F-1/A: Autozi Internet Technology (Global) Ltd. Files Amendment No. 7 to Form F-1 for IPO

Autozi Internet Technology (Global) Ltd. has filed an amendment to its Form F-1 registration statement for its initial public offering of Class A ordinary shares.

Summary

• Autozi Internet Technology (Global) Ltd., a Cayman Islands holding company with operations in China, has filed Amendment No. 7 to its Form F-1 registration statement.
• The company is planning an IPO of 2,500,000 Class A ordinary shares, with an anticipated initial public offering price between US$4.00 and US$5.00 per share.
• Existing shareholders are also offering an additional 2,500,000 Class A ordinary shares in a resale prospectus.
• The company has applied to list its Class A ordinary shares on the Nasdaq Global Market under the symbol AZI.
• Upon completion of the offering, the company's share capital will consist of 70,386,100 Class A ordinary shares and 34,595,100 Class B ordinary shares, with Class B shares having 20 votes per share.
• Dr. Houqi Zhang, the founder and CEO, will control approximately 90.8% of the total voting power after the offering.
• The company acknowledges risks related to operating in China, including regulatory changes and potential interventions by the PRC government.
• The company has completed the filing with the CSRC and received approval for its listing on the Nasdaq Global Market.
• The company's auditor, Marcum Asia CPAs LLP, is subject to PCAOB inspections, but the company acknowledges potential risks related to the HFCA Act if PCAOB access is restricted in the future.
• The company is an emerging growth company and a foreign private issuer, which allows for reduced reporting requirements.
• The company acknowledges substantial doubt about its ability to continue as a going concern.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While the company has achieved rapid growth in the past, it is currently experiencing financial difficulties, including net losses, negative cash flows, and substantial doubt about its ability to continue as a going concern. The company also faces significant risks related to operating in China and regulatory changes. The potential for a successful IPO and future growth is tempered by these challenges.

Positives

• The company has completed the filing with the CSRC and received approval for its listing on the Nasdaq Global Market.
• The company's auditor, Marcum Asia CPAs LLP, is subject to PCAOB inspections.
• The company is an emerging growth company and a foreign private issuer, which allows for reduced reporting requirements.

Negatives

• The company acknowledges risks related to operating in China, including regulatory changes and potential interventions by the PRC government.
• The company acknowledges substantial doubt about its ability to continue as a going concern.
• The company incurred net losses of US$6.2 million and US$10.5 million for fiscal year ended September 30, 2022 and 2023, respectively.
• For the fiscal year ended September 30, 2022 and 2023, we incurred negative operating cashflows of US$4.9 million and US$7.3 million, respectively, with negative working capital of US$29.0 million and accumulated deficits of US$166.0 million as of September 30, 2023.

Risks

• Operating in China involves risks related to regulatory changes and potential interventions by the PRC government.
• The HFCA Act poses risks if PCAOB access to the company's auditor is restricted.
• The dual-class share structure concentrates voting power with existing shareholders.
• The company acknowledges substantial doubt about its ability to continue as a going concern.
• Failure to comply with the fire safety filing requirements for some of our warehouses and offices may subject us to administrative penalties, which could cause our operations and financial conditions to be materially adversely affected.
• Failure to obtain insurance agency business permits for our insurance intermediation services may affect our ability to conduct our business, which could cause our operations and financial conditions to be materially adversely affected.
• Quantum Factoring and Quantum Data may be subject to administrative penalties or may be required to obtain approval or license for our loan facilitation services and factoring services.
• If we fail to obtain VATS license for the operation of our online supply chain cloud management systems and SaaS systems in the future, our business, financial condition and results of operations may be adversely affected.
• The approval, filing, or other procedures of the CSRC will be required in connection with our offshore offerings in the future under PRC laws and our future offering will be contingent upon the completion of such filing procedures.

Future Outlook

The company intends to expand its MBS store network, strengthen supply chain management, expand service offerings, build cooperation with more NEV manufacturers, and enhance research and development capabilities.

Industry Context

The company operates in the lifecycle automotive service market in China, which is experiencing growth driven by increasing car parc, rising average car age, and the growing popularity of NEVs.

Comparison to Industry Standards

• The document states that in 2022, Autozi ranked first in Chinas lifecycle automotive services market in terms of the growth rate of NEV revenues.
• The document states that in 2022, Autozi ranked third in Chinas lifecycle automotive services market in terms of the growth rate of revenues.
• The document compares Autozi to Company A, a leading integrated online and offline platform for automotive service based in Shanghai, China, which keeps its advantage in aftermarket with 179 self-operated stores and 4,114 franchised workshops.
• The document compares Autozi to Company B, a leading integrated online and offline platform for automotive service based in Zhejiang, China, which has the most efficient automotive supply chain service in Chinas automotive service market.
• The document compares Autozi to Company C, a leading player in the automotive service market with revenues of RMB 11.5 billion in 2022.
• The document compares Autozi to Company D, a leading player in the automotive service market with revenues of approximately RMB 5.0 billion in 2022.

Legal Proceedings

• Hunan Tianhuan Economic Development Co., Ltd. has filed a lawsuit against Autozi Internet Technology and Dr. Houqi Zhang to exercise its redemption right.

Stakeholder Impact

• Shareholders face risks related to the company's financial condition and operating environment.
• Employees face uncertainty related to the company's ability to continue as a going concern.
• Customers may be affected by the company's ability to provide products and services.

Next Steps

• The company needs to secure approval for its listing application from Nasdaq.
• The company needs to complete the IPO and raise capital to address its financial challenges.
• The company needs to successfully implement its growth strategies to improve its financial performance.

Key Dates

Keywords

IPO, Class A ordinary shares, China, Nasdaq, CSRC, HFCA Act, PCAOB, Dual-class structure, Going concern, Emerging growth company