UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 2 to
FORM 10-Q/A
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2009
OR
|_| 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
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification 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
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 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 check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of
the Exchange Act (Check one).
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller Reporting Company |X|
(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|
As of September 17, 2010, the registrant had outstanding 10,873,750 shares of
its $0.001 par value Common Stock.
Explanatory Note
----------------
We are filing this Amendment No. 2 on Form 10-Q/A for the quarter ended
December 31, 2009 to amend our Form 10-Q originally filed with the U. S.
Securities and Exchange Commission on February 16, 2010. We are filing
this amendment for the purpose of providing corrected information concerning
our Controls and Procedures under Item 4.
Unless otherwise expressly stated, this Amendment No. 2 does not reflect events
occurring after the filing of the original Form 10-Q, or modify or update in
any way disclosures contained in the original Form 10-Q.
Table of Contents
EZJR, Inc.
Index to Form 10-Q
For the Quarterly Period Ended December 31, 2009
Part I. Financial Information
Page
Item 1. Financial Statements
Balance Sheets as of December 31, 2009 and June 30, 2009 3
Statements of Operations for the three months and six months
ended December 31, 2009 and 2008 4
Statements of Cash Flows for the six months
ended December 31, 2009 and 2008 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
Item 4. Controls and Procedures 19
Part II Other Information
Item 1. Legal Proceedings 22
Item 1A. Risk Factors 22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits 23
Signatures 24
2
Part I. Financial Information
Item 1. Financial Statements
EZJR, Inc.
(A Development Stage Company)
Condensed Balance Sheets
December 31,
2009 June 30,
(Unaudited) 2009
---------- -------------
ASSETS
Current assets:
Funds in escrow $ $ -
Prepaid expenses 3,500
---------- -------------
Total current assets 3,500
----------- -------------
TOTAL ASSETS $ $ 3,500
=========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,980 $ 1,480
Accrued expense 1,000 2,500
----------- -------------
Total liabilities 2,980 3,980
----------- -------------
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 12/31/09 and 6/30/09 respectively 10,873 10,873
Additional paid-in capital 69,528 67,028
(Deficit) accumulated during development
stage (83,381) (78,381)
----------- -------------
Total stockholders' equity (2,980) (480)
----------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ $ 3,500
============ =============
The accompanying notes are an integral part of these financial statements.
3
EZJR, Inc.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
August 14,
For the For the 2006
Three Months Ended Six Months Ended (Inception)
----------------------- ----------------------- to
December 31, December 31, December 31, December 31, December 31,
2009 2008 2009 2008 2009
---------- ---------- ---------- ---------- ------------
REVENUE $ $ $ $ $ -
---------- ---------- ---------- ---------- ------------
EXPENSES
Audit fees 1,000 1,000 2,500 1,000 9,500
Incorporating
fees 430
Legal fees 2,500 2,500 2,500
Option
contract 46,000
Professional
fees 2,180 2,230 7,914
Research &
development 280 280 17,037
---------- ---------- ---------- ---------- ------------
Total Expenses 3,500 3,460 2,500 3,510 83,381
---------- ---------- ---------- ---------- ------------
Net loss
before income
taxes (3,500) (3,460) (5,000) (3,510) (83,381)
Income tax
expense -
---------- ---------- ---------- ---------- ------------
NET (LOSS) $ (3,500) $ (3,460) $ (5,000) $ (3,510) $ (83,381)
=========== =========== =========== =========== ============
NET (LOSS)
PER COMMON
SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
=========== =========== =========== ===========
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING 10,873,750 10,873,750 10,873,750 10,873,750
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
4
EZJR, Inc.
