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Ezagoo Ltd. – ‘10-Q’ for 6/30/22

On:  Monday, 8/15/22, at 6:00pm ET   ·   For:  6/30/22   ·   Accession #:  1493152-22-23027   ·   File #:  333-228681

Previous ‘10-Q’:  ‘10-Q’ on 5/16/22 for 3/31/22   ·   Next:  ‘10-Q’ on 11/14/22 for 9/30/22   ·   Latest:  ‘10-Q’ on 11/20/23 for 9/30/23

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/15/22  Ezagoo Ltd.                       10-Q        6/30/22   67:3.7M                                   M2 Compliance LLC/FA

Quarterly Report   —   Form 10-Q

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    736K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     24K 
 3: EX-31.2     Certification -- §302 - SOA'02                      HTML     25K 
 4: EX-32.1     Certification -- §906 - SOA'02                      HTML     21K 
 5: EX-32.2     Certification -- §906 - SOA'02                      HTML     21K 
11: R1          Cover                                               HTML     75K 
12: R2          Condensed Consolidated Balance Sheets               HTML    116K 
13: R3          Condensed Consolidated Balance Sheets               HTML     37K 
                (Parenthetical)                                                  
14: R4          Condensed Consolidated Statements of Operations     HTML    100K 
                and Comprehensive (Loss) Income (Unaudited)                      
15: R5          Condensed Consolidated Statements of Changes in     HTML     45K 
                Stockholders' Deficit (Unaudited)                                
16: R6          Condensed Consolidated Statements of Cash Flows     HTML     83K 
                (Unaudited)                                                      
17: R7          Organization and Business Background                HTML     42K 
18: R8          Going Concern Uncertainties                         HTML     24K 
19: R9          Summary of Significant Accounting Policies          HTML     87K 
20: R10         Property and Equipment                              HTML     29K 
21: R11         Amount Due From Related Party                       HTML     25K 
22: R12         Deposits, Prepayments and Other Receivables         HTML     27K 
23: R13         Accounts Payable                                    HTML     27K 
24: R14         Accrued Expenses, Other Payable and Deposits        HTML     27K 
                Received                                                         
25: R15         Deferred Revenues                                   HTML     26K 
26: R16         Due to Related Parties                              HTML     74K 
27: R17         Due to Director                                     HTML     23K 
28: R18         Operating Lease                                     HTML     52K 
29: R19         Common Stock                                        HTML     28K 
30: R20         Additional Paid-In Capital                          HTML     22K 
31: R21         Summary of Significant Accounting Policies          HTML    126K 
                (Policies)                                                       
32: R22         Summary of Significant Accounting Policies          HTML     31K 
                (Tables)                                                         
33: R23         Property and Equipment (Tables)                     HTML     25K 
34: R24         Deposits, Prepayments and Other Receivables         HTML     25K 
                (Tables)                                                         
35: R25         Accounts Payable (Tables)                           HTML     25K 
36: R26         Accrued Expenses, Other Payable and Deposits        HTML     26K 
                Received (Tables)                                                
37: R27         Due to Related Parties (Tables)                     HTML     44K 
38: R28         Operating Lease (Tables)                            HTML     50K 
39: R29         Organization and Business Background (Details       HTML     63K 
                Narrative)                                                       
40: R30         Going Concern Uncertainties (Details Narrative)     HTML     35K 
41: R31         Schedule of Foreign Currency Translation of         HTML     29K 
                Exchange Rates (Details)                                         
42: R32         Schedule of Plant and Equipment Expected Useful     HTML     25K 
                Lives (Details)                                                  
43: R33         Schedule of Property, Plant and Equipment           HTML     27K 
                (Details)                                                        
44: R34         Property and Equipment (Details Narrative)          HTML     24K 
45: R35         Amount Due From Related Party (Details Narrative)   HTML     26K 
46: R36         Schedule of Deposits, Prepayments and Other         HTML     24K 
                Receivables (Details)                                            
47: R37         Deposits, Prepayments and Other Receivables         HTML     21K 
                (Details Narrative)                                              
48: R38         Schedule of Account Payable (Details)               HTML     24K 
49: R39         Accounts Payable (Details Narrative)                HTML     21K 
50: R40         Schedule of Other Payable (Details)                 HTML     28K 
51: R41         Deferred Revenues (Details Narrative)               HTML     21K 
52: R42         Schedule of Due to Related Parties (Details)        HTML     54K 
53: R43         Schedule of Disclosure of Related Parties           HTML     34K 
                Transactions (Details)                                           
54: R44         Due to Related Parties (Details Narrative)          HTML     76K 
55: R45         Due to Director (Details Narrative)                 HTML     22K 
56: R46         Schedule of Details of Lease Term (Details)         HTML     30K 
57: R47         Schedule of Lease Cost and Other Information        HTML     29K 
                Related to Operating Leases (Details)                            
58: R48         Schedule of Supplemental Balance Sheet Information  HTML     29K 
                Related to Leases (Details)                                      
59: R49         Schedule of Maturities of Lease Liabilities         HTML     29K 
                (Details)                                                        
60: R50         Operating Lease (Details Narrative)                 HTML     25K 
61: R51         Common Stock (Details Narrative)                    HTML     28K 
62: R52         Additional Paid-In Capital (Details Narrative)      HTML     21K 
65: XML         IDEA XML File -- Filing Summary                      XML    116K 
63: XML         XBRL Instance -- form10-q_htm                        XML    812K 
64: EXCEL       IDEA Workbook of Financial Reports                  XLSX    100K 
 7: EX-101.CAL  Inline XBRL Taxonomy Extension Calculation           XML    139K 
                Linkbase Document -- ezgo-20220630_cal                           
 8: EX-101.DEF  Inline XBRL Taxonomy Extension Definition Linkbase   XML    274K 
                Document -- ezgo-20220630_def                                    
 9: EX-101.LAB  Inline XBRL Taxonomy Extension Label Linkbase        XML    669K 
                Document -- ezgo-20220630_lab                                    
10: EX-101.PRE  Inline XBRL Taxonomy Extension Presentation          XML    501K 
                Linkbase Document -- ezgo-20220630_pre                           
 6: EX-101.SCH  Inline XBRL Taxonomy Extension Schema Document --    XSD    131K 
                ezgo-20220630                                                    
66: JSON        XBRL Instance as JSON Data -- MetaLinks              251±   348K 
67: ZIP         XBRL Zipped Folder -- 0001493152-22-023027-xbrl      Zip    156K 


‘10-Q’   —   Quarterly Report

Document Table of Contents

Page (sequential)   (alphabetic) Top
 
11st Page  –  Filing Submission
"Financial Information
"Financial Statements
"Condensed Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021
"Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the three and six months ended June 30, 2022 and 2021 (unaudited)
"Condensed Consolidated Statement of Changes in Stockholders' Deficit for the three and six months ended June 30, 2022 and 2021 (unaudited)
"Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021(unaudited)
"Notes to the Condensed Consolidated Financial Statements
"Management's Discussion and Analysis of Financial Condition and Results of Operations
"Quantitative and Qualitatived Is Closures About Market Risk
"Controls and Procedures
"Other Information
"Legal Proceedings
"Unregistered Sales of Equity Securities and Use of Proceeds
"Defaults Upon Senior Securities
"Mine Safety Disclosures
"Exhibits
"Signatures

This is an HTML Document rendered as filed.  [ Alternative Formats ]



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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM  i 10-Q

 

 i  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended  i June 30, 2022

 

or

 

 i  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _________ to _________

 

Commission File Number  i 333-228681

 

 i EZAGOO LIMITED

(Exact name of registrant issuer as specified in its charter)

 

 i Nevada    i 30-1077936

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 i B192, 2/F, BLOCK B,  i BEIJING PUDI HOTEL,  i No. 7 SOUTH STREET OF JIANGUOMEN,

 i DONGCHENG DISTRICT, BEIJING  i 100000 CHINA

(Address of principal executive offices, including zip code)

 

Registrant’s phone number, including area code ( i +86)  i 139 751 09168

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
 i Common Stock    i EZAGOO   OTC Markets

 

Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $0.0001 per share

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 

Yes ☐ No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 

Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

YES ☒ NO ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).

