Exhibit 99.2
EZGO TECHNOLOGIES LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
(In U.S. dollars except for number of shares)
| As
of September 30, 2024 | As
of March 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Short-term investments | ||||||||
| Accounts receivable, net | ||||||||
| Notes receivable | ||||||||
| Inventories, net | ||||||||
| Advances to suppliers | ||||||||
| Amounts due from related parties, current | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets of discontinued operation | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Amounts due from a related party, non-current | ||||||||
| Property, plant and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Land use right, net | ||||||||
| Right-of-use assets, net | ||||||||
| Goodwill, net | ||||||||
| Deferred tax assets, net | ||||||||
| Long-term investments, net | ||||||||
| Other non-current assets | ||||||||
| Non-current assets of discontinued operation | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Short-term borrowings | $ | $ | ||||||
| Long-term borrowings, current | ||||||||
| Accounts payable | ||||||||
| Advances from customers | ||||||||
| Income tax payable | ||||||||
| Lease liabilities, current | ||||||||
| Amounts due to related parties, current | ||||||||
| Accrued expenses and other payables | ||||||||
| Current liabilities of discontinued operation | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Long-term borrowings | ||||||||
| Non-current liabilities of discontinued operation | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 16) | ||||||||
| EQUITY | ||||||||
| Ordinary shares (par value of $ | ||||||||
| Subscription receivable | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Statutory reserve | ||||||||
| Accumulated deficits | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total EZGO Technologies Ltd.’s shareholders’ equity | ||||||||
| Non-controlling interests | ||||||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
EZGO TECHNOLOGIES LTD. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In U.S. dollars except for number of shares)
| Six Months Ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| Net revenues | $ | $ | ||||||
| Cost of revenues -Third parties | ( | ) | ( | ) | ||||
| Cost of revenues -Related parties | ( | ) | ||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling and marketing | ( | ) | ( | ) | ||||
| General and administrative | ( | ) | ( | ) | ||||
| Research and development | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expenses): | ||||||||
| Interest expenses | ( | ) | ( | ) | ||||
| Interest income | ||||||||
| Non-operating income, net | ||||||||
| Fair value changes in contingent asset | ( | ) | ||||||
| Impairment loss of goodwill | ( | ) | ||||||
| Total other (expenses) income, net | ( | ) | ||||||
| Loss from continuing operations before income taxes and share of loss of equity method investments | ( | ) | ( | ) | ||||
| Income tax benefit (expense) | ( | ) | ||||||
| Share of loss of equity method investments | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Loss from operations of discontinued operations before income taxes and share of loss of equity method investments | ( | ) | ( | ) | ||||
| Income tax expenses | ||||||||
| Share of loss of equity method investments | ( | ) | ( | ) | ||||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Less: Net loss attributable to non-controlling interests from continuing operations | ( | ) | ( | ) | ||||
| Net loss attributable to EZGO Technologies Ltd.’s shareholders from continuing operations | ( | ) | ( | ) | ||||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Less: Net loss attributable to non-controlling interests from discontinued operations | ( | ) | ( | ) | ||||
| Net loss attributable to EZGO Technologies Ltd.’s shareholders from discontinued operation | ( | ) | ( | ) | ||||
| Net loss attributable to EZGO Technologies Ltd.’s shareholders | $ | ( | ) | $ | ( | ) | ||
| Net loss from continuing operations per ordinary share: | ||||||||
| Basic and diluted* | $ | ( | ) | $ | ( | ) | ||
| Net loss from discontinued operation per ordinary share: | ||||||||
| Basic and diluted* | $ | ( | ) | $ | ( | ) | ||
| Net loss per ordinary share: | ||||||||
| Basic and diluted* | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding | ||||||||
| Basic and diluted* | ||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
2
EZGO TECHNOLOGIES LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In U.S. dollars except for number of shares)
| Six Months Ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| Net loss from continuing operations before non-controlling interests | $ | ( | ) | $ | ( | ) | ||
| Loss from discontinued operation, net of tax | ( | ) | ( | ) | ||||
| Net loss | ( | ) | ( | ) | ||||
| Other comprehensive income (loss) | ||||||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Comprehensive loss | ( | ) | ( | ) | ||||
| Less: Comprehensive loss attributable to non-controlling interests | ( | ) | ( | ) | ||||
| Comprehensive loss attributable to EZGO Technologies Ltd.’s shareholders | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
3
EZGO TECHNOLOGIES LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
SIX MONTHS ENDED MARCH 31, 2024 AND 2025
(In U.S. dollars except for number of shares)
| Ordinary shares* | Subscription | Additional paid-in | Statutory | Accumulated | Accumulated other comprehensive | Total EZGO’s shareholders’ | Non-controlling | Total | ||||||||||||||||||||||||||||||||
| Share | Amount | receivables | capital | reserve | deficits | loss | equity | interest | equity | |||||||||||||||||||||||||||||||
| Balance as of September 30, 2023 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2024 (Unaudited) | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Ordinary shares | Subscription | Additional paid-in | Statutory | Accumulated | Accumulated other comprehensive | Total
EZGO’s shareholders’ | Non-controlling | Total | ||||||||||||||||||||||||||||||||
| Share | Amount | receivables | capital | reserve | deficits | loss | equity | interest | equity | |||||||||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||||||||||||||||||
| Warrant shares exercised via cashless option | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Imputed interest on related party loan | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 (Unaudited) | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
4
EZGO TECHNOLOGIES LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollars)
| Six Months Ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss from continuing operation | $ | ( | ) | $ | ( | ) | ||
| Net loss discontinued operation | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Allowance for credit losses | ||||||||
| Imputed interest on a related party loan | ( | ) | ||||||
| Provision for inventories | ||||||||
| Depreciation and amortization | ||||||||
| Share-based compensation | ||||||||
| Gain on short-term investments | ( | ) | ||||||
| Fair value changes in contingent asset | ||||||||
| Loss from long-term investment | ||||||||
| Impairment loss of goodwill | ||||||||
| Deferred tax (benefit) expense | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Notes receivable | ( | ) | ( | ) | ||||
| Advances to suppliers | ( | ) | ||||||
| Inventories | ( | ) | ( | ) | ||||
| Amounts due from related parties, current | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Advances from customers | ( | ) | ||||||
| Income tax payable | ( | ) | ( | ) | ||||
| Amounts due to related parties, current | ( | ) | ||||||
| Accrued expenses and other payables | ( | ) | ( | ) | ||||
| Net cash (used in) provided by operating activities from continuing operations | ( | ) | ||||||
| Net cash provided by operating activities from discontinued operations | ||||||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ||||
| Prepayment for construction in progress | ( | ) | ||||||
| Proceed from redemption of a short-term investment | ||||||||
| Purchase of a short-term investment | ( | ) | ||||||
| Prepayment for intent long-term investment | ( | ) | ||||||
| Loans to related parties | ( | ) | ( | ) | ||||
| Collection of loans to related parties | ||||||||
| Net cash used in investing activities from continuing operations | ( | ) | ( | ) | ||||
| Net cash provided by investing activities from discontinued operations | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from short-term borrowings | ||||||||
| Repayments of short-term borrowings | ( | ) | ( | ) | ||||
| Proceeds from long-term borrowings | ||||||||
| Loans from related parties | ||||||||
| Repayments of loans from related parties | ( | ) | ||||||
| Repayment of loans from third parties | ( | ) | ||||||
| Net cash provided by (used in) financing activities from continuing operations | ( | ) | ||||||
| Net cash (used in) provided by financing activities from discontinued operation | ||||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Effect of exchange rate changes | ||||||||
| Net decrease in cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Cash, cash equivalents and restricted cash, at beginning of the period | ||||||||
| Cash, cash equivalents and restricted cash, at end of the period | $ | $ | ||||||
| Reconciliation of cash, cash equivalents, and restricted cash to the Consolidated Balance Sheets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||
| Less: cash and cash equivalents from the discontinued operations, end of the period | ||||||||
| Cash and cash equivalent from the continuing operations, end of the period | ||||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Income tax paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| Warrant shares exercised via cashless option | $ | $ | ||||||
| Recognition of right-of use assets and lease liabilities | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
5
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
EZGO
Technologies Ltd. (“EZGO”), is a holding company incorporated under the laws of the British Virgin Islands (“BVI”)
on January 24, 2019. EZGO, its subsidiaries, VIE and VIE’s subsidiaries (collectively referred to as the “Company”)
mainly sells battery cells and packs, electronic control systems and second-hand machinery, and provides maintenance services in the
People’s Republic of China (“PRC”).