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
August 14,
For the 2006
Six Months Ended (Inception)
----------------------- to
December 31, December 31, December 31,
2009 2008 2009
---------- ---------- ------------
OPERATING ACTIVITIES
Net (loss) $ (5,000) $ (3,510) $ (83,381)
Adjustments to reconcile net loss to
net cash provided (used) by operating
activities:
Decrease in prepaid expenses 3,500 -
Increase (decrease) in
accounts payable 500 (12,527) 1,980
Increase (decrease) in
accrued expenses (1,500) 1,000
---------- ---------- ------------
Net cash (used) by operating
activities (2,500) (16,037) (80,401)
FINANCING ACTIVITIES
Contributed capital 2,500 20,967 80,401
---------- ---------- ------------
Net cash provided by financing
activities 2,500 20,967 80,401
---------- ---------- ------------
NET INCREASE (DECREASE) IN CASH 4,930 -
CASH AND EQUIVALENTS BEGINNING 7,500 -
---------- ---------- ------------
CASH AND EQUIVALENTS ENDING $ $ 12,430 $ -
=========== =========== ============
SUPPLEMENTAL DISCLOSURES:
Interest paid $ $ $ -
Income taxes paid $ $ $ -
Non-cash transactions $ $ $ -
The accompanying notes are an integral part of these financial statements.
5
EZJR, Inc.
(A Development Stage Company)
Notes to the Condensed Financial Statements
December 31, 2009
NOTE 1 CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at December 31, 2009 and for
all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It
is suggested that these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
June 30, 2009 audited financial statements. The results of operations for
the period ended December 31, 2009 and 2008 are not necessarily indicative of
the operating results for the full year.
NOTE 2 GOING CONCERN
These condensed financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. As of December 31, 2009,
the Company has not recognized any revenues and has accumulated operating
losses of approximately $83,381 since inception. The Company's ability
to continue as a going concern is contingent upon the successful completion of
additional financing arrangements and its ability to achieve and maintain
profitable operations. Management plans to raise equity capital to finance
the operating and capital requirements of the Company. Amounts raised will be
used to further development of the Company's products, to provide financing
for marketing and promotion, to secure additional property and equipment, and
for other working capital purposes. While the Company is putting forth its
best efforts to achieve the above plans, there is no assurance that any such
activity will generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
6
EZJR, Inc.
(A Development Stage Company)
Notes to the Condensed Financial Statements
December 31, 2009
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles 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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Recent Accounting Pronouncements
- --------------------------------
Below is a listing of the most recent accounting standards and their effect
on the Company.
In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity
(Topic 505): Accounting for Distributions to Shareholders with Components of
Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit
on the amount of cash that will be distributed is not a stock dividend for
purposes of applying Topics 505 and 260. Effective for interim and annual
periods ending on or after December 15, 2009, and would be applied on a
retrospective basis. The Company does not expect the provisions of ASU
2010-01 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In December 2009, the FASB issued Accounting Standards Update 2009-17,
Consolidations (Topic 810): Improvements to Financial Reporting by
Enterprises Involved with Variable Interest Entities. This Accounting
Standards Update amends the FASB Accounting Standards Codification for
Statement 167. (See FAS 167 effective date below)
In December 2009, the FASB issued Accounting Standards Update 2009-16,
Transfers and Servicing (Topic 860): Accounting for Transfers of Financial
Assets. This Accounting Standards Update amends the FASB Accounting
Standards Codification for Statement 166. (See FAS 166 effective date below)
In October 2009, the FASB issued Accounting Standards Update 2009-15,
Accounting for Own-Share Lending Arrangements in Contemplation of Convertible
Debt Issuance or Other Financing. This Accounting Standards Update amends
the FASB Accounting Standard Codification for EITF 09-1. (See EITF 09-1
effective date below)
7
EZJR, Inc.
(A Development Stage Company)
Notes to the Condensed Financial Statements
December 31, 2009
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
In October 2009, the FASB issued Accounting Standards Update 2009-14,
Software (Topic 985): Certain Revenue Arrangements That Include Software
Elements. This update changed the accounting model for revenue arrangements
that include both tangible products and software elements. Effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010. Early adoption is
permitted. The Company does not expect the provisions of ASU 2009-14 to have
a material effect on the financial position, results of operations or cash
flows of the Company.
