20-F: Jiuzi Holdings Reports Reduced Loss, Strategic Shift to Batteries

Jiuzi Holdings Inc. reported a significant reduction in net loss for fiscal year 2025, driven by lower impairment and share-based compensation, alongside a strategic pivot to new energy battery sales and future EV production in Southeast Asia.

Summary

• Net loss significantly decreased by 82.8% to $10.19 million for the fiscal year ended October 31, 2025, compared to $59.13 million in 2024.
• Total revenue increased to $2.88 million in 2025 from $1.40 million in 2024, primarily due to a substantial increase in resales of sourced equipment and accessories.
• Gross profit decreased by 72.2% to $20,069 in 2025, with gross margin falling to 0.70% from 5.15% in 2024, attributed to the termination of the higher-margin proprietary product line and lower margins on new product lines.
• Asset impairment and credit losses decreased by 79% to $8.69 million in 2025 from $42.04 million in 2024, largely due to the full impairment of remaining advance payments to suppliers, most of which was provided for in 2024.
• Share-based compensation expenses decreased from $12.36 million in 2024 to $0 in 2025.
• Cash and cash equivalents increased to $4.57 million as of October 31, 2025, from $0.94 million in 2024, boosted by a $5 million equity financing transaction.
• The company completed a 1-for-40 reverse stock split effective October 24, 2025.
• Management concluded that disclosure controls and procedures were ineffective as of October 31, 2025, due to insufficient accounting and finance personnel with U.S.-GAAP experience.
• The company is shifting its core business focus to sales of new energy batteries, electrical equipment, mobile phone accessories, and future production of electric two-wheelers, three-wheelers, and slow-speed cars in Southeast Asia.
• A shareholder derivative action was commenced on November 18, 2025, against current/former officers, alleging improper share dilution and fraudulent inducement of a former CEO/Chairman's resignation.
• The SEC initiated a formal investigation on November 21, 2025, related to 'Cross Border/ China Based Issuer Matters,' to which the company has voluntarily produced documents.
• The company holds a 'Receivable Bitcoin Consideration' of $10.97 million as of October 31, 2025, related to a share issuance transaction.
• Two beneficial owners who are PRC residents have not completed Circular 37 registration, potentially leading to penalties for them and restrictions on foreign exchange activities for SPVs.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing with a low sentiment score due to the 'going concern' warning, significant decline in gross margin, and ongoing legal and regulatory challenges, despite a reduction in net loss and increased revenue from a specific segment.

Positives

• Net loss significantly reduced by 82.8% to $10.19 million in 2025 from $59.13 million in 2024, indicating improved financial control and reduced extraordinary expenses.
• Total revenue increased by over 100% to $2.88 million in 2025 from $1.40 million in 2024, driven by strong growth in resales of sourced equipment and accessories.
• Net cash used in operating activities improved substantially, decreasing from $50.62 million in 2024 to $1.01 million in 2025, reflecting better working capital management and reduced advance payments.
• Cash and cash equivalents increased significantly to $4.57 million in 2025 from $0.94 million in 2024, supported by a $5 million equity financing.
• The company's current auditor, Audit Alliance LLP (Singapore), and former auditor, WWC, P.C. (California), are subject to regular PCAOB inspections, mitigating some HFCAA risks.
• The dissolution of the VIE structure on January 20, 2023, simplifies the corporate structure and reduces associated regulatory risks.
• The company has adopted a Clawback Policy and an Insider Trading Policy, enhancing corporate governance.
• The company is not currently subject to cybersecurity review by the CAC, as it does not control over one million users' personal information or data affecting national security.