| Name | Date of incorporation / acquisition | Place of incorporation | Percentage of ownership | Principal activities | ||||
| Subsidiaries | ||||||||
| China EZGO Group Ltd. (“EZGO HK”) | ||||||||
| Changzhou Langyi Electronic Technologies Co., Ltd. (“Changzhou Langyi”) | ||||||||
| EZGO Technologies Group Co., Ltd. (formerly known as Changzhou EZGO Enterprise Management Co., Ltd., and Changzhou Jiekai Enterprise Management Co., Ltd., “WFOE” or “Changzhou EZGO”) | ||||||||
| Jiangsu EZGO Energy Supply Chain Technology Co., Ltd. (“Jiangsu Supply Chain”) | ||||||||
| Jiangsu EZGO New Energy Technologies Co., Ltd. (“Jiangsu New Energy”) | ||||||||
| Sichuan EZGO Energy Technologies Co., Ltd. (“Sichuan EZGO”) | ||||||||
| Tianjin EZGO Electric Technologies Co., Ltd. (“Tianjin EZGO”) | ||||||||
| Changzhou Youdi Electric Bicycle Co., Ltd. (“Changzhou Youdi”) | ||||||||
| Changzhou Sixun Technology Co., Ltd. (“Changzhou Sixun”) | ||||||||
| Changzhou Higgs Intelligent Technology Co., Ltd. (“Changzhou Higgs”) | ||||||||
| Changzhou Zhuyun Technology Co., Ltd. (“Changzhou Zhuyun”) | ||||||||
| VIE and subsidiaries of VIE* | ||||||||
| Jiangsu EZGO Electronic Technologies Co., Ltd. (formerly known as Jiangsu Baozhe Electric Technologies, Co., Ltd.,“Jiangsu EZGO”) | ||||||||
| Changzhou Hengmao Power Battery Technology Co., Ltd. (“Hengmao”) | owned by VIE | |||||||
| Changzhou Yizhiying IoT Technologies Co., Ltd. (“Yizhiying”) | owned by VIE | |||||||
| Jiangsu Cenbird E-Motorcycle Technologies Co., Ltd. (“Cenbird E-Motorcycle”) | owned by VIE |
| * |
6
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
1. ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
The VIE contractual arrangements
Current PRC laws and regulations impose restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication services, and certain other businesses. Changzhou EZGO is considered a foreign-invested enterprise. To comply with PRC laws and regulations, EZGO conducts part of its business in PRC through Jiangsu EZGO and its subsidiaries, based on a series of contractual arrangements. These contractual arrangements expire on November 8, 2039. The following is a summary of the contractual arrangements that provide EZGO with effective control of its VIE and VIE’s subsidiaries and enable it to receive substantially all the economic benefits from their operations.
Each VIE Agreements is described below:
Proxy Agreement
Pursuant to the Proxy Agreement, dated November 8, 2019, among WFOE, Jiangsu EZGO and each equity holder of Jiangsu EZGO, each equity holder irrevocably authorizes WFOE to exercise his or her rights as an equity holder of Jiangsu EZGO, including the right to attend equity holders’ meetings, to exercise voting rights and to transfer all or a part of his or her equity interests therein pursuant to the Exclusive Call Option Agreement. During the term of Proxy Agreement, Jiangsu EZGO and all its equity holders may not terminate the agreements except when this agreement or applicable PRC laws provide otherwise.
Exclusive Call Option Agreement
Pursuant to the Exclusive Call Option Agreement, dated November 8, 2019, among WFOE, Jiangsu EZGO and the equity holders of Jiangsu EZGO, each equity holder of Jiangsu EZGO irrevocably granted WFOE an exclusive option to purchase, or to designate other persons to purchase, to the extent permitted by applicable PRC laws, rules, and regulations, all of the equity interest and assets in Jiangsu EZGO from each equity holder. The equity holders of Jiangsu EZGO agree that, without the prior written consent of WFOE, they will not dispose of their equity interests in Jiangsu EZGO or create or allow any encumbrance on their equity interests. The purchase price for the equity interest is to be the minimum permitted by applicable PRC laws, rules and regulations, or the amount that the equity holders actually pay to Jiangsu EZGO for the equity, whichever is lower. The purchase price for the assets is to be the minimum permitted by applicable PRC laws, rules and regulations, or the net book value of the assets, whichever is lower. The Exclusive Call Option Agreement expires when all the equity interest or all the assets are transferred pursuant to the agreement.
Exclusive Management Consulting and Technical Service Agreement (“EMCTSA”)
Pursuant
to the EMCTSA, dated November 8, 2019, between WFOE and Jiangsu EZGO, Jiangsu EZGO agrees to engage WFOE as its exclusive provider of
management consulting, technical support, intellectual property license and relevant services, including all services within Jiangsu
EZGO’s business scope and decided by WFOE from time to time as necessary. Jiangsu EZGO shall pay WFOE service fees within three
months after each fiscal year end. The service fees should be
7
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
1. ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)
Equity Pledge Agreement
Pursuant
to the Equity Pledge Agreement, dated November 8, 2019, among WFOE, Jiangsu EZGO and the equity holders of Jiangsu EZGO, the equity holders
of Jiangsu EZGO pledged the
Loan Agreement
Pursuant
to the Loan Agreement, dated November 8, 2019, WFOE agrees to provide Jiangsu EZGO with loans of different amounts with interest of
Spousal Consent Letter
The spouses of individual equity holders of Jiangsu EZGO each signed Spousal Consent Letters. Under the Spousal Consent Letter, the signing spouse unconditionally and irrevocably agreed to the execution by his or her spouse of the above-mentioned Equity Pledge Agreement, Exclusive Call Option Agreement and Proxy Agreement, and that his or her spouse may perform, amend or terminate such agreements without his or her consent. In addition, in the event that the spouse obtains any equity interest in Jiangsu EZGO held by his or her spouse for any reason, he or she agrees to be bound by and sign any legal documents substantially similar to the contractual arrangements entered into by his or her spouse, as may be amended from time to time.
Due to the declining performance of sales of e-bicycle business, the Company determined to dispose the variable interest entity, Jiangsu EZGO Electronic Technologies Co., Ltd., and its subsidiaries with no plan to acquire a new variable interest entity. The historical financial results of the sales of e-bicycles business were classified as discontinued operation and the related assets and liabilities associated with the discontinued operations of the prior year were reclassified as assets/liabilities held for sale to provide comparable financial information. The financial information of the VIE and its subsidiaries were disclosed in Note 12.
8
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
The accompanying CFS are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The CFS includes the financial statements of EZGO, its subsidiaries, its VIE and its VIE’s subsidiaries for which EZGO is the primary beneficiary.
The accompanying unaudited interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and have been consistently applied. The accompanying unaudited interim condensed consolidated financial statements of the Company include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. The results of operations for the six months ended March 31, 2025 are not necessarily indicative of results to be expected for any other interim period or for the full year ended September 30, 2025. Accordingly, these statements should be read in conjunction with the Company’s audited financial statements and notes thereto as of and for the years ended March 31, 2023 and 2024.
