 2009 was contributed to professional
fees of $7,410, research and development fees of $280 and auditing fees of
$5,500. Our auditor issued an opinion that our financial condition raises
substantial doubt about the Company's ability to continue as a going concern.
Revenues
- --------
We generated no revenues for the period from August 14, 2006 (inception)
through June 30, 2009. We do not anticipate generating any revenues for at
least 28 months.
Going Concern
- -------------
Our independent auditors included an explanatory paragraph in their report on
the accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional
note disclosures describing the circumstances that lead to this disclosure by
our independent auditors.
24
Summary of any product research and development that we will perform for the
term of our plan of operation.
- ----------------------------------------------------------------------------
Our progress in product research and development is contingent upon
developing a central line catheter prototype. This needs to be a working
prototype that can be readily duplicated by a contract manufacturer at a
reasonable price. In November, 2007, EZJR signed a purchase order with
Interplex Medical LLC of Midford, OH, to help the Company develop this
working prototype. The terms of the purchase order require that EZJR pay up
to $25,000 for the development of a prototype catheter. Their engineers
attempted to build this prototype without success. They worked closely with
the physician inventor from the Cleveland Clinic. The major hurdle in this
evaluation is whether or not a working prototype can be built and can easily
be replicated with a contract manufacturer. If a working prototype cannot be
built, there would be no reason to proceed in attempting to bring this
medical device to the market.
Expected purchase or sale of plant and significant equipment
- ------------------------------------------------------------
We do not anticipate the purchase or sale of any plant or significant
equipment; as such items are not required by us at this time.
Significant changes in the number of employees
- ----------------------------------------------
As of June 30, 2009, we did not have any employees. We are dependent upon
our sole officer and a director for our future business development. As our
operations expand we anticipate the need to hire additional employees,
consultants and professionals; however, the exact number is not quantifiable
at this time.
Liquidity and Capital Resources
- -------------------------------
Our balance sheet as of June 30, 2009 reflects $3,500 in assets and
$3,980 in liabilities. Cash and cash equivalents from inception to date have
been sufficient to provide the operating capital necessary to operate to date.
Our sole officer/director has agreed to contribute funds to the operations of
the Company, in order to keep it fully reporting for the next twelve (12)
months, without seeking reimbursement for funds contributed.
Notwithstanding, we anticipate generating losses and therefore we may be
unable to continue operations in the future. We anticipate we will require
additional capital up to approximately $500,000 and we would have to issue
debt or equity or enter into a strategic arrangement with a third party. We
intend to try and raise capital through a private offering after this
registration statement is declared effective and our shares are quoted on the
Over the Counter Bulletin Board. There can be no assurance that additional
capital will be available to us. We currently have no agreements,
arrangements or understandings with any person to obtain funds through bank
loans, lines of credit or any other sources.
25
As a result of the Company's current limited available cash, no officer or
director received cash compensation during the year ended June 30, 2009. The
Company has no employment agreements in place with its officers.
Off-Balance Sheet Arrangements
- ------------------------------
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results or operations,
liquidity, capital expenditures or capital resources that is material to
investors.
Critical Accounting Policies and Estimates
- ------------------------------------------
Revenue Recognition: We recognize revenue from product sales once all of the
following criteria for revenue recognition have been met: pervasive evidence
that an agreement exists; the services have been rendered; the fee is fixed
and determinable and not subject to refund or adjustment; and collection of
the amount due is reasonable assured.
New Accounting Standards
- ------------------------
June 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of
Financial Assets - an amendment of FASB Statement No. 140" ("SFAS
166"). The provisions of SFAS 166, in part, amend the derecognition
guidance in FASB Statement No. 140, eliminate the exemption from
consolidation for qualifying special-purpose entities and require
additional disclosures. SFAS 166 is effective for financial asset
transfers occurring after the beginning of an entity's first fiscal
year that begins after November 15, 2009. The Company does not expect
the provisions of SFAS 166 to have a material effect on the financial
position, results of operations or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB
Interpretation No. 46(R) ("SFAS 167"). SFAS 167 amends the
consolidation guidance applicable to variable interest entities. The
provisions of SFAS 167 significantly affect the overall consolidation
analysis under FASB Interpretation No. 46(R). SFAS 167 is effective as
of the beginning of the first fiscal year that begins after November
15, 2009. SFAS 167 will be effective for the Company beginning in 2010.
The Company does not expect the provisions of SFAS 167 to have a
material effect on the financial position, results of operations or
cash flows of the Company.
26
In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles - a replacement of FASB Statement No. 162" ("SFAS
No. 168"). Under SFAS No. 168 the "FASB Accounting Standards
Codification" ("Codification") will become the source of authoritative
U. S. GAAP to be applied by nongovernmental entities. Rules and
interpretive releases of the Securities and Exchange Commission ("SEC")
under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. SFAS No. 168 is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. On the effective date, the Codification will
supersede all then-existing non-SEC accounting and reporting standards.
All other non-grandfathered non-SEC accounting literature not included
in the Codification will become non-authoritative. SFAS No. 168 is
effective for the Company's interim quarterly period beginning July 1,
2009. The Company does not expect the adoption of SFAS No. 168 to have
an impact on the financial statements.
In June 2009, the Securities and Exchange Commission's Office of the
Chief Accountant and Division of Corporation Finance announced the
release of Staff Accounting Bulletin (SAB) No. 112. This staff
accounting bulletin amends or rescinds portions of the interpretive
guidance included in the Staff Accounting Bulletin Series in order to
make the relevant interpretive guidance consistent with current
authoritative accounting and auditing guidance and Securities and
Exchange Commission rules and regulations. Specifically, the staff is
updating the Series in order to bring existing guidance into conformity
with recent pronouncements by the Financial Accounting Standards Board,
namely, Statement of Financial Accounting Standards No. 141 (revised
2007), Business Combinations, and Statement of Financial Accounting
Standards No. 160, Non-controlling Interests in Consolidated Financial
Statements. The statements in staff accounting bulletins are not rules
or interpretations of the Commission, nor are they published as bearing
the Commission's official approval. They represent interpretations and
practices followed by the Division of Corporation Finance and the
Office of the Chief Accountant in administering the disclosure
requirements of the Federal securities laws.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements
Financial Statement
-------------------
PAGE
----
Independent Auditors' Report F-1
Balance Sheet F-2
Statements of Operations F-3
Statements of Changes in Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financials F-6
27
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
- --------------------------------
www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Board of Directors
EZJR, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of EZJR, Inc. (A Development
Stage Company) as of June 30, 2009 and June 30, 2008 (restated), and the
related statements of operations, stockholders' equity (deficit) and cash
flows for the years then ended June 30, 2009 and June 30, 2008 (restated),
and for the period from inception on August 14, 2006 through June 30, 2009.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits 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. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of EZJR, Inc. (A Development
Stage Company) as of June 30, 2009 and June 30, 2008 (restated), and the
related statements of operations, stockholders' equity (deficit) and cash
flows for the years then ended June 30, 2009 and June 30, 2008 (restated),
and for the period from inception on August 14, 2006 through June 30, 2009,
in conformity with accounting principles generally accepted in the United
States of America.
