E-WASTE CORP.

EZRAIDER CO.

Notes to the Condensed Consolidated Financial Statements

November 30, 2017For the Three Months Ended March 31, 2022

(Unaudited)

Note 1. Presentation1 – Organization and Nature of Operations

Throughout this report, the terms “our,” “we,” “us,”Organization

EZRaider Co. (f/k/a E-Waste Corp.) and subsidiary (collectively, “EZRaider”, “we”, “us”, “our” or the “Company” refer to E-Waste Corp. and its consolidated subsidiary.  The accompanying unaudited condensed consolidated financial statements of E-Waste Corp. have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial statements, instructions to Form 10-Q, and Regulation S-X.  Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.  These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended February 28, 2017 filed with the SEC on June 8, 2017 (“Annual Report”).  In management’s opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make our financial statements not misleading have been included.  The results of operations for the three and nine month periods ended November 30, 2017 and 2016 presented are not necessarily indicative of the results to be expected for the full year.  The February 28, 2017 balance sheet has been derived from our audited financial statements included in our Annual Report.

E-Waste Corp. 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 discontinued this line of business.ceased those operations.

Going forward,On August 28, 2021, the Company intends to seek, investigate and, if such investigation warrants, engage infiled a business combinationcertificate of amendment (the “Certificate of Amendment”) with a private entity whose business presents an opportunity for our shareholders.  Our objectives discussed below are extremely general and are not intended to restrict discretionthe Secretary of our BoardState of Directors to search for and enter into potential business opportunities or to reject any such opportunities.

In November 2014, we formed a wholly-owned subsidiary, which was subsequently dissolved in March 2016.  In November 2016, we formed a new wholly-owned Delaware subsidiary, in connection with our proposed reincorporation in the State of Delaware.Florida in order to effectuate a name change from E-Waste Corp. to EZRaider Co. The reincorporationCertificate 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).

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-KT for the ten months ended December 31, 2021, filed with the SEC on April 29, 2022.

Nature of Operations

The Company sells electric stand-up ATV vehicles, known as “EZRaider Vehicles,” and accessories to be effectedgovernment and private sector customers in connectionmultiple countries. EZRaider Vehicles feature an innovative technology platform that combines dynamic, proprietary suspension with a potentiallightweight, 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 currently offered – LW, HD2 and HD4. EZ Raider Vehicles come in both 2wd and 4wd options. Machines come with two battery options – a 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.

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Impact of COVID-19

The ongoing COVID-19 global and national health emergency has disrupted economies and financial markets world-wide. 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 combination we were considering.  Neitherand 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 reincorporation norCompany’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, combinationincluding 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 evolves, the Company will continue to closely monitor market conditions and respond accordingly.

To date, the Company has occurred as we have determined notexperienced significant economic impact due to proceed with this transaction.COVID-19, however, efforts are being made to secure additional capital while also executing operations.

Note 2. Significant Accounting PoliciesBasis of Presentation

The accompanying condensed consolidated financial statements have been prepared in conformityaccordance with accounting principles generally accepted in the United States of America (“GAAP”), which contemplates our continuation as a going concern.  WeStates.

Liquidity, Going Concern and Management’s Plans

These consolidated financial statements have not yet generated any revenue and have incurred losses to date of $363,637.  In addition, our current liabilities exceed our current assets by $319,872.  To date we have funded our operations through advances from a stockholder and the sale of common stock.  We intendbeen prepared on financing our future development activities and our working capital needs largely from the sale of equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements.  These factors raise substantial doubt about our ability to continue operating as a going concern.  Our ability to continue our operations as a going concern realizebasis, which contemplates the carrying valuerealization of our assets and discharge ourthe settlement of liabilities and commitments in the normal course of business.

As reflected in the accompanying consolidated financial statements, for the three months ended March 31, 2022 the Company had:

●          Net loss of $304,705; and

●          Net cash used in operations was $571,546.

Additionally, at March 31, 2022, the Company had:

●          Accumulated deficit of $3,099,497;

●          Stockholders’ equity of $2,009,771; and

●          Working capital deficit of $1,908,545.

We manage liquidity risk by reviewing, on an ongoing basis, our sources of liquidity and capital requirements. The Company had no cash on hand at March 31, 2022.

The Company expects business operations to generate sufficient revenues and positive cash flows from operations to meet its current obligations. However, the Company is dependent upon ourseeking 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 raisegenerate 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 December 31, 2022, and our current capital sufficientstructure including equity-based instruments and our obligations and debts.

