DRSLTR 1 filename1.htm

EZGO Technologies Ltd.

Building #A, Floor 2,

Changzhou Institute of Dalian University of Technology

Science and Education Town, Wujin District,

Changzhou City, Jiangsu, China 213164

VIA EDGAR

June 25, 2020

U.S. Securities & Exchange Commission

Division of Corporation Finance

Office of Manufacturing

100 F Street, NE

Washington, D.C. 20549

Attn: Jeff Gordon

Re:

EZGO Technologies Ltd.

Draft Registration Statement on Form F-1

Submitted April 17, 2020

CIK No. 0001806904

Dear Mr. Gordon,

EZGO Technologies Ltd. (the “Company” or “we”) hereby transmits its response to the comment letter received from the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”), dated May 13, 2020, regarding the Draft Registration Statement on Form F-1 (the “Registration Statement”) filed on April 17, 2020.

For the Staff’s convenience, we have repeated below the Staff’s comments in bold, and have followed each comment with the Company’s response. Disclosure changes made in response to the Staff’s comments have been made in Registration Statement on Form F-1 (the “Registration Statement”), which is being filed with the Commission contemporaneously with the submission of this letter.

Draft Registration Statement on Form F-1 submitted April 17, 2020

Our business, , page 1

Briefly explain what you mean by “trade” lithium cells. Also revise to clarify how you may legally sell or rent e-bicycles that do not comply with the national standards cited in the last sentence of the first paragraph, particularly given the prohibition discussed in the last paragraph on page 52.

In response to the Staff’s comment, we have revised disclosure on pages 1 and 54 of the Registration Statement.

Please clarify the significance to your overall business of each of your current business activities referenced in the first paragraph. For example, highlight for investors the portion of your revenue derived from the activities described in (i)-(iv).

In response to the Staff’s comment, we have revised disclosure on pages 1 and 54 of the Registration Statement.

Page 2

Risk Factors

We have identified material weaknesses ..., page 10

You indicate that pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, you will be required, beginning with your fiscal year ending September 30, 2020, to include in your annual report your assessment of the effectiveness of your internal control over financial reporting. We note that Item 308 of Regulation S-K states that a company does not need to file management’s report on internal control over financial reporting until it either had been required to file an annual report for the prior fiscal year or had filed an annual report with the Commission for the prior fiscal year. As such, it appears you should revise your disclosure to indicate that management’s report on internal control over financial reporting will be required beginning with your annual report for the fiscal year ended September 30, 2021.

In response to the Staff’s comment, we have revised disclosure on page 10 of the Registration Statement.

As a company incorporated in the BVI . . ., , page 25

Please revise to clarify the corporate governance practices in the BVI that you will be permitted to follow and explain how they differ from Nasdaq listing standards.

In response to the Staff’s comment, we have revised disclosure on page 25 of the Registration Statement.

Use of Proceeds, page 32

Please revise to clarify how the disclosure here and on page 34 account for the varying levels of underwriter discounts disclosed on page 102 and how the allocation will be made in the event that more investors wish to purchase shares than are registered for sale in this registration statement. Please also revise the second bullet here to clarify what you mean by “expanding” your business and “upgrading” your facility and equipment.

We respectfully advise the Staff that there will not be varying levels of underwriter discounts and have revised pages 32 and 34 of the Registration Statement.

Selected Consolidated Financial Data, page 40

Please present basic and diluted net income from continuing operations per common share and basic and diluted net income per common share for each period presented. See Item 3.A.2 of Form 20-F.

In response to the Staff’s comment, we have revised the disclosure on page 40 of the Registration Statement.

COVID-19, page 41

Please revise to discuss the effects, if any, that COVID-19 has had on your business to date. Include in your revisions what management expects its future impact will be, how management is responding to evolving events, and how it is planning for COVID-19- related uncertainties going forward.

In response to the Staff’s comment, we have revised disclosure on page 41 of the Registration Statement.

Page 3

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations, page 42

Please enhance your disclosures to also discuss the business reasons for the changes between periods in the significant line items of each of your segments: Battery cells and packs, Rental, and E-bicycle sales. At a minimum, you should discuss changes in revenue, material expenses and income for each segment. In doing so, please disclose the amount of each significant change and the business reasons for the change. In circumstances where there is more than one reason for a change, please quantify the incremental impact of each individual reason discussed on the overall change in the line item to the extent practicable. See Item 5.A of Form 20-F.

In response to the Staff’s comment, we have revised the disclosure on page 42 and page 43 of the Registration Statement.

In regard to revenue you recognize related to battery cell trading, please revise your disclosures to more fully explain the service/activity you perform. Please specifically explain the nature of the parties involved in these transactions as well as your involvement facilitating these transactions. In addition, based on the nature of these transactions, please more fully explain how and why you determined recording the related revenue on a net basis is appropriate.

In response to the Staff’s comment, we have revised the disclosure on page 44 of the Registration Statement.