As discussed in Note 11 to the accompanying financial statements, the
Company has restated its 2008 financial statements, which were previously
audited by other independent auditors who have ceased operations.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has not yet established an ongoing source
of revenues and has incurred losses since inception. These factors raise
substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 4.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/ Seale and Beers, CPAs, LLC
- ------------------------------
Seale and Beers, CPAs
Las Vegas, Nevada
October 10, 2009
Except for Notes 7 and 9, which are dated December 18, 2009; Notes 2 and 6,
which are dated January 28, 2010, and Notes 1, 3, and 11, which are dated
September 17, 2010.
50 South Jones Blvd. Suite 202, Las Vegas, NV 89107
(888) 727-8251 Fax (888) 782-2351
F-1
EZJR, Inc.
(A Development Stage Company)
Balance Sheets
Restated
June 30, June 30,
2009 2008
----------- -------------
ASSETS
Current assets:
Funds in escrow $ - $ 7,500
Prepaid expenses $ 3,500 $ -
----------- -------------
Total current assets 3,500 7,500
------------ -------------
TOTAL ASSETS $ 3,500 $ 7,500
=========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,480 $ 15,757
Accrued expense 2,500 -
------------ -------------
Total liabilities 3,980 15,757
------------ -------------
Stockholders' equity:
Preferred stock, $0.001 par value,
5,000,000 shares authorized,
none issued - -
Common stock, $0.001 par value, 70,000,000
shares authorized, 10,873,750 shares and
and 10,873,750 issued and outstanding
as of 6/30/09 and 6/30/08 respectively 10,873 10,873
Additional paid-in capital 67,028 46,061
(Deficit) accumulated during development
stage (78,381) (65,191)
------------ -------------
Total stockholders' equity (480) (8,257)
------------ -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,500 $ 7,500
============ =============
The accompanying notes are an integral part of these financial statements.
F-2
EZJR, Inc.
(A Development Stage Company)
Statements of Operations
For the years August 14,
ended June 30, 2006
------------------------ (inception) to
Restated June 30,
2009 2008 2009
----------- ----------- --------------
REVENUE $ - $ - $ -
----------- ----------- --------------
EXPENSES:
Audit fees 5,500 1,500 7,000
Incorporating fees - - 430
Option contract - 10,000 46,000
Professional fees 7,410 504 7,914
Research & Development 280 16,757 17,037
----------- ----------- --------------
Total expenses 13,190 28,761 78,381
----------- ----------- --------------
Net (loss) before income
taxes (13,190) (28,761) (78,381)
Income tax expense - - -
----------- ----------- --------------
NET (LOSS) $ (13,190) $ (28,761) $ (78,381)
=========== =========== ==============
NET (LOSS) PER COMMON
SHARE $ (0.00) $ (0.00)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 10,873,750 10,873,750
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-3
EZJR, Inc.
(A Development Stage Company)
Statements of Stockholders' Deficit
(Deficit)
Preferred Accumulated
Stock Common Stock Additional During
------------------------------ Paid-in Development
Shares Amount Shares Amount Capital Stage Total
-------------------------------------------------------
August 14,
2006
Contributed
capital (cash) 36,430 36,430
August 14,
2006
stock issued
as a dividend
from Eaton
Laboratories
at $0.001
per share 10,873,750 10,873 (10,873) -
Net (loss)
for the
year ended
June 30,
2007 (36,430) (36,430)
-------------------------------------------------------
Balance,
June 30,
2007 - - 10,873,750 10,873 25,557 (36,430) -
February 2008
Contributed
capital (cash) 2,500 2,500
April 2008
Contributed
capital (cash) 10,000 10,000
June 2008
Contributed
capital (cash) 8,004 8,004
F-4
EZJR, Inc.
(A Development Stage Company)
Statements of Stockholders' Deficit (Continued)
(Deficit)
Preferred Accumulated
Stock Common Stock Additional During
------------------------------ Paid-in Development
Shares Amount Shares Amount Capital Stage Total
-------------------------------------------------------
Net (loss)
for the
year ended
June 30,
2008 (28,761) (28,761)
-------------------------------------------------------
Balance,
June 30,
2008
(Restated) - - 10,873,750 10,873 46,061 (65,191) (8,257)
September
2008
Contributed
capital (cash) 1,500 1,500
December
2008
Contributed
capital (cash) 19,467 19,467
Net (loss)
for the
year ended
June 30,
2009 (13,190) (13,190)
--------------------------------------------------------
Balance,
June 30,
2009 - $ - 10,873,750 $10,873 $67,028 $ (78,381) $ (480)
====== ====== ========== ======= ======== =========== ==============
The accompanying notes are an integral part of these financial statements.
F-5
EZJR, Inc.
(A Development Stage Company)
Statements of Cash Flows
For the years August 14,
ended June 30, 2006
------------------------ (inception) to
Restated June 30,
2009 2008 2009
----------- ----------- --------------
OPERATING ACTIVITIES:
Net (loss) $ (13,190) $ (28,761) $ (78,381)
Adjustments to reconcile net loss
to net cash provided (used) by
operating activities:
(Increase) in prepaid expense (3,500) - (3,500)
(Decrease) increase in accounts
payable (14,277) 15,757 1,480
Increase in accrued expense 2,500 - 2,500
----------- ----------- --------------
Net cash (used) by operating
activities (28,467) (13,004) (77,901)
----------- ----------- --------------
FINANCING ACTIVITIES:
Contributed capital 20,967 20,504 77,901
----------- ----------- --------------
Net cash provided by financing
activities 20,967 20,504 77,901
----------- ----------- --------------
NET INCREASE (DECREASE) IN CASH (7,500) 7,500 -
CASH AND EQUIVALENTS - BEGINNING 7,500 - -
----------- ----------- --------------
CASH AND EQUIVALENTS - ENDING $ - $ 7,500 $ -
=========== =========== ==============
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ - $ -
=========== =========== ==============
Income taxes paid $ - $ - $ -
=========== =========== ==============
Non-cash transactions $ - $ - $ -
=========== =========== ==============
The accompanying notes are an integral part of these financial statements.
F-6
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 1. General Organization and Business
The Company was organized August 14, 2006 (Date of Inception) under the laws
of the State of Nevada, as IVPSA Corporation. The Company was incorporated
as a wholly owned subsidiary of Eaton Laboratories, Inc., a Nevada
corporation. Eaton Laboratories was incorporated February 2, 2002, and, at
the time of spin off was listed on the Over the Counter Bulletin Board.
The directors of Eaton Laboratories approved a spin off of its IVPSA subsidiary
in the form of a stock dividend as of November 1, 2006 (the "Record Date").
The record shareholders of Eaton received one (1) unregistered common share,
par value $0.001, of IVPSA Corporation common stock for every share of Eaton
Laboratories common stock owned. The IVPSA Corporation stock dividend was
based on 10,873,750 shares of Eaton common stock that were issued and
outstanding as of the record date. Since IVPSA's business was related to
developing medical devices and Eaton's business was related to developing
generic pharmaceutical products, the Eaton directors decided it was in the
best interest of Eaton and IVPSA's shareholders to spin off IVPSA to minimize
any potential of conflict of interest, in accessing funding.
