UNITED STATES

SECURITIES AND EXC HANGE COMMISSION

Washington, D.C. 20549

FORM S-1/A

AMENDMENT NO. 3  

 

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CURRENT REPORT

 

Ezagoo Li mited  

(Exact name of registrant as specified in its charter)

Date: May 3, 2019

 

Nevada 7310 30-1077936

(State or Other Jurisdiction

of Incorporation)

(Primary Standard Classification Code)

(IRS Employer

Identification No.) 

 

YIJIAREN BUSINESS HOTEL NO. 168, TONG ZI PO XI LU, YUELU DISTRICT CHANGSHA,

HUNAN 410205, CHINA

 

Issuer's telephone number: (+86) 139 751 09168

Issuer’s email: EZAGOOLIMITED@outlook.com

 

(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)

 

Please send copies of all correspondence to:

 

V FINANCIAL GROUP, LLC

http://www.vfinancialgroup.com

780 Reservoir Avenue, #123

Cranston, RI 02910

TELEPHONE: (401) 440-9533

FAX: (401) 633-7300

Email: jeff@vfinancialgroup.com

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. |X|

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration Statement number of the earlier effective registration statement for the same offering. |_|

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_|

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.|_|

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_|  (Do not check if a smaller reporting company) Smaller reporting company |X|

 

CALCULATION OF REGISTRATION FEE

 

Title of Each

Class of

Securities

to be Registered

Amount to be

Registered

Proposed

Maximum

Offering Price

Per Share (1)

Proposed

Maximum

Aggregate Offering Price

Amount of

Registration

Fee (2)

         

Common Stock,

$0.0001 par value

39,500,000 $0.10 $3,950,000 $478.74

 

(1) The offering price has been arbitrarily determined by the Company and bears no relationship to assets, earnings, or any other valuation criteria. No assurance can be given that the shares offered hereby will have a market value or that they may be sold at this, or at any price.
   
(2) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933.

 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY OUR EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

   


 

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. THERE IS NO MINIMUM PURCHASE REQUIREMENT FOR THE OFFERING TO PROCEED.

 

PRELIMINARY PROSPECTUS  

   

Ezagoo Limited

39,500,000 SHARES OF COMMON STOCK

$0.0001 PAR VALUE PER SHARE

 

Prior to this Offering, no public market has existed for the common stock of Ezagoo Limited. Upon completion of this Offering, we will attempt to have the shares quoted on the OTCQB operated by OTC Markets Group, Inc. There is no assurance that the Shares will ever be quoted on the OTCQB.  To be quoted on the OTCQB, a market maker must apply to make a market in our common stock.  As of the date of this Prospectus, we have not made any arrangement with any market makers to quote our shares.

 

In this public offering we, “Ezagoo Limited” are offering 30,000,000 shares of our common stock and our selling shareholders are offering 9,500,000 shares of our common stock. We will not receive any of the proceeds from the sale of personal shares sold by the selling shareholders. The offering is being made on a self-underwritten, “best efforts” basis.  There is no minimum number of shares required to be purchased by each investor. The shares offered by the Company will be sold on our behalf by our President, Tan Xiaohao. Mr. Tan Xiaohao is deemed to be an underwriter of this offering. There is uncertainty that we will be able to sell any of the 30,000,000 shares being offered herein by the Company. Mr. Tan Xiaohao will not receive any commissions or proceeds for selling the shares on our behalf.  All of the shares being registered for sale by the Company will be sold at a fixed price of $0.10 per share for the duration of the Offering. Additionally, all of the shares offered by the selling shareholders will be sold at a fixed price of $0.10 for the duration of the Offering. Assuming all of the 30,000,000 shares being offered by the Company are sold, the Company will receive $3,000,000 in net proceeds. Assuming 22,500,000 shares (75%) being offered by the Company are sold, the Company will receive $2,250,000 in net proceeds. Assuming 15,000,000 shares (50%) being offered by the Company are sold, the Company will receive $1,500,000 in net proceeds. Assuming 7,500,000 shares (25%) being offered by the Company are sold, the Company will receive $750,000 in net proceeds. There is no minimum amount we are required to raise from the shares being offered by the Company and any funds received will be immediately available to us. There is no guarantee that we will sell any of the securities being offered in this offering. Additionally, there is no guarantee that this Offering will successfully raise enough funds to institute our Company's business plan. Additionally, there is no guarantee that a public market will ever develop and you may be unable to sell your shares.

 

This primary offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this Prospectus, unless extended by our directors for an additional 90 days. We may however, at any time and for any reason terminate the offering.

 

Currently, our President Tan Xiaohao owns approximately 94.79% of the voting power of our outstanding capital stock. After the offering, assuming all of his personal shares that are being registered herein and those shares being offered on behalf of the company are sold, Mr. Tan Xiaohao will have the ability to control approximately 64.44% of the voting power of our outstanding capital stock.  

 

*Tan Xiaohao will be selling shares of common stock on behalf of the Company simultaneously to selling shares of his own personal stock from his own account. A conflict of interest may arise between Mr. Tan Xiaohao ’s interest in selling shares for his own account and in selling shares on the Company’s behalf. Regarding the sale of Mr. Tan Xiaohao’s shares, they will be sold at a fixed price of $0.10 for the duration of the offering.

 

The Company estimates the costs of this offering at about $69,000. All expenses incurred in this offering are being paid for by the Company. For the duration of the offering any and all sellers of the shares being registered herein agree to provide this prospectus to potential investors in its entirety.

 

The proceeds from the sale of the securities sold on behalf of the Company will be placed directly into the Company’s account; any investor who purchases shares will have no assurance that any monies, beside their own, will be subscribed to the prospectus. All proceeds from the sale of the securities are non-refundable, except as may be required by applicable laws.

 

The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, which became law in April 2012 and will be subject to reduced public company reporting requirements.

 

THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.  YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD THE COMPLETE LOSS OF YOUR INVESTMENT.  PLEASE REFER TO ‘RISK FACTORS’ BEGINNING ON PAGE 5.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

You should rely only on the information contained in this Prospectus and the information we have referred you to. We have not authorized any person to provide you with any information about this Offering, the Company, or the shares of our Common Stock offered hereby that is different from the information included in this Prospectus. If anyone provides you with different information, you should not rely on it.

     

The following table of contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus.  

