UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: August 31,November 30, 2021___________________________________________________________

or

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: 333-180251_____________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

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 ☐  No ☐ 

((Note: The registrant is a voluntary filer of reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 and has filed during the preceding 12 months all reports it would have been required to file by Section 13 or 15(d) of the Securities Exchange Act of 1934 if the registrant had been subject to one of such Sections.)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of the “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐Yes☐   No ☒

As of October 15, 2021,January 19, 2022, there were 41,070,00041,444,502 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding.

EZRAIDER CO.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED AUGUST 31,NOVEMBER 30, 2021

TABLE OF CONTENTS

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q (the “Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon our current assumptions, expectations, and beliefs concerning future developments and their potential effect on our business. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other comparable terminology, although the absence of these words does not necessarily mean that a statement is not forward-looking. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements.

Factors that may cause or contribute actual results to differ from these forward-looking statements include, but are not limited to:

These forward-looking statements represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties and other factors. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Considering these risks, uncertainties, and assumptions, the events described in the forward-looking statements may not occur or may occur to a different extent or at a different time than we have described.

All forward-looking statements speak only as of the date of this Report. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, or other information contained herein, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise. We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance.

PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2021, (“Annual Report”filed with the SEC on June 11, 2021 and Current Report on Form 8-K containing Form 10 information (as defined in Rule 144(i)), filed with the SEC on June 11,September 20, 2021. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

TABLE OF CONTENTS

EZRAIDER CO. AND SUBSIDIARY

Condensed Consolidated Balance Sheets

See accompanying notes to condensed consolidated financial statements.

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EZRAIDER CO. AND SUBSIDIARY

Condensed Consolidated Statements of Operations

For the Three and SixNine Months Ended August 31,November 30, 2021 and 2020

(Unaudited)

See accompanying notes to condensed consolidated financial statements.

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EZRAIDER CO. AND SUBSIDIARY

Condensed Consolidated StatementStatements of Stockholders’ Equity (Deficit)Changes in Stockholders Deficit

forFor the Three and SixNine Months Ended August 31,November 30, 2021 and 2020

(Unaudited)

See accompanying notes to condensed consolidated financial statements.

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EZRAIDER CO. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flow

For the SixNine Months Ended August 21,November 30, 2021 and 2020

(Unaudited)

See accompanying notes to condensed consolidated financial statements.

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EZRAIDER CO. AND SUBSIDIARY

(F/K/A E-WASTE CORP.)Notes to Condensed Consolidated Financial Statements

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31,November 30, 2021

(UNAUDITED) and 2020

Note 1 – PresentationOrganization and Nature of Operations

Presentation and Nature of Operations

On August 28, 2021, the Company filed a Certificate of Amendment with the Secretary of State of the State of Florida in order to effectuate a name change to EZRaider Co. The Certificate of Amendment became effective on September 3, 2021 (See Note 8).Organization

EZRaider CoCo. (f/k/a E-Waste Corp.) (theand 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 discontinued that line of business. Since that time,ceased those operations.

On August 28, 2021, the Company has beenfiled a “shell company” (as such term is definedcertificate of amendment (the “Certificate of Amendment”) with the Secretary of State of the State of Florida in Rule 12b-2 under the Securities Exchange Actorder to effectuate a name change from E-Waste Corp. to EZRaider Co. The Certificate of 1934, as amended (the “Exchange Act”))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 28,550,000shares of our common stock, $0.0001 par value per share.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. WeGlobal, and will continue the existing business operations of EZ Global, and its wholly-ownedwholly owned subsidiary, EZ Raider, LLC, a Washington limited liability company (“EZ Raider, LLC”), as a publicly-traded company under the name “EZRaider Co.” (See Note 8).

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

Nature of the effectiveness of the Merger, Elliot Mermel, who was our President, SecretaryOperations

The Company sells electric stand-up ATV vehicles, known as “EZRaider Vehicles,” and Treasurer prioraccessories to the Merger, resigned from these positions,government and Moshe Azarzar was appointedprivate 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 our Chief Executive Officer, President, Secretary, Treasurer and Director (See Note 8)an “all-terrain surfer”.

Previously, on May 7, 2021, John Rollo, the Company’s President, TreasurerThere are 3 vehicle models – LW, HD2 and Secretary,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 sole member3000-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 Company’s board of directors, resigned from all positions he held with the Companycustomer, including, but not limited to, remote control robotics for autonomous operation, agricultural spraying, golf, un-manned airport runway cleaning, off-road adventure and simultaneously appointed Elliot Mermel as the Company’s President, Secretarysport, facilities maintenance, security, law enforcement, fire, search and Treasurer,rescue (autonomous or manned), urban commuting & errands, disabled person mobility, hunting & fishing, tourism, military troop mobility, border patrol, and as the sole member of the Company’s board of the directors.micro-delivery.