 

YES ☒ NO ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” or an “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer Accelerated filer
 i Non-accelerated filer Smaller reporting company  i 
    Emerging growth company  i 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  i 

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Yes ☐  i No

 

The aggregate market value of the voting stock and non-voting common equity held by non-affiliates of the registrant as of August 15, 2022, was approximately $27.5 million.

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class   Outstanding at August 15, 2022
Common Stock, $.0001 par value    i 119,956,826

 

 

 

 C: 
 
 

 

TABLE OF CONTENTS

 

    Page
     
PART I FINANCIAL INFORMATION F-1
     
ITEM 1. FINANCIAL STATEMENTS: F-1
  Condensed Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021 F-1
  Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the three and six months ended June 30, 2022 and 2021 (unaudited) F-2
  Condensed Consolidated Statement of Changes in Stockholders’ Deficit for the three and six months ended June 30, 2022 and 2021 (unaudited) F-3
  Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021(unaudited) F-4
  Notes to the Condensed Consolidated Financial Statements F-5
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2-5
ITEM 3. QUANTITATIVE AND QUALITATIVED IS CLOSURES ABOUT MARKET RISK 5
ITEM 4. CONTROLS AND PROCEDURES 5
     
PART II OTHER INFORMATION 6
     
ITEM 1 LEGAL PROCEEDINGS 6
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 6
ITEM 3 DEFAULTS UPON SENIOR SECURITIES 6
ITEM 4 MINE SAFETY DISCLOSURES 6
ITEM 5 OTHER INFORMATION 6
ITEM 6 EXHIBITS 7
  SIGNATURES 8

 

 C: 
 C: 1
 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial statements

 

EZAGOO LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2022 AND DECEMBER 31, 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

   (Unaudited)   (Audited) 
   As of 
  

June 30, 2022

   December 31, 2021 
   (Unaudited)   (Audited) 
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents  $ i 395,656   $ i 559,119 
Amount due from related party   -     i 331,342 
Deposits paid, prepayments and other receivables    i 47,159     i 63,119 
Income Tax receivables    i 6,652    - 
Total current assets    i 449,467     i 953,580 
           
NON-CURRENT ASSETS          
Plant and equipment, net    i 6,027     i 11,324 
Operating right-of-use assets    i 263,959     i 350,984 
           
TOTAL ASSETS  $ i 719,453   $ i 1,315,888 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
CURRENT LIABILITIES          
Accounts payable  $-   $ i 28,638 
Accrued liabilities, other payable and deposits received    i 265,870     i 251,135 
Amount due to a director    i 28,155     i 29,174 
Amount due to the related parties    i 1,861,143     i 1,808,441 
Deferred revenues    i 2,925     i 111,388 
Income tax payable   -     i 21,348 
Operating lease liabilities, current portion    i 179,273     i 184,928 
Total current liabilities    i 2,337,366     i 2,435,052 
           
NON-CURRENT LIABILITIES          
Operating lease liabilities, non-current portion    i 85,516     i 169,616 
           
TOTAL LIABILITIES  $ i 2,422,882   $ i 2,604,668 
           
STOCKHOLDERS’ DEFICIT          
Preferred stock, $ i  i 0.0001 /  par value,  i  i 200,000,000 /  shares authorized,  i  i  i  i None /  /  /  issued and outstanding  $-   $- 
Common stock, $ i  i 0.0001 /  par value,  i  i 600,000,000 /  shares authorized,  i  i 119,956,826 /  and  i  i 119,956,826 /  shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively    i 11,996     i 11,996 
Additional paid-in capital    i 1,438,780     i 1,384,907 
Accumulated other comprehensive loss   ( i 6,637   ( i 107,503)
Accumulated deficit   ( i 3,147,568)   ( i 2,578,180)
TOTAL STOCKHOLDERS’ DEFICIT   ( i 1,703,429)   ( i 1,288,780)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $ i 719,453   $ i 1,315,888 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 C: 
F-1

 

 

EZAGOO LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
   Three months ended June 30,   Six months ended June 30, 
   2022   2021   2022   2021 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
REVENUES  $   $   $   $ 
Related party    i 9    -     i 9    - 
Non-related parties    i 190     i 440,282     i 245,009     i 892,536 
Total    i 199     i 440,282     i 245,018     i 892,536 
                     
COSTS AND EXPENSES                    
Cost of revenue for short video produce costs, related party   -    ( i 123,056)   ( i 5,541)   ( i 284,862)
Cost of revenue for rental and related costs   -    ( i 15,666)   ( i 1,294)   ( i 31,748)
Cost of revenue for salaries and related expenses   ( i 45,165)   -    ( i 101,150)   ( i 1,455)
Sales and marketing expenses   ( i 31,283)   ( i 33,078)   ( i 76,665)   ( i 67,672)
General and administrative expenses   ( i 261,344)   ( i 241,057)   ( i 578,556)   ( i 405,164)
TOTAL COSTS AND EXPENSES   ( i 337,792)   ( i 412,857)   ( i 763,206)   ( i 790,901)
                     
OPERATING (LOSS) INCOME   ( i 337,593)    i 27,425    ( i 518,188)    i 101,635 
                     
OTHER INCOME (EXPENSES)                    
Other income    i 3,373     i 10     i 4,578     i 5,165 
Imputed interest expenses   ( i 42,745)   ( i 10,734)   ( i 53,873)   ( i 6,259)
OTHER INCOME (EXPENSES)   ( i 39,372)   ( i 10,724)   ( i 49,295)   ( i 1,094)
                     
(LOSS) INCOME BEFORE INCOME TAX   ( i 376,965)    i 16,701    ( i 567,483)    i 100,541 
                     
INCOME TAX EXPENSES   ( i 1,905)   -    ( i 1,905)   - 
                     
NET (LOSS) INCOME  $( i 378,870)  $ i 16,701   $( i 569,388)  $ i 100,541 
                     
Other comprehensive income (loss)                    
Foreign exchange adjustment income (loss)    i 104,675    ( i 17,782)    i 100,866    ( i 14,925)
COMPREHENSIVE INCOME (LOSS)  $( i 274,195)  $( i 1,081)  $( i 468,522)  $ i 85,616 
                     
Net (loss) income per share - Basic and diluted  $( i 0.00)  $( i 0.00)  $( i 0.00)  $ i 0.00 
                     
Weighted average number of common shares outstanding – Basic and diluted    i 119,956,826     i 119,956,826     i 119,956,826     i 119,956,826 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 C: 
F-2

 

 

EZAGOO LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

For the three months ended June 30, 2022

 

   Number of
shares
   Amount   PAID-IN
CAPITAL
   ACCUMULATED
DEFICIT
   COMPREHENSIVE
INCOME
   STOCKHOLDER DEFICT 
   COMMON STOCK   ADDITIONAL      

