PART I [Key Information](index=5&type=section&id=Item%203.%20Key%20Information) Presents selected FY2018-2020 financial data, showing revenue growth but declining net income, and outlines key business and ownership risks [Selected Financial Data](index=5&type=section&id=3.A.%20Selected%20Financial%20Data) Net revenues grew significantly from $5.2 million in FY2019 to $16.8 million in FY2020, but gross profit and net income sharply decreased Selected Consolidated Statements of Income Data (Years ended September 30) | Indicator | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | | **Net revenues** | $3,191,560 | $5,194,259 | $16,838,508 | | **Gross profit** | $1,523,736 | $3,179,951 | $1,785,682 | | **Income (loss) from operations** | $1,059,902 | $2,247,878 | ($123,977) | | **Net income** | $633,749 | $2,191,437 | $276,922 | | **Net income attributable to EZGO** | $512,541 | $1,738,123 | $147,174 | | **Net income per ordinary share (Basic and diluted)** | $0.07 | $0.23 | $0.02 | Selected Consolidated Balance Sheet Data (As of September 30) | Indicator | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | | **Cash and cash equivalents** | $5,570 | $3,633,645 | $322,598 | | **Total assets** | $13,700,498 | $19,171,950 | $19,817,798 | | **Total liabilities** | $7,081,518 | $6,840,965 | $6,672,653 | | **Total EZGO shareholders' equity** | $3,652,813 | $8,226,779 | $8,869,462 | [Risk Factors](index=6&type=section&id=3.D.%20Risk%20Factors) The company faces significant risks including potential losses, limited operating history, intense competition, internal control weaknesses, and legal uncertainties from its China VIE structure - The company is an early-stage e-bicycle and charging pile company with a **limited operating history** since shifting focus in August 2019, which may not provide an adequate basis to judge future prospects[22](index=22&type=chunk)[23](index=23&type=chunk) - The company is highly dependent on a few core customers. For FY2020, three major customers accounted for **20%**, **19%**, and **10%** of battery sales, while one customer accounted for **31%** of e-bicycle sales. Three individual sublease agents accounted for **17%**, **13%**, and **9%** of rental revenues[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - Material weaknesses in internal control over financial reporting have been identified. These include a **lack of sufficient accounting personnel with U.S. GAAP and SEC reporting knowledge**, and a **lack of key monitoring mechanisms** like an internal control department[54](index=54&type=chunk)[55](index=55&type=chunk) - The company relies on a **Variable Interest Entity (VIE) structure** to operate in China. This structure involves contractual arrangements that may not be as effective as direct ownership and are subject to risks from PRC legal and regulatory uncertainties, including the new Foreign Investment Law[76](index=76&type=chunk)[77](index=77&type=chunk) - As a foreign private issuer incorporated in the BVI, the company is permitted to follow home country governance practices, which may offer **less protection to shareholders** than Nasdaq standards for U.S. domestic companies. Judicial precedent regarding shareholder rights is also more limited under BVI law[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) [Information On The Company](index=35&type=section&id=Item%204.%20Information%20On%20The%20Company) Details the company's history, VIE corporate structure, and business overview as a short-distance transportation provider in China, focusing on e-bicycle sales, rentals, and smart charging [History and Development of the Company](index=35&type=section&id=4.A.%20History%20and%20Development%20of%20the%20Company) EZGO Technologies Ltd., incorporated in BVI in January 2019, operates in PRC via subsidiaries and a VIE (Jiangsu Baozhe) controlled by contractual agreements due to foreign ownership restrictions - The company was incorporated in the BVI on **January 24, 2019**, and conducts its business in the PRC primarily through its VIE, Jiangsu Baozhe, and its subsidiaries[192](index=192&type=chunk) - Due to PRC legal restrictions on foreign ownership, the company controls its operating entity, Jiangsu Baozhe, through a series of **VIE agreements**, including an Equity Pledge Agreement, Exclusive Call Option Agreement, and Proxy Agreement, rather than direct equity ownership[195](index=195&type=chunk)[196](index=196&type=chunk) [Business Overview](index=38&type=section&id=4.B.