 

TABLE OF CONTENTS

 

PART I PROSPECTUS PAGE
   
PROSPECTUS SUMMARY 2
RISK FACTORS 5
SUMMARY OF FINANCIAL INFORMATION 13
MANAGEMENT’S DISCUSSION AND ANALYSIS 15
INDUSTRY OVERVIEW 16
FORWARD-LOOKING STATEMENTS 17
DESCRIPTION OF BUSINESS 17
USE OF PROCEEDS 19
DETERMINATION OF OFFERING PRICE 19
DILUTION 20
SELLING SHAREHOLDERS 21
PLAN OF DISTRIBUTION 22
DESCRIPTION OF SECURITIES 23
INTERESTS OF NAMED EXPERTS AND COUNSEL 24
REPORTS TO SECURITIES HOLDERS 24
DESCRIPTION OF FACILITIES 24
LEGAL PROCEEDINGS 25
PATENTS AND TRADEMARKS 25
DIRECTORS AND EXECUTIVE OFFICERS 25
EXECUTIVE COMPENSATION 25
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 28
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 28
PRINCIPAL ACCOUNTING FEES AND SERVICES 28
MATERIAL CHANGES 28
FINANCIAL STATEMENTS F1-F15
   
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS  
   
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION 29
INDEMNIFICATION OF OFFICERS AND DIRECTORS 29
RECENT SALES OF UNREGISTERED SECURITIES 30
EXHIBITS TO THE REGISTRATION STATEMENT 30
UNDERTAKINGS 31
SIGNATURES 32

 

You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission. We have not authorized anyone to provide you with additional information or information different from that contained in this prospectus filed with the Securities and Exchange Commission. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

 

Through August 31, 2019 , all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as  underwriters  and with respect to their unsold allotments or subscriptions.

 

  The date of this prospectus is __________________.

- 1 -


Table of Contents

 

PROSPECTUS SUMMARY

 

In this Prospectus, ‘‘Ezagoo,” the “Company,’’ ‘‘we,’’ ‘‘us,’’ and ‘‘our,’’ refer to Ezagoo Limited, unless the context otherwise requires. Unless otherwise indicated, the term ‘‘fiscal year’’ refers to our fiscal year ending December 31 st . Unless otherwise indicated, the term ‘‘common stock’’ refers to shares of the Company’s common stock.

 

This Prospectus, and any supplement to this Prospectus include “forward-looking statements”. To the extent that the information presented in this Prospectus discusses financial projections, information or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as “intends”, “anticipates”, “believes”, “estimates”, “projects”, “forecasts”, “expects”, “plans” and “proposes”. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These include, among others, the cautionary statements in the “Risk Factors” section and the “Management’s Discussion and Analysis of Financial Position and Results of Operations” section in this Prospectus.

 

This summary only highlights selected information contained in greater detail elsewhere in this Prospectus. This summary may not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire Prospectus, including “Risk Factors” beginning on Page 5, and the financial statements, before making an investment decision.

 

The Company

 

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 President, Secretary, Treasurer, and Director of the Company.

On May 9, 2018, our President, Tan Xiaohao, purchased 90,050,500 shares of restricted common stock at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $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 3,591,000 and 1,358,500 shares of restricted common stock respectively at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $495, have gone directly to the Company for initial working capital.

In regards to all of the above transaction we claim an exemption from registration afforded by Regulation S of the Securities Act of 1933, as amended ("Regulation S") for the above sale of the stock since the sale of the stock were made to non-U.S. person (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

On June 6, 2018 Ezagoo Holding Limited, a Seychelles Company, acquired Ezagoo Limited, A Hong Kong Company, in consideration of HK$1 (Hong Kong Dollar).

Ezagoo Limited, a Nevada Company, acquired Ezagoo Holding Limited, a Seychelles Company, on June 25, 2018 in consideration of $1 (USD). 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 (100%) by Ezagoo Limited, the Hong Kong Company. There was no consideration exchanged per the transaction.

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 Hunan 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 Hunan Ezagoo Zhicheng Internet Technology Limited. Hunan 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 Hunan Ezagoo Zhicheng Internet Technology Limited. This gives management of CETL the ability to conduct and control company affairs of Hunan 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.”

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 Hunan Ezagoo Zhicheng Internet Technology Limited. CETL is to be compensated with 100% of all profits generated by Hunan Ezagoo Zhicheng Internet Technology Limited. This Agreement is effective as of July 20, 2018 and will continue in effect for a period of ten (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. Hunan 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.”

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 Hunan 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$100,000 (Chinese Yuan) to BESH and RFLL, all of which shall be used for the benefit of Hunan Ezagoo Zhicheng Internet Technology Limited. The total amount of the loan is due on, or before, December 31, 2018. More information regarding this agreement can be found in exhibit 10.5, titled, “Loan Agreement. 

Hunan Ezagoo Zhicheng Internet Technology Limited is the company through which we operate, and which shares our business plan to provide video advertising on buses.

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

The Company’s mailing address is Yiji aren Business Hotel No. 168, Tong Zi Po Xi Lu, Yuelu District Changsha, Hunan 410205, China.

 

We share the same business plan as our subsidiaries, which is to provide video advertising on buses.

 

We believe we need to raise $3,000,000 to execute our business plan over the next 12 months. The funds raised in this offering, even assuming we sell all the shares being offered, may be insufficient to carry out our intended business operations.

 

We will receive proceeds from the sale of 30,000,000 shares of our common stock and intend to use the proceeds from this offering to further develop and market our health program. There is uncertainty that we will be able to sell any of the 30,000,000 shares being offered herein by the Company. The expenses of this offering, including the preparation of this prospectus and the filing of this registration statement, estimated at about $69,000, are being paid for by the Company.

 

Our budgetary allocations may vary depending upon the percentage of proceeds that we obtain from this offering. For example, we may determine that it is more beneficial to allocate funds toward securing potential financing and business opportunities in the short terms rather than to conserve funds to satisfy continuous disclosure requirements for a longer period. During the 12 months following the completion of this offering, we intend to continue our current business plan and increase our current level of operations.

 

- 2 - 


Table of Contents

 

Our Offering

 

We have authorized capital stock consisting of 600,000,000 shares of common stock, $0.0001 par value per share (“Common Stock”) and 200,000,000 shares of preferred stock, $0.0001 par value per share (“Preferred Stock”). We have 95,000,000 shares of Common Stock and no shares of Preferred Stock issued and outstanding.  Through this offering we will register a total of 39,500,000 shares. These shares represent 30,000,000 additional shares of common stock to be issued by us and 9,500,000 shares of common stock by our selling stockholders. We may endeavor to sell all 30,000,000 shares of common stock after this registration becomes effective. Upon effectiveness of this Registration Statement, the selling stockholders may also sell their own shares. The price at which we, the company, offer these shares is at a fixed price of $0.10 per share for the duration of the offering. The selling stockholders will also sell shares at a fixed price of $0.10 for the duration of the offering. There is no arrangement to address the possible effect of the offering on the price of the stock. We will receive all proceeds from the sale of our common stock but we will not receive any proceeds from the selling stockholders.