The Company’s liquidity is based on its ability to enhance its operating cash flow position, obtain capital financing from equity interest investors, initial public offering, and borrow funds to fund its general operations and capital expenditure. The Company’s ability to continue as a going concern is dependent on management’s ability to execute its business plan successfully, which includes increasing market acceptance of our products to boost its sales volume to achieve economies of scale while applying more effective marketing strategies and cost control measures to better manage operating cash flow position and obtaining funds from outside sources of financing to generate positive financing cash flows. The Comany would also further consider financing from bank credit or shareholder capital injection to enhance capital turnover and liquidity position if necessary.
Based on the Company’s current working capital, access to undrawn credit facilities, and financial support from related parties, the Company estimates that it will have sufficient liquidity to meet its obligations and operating requirements for at least the twelve months and accordingly these financial statements have been prepared on a going concern basis.
(b) Consolidation
The CFS include the financial statements of EZGO, its subsidiaries, VIE and VIE’s subsidiaries for which EZGO is the primary beneficiary. Consolidation of subsidiaries begins from the date the Company obtains control of the subsidiaries and ceases when the Company loses control of the subsidiaries. All inter-company transactions, balances and unrealized gains or losses on transitions among the Company and its subsidiaries were eliminated in consolidation.
A non-controlling interest in a subsidiary of the Company is the portion of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Company. Non-controlling interests are presented as a separate component of equity on the Unaudited Interim Condensed Consolidated Balance Sheets and net loss and other comprehensive loss attributable to non-controlling shareholders is presented as a separate component on the Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss.
(c) Reverse Share Split
Effective on March 22, 2024, the Company effected a Reverse Share Split of all of the Company’s ordinary shares at a ratio of 1-for-40 so that every forty (40) shares are combined into one (1) share (with the fractional shares rounding off to the nearest whole share). The par values and the authorized shares of the ordinary shares were adjusted as a result of the Reverse Share Split. All numbers of shares and per share data presented in the CFS and related notes have been retroactively restated to reflect the reverse share split stated above, refer to Note 15. The Company issued one full post-Reverse Share Split ordinary share to any shareholder who would have been entitled to receive a fractional share as a result of the process.
(d) Discontinued operation
A discontinued operation may include a component of an entity or a group of components of an entity, or a business or non-profit activity. A disposal of a component of an entity or a group of components of an entity is reported in discontinued operation if the disposal results from strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). For any component classified as held for sale or disposed of by sale or other than by sale that qualify for presentation as a discontinued operation in the period, the Company has reported the assets and liabilities of the discontinued operation as assets of discontinued operation, and liabilities of discontinued operation in the Unaudited Interim Condensed Consolidated Balance Sheets. The results of discontinued operation were reflected separately in the Unaudited Interim Condensed Consolidated Statements of Operations as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operation of the three categories were separately presented in the Unaudited Interim Condensed Consolidated Statements of Cash Flows for all periods presented in accordance with U.S. GAAP.
9
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Short-term investments
Short-term investments include fixed deposit receipt, which is classified based on the nature and characteristics. Fixed deposit receipt is measured at amortized cost, which is classified as held-to-maturity debt investments in accordance with ASC topic 310 (“ASC 310”), Receivables.
(f) Credit losses
In accordance with Accounting Standards Update (“ASU”) 2016-13 “Financial Instruments – Credit Losses” (Topic 326), the Company estimates and records an expected lifetime credit loss by using an aging schedule method in combination with current situation adjustment, which replaces the previous incurred loss impairment model. The expected credit loss impairment model requires the entity to recognize its estimate of expected credit losses for affected financial assets using an allowance for credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
The Company’s accounts receivable, notes receivable, amounts due from related parties and certain receivables which are included in prepaid expenses and other current assets line items in the balance sheet are within the scope of ASC Topic 326. The Company uses an aging schedule method in combination with current situation adjustment, to determine the loss rate of receivable balances and evaluate the expected credit losses on an individual basis. When establishing the loss rate, the Company makes the assessment based on various factors, including aging of receivable balances, historical experience, creditworthiness of debtor, current economic conditions, reasonable and supportable forecasts of future economic, and other factors that may affect the Company’s ability to collect from the debtors. The Company also applies current situation adjustment to provide specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected.
(g) Accounts receivable, net
Accounts
receivable, net are stated at the original amount less allowances for credit losses. Accounts receivable are recognized in the period
when the Company has provided services to its customers and when its right to consideration is unconditional. For the six months ended
March 31, 2024 and 2025, the Company recorded allowance for credit losses of $
(h) Goodwill, net
Goodwill is the excess of the purchase price over fair value (“FV”) of the identifiable assets and liabilities acquired in a business combination.
Goodwill is not depreciated or amortized but is tested for impairment on an annual basis as of September 30 of each year and in between annual tests when an event occurs or circumstances change that could indicate the asset might be impaired. The Company first has the option to assess qualitative factors to determine whether it is more likely than not that the FV of a reporting unit is less than it’s carrying amount.
If
the Company decides, as a result of its qualitative assessment, that it is more likely than not that the FV of a reporting unit is less
than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative
impairment test consists of a comparison of the FV of each reporting unit with its carrying amount, including goodwill. A goodwill impairment
charge will be recorded for the amount by which a reporting unit’s carrying value exceeds its FV, but not to exceed the carrying
amount of goodwill. Application of a goodwill impairment test requires significant management judgment, including the identification
of reporting units and determining the FV of each reporting unit. The judgment in estimating the FV of reporting units includes estimating
future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could
materially affect the determination of FV for each reporting unit. The Company recognized $
10
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Long term investments, net
Long-term investments are the Company’s equity investments in privately held companies accounted for equity method, and equity investments without readily determinable FVs.
(1) Equity investments accounted for using the equity method
Equity investments are comprised of investments in privately held companies. The Company uses the equity method to account for an equity investment over which it has the ability to exert significant influence but does not otherwise have control. The Company records equity method investments at the cost of acquisition, plus the Company’s share in undistributed earnings and losses since acquisition. For equity investments over which the Company does not have significant influence or control, the cost method of accounting is used.
The Company has historically provided financial support to certain equity investees in the form of loans. If the Company’s share of the undistributed losses exceeds the carving amount of an investment accounted for by the equity method, the Company continues to report losses up to the investment carrying amount, including any loans balance due from the equity investees.
The Company asses its equity investment and loans to equity investees for impairment on a periodic basis by considering factors including, but not limited to, current economic and market conditions, the operating performance of the investees including current earnings trends, the technological feasibility of the investee’s products and technologies, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, cash bur rate, and other company-specific information including recent financing rounds. If it has been determined that the equity investment is less than its related FV and that is decline is other-than-temporary, the carrying value of the investment and loan to equity investee is adjusted downward to reflect these declines in value.
(2) Equity investment without readily determinable FVs
Equity investment without readily determinable FVs refers to the investment over which the Company does not have the ability to exercise significant influence through the investments in common stock or in substance common stock, are accounted for under the measurement alternative upon the adoption of ASU 2016-01 (the “Measurement Alternative”). Under the Measurement Alternative, the carrying value is measured at purchase cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. All gains and losses on these investments, realized and unrealized, are recognized in the consolidated statements of operations. The Company makes an assessment of whether an investment is impaired based on performance and financial position of the investee as well as other evidence of market value at each reporting date. Such assessment includes, but is not limited to, reviewing the investee’s cash position, recent financing, as well as the financial and business performance. The Company recognizes an impairment loss equal to the difference between the carrying value and FV in the unaudited interim condensed consolidated statements of operations.
11
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j) Revenue recognition
The Company recognizes revenues in accordance with ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The Company’s revenues are mainly generated from 1) sales of products, 2) maintenance services and 3) other services.
The core principle of ASC Topic 606 is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
Step 1: Identify the contract with the customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the company satisfies a performance obligation
Revenue recognition policies are discussed as follows:
Revenue from sales of products
The Company sells products to different customers, primarily battery cells and packs, e-bicycles (see Note 12 Discontinued Operation), electronic control systems and second-hand machinery. The Company identifies one performance obligation in providing the products for a fixed consideration as stated in the sales contract. The Company presents the revenue generated from its sales of products on a gross basis as the Company acts as the principal. The revenue is recognized when the Company satisfies the performance obligation by transferring the promised product to the customers upon acceptance by customers.