ACCUMULATED

OTHER

   TOTAL 
   Number of
shares
   Amount   PAID-IN
CAPITAL
   ACCUMULATED
DEFICIT
   COMPREHENSIVE
INCOME
   STOCKHOLDER DEFICT 
Balance as of April 1, 2022 (Unaudited)    i 119,956,826     i 11,996     i 1,396,035    ( i 2,768,698)   ( i 111,312)   ( i 1,471,979)
Imputed interest expenses   -    -     i 42,745    -    -     i 42,745 
Net loss   -    -    -    ( i 376,965)   -    ( i 376,965)
Other comprehensive income   -    -    -    -     i 104,675     i 104,675 
Balance as of June 30, 2022 (Unaudited)    i 119,956,826     i 11,996     i 1,438,780    ( i 3,147,568)   ( i 6,637   ( i 1,703,429)

 

For the three months ended June 30, 2021

 

   COMMON STOCK   ADDITIONAL      

ACCUMULATED

OTHER

   TOTAL 
   Number of
shares
   Amount   PAID-IN
CAPITAL
   ACCUMULATED
DEFICIT
   COMPREHENSIVE
INCOME
   STOCKHOLDER DEFICT 
Balance as of April 1, 2021 (Unaudited)    i 119,956,826     i 11,996     i 1,304,064    ( i 2,748,980)   ( i 59,071)   ( i 1,491,991)
Imputed interest income   -    -     i 817    -    -     i 817 
                               
Net profit   -    -    -     i 16,701    -     i 16,701 
                               
Other comprehensive loss   -    -    -    -    ( i 17,782)   ( i 17,782)
Balance as of June 30, 2021 (Unaudited)    i 119,956,826     i 11,996     i 1,304,881    ( i 2,732,279)   ( i 76,853)   ( i 1,492,255)

 

For the six months ended June 30, 2022

 

   COMMON STOCK   ADDITIONAL      

ACCUMULATED

OTHER

   TOTAL 
   Number of
shares
   Amount   PAID-IN
CAPITAL
   ACCUMULATED
DEFICIT
   COMPREHENSIVE
INCOME
   STOCKHOLDER DEFICT 
Balance as of January 1, 2022 (Audited)    i 119,956,826     i 11,996     i 1,384,907    ( i 2,578,180)   ( i 107,503)   ( i 1,288,780)
Imputed interest expenses   -    -     i 53,873    -    -     i 53,873 
Net loss   -    -    -    ( i 567,483)   -    ( i 567,483)
Other comprehensive loss   -    -    -    -     i 100,866     i 100,866 
Balance as of June 30, 2022 (Unaudited)    i 119,956,826     i 11,996     i 1,438,780    ( i 3,147,568)   ( i 6,637   ( i 1,703,429)

 

For the six months ended June 30, 2021

 

   COMMON STOCK   ADDITIONAL      

ACCUMULATED

OTHER

   TOTAL 
   Number of
shares
   Amount   PAID-IN
CAPITAL
   ACCUMULATED
DEFICIT
   COMPREHENSIVE
INCOME
   STOCKHOLDER DEFICT 
Balance as of January 1, 2021 (Audited)    i 119,956,826     i 11,996     i 1,308,646    ( i 2,832,820)   ( i 61,928)   ( i 1,574,106)
Imputed interest expenses   -    -    ( i 3,765)   -    -    ( i 3,765)
Imputed interest income (expenses)   -    -    ( i 3,765)   -    -    ( i 3,765)
                               
Net profit   -    -    -     i 100,541    -     i 100,541 
Net profit (loss)   -    -    -     i 100,541    -     i 100,541 
                               
Other comprehensive loss   -    -    -    -    ( i 14,925)   ( i 14,925)
Other comprehensive income (loss)   -    -    -    -    ( i 14,925)   ( i 14,925)
Balance as of June 30, 2021 (Unaudited)    i 119,956,826     i 11,996     i 1,304,881    ( i 2,732,279)   ( i 76,853)   ( i 1,492,255)

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 C: 
F-3

 

 

EZAGOO LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

   (Unaudited)   (Unaudited) 
  

Six months ended

June 30,

 
   2022   2021 
   (Unaudited)   (Unaudited) 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net (loss) income  $( i 569,388)  $ i 100,541 
Adjustments to reconcile net (loss) income to net cash used in operating activities          
Depreciation    i 5,297     i 5,661 
Imputed interests    i 53,873    ( i 3,765)
           
Changes in operating assets and liabilities:          
Deposits, prepayments, and other receivables    i 13,184    ( i 51,764)
Repayment from related parties    i 325,164     i 199,998 
Accounts payable   ( i 28,104)   ( i 6,767)
Accrued liabilities and other payable    i 27,557    ( i 19,291)
Receipts in advance    i 19   ( i 110,220)
Deferred revenues   ( i 106,285)   ( i 512,197)
Income tax payable   ( i 28,000)   - 
Operating lease right-of-use assets    i 87,025    ( i 432,839)
Operating lease liabilities   ( i 89,755)    i 436,215 
Net cash (used in) provided by operating activities   ( i 309,413)   ( i 394,428)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Advance from related parties    i 149,039     i 463,156 
Advance from a director   -     i 209 
Net cash provided by financing activities    i 149,039     i 463,365 
           
Effect of exchange rate changes on cash and cash equivalents   ( i 3,089)   ( i 14,925)
           
Net change in cash and cash equivalents   ( i 163,463)    i 54,012 
Cash and cash equivalents, beginning of period    i 559,119     i 824,733 
CASH AND CASH EQUIVALENTS, END OF PERIOD  $ i 395,656   $ i 878,745 
           
SUPPLEMENTAL CASH FLOWS INFORMATION          
Cash paid for income taxes  $ i 29,905   $- 
Cash paid for interest paid  $-   $- 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 C: 
F-4

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 i 

NOTE 1 – ORGANIZATION AND BUSINESS BACKGROUND

 

Ezagoo Limited, a Nevada corporation (the Company) was incorporated under the laws of the State of Nevada on May 9, 2018.

 

On May 9, 2018 Tan Xiaohao was appointed as President, Secretary, Treasurer, and Director of the Company.

 

On May 9, 2018, our President, Tan Xiaohao, purchased  i 90,050,500 shares of restricted common stock at a purchase price of $ i 0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $ i 9,005 have gone directly to the Company for initial working capital.

 

On June 30, 2018 Zhang Qianwen and Greenpro Asia Strategic SPC- Greenpro Asia Strategic Fund SP purchased  i 3,591,000 and  i 1,358,500 shares of restricted common stock respectively at a purchase price of $ i 0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $ i 495, have gone directly to the Company for initial working capital.

 

On June 6, 2018 Ezagoo Holding Limited, a Seychelles Company, acquired Ezagoo Limited, A Hong Kong Company, in consideration of $ i 0.13.

 

Ezagoo Limited, a Nevada Company, acquired Ezagoo Holding Limited, a Seychelles Company, on June 25, 2018 in consideration of $ i 1. Ezagoo Holding Limited is now a wholly owned subsidiary of the Company.

 

On July 20, 2018, Ezagoo Limited, a Hong Kong Company, incorporated a new subsidiary in Changsha, China, called Changsha Ezagoo Technology Limited, whereas it is owned entirely ( i 100%) by Ezagoo Limited, the Hong Kong Company. There was no consideration exchanged per the transaction.

 

The three companies above are under common control Mr. Tan Xiaohao, the director of the Company, so they are related parties.