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This
update addressed the accounting for multiple-deliverable arrangements to
enable vendors to account for products or services (deliverables) separately
rather than a combined unit and will be separated in more circumstances that
under existing US GAAP. This amendment has eliminated that residual method
of allocation. Effective prospectively for revenue arrangements entered into
or materially modified in fiscal years beginning on or after June 15, 2010.
Early adoption is permitted. The Company does not expect the provisions of
ASU 2009-13 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In September 2009, the FASB issued Accounting Standards Update 2009-12, Fair
Value Measurements and Disclosures (Topic 820): Investments in Certain
Entities That Calculate Net Asset Value per Share (or Its Equivalent). This
update provides amendments to Topic 820 for the fair value measurement of
investments in certain entities that calculate net asset value per share (or
its equivalent). It is effective for interim and annual periods ending after
December 15, 2009. Early application is permitted in financial statements
for earlier interim and annual periods that have not been issued. The Company
does not expect the provisions of ASU 2009-12 to have a material effect on
the financial position, results of operations or cash flows of the Company.
8
EZJR, Inc.
(A Development Stage Company)
Notes to the Condensed Financial Statements
December 31, 2009
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
In July 2009, the FASB ratified the consensus reached by EITF (Emerging
Issues Task Force) issued EITF No. 09-1, (ASC Topic 470) "Accounting for Own-
Share Lending Arrangements in Contemplation of Convertible Debt Issuance"
("EITF 09-1"). The provisions of EITF 09-1, clarifies the accounting
treatment and disclosure of share-lending arrangements that are classified as
equity in the financial statements of the share lender. An example of a
share-lending arrangement is an agreement between the Company (share lender)
and an investment bank (share borrower) which allows the investment bank to
use the loaned shares to enter into equity derivative contracts with
investors. EITF 09-1 is effective for fiscal years that beginning on or
after December 15, 2009 and requires retrospective application for all
arrangements outstanding as of the beginning of fiscal years beginning on or
after December 15, 2009. Share-lending arrangements that have been
terminated as a result of counterparty default prior to December 15, 2009,
but for which the entity has not reached a final settlement as of December
15, 2009 are within the scope. Effective for share-lending arrangements
entered into on or after the beginning of the first reporting period that
begins on or after June 15, 2009. The Company does not expect the provisions
of EITF 09-1 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. 168 (ASC Topic 105), "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 US 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.
9
EZJR, Inc.
(A Development Stage Company)
Notes to the Condensed Financial Statements
December 31, 2009
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
In June 2009, the FASB issued SFAS No. 167 (ASC Topic 810), "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.
In June 2009, the FASB issued SFAS No. 166, (ASC Topic 860) "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 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) (ASC Topic 805), Business Combinations, and
Statement of Financial Accounting Standards No. 160 (ASC Topic 810),
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.
10
EZJR, Inc.
(A Development Stage Company)
Notes to the Condensed Financial Statements
December 31, 2009
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
- --------------------------------------------
In April 2009, the FASB issued SFAS No. 164, (ASC Topic 810) "Not-for-Profit
Entities: Mergers and Acquisitions including an amendment of FASB Statement
No. 142" ("SFAS 164"). The provisions of SFAS 164 provide guidance on
accounting for a combination of not-for-profit entities either via merger or
acquisition. SFAS 164 is effective for mergers occurring on or after the
beginning of an initial reporting period beginning on or after December 15,
2009 and acquisitions occurring on or after the beginning of the first annual
reporting period beginning on or after December 15, 2009. The Company does
not expect the provisions of SFAS 164 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In September 2008, the FASB issued exposure drafts that eliminate qualifying
special purpose entities from the guidance of SFAS No. 140 (ASC Topic 860),
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," and FASB Interpretation 46 (ASC Topic 810)
(revised December 2003), "Consolidation of Variable Interest Entities an
interpretation of ARB No. 51 (ASC Topic 810)," 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.
NOTE 4 RELATED PARTY TRANSACTIONS
The Company does not lease or rent any property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein.
The officers and directors of the Company are 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.
11
EZJR, Inc.