The Company generally provides different warrant periods for different products: a six-month warranty period for battery packs, and a one-year warranty period for electronic control systems. The customers are required to perform product quality check upon acceptance of delivery and the warranty covers only production defects. Customers do not have the option to purchase a warranty separately, nor does a warranty provide services other than a warranty. Therefore, warranty costs are considered as accrued performance costs rather than performance obligations. As of September 30, 2024 and March 31, 2025, there is no warranty claim by customer and the Company did not accounted provision for warranty cost related to product quality issues in the unaudited condensed consolidated balance sheet as the Company believes that the likelihood of warranty claims is remote or immaterial, based on historical experience, the nature of the products, and other relevant factors.
Revenue from maintenance services
The Company provides comprehensive machine maintenance services, usually through a separate contract specified for the provision of maintenance services. In accordance with the detailed requirements in the contract, the Company implements a targeted maintenance strategy for machines in need of repair. The Company identifies one performance obligation in providing maintenance service for a fixed consideration as stated in the sales contract. The Company presents the revenue generated from its sales of products on a gross basis as the Company acts as the principal. The revenue is recognized when the Company satisfies the performance obligation by completion of maintenance service upon acceptance by customers.
Revenue from other services
The Company also provides other services, mainly including photovoltaic engineering contracting. The Company identifies one performance obligation in the provision of services in the contract, and recognizes revenue when the Company satisfies the performance obligation upon acceptance by customers. For photovoltaic engineering contracting, the Company does not directly engage in the construction but rather serves as an intermediatory to connect the party awarding the contract with suitable contractors. Therefore, the Company presents the revenue from photovoltaic engineering contracting on a net basis as the Company acts as an agent.
12
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j) Revenue recognition (continued)
The following table identifies the disaggregation of the Company’s revenues from continuing operations for the six months ended March 31, 2024 and 2025, respectively:
| Six months ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Battery cells and packs segment | ||||||||
| Sales of products | $ | $ | ||||||
| Electronic control system sales segment | ||||||||
| Sales of products | ||||||||
| Others | ||||||||
| Maintenance services | ||||||||
| Other services | ||||||||
| Net revenues | $ | $ | ||||||
Contract balance
Contract liabilities primarily consist of advances from customers.
Advances
from customers amounted to $
Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable is revenue recognized for amounts invoiced and/or prior to invoicing when the Company has satisfied its performance obligation and has unconditional right to the payment. The Company has no contract assets as of September 30, 2024 and March 31, 2025.
The Company applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company has no material incremental costs of obtaining contracts with customers and the Company expects the benefit of those costs to be longer than one year.
(k) Share-based compensation
The Company applies ASC 718, Compensation—Stock Compensation (“ASC 718”), to account for all of its share-based payments. In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or equity award. All the Company’s grants of share-based awards were classified as equity awards and are recognized in the financial statements based on their grant date FVs.
The Company elected to recognize compensation expense using the straight-line method for all awards granted with graded vesting based on service conditions. The Company also elected to account for forfeitures as they occur. Previously recognized compensation cost for the awards is reversed in the period that the award is forfeited.
(l) Warrants
The Company accounts for the warrants issued in connection with equity-linked instruments under authoritative guidance on accounting from ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The Company classifies warrants in its unaudited interim condensed consolidated balance sheet as an equity based on the nature and characteristics of each warrant issued. Accordingly, the Company evaluated and classified the warrant instrument under equity treatment at its assigned value.
13
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) Recent Accounting Standards
The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280)- Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which provides guidance on the enhanced disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, on an annual and interim basis. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of this guidance should be applied retrospectively to all prior periods presented. Early adoption is permitted. The Company, an emerging growth company, does not expect to adopt this guidance early and does not expect the adoption of this ASU to have a material impact on its future consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. The guidance is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company does not expect to adopt this guidance early and does not expect the adoption of this ASU to have a material impact on its future consolidated financial statements.
In March 2024, the FASB issued ASU No. 2024-02, Codification Improvements-Amendments to Remove References to the Concepts Statements (“ASU 2024-02”). The amendments in this Update affect a variety of Topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance. This update contains amendments to the Codification that remove references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. ASU 2024-02 is effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company does not expect to adopt this guidance early and does not expect the adoption of this ASU to have a material impact on its future consolidated financial statements.
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) which requires detailed disclosures in the notes to financial statements disaggregating specific expense categories and certain other disclosures to provide enhanced transparency into the nature and function of expenses. The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a
prospective basis while retrospective application is permitted. The Group does not expect to adopt this guidance early and does not expect the adoption of this ASU to have a material impact on its future consolidated financial statements.
In March 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2025-02 “Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122” (“ASU 2025-02”), which amends the Accounting Standards Codification to remove the text of SEC Staff Accounting Bulletin (“SAB”) 121 “Accounting for Obligations to Safeguard Crypto- Assets an Entity Holds for its Platform Users” as it has been rescinded by the issuance of SAB 122. ASU 2025-02 is effective immediately and is not expected to have an impact on the Group’s financial statements.
Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the CFS upon adoption. The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its CFS.
14
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
3. ACQUISITION
Acquisition of Changzhou Sixun
On
January 25, 2023, the Company completed the acquisition of Changzhou Sixun through an equity transfer agreement with certain “non-U.S.
persons” (“the Sellers”) as defined in Regulation S of the Securities Act of 1933, as amended, for the transfer of
The transaction constitutes a business combination for accounting purposes and is accounted for using the acquisition method under ASC 805. The Company is deemed to be the accounting acquirer. The Company completed the valuations necessary to assess the FV of the acquired assets and liabilities with the assistance from an independent valuation firm, resulting from which the amounts of goodwill were determined and recognized as of the acquisition dates.
Goodwill arising from the acquisition of Changzhou Sixun
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Beginning balance | $ | $ | ||||||
| Goodwill impairment | ( | ) | ||||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
For
six months ended March 31, 2024 and 2025, the Company recognized $
15
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
4. ACCOUNTS RECEIVABLE, NET
As of September 30, 2024 and March 31, 2025, accounts receivable and allowance for credit losses consisted of the following:
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
Accounts
receivable are considered overdue after 180 days, the general credit term the Company offers to customers. As of September 30, 2024 and
March 31, 2025, the overdue accounts receivable, net of allowance for credit losses, ageing between 180 days and one year were $
The movement is the allowance for credit losses for the six months ended March 31, 2024 and 2025:
| Six months ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at beginning of period | $ | $ | ||||||
| Changes in credit losses | ||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||
| Balance at the end of period | $ | $ | ||||||
For
the six months ended March 31, 2024 and 2025, the Company recorded credit losses of $
16
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
5. INVESTMENTS
As of September 30, 2024 and March 31, 2025, investments consisted of the following:
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Short-term investments: | ||||||||
| Fixed deposit receipt | $ | $ | ||||||
| Total short-term investments | ||||||||
| Long-term investments: | ||||||||
| Investments accounted for using the equity method (1) | ||||||||
| Investments without readily determinable FVs (2) | ||||||||
| Total long-term investments | ||||||||
| Impairment loss of long-term equity investments | ( | ) | ( | ) | ||||
| Total long-term investments, net | ||||||||
| Total investments | $ | $ | ||||||
| (1) |
| (2) |
The movement of the carrying amount of long-term investment was as follows for the six months ended March 31, 2024 and 2025:
| Six months ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Beginning balance | $ | $ | ||||||
| Addition of investments without readily determinable FVs | ||||||||
| Proportionate share of the equity investee’s net loss | ( | ) | ( | ) | ||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
For the six months ended March 31, 2025, equity method investments held by the Company individually have not met the significance criteria as defined under Rule 10-01(b)(1) of Regulation S-X.
