EZGO ANNOUNCES FINANCIAL RESULTS FOR FISCAL YEAR 2021

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Jan 27, 2022, 20:30 ET

CHANGZHOU, China, Jan. 27, 2022 /PRNewswire/ -- EZGO Technologies Ltd. (Nasdaq: EZGO) ("EZGO" or "we", "our", or "the Company"), a leading short-distance transportation solutions provider in China, today announced its audited financial results for the fiscal year ended September 30, 2021 ("Fiscal Year 2021").

Fiscal Year 2021 Financial Highlights (all results compared to the prior fiscal year unless otherwise noted)

Revenues were $23.4 million, an increase of 53.7%
Net loss was $3.4 million, compared to net income of $0.3 million, primarily as a result of increased cost of revenues and operating expenses associated with new hires and marketing
Cash and cash equivalents of approximately $4.8 million at September 30, 2021

Management Commentary

Mr. Jianhui Ye, Chief Executive Officer of EZGO, stated, "We are pleased with the progress we have made during Fiscal Year 2021, which was a major turning point in our Company's development. We became a public company following our IPO in the first half of the fiscal year and made great strides with our new business focus—manufacturing and sales of two- and three-wheeled electric vehicles. We reported solid year-over-year top line growth of 53.7% due to the increased sales of our e-bicycles, which we attribute to our ongoing development and launch of high-quality products, all of which was possible with the help of our growing sales and support team. As we have continued to invest in our products and people to support EZGO's long-term growth, our bottom line for Fiscal Year 2021 was impacted. We anticipate that these investments will enable us to realize economies of scale in our business over time."

Mr. Ye concluded, "Demand for our e-bicycles remains strong, and we are working to increase the production capacity at our current facilities to up to 200,000 units of our e-bicycles in the next couple of months. Last November, we were excited to announce the launch of our new EZGO branded products, along with the release of seven new independent innovation models. Of these new models, the four ultra-high-speed electric motorcycles are anticipated to be marketed primarily in American, European and other markets. We believe our commitment to ongoing innovation and quality, as well as our expanded marketing efforts, will lead to increased brand awareness and sales of our e-bicycles in Fiscal Year 2022 and beyond."

Fiscal Year 2021 Financial Review

Net Revenues

Net revenues from continuing operations for the fiscal year ended September 30, 2021, were approximately $23.4 million, a 53.7% increase from approximately $15.2 million for the prior fiscal year. The significant increase in revenues were mainly driven by the increase of sales of e-bicycles, which was a result of reduced unit prices and increased advertising.

The following table identifies revenue from continuing operations and reportable segments for the fiscal years ended September 30, 2021 and 2020:

		For the fiscal year ended September 30,								Change
	Segment	2021		%		2020		%		Amount		%
Sales of e-bicycles	E-bicycle sales segment	$	18,232,537		77.9	$	11,165,290		73.2	$	7,067,247		63.3
Sales of batteries and battery packs	Battery cells and packs segment		4,288,366		18.3		3,148,156		20.7		1,140,210		36.2
Others			901,103		3.8		929,836		6.1		(28,733)		(3.1)
Net revenues		$	23,422,006		100.0	$	15,243,282		100.0	$	8,178,724		53.7

The e-bicycles sales segment mainly engages in offline sales of e-bicycles. For the fiscal year ended September 30, 2021, revenues from sales of e-bicycles were $18.2 million, a 63.3% increase from the prior fiscal year, mainly due to the continued development and launch of new products, rapid growth in the Company's offline e-bicycles sales market, and the mitigated impact of COVID-19 since the second quarter of 2020.

Revenue from battery cells and packs segment for the fiscal year ended September 30, 2021, were $4.3 million, a 36.2% increase from $3.1 million in the prior fiscal year, as a result of increased demand from long-term customers.