(A Development Stage Company)
Notes to the Condensed Financial Statements
December 31, 2009
NOTE 5 CONTRIBUTED CAPITAL
During the quarter ending December 31, 2009, the Company's corporate counsel
agreed to prepare, write, EDGARize and provide legal opinion for the
Company's interim reports and Form 10-K filing, which the law firm valued at
$2,500.
The law firm decided to contribute this capital based on its recommendation
that the Company engage the services of an auditor, who had his licensed
revoked and was not able to complete the Company's audit for the past fiscal
year. Based on this decision, the Company needed to engage a new auditor.
The Company's corporate counsel believes this action will help build goodwill
for its law firm.
NOTE 6 SUBSEQUENT EVENTS
None. The Company has evaluated subsequent events through February 4, 2010,
the date which the financial statements were available to be issued.
12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information
The Company may from time to time make written or oral "forward-looking
statements" including statements contained in this report and in other
communications by the Company, which are made in good faith by the Company
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include statements of the Company's plans,
objectives, expectations, estimates and intentions, which are subject to
change based on various important factors (some of which are beyond the
Company's control). The following factors, in addition to others not listed,
could cause the Company's actual results to differ materially from those
expressed in forward looking statements: the strength of the domestic and
local economies in which the Company conducts operations, the impact of
current uncertainties in global economic conditions and the ongoing financial
crisis affecting the domestic and foreign banking system and financial
markets, including the impact on the Company's suppliers and customers,
changes in client needs and consumer spending habits, the impact of
competition and technological change on the Company, the Company's ability to
manage its growth effectively, including its ability to successfully integrate
any business which it might acquire, and currency fluctuations. All forward-
looking statements in this report are based upon information available to the
Company on the date of this report. The Company undertakes no obligation to
publicly update or revise any forward-looking statement, whether as a result
of new information, future events, or otherwise, except as required by law.
Critical Accounting Policies
- ----------------------------
There have been no material changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations", included in our
Annual Report on Form 10-K for the fiscal year ended June 30, 2009.
13
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 August 14, 2006, under
the corporate name IVPSA Corporation. The Company subsequently changed its
corporate name to EZJR, Inc. on July 25, 2008.
EZJR, Inc. is a developmental 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.
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.
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.
14
Management continues to seek different funding sources in order to advance
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, EZJR may need to curtail, limit or cease its
existing operations.
Future funding could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or
amortization 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.
Results of Operations for the year ended December 31, 2009
- -----------------------------------------------------------
We earned no revenues since our inception on August 14, 2006 through
December 31, 2009. We do not anticipate earning any significant revenues
until such time as we can bring to the market a medical device product. We
can provide no assurance that we will be successful in developing any
medical device products.
For the period inception through December 31, 2009, we generated no income.
Since our inception on August 14, 2006 we experienced a net loss of $(83,381).
Our loss was attributed to organizational expenses, entering into an exclusive
option agreement for a medical device and development costs to build 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 maintaining our fully reporting requirements with
the U. S. Securities and Exchange Commission, and with added medical device
development costs.
For the three months ending December 31, 2009, we experienced a net loss of
$(3,500) as compared to a net loss of $(3,460) for the same period last year.
The net loss for the three months ending December 31, 2009 was contributed
to audit expenses of $1,000 and legal fees of $2,500. For the six months
ending December 31, 2009, we experienced a net loss of $(5,000) as compared
to a net loss of $(3,510) for the same period last year. The net loss for
the 9 months ending December 31, 2009 was contributed to audit expenses of
$2,500 and legal fees of $2,500. We have no cash at hand as of December 31,
2009. In our June 30, 2009 year-end financials, our auditor issued an
opinion that our financial condition raises substantial doubt about the
Company's ability to continue as a going concern.
15
Revenues
- --------
We generated no revenues for the period from August 14, 2006 (inception)
through December 31, 2009. We do not anticipate generating any revenues
for at least 24 months or until we can bring to market a viable medical device.
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.