 

*The primary offering on behalf of the Company is separate from the secondary offering of the selling stockholders in that the proceeds from the shares of stock sold by the selling stockholders will go directly to them, not the Company. The same idea applies if the Company approaches or is approached by investors who then subsequently decide to invest with the Company. Those proceeds would then go to the Company. Whomever the investors decide to purchase the shares from will be the beneficiary of the proceeds. None of the proceeds from the selling stockholder’s will be utilized or given to the Company. Mr. Tan Xiaohao will clarify for investors at the time of purchase whether the proceeds are going to the Company or directly to himself.

 

*Mr. Tan Xiaohao will be able to sell his shares at any time during the duration of this offering. Regarding the sale of Mr. Tan Xiaohao ’s shares, they will be sold at a fixed price of $0.10 for the duration of the offering.

 

*Mr. Tan Xiaohao will be selling shares of common stock on behalf of the Company simultaneously to selling shares of his own personal stock from his own account. A conflict of interest may arise between Mr. Tan Xiaohao ’s interest in selling shares for his own account and in selling shares on the Company’s behalf. Please note that at this time Mr. Tan Xiaohao intends to sell the Company’s shares prior to selling his own shares, although he is under no obligation to do so. Mr. Tan Xiaohao will decide whether shares are being sold by the Company or by Mr. Tan Xiaohao himself.

 

*We will notify investors by filing a prospectus supplement that will be available for public viewing on the SEC Edgar Database of any such extension of the offering.

 

   
Securities being offered by the Company

30,000,000 shares of common stock, at a fixed price of $0.10 offered by us in a direct offering. Our offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this prospectus unless extended by our Board of Directors for an additional 90 days. We may however, at any time and for any reason terminate the offering.

 

Securities being offered by the Selling Stockholders 9,500,000 shares of common stock, at a fixed price of $0.10 offered by selling stockholders in a resale offering. As previously mentioned this fixed price applies at all times for the duration of the offering. The offering will terminate upon the earliest of (i) such time as all of the common stock has been sold pursuant to the registration statement or (ii) 365 days from the effective date of this prospectus, unless extended by our Board of Directors for an additional 90 days. We may however, at any time and for any reason terminate the offering.
   
Offering price per share We and the selling shareholders will sell the shares at a fixed price per share of $0.10 for the duration of this Offering.
   
Number of shares of common stock outstanding before the offering of common stock 95,000,000 common shares are currently issued and outstanding.
   
Number of shares of common stock outstanding after the offering of common stock 125,000,000 common shares will be issued and outstanding if we sell all of the shares we are offering.
   
The minimum number of shares to be
sold in this offering
None.
   
Market for the common shares There is no public market for the common shares. The price per share is $0.10.
   
  We may not be able to meet the requirement for a public listing or quotation of our common stock. Furthermore, even if our common stock is quoted or granted listing, a market for the common shares may not develop.
   
  The offering price for the shares will remain at $0.10 per share for the duration of the offering.

 

- 3 -  


Table of Contents

 

Use of Proceeds We intend to use the gross proceeds to us for furthering our business operations as detailed in the section titled, “use of proceeds” on page 20.
   
Termination of the Offering This offering will terminate upon the earlier to occur of (i) 365 days after this registration statement becomes effective with the Securities and Exchange Commission, or (ii) the date on which all 39,500,000 shares registered hereunder have been sold. We may, at our discretion, extend the offering for an additional 90 days. At any time and for any reason we may also terminate the offering.
   
Terms of the Offering Our President, Tan Xiaohao will sell the 30,000,000 shares of common stock on behalf of the company, upon effectiveness of this registration statement, on a BEST EFFORTS basis.
Subscriptions:

All subscriptions once accepted by us are irrevocable.

 

Registration Costs

We estimate our total offering registration costs to be approximately $69,000.

 

Risk Factors: See “Risk Factors” and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock.

 

Currently, our President Tan Xiaohao owns approximately 94.79% of the voting power of our outstanding capital stock. After the offering, assuming all of his personal shares that are being registered herein and those shares being offered on behalf of the company are sold, Mr. Tan Xiaohao will have the ability to control approximately 64.84% of the voting power of our outstanding capital stock. 

 

You should rely only upon the information contained in this prospectus. We have not authorized anyone to provide you with information different from that which is contained in this prospectus. We are offering to sell common stock and seeking offers to common stock only in jurisdictions where offers and sales are permitted.

 

- 4 -  


Table of Contents

   

RISK FACTORS

 

Please consider the following risk factors and other information in this prospectus relating to our business before deciding to invest in our common stock.

 

This offering and any investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and all of the information contained in this prospectus before deciding whether to purchase our common stock. If any of the following risks actually occur, our business, financial condition and results of operations could be harmed. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

 

We consider the following to be the material risks for an investor regarding this offering. Our company should be viewed as a high-risk investment and speculative in nature. An investment in our common stock may result in a complete loss of the invested amount.

 

An investment in our common stock is highly speculative, and should only be made by persons who can afford to lose their entire investment in us. You should carefully consider the following risk factors and other information in this report before deciding to become a holder of our common stock. If any of the following risks actually occur, our business and financial results could be negatively affected to a significant extent.

 

Risks Relating to Our Company and Our Industry

 

We rely entirely on the operations of Hunan Ezagoo Zhicheng Internet Technology Limited. Any successes or failures of Hunan Ezagoo Zhicheng Internet Technology Limited will directly impact our financial condition and may cause your investment to be either positively or negatively impacted.

 

At present, we share the same business plan as, and rely entirely upon, Hunan Ezagoo Zhicheng Internet Technology Limited. Any successes or failures of Hunan Ezagoo Zhicheng Internet Technology Limited will directly impact our financial condition and may cause your investment to be either positively or negatively impacted.  Hunan Ezagoo Zhicheng Internet Technology Limited is considered a variable interest entity through which we operate exclusively at this time and we have been deemed to currently be a direct beneficiary of Hunan Ezagoo Zhicheng Internet Technology Limited. As such, in the event that the business of operations of Hunan Ezagoo Zhicheng Internet Technology Limited were to fail, then our own business would, in turn, fail as well. We would be forced to either drastically alter our business strategy, or we would likely cease operations entirely, which could result in the whole or partial loss of any investments made in the company.

Our loan agreement contains operating and financial covenants that restrict our business and financing activities.

