F-1/A: Autozi Internet Technology (Global) Ltd. Files Amendment No. 8 to Form F-1 for IPO

Autozi Internet Technology (Global) Ltd. has filed Amendment No. 8 to its Form F-1 registration statement for an initial public offering of Class A ordinary shares.

Summary

• Autozi Internet Technology (Global) Ltd., a Cayman Islands holding company with operations in China, is planning an initial public offering (IPO) of 2,500,000 Class A ordinary shares.
• The company anticipates the IPO price to be between US$4.00 and US$5.00 per share.
• Existing shareholders are also offering an additional 2,500,000 Class A Ordinary Shares pursuant to the Resale Prospectus.
• Upon completion of the offering, the company will have a dual-class structure with Class A and Class B ordinary shares.
• Class B shares will have 20 votes per share, concentrating voting power with the founder and CEO, Dr. Houqi Zhang, who will control approximately 90.8% of the total voting power.
• The company is an emerging growth company and a foreign private issuer, which allows for reduced reporting requirements.
• Autozi conducts its business through subsidiaries in China and faces legal and operational risks associated with operating in China, including potential regulatory changes and government intervention.
• The company has completed the filing with the CSRC in connection with this offering and its listing on the Nasdaq Global Market, and the CSRC published the notification of its approval of our completion of the required filing procedures on January 2, 2024.
• The company's revenues decreased slightly from US$120.3 million in the fiscal year ended September 30, 2022 to US$113.5 million in the fiscal year ended September 30, 2023.
• 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.
• The company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that its consolidated financial statements for the fiscal year ended September 30, 2023 were issued.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While the company is pursuing an IPO and has achieved some success in the NEV market, it faces significant risks related to operating in China, has a dual-class share structure, and has a going concern warning.

Positives

• The company is actively communicating with the CAC to confirm that it is not required to apply for cybersecurity review.
• The company has completed the filing with the CSRC in connection with this offering and its listing on the Nasdaq Global Market, and the CSRC published the notification of its approval of our completion of the required filing procedures on January 2, 2024.

Negatives

• The company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that its consolidated financial statements for the fiscal year ended September 30, 2023 were issued.
• 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.
• The company's revenues decreased slightly from US$120.3 million in the fiscal year ended September 30, 2022 to US$113.5 million in the fiscal year ended September 30, 2023.

Risks

• The company faces legal and operational risks associated with operating in China, including potential regulatory changes and government intervention.
• The dual-class share structure concentrates voting power with the founder and CEO, Dr. Houqi Zhang.
• The company's auditor may be subject to PCAOB inspection limitations in the future.
• The company may be classified as a PRC resident enterprise for tax purposes, leading to unfavorable tax consequences.
• The company may face difficulties in using proceeds from the offering due to PRC regulations on loans and direct investment.
• The company may be classified as a PFIC, which could subject U.S. investors to significant adverse U.S. federal income tax consequences.

Future Outlook

The company intends to use the net proceeds from this offering for the daily operations of onshore and offshore subsidiaries.

Industry Context

The company operates in the lifecycle automotive service market in China, which is highly competitive and subject to evolving government regulations.

Comparison to Industry Standards

• The company ranked first in Chinas lifecycle automotive services market in terms of the growth rate of NEV revenues in 2022.
• The company ranked third in Chinas lifecycle automotive services market in terms of the growth rate of revenues in 2022.
• The company competes with authorized dealership stores, e-commerce platforms, traditional automotive manufacturers, and franchised independent repair shops.
• The company's competitors may have greater brand recognition or be able to devote greater resources to development and promotion.

Legal Proceedings

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

Related Party Transactions

• The company has engaged in various related party transactions, including loans to and from related parties.

Stakeholder Impact

• Shareholders may face difficulties in protecting their interests due to the company's incorporation in the Cayman Islands and the dual-class share structure.
• Shareholders may experience dilution due to the issuance of new shares.
• Shareholders may be subject to PRC income tax on dividends and gains from the transfer of shares.
• The company's ability to pay dividends may be restricted by PRC regulations.

Next Steps

• The company needs to obtain Nasdaq approval for its listing application.
• The company needs to report the offering and listing status to the CSRC within 15 business days from the completion of the offering.
• The company needs to address the material weaknesses in its internal control over financial reporting.
• The company needs to continue to monitor and comply with evolving PRC regulations.

Key Dates

Keywords

IPO, initial public offering, Class A ordinary shares, Autozi, China, CSRC, PCAOB, dual-class structure, emerging growth company, foreign private issuer, HFCA Act, securities, listing, regulation