Note 1 – Organization and Nature of Operations

Organization

EZRaider Co. (f/k/a E-Waste Corp.) and subsidiary (collectively, “EZRaider”, “we”, “us”, “our” or the “Company”) was organized in the State of Florida on January 26, 2012, to develop an e-waste recycling business. The Company was not successful in its efforts and ceased those operations.

On August 28, 2021, the Company filed a certificate of amendment (the “Certificate of Amendment”) with the Secretary of State of the State of Florida in order to effectuate a name change from E-Waste Corp. to EZRaider Co. The Certificate of Amendment became effective on September 3, 2021 (See Note 8).

On September 14, 2021, our wholly owned subsidiary, E-Waste Acquisition Corp., a Delaware corporation, merged with and into EZRaider Global, Inc., a private Nevada corporation (“EZ Global”). EZ Global was the surviving corporation in the Merger and became our wholly owned subsidiary. All of the outstanding shares of capital stock of EZ Global, were exchanged for shares of our common stock. As a result of the Merger, we discontinued our prior activities, which consisted primarily of seeking a business for a merger or acquisition, and acquired the business of EZ Global, and will continue the existing business operations of EZ Global, and its wholly owned subsidiary, EZ Raider, LLC, a Washington limited liability company (“EZ LLC”), as a publicly-traded company under the name “EZRaider Co.” (See Note 8).

The Company’s fiscal year end is February 28/29.

Nature of Operations

The Company sells electric stand-up ATV vehicles, known as “EZRaider Vehicles,” and accessories to government and private sector customers in multiple countries. EZRaider Vehicles feature an innovative technology platform that combines dynamic, proprietary suspension with a lightweight, narrow-profile design that can traverse rugged off-road terrain while being small enough to fit through any normal household doorway. It is frequently referred to as an “all-terrain surfer”.

There are 3 vehicle models – LW, HD2 and HD4. EZ Raider Vehicles come in both 2wd and 4wd options. Machines come with two battery options – 1740-Watt battery which provides up to 30 miles of range and the 3000-Watt battery that provides up to 50 miles of range. Range can be significantly increased with an optional additional battery pack. The EZ Raider trailer, or Ecart, is also equipped with its own 3000-Watt battery. With all additional battery packs available, EZ Raider Vehicles can have a range of up to 130 miles.

The Company’s products appeal to a wide variety of customers for government, commercial and private uses. EZ Raider Vehicles can be accessorized to fit the needs of the customer, including, but not limited to, remote control robotics for autonomous operation, agricultural spraying, golf, un-manned airport runway cleaning, off-road adventure and sport, facilities maintenance, security, law enforcement, fire, search and rescue (autonomous or manned), urban commuting & errands, disabled person mobility, hunting & fishing, tourism, military troop mobility, border patrol, and micro-delivery.

The Company has historically promoted its products directly to the public. The use of existing ATV, car, or motorcycle dealers/distribution networks has been minimal.

In 2020, the Company experienced significant distribution and sales set-backs due to the Covid-19 pandemic. Lockdowns were implemented in both Israel and the United States just as the spring/summer sales season was beginning, causing the cancelation of orders worldwide. Sales growth resumed in 2021, but supply of machines was impeded by the global supply chain backlog, causing extensive delays in delivering machines to customers.

Impact of COVID-19

The ongoing COVID-19 global and national health emergency has caused significant disruption in the international and United States economies and financial markets. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability. The COVID-19 pandemic significantly impacted the Company’s supply chain, distribution centers, logistics and other service providers.

In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including weakened demand for products and services and a decreased ability to raise additional capital when needed on acceptable terms, if at all. As the situation continues to evolve, the Company will continue to closely monitor market conditions and respond accordingly.

To date, the Company has experienced significant economic impact due to COVID-19, however, efforts are being made to secure additional capital while also executing operations.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States.

Liquidity, Going Concern and Management’s Plans

These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

As reflected in the accompanying consolidated financial statements, for the nine months ended November 30, 2021, the Company had:

●          Net loss of $1,542,536; and

●          Net cash used in operations was $436,907.

Additionally, at November 30, 2021, the Company had:

●          Accumulated deficit of $2,135,999;

●          Stockholders’ equity of $2,499,269; and

●          Working capital deficit of $1,434,669.