Borrowings under our loan agreement with certain lenders and Commercial Bank, are secured by substantially all of our assets, including our intellectual property. Our loan agreement also restricts our ability to, among other things:

 

• dispose of or sell our assets;

• make material changes in our business or management;

• consolidate or merge with other entities;

• incur additional indebtedness;

• create liens on our assets;

• pay dividends;

• make investments;

• enter into transactions with affiliates; and

• pay off or redeem subordinated indebtedness.

The operating and financial restrictions and covenants in the loan agreement, as well as any future financing agreements that we may enter into, could restrict our ability to finance our oper ations and to engage in, expand or otherwise pursue business activities and strategies that we or our stockholders may consider beneficial. If we do not have or are unable to generate sufficient cash available to repay our debt obligations when they become due and payable, either upon maturity or in the event of a default, we may not be able to obtain additional debt or equity financing on favorable terms, if at all. This could materially and adversely affect our liquidity and financial condition and our ability to operate and continue our business as a going concern.

Competition from both large, established industry participants and new market entrants may negatively affect our current and future results of operations.

 

We face vigorous competition from companies throughout the world and in China specifically, including large multinational advertising companies. Some established competitors have greater resources and better accessibility than us, therefore they are able to adapt quicker to changes in customer requirements and reach customers easier from all over the globe. If we are unable to continue to compete effectively, it could have an adverse impact on our business, results of operations and financial condition.

 

A decline in general economic condition could lead to reduced consumer demand and could negatively impact our business operation and financial condition, which in turn could have a material adverse effect on our business, financial condition and results of operations.

 

Our operating and financial performance may be adversely affected by a variety of factors that influence the general economy. Consumer spending habits, including spending on products relating to the advertisements we display, are affected by, among other things, prevailing economic conditions, levels of unemployment, salaries and wage rates, prevailing interest rates, income tax rates and policies, consumer confidence and consumer perception of economic conditions. In addition, consumer purchasing patterns may be influenced by consumers’ disposable income. In the event of an economic slowdown, consumer spending habits could be adversely affected and we could experience lower net sales than expected on a quarterly or annual basis which could have a material adverse effect on our business, financial condition and results of operations.

 

Our business is subject to the risk of earthquakes, fire, power outages, floods and other catastrophic events, and to other interruptions due to natural or human causes.

 

We maintain servers in City Changsha China that we use to deliver advertising campaigns for our advertisers, and expect to add other data centers in the future. Any of our facilities may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes, tornadoes, hurricanes, fires, floods, nuclear disasters, war, acts of terrorism, vandalism or other criminal activities, infectious disease outbreaks and power outages, any of which could render it difficult or impossible for us to operate our business for some period of time. Major damage to our TV display facilities or offices or their power or internet connectivity may be costly to recover, and any such efforts may take several weeks, if not months. Our facilities would likely be costly to repair or replace, and any such efforts would likely require substantial time. Any disruptions in our operations could negatively impact our business and results of operations, and harm our reputation. In addition, we may not carry sufficient business interruption insurance to compensate for the losses that may occur. Any such losses or damages could have a material adverse effect on our business, financial condition and results of operations.

 

- 5 -  


Table of Contents

 

If we do not manage our growth effectively, the quality of our solution or our relationships with our customers may suffer, and our operating results may be negatively affected.

We rely heavily on information technology, or IT, systems to manage critical functions such as advertising campaign management and operations, data storage and retrieval, revenue recognition, budgeting, forecasting, financial reporting and other administrative functions. To manage our growth effectively, we must continue to improve and expand our infrastructure, including our IT, financial and administrative systems and controls. We must also continue to manage our employees, operations, finances, research and development and capital investments efficiently. Our productivity and the quality of our solution may be adversely affected if we do not integrate and train our new employees, particularly our sales and account management personnel, quickly and effectively and if we fail to appropriately coordinate across our executive, engineering, finance, human resources, legal, marketing, sales, operations and customer support teams. If we continue our rapid growth, we will incur additional expenses, and our growth may continue to place a strain on our resources, infrastructure and ability to maintain the quality of our solution. If we do not adapt to meet these evolving growth challenges, and if the current and future members of our management team do not effectively scale with our growth, the quality of our solution may suffer and our corporate culture may be harmed. Failure to manage our future growth effectively could cause our business to suffer, which, in turn, could have an adverse impact on our financial condition and results of operations.

We are an "emerging growth company," and we cannot be certain if the reduced disclosure requirements applicable to small reporting companies will make our common stock less attractive to investors.

For so long as we remain an "small reporting company" as defined in the JOBS Act, we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not "small reporting companies," including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage of these exemptions for so long as we are an "small reporting company," which could be as long as five years following the completion of our initial public offering. Investors may find our common stock less attractive because we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile and may decline.

In addition, Section 107 of the JOBS Act also provides that an " small reporting company" can take advantage of an extended transition period for complying with new or revised accounting standards. However, we chose to "opt out" of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

If we fail to make the right investment decisions in our offerings and technology platform, we may not attract and retain advertisers and advertising agencies and our revenue and results of operations may decline.

We compete for advertisers, which are often represented by advertising agencies, who want to purchase digital media for advertising campaigns. Our industry is subject to rapid changes in standards, technologies, products and service offerings, as well as in advertiser demands and expectations. We continuously need to make decisions regarding which offerings and technology to invest in to meet advertiser demand and evolving industry standards and regulatory requirements. We may make wrong decisions regarding these investments. For example, we expect advertisers to award us credit, or attribution, for impressions that generate specific consumer purchases or responses using certain criteria such as last ad clicked or viewed. Our technology considers these attribution models and if new attribution models are introduced by advertisers, we may need to make changes in our technology. If new or existing competitors offer more attractive offerings, we may lose advertisers or advertisers may decrease their spending on our solution. New advertiser demands, superior competitive offerings or new industry standards could render our existing solution unattractive, unmarketable or obsolete and require us to make substantial unanticipated changes to our technology platform or business model. Our failure to adapt to a rapidly changing market or to anticipate advertiser demand could harm our business and our financial performance.

We may experience fluctuations in our operating results, which make our future results difficult to predict and could cause our operating results to fall below investors' and analysts' expectations.

We expect our future operating results to fluctuate for the foreseeable future due to a variety of factors, many of which are beyond our control. Our fluctuating results could cause our performance to fall below the expectations of investors and securities analysts, and adversely affect the price of our common stock. Because our business is changing and evolving rapidly, our historical operating results may not be useful in predicting our future operating results. Factors that may increase the volatility of our operating results include the following:

• the addition or loss of new advertisers and advertising agencies;

• changes in demand and pricing for our solution;

• the seasonal nature of our customers' spending on digital advertising campaigns;

• changes in our pricing policies or the pricing policies of our competitors;

• and the pricing of advertising inventory or of other third-party services;

• the introduction of new technologies, product or service offerings by our competitors;

• changes in our customers' advertising budget allocations, agency affiliations, or marketing strategies;

• changes and uncertainty in the regulatory environment for us or our advertisers;

• changes in the economic prospects of our advertisers or the economy generally, which could alter current or prospective advertisers' spending priorities, or could increase the time or costs required to complete sales with advertisers;

• changes in the availability of advertising inventory through real-time advertising exchanges, or in the cost to reach end consumers through digital advertising;

• changes in our capital expenditures as we acquire the hardware, equipment and other assets required to support our business; and

• costs related to acquisitions of people, businesses or technologies.