During the three months ended March 31, 2022, the Company has partially satisfied its obligations from the sale of common stock ($95,000); however, there is no assurance that such successful efforts will continue during the twelve months subsequent to fund commitments, ongoing losses,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 ultimately generate profitable operations.the Company is closely monitoring its cash balances, cash needs, and expense levels.

Basis of Consolidation- 10 -

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 condensed 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

Principles of Consolidation

These consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and aits inactive, wholly owned subsidiary. All inter-companyintercompany transactions and balances and transactions among the companies have been eliminated upon consolidation.eliminated.

Use of Estimates

The preparation of consolidatedPreparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reportingreported period. Actual results maycould differ from those estimates.estimates, and those estimates may be material.

Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and other assumptions, which include both quantitative and qualitative assessments that it believes to be reasonable under the circumstances.

Significant estimates during the three months ended March 31, 2022 and 2021, include stock-based compensation, uncertain tax positions, and the valuation allowance on deferred tax assets.

Business Segments and Concentrations

The Company uses the “management approach” to identify its reportable segments. The management approach requires companies to report segment financial information consistent with information used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. The Company manages its business as one reportable segment.

Fair Value of Financial Instruments

The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. ASC 820 provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability.

The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value.

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E-WASTE CORP.

Notes

The three tiers are defined as follows:

The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the Condensed Consolidated Financial Statementsasset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist us in determining fair value, as appropriate.

November 30, 2017

(Unaudited)Although the Company believes that the recorded fair value of our financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values.

Financial Instruments

Our balance sheet includes certainThe Company’s financial instruments.  Theinstruments, including cash, accounts receivable, and accounts payable and accrued expenses, are carried at historical cost. At March 31, 2022 and December 31, 2021, the carrying amounts of current liabilities approximatethese instruments approximated their fair valuevalues because of the relatively short period of time between the originationshort-term nature of these instrumentsinstruments.

ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and their expected realization.liabilities at fair value (“fair value option”). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding financial instruments.

RevenueCash and Cost RecognitionCash Equivalents

We currentlyFor purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At March 31, 2022 and December 31, 2021, the Company did not have no source of revenue; therefore, we have not yet adopted any policy regarding the recognition of revenue or cost.cash equivalents.

Income TaxesConcentration of Credit Risks

A provisionThe Company at times has cash in banks in excess of FDIC insurance limits. At March 31, 2022 and December 31, 2021, the Company had approximately $0 and $115,000, respectively, of cash in excess of FDIC insurance limits.

Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from outstanding customer balances. Credit is extended to customers based on an evaluation of their financial condition and other factors. Interest is not accrued on overdue accounts receivable. The Company does not require collateral.

Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for income taxesestimated uncollectible amounts. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. Accounts determined to be uncollectible are charged to operations when that determination is determinedmade.

Allowance for doubtful accounts was $0 and $26,677 at March 31, 2022 and December 31, 2021, respectively.

For the three months ended March 31, 2022, the Company recorded a bad debt recovery of $43,069.

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Inventory

Inventory consists of components held for assembly and finished goods held for resale. Inventory is valued at lower of cost or net realizable value on a first-in, first-out basis. The Company’s policy is to record a reserve for technological obsolescence or slow-moving inventory items. The Company only carries finished goods to be shipped to customers. All existing inventory is considered current and usable.

The Company recorded no reserve for slow-moving or obsolete inventory for the three months ended as of March 31, 2022 and December 31, 2021.

Impairment of Long-lived Assets

Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets.” Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; and changes in the Company’s business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets.

If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Property and Equipment

Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations.

Management reviews the carrying value of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

There were no impairment losses for the three months ended March 31, 2022 and 2021.

Paycheck Protection Program Loans

The Company records Paycheck Protection Program (“PPP”) loan proceeds in accordance with ASC 470, Debt. Debt is extinguished when either debtor pays the creditor or the debtor is legally released from being the primary obligor, either judicially or by the creditor.

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 months ended March 31, 2022 and 2021, 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

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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 740, Accounting606. 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 March 31, 2022 and December 31, 2021, 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 March 31, 2022 and December 31, 2021, deferred revenues were $943,126 and $912,464, 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 $12,066 and $5,016 during the three months ended March 31, 2022 and 2021, 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.

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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 taxes under FASB Codification Topic 740-10-25 (“ASC 740”740-10-25”). Under this method,ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. AnyUnder ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Basic and Diluted Earnings (Loss) per Share

Pursuant to ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return.  Under ASC 740, tax positions must initially be recognized in the financial statements when it260-10-45, basic loss per common share is more likely than not the position will be sustained upon examinationcomputed by dividing net loss by the tax authorities. Such tax positions must initially and subsequently be measured asweighted average number of shares of common stock outstanding for the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the three and nine-month periods ended November 30, 2017 and 2016 we did not have any interest and penalties or any significant unrecognized uncertain tax positions.

