20-F: EZGO Technologies Reports Deepening Losses Amid Strategic Shift

EZGO Technologies Ltd. reported a net loss of $9.28 million for fiscal year 2025, driven by strategic shifts including the termination of its VIE structure and e-bicycle business, while focusing on battery packs and electronic control systems.

Summary

• EZGO Technologies Ltd. is a British Virgin Islands holding company with operations primarily in China through its subsidiaries.
• The company terminated its Variable Interest Entity (VIE) structure and disposed of its e-bicycle sales business on September 25, 2025, due to declining sales in that segment.
• The business now focuses on designing, manufacturing, and selling battery packs, intelligent robots, electronic control systems, and providing comprehensive machine maintenance services.
• Net revenues from continuing operations increased to $20.49 million in fiscal year 2025, up from $18.22 million in 2024 and $9.16 million in 2023.
• The company reported a net loss of $9.28 million for fiscal year 2025, compared to $8.09 million in 2024 and $7.26 million in 2023.
• Gross profit margin from continuing operations decreased to 6.5% in fiscal year 2025, down from 9.3% in 2024 and 11.3% in 2023, primarily due to proactive pricing adjustments in battery sales and higher raw material costs for electronic control systems.
• EZGO regained compliance with Nasdaq's minimum bid price requirement on December 11, 2025, following a 1-for-25 reverse share split effective November 21, 2025.
• Material weaknesses in internal control over financial reporting persist, related to insufficient U.S. GAAP and SEC reporting personnel and lack of key monitoring mechanisms.
• A lawsuit regarding warrant exercise was settled on October 29, 2024, with warrant shares reduced to 3,000,000 and fully exercised by September 30, 2025.

Sentiment

Score: 3

Explanation: While the company is making strategic shifts to focus on higher-growth areas and has addressed Nasdaq listing compliance, the increasing net losses, declining gross profit margins, persistent negative operating cash flows, and identified material weaknesses in internal controls present significant concerns. The substantial impairment charges further highlight operational challenges.

Positives

• Net revenues from continuing operations increased by 12.4% to $20.49 million in fiscal year 2025, driven by higher sales of battery cells and packs and maintenance services.
• Sales volume of lithium battery packs increased by 256.5% in fiscal year 2024 compared to 2023, indicating strong market demand and acceptance.
• The company successfully regained compliance with Nasdaq's minimum bid price requirement on December 11, 2025.
• The disposal of the underperforming e-bicycle business and VIE structure represents a strategic shift towards more focused core businesses.
• Maintenance service revenue increased due to higher volume, with gross profit margin rising from 24.1% in 2024 to 34.2% in 2025, indicating operating leverage.
• Secured a funding support agreement with a shareholder for up to RMB25,000,000 ($3,511,729) expiring December 31, 2026, to address liquidity.
• Filed a shelf registration statement on Form F-3 for up to $200.0 million, providing flexibility for future capital access.

Negatives

• Net loss increased to $9.28 million in fiscal year 2025, from $8.09 million in 2024 and $7.26 million in 2023.
• Gross profit margin from continuing operations significantly decreased to 6.5% in fiscal year 2025, down from 9.3% in 2024 and 11.3% in 2023.
• Operating expenses increased to $4.69 million in fiscal year 2025 from $4.03 million in 2024.
• Impairment loss of intangible assets of $1,401,416 recognized in fiscal year 2025 due to deterioration in the electronic control system segment.
• Impairment loss of long-term equity investments of $3,520,660 and goodwill of $1,732,454 in fiscal year 2025.
• Electronic control system sales decreased by 23.7% to $1.07 million in fiscal year 2025, with gross profit margin declining from 47.3% to 38.8%.
• The company had negative operating cash flows of $2.21 million in 2025, $10.31 million in 2024, and $1.89 million in 2023.
• Material weaknesses in internal control over financial reporting persist, indicating ongoing financial reporting risks.
• Cash and cash equivalents significantly decreased to $517,338 as of September 30, 2025, from $4.46 million in 2024.
• Significant reliance on a few major customers for battery sales (e.g., Ningbo Yiqi New Energy Technology Co., Ltd. accounted for 31% of battery sales in 2025).