%20Business%20Overview) Positions itself as a short-distance transportation provider in China, focusing on e-bicycle and battery sales/rentals, with e-bicycle sales dominating FY2020 revenue, aiming for 1% market share by 2025 - The company's business model focuses on **e-bicycle sales, battery/e-bicycle rentals, and smart charging piles**, leveraging an Internet of Things (IoT) platform[207](index=207&type=chunk) Revenue Breakdown by Business Line (FY2018-FY2020) | Business Line | FY2018 Revenue % | FY2019 Revenue % | FY2020 Revenue % | | :--- | :--- | :--- | :--- | | Rental Service | 83% | 74% | 9% | | E-Bicycles Sales | 0% | 2% | 66% | | Battery Packs Sales | 17% | 1% | 19% | | Lithium Battery Cell Trading | 0% | 23% | 0% | - Strategic goals for 2021-2025 include achieving at least **1% market share** in China's e-bicycle industry (annual sales of **350,000 units**) and deploying **50,000 smart charging piles**[225](index=225&type=chunk) - The company holds **six registered patents** in China related to battery technology and e-bicycle manufacturing, **nine registered trademarks**, and **12 software copyrights**[48](index=48&type=chunk)[272](index=272&type=chunk)[274](index=274&type=chunk) [Regulations](index=58&type=section&id=Regulations) PRC operations are subject to complex regulations including foreign investment, e-bicycle production, IP, labor, and foreign exchange, with an evolving legal environment creating compliance uncertainties for VIE structures and cross-border data - The PRC's **Foreign Investment Law**, effective **January 1, 2020**, grants national treatment to foreign-invested entities but does not explicitly clarify the status of VIE structures, creating uncertainty[288](index=288&type=chunk)[290](index=290&type=chunk) - E-bicycle production is regulated by mandatory product certification (**CCC**) and must comply with the **"New National Standards" (GB 17761-2018)** which became effective on **April 15, 2019**[296](index=296&type=chunk)[297](index=297&type=chunk) - The PRC Securities Law (**Article 177**) prohibits overseas securities regulators from directly conducting investigations or evidence collection within the PRC, which may hinder regulatory oversight and shareholder claims[333](index=333&type=chunk) [Operating And Financial Review And Prospects](index=66&type=section&id=Item%205.%20Operating%20And%20Financial%20Review%20And%20Prospects) Provides management's analysis of financial performance, highlighting FY2020 revenue surge to $16.8 million from e-bicycle sales, leading to gross margin drop and operating loss, with liquidity supported by operations, shareholder loans, and its January 2021 IPO [Results of Operations](index=67&type=section&id=Results%20of%20Operations) For FY2020, net revenues increased dramatically to $16.8 million from e-bicycle sales, offset by a 58% decrease in rental revenue, causing gross profit margin to plummet from 61% to 11% and leading to an operating loss Revenue Disaggregation (Years ended September 30) | Revenue Source | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | | Rental of lithium batteries and e-bicycles | $2,641,179 | $3,823,058 | $1,595,226 | | Battery cell trading | $0 | $1,186,185 | $0 | | Sales of battery packs | $550,381 | $67,384 | $3,148,156 | | Sales of e-bicycles | $0 | $104,080 | $11,165,290 | | **Total Net Revenues** | **$3,191,560** | **$5,194,259** | **$16,838,508** | - Gross profit margin decreased significantly from **61% in FY2019 to 11% in FY2020**. This was primarily due to the absence of high-margin battery cell trading revenue in 2020 and the shift in revenue mix towards lower-margin e-bicycle sales[368](index=368&type=chunk) - Rental segment revenue decreased by **58% in FY2020** compared to FY2019, mainly due to the impact of COVID-19 and the termination of contracts with major sublease agents[365](index=365&type=chunk) - General and administrative expenses increased by **75% in FY2020 to $1.4 million**, largely due to higher research and development costs for new e-bicycle models[371](index=371&type=chunk) [Liquidity and Capital Resources](index=73&type=section&id=Liquidity%20and%20Capital%20Resources) Historically financed by capital contributions, shareholder loans, and operations, the company held $322,598 cash as of September 30, 2020, and received $9.23 million net proceeds from its January 2021 IPO to support future operations - As of September 30, 2020, the company had cash and cash equivalents of **$322,598** and a working capital of **$9.6 million**[374](index=374&type=chunk) - The company received net proceeds of approximately **$9.23 million** from its Initial Public Offering in **January 2021**, which will be used to fund future operations[373](index=373&type=chunk)[376](index=376&type=chunk) - Net cash provided by operating activities was **$4.0 million in FY2020**, a significant improvement from the **$5.5 million used in FY2019**. This was driven by a decrease in advances to suppliers and an increase in accrued expenses, offset by a large increase in accounts receivable[381](index=381&type=chunk) - Net cash used in investing activities was **$3.3 million in FY2020**, primarily for the purchase of property, equipment, and short-term investments[389](index=389&type=chunk) - Net cash used in financing activities was **$4.0 million in FY2020**, mainly due to the repayment of a **$4.3 million loan** to a shareholder[392](index=392&type=chunk) [Critical Accounting Policies](index=78&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies include U.S. GAAP