The Company has a February 28/29 fiscal year end.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 has the potential to significantly impactimpacted the Company’s supply chain, distribution centers, or 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 not experienced any significant economic impact due to COVID-19, however, efforts are being made to secure additional capital.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 condensed consolidated unaudited 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 unaudited consolidated financial statements, for the sixnine months ended August 31,November 30, 2021, the Company had:

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EZRAIDER CO. AND SUBSIDIARY

(F/K/A E-WASTE CORP.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2021

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

Additionally, at August 31,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 $13,70918,641 at August 31,November 30, 2021. Although

The Company expects business operations to generate sufficient revenues and positive cash flows from operations to meet its current obligations. However, the Company intendsis seeking to raise additional debt or equityequity-based capital at favorable terms, though such terms are not certain. Currently, the Company expects to continue to incur significant losses from operations and have negative cash flows from operating activities for the near-term. These losses could be significant. The Company will have continuing expenses related to compensation, professional fees, and regulatory.

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 year ending February 28,twelve months ended November 30, 2022, and our current capital structure including equity-based instruments and our obligations and debts.

During the sixnine months ended August 31,November 30, 2021, the Company has partially satisfied its obligations from the sale of $2,500,000 of common stock;stock ($3,840,001); however, there is no assurance that such successful efforts will continue during the twelve months subsequent to the date these condensed consolidated unaudited 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

Principles of Consolidation

These condensed consolidated audited financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its inactive, wholly owned subsidiary. All intercompany transactions and balances have been eliminated.

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Use of Estimates

EZRAIDER CO. AND SUBSIDIARYPreparing 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 revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material.

(F/K/A E-WASTE CORP.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSChanges 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.

AUGUST 31,

Significant estimates during the nine months ended November 30, 2021 and 2020, include stock-based compensation, uncertain tax positions, and the valuation allowance on deferred tax assets.

(UNAUDITED)

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.

Use of Estimates

Preparing 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 revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material.

Significant estimates during the three and six months ended August 31, 2021, include uncertain tax positions, and the valuation allowance on deferred tax assets.

Fair Value of Financial Instruments

The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements.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.

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 asset 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.

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.

The Company’s financial instruments, including cash, accounts receivable, and accounts payable and accrued expenses, are carried at historical cost. At August 31,November 30, 2021 and February 29,28, 2021, respectively, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.

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EZRAIDER CO. AND SUBSIDIARY

(F/K/A E-WASTE CORP.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2021

(UNAUDITED)

ASC 825-10 “Financial“Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and 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.

Cash and Cash Equivalents

For 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 August 31,November 30, 2021 and February 29,28, 2021, respectively, the Company did not have any cash equivalents.

Concentration of Credit Risks

The Company at times has cash in banks in excess of FDIC insurance limits. At November 30, 2021 and February 28, 2021, the Company had no 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 estimated 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 made.

Allowance for doubtful accounts was $0 and $0 at November 30, 2021 and February 28, 2021, respectively.

For the three months ended November 30, 2021 and 2020, the Company recorded bad debt expense of $0 and $0, respectively.

For the nine months ended November 30, 2021 and 2020, the Company recorded bad debt expense of $0 and $0, respectively.

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 and nine months ended as of November 30, 2021 and 2020.

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 and nine months ended November 30, 2021 and 2020.

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.

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“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 August 31,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 August 31,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. At August 31, 2021 and February 29, 2021, the Company did not have any potential dilutive securities.

The computation of basic and diluted loss per share for August 31,November 30, 2021 and February 28, 20212020, excludes the common stock equivalents of the following potentially dilutive securities because their inclusion would be anti-dilutive:

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.

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Recent Accounting Standards

EZRAIDER CO. AND SUBSIDIARY

(F/K/A E-WASTE CORP.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2021

(UNAUDITED)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.

Recent Accounting StandardsIn 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

At November 30, 2021 and February 28, 2021, property and equipment, net, was as follows:

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 35 – Note ReceivableSecurities

On May 25,Equity Securities Without a Readily Determinable Fair Value

At November 30, 2021, the Company entered into a binding letterpaid deposits of intent (the “EZ Raider LOI”) with EZ Raider Global, Inc., a privately held Nevada company (“EZ Global”), and EZ Raider, LLC, a Washington limited liability company (“EZ Raider”), which contemplates EZ Global’s acquisition of DS$3,850,000 to D.S. Raider, Ltd., an Israeli company (“DS Israel”D.S Raider”), in connection with a potential future acquisition of D.S Raider under the consummation of a reverse merger by and among the Company, its acquisition subsidiary and EZ Global, and related transactions.