Cost of Revenues

Cost of revenues for the fiscal year ended September 30, 2021, were $23.0 million, an increase of 68.1% from $13.7 million for the prior fiscal year. The increase was primarily due to increased manufacturing and purchase costs of e-bicycles, increased purchase costs of battery packs, and increased costs associated with sales rebates the Company provided to distributors and wholesalers.

Gross Profit

Gross profit for the fiscal year ended September 30, 2021, was $0.4 million, compared to $1.5 million in the prior fiscal year.

Selling and Marketing Expenses

EZGO's selling and marketing expenses primarily consist of salaries and benefits expense, advertising expense, and freight expense. Selling and marketing expenses increased to $1.6 million for the fiscal year ended September 30, 2021, from $0.4 million for the prior fiscal year, primarily due to expenses related to the hiring of additional salespersons and marketing costs to promote sales of the Company's e-bicycles during the period.

General and Administrative Expenses

General and administrative expenses increased to $2.7 million for the fiscal year ended September 30, 2021, from $1.1 million from the prior fiscal year. The increase was mainly due to increased expenses related to operating as a public company, as well as additional consulting, research and development and salary expenses.

Income Tax Benefit (Expense)

Income tax benefit was approximately $0.4 million for the fiscal year ended September 30,2021, compared to income tax expense of approximately $0.1 million for the prior fiscal year. The income tax benefit was recognized due to the net loss recorded for Fiscal Year 2021, which was partially offset by the deferred tax asset valuation allowance.

Net Income (Loss)

Net loss was $3.4 million for the fiscal year ended September 30, 2021, compared to net income of $0.3 million for the prior fiscal year. The net loss was primarily a result of the aforementioned increased cost of revenues and increased selling and marketing and general and administrative expenses.

For additional information, please see EZGO's Annual Report on Form 20-F for the fiscal year ended September 30, 2021, which was filed with the U.S. Securities and Exchange Commission on January 27, 2022.

About EZGO Technologies Ltd.

Leveraging an Internet of Things (IoT) product and service platform and three E-bicycle brands, "EZGO", "Dilang" and "Cenbird", EZGO has established a business model centered on the manufacturing and sale of two- and three-wheeled electric vehicles, complemented by the E-bicycle charging pile business. 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 http://www.ezgotech.com.cn/Investor/index.html.

Exchange Rate

This announcement 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 RMB6.4854 to US$ 1.00, the exchange rate in effect as of September 30, 2021, as set forth in the H.10 Statistical release of the Board of Governors of the Federal Reserve System. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

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.

For more information, please contact:

At the Company:
Shawn Wen
Email: [email protected]
Phone: (+86) 13502829216

Investor Relations:
Carolyne Sohn
The Equity Group Inc.
Email: [email protected]
Phone: (415) 568-2255

EZGO TECHNOLOGIES LTD.
CONSOLIDATED BALANCE SHEETS
(In U.S. dollars except for number of shares)


	As of September 30,
	2020		2021
ASSETS
Current assets:
Cash and cash equivalents	$	322,598	$	4,774,531
Restricted cash		17,932		1,115,354
Short-term investments		2,209,261		2,387,003
Accounts receivable, net		6,325,733		6,847,608
Notes receivable		1,664,310		-
Inventories, net		867,752		924,342
Advances to suppliers, net		2,700,383		7,404,538
Amount due from related parties, current		577,035		3,524,635
Prepaid expenses and other current assets, net		881,073		609,602
Current assets of discontinued operation		750,784		91,997
Total current assets		16,316,861		27,679,610
Property, plants and equipment, net		2,369,891		8,746,386
Land use right		-		4,510,849
Amount due from related parties, noncurrent		294,568		310,395
Long-term investments		-		132,621
Deferred tax assets, net		97,324		585,428
Non-current assets of discontinued operation		739,154		46,381
Total assets	$	19,817,798	$	42,011,670