We manage liquidity risk by reviewing, on an ongoing basis, our sources of liquidity and capital requirements. The Company has cash on hand of $18,641 at November 30, 2021.

The Company expects business operations to generate sufficient revenues and positive cash flows from operations to meet its current obligations. However, the Company is seeking to raise debt or equity-based capital at favorable terms, though such terms are not certain. Currently, the Company expects to incur losses from operations and have negative cash flows from operating activities for the near-term. 

The Company has incurred significant losses since its inception and has not demonstrated an ability to generate sufficient revenues from the sales of its products and services to achieve profitable operations. There can be no assurance that profitable operations will ever be achieved, or if achieved, could be sustained on a continuing basis. In making this assessment we performed a comprehensive analysis of our current circumstances including: our financial position, our cash flows and cash usage forecasts for the twelve months ended November 30, 2022, and our current capital structure including equity-based instruments and our obligations and debts.

During the nine months ended November 30, 2021, the Company has partially satisfied its obligations from the sale of common stock ($3,840,001); however, there is no assurance that such successful efforts will continue during the twelve months subsequent to the date these consolidated financial statements are issued.

If the Company does not obtain additional capital, the Company will be required to reduce the scope of its business development activities or cease operations. The Company continues to explore obtaining additional capital financing and the Company is closely monitoring its cash balances, cash needs, and expense levels.

These factors create substantial doubt about the Company’s ability to continue as a going concern within the twelve-month period subsequent to the date that these consolidated financial statements are issued. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Management’s strategic plans include the following:

Note 2 - Summary of Significant Accounting Policies

Note 3 - Reverse Recapitalization

On September 14, 2021, the Company’s wholly owned acquisition subsidiary merged with and into EZ Global, with EZ Global being the surviving corporation, in a transaction treated as a reverse recapitalization (the “Merger”). As a result of the Merger, EZ Global became the Company’s wholly owned subsidiary. At the time of the Merger, the Company had insignificant operations relative to the EZ Global operations acquired and is considered the successor to substantially all of the operations of EZ Global. After the Merger, the officers and directors of EZ Global became officer and directors of the Company.

In the reverse recapitalization, the Company issued 28,550,000 shares of common stock to the shareholders of EZ Global, in exchange for all issued and outstanding shares of EZ Global. The share exchange resulted in a change in control of the Company. Due to the recapitalization, these shares are considered issued and outstanding as of the earliest period presented. 

The transaction also requires a recapitalization of EZ Global. Since the shareholders of EZ Global acquired a controlling voting interest as a result of the Merger, EZ Global was deemed the accounting acquirer, while the Company was deemed the legal acquirer. The historical financial statements of the Company are those of EZ Global and of the consolidated entities from the date of recapitalization.

Prior to the recapitalization, in May 2021, the Company had loaned $2,000,000 to EZ Global. The loan bore interest at 5%, was unsecured, and due in November 2021. On September 14, 2021, in connection with the recapitalization, the loan and related accrued interest of $2,015,493 was forgiven. Since the transaction occurred with a related party, accordingly, there is no loss recorded in the consolidated statements of operations. As a result, the Company has recorded a reduction to additional paid-in capital.

The Company did not recognize goodwill or any intangible assets in connection with the transaction. Additionally, since the transaction is considered a reverse recapitalization with a public shell corporation, the presentation of pro-forma financial information was not required.

Revenue Recognition

The Company recognizes revenue according to ASC 606, Revenue from Contracts with Customers. When the customer obtains control over the promised goods or services, the Company records revenue in the amount of consideration that can be expected to be received in exchange for those goods and services.

During the three and nine months ended November 30, 2021 and 2020, the Company primarily recognized revenues from the sale of its products, which occurs at a point in time, which is when the customer takes possession.

The Company determines revenue recognition based upon the following five (5) criteria:

Step 1 - Identification of the contract with the customer

Step 2 - Identification of promised goods and services and evaluation of whether the promised goods and services are distinct performance obligations

Step 3 - Determination of the transaction price

Step 4 - Allocation of the transaction price to distinct performance obligations

Step 5 - Attribution of revenue for each distinct performance obligation

We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit or financial information pertaining to the customer.