presentation, VIE consolidation, and estimates, with revenue recognized under ASC Topic 606 for product sales/trading and ASC Topic 840 for rentals, covering discontinued operations - The consolidated financial statements are prepared in accordance with **U.S. GAAP** and include the accounts of the company, its subsidiaries, and its VIE, for which it is the primary beneficiary[402](index=402&type=chunk) - Revenue from product sales (battery packs, e-bicycles) is recognized at a point in time upon customer acceptance. Revenue from battery cell trading is recognized on a net basis as the company acts as an agent. Revenue from rentals is recognized over the rental period[421](index=421&type=chunk)[423](index=423&type=chunk) - The company's previous business of manufacturing battery cells was disposed of in **December 2018** and is accounted for as a discontinued operation in the financial statements[404](index=404&type=chunk)[746](index=746&type=chunk) [Directors, Senior Management And Employees](index=84&type=section&id=Item%206.%20Directors,%20Senior%20Management%20And%20Employees) Provides information on leadership and workforce, listing directors and executive officers, including CEO Jianhui Ye and CFO Jingyan Wu, with a five-member board (three independent), and details executive compensation and significant share ownership - The board of directors consists of **5 members**, including **3 independent directors**. The company has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee[461](index=461&type=chunk)[463](index=463&type=chunk) - For the fiscal year ended September 30, 2020, the aggregate cash compensation paid to all directors and senior management was approximately **$24,338**[458](index=458&type=chunk) - As of **February 16, 2021**, directors and executive officers as a group beneficially owned approximately **51.30%** of the company's outstanding ordinary shares, with CEO Jianhui Ye holding **27.99%**[162](index=162&type=chunk)[472](index=472&type=chunk) - As of September 30, 2020, the company had **62 full-time employees**, primarily in business/marketing, administration/finance, and R&D[276](index=276&type=chunk)[277](index=277&type=chunk) [Major Shareholders And Related Party Transactions](index=90&type=section&id=Item%207.%20Major%20Shareholders%20And%20Related%20Party%20Transactions) Details major shareholders, with CEO Jianhui Ye as the largest at 27.99% ownership, and outlines numerous related party transactions including significant e-bicycle purchases and interest-free loans, subject to Audit Committee review - The company's major shareholders include WXYZ Group Ltd. (controlled by CEO Jianhui Ye) with **27.99% ownership** and JKC Investment Holding Co., Ltd. (controlled by Director Di Wu) with **9.81% ownership**[472](index=472&type=chunk) - Significant related party transactions in FY2020 include the purchase of e-bicycles for **$4.54 million** from Changzhou Cenbird Electric Bicycle Manufacturing Co., Ltd. and the repayment of a **$4.29 million interest-free loan** to CEO Jianhui Ye[479](index=479&type=chunk) - The company's operations in China are conducted through a **VIE structure**, which involves a series of contractual arrangements with Jiangsu Baozhe and its shareholders, constituting a significant set of related party agreements[480](index=480&type=chunk) [Financial Information](index=91&type=section&id=Item%208.%20Financial%20Information) Confirms inclusion of consolidated financial statements, discloses two ongoing contract disputes with suppliers totaling $286,000, and states the company has never paid dividends, intending to retain earnings for growth - The company is involved in two contract disputes with suppliers, Anruida and Titans, over alleged defaulted payments totaling approximately **$286,000**[283](index=283&type=chunk)[284](index=284&type=chunk) - The company has never declared or paid dividends and intends to retain all future earnings to finance operations and business expansion[484](index=484&type=chunk) [The Offer And Listing](index=92&type=section&id=Item%209.%20The%20Offer%20And%20Listing) The company's ordinary shares are listed on the Nasdaq Capital Market under "EZGO", with trading commencing January 26, 2021 - The company's ordinary shares began trading on the **Nasdaq Capital Market** on **January 26, 2021**, under the symbol **"EZGO"**[485](index=485&type=chunk) [Additional Information](index=92&type=section&id=Item%2010.