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	$	299,315	$	310,395
Accounts payable		298,060		650,693
Accrued expenses and other payables		3,753,817		7,142,630
Advances from customers		154,554		94,899
Income tax payable		292,940		395,483
Amount due to related parties		754,283		71,849
Current liabilities of discontinued operation		1,119,684		809,221
Total current liabilities		6,672,653		9,475,170
Total liabilities		6,672,653		9,475,170

Commitments and contingencies		-		-

Equity
Preferred shares		-		-
Ordinary shares (par value of $0.001 per share; 100,000,000 shares authorized as of September 30, 2020 and 2021; 7,800,000 and 13,626,602 shares issued and outstanding as of September 30, 2020 and 2021, respectively)		7,800		13,627
Subscription receivable		(7,800)		(7,800)
Receivables from a shareholder		(4,737,521)		(3,152,179)
Additional paid-in capital		12,078,058		32,260,048
Statutory reserve		212,842		233,413
Retained earnings and (deficit)		1,575,630		(1,423,614)
Accumulated other comprehensive income (loss)		(259,547)		594,507
Total EZGO Technologies Ltd.'s shareholders' equity		8,869,462		28,518,002
Non-controlling interests		4,275,683		4,018,498
Total equity		13,145,145		32,536,500

Total liabilities and equity	$	19,817,798	$	42,011,670

EZGO TECHNOLOGIES LTD.
CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME (LOSS)
(In U.S. dollars except for number of shares)


	For the fiscal years ended September 30,
	2020		2021

Net revenues	$	15,243,282	$	23,422,006
Cost of revenues		(13,704,248)		(23,039,528)
Gross profit		1,539,034		382,478

Operating expenses:
Selling and marketing expenses		(385,722)		(1,558,719)
General and administrative expenses		(1,081,346)		(2,701,178)
Total operating expenses		(1,467,068)		(4,259,897)

Income (loss) from operations		71,966		(3,877,419)

Other income (expenses):
Interest expense, net		(14,803)		(60,756)
Other income, net		393,198		141,530
Total other income, net		378,395		80,774

Income (loss) from continuing operations before income tax expense		450,361		(3,796,645)
Income tax (expense) benefit		(116,063)		419,405
Net income (loss) from continuing operations		334,298		(3,377,240)
Income (loss) from discontinued operation, net of tax		(57,376)		(36,404)
Net income (loss)		276,922		(3,413,644)

Net income (loss) from continuing operations		334,298		(3,377,240)
Less: Net income (loss) attributable to non-controlling interests from continuing operations		129,748		(434,971)
Net income (loss) attributable to EZGO Technologies Ltd.'s shareholders from continuing operations		204,550		(2,942,269)

Income (loss) from discontinued operation, net of tax		(57,376)		(36,404)
Less: Net income attributable to non-controlling interests from discontinued operation		-		-
Net income (loss) attributable to EZGO Technologies Ltd.'s shareholders from discontinued operation		(57,376)		(36,404)
Net income (loss) attributable to EZGO Technologies Ltd.'s shareholders	$	147,174	$	(2,978,673)

Net income (loss) from continuing operations per ordinary share:
Basic and diluted	$	0.03	$	(0.27)
Net income (loss) from discontinued operation per ordinary share:
Basic and diluted	$	(0.01)	$	(0.00)
Net income (loss) per ordinary share:
Basic and diluted	$	0.02	$	(0.27)
Weighted average shares outstanding
Basic and diluted		7,800,000		10,735,606

Income (loss) from continuing operations before non-controlling interests	$	334,298	$	(3,377,240)
Income (loss) from discontinued operation, net of tax		(57,376)		(36,404)
Net income (loss)		276,922		(3,413,644)

Other comprehensive (loss) income
Foreign currency translation adjustment		438,839		973,379
Unrealized gain on investments in available-for-sale debt investments		-		58,461
Comprehensive income (loss)		715,761		(2,381,804)
Less: Comprehensive income (loss) attributable to non-controlling interests		171,477		(257,185)
Comprehensive income (loss) attributable to EZGO Technologies Ltd.'s shareholders	$	544,284	$	(2,124,619)