17
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
6. INVENTORIES, NET
As of September 30, 2024 and March 31, 2025, inventories and reserve of inventories consisted of the following:
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Finished goods (1) | $ | $ | ||||||
| Work in progress (2) | ||||||||
| Raw materials (3) | ||||||||
| Subtotal | ||||||||
| Less: provision for inventories | ( | ) | ( | ) | ||||
| Inventories, net | $ | $ | ||||||
| (1) |
| (2) |
| (3) |
The movement of provision for inventories was as follows for the six months ended March 31, 2024 and 2025:
| Six months ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at beginning of period | $ | $ | ||||||
| Current period addition | ||||||||
| Charge off | ( | ) | ( | ) | ||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Balance at the end of period | $ | $ | ||||||
For
the six months ended March 31, 2024 and 2025, provisions for inventories of $
18
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
7. ADVANCES TO SUPPLIERS
As of September 30, 2024 and March 31, 2025, advances to suppliers consisted of the following:
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Prepayment for purchase of battery packs | $ | $ | ||||||
| Others | ||||||||
| Advances to supplier | $ | $ | ||||||
8. PROPERY, PLANT AND EQUIPMENT, NET
As of September 30, 2024 and March 31, 2025, property, plant and equipment, net consisted of the following:
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Construction in progress (1) | $ | $ | ||||||
| Vehicles | ||||||||
| Furniture, fixtures and office equipment | ||||||||
| Subtotal | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
| (1) |
For
the six months ended March 31, 2024 and 2025, depreciation expenses were $
9. OTHER NON-CURRENT ASSETS
As of September 30, 2024 and March 31, 2025, other non-current assets consisted of the following:
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Prepayment for purchase of customized equipment | $ | $ | ||||||
| Prepaid construction fee | ||||||||
| Long-term security deposit for land use right (1) | ||||||||
| Other non-current assets | $ | $ | ||||||
| (1) |
19
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
10. BORROWINGS
As of September 30, 2024 and March 31, 2025, the bank borrowings were for working capital and capital expenditures. Borrowings consisted of the following:
| Creditor | Interest rate | Borrowing date | Maturity date | As of September 30, 2024 | As of March 31, 2025 | |||||||||||
| (Unaudited) | ||||||||||||||||
| Bank of Jiangsu (1) | % | |||||||||||||||
| Bank of Jiangsu (2) | % | |||||||||||||||
| Bank of Jiangsu (3) | % | |||||||||||||||
| Bank of Jiangsu (3) | % | - | ||||||||||||||
| Bank of Nanjing (4) | % | |||||||||||||||
| Agricultural Bank of China (5) | % | |||||||||||||||
| Agricultural Bank of China (6) | % | |||||||||||||||
| Total short-term borrowings | $ | $ | ||||||||||||||
| Bank of Jiangnan (7) | % | |||||||||||||||
| Total long-term borrowings, current | $ | $ | ||||||||||||||
| Bank of Jiangnan (7) | % | |||||||||||||||
| Bank of Jiangnan (7) | % | |||||||||||||||
| Bank of Jiangnan (7) | % | |||||||||||||||
| Bank of Jiangnan (7) | % | |||||||||||||||
| Total long-term borrowings, non-current | $ | $ | ||||||||||||||
| Total borrowings | $ | $ | ||||||||||||||
| (1) |
| (2) |
| (3) |
| (4) |
20
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
10. BORROWINGS (CONTINUED)
| (5) |
| (6) |
| (7) |
| Repayment date | Repayment amount | |||
| 6/30/2025 | $ | |||
| 12/31/2025 | ||||
| 6/30/2026 | ||||
| 12/31/2026 | ||||
| 6/30/2027 | ||||
| 12/31/2027 | ||||
| 6/30/2028 | ||||
| 12/31/2028 | ||||
| 6/30/2029 | ||||
| 12/31/2029 | ||||
For
the six months ended March 31, 2024 and 2025, the Company recorded interest expenses of $
21
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
11. RELATED PARTY TRANSACTIONS AND BALANCES
The following is a list of related parties which the Company has transactions with during the six months ended March 31, 2024 and 2025:
| Name | Relationship | |
| (a) Shuang Wu | ||
| (b) Yan Fang | ||
| (c) Jianhui Ye | ||
| (d) Changzhou Cenbird Electric Bicycle Manufacturing Co., Ltd. | ||
| (e) Jiangsu Xinzhongtian Suye Co., Ltd. | ||
| (f) Shenzhen Star Asset Management Co., Ltd. | ||
| (g) Shenzhen Star Cycling Network Technology Co., Ltd. | ||
| (h) Nanjing Mingfeng Technology Co., Ltd. | ||
| (i) Shandong Xingneng’an New Energy Technology Co., Ltd. | ||
| (j) Jiangsu Youdi Technology Co., Ltd. | ||
| (k) Shanghai Mingli New Energy Technology Co., Ltd. |
Amounts due from related parties
As of September 30, 2024 and March 31, 2025, amounts due from related parties consisted of the following:
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Changzhou Cenbird Electric Bicycle Manufacturing Co., Ltd. (d) (1) | $ | $ | ||||||
| Shandong Xingneng’an New Energy Technology Co., Ltd. (i) (1)&(2) | ||||||||
| Shenzhen Star Cycling Network Technology Co., Ltd. (g) (2) | ||||||||
| Jiangsu Youdi Technology Co., Ltd. (j)(2) | ||||||||
| Jianhui Ye (c)(3) | ||||||||
| Total amount due from related parties, current | ||||||||
| Less: amount due from related parties, current, of discontinued operations | ( | ) | ( | ) | ||||
| Amount due from related parties, current, of continuing operations | ||||||||
| Shanghai Mingli New Energy Technology Co., Ltd. (k) (4) | ||||||||
| Amounts due from a related party, non-current | $ | $ | ||||||
| (1) |
| (2) |
| (3) |
| (4) |
22
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
11. RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)
Amounts due to related parties
As of September 30, 2024 and March 31, 2025, amounts due to related parties consisted of the following:
| As of September 30, 2023 | As of March 31, 2024 | |||||||
| (Unaudited) | ||||||||
| Jiangsu Xinzhongtian Suye Co., Ltd. (e) (1)&(2) | $ | $ | ||||||
| Shuang Wu (a) (2)&(3) | ||||||||
| Yan Fang (b) (2) | ||||||||
| Shenzhen Star Asset Management Co., Ltd. (f) (2) | ||||||||
| Nanjing Mingfeng Technology Co., Ltd. (h) (4) | ||||||||
| Total amount due to related parties | ||||||||
| Less: amount due to related parties, of discontinued operations | ( | ) | ( | ) | ||||
| Amount due to related parties, of continuing operations | $ | $ | ||||||
| (1) |
| (2) |
| (3) |
| (4) |
23
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
11. RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)
Related party transactions
For the six months ended March 31, 2024 and 2025, the Company had the following material related party transactions:
| Related Parties | Nature | Six months ended March 31, | ||||||||
| 2024 | 2025 | |||||||||
| (Unaudited) | (Unaudited) | |||||||||
| Inventory purchased from related parties | ||||||||||
| Jiangsu Xinzhongtian Suye Co., Ltd. (e) | Purchase of e-bicycles | $ | $ | |||||||
| Changzhou Cenbird Electric Bicycle Manufacturing Co., Ltd. (d) | Purchase of e-bicycles | |||||||||
| Total inventory purchased from related parties | ||||||||||
| Less: inventory purchased from related parties from discontinued operation | ( | ) | ( | ) | ||||||
| Inventory purchased from continuing operations | $ | $ | ||||||||
| Loans to related parties | ||||||||||
| Shanghai Mingli New Energy Technology Co., Ltd. (k) | Loan to a related party | $ | $ | |||||||
| Shanghai Mingli New Energy Technology Co., Ltd. | Imputed interest on related party loan | |||||||||
| Shandong Xingneng’an New Energy Technology Co., Ltd. (i) | Loan to a related party | |||||||||
| Shandong Xingneng’an New Energy Technology Co., Ltd. (i) | Interest receivable from a related party | |||||||||
| Shenzhen Star Cycling Network Technology Co., Ltd. (g) | Interest receivable from a related party | |||||||||
| Jiangsu Youdi Technology Co., Ltd. (j) | Interest receivable from a related party | |||||||||
| Jiangsu Youdi Technology Co., Ltd. (j) | Loan to a related party | |||||||||
| Total loans to related parties | ||||||||||
| Less: loans to related parties from discontinued operation | ( | ) | ( | ) | ||||||
| Loans to related parties from continuing operations | $ | $ | ||||||||