The spin-off transaction was accomplished by the distribution of certain
intellectual property, representing industry contacts, third party
relationships and trade secrets. It did not include the transfer of any hard
assets or liabilities. This spin off was valued at par value since the
company held no assets, was uncertain as to future benefit, the stock was not
trading, and the company did not yet receive a stock symbol.
Eaton retained no ownership in IVPSA Corporation following the spin off.
IVPSA Corporation is no longer a subsidiary of Eaton Laboratories.
On July 25, 2008, EZJR, Inc., a Nevada corporation and IVPSA Corporation,
entered into an Acquisition Agreement and Plan of Merger whereby IVPSA
was the successor corporation. Immediately after the acquisition was
consummated, the two major shareholders of the Company, in a private
transaction, paid the original EZJR founder $4,000 for all of his stock in
EZJR. These shares were returned to the corporate treasury, without
consideration and cancelled on the corporate books. At the time of the
acquisition, the original EZJR, Inc. had no assets, liabilities or any cash
flows. Upon the merger of the two entities, IVPSA changed its corporate name
to EZJR, Inc. The business plan of the original EZJR was to find a merger
candidate or business acquisition transaction to take over its fully
reporting requirements.
The Company is a development stage enterprise in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by
Development Stage Enterprises". The Company plans to develop and market
medical devices.
F-7
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 2. Summary of Significant Accounting Practices
The Company has assets of $3,500 in prepaid expenses and liabilities of
$3,980 as of June 30, 2009. The relevant accounting policies are listed
below.
Basis of Accounting
- -------------------
The basis is United States generally accepted accounting principles.
NOTE 2. Summary of Significant Accounting Practices (Continued)
Earnings per Share
- ------------------
The basic earnings (loss) per share is calculated by dividing the Company's
net income (loss) available to common shareholders by the weighted average
number of common shares during the year. The diluted earnings (loss) per
share is calculated by dividing the Company's net income (loss) available to
common shareholders by the diluted weighted average number of shares
outstanding during the year. The diluted weighted average number of shares
outstanding is the basic weighted number of shares adjusted as of the first
of the year for any potentially dilutive debt or equity.
The Company has not issued any options or warrants or similar securities
since inception.
Research and development costs
- ------------------------------
Research and development costs are expensed as incurred. The amounts of
costs expensed for the years ended June 30, 2009 and 2008, were $280
and $16,757, respectively.
Revenue recognition
- -------------------
The Company applies the provision of SEC Staff Accounting Board ("SAB")
No. 104, Revenue Recognition. SAB No. 104, which supersedes SAB No. 101,
Revenue Recognition in Financial Statements, provides guidance on the
recognition, presentation and disclosure of revenue in financial statements.
SAB No. 104 outlines the basic criteria that must be met to recognize revenue
and provides guidance for the disclosure of revenue recognition policies.
The Company recognizes revenue related to product sales when (i) persuasive
evidence of the arrangement exists, (ii) shipment has occurred, (iii) the
fee is fixed or determinable, and (iv) collectability is reasonably assured.
For the period from August 14, 2006 (inception) to June 30, 2009, the Company
has not recognized any revenues.
Dividends
- ---------
The Company has not yet adopted any policy regarding payment of dividends.
No Dividends have been paid during the period shown.
Income Taxes
- ------------
The provision for income taxes is the total of the current taxes payable and
the net of the change in the deferred income taxes. Provision is made for
the deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
F-8
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 2. Summary of Significant Accounting Practices (Continued)
Year-end
- --------
The Company originally selected December 31 as its year-end. On March 31,
2008 the board of directors and majority of shareholders accepted a change
of the year-end to June 30.
Advertising
- -----------
Advertising is expensed when incurred. There has been no advertising
during the period.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 3 -- MERGER WITH EZJR (the reporting Company)
On July 25, 2008, the Company, at that time known as IVPSA Corporation,
which was a private company and EZJR, Inc., a Nevada corporation, that was
fully reporting the SEC, entered into an Acquisition Agreement and Plan of
Merger whereby EZJR, Inc. was acquired by IVPSA Corporation. Immediately
after the acquisition was consummated, the two major shareholders of the
Company, in a private transaction, paid the original EZJR founder $4,000 for
all of his stock in EZJR. Upon the execution of the private transaction to
purchase this stock, these shares were returned to the corporate treasury,
without consideration and cancelled on the corporate books. From an
accounting point of view, a contribution by the two major shareholders was
made to the Company for these shares. When the shares were returned to the
corporate treasury for cancellation, the credit to contributed capital was
reversed with a net impact to the Company of zero.
Pursuant to Nevada Revised Statutes Chapter 92A, both companies under Nevada
law were required to file Articles of Merger. The Articles of Merger state
that IVPSA became the surviving entity. The financials are presented as if
they were consolidated financials for IVPSA and EZJR, as the financials
represent both entities. However, once the Articles of Merger were filed
with the Nevada Secretary of State, both companies aligned and became a
single entity. Therefore, since only one entity exists, the financials are
not classified as consolidated, although they represent both entities.
The Articles of Merger filed with the Nevada Secretary of State, changed the
corporate name of the consolidated companies to EZJR, Inc.
F-9
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 4- Going concern
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of
America, which contemplates continuation of the Company as a going concern.
As shown in the accompanying financial statements, the Company is a
development stage company with no history of operations, limited assets, and
has incurred operating losses since inception. These factors, among others,
raise substantial doubt about its ability to continue as a going concern.
The financial statements do not include any adjustments relating to the
recoverability of assets and classification of liabilities that might be
necessary should the Company be unable to continue as a going concern. The
Company's continuation as a going concern is dependent upon its ability to
obtain additional operating capital, commence operations, provide competitive
services, and ultimately to attain profitability. The Company intends to
acquire additional operating capital through equity offerings. There is no
assurance that the Company will be successful in raising additional funds.
NOTE 5 - Stockholders' equity
The Company is authorized to issue 70,000,000 shares of its $0.001 par value
common stock and 5,000,000 shares of its $0.001 par value preferred stock.
The Company was a subsidiary of Eaton Laboratories, Inc. On November 1,
2006, the record shareholders of Eaton received a spin off dividend of one
(1) common share, par value $0.001, of IVPSA Corporation common stock for
every share of Eaton Laboratories common stock owned.
As of June 30, 2009, EZJR, Inc. has 10,873,750 of its common stock issued
and outstanding and none of its preferred stock issued nor outstanding.
There have been no other issuances of common stock.
NOTE 6. Related Party Transactions
The Company does not lease or rent any property. Office space is being
provided by the Company's director on a rent free basis. The amount is not
considered material to the financial statements. The Company believes that
its current facilities are adequate for its needs through the next twelve
months, and that, should it be needed, suitable additional space will be
available to accommodate expansion of the Company's operations on
commercially reasonable terms, although there can be no assurance in this
regard
F-10
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
The sole officer and director of the Company is involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
The sole officer and director of the Company is not compensated for his
services. The Company does not anticipate paying compensation to any
officer/director until the Company can generate a profit on a regular basis.
Further, the executive officer/director of the Company has no plans to take
any salary until the Company can generate a profit on a regular basis.
There are no Employment Agreements in place, and the sole officer/director
will not be compensated for services previously provided. He will receive no
accrued remuneration.