Risks

• Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit legal protections.
• Adverse effects from the complexity, uncertainties, and changes in PRC regulation of internet retailers.
• Changes in China's economic, political, or social conditions or government policies could have a material adverse effect.
• Enforcement of laws and rules in China may change quickly with little advance notice.
• Restrictions on currency exchange or outbound capital flows may limit the ability to utilize PRC revenue effectively.
• PRC regulations relating to foreign exchange registration of overseas investment by PRC residents may subject beneficial owners or subsidiaries to liability or penalties.
• PRC regulation on loans to, and direct investment in, PRC entities by offshore holding companies and governmental control in currency conversion may delay or prevent the use of financing proceeds.
• PRC subsidiaries are subject to restrictions on paying dividends or making other payments, which may restrict liquidity.
• The CSRC's Overseas Listing Regulations for China-based companies seeking to offer securities in foreign markets could significantly limit or hinder the ability to offer securities.
• Difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against the company or management.
• Ordinary Shares may be delisted or prohibited from trading under the HFCA Act if the PCAOB is unable to adequately inspect auditors for two consecutive years.
• Future losses may be incurred, and profitability may not be achieved or maintained.
• Inability to manage growth or execute strategies effectively could materially and adversely affect business.
• Marketing strategy of appealing to and growing sales to a more diversified group of customers may not be successful.
• Intense competition in the electric bicycle accessories market could lead to loss of market share and customers.
• Product and service quality problems could result in decreased sales, adverse operating results, and harm to reputation.
• Product liability claims, recalls, or other actions could adversely affect brand image and results of operations.
• Failure to satisfy safety and other mandated product standards would have a material adverse effect.
• Dependence on core customers for substantial portions of sales, with any interruption adversely affecting growth and financial condition.
• Inability to prevent others from unauthorized use of intellectual property could harm business and competitive position.
• Patent rights may not protect effectively due to expiration, non-granting of applications, or being contested/invalidated.
• Subject to intellectual property infringement claims, which may be expensive to defend and disrupt business.
• Downturn in global or Chinese economies could adversely affect business.
• Material weaknesses in internal control over financial reporting could lead to inaccurate financial reporting or fraud.
• Significant cybersecurity incident or disruption of information technology systems could damage user relationships and lead to reputational, financial, legal, and operational consequences.
• Limited insurance coverage could expose the company to significant costs and business disruption.
• Changes in U.S. and Chinese regulations or relations may adversely impact business, operating results, and ability to raise capital.
• Operating as a publicly traded company in the United States subjects the company to additional rules, regulations, and costs, with management having limited public company experience.
• Occurrence of natural disasters may adversely affect business.
• Corporate structure and business operations may be affected by the Foreign Investment Law.
• Previous contractual arrangements were governed by PRC law, and current contract engagements are also governed by PRC laws, which may not protect as much as other jurisdictions.
• Previous contractual arrangements in relation to the VIE may be subject to scrutiny by PRC tax authorities, potentially leading to additional taxes.
• Loss of ability to use and enjoy assets held by subsidiaries if they go bankrupt or are liquidated.
• An active trading market for Ordinary Shares may not continue, and the trading price may fluctuate significantly.
• The trading price of Ordinary Shares may be volatile, resulting in substantial losses.
• Inability to maintain Nasdaq listing could limit transaction ability and subject to additional trading restrictions.
• Reliance on price appreciation for investment return, as no dividends are expected.
• Restrictive covenants related to previous registered direct offering may restrict future financing ability.
• Subject to changing law and regulations regarding regulatory matters, corporate governance, and public disclosure, increasing costs and risk of non-compliance.
• Judgments obtained against the company by shareholders may not be enforceable due to BVI incorporation and PRC operations.
• Provisions in amended and restated memorandum and articles of association may inhibit a takeover.
• Risk of being classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes.

Future Outlook

The company intends to strengthen its battery technologies, expand intelligent robotics and electronic control system offerings, grow smart charging infrastructure, and improve operational efficiency. It also plans to broaden market opportunities through domestic and international partnerships and expanded sales channels. The company does not expect to pay dividends in the foreseeable future, intending to retain funds for business development and growth.

Management Comments

• "We are continually making efforts to improve operating efficiency and reducing discretionary spending, including optimization of general and administrative headcount and reduction in general and administrative expenditures."
• "We intend to retain most, if not all, of its available funds and any future earnings for the development and growth of its business in China. EZGO does not expect to pay dividends or distribute earnings in the foreseeable future."

Industry Context

The company operates in a competitive and evolving landscape, particularly in the lithium battery and e-bicycle industries in China. Its strategic shift towards electric vehicle accessories, intelligent robotics, and IoT-enabled hardware aligns with broader trends in electric mobility and smart technology. The decline in raw material costs for lithium batteries since late 2022 has provided support for the company's battery sales, indicating sensitivity to commodity price fluctuations in its core business.

Comparison to Industry Standards

• Our self-developed batteries demonstrate usage durations that exceed the national standards for lithium batteries (GB/T 36972-2018).
• Our smart charging piles satisfy the highest electric spark fire protection standards that are obtainable in the PRC, IoT smart control capability, which allows us to remotely monitor the charging status of each port, and a broad voltage range, and can be used to charge e-bicycles, mobile phones and laptops.

Management Changes

Corporate Governance

Legal Proceedings

• A lawsuit was filed on April 29, 2024, in the Supreme Court for the State of New York by Empery Asset Master, Ltd. and others, relating to the exercise of certain exchange warrants issued in September 2023.
• Plaintiffs sought to exercise warrants on an alternative cashless basis, which the company disputed.
• Plaintiffs' motion for a preliminary injunction was denied on July 1, 2024.
• The company filed a motion to dismiss on July 19, 2024.
• A Settlement Agreement and Release was entered into on October 29, 2024, resolving the lawsuit.
• The warrant shares were reduced to no more than 3,000,000 Ordinary Shares, exercisable via alternative cashless exercises.
• The company agreed to pay Plaintiffs $10,000 as compensation for costs.
• The lawsuit was discontinued without prejudice on October 31, 2024.
• As of September 30, 2025, the 3,000,000 2023 Exchange Warrants were fully exercised for 120,000 ordinary shares, resolving the matter.