| Collection of loan to a related party | ||||||||||
| Shandong Xingneng’an New Energy Technology Co., Ltd. (i) | Collection of loan to a related party | $ | $ | |||||||
| Total collection of loan to a related party | $ | $ | ||||||||
| Loans from related parties | ||||||||||
| Jiangsu Xinzhongtian Suye Co., Ltd. (e) | Interest-free loan from a related party | $ | $ | |||||||
| Shuang Wu (a) | Interest-free loan from a related party | |||||||||
| Yan Fang (b) | Interest-free loan from a related party | |||||||||
| Total loans from related parties | ||||||||||
| Less: loans from related parties from discontinued operation | ( | ) | ( | ) | ||||||
| Loans from related parties from continuing operations | $ | $ | ||||||||
| Repayment of loans from related parties | ||||||||||
| Shuang Wu (a) | Repayment of interest-free loans from a related party | $ | $ | |||||||
| Jiangsu Xinzhongtian Suye Co., Ltd. (e) | Repayment of interest-free loans from a related party | |||||||||
| Yan Fang (b | Repayment of interest-free loans from a related party | |||||||||
| Total repayment of loans from related parties | ||||||||||
| Less: repayment of loans from related parties from discontinued operation | ( | ) | ( | ) | ||||||
| Repayment of loans from related parties from continuing operations | $ | $ | ||||||||
| Others | ||||||||||
| Shuang Wu (a) | Reimbursement for expenses paid for daily operation on behalf of the Company | $ | $ | |||||||
| $ | $ | |||||||||
24
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
12. DISCONTINUED OPERATIONS
Due to the declining performance of sales of e-bicycle business, the Company determined to dispose the variable interest entity, Jiangsu EZGO Electronic Technologies Co., Ltd. (“Jiangsu EZGO”), and its subsidiaries. On March 30, 2025, the Company’s Board of Directors approved this disposal of Jiangsu EZGO and its subsidiaries. The disposal is expected to be executed through a sale transaction and is anticipated to be completed within 12 months from the date of approval by the Board of Directors. The VIE and subsidiaries mainly operated in sales of e-bicycles business in PRC. The disposal of the sales of e-bicycles business represented strategic shifts of the Company that had a major impact on the Company’s financial results, and met the held-for-sale criteria, which trigger discontinued operations accounting in accordance with ASC 205-20-45. Therefore, the historical financial results of the sales of e-bicycles business were classified as discontinued operation and the related assets and liabilities associated with the discontinued operations of the prior year were reclassified as assets/liabilities held for sale to provide comparable financial information.
The following tables set forth the assets, liabilities, results of operations and cash flows of the discontinued operations, which were included in the Company’s unaudited condensed consolidated financial statements.
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Advances to suppliers, net | ||||||||
| Amounts due from related parties, current | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets of discontinued operation | ||||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Long-term investments, net | ||||||||
| Non-current assets of discontinued operation | ||||||||
| Total assets of discontinued operation | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Advances from customers | ||||||||
| Income tax payable | ||||||||
| Lease liabilities, current | ||||||||
| Amounts due to related parties, current | ||||||||
| Accrued expenses and other payables | ||||||||
| Total current liabilities of discontinued operation | ||||||||
| Non-current liabilities: | ||||||||
| Lease liabilities, non-current | ||||||||
| Total non-current liabilities of discontinued operation | ||||||||
| Total liabilities of discontinued operation | ||||||||
25
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
12. DISCONTINUED OPERATIONS (CONTINUED)
| Six Months Ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| Gross (loss) profit | ( | ) | ||||||
| Operating expenses: | ||||||||
| Selling and marketing | ( | ) | ( | ) | ||||
| General and administrative | ( | ) | ( | ) | ||||
| Research and development | ( | ) | ||||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Loss from discontinued operations | ( | ) | ( | ) | ||||
| Other income (expenses): | ||||||||
| Interest expenses | ( | ) | ( | ) | ||||
| Interest income | ||||||||
| Non-operating income, net | ||||||||
| Total other income, net from discontinued operations | ||||||||
| Loss from discontinued operations before income taxes and share of loss of equity method investments | ( | ) | ( | ) | ||||
| Income tax expenses | ||||||||
| Share of loss of equity method investments | ( | ) | ( | ) | ||||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Less: Net loss attributable to non-controlling interests from discontinued operations | ( | ) | ( | ) | ||||
| Net loss attributable to EZGO Technologies Ltd.’s shareholders from discontinued operation | $ | ( | ) | $ | ( | ) | ||
| Six Months Ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net cash provided by operating activities from discontinued operations | $ | $ | ||||||
| Net cash provided by investing activities from discontinued operations | ||||||||
| Net cash provided by financing activities from discontinued operation | ||||||||
26
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
13. INCOME TAXES
BVI
The Company is incorporated in the BVI. Under the current laws of the BVI, the Company is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the BVI.
Hong Kong
On
March 21, 2018, the HK Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which introduces
the two-tiered profits tax rates regime. The Bill was signed into law on March 28, 2018 and was announced on the following day. Under
the two-tiered profits tax rates regime, the first
PRC
Under
the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign
invested enterprises is
In
accordance with the implementation rules of EIT Laws, a qualified “High and New Technology Enterprise” (“HNTE”)
is eligible for a preferential tax rate of
According
to Caishui [2021] No.13, announcement of the Ministry of Finance and the State Taxation Administration, which became effective from January
1, 2021, an enterprise engaged in manufacturing business and whose main operating revenue accounts for more than
For
qualified small and low-profit enterprises, from January 1, 2022 to December 31, 2022,
The components of the income tax benefit from continuing operations are:
| Six Months Ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Current | $ | $ | ||||||
| Deferred | ( | ) | ||||||
| Total income tax (benefit) expense | $ | ( | ) | $ | ||||
27
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
13. INCOME TAXES (CONTINUED)
The reconciliations of the statutory income tax rate and the Company’s effective income tax rate are as follows:
| Six Months Ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net loss before income tax benefit from continuing operations | $ | ( | ) | $ | ( | ) | ||
| PRC statutory tax rate | % | % | ||||||
| Income tax at statutory tax rate | ( | ) | ( | ) | ||||
| Effect of income tax rate differences in jurisdictions other than the PRC | ||||||||
| Expenses not deductible for tax purpose and non-taxable income | ||||||||
| Additional deduction of R&D expenses | ( | ) | ( | ) | ||||
| Effect of preferential tax rates | ( | ) | ||||||
| Effect of utilization of tax loss carried forward | ||||||||
| Effect on valuation allowance | ||||||||
| Income tax (benefit) expense | $ | ( | ) | $ | ||||
The
current PRC EIT Law imposes a
As of September 30, 2024 and March 31, 2025, the Company had not recorded any withholding tax on the retained earnings of its foreign invested enterprises in the PRC, since the Company intends to reinvest its earnings to further expand its business in PRC, and its foreign invested enterprises do not intend to declare dividends to their immediate foreign holding companies.