The sole officer/director has contributed funds to the operations of the
Company, in order to keep it fully reporting and operational for the next
twelve (12) months, without seeking reimbursement for funds contributed.
NOTE 7. Exclusive Option Agreement
The Company entered into an "Exclusive Option Agreement" with the Cleveland
Clinic, Cleveland, Ohio, on March 15, 2007 to investigate and conduct due
diligence with respect to the commercial viability of the licensable
technology prior to executing a formal License Agreement. The Company paid
the Cleveland Clinic, a nonrefundable fee of $36,000 for a one year Option
Agreement and another $10,000 nonrefundable fee to extend the option
agreement for another year. The agreement terminated in March, 2009.
This was accounted on our Statement of Operations as an Option Contract.
The expense was recognized upon payment for the option.
NOTE 8. Provision for Income Taxes
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which
requires use of the liability method. SFAS No. 109 provides that deferred
tax assets and liabilities are recorded based on the differences between the
tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes, referred to as temporary differences. Deferred tax
assets and liabilities at the end of each period are determined using the
currently enacted tax rates applied to taxable income in the periods in which
the deferred tax assets and liabilities are expected to be settled or
realized.
F-11
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 8. Provision for Income Taxes (continued)
The computation of limitations relating to the amount of such tax assets, and
the determination of appropriate valuation allowances relating to the
realizing of such assets, are inherently complex and require the exercise of
judgment. As additional information becomes available, we continually assess
the carrying value of our net deferred tax assets.
The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to income before provision for income
taxes. The sources and tax effects of the differences are as follows:
U.S federal statutory rate (34.0%)
Valuation reserve 34.0%
------
Total -%
NOTE 9. Operating Leases and Other Commitments
The Company has no lease or other obligations.
NOTE 10. Recent Pronouncements
June 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of
Financial Assets - an amendment of FASB Statement No. 140" ("SFAS
166"). The provisions of SFAS 166, in part, amend the derecognition
guidance in FASB Statement No. 140, eliminate the exemption from
consolidation for qualifying special-purpose entities and require
additional disclosures. SFAS 166 is effective for financial asset
transfers occurring after the beginning of an entity's first fiscal
year that begins after November 15, 2009. Management is currently
evaluating the potential impact this standard may have on its financial
position, cash flows and results of operations, but does not believe the
impact of the adoption will be material.
In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB
Interpretation No. 46(R) ("SFAS 167"). SFAS 167 amends the
consolidation guidance applicable to variable interest entities. The
provisions of SFAS 167 significantly affect the overall consolidation
analysis under FASB Interpretation No. 46(R). SFAS 167 is effective as
of the beginning of the first fiscal year that begins after November
15, 2009. SFAS 167 will be effective for the Company beginning in 2010.
Management is currently evaluating the potential impact this standard may
have on its financial position, cash flows and results of operations, but
does not believe the impact of the adoption will be material.
F-12
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 10. Recent Pronouncements (Continued)
In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles - a replacement of FASB Statement No. 162" ("SFAS
No. 168"). Under SFAS No. 168 the "FASB Accounting Standards
Codification" ("Codification") will become the source of authoritative
U. S. GAAP to be applied by nongovernmental entities. Rules and
interpretive releases of the Securities and Exchange Commission ("SEC")
under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. SFAS No. 168 is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. On the effective date, the Codification will
supersede all then-existing non-SEC accounting and reporting standards.
All other non-grandfathered non-SEC accounting literature not included
in the Codification will become non-authoritative. SFAS No. 168 is
effective for the Company's interim quarterly period beginning July 1,
2009. Management is currently evaluating the potential impact this
standard may have on its financial position, but does not believe the
impact of the adoption will be material.
In June 2009, the Securities and Exchange Commission's Office of the
Chief Accountant and Division of Corporation Finance announced the
release of Staff Accounting Bulletin (SAB) No. 112. This staff
accounting bulletin amends or rescinds portions of the interpretive
guidance included in the Staff Accounting Bulletin Series in order to
make the relevant interpretive guidance consistent with current
authoritative accounting and auditing guidance and Securities and
Exchange Commission rules and regulations. Specifically, the staff is
updating the Series in order to bring existing guidance into conformity
with recent pronouncements by the Financial Accounting Standards Board,
namely, Statement of Financial Accounting Standards No. (revised
2007), Business Combinations, and Statement of Financial Accounting
Standards No. 160, Non-controlling Interests in Consolidated Financial
Statements. The statements in staff accounting bulletins are not rules
or interpretations of the Commission, nor are they published as bearing
the Commission's official approval. They represent interpretations and
practices followed by the Division of Corporation Finance and the
Office of the Chief Accountant in administering the disclosure
requirements of the Federal securities laws.
F-13
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 10. Recent Pronouncements (Continued)
In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim
Disclosures about Fair Value of Financial Instruments. This FSP amends
FASB Statement No. 107, Disclosures about Fair Value of Financial
Instruments, to require disclosures about fair value of financial
instruments for interim reporting periods of publicly traded companies
as well as in annual financial statements. This FSP also amends APB
Opinion No. 28, Interim Financial Reporting, to require those
disclosures in summarized financial information at interim reporting
periods. This FSP shall be effective for interim reporting periods
ending after June 15, 2009. The Company does not have any fair value of
financial instruments to disclose.
In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2,
Recognition and Presentation of Other-Than-Temporary Impairments. This
FSP amends the other-than-temporary impairment guidance in U.S. GAAP
for debt securities to make the guidance more operational and to
improve the presentation and disclosure of other-than-temporary
impairments on debt and equity securities in the financial statements.
The FSP does not amend existing recognition and measurement guidance
related to other-than-temporary impairments of equity securities. The
FSP shall be effective for interim and annual reporting periods ending
after June 15, 2009. The Company currently does not have any financial
assets that are other-than-temporarily impaired.
In April 2009, the FASB issued FSP No. FAS (R)-1, Accounting for
Assets Acquired and Liabilities Assumed in a Business Combination That
Arise from Contingencies, to address some of the application issues
under SFAS 141(R). The FSP deals with the initial recognition and
measurement of an asset acquired or a liability assumed in a business
combination that arises from a contingency provided the asset or
liability's fair value on the date of acquisition can be determined.
When the fair value can-not be determined, the FSP requires using the
guidance under SFAS No. 5, Accounting for Contingencies, and FASB
Interpretation (FIN) No. 14, Reasonable Estimation of the Amount of a
Loss. This FSP was effective for assets or liabilities arising from
contingencies in business combinations for which the acquisition date
is on or after January 1, 2009. The adoption of this FSP has not had a
material impact on our financial position, results of operations, or
cash flows during the six months ended June 30, 2009.
F-14
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 10. Recent Pronouncements (Continued)
In April 2009, the FASB issued FSP No. FAS 157-4, "Determining Fair
Value When the Volume and Level of Activity for the Asset or Liability
Have Significantly Decreased and Identifying Transactions That Are Not
Orderly" ("FSP FAS 157-4"). FSP FAS 157-4 provides guidance on
estimating fair value when market activity has decreased and on
identifying transactions that are not orderly. Additionally, entities
are required to disclose in interim and annual periods the inputs and
valuation techniques used to measure fair value. This FSP is effective
for interim and annual periods ending after June 15, 2009. The Company
does not expect the adoption of FSP FAS 157-4 will have a material
impact on its financial condition or results of operation.