Based upon all of the factors described above and others that we may not anticipate, including those beyond our control, we have a limited ability to forecast our future revenue, costs and expenses. As a result, our operating results may from time to time fall below our estimates or the expectations of investors and analysts. 

 

- 6 -  


Table of Contents

 

If we are unable to attract new advertising customers and sell additional offerings to our existing customers, our revenue growth will be adversely affected.

To sustain or increase our revenue, we must add new advertisers and encourage existing advertisers (both of which are often represented by advertising agencies), to purchase additional offerings from us. As the digital advertising industry matures and as competitors introduce lower cost or differentiated products or services that compete with or are perceived to compete with ours, our ability to sell our solution to new and existing advertisers based on our offerings, pricing, technology platform and functionality could be impaired. Some advertisers that are repeat users of our solution tend to increase their spend over time. Conversely, some advertisers that are newer to our solution tend to spend less than, and may not return as frequently as, advertisers who have used our solution for longer periods of time. If we fail to retain or cultivate the spending of our newer, lower-spending advertisers, it will be difficult for us to sustain and grow our revenue from existing advertisers. Even with long-time advertisers, we may reach a point of saturation at which we cannot continue to grow our revenue from those advertisers because of internal limits that advertisers may place on the allocation of their advertising budgets to digital media, to particular campaigns, to a particular provider, or for other reasons not known to us. If we are unable to attract new advertisers or obtain new business from existing advertisers, our revenue growth and our business may be adversely affected.

The requirements of being a public company may strain our resources, divert our management's attention and affect our ability to attract and retain qualified board members.

As a public company, we are subject to the reporting requirements of the Exchange Act, and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, and other applicable securities rules and regulations. Compliance with these rules and regulations have increased our legal and financial compliance costs, made some activities more difficult, time-consuming or costly and increased demand on our systems and resources. Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and results of operations and maintain effective disclosure controls and procedures and internal controls over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal controls over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management's attention may be diverted from other business concerns, which could harm our business and results of operations. We may need to hire more employees to comply with these requirements in the future, which will increase our costs and expenses.

We may require additional capital to support growth, and such capital might not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business.

We intend to continue to make investments to support our business growth and may require additional funds, beyond those generated by this offering, to respond to business challenges, including the need to develop new features or enhance our platform, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in public or private equity, equity-linked or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, including the ability to pay dividends. This may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business challenges could be significantly impaired, and our business could be adversely affected.

We may not be able to compete successfully against current and future competitors because competition in our industry is intense, and our competitors may offer solutions that are perceived by our customers to be more attractive than ours. These factors could result in declining revenue, or inability to grow our business.

Competition for our advertisers' advertising budgets is intense. We also expect competition to increase as the barriers to enter our market are low. Increased competition may force us to charge less for our solution, or offer pricing models that are less attractive to us and decrease our margins. Our principal competitors include companies that offer demand-side platforms that allow advertisers to purchase inventory directly from advertising exchanges or other third parties and manage their own consumer data, traditional advertising networks and advertising agencies themselves.

We also rely predominately on advertising agencies to purchase our solution on behalf of advertisers, and certain of those agencies or agency holding companies are creating competitive solutions, referred to as agency trading desks. If these agency trading desks are successful in leveraging their relationships with the advertisers we may be unable to compete even if our solution is more effective. Many agencies that we work with are also owned by large agency holding companies. For various reasons related to the agencies' own priorities or those of their holding companies, they may not recommend our solution, even though it may be more effective, and we may not have the opportunity to demonstrate our value to advertisers.

Many current and potential competitors have competitive advantages relative to us, such as longer operating histories, greater name recognition, larger client bases, greater access to advertising inventory on premium websites and significantly greater financial, technical, sales and marketing resources. Increased competition may result in reduced pricing for our solution, longer sales cycles or a decrease of our market share, any of which could negatively affect our revenue and future operating results and our ability to grow our business.

We have been dependent on TV display advertising. A decrease in the use of display advertising, or our inability to further penetrate display, mobile, social and video advertising channels would harm our business, growth prospects, operating results and financial condition.

Historically, our customers have predominantly used our solution for TV display advertising, and the substantial majority of our revenue is derived from advertisers, that use our solution for TV display advertising. We expect that TV display advertising will continue to be a significant channel used by our customers. Recently, overall display advertising growth has been driven by mobile, social and video advertising. Should our customers lose confidence in the value or effectiveness of TV display advertising, the demand for our display solution could decline. In addition, our failure to achieve market acceptance of our solution for mobile, social and video advertising would harm our growth prospects, financial condition and results of operations.

Our growth depends, in part, on the success of our strategic relationships with advertisers, including ready access to hardware in key bus line to facilitate the delivery of our solution and reliable management of Internet traffic.

We anticipate that we will continue to depend on various advertisers’ relationships in order to grow our business. We continue to pursue additional relationships with advertisers. Identifying, negotiating and documenting relationships with them requires significant time and resources as does integrating advertisers’ data and services. Our agreements with providers of technology, computer hardware, display facilities, content and consulting services and real-time advertising exchanges are typically non-exclusive, do not prohibit them from working with our competitors or from offering competing services and do not typically have minimum purchase commitments. Our competitors may be effective in providing incentives to third parties to favor their products or services over ours or to otherwise prevent or reduce purchases of our solution. In addition, these advertisers may not perform as expected under our agreements with them, and we may have disagreements or disputes with advertisers, which could negatively affect our brand and reputation.

In particular, our continued growth depends on our ability to source computer hardware, including servers built to our specifications, and the ability to locate those servers and related hardware in co-location facilities in the most desirable bus line and time slot to facilitate the timely delivery of our services. Disruptions in the services provided at co-location facilities that we rely upon can degrade the level of services that we can provide, which could harm our business. We also rely on our integration with many advertisers’ technology providers to execute our business on a daily basis. We must efficiently direct a large amount of network traffic and each bid typically must take place. We rely on TV screens to direct display to our solution for efficient processing. If our TV screens experiences disruptions or performance problems, this could result in inefficient balancing of traffic across our servers as well as impairing or preventing audiences connectivity to our TV advertisings, which could harm our business.