 

On July 20, 2018, Changsha Ezagoo Technology Limited, the Hong Kong Company, also referred to herein as “CETL”, entered into and consummated an agreement with Beijing Ezagoo Shopping Holding Limited, also referred to herein as “BESH”, and Ruiyin (Shenzhen) Financial Leasing Limited, also referred to herein as “RFLL”, whereas CETL has the option to purchase all of the equity interests of Beijing Ezagoo Zhicheng Internet Technology Limited, a Chinese, “PRC” Company, from RFLL and BESH. These equity interests would make up 100% of the equity interests of Beijing Ezagoo Zhicheng Internet Technology Limited. Beijing Ezagoo Zhicheng Internet Technology Limited is considered to be a variable interest entity, also referred to herein as a “VIE”, to Changsha Ezagoo Technology Limited, and therefore a VIE of the issuer, Ezagoo Limited, a Nevada Company. More information regarding this agreement can be found in exhibit 10.1, titled, “Call Option Agreement”.

 

On July 20, 2018, CETL entered into and consummated an agreement with BESH and RFLL whereas BESH and RFLL have given CETL the right to appoint management of CETL to act as proxy to existing shareholders of Beijing Ezagoo Zhicheng Internet Technology Limited. This gives management of CETL the ability to conduct and control company affairs of Beijing Ezagoo Zhicheng Internet Technology Limited. Actions which management of CETL may be able to carry out include, but are not limited to, exercising voting rights as proxy of the existing shareholder(s), appointing new directors, hiring new management, and carrying out corporate actions. More information regarding this agreement can be found in exhibit 10.2, titled, “Shareholder’ Voting Rights Proxy Agreement.”

 

 i On July 20, 2018 CETL entered into and consummated an agreement with BESH and RFLL whereas BESH and RFLL have engaged CETL to provide management, financial, and other business services to Beijing Ezagoo Zhicheng Internet Technology Limited (formerly named as Hunan Ezagoo Zhicheng Internet Technology Limited that change the company name on December 2, 2020). CETL is to be compensated with  i 100% of all profits generated by Beijing Ezagoo Zhicheng Internet Technology Limited. This Agreement is effective as of  i July 20, 2018 and will continue in effect for a period of ten ( i 10) years (the “Initial Term”), and for succeeding periods of the same duration (each, “Subsequent Term”), until terminated by one of the following means either during the Initial Term or thereafter: Mutual Consent, Termination by CETL, Breach or Insolvency / . Beijing Ezagoo Zhicheng Internet Technology Limited is considered to be a variable interest entity to Changsha Ezagoo Technology Limited, and therefore a VIE of the issuer, Ezagoo Limited, a Nevada Company. More information regarding this agreement can be found in exhibit 10.3, titled, “Management Services Agreement.”

 

 C: 
F-5

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

On July 20, 2018, CETL entered into and consummated an agreement with BESH and RFLL whereas BESH and RFLL have pledged their equity interests in Beijing Ezagoo Zhicheng Internet Technology Limited, to CETL. More information regarding this agreement can be found in exhibit 10.4, titled, “Equity Pledge Agreement.”

 

On July 20, 2018, CETL entered into a loan agreement with BESH and RFLL wherein CETL will loan the amount of approximately CNY$ i 100,000 (Chinese Yuan) to BESH and RFLL, all of which shall be used for the benefit of Beijing Ezagoo Zhicheng Internet Technology Limited. The total amount of the loan is due on, or before,  i December 31, 2018. More information regarding this agreement can be found in exhibit 10.5, titled, “Loan Agreement.”

 

On July 31, 2018 Xin Yang was appointed Chief Financial Officer of the Company.

 

On March 3, 2021, the Company incorporated a branch company of Beijing Ezagoo Zhicheng Internet Technology Limited, named Changsha Branch of Beijing Ezagoo Industrial Development Group Holding Limited, the reason to continue the operating in Changsha is we had adapted to the business environment and adjusted business strategy.

 

EZAGOO LIMITED and its subsidiaries are hereinafter referred to as the “Company”.

 

 / 
 i 

NOTE 2 - GOING CONCERN UNCERTAINTIES

 

As of June 30, 2022, the Company suffered an accumulated deficit of $ i 3,147,568, and incurred a net loss of $ i 569,388 for six months ended June 30, 2022. The continuation of the Company as a going concern through June 30, 2022 is dependent upon improving the profitability and the continuing financial support from its stockholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due.

 

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

 C: 

 

 / 
 i 

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.

 

 i 

Basis of consolidated presentation

 

These condensed consolidated financial statements, accompanying notes, and related disclosures have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The Company’s fiscal year end is December 31. The Company’s financial statements are presented in U.S. dollars.

 

The condensed consolidated financial statements include the accounts of EZAGOO LIMITED and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

 C: 
F-6

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 i 

Use of estimates

 

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates.

 

 i 

Reclassification

 

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

 

 i 

Foreign currencies translation and re-measurement

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations and comprehensive income.

 

The reporting currency of the Company is United States Dollars (“US$”) and the accompanying condensed financial statements have been expressed in US$. In addition, the Company’s subsidiary in People’s Republic of China maintains its books and record in its local currency, Chinese Yuan (“RMB”), which is functional currency as being the primary currency of the economic environment in which the entity operates.

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income (loss) within the statements of stockholders’ deficit.

 

 i 

Translation of amounts from RMB into US$1 has been made at the following exchange rates for the respective periods:

SCHEDULE OF FOREIGN CURRENCY TRANSLATION OF EXCHANGE RATES 

   2022   2021 
   As of and for the six months ended
June 30,
 
   2022   2021 
   (Unaudited)   (Unaudited) 
Period-end RMB: US$1 exchange rate    i 6.70     i 6.46 
Period-average RMB: US$1 exchange rate    i 6.47     i 6.47 
Period-end HK$: US$1 exchange rate    i 7.85     i 7.76 
Period-average HK$: US$1 exchange rate    i 7.82     i 7.76 
Period-end and Period-average RMB and HK$: US$1 exchange rate    i 7.82     i 7.76 
 / 

 

 

 / 
 i 

Cash and cash equivalents

 

The company considers all highly liquid instruments with a maturity of six months or less at the time of issuance to be cash equivalents.

 

 i 

Account receivables

 

Account receivables are stated at the customer obligations due under normal trade terms net of allowance for doubtful accounts.

 

 C: 
F-7

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 i 

Property, plant and equipment

 

 i 

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the property and equipment are as follows:

 SCHEDULE OF PLANT AND EQUIPMENT EXPECTED USEFUL LIVES

Office equipment  i 3- i 5 years
 / 

 

The cost of maintenance and repairs is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.

 

 / 
 i 

Lease

 

The Company accounts for its leases in accordance with ASC 842 Leases. The Company leases office space. The Company concludes on whether an arrangement is a lease at inception. This determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right to the Company to control the use of identified property, plant or equipment for period of time in exchange for consideration. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes these lease expenses on a straight-line basis over the lease term.

 

The Company has assessed its contracts and concluded that its leases consist of only operating leases. Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s consolidated balance sheets.

 

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

 

 i 

Revenue recognition

 

The Company assesses and follows the guidance of ASC 606, revenue from contracts with customers is recognized using the following five steps:

 

  1. Identify the contract(s) with a customer;

 

    a. The parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations.
    b. The entity can identify each party’s rights regarding the services to be transferred.
    c. The entity can identify the payment terms for the services to be transferred.
    d. The contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract).
    e. It is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the services that will be transferred to the customer.