If a contract includes multiple promised goods or services, we apply judgment to determine whether the promised goods or services are capable of being distinct and are distinct within the context of the contract. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation. We determine the transaction price based on the consideration which we will be entitled to receive in exchange for transferring goods or services to our customer.

We recognize revenue at the time that the related performance obligation is satisfied by transferring the promised goods or services to our customer.

Remaining Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under Topic 606. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied by transferring the promised good or service to the customer. The Company identifies and tracks the performance obligations at contract inception so that the Company can monitor and account for the performance obligations over the life of the contract.

Remaining performance obligations represent the transaction price of orders for which products have not been delivered or services have not been performed. As of November 30, 2021 and 2020, the Company had no remaining performance obligations.

Contract Liabilities (Deferred Revenue)

The Company recognizes a contract liability when consideration is received, or if the Company has the unconditional right to receive consideration, in advance of satisfying the performance obligation. A contract liability is the Company’s obligation to transfer goods to a customer for which the Company has received consideration, or an amount of consideration due from the customer.

At November 30, 2021 and February 28, 2021, deferred revenues were $315,788 and $21,275, respectively.

Cost of Sales

Cost of sales predominantly represents job-related materials and supplies.

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs are included as a component of general and administrative expense in the consolidated statements of operations.

The Company had advertising costs of $68,765 and $15,453 during the nine months ended November 30, 2021 and 2020, respectively.

Stock-Based Compensation

We account for our stock-based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.

We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.

When determining fair value, the Company considers the following assumptions in the Black-Scholes model:

●          Exercise price,

●          Expected dividends,

●          Expected volatility,

●          Risk-free interest rate; and

●          Expected life of option.

Common Stock Awards

The Company may grant common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted, whichever is more reliably measurable. The fair value measurement date of these awards is generally the date the performance of services is complete. The fair value of the awards is recognized on a straight-line basis as services are rendered.

The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded on the statement of operations in the same manner and charged to the same account as if such settlements had been made in cash.

Stock Warrants

In connection with certain financing, consulting and collaboration arrangements, the Company may issue warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants issued in conjunction with the issuance of common stock are initially recorded at fair value as a reduction in additional paid-in capital of the common stock issued. All other warrants are recorded at fair value as expense over the requisite service period or at the date of issuance if there is not a service period.

Income Taxes

The Company accounts for income tax using the asset and liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of November 30, 2021 and February 28, 2021, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements.

The Company recognizes interest and penalties related to uncertain income tax positions in other expense. No interest and penalties related to uncertain income tax positions were recorded during the nine months ended November 30, 2021 and 2020.

As of November 30, 2021, tax years 2018-2021 remain open for IRS audit.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carryback net operating losses (NOLs) originating between 2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act.

In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the three and nine months ended November 30, 2021 and 2020.

Basic and Diluted Earnings (Loss) per Share

Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares may consist of common stock issuable for stock options and warrants (using the treasury stock method), convertible notes and common stock issuable. These common stock equivalents may be dilutive in the future.

The computation of basic and diluted loss per share for November 30, 2021 and 2020, excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive.

As of November 30, 2021 the Company had sufficient authorized shares of common stock to settle any potential conversions of its common stock equivalents.

Related Parties

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

Recent Accounting Standards

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement - Disclosure Framework (Topic 820)”. The updated guidance improves the disclosure requirements on fair value measurements. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. We applied this guidance, as of May 1, 2020. The application of this guidance did not have a material effect on our disclosures.

In January 2020, the FASB issued ASU 2020-01, “Investments - Equity Securities (Topic 321),” “Investments - Equity Method and Joint Ventures (Topic 323),” and “Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2016-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. For public business entities, the amendments in the ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2020-01 to have a material impact on its financial statements.

There are no other new accounting pronouncements that are expected to have a significant impact on our financial statements.

Changes to accounting principles are established by the FASB in the form of ASU’s to the FASB’s Codification. We consider the applicability and impact of all ASU’s on our unaudited consolidated financial position, results of operations, stockholders’ deficit, cash flows, or presentation thereof.

Management has considered all recent accounting pronouncements and believes that these recent pronouncements will not have a material effect on the company’s financial statements.