For
the six months ended March 31, 2024 and 2025, the effect of income tax rate differences in jurisdictions other than the PRC mainly resulted
from the loss in EZGO, which is incorporated in BVI and is not subject to income or capital gains taxes. The effective tax rates are
The tax effect of temporary difference under ASC Topic 740 “Accounting for Income Taxes” that gives rise to deferred tax asset and liability as of September 30, 2024 and March 31, 2025 was as follows:
| As of September 30, 2024 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Deferred tax assets: | ||||||||
| Tax loss carry forwards | $ | $ | ||||||
| Other-than-temporary impairment | ||||||||
| Credit loss allowance | ||||||||
| Reserve for inventory | ||||||||
| Less: disposal of a subsidiary | ( | ) | ||||||
| Deferred tax assets, net | $ | $ | ||||||
28
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
13. INCOME TAXES (CONTINUED)
For the six months ended March 31, 2024 and 2025, the Company accrued valuation allowance for deferred tax assets of and , respectively, for which the Company concluded it is more likely than not that these net operating losses would not be utilized in the future. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company’s experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more-likely-than-not threshold.
Accounting for uncertainty tax position
The Company did not identify significant unrecognized tax benefits for the six months ended March 31 2024 and 2025. The Company did not incur any interest and penalties related to potential underpaid income tax expenses. In general, the PRC tax authority has up to five years to conduct examinations of the Company’s tax filings. Accordingly, the tax years from 2019 to 2024 of the Company’s PRC subsidiaries and VIE and subsidiaries of the VIE remain open to examination by the taxing jurisdictions. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.
14. SHARE-BASED COMPENSATION
EZGO Technologies Ltd. Incentive Plan (the “EZGO 2022 Plan”)
On August 6, 2022, the Board of Directors of EZGO approved the EZGO 2022 Plan. As of September 30, 2024, there was no unvested share under the EZGO 2022 plan. Please refer to the Note 19: Share-based Compensation in the Company’s Annual Report on Form 20-F for the year ended September 30, 2024.
EZGO Technologies Ltd. 2025 Equity Incentive Plan (the “EZGO 2025 Plan”)
On February 18, 2025, the Board of Directors
of EZGO approved the EZGO 2025 Plan. On February 18, 2025,
The estimated FV of restricted shares granted was the closing price of the Company’s ordinary shares traded in the Stock Exchange on grant date.
A summary of activities of the restricted shares for the six months ended March 31, 2025 is as follow:
| Number of nonvested restricted shares | Weighted average FV per ordinary share on the grant date | |||||||
| Unvested as of September 30, 2024 | ||||||||
| Granted | ||||||||
| Vested | ||||||||
| Unvested as of March 31, 2025 | ||||||||
As
of March 31, 2025, there was unrecognized share-based compensation expenses of $
29
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
15. EQUITY
(a) Ordinary shares
The Company was established under the laws of the BVI on January 24, 2019.
On
April 12, 2024, the Company effected a reverse share split (the “Reverse Share Split”) of the Company’s ordinary shares
at a ratio of
(b) Statutory reserve and restricted net assets
The
Company’s PRC subsidiaries are required to reserve
Relevant
PRC statutory laws and regulations permit the payment of dividends by the Company’s PRC subsidiaries only out of their retained
earnings, if any, as determined in accordance with PRC accounting standards and regulations. Furthermore, registered share capital and
capital reserve accounts are also restricted from distribution. As a result of these PRC laws and regulations, the Company’s PRC
subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company either in the form of dividends,
loans or advances. The Company’s restricted net assets, comprising of the registered paid-in capital and statutory reserve of Company’s
PRC subsidiaries, were $
(c) Warrants
In September 2023,
On April 29, 2024, the Company was named as defendant
in a lawsuit in the Supreme Court for the State of New York by Empery Asset Master, Ltd., Empery Tax Efficient, LP, and Empery Tax Efficient
III, LP (collectively, the “Plaintiffs”), relating to certain purported notices of exercise and the number of warrant shares
issuable under certain exchange warrants (the “Exchange Warrants”) issued to the Plaintiffs in September 2023. On October
29, 2024, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) and certain Side Letter
Agreements (the “Side Letter Agreements”) with the Plaintiffs, which resolved and settled the above referenced lawsuit between
the Company and Plaintiffs. Pursuant to the Settlement Agreement and the Side Letter Agreements, the Plaintiffs and the Company agree
and acknowledge that the Warrant Shares shall be reduced to
30
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
15. EQUITY (CONTINUED)
As of March 31, 2025, there were no Exchange Warrant granted to investors left unexercised.
Following table summarizes the movement of warrant activities during the six months ended March 31, 2024 and 2025, respectively:
| Ordinary Shares Number Outstanding | Weighted Average Exercise Price | Contractual Life in Years | Intrinsic Value | |||||||||||||
| Exchange Warrants Outstanding as of September 30, 2023 | $ | $ | ||||||||||||||
| Exchange Warrants Exercisable as of September 30, 2023 | ||||||||||||||||
| Common Warrants Outstanding as of September 30, 2023 | ||||||||||||||||
| Common Warrants Exercisable as of September 30, 2023 | ||||||||||||||||
| Exchange Warrants Granted | ||||||||||||||||
| Exchange Warrants Exercises | ||||||||||||||||
| Exchange Warrants Forfeited | ||||||||||||||||
| Exchange Warrants Expired | ||||||||||||||||
| Exchange Warrants Outstanding as of March 31, 2024 | ||||||||||||||||
| Exchange Warrants Exercisable as of March 31, 2024 | ||||||||||||||||
| Common Warrants Outstanding as of March 31, 2024 | ||||||||||||||||
| Common Warrants Exercisable as of March 31, 2024 | ||||||||||||||||
(c) Warrants
| Ordinary Shares Number Outstanding | Weighted Average Exercise Price | Contractual Life in Years | Intrinsic Value | |||||||||||||
| Exchange Warrants Outstanding as of September 30, 2024 | $ | $ | ||||||||||||||
| Exchange Warrants Exercisable as of September 30, 2024 | ||||||||||||||||
| Common Warrants Outstanding as of September 30, 2024 (1) | ||||||||||||||||
| Common Warrants Exercisable as of September 30, 2024 (1) | ||||||||||||||||
| Exchange Warrants Granted | ||||||||||||||||
| Exchange Warrants Exercises | ( | ) | ||||||||||||||
| Exchange Warrants Forfeited | ||||||||||||||||
| Exchange Warrants Expired | ||||||||||||||||
| Exchange Warrants Outstanding as of March 31, 2025 | ||||||||||||||||
| Exchange Warrants Exercisable as of March 31, 2025 | ||||||||||||||||
| Common Warrants Outstanding as of March 31, 2025 (1) | ||||||||||||||||
| Common Warrants Exercisable as of March 31, 2025 (1) | ||||||||||||||||
| (1) |
(d) Non-controlling interests
As
of March 31, 2025, the Company’s non-controlling interests included a
31
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
16. COMMITMENTS AND CONTINGENCIES
Commitments
On May 25, 2023, the Company entered into a construction
contract of RMB
In May 2023, the Company entered into procurement
agreements for production equipment, scheduled to be installed and operational following the completion of the ongoing construction project.
As stipulated in the contracts, is obligated to make an upfront payment of
Legal Proceedings
From time to time, the Company may be subject to legal proceedings, investigations and claims incidental to the conduct of business. The Company currently have two contract disputes with our suppliers, Jiangsu Anruida New Material Company Limited (“Anruida”) and Zhuhai Titans New Power Electric Co., Ltd. (“Titans”).
On
October 21, 2019, Anruida commenced an action against Hengmao Power Battery in Changzhou Wujin District Intermediate People’s Court
alleging that Hengmao Power Battery defaulted on the contract payment of RMB
On
January 6, 2020, Titans commenced an action against Hengmao Power Battery in Changzhou Wujin District Intermediate People’s Court
alleging that Hengmao Power Battery defaulted on the payment of RMB
Other than disclosed above, the Company are not a party to, nor are we aware of, any legal proceedings, investigations or claims which, in the opinion of our management, are likely to have a material adverse effect on our business, financial condition or results of operations.