 

 C: 
F-8

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

  2. Identify the performance obligations in the contract;

 

    a. According to the contract, the Company and Customer has to maintain the performance obligation, respectively.
    b. The customer shall pay for the advertising services after signing of the contract and provide appropriate advertisement materials to the Company, the Company shall ensure the advertisement of the Customer is published according to the contract terms.

 

  3. Determine the transaction price;

 

    a. For the advertising contract, the transaction price is explicitly stated in fixed amount in the contract. There is no variable consideration, such as discounts, rebates, consideration payable to customer or noncash consideration. There was no price concession, and the Company did not expect any price concession for the service performed during the six months ended June 30, 2022 and 2021.
    b. The contract does not contain any elements that would cause consideration under the arrangement to be variable (Examples include discounts, rebates, refunds, credits, incentives, tiered pricing, price guarantees, right of return, etc.).
    c. There are no factors that exist whereby it is not probable that a significant reversal or revenues will not occur in the contract.

 

  4. Allocate the transaction price to the performance obligations in the contract; and

 

    a. There were no multiple performance obligations to which the transaction price must be allocated, and each contract only has one performance obligation. The standalone selling price is explicated stated in the contract.

 

  5. Recognize revenue when (or as) the entity satisfies a performance obligation.

 

    a. Per ASC 606, an entity shall recognize revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service (that is, an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset.
    b. Revenue is recognized when the advertising service is performed. According to the sample advertising contract, upon obtaining the signed contract from the Customer, the service period would be started. Therefore, the revenue is recognized when the service completely provided at that point in time.

 

Under Topic 606, revenues are recognized when the promised services have been confirmed and transferred to the consumers in amounts that reflect the consideration the customer expects to be entitled to in exchange for those services. The Company presents value added taxes (“VAT”) as reductions of revenues. The Company recognizes revenues net of value added taxes (“VAT”) and relevant charges.

 

As of January 1, 2022, the Company’s revenue will mainly be generated revenue from Xindian application platform. According to the announcement of <Approval of Changsha Municipal People’s Government on establishing Changsha Bus Group Co., LTD.> that was issued by the Changsha government on November 17, 2020, “In order to accelerate the development of the Changsha City, the local government decided to set up the Changsha Public Transportation Group Ltd, which is holds Baojun Bus Co., Zhongwang Bus Co., and Tongchang Bus Co.” These mentioned Bus companies are used to be our vendors, our contracts with Zhongwang Bus Co., and Tongchang Bus Co., were expired on February 9, 2021, and April 1, 2020, respectively, and we were not renewed as they were the first batch of bus companies to be merged by the Changsha government. The contract with Baojun Bus Co., was expired on December 31, 2020 but we continued the bus rent on a monthly basis until December 28, 2021. The Changsha government completed the merge and acquisition at the end of 2021, which makes it very difficult for us to continue to operate in this area.

 

 i 

Cost of revenues

 

Cost of revenue includes bus media terminal rental fees, bus monitors maintenance fees, bus screen installation fees, internet data fees, cloud fees for storage use and the operating salaries for the staffs who running the Xindian application.

 

 C: 
F-9

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 i 

Imputed Interest

 

The Company owned director and related parties some loans which are unsecured, interest-free with no fixed payment term, for working capital purpose. Imputed interest is considered insignificant.

 

 i 

Value-added taxes

 

Revenue is recognized net of value-added taxes (“VAT”). The VAT is based on gross sales price and VAT rates applicable to the Company is 6% for the six months ended June 30, 2022 and 2021. All of the VAT returns filed by the Company’s subsidiaries in the PRC, have been and remain subject to examination by the PRC tax authorities for five years from the date of filing. VAT payables are included in accrued liabilities.

 

 i 

Income taxes

 

The Company followed the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes, or ASC 740. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company recorded a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate.

 

The Company accounted for uncertainties in income taxes in accordance with ASC 740. Interest and penalties related to unrecognizable tax benefit recognized in accordance with ASC 740 are classified in the consolidated statements of comprehensive loss as income tax expense.

 

 i 

Earnings per share

 

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Any potential common shares in 2022 and 2021 that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

 

 i 

Commitments and contingencies

 

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

 i 

Related party transaction

 

A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

 

 C: 
F-10

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

 

 i 

Recent accounting pronouncements

 

In January 2017, the FASB issued ASU 2017-04, “Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which simplifies how an entity is required to test goodwill for impairment by eliminating step two from the goodwill impairment test. Step two of the goodwill impairment test measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with its carrying amount. The new guidance is effective prospectively but not applicable for us for the period ending June 30, 2022 and interim reporting periods during the six months ending June 30, 2022. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are evaluating the effects, if any, of the adoption of this guidance on our financial position, results of operations and cash flows.

 

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement. The new guidance modifies disclosure requirements related to fair value measurement. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Implementation on a prospective or retrospective basis varies by specific disclosure requirement. Early adoption is permitted. The standard also allows for early adoption of any removed or modified disclosures upon issuance of this ASU while delaying adoption of the additional disclosures until their effective date.

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

 / 
 i 

NOTE 4 - PROPERTY AND EQUIPMENT

 i 

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT

         
   As of 
   June 30, 2022   December 31, 2021 
   (Unaudited)   (Audited) 
Office equipment  $ i 42,332   $ i 42,332 
Accumulated depreciation   ( i 36,305)   ( i 31,008)
Property and equipment, net  $ i 6,027   $ i 11,324 
 / 

 

Depreciation expense, classified as operating expenses, was $ i 5,297 and $ i 5,661 for the six months ended June 30, 2022 and 2021, respectively.

 

Accumulated depreciation as of June 30, 2022 and December 31, 2021 were $ i 36,305 and $ i 31,008, respectively.

 

 / 
 i 

NOTE 5 - AMOUNT DUE FROM RELATED PARTY

 

As of June 30, 2022, and December 31, 2021, our amount due from a related party, Hunan Homestead Asset Management Co., Ltd., is $0 and $ i 331,342, respectively. During the period through May 16, 2022, the related party repaid $ i 325,164, which the Company is fully collected as of the filing date. The different of repayment amounts in US$ due to the different exchange rate used to evaluate the six months ended as of June 30, 2022 and the year ended as of December 31, 2021.

 

 C: 
F-11

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 / 
 i 

NOTE 6 - DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

 

 i 

Deposits, prepayments and other receivables consisted of the following:

 SCHEDULE OF DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

         
   As of 
   June 30, 2022   December 31, 2021 
   (Unaudited)   (Audited) 
Deposits, prepayments and other receivables  $ i 47,159   $ i 63,119 
           
Total deposits, prepayments and other receivables  $ i 47,159   $ i 63,119 
 / 

 

As of June 30, 2022, the balance $ i 47,159 represented an outstanding prepayment which included rent prepayments and related costs. As of December 31, 2021, the balance $ i 63,119 represented an outstanding prepayment which included rent prepayment, and housing funds.

 

 / 
 i 

NOTE 7 - ACCOUNTS PAYABLE

 

 i 

Accounts payable consists of the following:

SCHEDULE OF ACCOUNT PAYABLE 

         
   As of 
   June 30, 2022   December 31, 2021 
   (Unaudited)   (Audited) 
Accounts payable  $-   $ i 28,638 
           
Total  $          -   $ i 28,638 
 / 

 

As of June 30, 2022, and December 31, 2021, our accounts payable are $0 and $ i 28,638, respectively. During the period ended June 30, 2022, the remaining balance of bus screen terminal platform fee in 2021 has been paid.