 

- 7 -  


Table of Contents

 

We have historically relied, and expect to continue to rely, on our existing customers for a significant portion of our revenue. The loss of any of existing customers could significantly harm our business, financial condition and results of operations.

 

We expect that we will continue to depend upon our existing customers for a significant portion of our revenue for the foreseeable future. As a result, if we fail to successfully attract or retain new or existing customers or if existing customers run fewer advertising campaigns with us, defer or cancel their insertion orders, or terminate their relationship with us altogether, whether through the actions of their agency representatives or otherwise, our business, financial condition and results of operations would be harmed.

Our sales and marketing efforts require significant investment, which may not yield returns in the foreseeable future, if at all.

We have invested significant resources in our research and development, sales and marketing teams to educate potential and prospective advertisers about the value of our solution. We often spend substantial time and resources explaining how our solution can optimize advertising campaigns in real time, and responding to requests for proposals from potential advertisers, including developing material specific to the needs of such potential advertisers. Our business depends in part upon advertisers' confidence that represent those advertisers, that our use of real-time advertising exchanges to purchase inventory is superior to other methods of purchasing digital TV display advertising. We may not be successful in attracting new advertisers despite our investment in our business development, sales and marketing organizations.

Our historical revenue growth has masked seasonal fluctuations in advertising activity. As growth declines or seasonal patterns become more pronounced, seasonality could have a material impact on our cash flows and operating results.

Our revenue, cash flow from operations, operating results and other key operating and performance metrics may vary from quarter to quarter due to the seasonal nature of our advertisers' spending on digital advertising campaigns. For example, advertisers tend to devote more of their advertising budgets to the fourth calendar quarter to coincide with consumer holiday spending. Moreover, advertising inventory in the fourth quarter may be more expensive due to increased demand for advertising inventory. Our historical revenue growth has masked the impact of seasonality, but if our growth rate declines or seasonal spending becomes more pronounced, seasonality could have a material impact on our revenue, cash flow, operating results and other key operating and performance metrics from period to period.

Legal claims against us resulting from the actions of our advertisers could damage our reputation and be costly to defend.

We receive representations from advertisers that the content of the advertising that we place on their behalf is lawful. We also rely on representations from our advertisers that they maintain adequate privacy policies that allow us to place pixels on their websites and collect data from users that visit those websites to aid in delivering our solution. However, we do not independently verify whether we are permitted to deliver advertising to our advertisers' Internet users or that the content of the advertisements we deliver is legally permitted. If any of our advertisers' representations are untrue and our advertisers do not abide by foreign, federal, state or local laws or regulations governing their content or privacy practices, we could become subject to legal claims against us, we could be exposed to potential liability (for which we may or may not be indemnified by our customers), and our reputation could be damaged.

We operate through “Hunan Ezagoo Zhicheng Internet Technology Limited,” a Chinese, “PRC” Company, which is considered to be a variable interest entity of our company, the issuer. Any gains or losses of Hunan Ezagoo Zhicheng Internet Technology Limited directly impact our own financial condition.

 

We operate through “Hunan Ezagoo Zhicheng Internet Technology Limited,” a Chinese, “PRC” Company, which is considered to be a variable interest entity of our company, the issuer. We rely in great part on the success of Hunan Ezagoo Zhicheng Internet Technology Limited. Our consolidated financial statements include the financial statements of our company, our subsidiaries and our consolidated VIE for which we are the primary beneficiary. The Company relies on contractual arrangement of the VIEs to operate business. In accordance with the contractual agreements among our wholly foreign-owned enterprise (WFOE), consolidated VIEs and the respective shareholders of our consolidated VIEs, we have power to direct activities of our consolidated VIEs, and can have assets transferred out of our consolidated VIEs. Our ability to control our consolidated VIEs also depends on the voting rights proxy agreements. Our company, through our WFOE, has to vote on all matters requiring shareholder approval in our consolidated VIEs. As noted above, we believe this voting rights proxy agreement is legally enforceable but may not be as effective as direct equity ownership. Any losses or detriments that affect Hunan Ezagoo Zhicheng Internet Technology Limited, also directly affect our own financial condition. Further, it is possible, although the Company considers it unlikely given the above, that potential conflicts of interest may arise as a result of our ownership structure which could result in, as a worst case scenario, the Company needing to entirely reevaluate and restructure the method through which operations are conducted which could result in a partial or complete loss of investment.

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses.

Our agreements with advertisers and advertising agencies may include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by us to property or persons, or other liabilities relating to or arising from our products, services, or other contractual obligations. The term of these indemnity provisions generally survives termination or expiration of the applicable agreement. Large indemnity payments would harm our business, financial condition and results of operations.

If we do not effectively grow and train our sales team, we may be unable to add new customers or increase sales to our existing customers, and our business would be adversely affected.

We continue to be substantially dependent on our sales team to obtain new customers and to drive sales from our existing customers. We believe that there is significant competition for sales personnel with the skills and technical knowledge that we require. Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting, training, integrating and retaining sufficient numbers of sales personnel to support our growth. Our current sales team is primarily trained and experienced in selling to advertising agencies, which often control an advertiser's budget. If more of our business shifts to direct relationships with brand advertisers, we may not have an adequately trained sales team to support that shift and to sell products effectively to those advertisers. New hires require significant training and it may take significant time before they achieve full productivity. Our recent hires and planned hires may not become productive as quickly as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals in the markets where we do business or plan to do business. In addition, as we continue to grow rapidly, a large percentage of our sales team will be new to the company and our solution. If we are unable to hire and train sufficient numbers of effective sales personnel, or the sales personnel are not successful in obtaining new customers or increasing sales to our existing customer base, our business would be adversely affected.

We have broad discretion in the use of net proceeds that we receive in this offering, and if we do not use those proceeds effectively, your investment could be harmed.

Our management will have broad discretion over the specific use of the net proceeds that we receive in this offering and might not be able to obtain a significant return, if any, on use and investment of these net proceeds. Investors in this offering will need to rely upon the judgment of our management with respect to the use of proceeds. If we do not use and invest the net proceeds that we receive in this offering and our initial public offering effectively, our business, results of operations and financial condition could be harmed.

 

- 8 -  


Table of Contents

 

Risks Relating to the Company’s Securities

 

We may never have a public market for our common stock or may never trade on a recognized exchange. Therefore, you may be unable to liquidate your investment in our stock.

 

There is no established public trading market for our securities. Our shares are not and have not been listed or quoted on any exchange or quotation system.