10.

We note your disclosure and discussion of new national safety standards for electric bikes in the PRC. Please quantify any amounts included in inventory, advances to suppliers, and property and equipment related to electric bikes that do not meet these new standards that are recorded in your most recent balance sheet. If material, please disclose and discuss how you assessed those assets for impairment.

In response to the Staff’s comment, we respectfully advise the Staff that except for e-bicycles of $854,820 that do not meet new national standards in property and equipment, net, there is no other amount related to e-bicycles that do not meet new national standards in inventory, advances to suppliers, and property and equipment.

The e-bicycles of $854,820 in property and equipment, net is used for the Company’s e-bicycles rental business in Jiangsu Province. Jiangsu province gives a 5-year transition period from April 15, 2019 for e-bicycles that do not meet the new national standards, and they can still be used normally during the transition period. Since the useful life of the Company’s e-bicycles of $854,820 is less than the transition period, and the Company’s e-bicycles could be used during the transition period, the Company determined that there is no impairment indictor related to the e-bicycles that do not meet new national standards.

Results of Operations, page 42

11.

Please clarify how battery cell trading enables you to realize a gross margin of almost 100%, as disclosed on page F-30.

In response to the Staff’s comment, we have revised the disclosure on page 44 of the Registration Statement.

Liquidity and Capital Resources, page 44

12.

Please revise your disclosures on page 45 to provide a more robust discussion of changes in operating, investing and financing cash flows for each period presented. Your revised discussion should not only quantify the impact of the line item(s) which contributed most to the changes but should also provide detailed explanations of the reasons for the fluctuations. Your revised discussion should also focus on the primary drivers of and other material factors necessary to an understanding of your cash flows and the indicative value of historical cash flows. In addition, based on the disclosures in the forepart of the filing related to your operating plans, please disclose and discuss your long term liquidity needs to implement those plans.

In response to the Staff’s comment, we have revised the disclosure on page 45, page 46 and page 47 of the Registration Statement.

Page 4

13.

You disclose on page 46 that, except for operating lease obligations, you had no other contractual obligations as of September 30, 2019; however, you disclose on page F-22 that you entered into a non-revolving loan facility on December 24, 2018. As such, please revise your table of contractual obligations to include payments you are obligated to make under your loan facility as well as any estimated interest payments. Because the table is aimed at increasing transparency of cash flow, we believe these payments should be included in the table. Please also disclose any assumptions you make to derive these amounts.

In response to the Staff’s comment, we respectfully advise the Staff that the loan facility amounted to $42,415 and the balance of short-term and long-term borrowing as of September 30, 2019 amounted to $27,324, which is not significant. We have revised the disclosure on page 48 of the Registration Statement.

14.

Please clarify how cash flows from operations have been a primary source of liquidity and are expected to be sufficient to fund your operations, given the information on page F-7.

In response to the Staff’s comment, we have revised disclosure on page 45 of the Registration Statement.

Operating Lease, page 46

15.

Please disclose any material changes to the information in the table since September 30, 2019. See Instruction 1 to the Instructions to Item 5.F of Form 20-F.

In response to the Staff’s comment, we respectfully advise the Staff that we had no material changes in lease since September 30, 2019 due to only a new lease payment amounted to $50,000 for Jiangsu Cenbird.

Business, page 52

16.

Please disclose the nature of your arrangements with your external suppliers and delivery service providers, as mentioned on page 11. For example, do you acquire components on a purchase order basis or do you have agreements with the suppliers guaranteeing you a regular supply of those components?

In response to the Staff’s comment, we have revised disclosure on page 55 of the Registration Statement.

With the implementation of the New National Standards . . ., , page 53

17.

We note the disclosed expectation on page 57 of reaching a more than 80% utilization rate within three years. Clarify the basis for that statement, particularly in light of the amount of e-bicycle sales for the year ended September 30, 2019. Also revise to disclose your current utilization rate and whether the 80% figure includes the expansion you intend to undertake with the proceeds of this offering. Please also describe the “new progress” in production and sales and the models you introduced, as mentioned on page 57.

In response to the Staff’s comment, we have revised disclosure on page 59 of the Registration Statement.

Customers, page 68

18.

Please disclose whether you have sales agreements with the customers identified in this section and, if so, describe the material terms of those agreements.

In response to the Staff’s comment, we have revised disclosure on page 71 of the Registration Statement.

Page 5

Intellectual Property, page 69

19.

Please disclose the duration of the intellectual property cited in this section.

In response to the Staff’s comment, we have revised disclosure on page 72 of the Registration Statement.

Management, page 80

20.

Your disclosure regarding Mr. Ye’s business experience indicates that he is currently employed by Zhuhai Dinghua and your disclosure regarding Mr. Liang’s business experience indicates that he currently is employed by Sirius International Insurance Group. If so, revise to clarify the amount of time each is required to devote to your affairs. Please also clarify Mr. Liang’s business experience from January 2016 to June 2016 and Mr. Shuang Wu’s business experience from December 2017 to August 2019 and November 2011 to June 2015.