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. EZJR has yet to find a contract manufacturer who can build
a working prototype of this catheter. 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.
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.
16
Significant changes in the number of employees.
- -----------------------------------------------
As of December 31, 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 December 31, 2009 reflects no assets and current
liabilities of $2,980. Cash and cash equivalents from inception to date have
been sufficient to provide the operating capital necessary to operate to date.
A critical component of our operating plan impacting our continued existence
is the ability to obtain additional capital through additional equity and/or
debt financing. We do not anticipate generating sufficient positive internal
operating cash flow until such time as we can deliver our product to market,
complete additional financial service company acquisitions and generate
substantial revenues, which may take the next few years to fully realize.
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 have been trying without success to raise
capital. In the event we cannot obtain the necessary capital to pursue our
strategic plan, we may have to cease or significantly curtail our operations.
This would materially impact our ability to continue operations.
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations. These
limitations have adversely affected the Company's ability to obtain certain
projects and pursue additional business. Without realization of additional
capital, it would be unlikely for the Company to continue as a going concern.
In order for the Company to remain a Going Concern it will need to find
additional capital. Additional working capital may be sought through
additional debt or equity private placements, additional notes payable to
banks or related parties (officers, directors or stockholders), or from other
available funding sources at market rates of interest, or a combination of
these. The ability to raise necessary financing will depend on many factors,
including the nature and prospects of any business to be acquired and the
economic and market conditions prevailing at the time financing is sought.
No assurances can be given that any necessary financing can be obtained on
terms favorable to the Company, or at all.
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.
As a result of the Company's current limited available cash, no officer or
director received compensation through the quarter ended December 31, 2009.
The Company has no employment agreements in place with its officers.
17
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
- ------------------------
In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in
Consolidated Financial Statements". This statement amends ARB 51 to establish
accounting and reporting standards for the non-controlling (minority) interest
in a subsidiary and for the de-consolidation of a subsidiary. It clarifies
that a non-controlling interest in a subsidiary is equity in the consolidated
financial statements. SFAS No. 160 is effective for fiscal years and interim
periods beginning after December 15, 2008. The adoption of SFAS 160 is not
expected to have a material impact on the Company's financial position,
results of operation or cash flows.
As of January 1, 2008 we adopted SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS No. 159"). SFAS No. 159
allows the company to choose to measure many financial assets and financial
liabilities at fair value. Unrealized gains and losses on items for which
the fair value option has been elected are reported in earnings. The adoption
of SFAS 159 has not had a material impact on our financial position, results
of operation or cash flows.
As of January 1, 2008 we adopted SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS No. 157 defines fair value and provides guidance for
measuring and disclosing fair value. The adoption of SFAS 157 has not had a
material impact on our financial position, results of operation or cash flows.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
18
Item 4T. 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 report. Based
on such evaluation, the Chief Executive Officer and the Chief Financial
Officer concluded that, 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
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
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
19
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
quarter related to the preparation of management's report on internal
controls over financial reporting required for this quarterly report on
Form 10-Q/A, 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.
20
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 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.
21
PART II. OTHER INFORMATION
Item 1 -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 1A Risk Factors
See Risk Factors set forth in Part I, Item 1A of the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 2009 and the
discussion in Item 1, above, under " Liquidity and Capital Resources."
Item 2 -Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 -Defaults Upon Senior Securities
None.
Item 4 -Submission of Matters to a Vote of Security Holders
On August 11, 2009, the Company held its annual shareholder meeting. At this
meeting, a majority of shareholders re-elected the current Board member to
serve until the 2010 annual meeting of stockholders. The shareholders also
approved Seale and Beers, CPAs, Certified Public Accountants, as the
Company's auditor, to perform the audit of the Company's financial
statements. No other business was conducted at this annual shareholder
meeting.
Item 5 -Other Information
None.
22
Item 6 -Exhibits
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
- ------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------
23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EZJR, Inc.
-----------
Registrant
Date: September 17, 2010 By: /s/ T J Jesky
----------------- -----------------
T J Jesky
President
24