Earnings per Share

We calculate net loss per share in accordance with ASC Topic 260, Earnings per Share.  Basic netpresented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of Common Stockcommon stock, common stock equivalents and potentially dilutive securities outstanding forduring the period, and diluted earnings per share is computed by including Common Stock equivalents outstanding for the period in the denominator.  At November 30, 2017 and 2016 we had no potentialperiod. Potentially dilutive common shares may consist of common stock issuable for stock options and anywarrants (using the treasury stock method), convertible notes and common stock issuable. These common stock equivalents would have been anti-dilutive as we had losses for the periods then ended.

Going Concern

In August 2014, the FASB issued FASB ASU2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern. FASB ASU 2015-15 changes the disclosure requirements of uncertainties about an entity’s ability to continue as a going concern. FASB ASU2014-15 is effective for annual periods ending after December 15, 2016, and for interim periods within annual periods beginning after that date. These changes require an entity’s management to evaluate whether there are conditions or events, consideredmay be dilutive in the aggregate, that raise substantial doubt about an entities ability to continue as a going concern within one year afterfuture.

The computation of basic and diluted loss per share for March 31, 2022 and 2021, excludes the date the financial statements are issued. If management has concluded that substantial doubt exists, thencommon stock equivalents of the following disclosures shouldpotentially dilutive securities because their inclusion would be made inanti-dilutive.

As of March 31, 2022 the financial statements: (i) principal conditions or events that raised the substantial doubt; (ii) management’s evaluationCompany had sufficient authorized shares of the significancecommon stock to settle any potential conversions of those conditions or events in relation to the entities ability to meet those obligations; (iii) management’s plans that alleviated the initial substantial doubt or, if substantial doubt was not alleviated, management’s plans that are intended to at least mitigate the conditions or events that raise the substantial doubt, and (iv) if management’s plans did not alleviate the substantial doubt, an explicit statement that there is a substantial doubt. These changes are reflected in the disclosure included in Note 8.its common stock equivalents.

Recent Pronouncements

We have reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoptions of any such pronouncements may be expected to cause a material impact on our financial condition or the results of operations.

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E-WASTE CORP.

Notes to the Condensed Consolidated Financial Statements

November 30, 2017Related Parties

(Unaudited)

Note 3. Stockholder Advances - Related Party

Parties which can be a corporation or individual, are considered to be related to the Company if we have the ability,parties, directly or indirectly, tothrough 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

All newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.

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 March 31, 2022 and December 31, 2021.

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 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 exercise significant influenceany 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.

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Note 4 – Property and Equipment

At March 31, 2022 and December 31, 2021, property and equipment, net, was as follows:

Depreciation expense for the three months ended March 31, 2022 and 2021, was $13,103 and $4,122, respectively.

Note 5 – Securities

Equity Securities Without a Readily Determinable Fair Value

At December 31, 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 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.

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. Negotiations about a possible combination of the two companies is ongoing.

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.

The Company held equity securities without a readily determinable fair values and measured at cost of $3,850,000 at March 31, 2022.

Note 6 – Notes Payable - Related Party

The following represents a summary of the Company’s notes payable and the related key terms and outstanding balances at December 31, 2021 and February 28, 2021, respectively:

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Note 7 – Convertible Notes Payable

The following represents a summary of the Company’s convertible notes payable and the related key terms and outstanding balances at March 31, 2022 and December 31, 2021, respectively:

On January 8, 2022, a Secured Convertible Promissory Note the Company’s subsidiary EZRaider LLC issued to Cooper DuBois, in the principal amount of $500,000, became due and payable. The note is secured against all of EZRaider LLC’s assets. On June 7, 2022 the Company issued 810,384 in consideration for the extension of the maturity date of the promissory notes until July 8, 2022.

The Company issued a $220,254, twelve-month (12), unsecured, convertible note on May 27, 2022, which is due May 27, 2023. The note represents the amount of accrued and unpaid legal fees owed by the Company. The convertible note bears interest at 10%. The note has a conversion price of $1.00 per share. The note bears a default interest rate of 15% (See Note 14).

Note 8 – Convertible Notes Payable – Related Party

The following represents a summary of the Company’s convertible notes payable and the related key terms and outstanding balances at March 31, 2022 and December 31, 2021, respectively:

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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 partythings, payment defaults, breach of representations and warranties, or provisions of the promissory note. The occurrence of an event of default may result in makingthe repayment of all amounts outstanding, collection of all amounts owing from the Company, and/or filing suit and obtaining judgment against the Company.