On May 25, 2021,Share Purchase Agreement between the parties to the EZ(the “D.S Raider LOI also entered into a side letter-agreement (the “Side Letter”SPA”) that further memorialized the understanding between EZ Global and the Company. Pursuant to the Side Letter, the Company wired $2,000,000 to EZ Global to enable EZ Global to, among other things: (a) commence an audit of EZ Global and EZ Raider; (b) renegotiate the closing date for EZ Raider’s acquisition of DS Israel, and (c) fulfill its obligations under the definitive purchase agreement with DS Israel for such acquisition.

. On July 19,October 11, 2021, the Company reclassified this $converted the deposits into 2,000,000295,947 advance as a note receivable. The note bears interest at a rateordinary shares of 5% and is secured by certain pledged collateral. The outstanding principal and accrued interest is due on November 26, 2021. However, if the proposed revere merger is consummated prior to the note’s maturity date, the outstanding principal and any accrued and unpaid interest will be forgiven, and the note shall be deemed to be repaid in full.

For the six months ended August 31, 2021, the Company recorded a $2,000,000 note receivable and $11,635 interest receivable from EZD.S. Raider.

On September 14, 2021, our wholly owned subsidiary, E-Waste Acquisition Corp.,The Company held equity securities without a Delaware corporation, merged withreadily determinable fair values and into 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 28,550,000 shares of our common stock, $0.0001 par value per share. As a result of the Merger the outstanding note receivable balancemeasured at cost of $2,000,0003,850,000 and accrued interest of $11,635 resulted in a loss on forgiveness of note receivable and related accrued interest of $2,011,635. Since the transaction occurred with a related party, accordingly, there is no loss recorded in the consolidated statements of operations. The loss will be charged to additional paid in capital, as this is deemed to be a capital transaction (See Note 8).at November 30, 2021.

Note 46 – Notes Payable and Accrued Interest –- Related PartiesParty

The Company had two (2) outstanding notes payable to related parties. As of August 31, 2021, the notes and the accrued interest were repaid in full.

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EZRAIDER CO. AND SUBSIDIARY

(F/K/A E-WASTE CORP.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2021

(UNAUDITED)

The following represents a summary of the Company’s notes payable –and the related parties, key terms and outstanding balances at August 31,November 30, 2021 and February 29,28, 2021, respectively:

Note 57 –Advances Convertible Notes Payable – Former Related Party and Change in Control

The Company has received and repaid advances to a former related party that was its controlling stockholder.

On September 25, 2020, the Company paid this related party $252,750 in full settlement of the outstanding advances, and the related party simultaneously forgave the remaining debt in the amount of $194,701. Since the settlement occurred with a related party, the amount was credited to additional paid-in capital.

Additionally, on October 14, 2020, in a private transaction, the former controlling stockholder of the Company sold 6,000,000 shares of the Company’s common stock to a third party. As a result of the sale, and the simultaneous cancellation of 3,000,000 shares owned by another stockholder, there was a change in control of the Company.

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EZRAIDER CO. AND SUBSIDIARY

(F/K/A E-WASTE CORP.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2021

(UNAUDITED)

The following represents a summary of the Company’s advances – formerconvertible notes payable and the related party, key terms and outstanding balances at November 30, 2021 and February 28, 2021, respectivelyrespectively::

Note 68 – 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 November 30, 2021 and February 28, 2021, respectively:

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.

The following is a summary of the PPP loan:

Note 10 – Loan Payable – Other

The following represents a summary of the Company’s loan payable – other and the related key terms and outstanding balances at November 30, 2021 and February 28, 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.

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 – Related Party

On September 25, 2020,July 15, 2021, the Company entered into a one-year operating lease with a family member of a significant stockholder for its office space at arenewed leased offices located in Kent, WA. The net monthly rate ofpayment is $2507,800. The lease agreement can be terminated by either party at any time, with 30 days written notice.leases expire on August 31, 2022.

For the three months ended August 31,November 30, 2021 and 2020, the Company recorded rent expense of $25028,151 and $013,275, respectively.

For the sixnine months ended August 31,November 30, 2021 and 2020, the Company recorded rent expense of $1,00060,729 and $039,825, respectively.