 

In order for our shares to be quoted, a market maker must agree to file an application with the Financial Industry Regulatory Authority (FINRA) to have our common stock quoted on the OTCMarkets.com OTC Marketplace. In addition, it is possible that such application for quotation may not be approved and even if approved it is possible that a regular trading market will not develop or that if it did develop, will be sustained. In the absence of a trading market, an investor may be unable to liquidate their investment.

 

We may, in the future, issue additional shares of our common stock, which may have a dilutive effect on our stockholders.

 

Our Certificate of Incorporation authorizes the issuance of 600,000,000 shares of common stock, of which 95,000,000 shares are issued and outstanding as of the date of this filing. The future issuance of our common shares may result in substantial dilution in the percentage of our common shares held by our then existing stockholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.

 

We may issue shares of preferred stock in the future that may adversely impact your rights as holders of our common stock.

 

Our Certificate of Incorporation authorizes us to issue up to 200,000,000 shares of preferred stock. Accordingly, our board of directors will have the authority to fix and determine the relative rights and preferences of preferred shares, as well as the authority to issue such shares, without further stockholder approval.

 

Our preferred Stock does not have any dividend, conversion, liquidation, or other rights or preferences, including redemption or sinking fund provisions. However, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders preferred rights to our assets upon liquidation, the right to receive dividends before dividends are declared to holders of our common stock, and the right to the redemption of such preferred shares, together with a premium, prior to the redemption of the common stock. To the extent that we do issue such additional shares of preferred stock, your rights as holders of common stock could be impaired thereby, including, without limitation, dilution of your ownership interests in us. In addition, shares of preferred stock could be issued with terms calculated to delay or prevent a change in control or make removal of management more difficult, which may not be in your interest as holders of common stock. 

 

- 9 -  


Table of Contents

  

Our securities have no prior market and an active trading market may not develop, which may cause our common stock to trade at a discount from the initial public offering price.

 

Prior to this offering there has been no public market for our common stock. The initial public offering price for our common stock will be determined through negotiations between us and the representatives of the underwriters and may not be indicative of the market price of our common stock after this offering. If you purchase shares of our common stock, you may not be able to resell those shares at or above the initial public offering price. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market on or otherwise or how liquid that market might become. An active public market for our common stock may not develop or be sustained after the offering. If an active public market does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at a price that is attractive to you, or at all.

 

We do not currently intend to pay dividends on our common stock and consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

 

We have never declared or paid any cash dividends on our common stock and do not currently intend to do so for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future and the success of an investment in shares of our common stock will depend upon any future appreciation in its value. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.

 

The costs to meet our reporting and other requirements as a public company subject to the Exchange Act of 1934 and will be substantial, which may result in us having insufficient funds to expand our business or even to meet routine business obligations.

 

As a public entity, subject to the reporting requirements of the Exchange Act of 1934, we will continue to incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses for annual reports and proxy statements. We estimate that these costs will range up to $35,000 per year for the next few years and will be higher if our business volume and activity increases. As a result, we may not have sufficient funds to grow our operations.

 

State Securities Laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell Shares.

 

Secondary trading in our common stock may not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the common stock cannot be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted.

 

- 10 -  


Table of Contents

 

  Risks Relating to this Offering  

 

Investors cannot withdraw funds once invested and will not receive a refund.

 

Investors do not have the right to withdraw invested funds. Subscription payments will be paid to Ezagoo Limited, or a subsidiary of the Company and held in our corporate bank account or that of our subsidiary if the Subscription Agreements are in good order and the Company accepts the investor’s investment. Therefore, once an investment is made, investors will not have the use or right to return of such funds.

 

Tan Xiaohao will be able to sell his shares at any time during the duration of this offering. This may pose a conflict of interest since he is also selling shares on behalf of the company in this offering. It is possible that this conflict of interest could affect the ultimate amount of funds raised by the Company. This could negatively affect your investment.

 

As previously mentioned Mr. Tan is going to be selling shares on behalf of the Company in this offering. Mr. Tan is also simultaneously having his shares registered for resale. This conflict of interest could divert Mr. Tan’s time and attention in selling shares on behalf of the Company since he will also be able to sell his own shares. Several factors that could result are less monies raised by the company, and less desire to purchase shares by investors to name a few negative consequences. Because of this your investment could be adversely affected.

 

Our President and Member of our Board of Directors Tan Xiaohao does not have any prior experience conducting a best effort offering, and our best efforts offering does not require a minimum amount to be raised. As a result, we may not be able to raise enough funds to commence and sustain our business and our investors may lose their entire investment.

 

Mr. Tan does not have any experience conducting a best-efforts offering. Consequently, we may not be able to raise the funds needed to commence business operations. Also, the best efforts offering does not require a minimum amount to be raised. If we are not able to raise sufficient funds, we may not be able to fund our operations as planned, and our business will suffer and your investment may be materially adversely affected. Our inability to successfully conduct a best-efforts offering could be the basis of your losing your entire investment in us.

 

We may be subject to the penny stock rules which will make shares of our common stock more difficult to sell.

 

We may be subject now and in the future to the SEC’s “penny stock” rules if our shares of common stock sell below $5.00 per share. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation.

 

In addition, the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for shares of our common stock. As long as our shares of common stock are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to sell their securities.

 

We are selling the shares of this offering without an underwriter and may be unable to sell any shares.

 

This offering is self-underwritten, that is, we are not going to engage the services of an underwriter to sell the shares; we intend to sell our shares through our President Tan Xiaohao, who will receive no commissions. There is no guarantee that he will be able to sell any of the shares. Unless he is successful in selling all of the shares of our Company’s offering, we may have to seek alternative financing to implement our business plan.

 

- 11 -  


Table of Contents

 

Due to the lack of a trading market for our securities, you may have difficulty selling any shares you purchase in this offering.

 

We are not registered on any market or public stock exchange. There is presently no demand for our common stock and no public market exists for the shares being offered in this prospectus. We plan to contact a market maker immediately following the completion of the offering and apply to have the shares quoted on the OTCMarkets.com OTC Marketplace. The OTC Marketplace is a regulated quotation service that display real-time quotes, last sale prices and volume information in over-the-counter securities. The OTC Marketplace is not an issuer listing service, market or exchange. Although the OTC Marketplace does not have any listing requirements per se, to be eligible for quotation on the OTC Marketplace, issuers must remain current in their filings with the SEC or applicable regulatory authority. If we are not able to pay the expenses associated with our reporting obligations we will not be able to apply for quotation on the OTC Marketplace. Market makers are not permitted to begin quotation of a security whose issuer does not meet this filing requirement. Securities already quoted on the OTC Marketplace that become delinquent in their required filings will be removed following a 30 to 60-day grace period if they do not make their required filing during that time. We cannot guarantee that our application will be accepted or approved and our stock listed and quoted for sale. As of the date of this filing, there have been no discussions or understandings between the Company and anyone acting on our behalf, with any market maker regarding participation in a future trading market for our securities. If no market is ever developed for our common stock, it will be difficult for you to sell any shares you purchase in this offering. In such a case, you may find that you are unable to achieve any benefit from your investment or liquidate your shares without considerable delay, if at all. In addition, if we fail to have our common stock quoted on a public trading market, your common stock will not have a quantifiable value and it may be difficult, if not impossible, to ever resell your shares, resulting in an inability to realize any value from your investment.