Negatives

• Gross profit decreased by 72.2% to $20,069 in 2025, and gross margin fell sharply to 0.70% from 5.15% in 2024, indicating pressure on profitability from product mix changes.
• The company's auditors expressed substantial doubt about its ability to continue as a going concern due to an accumulated deficit of $87.98 million and a loss from operations of $10.19 million as of October 31, 2025.
• Management concluded that disclosure controls and procedures were ineffective as of October 31, 2025, due to insufficient accounting and finance personnel with U.S.-GAAP experience, posing a risk to financial reporting reliability.
• A shareholder derivative action was filed on November 18, 2025, against current and former officers, alleging serious issues including improper share dilution and fraudulent inducement, which could result in substantial damages and divert management attention.
• The SEC initiated a formal investigation on November 21, 2025, into 'Cross Border/ China Based Issuer Matters,' which could lead to regulatory actions or reputational damage.
• Two beneficial owners who are PRC residents have not completed the required Circular 37 registration, potentially leading to penalties for them and restrictions on foreign exchange activities for SPVs.
• The company has not paid any dividends to date and does not anticipate doing so in the foreseeable future, meaning investors must rely solely on share price appreciation.
• The company's reliance on a few key customers (top five accounted for 78.78% of revenue in 2025) and suppliers (top five accounted for 75.19% of cost of revenue in 2025) creates significant concentration risk.

Risks

• Reliance on China's automotive industry for revenues and future growth, subject to government regulations and policies, including potential restrictions on new energy vehicle (NEV) purchases.
• Unavailability, reduction, or elimination of government and economic incentives for electric vehicles could materially adversely affect business.
• Share-based compensation may impact future profit and exercise of options could dilute existing shares.
• A severe or prolonged downturn in the global or Chinese economy could materially and adversely affect business and financial condition.
• Extreme and rapid fluctuations in Bitcoin price could materially and adversely affect business, financial condition, and results of operations, especially with the company's digital asset holdings.
• Risks related to the Cayman Islands incorporated holding company structure and conducting business through subsidiaries in China, including uncertainty of PRC laws and regulations.
• Potential for the Foreign Investment Law to substantially affect current corporate structure and business operations.
• Requirement for China Securities Regulatory Commission (CSRC) approval or filing for future offerings, with uncertainty in obtaining such approvals.
• Significant legal and other obstacles to obtaining information for shareholder investigations or litigation outside China.
• PRC regulation of loans and direct investments in PRC entities by offshore holding companies may delay or prevent the use of financing proceeds.
• Adverse changes in political and economic policies of the PRC government could materially affect overall economic growth and demand for products/services.
• Potential classification as a Resident Enterprise of China under the Enterprise Income Tax Law, leading to unfavorable tax consequences for the company and non-PRC stockholders.
• Exposure to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law, especially concerning franchisees.
• Governmental control of currency conversion may affect the value of investment and ability to remit funds out of China.
• Business may be materially and adversely affected if any PRC subsidiaries declare bankruptcy or become subject to dissolution/liquidation.
• The Chinese government exerts substantial influence over business activities and may intervene or influence operations at any time, potentially hindering ability to offer securities.
• Fluctuations in exchange rates could adversely affect business and the value of securities.
• Risk of key employees or designated legal representatives abusing authority or misusing chops and seals, disrupting business operations.
• Increases in labor costs in the PRC may adversely affect business and results of operations.
• Non-compliance by some shareholders with PRC regulations relating to offshore investment activities (Circular 37) may lead to penalties for those shareholders and restrictions on SPV foreign exchange activities.
• Potential liability for improper use or appropriation of personal information due to evolving PRC laws and regulations regarding privacy, data security, and cybersecurity.
• Risk of becoming subject to increased scrutiny, criticism, and negative publicity involving U.S.-listed Chinese companies, harming business and reputation.
• Difficulties for shareholders in protecting interests and exercising rights due to substantial operations in China and most officers/directors residing outside the U.S.
• Financial and operating performance may be adversely affected by general economic conditions, natural catastrophic events, epidemics, public health crises, and downturns in NEV purchase behavior.
• Additional and more stringent criteria applied to emerging market companies' auditors by SEC, PCAOB, and Nasdaq rules, potentially leading to delisting if PCAOB inspections are obstructed.
• Extreme stock price volatility, including stock run-ups unrelated to operating performance, making it difficult for investors to assess value.
• Potential for short sellers to drive down market price of ordinary shares.
• If securities or industry analysts do not publish research or publish inaccurate/unfavorable research, market price and trading volume could decline.
• Memorandum and articles of association contain anti-takeover provisions that could adversely affect shareholder rights.
• As an emerging growth company and foreign private issuer, the company may take advantage of reduced reporting requirements, affording less protection to shareholders.
• Risk of being classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, resulting in adverse tax consequences for U.S. investors.
• Future sales of substantial amounts of ordinary shares could adversely affect market price.
• Restrictions and limitations imposed by the PRC government on the transfer of cash or assets out of the PRC or Hong Kong.
• As a controlled company, the company may rely on exemptions from certain Nasdaq corporate governance requirements, potentially affording less protection to shareholders.
• Increased monitoring of the Cayman Islands by the Financial Action Task Force (FATF) may adversely affect business.
• Failure to comply with Nasdaq continued listing requirements could lead to suspension of trading and delisting.