We respectfully advise the Staff that both Mr. Ye and Mr. Liang work full time for us and allocate the majority of their business hours to us. In response to the Staff’s comment, we have revised disclosure on page 83 of the Registration Statement. In addition, we respectfully advise the Staff that Mr. Liang and Ms. Wu were not employed during the respective time periods due to personal reasons.

Terms of Directors and Officers, page 82

21.

Your disclosure in the last two sentences of the first paragraph indicates that the term of office of the second and third class of directors expires at the same time. If so, please clarify how they are in separate classes.

In response to the Staff’s comment, we have revised disclosure on page 85 of the Registration Statement.

Related Party Transactions, page 84

22.

The first sentence says that the information disclosed in this section is as of the date of this prospectus; however, it appears the latest disclosure is as of September 30, 2019. Please revise to disclose the information required by Item 7.B of Form 20-F to be as of the date of the document.

In response to the Staff’s comment, we have revised the disclosure on page 87 and page 88 of the Registration Statement.

23.

Revise the second paragraph to define what will be considered a “related party transaction” and the factors to be considered by the audit committee in determining whether to approve the transaction.

In response to the Staff’s comment, we have revised disclosure on page 87 of the Registration Statement.

Amendment of Governing Documents, page 95

24.

Please disclose the “certain exception[s]” that permit your directors to amend your governing documents.

In response to the Staff’s comment, we have revised disclosure on page 99 of the Registration Statement.

History of Securities Issuances, page 95

25.

Please reconcile the disclosure here regarding a single issuance of 50,000 shares with the disclosure in the table on page 83.

In response to the Staff’s comment, we have revised disclosure on page 99 of the Registration Statement.

Page 6

Shares Eligible for Future Sale, page 96

26.

Please clarify the meaning of the last sentence of the second paragraph.

In response to the Staff’s comment, we have revised disclosure on page 100 of the Registration Statement.

Taxation, page 97

27.

It appears from your exhibit index that you intend to file multiple exhibits relating to Item 601(b)(8) of Regulation S-K. If so, please revise to state clearly that the disclosure here and throughout, such as page 20, is the opinion of the named counsel and clearly identify and articulate the opinion being rendered.

In response to the Staff’s comment, we have revised disclosure on page 101 of the Registration Statement.

Financial Statements for the Years Ended September 30, 2019 and 2018

Consolidated Statements of Income, page F-4

28.

We note that you have presented net income from continuing operations per ordinary share and net (loss) income from discontinued operations per ordinary share. Please revise your presentation to also present net income per ordinary share. Refer to ASC 260-10-45-2 and 3 and the example in ASC 810-10-55-4J.

In response to the Staff’s comment, we have revised the disclosure on F-4 of the Registration Statement.

Note 9. Related Party Transactions and Balances, page F-22

29.

Please revise your disclosures regarding related party balances and transactions to more fully address the following:

●

In regard to notes (1) and (2) under amounts due from related parties, disclose how each amount due at September 30, 2019 was settled;

●

In regard to note (1) under amounts due to related parties, disclose the reasons why the loan was provided and disclose the source of funds used to repay the loan subsequent to September 30, 2019; and

●

In regard to the amount due from Henglong Chen under transactions with related parties that you net in equity, disclose the reasons why the funds were provided and address any expectation if and when the amount loaned will be repaid to the company.

In response to the Staff’s comment, we have revised the disclosure on page F-23 and page F-24 of the Registration Statement.

Note 16. Condensed Financial Information of the Parent Company, page F-33

30.

Please provide parent company only statements of cash flows for each period presented. Refer to Rule 12-04 of Regulation S-X.

In response to the Staff’s comment, we have revised the disclosure on page F-34 of the Registration Statement.

Page 7

Note 17. Subsequent Events, page F-34

31.

Please enhance your disclosure to disclose the actual date through which subsequent events have been evaluated. Please also disclose whether the date through which subsequent events have been evaluated is the date the financial statements were issued or the date the financial statements were available to be issued. Refer to ASC 855-10-50-1.

In response to the Staff’s comment, we have revised the disclosure on F-34 of the Registration Statement.

Exhibits

32.

Please file as an exhibit the lock-up agreement referenced on page 96.

In response to the Staff’s comment, we have revised disclosure on page II-4 of the Registration Statement.

We thank the Staff for its review of the foregoing and the Registration Statement. If you have further comments, please feel free to contact our counsel Richard Anslow, Esq. of Ellenoff Grossman & Schole LLP by email at ranswlow@egsllp.com or by telephone at (212) 370-1300.

	Sincerely,

	/s/ Jianhui Ye
	Jianhui Ye

cc:
	Ellenoff Grossman & Schole LLP