32
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
17. SEGMENT REPORTING
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.
The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Financial Officer. The Company’s CODM, chief executive officer, measures the performance of each segment based on metrics of revenue and profit before taxes from operations and uses these results to evaluate the performance of, and to allocate resources to each of the segments. As most of the Company’s long-lived assets are located in the PRC and most of the Company’s revenues are derived from the PRC, no geographical information is presented. The Company does not allocate assets to its segments as the CODM does not evaluate the performance of segments using asset information.
Historically,
the Company determined it operates in
The following tables present a summary of each reportable segment’s revenue and income from continuing operations—excluding the e-bicycle sales segment, which is disclosed as a discontinued operation for the six months ended March 31, 2024, and 2025:
| Six months Ended March 31, 2024 | ||||||||||||||||
| Battery cells and packs sales segment | Electronic control system sales segment | Others | Total | |||||||||||||
| Revenue from external customers | $ | $ | $ | $ | ||||||||||||
| Segment loss before tax and share of loss of equity method investments | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Segment gross profit margin | % | % | % | % | ||||||||||||
| Six months Ended March 31, 2025 | ||||||||||||||||
| Battery cells and packs sales segment | Electronic control system sales segment | Others | Total | |||||||||||||
| Revenue from external customers | $ | $ | $ | $ | ||||||||||||
| Segment loss before tax and share of loss of equity method investments | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Segment gross profit margin | % | % | % | % | ||||||||||||
33
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
17. SEGMENT REPORTING (CONTINUED)
The following table presents the reconciliation from reportable segment income to the consolidated income from continuing operations before income taxes for the six months ended March 31, 2024 and 2025:
| Six months ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Net revenues | ||||||||
| Battery cells and packs segment | $ | $ | ||||||
| Electronic control system and intelligent robots sales segment | ||||||||
| Others segment | ||||||||
| Total net revenues | ||||||||
| Cost of revenues | ||||||||
| Battery cells and packs segment | ||||||||
| Electronic control system and intelligent robots sales segment | ||||||||
| Others segment | ||||||||
| Total cost of revenues | ||||||||
| Gross profit | ||||||||
| Battery cells and packs segment | ||||||||
| Electronic control system and intelligent robots sales segment | ||||||||
| Others segment | ||||||||
| Total Gross profit | ||||||||
| Reconciliation of profit or loss: | ||||||||
| Selling and marketing | ( | ) | ( | ) | ||||
| General and administrative | ( | ) | ( | ) | ||||
| Research and development | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Fair value changes in contingent asset | ( | ) | ||||||
| Impairment loss of goodwill | ( | ) | ||||||
| Other (loss) income | ||||||||
| Loss from continuing operations before income tax and share of loss of equity method investments | $ | ( | ) | $ | ( | ) | ||
| Loss from discontinued operations before income tax and share of loss of equity method investments | ( | ) | ( | ) | ||||
| Loss before income tax and share of loss of equity method investments | ( | ) | ( | ) | ||||
34
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
18. CONCENTRATIONS
Concentrations of credit risk
As
of September 30, 2024 and March 31, 2025 cash, cash equivalents and restricted cash balances in the PRC was $
Concentrations of customers
The following table sets forth information as to each customer that accounted for 10% or more of total accounts receivable as of September 30, 2024 and March 31, 2025.
| As of September 30, 2024 | As of March 31, 2025 | |||||||||||||||
| Customer | Amount | % of Total | Amount | % of Total | ||||||||||||
| (Unaudited) | ||||||||||||||||
| A | $ | % | $ | % | ||||||||||||
| B | % | % | ||||||||||||||
| C | % | |||||||||||||||
| D | % | |||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
| * |
The following table sets forth information as to each customer that accounted for 10% or more of total advances from customers as of September 30, 2024 and March 31, 2025.
| As of September 30, 2024 | As of March 31, 2025 | |||||||||||||||
| Customer | Amount | % of Total |
Amount | % of Total |
||||||||||||
| (Unaudited) | ||||||||||||||||
| E | $ | $ | % | |||||||||||||
| F | % | |||||||||||||||
| G | % | |||||||||||||||
| H | % | |||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
| * | The percentage is below 10% |
35
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
18. CONCENTRATIONS (CONTINUED)
The following table sets forth information as to each customer that accounted for 10% or more of total revenues for the six months ended March 31, 2024 and 2025.
| Six months ended March 31, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| Customer | Amount | % of Total | Amount | % of Total | ||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| B | $ | % | $ | % | ||||||||||||
| A | % | % | ||||||||||||||
| C | % | |||||||||||||||
| I | % | |||||||||||||||
| J | % | |||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
| * | The percentage is below 10% |
Concentrations of suppliers
The following table sets forth information as to each supplier that accounted for 10% or more of total accounts payable as of September 30, 2024 and March 31, 2025.
| As of September 30, 2024 | As of March 31, 2025 | |||||||||||||||
| Supplier | Amount | % of Total | Amount | % of Total | ||||||||||||
| (Unaudited) | ||||||||||||||||
| A | $ | % | $ | % | ||||||||||||
| B | % | % | ||||||||||||||
| C | % | % | ||||||||||||||
| D | % | |||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
| * | The percentage is below 10% |
36
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
18. CONCENTRATIONS (CONTINUED)
The following table sets forth information as to each third party that accounted for 10% or more of total advances to suppliers as of September 30, 2024 and March 31, 2025.
| As of September 30, 2024 | As of March 31, 2025 | |||||||||||||||
| Supplier | Amount | % of Total | Amount | % of Total | ||||||||||||
| (Unaudited) | ||||||||||||||||
| E | $ | % | $ | % | ||||||||||||
| F | % | % | ||||||||||||||
| G | % | % | ||||||||||||||
| H | % | % | ||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
| * | The percentage is below 10% |
The following table sets forth information as to each supplier that accounted for 10% or more of total purchases for the six months ended March 31, 2024 and 2025.
| Six months ended March 31, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| Supplier | Amount | % of Total | Amount | % of Total | ||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| H | $ | % | $ | % | ||||||||||||
| F | % | % | ||||||||||||||
| I | % | |||||||||||||||
| G | % | |||||||||||||||
| E | % | |||||||||||||||
| J | % | |||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
| * | The percentage is below 10% |
37
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In U.S. dollars except for number of shares)
19. SUBSEQUENT EVENTS
On December 30, 2024, the Company received notification
from the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the minimum closing bid price per share for its ordinary
shares, par value US$
On
March 14, 2025, Changzhou EZGO and Jiangsu Yiwo Investment Co., Ltd. (“Jiangsu Yiwo”) entered into an Equity Investment Agreement,
pursuant to which Jiangsu Yiwo was approved to make a capital contribution of $
The Company performed an evaluation of subsequent events through [ ], 2025, which was the date of the issuance of the unaudited interim condensed consolidated financial statements , and determined there were no other events that would have required adjustment or disclosure in the unaudited interim condensed consolidated financial statements.
About EZGO Technologies Ltd.
EZGO’s vision is to build a leading short-distance transportation solution provider and intelligent manufacturer in China. Leveraging an Internet of Things (IoT) management platform, EZGO has established a business model centered on the sale of battery packs and electronic control system. EZGO also conducts the design and manufacturing of electronic control system to deliver tailored products in accordance with customer requirements. For additional information, please visit EZGO’s website at www.ezgotech.com.cn. Investors can visit the “Investor Relations” section of EZGO’s website at www.ezgotech.com.cn/Investor.
Exchange Rate
This
press release contains translations of certain Chinese Renminbi (“RMB”) amounts into U.S. dollars (“US$”) at
specified rates solely for the convenience of the readers. Unless otherwise stated, all translations from RMB to US$ were made at the
rate of RMB
Safe Harbor Statement
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s goals and strategies; the Company’s future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the short-distance transportation solutions market in China and the other international markets the Company plans to serve; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the international markets the Company plans to serve and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission (“SEC”). For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
38