On February 7, 2022, the loan was a portion of the loan was forgiven by the SBA. As a result, the Company will record a gain on debt forgiveness of PPP loan in the amount of $12,489 in the first quarter of 2022.

(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.

The following is a summary of the PPP loan:

On February 7, 2022, the loan was a portion of the loan was forgiven by the SBA. As a result, the Company will record a gain on debt forgiveness of PPP loan in the amount of $12,489 in the first quarter of 2022.

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Note 10 – Loan Payable – Other

The following represents a summary of the Company’s loan payable – other and operating decisions.  Companiesthe related key terms and outstanding balances at March 31, 2022 and December 31, 2021, respectively:

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.

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, having a fair value of $18,750 ($1.50 per share). Fair value of the stock was based upon recent third-party cash offering prices, which represented the best evidence of fair value.

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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 also consideredused to be related if theyfinance sales and are subjectcollateralized by accounts receivable and all accounts of the Company. Interest accrued at 17% and the loans required payments from sales. During the ten months ended December 31, 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 common control or common significant influence.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 three months ended March 31, 2022, the majority shareholder was owed $21,078. The loans are non-interest bearing, unsecured and nine-month periodsdue on demand. As of March 31, 2022, and December 31, 2021, the loan balance is $21,078 and $0, 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, 2017 we received $17,263March 31, 2022, and $62,157, respectively, in advances from2021, the Company recorded rent expense of $28,014 and $23,196, respectively.

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

Employment Agreements – Related Party

On May 1, 2021, the Company entered into an employment agreement with its Chief Executive Officer. The initial term of the Company.  Duringagreement is through May 1, 2022, at an annual salary of $250,000 with $75,000 first year bonus and a minimum of 30% raise after first year of employment. The Company will also pay up to $12,000 annually in expenses. At March 31, 2022, the threeCompany has expensed $62,500 as a component of general and nine-month periods endedadministrative expenses in the consolidated statements of operations.

On November 30, 2016 we received $12,962 and $50,037, respectively, in advances from a shareholder18, 2021, the Company entered into an employment agreement with its Chief Operating Officer. The initial term of the Company.  Asagreement is through January 31, 2023, at an annual salary of November 30, 2017, the balance of the advances was $309,847.  The advances bear no interest, are unsecured and are due on demand.

Note 4. Stockholders’ Equity

During the three and nine-month periods ended November 30, 2017 and 2016 there were no issuances or cancellations of our common stock.

There are no warrants or options outstanding to acquire any additional$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 December 31, 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 Company.stock was based upon recent third-party cash offering prices.

Note 5. Income Taxes

We have determinedOn November 15, 2021, the Company entered into an estimated annual effective tax rate.  employment agreement with its Chief Financial Officer. The rate will be revised, if necessary, asinitial term of the endagreement 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 March 31, 2022, the Company issued 16,667 shares of its common stock to its Chief Financial Officer with a fair value of $25,000 ($1.50 per share) on the date of grant. The fair value of the stock was based upon recent third-party cash offering prices.

Consulting Agreement – Third Parties

On December 30, 2021, the Company entered into a consulting agreement. The agreements has a term of three (3) months. The Company will pay an aggregate $3,000 per month and 5,333 shares of Company’s common stock. As of March 31, 2022, the Company issued 10,666 shares of its common stock to a consultant with a fair value of $16,000 ($1.50 per share) on the date of grant. The fair value of the stock was based upon recent third-party cash offering prices and expensed $6,000 as a component of general and administrative expenses.

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Note 13 – Stockholders’ Deficit

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

Common Stock

●    250,000,000 shares authorized

●    Par value - $0.0001

●    Voting at 1 vote per share

Equity Transactions – Three Months Ended March 31, 2022

Stock and Warrants Issued for Cash

The Company issued 70,001 shares of common stock for gross proceeds of $105,001 ($1.50/share) and a subscription receivable of $10,001.

Stock Issued for Services and Debt Settlement

The Company issued an aggregate 16,667 shares of its common stock to its Chief Financial Officer, having a fair value of $25,000 ($1.50/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 10,666 shares of its common stock for services rendered in according with the consulting agreement entered on December 31, 2021, having a fair value of $16,000 ($1.50 per share). Fair value of the stock was based upon recent third-party cash offering prices, which represented the best evidence of fair value.