%20Additional%20Information) Provides details on the company's BVI corporate structure and governance, outlining shareholder rights, comparing BVI to Delaware law, discussing PRC exchange controls, and summarizing material tax considerations including PFIC risk - The company is incorporated in the **British Virgin Islands (BVI)** and its affairs are governed by its memorandum and articles of association and the BVI Business Company Act[485](index=485&type=chunk) - The company is authorized to issue up to **100,000,000 ordinary shares** with a par value of **$0.001 each**. Each ordinary share is entitled to one vote[487](index=487&type=chunk)[489](index=489&type=chunk) - PRC regulations restrict the conversion of Renminbi for capital-account items, which could affect the company's ability to make direct investments or repatriate funds, although routine current-account transactions like dividend payments are permitted[544](index=544&type=chunk) - The company may be considered a PRC "resident enterprise" for tax purposes if its "de facto management" is in China, which would subject it to a **25% tax** on its worldwide income. There is also a risk of being classified as a **Passive Foreign Investment Company (PFIC)** for U.S. federal income tax purposes, which could have adverse tax consequences for U.S. investors[550](index=550&type=chunk)[563](index=563&type=chunk)[564](index=564&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=109&type=section&id=Item%2011.%20Quantitative%20And%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily foreign exchange risk (RMB/USD), credit risk (receivables, PRC bank deposits), and inflation risk in China - The company's primary market risk is **foreign exchange risk**, as its operations are in RMB but reporting is in USD. A change in the RMB/USD exchange rate can materially affect reported financial results[579](index=579&type=chunk)[580](index=580&type=chunk) - Credit risk exists from cash deposits held in PRC financial institutions, which do not have insurance rules equivalent to those in the U.S., and from unsecured accounts receivable from customers[581](index=581&type=chunk) PART II [Material Modifications To The Rights Of Security Holders And Use Of Proceeds](index=110&type=section&id=Item%2014.%20Material%20Modifications%20To%20The%20Rights%20Of%20Security%20Holders%20And%20Use%20Of%20Proceeds) The company completed its IPO on January 28, 2021, issuing 2,800,000 ordinary shares at $4.00 each, receiving net proceeds of approximately $9.23 million after expenses - The company's IPO closed on **January 28, 2021**, raising net proceeds of approximately **$9.23 million** after expenses[585](index=585&type=chunk)[586](index=586&type=chunk) [Controls and Procedures](index=110&type=section&id=Item%2015.%20Controls%20And%20Procedures) Management concluded disclosure controls and procedures were ineffective as of September 30, 2020, due to two material weaknesses: insufficient U.S. GAAP/SEC accounting personnel and lack of key monitoring mechanisms, with remediation underway - Management concluded that disclosure controls and procedures were **not effective** as of the end of the fiscal year[587](index=587&type=chunk) - Two **material weaknesses** were identified in internal control over financial reporting: 1) **Lack of sufficient financial reporting and accounting personnel with U.S. GAAP/SEC knowledge**. 2) **Lack of key monitoring mechanisms** like an internal control department[588](index=588&type=chunk) - Remediation efforts include hiring a new Chief Financial Officer on **September 1, 2020**, and working to establish an internal audit department[590](index=590&type=chunk) [Corporate Governance and Other Matters](index=112&type=section&id=Item%2016.%20Corporate%20Governance%20And%20Other%20Matters) Covers corporate governance and compliance, including audit committee financial expert determination, code of ethics adoption, principal accountant fees ($350,000 in FY2019, $200,000 in FY2020), and Nasdaq governance compliance - The board has identified Robert Johnson as an **"audit committee financial expert"**[593](index=593&type=chunk) - A **code of ethics** has been adopted that applies to all executive officers, directors, and employees[594](index=594&type=chunk) Principal Accountant Fees | Fee Type | FY 2019 | FY 2020 | | :--- | :--- | :--- | | Audit fees | $350,000 | $200,000 | PART III [Financial Statements](index=113&type=section&id=Item%2018.%20Financial%20Statements) Contains the company's audited consolidated financial statements for FY2018-2020 by Marcum Bernstein & Pinchuk LLP, including balance sheets, income statements, comprehensive income, equity changes, and cash flows, with notes prepared in U.S. GAAP - The report includes the audited consolidated financial statements for the fiscal years ended **September 30, 2018, 2019, and 2020**[600](index=600&type=chunk) - The independent registered public accounting firm, **Marcum Bernstein & Pinchuk LLP**, issued an opinion stating that the financial statements present fairly, in all material respects, the financial position and results of operations in conformity with **U.S. GAAP**[609](index=609&type=chunk) [Exhibits](index=113&type=section&id=Item%2019.%20Exhibits) Lists all exhibits filed, including governing documents, securities descriptions, various VIE agreements forming its China corporate structure, and CEO/CFO certifications - Key exhibits filed with the report include the company's governing documents, descriptions of securities, and the **full set of VIE contractual agreements**[601](index=601&type=chunk)