Equity Securities Without a Readily Determinable Fair Value

Certain equity securities are carried at cost as these securities did not have a readily determinable fair value. There were no observable price changes in orderly transactions for the identical or a similar investment of the same issuer as of November 30, 2021 and 2020.

Reclassifications

Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the unaudited condensed consolidated results of operations, stockholders’ deficit, or cash flows. 

Note 4 – Property and Equipment

Depreciation expense for the three months ended November 30, 2021 and 2020, was $7,426 and $0, respectively.

Depreciation expense for the nine months ended November 30, 2021 and 2020, was $19,793 and $4,116, respectively.

Note 5 – Securities

Equity Securities Without a Readily Determinable Fair Value

At November 30, 2021, the Company paid deposits of $3,850,000 to D.S. Raider, Ltd., an Israeli company (“D.S Raider”) in connection with a potential future acquisition of D.S Raider under the a Share Purchase Agreement between the parties (the “D.S Raider SPA”). On October 11, 2021, the Company converted the deposits into 295,947 ordinary shares of D.S. Raider.

The Company held equity securities without a readily determinable fair values and measured at cost of $3,850,000 at November 30, 2021.

Note 6 – Notes Payable - Related Party

Note 7 – Convertible Notes Payable

Note 8 – Convertible Notes Payable – Related Party

Note 9 – Note Payable – Government Loan

(A)       Payroll Protection Program (“PPP”)

On April 30, 2020, we executed an unsecured promissory note for $13,215 under the PPP.

Interest is deferred for the first nine months of the term of the loan. These loans require equal payments of principal and interest over the eighteen (18) months following the interest deferral period.

The promissory note evidencing this loan contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory note. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, and/or filing suit and obtaining judgment against the Company.

(B)       Conditional Loan Forgiveness

Under the terms of the PPP loan program, all or a portion of a loan may be forgiven upon request from borrower to lender, provided the loan proceeds are used in accordance with the terms of the Coronavirus Aid, Relief and Economic Security Act (the “Act” or “CARES”), borrower is not in default under the loan or any of the loan documents, and borrower has provided documentation to lender supporting such request for forgiveness that includes verifiable information on borrower’s use of the loan proceeds, to lender’s satisfaction, in its sole and absolute discretion. Currently, the Company believes these loans will be forgiven, however, there is a significant uncertainty that prevents a final determination from being made as of the date of these financial statements.

Note 10 – Loan Payable – Other

Pursuant to the 6% Note, the Company shall pay the holder interest only payments of $1,800 for the first three months, and thereafter shall pay $11,800 per month for months four to six, and $30,034 per month thereafter until maturity.

On July 11, 2021, the Company and holder amended the terms of the original agreement follows: (i) the maturity date was extended from March 16, 2021 to March 16, 2022 or the date the Company completes the acquisition of D.S Raider, whichever comes sooner, (ii) the parties acknowledged there is no further Supplemental Incentive Interests as the goals were not met, and (iii) repayment of the 6% Note shall be paid by Company on or prior to the Maturity Date, as amended, in one balloon payment all existing defaults were waived; in exchange, the Lender waived all claims with respect to any breach, default or event of default of the Note.

The Company executed short term loans for $39,550 with Shopify Capital Inc. The loans are used to finance sales and are collateralized by accounts receivable and all accounts of the Company. Interest accrued at 17% and the loans required payments from sales. During the nine months ended November 30, 2021, the $39,550 was repaid.

Between January 18, 2021 and January 25, 2021, the Company entered into two unsecured convertible notes for an aggregate amount of $160,000 from two investors. The notes accrue interest at 5% per annum and are convertible at a 35% discount to price of financing used to complete the acquisition of D.S Raider. The Company accrued interest of $2,842 as of May 31, 2021.

Note 11 – Advances – Related Party

During the nine months ended November 30, 2021, the majority shareholder advanced and was a net amount $404,429. The loans are non-interest bearing, unsecured and due on demand. As of November 30, 2021 and February 28, 2021, the loan balance is $49,307 and $453,736, respectively.

Note 12 – Commitments

Operating Lease Agreement

On July 15, 2021, the Company renewed leased offices located in Kent, WA. The net monthly payment is $7,800. The leases expire on August 31, 2022.