On March 15, 2022, the Company entered into amendments to certain unsecured 6% promissory notes (the "Amendments") with three investors and issued additional 12,500 shares of common stock to these investors in consideration for the extension of the maturity date of the promissory notes until July 8, 2022.

The following is a summary of the Company’s warrants at March 31, 2022 and December 31, 2021:

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

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Note 14 – Subsequent Events

The Company issued a $880,000, six-month (6), unsecured, convertible note on June 11, 2022, which is due December 10, 2022. The convertible note bears interest at 12%, with a 10% original issue discount ($88,000), resulting in net proceeds of $792,000. The note contains a discount to market feature, whereby, the lender can purchase stock at 90% of the lowest trading price for a period of twenty (20) days preceding the conversion date. The right to convert begins 180 days following an event of default. The note bears a default interest rate of 18%.

The Company also paid $82,000 as a debt issuance cost to placement agent and for professional fees for services rendered. These costs are considered to be a component of the total debt discount. The Company also, issued 302,500 shares of its common stock as additional consideration with fair value of $453,750 ($1.50 per share) on the date of grant. The fair value of the stock was based upon recent third-party cash offering prices. These costs are considered to be a component of interest expense.

Additionally, the Company issued 800,000 five-year (5) warrants. The warrants had a fair value of $2,599,066, based upon using a black-scholes option pricing model with the following inputs:

Schedule of black scholes option pricing model

The Company issued a $220,254, twelve-month (12), unsecured, convertible note on May 27, 2022, which is due May 27, 2023. The note represents the amount of accrued and unpaid legal fees owed by the Company. The convertible note bears interest at 10%. The note has a conversion price of $1.00 per share. The note bears a default interest rate of 15%.

On June 7, 2022 the Company issued 810,384 in consideration for the extension of the maturity date of the $550,000 promissory note until July 8, 2022.

On March 15, 2022, EZ Global and Konrad Koss entered into Amendment No. 2 to the 6% unsecured promissory note in the principal amount of $200,000 (the "Second Amendment"). Pursuant to the Second Amendment, the interest rate on the principal amount was increased from 6% to 7.5% per annum, and the maturity date was extended until September 16, 2022.

On March 15, 2022, EZ Global and Konrad Koss entered into Amendment No. 1 to the 6% unsecured promissory note in the principal amount of $50,000 (the "Amendment"). Pursuant to the Amendment, the interest rate on the principal amount was increased from 6% to 7.5%, and the maturity date was extended until September 16, 2022.

On July 11, 2022, the Company repaid $25,687.50, representing the outstanding principal amount and the accrued interest due under the 6% unsecured promissory note, originally issued on December 2, 2021, as amended on March 15, 2022, to Lynda N. Simmons Trust dated 2/9/2011 Peter A. Reichard, TTEE. Also on July 11, 2022, the Company paid $3,516, the total amount of interest accrued on the outstanding principal amount of the two 6% unsecured promissory notes, originally issued on December 8, 2021, as amended on March 15, 2022, to each of (i) Martin Fox and (ii) Initio, Inc. On July 8, 2022, the Company entered into Amendment No. 2 to these promissory notes with each of Martin Fox and Initio, Inc. pursuant to which, the maturity date of each successive interim period during our fiscal yearnote was extended to our best current estimate.September 8, 2022.

There are open statutes of limitations for taxing authorities in federalManagement has evaluated subsequent events through September 7, 2022, and state jurisdictions to audit our tax returns from 2013 through the current period.  Our policy is to account for income tax related interest and penalties in income tax expense in the statements of operations.  There have been no income tax related interest or penalties assessed or recorded.

ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  This pronouncement also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  There have been no uncertain tax positions taken.

Note 6. Commitments and Contingency

From time to time the Company may be a party to litigation matters involving claims against the Company.  Management believesdetermined that there are no current mattersother transactions that would have a material effect on the Company’s financial positionrequire additional accounting or results of operations.disclosure.

Note 7. Business Segments

There are no reportable business segments.

Note 8. Liquidity

We have a history of operating losses and negative cash flow.  These conditions raise substantial doubt over the Company’s ability to meet all of its obligations over the twelve months following the filing of this Form 10-Q.  Management has evaluated these conditions, and concluded that current plans will alleviate this concern.  We currently have no debt other than advances from a shareholder and have no reason to believe that the shareholder will cease advancing the Company operating capital.  However, there is no guarantee that they will do so.

Note 9. Subsequent Events

Management has evaluated all activity and concluded that no subsequent events have occurred as of January 16, 2018 that would require recognition in the financial statements or disclosure in the notes to the financial statements.

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