Related Party Transactions

• Inventory purchased from Jiangsu Youdi Technology Co., Ltd. (29% equity interest) for $60,920 in 2025.
• Loan to Shanghai Mingli New Energy Technology Co., Ltd. (40% equity interest) for $4,020,797 in 2025.
• Loan to Shandong Xingnengan New Energy Technology Co., Ltd. (25% equity interest before VIE disposal) for $138,648 in 2025.
• Interest receivable from Shandong Xingnengan New Energy Technology Co., Ltd. for $51,956 in 2025.
• Interest receivable from Jiangsu Youdi Technology Co., Ltd. for $21,157 in 2025.
• Loan to Jiangsu Youdi Technology Co., Ltd. for $1,207 in 2025.
• Collection of loan from Shandong Xingnengan New Energy Technology Co., Ltd. for $2,483,432 in 2025.
• Interest-free loan from Shuang Wu (non-controlling shareholder of Changzhou EZGO) for $2,288,670 in 2025.
• Repayment of interest-free loan from Shuang Wu for $741,767 in 2025.
• Loan from Jiangsu EZGO (entity controlled by Mr. Jianhui Ye) for $2,499,508 in 2025.
• Inventory purchased from Changzhou Cenbird Electric Bicycle Manufacturing Co., Ltd. (related party before VIE disposal) for $2,207,674 in 2025.
• Inventory purchased from Jiangsu Xinzhongtian Suye Co., Ltd. (related party before VIE disposal) for $1,398,017 in 2025.
• Interest receivable from Shenzhen Star Cycling Network Technology Co., Ltd. (42% equity interest before VIE disposal) for $33,830 in 2025.
• Interest-free loan from Jiangsu Xinzhongtian Suye Co., Ltd. for $674,302 in 2025.
• Interest-free loan from Yan Fang (non-controlling shareholder of Cenbird E-Motorcycle before VIE disposal) for $367,071 in 2025.
• Repayment of interest-free loan from Jiangsu Xinzhongtian Suye Co., Ltd. for $669,449 in 2025.
• Repayment of interest-free loan from Yan Fang for $380,268 in 2025.

Stakeholder Impact

• Shareholders: Potential for dilution from future capital raises and increased authorized shares. Risk of delisting if Nasdaq compliance is not maintained. Less protection for shareholder rights due to BVI incorporation and home country practices. Continued net losses and declining margins negatively impact shareholder value.
• Employees: Changes in management (CFO, Director). Potential for optimization in general and administrative headcount.
• Customers: Strategic shift aims to provide cost-effective and technology-driven solutions. Quality control and customer service are emphasized. Dependence on major customers for battery sales.
• Suppliers: Prepayments to suppliers for equipment, with some refunds expected.
• Creditors: Ongoing liquidity pressure and reliance on borrowings. Funding support agreement from a shareholder and shelf registration provide potential for meeting obligations.

Next Steps

• Continue efforts to set up an internal audit department and enhance the effectiveness of the internal control system.
• Implement regular and continuous U.S. GAAP accounting and financial reporting training programs for personnel.
• Strengthen battery technologies through continued R&D.
• Expand intelligent robotics and electronic control system offerings.
• Grow the smart charging infrastructure business.
• Improve operational efficiency through refined production processes and supply chain optimization.
• Broaden market opportunities by developing domestic and international partnerships and expanding sales channels.
• Potentially access capital markets through the $200.0 million shelf registration.
• Collect the remaining $2,757,621 ($6,884,675 $4,127,054) in refunds from suppliers for terminated equipment purchases by January 2026.
• Reapplication for HNTE certificate for Changzhou Higgs to maintain preferential tax rate from October 1, 2025, to September 30, 2028.

Key Dates

Recommendation

The company exhibits a concerning trend of increasing net losses and declining gross profit margins from continuing operations over the past three fiscal years. Despite strategic shifts and revenue growth in core segments, the profitability remains severely challenged, exacerbated by significant impairment losses. Persistent negative operating cash flows and a rapidly dwindling cash balance raise serious liquidity concerns, necessitating shareholder funding and a large shelf registration for future capital. The identified material weaknesses in internal controls further undermine confidence in financial reporting. While the company has regained Nasdaq compliance through reverse stock splits, this is often a temporary measure and does not address underlying operational issues. The overall financial health and operational efficiency indicate a high-risk investment with a strong likelihood of further value erosion.

Keywords

Battery Packs, Electronic Control Systems, Intelligent Robotics, IoT Platform, China, SEC Filing, Nasdaq, VIE Termination, Financial Performance, Corporate Governance, Risk Management, Manufacturing, Electric Vehicle Accessories, Maintenance Services, Reverse Stock Split, Liquidity, Capital Raise, Losses, Gross Margin