 

 / 
 i 

NOTE 8 – ACCRUED EXPENSES, OTHER PAYABLE AND DEPOSITS RECEIVED

 

 i 

Accrued expenses, other payable and deposits received consisted of the following:

SCHEDULE OF OTHER PAYABLE 

         
   As of 
   June 30, 2022   December 31, 2021 
   (Unaudited)   (Audited) 
Accrued expenses  $ i 7,751   $ i 40,492 
Other payable    i 202,075     i 151,581 
Deposits received from customers    i 56,044     i 59,062 
           
Total  $ i 265,870   $ i 251,135 
 / 

 

Accrued expenses include the quarterly review fee & other accrued expenses. Other payable include the rent payable, PRC tax payable, and employee payable etc. Deposits received from customers are advertisement service fee paid in advance by customers.

 

 / 
 i 

NOTE 9 - DEFERRED REVENUES

 

As of June 30, 2022, and December 31, 2021, our deferred revenues are $ i 2,925 and $ i 111,388, respectively. This deferred revenue was expected to be recognized as revenue during the year of 2022.

 

 C: 
F-12

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 / 
 i 

NOTE 10 - DUE TO RELATED PARTIES

 i 

 SCHEDULE OF DUE TO RELATED PARTIES

           
   As of 
   June 30, 2022   December 31, 2021 
   (Unaudited)   (Audited) 
Amount due to related party B  $ i 222,264   $ i 234,307 
Amount due to related party C    i 24,060     i 25,364 
Amount due to related party D    i 26,402     i 27,288 
Amount due to related party E    i 127,673     i 134,591 
Amount due to related party G    i 272,020     i 286,759 
Amount due to related party H    i 7,720     i 8,138 
Amount due to related party I   -     i 4,835 
Amount due to related party J    i 468,696     i 291,105 
Amount due to related party K    i 40,302     i 42,486 
Amount due to related party L    i 20,893     i 20,893 
Amount due to related party M    i 355,845     i 463,892 
Amount due to related party N    i 139,555     i 162,852 
Amount due to related party O    i 122,397     i 70,809 
Amount due to related party P    i 33,316     i 35,122 
Total  $ i 1,861,143   $ i 1,808,441 
 / 

 

Related party B is Hunan Ezagoo Shopping Co. Ltd., Hunan Homestead Asset Management Co., Ltd. is a shareholder of Hunan Ezagoo Shopping Co. Ltd, which is  i 100% owned by Chengfu Tan, who is Xiaohao Tan’s Father. As of June 30, 2022, and December 31, 2021, related party B advanced $ i 222,264 and $ i 234,307 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party C is Ms. Weihong Wan, Assistant and Secretary of Mr. Xiaohao Tan. Ms. Weihong Wan is a shareholder and Legal Company Representative of Ruiyin (Shenzhen) Financial Leasing Limited. As of June 30, 2022, and December 31, 2021, related party C advanced $ i 24,060 and $ i 25,364 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party D is Ms. Qianwen Zhang, the wife of Mr. Xiaohao Tan. Ms. Qianwen Zhang is also the Legal Company Representative of Beijing Ezagoo Zhicheng Internet Technology Limited. As of June 30, 2022, and December 31, 2021, related party D advanced $ i 26,402 and $ i 27,288 to the Company as working capital, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party E is Changsha Kexibeier E-commerce Limited, Mr. Cheng Zhang is the Legal Company Representative of the Changsha Kexibeier E-commerce Limited, and a key management of the Company. As of June 30, 2022, and December 31, 2021, related party E advanced $ i 127,673 and $ i 134,591 to the Company as working capital, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party G is Kuaile Motors Camping Site Investment Development Limited. It’s owns  i 92% and  i 8% by Mr. Xiaohao Tan and Ms. Qianwen Zhang, the wife of Mr. Xiaohao Tan, respectively. Ms. Qianwen Zhang is also the legal Company Representative of this company. As of June 30, 2022, and December 31, 2021, related party G advanced $ i 272,020 and $ i 286,759 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party H is Hunan Yijiaren Hotel Limited, it’s owns  i 90% and  i 10% by Beijing Ezagoo Zhicheng Internet Technology Limited and Ms. Qianwen Zhang, the wife of Mr. Xiaohao Tan, respectively. As of June 30, 2022, and December 31, 2021, related party H advanced $ i 7,720 and $ i 8,138 to the Company as working capital, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

 C: 
F-13

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

Related party I is Hunan Bright Lionrock Mountain Resort Limited. Beijing Ezagoo Industrial Development Group Holding Limited, which is a shareholder of Beijing Ezagoo Zhicheng Internet Technology Limited, owns  i 80% of Hunan Bright Lionrock Mountain Resort Limited. Mr. Xiao Hao Tan is the Legal Company Representative of this Company. As of June 30, 2022, and December 31, 2021, related party I advanced $ i 0 and $ i 4,835 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party J is Beijing Ezagoo Industrial Development Group Holding Limited. It is a shareholder of Beijing Ezagoo Zhicheng Internet Technology Limited, and Mr. Xiaohao Tan owns  i 75% of related party J. As of June 30, 2022, and December 31, 2021, related party J advanced $ i 468,696 and $ i 291,105 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party K is Ruiyin (Shenzhen) Financial Leasing Limited. Weihong Wan, Assistant and Secretary of Xiaohao Tan, is a Legal Company Representative of related party K. As of June 30, 2022, and December 31, 2021, related party K advanced $ i 40,302 and $ i 42,486 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party L is Ezagoo B&R (HongKong) Industry Development Group Limited, which is a shareholder of Beijing Ezagoo Industrial Development Group Holding Limited, owns  i 100% of Ezagoo B&R (HongKong) Industry Development Group Limited. Mr. Xiao Hao Tan is the Legal Company Representative of this company. As of June 30, 2022, and December 31, 2021, related party L advanced $ i 20,893 and $ i 20,893 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party M is Hunan Ezagoo Film Co., Limited, which  i 85% of its equity is owned by Mr. Xiao Hao Tan, he is the director of the Company. As of June 30, 2022, and December 31, 2021, the Company has $ i 355,845 and $ i 463,892 and $ i 0 advertising production cost payable to related party M, which is unsecured, interest-free with no fixed payment term.

 

Related party N is Hunan Wancheng Xingyi Industrial Development Co., Limited, which  i 100% of its equity is owned by Mr. Xiao Hao Tan, he is the director of the Company. As of June 30, 2022, and December 31, 2021, related party N advanced $ i 139,555 and $ i 162,852 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party O is Hunan Little Penguin Culture Communication Co., Limited, which  i 95% and  i 5% of its equity is owned by related party J and Mr. Xiao Hao Tan, respectively. And Mr. Xiaohao Tan is the director of the Company. As of June 30, 2022, and December 31, 2021, related party N advanced $ i 122,397 and $ i 70,809 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party P is Hunan Yuancheng Shengwang Marketing Co., Limited, which  i 82% of its equity is owned by related party J, Beijing Ezagoo Industrial Development Group Holding Limited. As of June 30, 2022, and December 31, 2021, related party P advanced $ i 33,316 and $ i 35,122 to the Company as working capital and to pay administrative expenses, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 i 

 

 SCHEDULE OF DISCLOSURE OF RELATED PARTIES TRANSACTIONS

   2022   2021 
Disclosure of related parties’ transactions  Six months ended June 30, 
   2022   2021 
   (Unaudited)   (Audited) 
Imputed interest expenses to director  $ i 619   $ i 417 
Imputed interest expenses to related parties    i 70,048     i 22,865 
Imputed interest income from related parties   ( i 16,794)   ( i 27,047)
Total imputed interest expenses (income)  $ i 53,873   $( i 3,765)
Commission income, related party  $ i 9   $- 
Cost of revenue, related parties  $ i 5,541   $ i 284,862 