Future Outlook

The company intends to retain all available funds and future earnings for the operation and expansion of its business, with no anticipated dividend payments in the foreseeable future. Management believes current cash resources and operating cash flow will be sufficient for at least the next 12 months, contingent on factors like NEV demand, economic conditions, and competitive pricing. The company plans to continue brand building and franchise store expansion in mainland China, establish long-term partnerships with major automakers, expand into home, commercial, industrial, and grid-level energy storage markets, and explore emerging applications like electric ships and drones. A key strategic focus is on sales and production of electric two-wheelers, three-wheelers, and slow-speed cars in Southeast Asia. The company also intends to integrate mainstream cryptocurrencies into its balance sheet, build a risk-controlled treasury management framework with yield optimization, and explore DeFi and staking to boost shareholder value.

Management Comments

• Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
• Management believes that the Company has sufficient funds to meet its working capital requirements and debt obligations, as they will be due at least 12 months from the date of financial reporting, based on historical experience, the economy, trends in the automotive industry, collectability of accounts receivable, and realization of inventory.
• We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future.

Industry Context

StockSavvy.ai notes that Jiuzi Holdings is strategically repositioning itself within the rapidly evolving new energy sector, aligning with global trends towards electric vehicles (EVs) and renewable energy storage. The company's shift from proprietary product sales to a focus on new energy battery sales and future EV production in Southeast Asia reflects a move towards higher-growth segments and geographical diversification. The Chinese market, where Jiuzi primarily operates, remains the largest new energy battery market globally, with significant government support through policies like the Dual Carbon goals and the 14th Five-year Plan. However, the phase-out of NEV purchase subsidies in China since 2023, while offset by tax exemptions, indicates a transition towards a more market-driven environment. The company's emphasis on the Pearl River Delta region leverages its established battery materials industry chain, a competitive advantage in a highly competitive market. The expansion into Southeast Asia for electric two-wheelers, three-wheelers, and slow-speed cars targets a growing market with potentially less intense competition than the mature Chinese passenger EV market. The company's exploration of blockchain and crypto assets for treasury management is an unconventional move for an automotive-related company, potentially offering new revenue streams or yield optimization but also introducing additional market volatility and regulatory risks.

Comparison to Industry Standards

• The company's gross margin of 0.70% in 2025 is significantly lower than typical industry averages for automotive or battery sales, which often range from 10-25% or higher depending on the specific product and market segment. This suggests intense pricing pressure or a less favorable product mix.
• The substantial reduction in net loss is positive, but the accumulated deficit of $87.98 million and the 'going concern' warning from auditors indicate that the company's financial health is still below industry standards for stable, profitable operations.
• The high concentration of revenue from top five customers (78.78%) and cost of revenue from top five suppliers (75.19%) suggests a higher business risk compared to diversified industry players like CATL or BYD in the battery sector, or major EV manufacturers like Tesla or Nio, which typically have broader customer and supplier bases.
• The company's strategic pivot to Southeast Asia for electric two/three-wheelers and slow-speed cars targets a market segment that is less developed than the passenger EV market in China, potentially offering higher growth opportunities but also facing different infrastructure and regulatory challenges compared to established players in mature markets.

Management Changes

Corporate Governance

Legal Proceedings

• On or about November 18, 2025, a shareholder derivative action was commenced by Shuibo Zhang against current/former officers (Tao Li, Huijie Gao, Yi Zhu, Shu Liu, Wenqian Gao, and Xinping Li) and Jiuzi Holdings Inc. as nominal defendant. Allegations include improper share dilution, unapproved transactions, and fraudulent inducement of the plaintiff's resignation as CEO/Chairman. The lawsuit seeks to void certain corporate actions, restore the plaintiff as Chairman, unspecified damages, injunctive relief, an accounting, and attorneys' fees. The litigation is currently stayed as plaintiff's counsel withdrew.
• On November 21, 2025, the SEC sent a request for documents and information in connection with a formal order of investigation captioned 'Cross Border/ China Based Issuer Matters (H)-15212).' The company voluntarily produced documents on December 3 and December 12, 2025, and informed the SEC of completion on December 19, 2025. No further communications have occurred regarding this matter.