In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8,
"Disclosures by Public Entities (Enterprises) about Transfers of
Financial Assets and Interests in Variable Interest Entities." This
disclosure-only FSP improves the transparency of transfers of financial
assets and an enterprise's involvement with variable interest entities,
including qualifying special-purpose entities. This FSP is effective
for the first reporting period (interim or annual) ending after
December 15, 2008, with earlier application encouraged. The Company
adopted this FSP effective January 1, 2009. The adoption of the FSP had
no impact on the Company's results of operations, financial condition
or cash flows.
In December 2008, the FASB issued FSP No. FAS 132(R)-1, "Employers'
Disclosures about Postretirement Benefit Plan Assets" ("FSP FAS 132(R)-
1"). FSP FAS 132(R)-1 requires additional fair value disclosures about
employers' pension and postretirement benefit plan assets consistent
with guidance contained in SFAS 157. Specifically, employers will be
required to disclose information about how investment allocation
decisions are made, the fair value of each major category of plan
assets and information about the inputs and valuation techniques used
to develop the fair value measurements of plan assets. This FSP is
effective for fiscal years ending after December 15, 2009. The Company
does not expect the adoption of FSP FAS 132(R)-1 will have a material
impact on its financial condition or results of operation.
In October 2008, the FASB issued FSP No. FAS 157-3, "Determining the
Fair Value of a Financial Asset When the Market for That Asset is Not
Active," ("FSP FAS 157-3"), which clarifies application of SFAS 157 in
a market that is not active. FSP FAS 157-3 was effective upon
issuance, including prior periods for which financial statements have
not been issued. The adoption of FSP FAS 157-3 had no impact on the
Company's results of operations, financial condition or cash flows.
F-15
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 10. Recent Pronouncements (Continued)
In September 2008, the FASB issued exposure drafts that eliminate
qualifying special purpose entities from the guidance of SFAS No. 140,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," and FASB Interpretation 46 (revised
December 2003), "Consolidation of Variable Interest Entities - an
interpretation of ARB No. 51," as well as other modifications. While
the proposed revised pronouncements have not been finalized and the
proposals are subject to further public comment, the Company
anticipates the changes will not have a significant impact on the
Company's financial statements. The changes would be effective March
1, 2010, on a prospective basis.
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1,
Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities, ("FSP EITF 03-6-1"). FSP
EITF 03-6-1 addresses whether instruments granted in share-based
payment transactions are participating securities prior to vesting, and
therefore need to be included in the computation of earnings per share
under the two-class method as described in FASB Statement of Financial
Accounting Standards No. 128, "Earnings per Share." FSP EITF 03-6-1 is
effective for financial statements issued for fiscal years beginning on
or after December 15, 2008 and earlier adoption is prohibited. We are
not required to adopt FSP EITF 03-6-1; neither do we believe that FSP
EITF 03-6-1 would have material effect on our consolidated financial
position and results of operations if adopted.
In May 2008, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts-
and interpretation of FASB Statement No. 60". SFAS No. 163 clarifies
how Statement 60 applies to financial guarantee insurance contracts,
including the recognition and measurement of premium revenue and claims
liabilities. This statement also requires expanded disclosures about
financial guarantee insurance contracts. SFAS No. 163 is effective for
fiscal years beginning on or after December 15, 2008, and interim
periods within those years. SFAS No. 163 has no effect on the Company's
financial position, statements of operations, or cash flows at this
time.
F-16
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 10. Recent Pronouncements (Continued)
In May 2008, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 162, "The Hierarchy of Generally Accepted Accounting
Principles". SFAS No. 162 sets forth the level of authority to a given
accounting pronouncement or document by category. Where there might be
conflicting guidance between two categories, the more authoritative
category will prevail. SFAS No. 162 will become effective 60 days after
the SEC approves the PCAOB's amendments to AU Section 411 of the AICPA
Professional Standards. SFAS No. 162 has no effect on the Company's
financial position, statements of operations, or cash flows at this
time.
In March 2008, the Financial Accounting Standards Board, or FASB,
issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities-an amendment of FASB Statement No. 133. This
standard requires companies to provide enhanced disclosures about (a)
how and why an entity uses derivative instruments, (b) how derivative
instruments and related hedged items are accounted for under Statement
133 and its related interpretations, and (c) how derivative instruments
and related hedged items affect an entity's financial position,
financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods
beginning after November 15, 2008, with early application encouraged.
The Company has not yet adopted the provisions of SFAS No. 161, but
does not expect it to have a material impact on its consolidated
financial position, results of operations or cash flows.
In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No.
110 regarding the use of a "simplified" method, as discussed in SAB No.
107 (SAB 107), in developing an estimate of expected term of "plain
vanilla" share options in accordance with SFAS No. 123 (R), Share-Based
Payment. In particular, the staff indicated in SAB 107 that it will
accept a company's election to use the simplified method, regardless of
whether the company has sufficient information to make more refined
estimates of expected term. At the time SAB 107 was issued, the staff
believed that more detailed external information about employee
exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily
available to companies. Therefore, the staff stated in SAB 107 that it
would not expect a company to use the simplified method for share
option grants after December 31, 2007. The staff understands that such
detailed information about employee exercise behavior may not be widely
available by December 31, 2007. Accordingly, the staff will continue to
accept, under certain circumstances, the use of the simplified method beyond
December 31, 2007. The Company currently uses the simplified method for
F-17
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 10. Recent Pronouncements (Continued)
"plain vanilla" share options and warrants, and will assess the impact of
SAB 110 for fiscal year 2009. It is not believed that this will have an
impact on the Company's consolidated financial position, results of
operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51. This statement
amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as
equity in the consolidated financial statements. Before this statement was
issued, limited guidance existed for reporting noncontrolling interests. As a
result, considerable diversity in practice existed. So-called minority
interests were reported in the consolidated statement of financial position
as liabilities or in the mezzanine section between liabilities and equity.
This statement improves comparability by eliminating that diversity. This
statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1,
2009, for entities with calendar year-ends). Earlier adoption is prohibited.
The effective date of this statement is the same as that of the related
Statement 141 (revised 2007). The Company will adopt this Statement
beginning March 1, 2009. It is not believed that this will have an impact on
the Company's consolidated financial position, results of operations or cash
flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007), "Business
Combinations". This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in Statement 141.
This Statement establishes principles and requirements for how the acquirer:
(a) recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in
the acquiree; (b) recognizes and measures the goodwill acquired in the
business combination or a gain from a bargain purchase; and (c) determines
what information to disclose to enable users of the financial statements to
evaluate the nature and financial effects of the business combination. This
statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. An entity may not apply it
before that date. The effective date of this statement is the same as that of
the related FASB Statement No. 160, Noncontrolling Interests in Consolidated
Financial Statements. The Company will adopt this statement beginning March
1, 2009. It is not believed that this will have an impact on the Company's
consolidated financial position, results of operations or cash flows.