 / 

 

 / 
 i 

NOTE 11 - DUE TO DIRECTOR

 

As of June 30, 2022, and December 31, 2021, a director of the Company advanced $ i 28,155 and $ i 29,174 to the Company, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

 C: 
F-14

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 / 
 i 

NOTE 12 - OPERATING LEASE

 

The Company has three operating lease agreement for the office space, the first one is in Beijing China with remaining lease term of  i 1.42 years, the second one is in Beijing China with remaining lease term of  i 0.33 years, the third one is in Changsha, Hunan China that paid month by month rent as of June 30, 2022 after the lease ends. A lease with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its leases as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

 

 i 

The details lease terms are shown as followings:

SCHEDULE OF DETAILS OF LEASE TERM

 

Lease agreement  Expiry Date  Original Lease Term  The Remaining Lease Term
1st Beijing office rent   i Dec 9, 2023   i 2.67 years   i 1.42 years
2nd Beijing office rent   i Oct 22, 2022   i 1 years   i 0.33 years
3rd Changsha office rent   i Nov 15, 2020   i 3 years   i Month by month
 / 

 

Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.

 

This standard did not have a significant impact on our liquidity or on our compliance with our financial covenants associated with our loans.

 

The components of lease expense and supplemental cash flow information related to leases for the period are as follows:

 

(a) Rent expenses

 

 i 

For six months ended June 30, 2022 and 2021, the Company has incurred rent expenses solely for the office premises on a monthly basis as follows:

 SCHEDULE OF LEASE COST AND OTHER INFORMATION RELATED TO OPERATING LEASES

           
   Six months ended June 30, 
   2022   2021 
   (Unaudited)   (Unaudited) 
Lease Cost        
Operating lease cost (included in general and administration in the Company’s unaudited condensed statement of operations)  $ i 93,783   $ i 58,483 
           
Other Information          
Cash paid for amounts included in the measurement of lease liabilities for the six months ended June 30, 2022  $ i 96,513   $ i 59,014 
Weighted average remaining lease term – operating leases (in years)    i 1.42     i 2.42 
Average discount rate – operating leases    i 4.35%    i 4.35%
 / 

 

 C: 
F-15

 

 

EZAGOO LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 (Unaudited)

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 i 

The supplemental balance sheet information related to leases for the period is as follows:

 SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES

           
Operating leases        
Operating right-of-use assets  $ i 263,959   $ i 432,839 
Total operating right-of-use assets  $ i 263,959   $ i 432,839 
           
Operating lease liabilities- current portion  $ i 179,273   $ i 85,776 
Operating lease liabilities- non-current portion    i 85,516     i 350,439 
Total operating lease liabilities  $ i 264,789   $ i 436,215 
 / 

 

 i 

Maturities of the Company’s lease liabilities are as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

 

Period ending June 30,    
2023  $ i 186,583 
2024    i 71,005 
Total lease payments   - 
Less: Imputed interest/present value discount   ( i 7,201)
Present value of lease liabilities  $ i 264,789 
 / 

 

Lease expenses were $ i 93,783 and $ i 58,483 during the six months ended June 30, 2022 and 2021, respectively.

 

 / 
 i 

NOTE 13 – COMMON STOCK

 

As of June 30, 2022, and December 31, 2021, the Company has  i  i  i  i 119,956,826 /  /  /  shares issued and outstanding. There are  i  i  i  i no /  /  /  shares of preferred stock issued and outstanding.

 

 / 
 i 

NOTE 14 – ADDITIONAL PAID-IN CAPITAL

 

As of June 30, 2022, and December 31, 2021, the Company has a total additional paid-in capital - capital contribution balance of $ i 1,438,780 and $ i 1,384,907, respectively.

 / 

 

 C: 
F-16

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2021 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Form 10-Q.

 

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form S-1 Amendment No.5, dated May 3, 2019 in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.

 

Company Overview

 

Ezagoo Limited (the Company or “EZAGOO”), was incorporated in the State of Nevada on May 9, 2018. As of January 1, 2022, the Company’s revenue will mainly be generated revenue from Xindian application platform. According to the announcement of <Approval of Changsha Municipal People’s Government on establishing Changsha Bus Group Co., LTD.> that was issued by the Changsha government on November 17, 2020, “In order to accelerate the development of the Changsha City, the local government decided to set up the Changsha Public Transportation Group Ltd, which is holds Baojun Bus Co., Zhongwang Bus Co., and Tongchang Bus Co.” These mentioned Bus companies are used to be our vendors, our contracts with Zhongwang Bus Co., and Tongchang Bus Co., were expired on February 9, 2021, and April 1, 2020, respectively, and we were not renewed as they were the first batch of bus companies to be merged by the Changsha government. The contract with Baojun Bus Co., was expired on December 31, 2020 but we continued the bus rent on a monthly basis until December 28, 2021. The Changsha government completed the merge and acquisition at the end of 2021, which makes it very difficult for us to continue to operate in this area.

 

During the quarterly ended June 30, 2022, the Company conducted its business in generally two revenue streams: the advertisement income of mobile short video, and the commission income from e-commerce business & other value-added services that started from June 1, 2022.

 

Results of Operation

 

For the three and six months ended June 30, 2022 compared with the three and six months ended June 30, 2021

 

Revenue

 

   Three months ended June 30,   Six months ended June 30, 
   2022   2021   2022   2021 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
REVENUES  $    $    $    $  
                     
Advertisement income of mobile short video   -    440,282    244,819    892,536 
Commission income                    
-Commission income of e-commerce business   9    -    9    - 
-Commission income of other value-added services   190    -    190    - 
   $199   $440,282   $245,018   $892,536 

 

For three months ended June 30, 2022 and 2021, we realized revenue in amount of $199 and $440,282, respectively. The decrease in advertisement income is the Company suffered from the Covid-19, and we met the bottleneck when we transformed the traditional bus advertising to their Xindian platform since January 1, 2022. We’re planning to expand our brand to attract more potential users and customers.

 

For six months ended June 30, 2022 and 2021, we realized revenue in amount of $245,018 and $892,536, respectively. The decrease in revenue is the Company’s business development is focus on the advertisement income and other income from Xindian, and no traditional advertisement on urban-bus since January 1, 2022. We’re planning to expand our brand to attract more potential users and customers.

 

 C: 
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Costs and Expenses

 

Cost of revenues is comprised of short video produce costs, bus rental fee and related costs, salaries and related costs.

 

 

Short video produce costs of $0 and $123,056 for three months ended June 30, 2022 and 2021, respectively, which are outsourcing to the related party.

Short video produce costs of $5,541 and $284,862 for six months ended June 30, 2022 and 2021, respectively, which are outsourcing to the related party.

 

Bus rental fee and related costs of $0 and $15,666 for three months ended June 30, 2022 and 2021 respectively, which for surcharges expenses.

Bus rental fee and related costs of $1,294 and $31,748 for six months ended June 30, 2022 and 2021 respectively, which for surcharges expenses.

 

Salaries and related costs of $45,165 and $0 for three months ended June 30, 2022 and 2021 respectively, which are the compensation expenses for technical employees responsible for R&D and depreciation of computer related to our existing Xindian platform.

Salaries and related costs of $101,150 and $1,455 for six months ended June 30, 2022 and 2021 respectively, which are the compensation expenses for technical employees responsible for R&D and depreciation of computer related to our existing Xindian platform.