Related Party Transactions

• As of October 31, 2025, the amount due to related parties was $12,562, down from $211,630 in 2024. This includes interest-free loans from Tao Li ($703) and Huijie Gao ($11,859).
• As of October 31, 2024, amounts due to related parties included $210,000 from Tao Li (interest-free loan) and $1,630 payable to Shuibo Zhang (Company shareholder, director, and officer).

Stakeholder Impact

• **Shareholders**: Face significant risks due to the 'going concern' warning, declining gross margins, and ongoing legal/regulatory investigations. The lack of anticipated dividends means reliance on volatile share price appreciation. The 1-for-40 reverse stock split and potential future 1-for-100 split aim to address Nasdaq listing requirements but can also impact liquidity and perception. The shareholder derivative lawsuit directly impacts shareholder interests.
• **Employees**: The company's plan to hire additional U.S.-GAAP experienced personnel indicates potential new job opportunities in finance and accounting. However, the overall financial instability and 'going concern' doubt could create job insecurity.
• **Customers**: The strategic shift to new energy batteries and future EV production in Southeast Asia could lead to new product offerings and expanded market reach. However, the termination of the proprietary product line and reliance on a few key customers could impact service consistency or product availability for some.
• **Suppliers**: The company's concentration risk with its top five suppliers (75.19% of cost of revenue in 2025) means that changes in these relationships could significantly impact the company's ability to procure goods, potentially affecting its operational stability and ability to meet customer demand.
• **Creditors**: The 'going concern' warning and accumulated deficit raise concerns about the company's ability to meet its debt obligations. The company's ability to service current debt depends on future realization of current assets and successful implementation of management's plans.

Next Steps

• Develop and implement remedial actions to strengthen accounting and financial reporting functions, including hiring additional U.S.-GAAP experienced personnel.
• Design, implement, and test internal controls over financial reporting.
• Continue brand building and franchise store expansion in key new energy cities across mainland China, including opening operational sites and marketing channels in Hangzhou, Guangzhou, and Hefei.
• Establish long-term partnerships with major automakers to become a core battery supplier and focus on niche markets like commercial vehicles and two-wheelers.
• Expand into home energy storage, commercial and industrial energy storage, and grid-level energy storage markets.
• Explore emerging applications for batteries in fields such as electric ships, electric aircraft, and drones.
• Collaborate with material suppliers, equipment manufacturers, and recycling companies to build an industrial ecosystem.
• Tailor localized marketing strategies for international market expansion and obtain international certifications (e.g., UL, CE).
• Integrate mainstream cryptocurrencies into balance sheets, build a risk-controlled treasury management framework with yield optimization, and explore DeFi and staking.
• Address the shareholder derivative lawsuit and SEC investigation, which may involve legal defense and potential settlements.
• Monitor and comply with evolving PRC regulatory requirements, especially regarding overseas listings and data security.
• Address non-compliance of PRC resident beneficial owners with Circular 37 registration requirements.
• Potentially implement a future 1-for-100 reverse stock split as approved by shareholders on February 6, 2026, subject to board discretion and Nasdaq approval.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by the 'going concern' warning from its auditors, a substantial accumulated deficit, and a sharp decline in gross margin. The ongoing shareholder derivative lawsuit and SEC investigation introduce significant legal and regulatory uncertainties, potential liabilities, and management distraction. While revenue increased and net loss decreased, the underlying profitability issues and internal control weaknesses are critical concerns. The strategic shift and capital raises offer potential, but the immediate risks and lack of clear path to sustained profitability make the stock a high-risk investment with significant downside potential.

Keywords

New Energy Vehicles, EV Batteries, China Market, SEC Filing, Form 20-F, Nasdaq, JZXN, Financial Performance, Corporate Governance, Regulatory Risk, PCAOB, HFCAA, Shareholder Litigation, Cryptocurrency, Digital Assets, Reverse Stock Split, Going Concern, PRC Regulations, Southeast Asia EV, Supply Chain, Capital Raise