F-18
EZJR, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
NOTE 11. RESTATEMENT
The Company restated its financial statements as of and for the year ending
June 30, 2008 due to an accounting error. The June 30, 2008 year-end
financials reflect the correction of an expense in the amount of $7,500 due
to a timing error. The Company's summarized financial statements comparing
the restated financial statements to those originally filed are as follows:
Year Ended
June 30, 2008
Originally
Reported Restated Difference
---------- ---------- ----------
BALANCE SHEET
Current Liabilities
Accounts Payable $ 8,257 $ 15,757 $ 7,500
Total Liabilities and Stockholders' Equity
(Deficit) 57,691 65,191 (7,500)
Total stockholder's equity (757) (8,257) (7,500)
Total liabilities and Stockholders' Equity - 7,500 7,500
Statement of Operations
Expenses:
Audit fees 1,500 1,500 -
Option contract 2,500 10,000 7,500
Professional fees 504 504 -
Research & Development 16,757 16,757 -
------- -------- --------
Total Expenses 21,261 28,761 7,500
------- -------- --------
Net Loss (21,261) (28,761) (7,500)
========== ========== ==========
STATEMENT OF CASH FLOWS
Operating Activities $(20,504) $(13,004) $ 7,500
Cash Ending $ - $ 7,500 $ 7,500
========== ========== ==========
=============================================================================
F-19
Item 9. Changes in and Disagreements With Accountants On Accounting and
Financial Disclosure.
None.
Item 9A(T). Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
- ------------------------------------------------
Our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in rules and forms
adopted by the SEC, and that such information is accumulated and communicated
to management, including the Chief Executive Officer and the Chief Financial
Officer, to allow timely decisions regarding required disclosures.
Management, with the participation of the Chief Executive Officer and the
Chief Financial Officer, who is also the sole member of our Board of
Directors, has evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this Form 10-K. Based on
such evaluation, the Chief Executive Officer and the Chief Financial Officer
concluded that, as of June 30, 2009, our disclosure controls and procedures
were not effective. Our disclosure controls and procedures were not
effective because of the "material weaknesses" described below under
"Management's annual report on internal control over financial reporting,"
which are in the process of being remediated as described below under
"Management Plan to Remediate Material Weaknesses."
Management's Report on Internal Control over Financial Reporting
- ----------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting, as defined in rules promulgated under the Exchange Act, is a
process designed by, or under the supervision of, our Chief Executive Officer
and Chief Financial Officer and affected by our Board of Directors,
management and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP. Internal control
over financial reporting includes those policies and procedures that:
o pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of our assets;
o provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that
our receipts and expenditures are being made only in accordance with
authorizations of our management and our Board of Directors; and
28
o provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on our financial statements
Because of its inherent limitations, a system of internal control over
financial reporting can provide only reasonable, not absolute, assurance
that the objectives of the control system are met and may not prevent or
detect misstatements. Internal control over financial reporting is a process
that involves human diligence and compliance and is subject to lapses in
judgment and breakdowns resulting from human failures. Internal control over
financial reporting also can be circumvented by collusion or improper
override. Because of such limitations, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are
known features of the financial reporting process, and it is possible to
design into the process safeguards to reduce, though not eliminate, this
risk. Further, over time control may become inadequate because of changes in
conditions or the degree of compliance with the policies or procedures may
deteriorate.
Our management assessed the effectiveness of our internal control over
financial reporting as of June 30, 2009. In making its assessment, management
used the criteria established in Internal Control-Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO"). Based on its assessment, management has concluded that
we had certain control deficiencies described below that constituted
material weaknesses in our internal controls over financial reporting. As a
result, our internal control over financial reporting was not effective as
of June 30, 2009.
A "material weakness" is defined under SEC rules as a deficiency, or a
combination of deficiencies, in internal control over financial reporting
such that there is a reasonable possibility that a material misstatement of
a company's annual or interim financial statements will not be prevented or
detected on a timely basis by the company's internal controls. As a result
of management's review of the investigation issues and results, and other
internal reviews and evaluations that were completed after the end of fiscal
year 2009 related to the preparation of management's report on internal
controls over financial reporting required for this annual report on
Form 10-K, management concluded that we had material weaknesses in our
control environment and financial reporting process consisting of the
following:
1) lack of a functioning audit committee due to a lack of a majority of
independent members and a lack of a majority of outside directors on our
board of directors, resulting in ineffective oversight in the establishment
and monitoring of required internal controls and procedures;
2) inadequate segregation of duties consistent with control objectives;
3) insufficient written policies and procedures for accounting and financial
reporting with respect to the requirements and application of US GAAP and
SEC disclosure requirements; and
4) ineffective controls over period end financial disclosure and reporting
processes.
29
We do not believe the material weaknesses described above caused any
meaningful or significant misreporting of our financial condition and results
of operations for the fiscal year ended June 30, 2009. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required
internal controls and procedures, which could result in a material
misstatement in our financial statements in future periods.
Management Plan to Remediate Material Weaknesses
- ------------------------------------------------
Management is pursuing the implementation of corrective measures to address
the material weaknesses described below. In an effort to remediate the
identified material weaknesses and other deficiencies and enhance our
internal controls, we have initiated, or plan to initiate, the following
series of measures:
We will create a position to segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to us.
We plan to appoint one or more outside directors to our board of directors who
shall be appointed to an audit committee resulting in a fully functioning audit
committee who will undertake the oversight in the establishment and monitoring
of required internal controls and procedures such as reviewing and approving
estimates and assumptions made by management when funds are available to us.
We believe the remediation measures described above will remediate the
material weaknesses we have identified and strengthen our internal control
over financial reporting. We are committed to continuing to improve our
internal control processes and will continue to diligently and vigorously
review our financial reporting controls and procedures. As we continue to
evaluate and work to improve our internal control over financial reporting,
we may determine to take additional measures to address control deficiencies
or determine to modify, or in appropriate circumstances not to complete,
certain of the remediation measures described above.
Changes in Internal Control over Financial Reporting
- ----------------------------------------------------
There were no changes in our internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
during the most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
This amended annual report does not include an attestation report of the
Corporation's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation
by the Corporation's registered public accounting firm pursuant to temporary
rules of the SEC that permit the Corporation to provide only the management's
report in this quarterly report.
30
(c) Changes in internal controls over financial reporting
- ----------------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
Item 9B. Other Information.
None.
31
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The following table sets forth certain information regarding our current
directors and executive officers. Our executive officers serve one-year
terms.