 

Operating Expenses

 

Operating expenses are generally included during our normal course of business, which we categorize as either sales and marketing expenses and general & administrative expenses.

 

  The main components of our sales and marketing expenses of $31,283 and $33,078 for three months ended June 30, 2022 and 2021 respectively, and of $76,665 and $67,672 for the six months ended June 30, 2022 respectively, are:

 

  a. Compensation expenses for employees engaged in sales and marketing, sales support, and certain customer service functions;
  b. Spending related to our advertising and promotional activities in support of our services and Xindian platform.

 

  The main components of our general and administrative expenses of $261,344 and $241,057 for three months ended June 30, 2022 and 2021 respectively, and of $578,556 and $405,164 for the six months ended June 30, 2022 respectively, are:

 

  a. Compensation expenses for employees in financial, human resources, and other administrative support functions;
  b. Professional services fees, including audit, consulting.
  c. Office expenses, including rent and rate, insurance.

 

Net (Loss) Income

 

The net loss was $378,870 for three months ended June 30, 2022, as compared to net income of $16,701 for three months ended June 30, 2021.

 

The net loss was $569,388 for six months ended June 30, 2022, as compared to net income of $100,541 for six months ended June 30, 2021. The decrease of net profit mainly derived from the decrease in the advertisement income and increase in administrative expenses.

 

 C: 
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Liquidity and Capital Resources

 

As of June 30, 2022, we had working capital deficit of $1,887,899 as compared to working capital deficit of $1,481,472 as of December 31, 2021. The increase in working capital deficit was reflected in the advanced from related parties and the deferred income for operating use. The Company’s net loss of $569,388 and net income of $100,541 for six months ended June 30, 2022 and 2021, respectively.

 

Cash Flow from Operating Activities

 

For six months ended June 30, 2022, net cash used in operating activities was $309,414, compared to net cash used in operating activities of $394,428 for three months ended June 30, 2021, reflecting an increase of 85,014. The cash used in operating activities was mainly due to increasing in the repayment from related party and the decreasing in deferred revenue.

 

Cash Flow from Investing Activities

 

For six months ended June 30, 2022, and 2021, net cash used in investing activities was $0 and $0, respectively.

 

Cash Flow from Financing Activities

 

For six months ended June 30, 2022, net cash provided by financing activities was $149,039, as compared to net cash used in financial activities of $463,365, reflecting a decrease of $314,326. The net cash provided by financing activities for six months ended June 30, 2022 was the loan advanced from related parties.

 

Credit Facilities

 

We do not have any credit facilities or other access to bank credit.

 

Contractual Obligations, Commitments and Contingencies

 

We currently have three lease agreement in place with respect to office premises in Beijing and Changsha China to commence our business operations.

 

Off-balance Sheet Arrangements

 

As of June 30, 2022, we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

 

Additional Information

 

VIE STRUCTURE AND ARRANGEMENTS

 

Foreign ownership in companies providing media advertising services is subject to certain restrictions under PRC laws and regulations. To comply with the PRC laws and regulations, we, through our wholly-owned subsidiary, Changsha Ezagoo Technology Limited (CETL), entered into a set of contractual arrangements with Beijing Ezagoo Zhicheng Internet Technology Limited (BEZL) and its shareholders. The contractual arrangements between CETL, BEZL and shareholders of BEZL allow us to:

 

1. exercise effective control over BEZL whereby having the power to direct BEZL’s activities that most significantly drive the economic results of BEZL
   
2. receive substantially all of the economic benefits and residual returns, and absorb substantially all the risks and expected losses from BEZL as if it was their sole shareholder; and
   
3. have an exclusive option to purchase all of the equity interests in BEZL.

 

 C: 
4

 

 

Our consolidated financial statements include the financial statements of our company, our subsidiaries and our consolidated VIE for which we are the primary beneficiary. All transactions and balances among our company, our subsidiaries and our consolidated VIE have been eliminated upon consolidation.

 

A subsidiary is an entity in which we, directly or indirectly, control more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

 

A consolidated VIE is an entity in which we, or our subsidiaries, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity. In determining whether we or our subsidiaries are the primary beneficiary, we considered whether it has the power to direct activities that are significant to the consolidated VIE’s economic performance, and also our obligation to absorb losses of the consolidated VIE that could potentially be significant to the consolidated VIE or the right to receive benefits from the consolidated VIE that could potentially be significant to the consolidated VIE. We hold all the variable interests of the consolidated VIE and its subsidiaries, and has been determined to be the primary beneficiary of the consolidated VIE.

 

In accordance with the contractual agreements among between CETL, BEZL and shareholders of BEZL allow us to:

 

1. exercise effective control over BEZL whereby having the power to direct BEZL’s activities that most significantly drive the economic results of BEZL;
   
2. receive substantially all of the economic benefits and residual returns, and absorb substantially all the risks and expected losses from BEZL as if it was their sole shareholder;
   
3. and have an exclusive option to purchase all of the equity interests in BEZL.

 

We believe that the contractual arrangements among CETL, BEZL and the shareholders of BEZL are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements and if the shareholders of our consolidated VIE were to reduce their interest in us, their interests may diverge from ours and that may potentially increase the risk that they would seek to act contrary to the contractual terms.

 

Our ability to control the consolidated VIE also depends on the voting rights proxy agreement and our company, through CETL, has to vote on all matters requiring shareholder approval in the consolidated VIE. As noted above, we believe this voting rights proxy agreement is legally enforceable but may not be as effective as direct equity ownership.

 

On July 31, 2018 Xin Yang was appointed as Chief Financial Officer of the Company.

 

The Company’s mailing address is B127, 2/F, Block B, Beijing Pudi Hotel, No.7 South Street of Jianguomen, Dongcheng District, Beijing 100000, China

 

Item 3 Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

Item 4 Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures:

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2022. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2022, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

 

 C: 
5

 

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of June 30, 2022, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

Changes in Internal Control over Financial Reporting:

 

There were no changes in our internal control over financial reporting during the quarter ending June 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.

 

Item 1A. Risk Factors.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

 C: 
6

 

 

ITEM 6. Exhibits

 

Exhibit No.   Description
31.1   Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer*
31.2   Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer*
32.1   Section 1350 Certification of principal executive officer *
32.2   Section 1350 Certification of principal executive officer *
101.INS   Inline XBRL Instance Document*
101.SCH   Inline XBRL Schema Document*
101.CAL   Inline XBRL Calculation Linkbase Document*
101.DEF   Inline XBRL Definition Linkbase Document*
101.LAB   Inline XBRL Label Linkbase Document*
101.PRE   Inline XBRL Presentation Linkbase Document*
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Filed herewith.

 

 C: 
7

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  EZAGOO LIMITED
  (Name of Registrant)
   
Date: August 15, 2022    
     
  By: /s/ Tan Xiaohao
  Title: President, Secretary, Treasurer, Director

 

 C: 
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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-Q’ Filing    Date    Other Filings
6/30/23
Filed on:8/15/22
For Period end:6/30/22
6/1/22
5/16/2210-Q
4/1/22
1/1/22
12/31/2110-K,  NT 10-K
12/28/21
6/30/2110-Q
4/1/21
3/3/21
2/9/21
1/1/21
12/31/2010-K,  NT 10-K
12/2/20
11/17/20
4/1/20
12/15/19
5/3/19S-1/A
12/31/18
7/31/18
7/20/18
6/30/18
6/25/18
6/6/18
5/9/18
1/1/17
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