For the three months ended November 30, 2021 and 2020, the Company recorded rent expense of $28,151 and $13,275, respectively.

For the nine months ended November 30, 2021 and 2020, the Company recorded rent expense of $60,729 and $39,825, respectively.

Rent expense is included as a component of general and administrative expenses on the accompanying consolidated statements of operations.

Employment Agreements – Related Party

On November 18, 2021, the Company entered into an employment agreement with its Chief Operating Officer. The initial term of the agreement is through January 31, 2023, at an annual salary of $100,000 with 50,000 shares of common stock issued as a signing bonus. The Company will also pay up to $30,000 annually in housing costs during the first year of employment. As of November 30, 2021, the Company issued 50,000 shares of its common stock to its Chief Operating Officer with a fair value of $50,000 ($1.00 per share) on the date of grant. The fair value of the stock was based upon recent third-party cash offering prices.

On November 15, 2021, the Company entered into an employment agreement with its Chief Financial Officer. The initial term of the agreement is through February 1, 2021, at a salary of $48,000, with 50,000 shares of common stock to be issued. At February 1, 2022, the compensation will increase to $120,000. As of November 30, 2021, the Company issued 33,334 shares of its common stock to its Chief Financial Officer with a fair value of $33,334 ($1.00 per share) on the date of grant. The fair value of the stock was based upon recent third-party cash offering prices.

Note 13 – Stockholders’ Deficit

The Company has one (1) class of common stock:

Common Stock

Equity Transactions – Nine Months Ended November 30, 2021

Stock Issued in Reverse Recapitalization

On September 14, 2021, the Company issued 28,550,000 shares of common stock in connection with the reverse recapitalization, for net equity of $894,920 See Note 3.

Stock and Warrants Issued for Cash

The Company issued 1,333,334 shares of common stock for gross proceeds of $1,340,001 ($1.00 - $1.50/share).

The Company sold 2,500,000 units of equity securities for gross proceeds of $2,500,000 ($1.00 per share). Each unit consisted of one share of common stock and two fully vested warrants. In total, the Company issued 2,500,000 shares of common stock and 5,000,000 warrants.

The warrants expire January 2023 and have an exercise price $4.50/share.

As of the date of this report, no warrants have been exercised.

Warrants Issued for Services

These warrants are considered a direct offering cost in connection with raising capital. As a result, the net effect on stockholders’ equity was $0.

Stock Issued for Services and Debt Settlement

The Company issued an aggregate 83,334 shares of its common stock to its Chief Financial Officer and Chief Operating Officer, having a fair value of $83,334 ($1/share). Fair value of the stock was based upon recent third-party cash offering prices, which represented the best evidence of fair value.

The Company issued 100,000 shares of its common stock in settlement of accounts payable, having a fair value of $100,000 ($1.00 per share). Fair value of the stock was based upon recent third-party cash offering prices, which represented the best evidence of fair value.

Cancellation of Common Stock

In connection with the recapitalization in connection with the Merger, our majority shareholder, cancelled 1,300,000 shares of common stock. The net effect on stockholders’ equity was $0.

Note 14 – Subsequent Events

Subsequent to November 30, 2021, the Company closed a private placement offering for the issuance of 160,001 shares of common stock at a purchase price of $1.50 per share, for gross proceeds of $240,001.

As part of the Company’s overall capital initiatives, a bridge loan offering of up to a maximum of $300,000 was initiated to facilitate working capital and other expenses associated with the ongoing efforts to raise capital. A total of $125,000 was raised through this bridge loan offering from three investors, which will be paid back to the lenders upon subsequent capital raises in the aggregate of $500,000. An aggregate of 12,500 shares were issued to the lenders as part of this bridge loan offering.

On December 30, 2021, the Company signed a further extension to the D.S Raider SPA, extending the date for closing from December 31, 2021 to March 15, 2022. As part of this extension, exclusive sales and distribution rights for EZ Global to sell D.S Raider products for the North American market were extended through January 31, 2023.

In addition, as part of the extension, EZ Global was required to secure $1,600,000 of purchase orders for EZRaider Vehicles and pay D.S Raider a down payment of $800,000, representing 50% of the purchase price for the purchase orders, no later than January 17, 2022. The $800,000 payment was paid to D.S Raider on January 13, 2022.