Name Age Positions and Offices Held
- --------------- --- --------------------------
T J Jesky 62 President, Secretary and Director
The Company is managed by T J Jesky, who has 22-years experience in the
pharmaceutical industry. He is a former Division Manager for Procter &
Gamble Pharmaceuticals. He began his pharmaceutical career in 1973 with
Norwich Pharmacal, whose headquarters were based in Norwich, New York. This
company subsequently changed its name to Norwich Eaton, and in 1981 it was
purchased by Procter & Gamble. Norwich Eaton subsequently changed its name
to Procter & Gamble Pharmaceuticals. Mr. Jesky held various positions in the
company, including but not limited to: District Manager, Key Account
Manager, Hospital Manager, Region Manager, Division Manager for U.S., Canada
and Puerto Rico. He resigned from Procter & Gamble in 1995. He became
President, CEO and sole stockholder of Studebaker's, Inc. a
restaurant/nightclub and real estate holding company in Arizona. He
privately sold this business in 1997. In 1997 through 1998, he owned and
operated a restaurant consulting business, named Ionosphere, Inc. In 1998,
he resigned from the Company when it was acquired by Axonyx, Inc., which is
currently trading on the NASDAQ National Market, under the name TorreyPines
Therapeutics, Inc. From 1996 through 1999 he was President and Chairman of
the Board of Boppers Holdings, Inc., a Nevada Corporation real estate
business; he resigned from the Company when it was acquired by e-Smart
Technologies, Inc. which is currently listed on the Pink Sheets. In August,
1998, Mr. Jesky founded Barrington Laboratories, Inc., he resigned from the
Company when it was acquired by ModernGroove Entertainment, in January, 2001
and subsequently acquired by Immediatek, Inc. Immediatek is currently traded
on the OTC-BB. From February, 2000 to March, 2007, he held the position as
President/Director of Eaton Laboratories, Inc. In March, 2007, Eaton
Laboratories was acquired by Hydrogen Hybrid Technologies, Inc, a Canadian-
based firm which is currently traded on OTC-BB under the stock symbol HYHY.
From inception to present, he has held the position as President/ Director of
IVPSA Corporation. IVPSA Corporation was a subsidiary of Eaton Laboratories.
IVPSA Corporation subsequently acquired EZJR, Inc.
32
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires our executive officers and directors, and persons
who beneficially own more than ten percent of our common stock, to file
initial reports of ownership and reports of changes in ownership with the
SEC. Executive officers, directors and greater than ten percent beneficial
owners are required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file. Based upon a review of the copies of such
forms furnished to us and written representations from our executive officers
and directors, we believe that as of the date of this report they were not
current in his 16(a) reports.
Board of Directors
- ------------------
Our board of directors currently consists of one member, Mr. Jesky. Our
directors serve one-year terms.
Audit Committee
- ---------------
The company does not presently have an Audit Committee. The sole member of
the Board sits as the Audit Committee. No qualified financial expert has
been hired because the company is too small to afford such expense.
Committees and Procedures
- -------------------------
(1) The registrant has no standing audit, nominating and compensation
committees of the Board of Directors, or committees performing
similar functions. The Board acts itself in lieu of committees due
to its small size.
(2) The view of the board of directors is that it is appropriate for the
registrant not to have such a committee because its directors
participate in the consideration of director nominees and the
board and the company are so small.
(3) The members of the Board who acts as nominating committee is
not independent, pursuant to the definition of independence of a
national securities exchange registered pursuant to section 6(a)
of the Act (15 U.S.C. 78f(a).
(4) The nominating committee has no policy with regard to the
consideration of any director candidates recommended by security
holders, but the committee will consider director candidates
recommended by security holders.
33
(5) The basis for the view of the board of directors that it is
appropriate for the registrant not to have such a policy is that
there is no need to adopt a policy for a small company.
(6) The nominating committee will consider candidates recommended by
security holders, and by security holders in submitting such
recommendations.
(7) There are no specific, minimum qualifications that the nominating
committee believes must be met by a nominee recommended by security
holders except to find anyone willing to serve with a clean
background.
(8) The nominating committee's process for identifying and evaluation
of nominees for director, including nominees recommended by security
holders, is to find qualified persons willing to serve with a clean
backgrounds. There are no differences in the manner in which the
nominating committee evaluates nominees for director based on
whether the nominee is recommended by a security holder, or found
by the board.
Code of Ethics
- --------------
We have not adopted a Code of Ethics for the Board and any salaried
employees.
Limitation of Liability of Directors
- ------------------------------------
Pursuant to the Nevada General Corporation Law, our Articles of Incorporation
exclude personal liability for our Directors for monetary damages based upon
any violation of their fiduciary duties as Directors, except as to liability
for any breach of the duty of loyalty, acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, or any
transaction from which a Director receives an improper personal benefit. This
exclusion of liability does not limit any right which a Director may have to
be indemnified and does not affect any Director's liability under federal or
applicable state securities laws. We have agreed to indemnify our directors
against expenses, judgments, and amounts paid in settlement in connection
with any claim against a Director if he acted in good faith and in a manner
he believed to be in our best interests.
34
Nevada Anti-Takeover Law and Charter and By-law Provisions
- ----------------------------------------------------------
The anti-takeover provisions of Sections 78.411 through 78.445 of the Nevada
Corporation Law apply to EZJR. Section 78.438 of the Nevada law prohibits
the Company from merging with or selling more than 5% of our assets or stock
to any shareholder who owns or owned more than 10% of any stock or any entity
related to a 10% shareholder for three years after the date on which the
shareholder acquired the EZJR shares, unless the transaction is approved by
EZJR's Board of Directors. The provisions also prohibit the Company from
completing any of the transactions described in the preceding sentence with a
10% shareholder who has held the shares more than three years and its related
entities unless the transaction is approved by our Board of Directors or a
majority of our shares, other than shares owned by that 10% shareholder or
any related entity. These provisions could delay, defer or prevent a change
in control of EZJR, Inc.
Item 11. Executive Compensation.
The following table sets forth summary compensation information for the
fiscal year ended June 30, 2009 for our Chief Executive Officer, who was
appointed on August 14, 2006. We did not have any executive officers as of
the year end of June 30, 2009 who received any compensation.
Compensation
- ------------
As a result of our the Company's current limited available cash, no officer
or director received compensation since August 14, 2006 (inception) of the
company through the fiscal years ending June 30, 2009 and June 30, 2007. EZJR
has no intention of paying any salaries at this time. We intend to pay
salaries when cash flow permits.
Summary Compensation Table
- --------------------------
All
Fiscal Other
Year Compen-
Ending Salary Bonus Awards sation Total
Name and Principal Position June 30 ($) ($) ($) ($) ($)
- ----------------------------------------------------------------------------
T J Jesky CEO/Dir. 2009 -0- -0- -0- -0- -0-
2008 -0- -0- -0- -0- -0-
2007 -0- -0- -0- -0- -0-
35
We do not have any employment agreements with our officers/directors. We do
not maintain key-man life insurance for any our executive officers/directors.
We do not have any long-term compensation plans or stock option plans.
Stock Option Grants
- -------------------
We did not grant any stock options to the executive officers or directors
from inception through fiscal year end June 30, 2009.
Outstanding Equity Awards at Fiscal Year-Ending June 30, 2009
- -------------------------------------------------------------
We did not have any outstanding equity awards as of June 30, 2009.
Option Exercises for Fiscal Year-Ending June 30, 2009
- -----------------------------------------------------
There were no options exercised by our named executive officer in
fiscal year ending June 30, 2009.
Potential Payments upon Termination or Change in Control
- --------------------------------------------------------
We have not entered into any compensatory plans or arrangements with respect
to our named executive officer, which would in any way result in payments to
such officer because of his resignation, retirement, or other termination of
employment with us or our subsidiaries, or any change in control of, or a
change in his responsibilities following a change in control.
Director Compensation
- ---------------------
We did not pay our directors any compensation during fiscal years ending
June 30, 2009 or June 30, 2008.
36
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
The following table presents information, to the best of our knowledge, about
the ownership of our common stock on September 17, 2010 relating to those
persons known to beneficially own more than 5% of our capital stock and by
our named executive officer and sole director. The percentage of beneficial
ownership for the following table is based on 10,873,750 shares of common
stock outstanding.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and does not necessarily indicate
beneficial ownership for any other purpose. Under these rules, beneficial
ownership includes those shares of common stock over which the stockholder
has sole or shared voting or investment power. It also includes shares of
common stock that the stockholder has a right to acquire within 60 days after
September 17, 2010 pursuant to options, warrants, conversion privileges or
other right. The percentage ownership of the outstanding common stock,
however, is based on the assumption, expressly required by the rules of the
Securities and Exchange Commission, that only the person or entity whose
ownership is being reported has converted options or warrants into shares of
EZJR's common stock.
Amount
Title Name and Address of shares Percent
of of Beneficial held by of
Class Owner of Shares Position Owner Class(1)
- ----------------------------------------------------------------------------
Common T J Jesky (2) Pres./Director 4,000,000 36.7%
Common Mark DeStefano (3) Shareholder 3,500,000 32.2%
- ---------------------------------------------------------------------------
All Executive Officers, Directors
as a Group (1 person) 4,000,000 36.7%
(1) The percentages listed in the Percent of Class column are based upon
10,873,750 issued and outstanding shares of Common Stock.
(2) T J Jesky, 2235 E. Flamingo, Suite 114, Las Vegas, NV 89119.
(3) Mark DeStefano, 500 N. Rainbow, Suite 300, Las Vegas, NV 89107.
We are not aware of any arrangements that may result in "changes in control"
as that term is defined by the provisions of Item 403(c) of Regulation S-B.
37
We believe that all persons named have full voting and investment power with
respect to the shares indicated, unless otherwise noted in the table. Under
the rules of the Securities and Exchange Commission, a person (or group of
persons) is deemed to be a "beneficial owner" of a security if he or she,
directly or indirectly, has or shares the power to vote or to direct the
voting of such security, or the power to dispose of or to direct the
disposition of such security. Accordingly, more than one person may be deemed
to be a beneficial owner of the same security. A person is also deemed to be
a beneficial owner of any security, which that person has the right to
acquire within 60 days, such as options or warrants to purchase our common
stock.
Item 13. Certain Relationships and Related Transactions, and Director
Independence.
The company's sole officer/director has contributed office space for our use.
There is no charge to us for the space. Our officer will not seek
reimbursement for past office expenses.
Through a Board Resolution and the approval of the majority of shareholders
at the Company's annual shareholder meeting, the Company hired the
professional services of Seale and Beers, CPAs, Certified Public Accountants,
to perform an audit of the financial statements of the Company. Seale and
Beers, CPAs own no stock in the Company. The company has no formal contracts
with its accountants and they are paid on a fee for service basis.
Other than as set forth above, there are no transactions since our inception,
or proposed transactions, to which we were or are to be a party, in which any
of the following persons had or is to have a direct or indirect material
interest:
a) Any director or executive officer of the small business issuer;
b) Any majority security holder; and
c) Any member of the immediate family (including spouse, parents, children,
siblings, and in-laws) of any of the persons in the above.
38
Item 14. Principal Accountant Fees and Services.
Seale and Beers, CPAs served as our principal independent public accountants
for fiscal year ending June 30, 2009. Aggregate fees billed to us for the
years ended June 30, 2009 and June 30, 2008 to Seale and Beers, CPAs and by
our former auditor were as follows:
For the Years Ended
June 30,
-------------------
2009 2008
-------------------
(1) Audit Fees(1) $5,500 $1,500
(2) Audit-Related Fees -0- -0-
(3) Tax Fees -0- -0-
(4) All Other Fees -0- -0-
Total fees paid or accrued to our principal accountant
(1) Audit Fees include fees billed and expected to be billed for services
performed to comply with Generally Accepted Auditing Standards (GAAS),
including the recurring audit of the Company's financial statements for such
period included in this Annual Report on Form 10-K and for the reviews of the
quarterly financial statements included in the Quarterly Reports on Form
10-QSB filed with the Securities and Exchange Commission.
Audit Committee Policies and Procedures
- ---------------------------------------
We do not have an audit committee; therefore our sole director pre-approves
all services to be provided to us by our independent auditor. This process
involves obtaining (i) a written description of the proposed services, (ii)
the confirmation of our Principal Accounting Officer that the services are
compatible with maintaining specific principles relating to independence, and
(iii) confirmation from our securities counsel that the services are not
among those that our independent auditors have been prohibited from
performing under SEC rules. In fiscal year ending June 30, 2009, all fees
paid to Seale and Beers, CPAs were unanimously pre-approved in accordance
with this policy.
Less than 50 percent of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees.
39
PART IV
Item 15. Exhibits, Financial Statement Schedules.
The following information required under this item is filed as part of
this report:
(a) 1. Financial Statements
Page
----
Management's Report on Internal Control Over Financial Reporting 28
Report of Independent Registered Public Accounting Firm F-1
Balance Sheets F-2
Statements of Operations F-3
Statements of Stockholders' Equity F-4
Statements of Cash Flows F-5
(b) 2. Financial Statement Schedules
None.
40
(c) 3. Exhibit Index
Incorporated by reference
-------------------------
- ------------------------------------------------------------------------------
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
- ------------------------------------------------------------------------------
2.1 Acquisition and Plan of 10 6/30/09 2.1 10/29/09
Merger between EZJR, Inc.
and IVPSA Corporation
dated July 25, 2008
- ------------------------------------------------------------------------------
3.1 Articles of Incorporation, 10 6/30/09 3.1 10/29/09
as currently in effect
- ------------------------------------------------------------------------------
3.2 Bylaws 10 6/30/09 3.2 10/29/09
Corrected Bylaws 10/A 9/30/09 3.2 12/21/09
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3.3 Articles of Merger 10 6/30/09 3.3 10/29/09
between EZJR, Inc. and
IVPSA Corporation
- ------------------------------------------------------------------------------
10.1 Exclusive Option Agreement 10 6/30/09 10.1 10/29/09
between IVPSA Corporation
and the Cleveland Clinic,
dated March 15, 2007
- ------------------------------------------------------------------------------
10.2 Extension of Exclusive 10 6/30/09 10.2 10/29/09
Option Agreement between
IVPSA Corporation and
the Cleveland Clinic,
dated April 14, 2008.
- ------------------------------------------------------------------------------
31.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
- ------------------------------------------------------------------------------
32.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
- ------------------------------------------------------------------------------
41
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
EZJR, Inc.
- -----------
Registrant
By: /s/ T J Jesky
-------------
T J Jesky
President
Date: September 17, 2010
-------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
following persons on behalf of the Registrant and in the capacities and on
the dates indicated have signed this report below.
By: /s/ T J Jesky
-------------
T J Jesky
President, Secretary,
Treasurer and Director
(Principal Executive,
Principal Financial and
Principal Accounting Officer)
Date: September 17, 2010
------------------
42