 

We will incur ongoing costs and expenses for SEC reporting and compliance. Without revenue we may not be able to remain in compliance, making it difficult for investors to sell their shares, if at all. 

 

The estimated cost of this offering is about $69,000. After the effective date of this prospectus, we will be required to file annual, quarterly and current reports, or other information with the SEC as provided by the Securities Exchange Act. We plan to contact a market maker immediately following the close of the offering and apply to have the shares quoted on the OTC Marketplace. To be eligible for quotation, issuers must remain current in their filings with the SEC. In order for us to remain in compliance we will require future revenues to cover the cost of these filings, which could comprise a substantial portion of our available cash resources. The costs associated with being a publicly traded company in the next 12 months will be approximately $35,000. If we are unable to generate sufficient revenues to remain in compliance it may be difficult for you to resell any shares you may purchase, if at all. Also, if we are not able to pay the expenses associated with our reporting obligations we will not be able to apply for quotation on the OTC Marketplace.

 

Our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at, or above, the initial public offering price and the price of our common stock may fluctuate significantly.

 

After this offering, the market price for our common stock is likely to be volatile, in part because our shares have not been traded publicly. In addition, the market price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:

 

These and other factors may lower the market price of our common stock regardless of our actual operating performance. As a result, our common stock may trade at prices significantly below the initial public offering price.

 

- 12 -


Table of Contents

 

SUMMARY OF OUR FINANCIAL INFORMATION

 

The following table sets forth selected financial information, which should be read in conjunction with the information set forth in the “Management’s Discussion and Analysis” section and the accompanying financial statements and related notes included elsewhere in this Prospectus.

 

EZAGOO LIMITED

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2018, AND 2017

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

 

   

December 31, 2018

    December 31, 2017
           
ASSETS          
    CURRENT ASSETS          
Cash and cash equivalents   $ 795,618     $ 10,612
Account receivables   47,916     -
Prepaid expenses and other receivables   58,596     32,219
Total Current Assets   902,130     42,831
           
NON-CURRENT ASSETS          
Property and equipment, net   650     375
Total Non-Current Assets   650     375
           
TOTAL ASSETS $ 902,780   $ 43,206
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT            
CURRENT LIABILITIES          
    Account payables $ 10,160    $ -
Other payables and accrued liabilities   58,198     10,801
Due to related parties   1,178,996     153,995
Due to director   109,024     109,048
Total Current Liabilities   1,356,378     273,844
           
TOTAL LIABILITIES $ 1,356,378   $ 273,844
           
STOCKHOLDERS’ DEFICIT          
           
Preferred stock, $0.0001 par value, 200,000,000 shares authorized, None issued and outstanding   -     -
Common stock, $0.0001 par value, 600,000,000 shares authorized, 95,000,000 and 0 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively $ 9,500   $ -
Additional paid in capital   774,007     39,368
Accumulated other comprehensive income   56,550     6,143
Accumulated deficit   (1,293,655)     (276,149)
TOTAL STOCKHOLDERS’ DEFICIT $ (453,598)   $ (230,638)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 902,780   $ 43,206

 

EZAGOO LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018, AND 2017

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

 

      Year Ended
      D ecember 31 , 2018     D ecember 31 , 2017
           
REVENUE   $ 68,553   8,512
           
COST OF REVENUE     (138,163)   (3,272)
           
GROSS PROFIT (LOSS)     (69,610)   5,240
           
OPERATING EXPENSES     (953,561)   (103 , 536)
           
LOSS FROM OPERATIONS     (1,023,171)   (98,296)
           
Other income     6,405   -
           
Interest expense     (736)   -
           
LOSS BEFORE INCOME TAX     (1,017,502)   (98,296)
            
Income tax expense     (4)      -
           
  NET LOSS     (1,017,506)   (98,296)
           
Other comprehensive income/(loss):          
 -  Foreign currency translation adjustment     50,407   (9,041)
           
COMPREHENSIVE LOSS     (967,099)   (107,337)
           
Net loss per share- Basic and diluted     (0.02)   (0.00)
           
Weighted average number of common shares outstanding - Basic and diluted     60,979,798   -

 

- 13 -   


Table of Contents

 

The Company is electing to not opt out of JOBS Act extended accounting transition period. This may make its financial statements more difficult to compare to other companies.

 

Pursuant to the JOBS Act of 2012, as an emerging growth company the Company can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the PCAOB or the SEC. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the standard for the private company. This may make comparison of the Company’s financial statements with any other public company which is not either an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.

 

Emerging Growth Company

 

The recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies. The Company meets the definition of an emerging growth company and so long as it qualifies as an “emerging growth company,” it will, among other things:

 

   
· be temporarily exempted from the internal control audit requirements Section 404(b) of the Sarbanes-Oxley Act;
   
· be temporarily exempted from various existing and forthcoming executive compensation-related disclosures, for example: “say-on-pay”, “pay-for-performance”, and “CEO pay ratio”;
   
· be temporarily exempted from any rules that might  be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or supplemental auditor discussion and analysis reporting;
   
· be temporarily exempted  from having to solicit advisory say-on-pay, say-on-frequency and say-on-golden-parachute shareholder votes on executive compensation under Section 14A of the Securities Exchange Act of 1934, as amended;
   
· be permitted to comply with the SEC’s detailed executive compensation disclosure requirements on the same basis as a smaller reporting company; and,
   
· be permitted to adopt any new or revised accounting standards using the same timeframe as private companies (if the standard applies to private companies).

 

Our company will continue to be an emerging growth company until the earliest of:

 

   
· the last day of the fiscal year during which we have annual total gross revenues of $1 billion or more;
   
· the last day of the fiscal year following the fifth anniversary of the first sale of our common equity securities in an offering registered under the Securities Act;
   
· the date on which we issue more than $1 billion in non-convertible debt securities during a previous three-year period; or
   
· the date on which we become a large accelerated filer, which generally is a company with a public float of at least $700 million (Exchange Act Rule 12b-2).

 

- 14 - 


Table of Contents

 

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

Comparison of the year ended December 31, 2018 and December 31, 2017

 

Revenues, net

 

Total revenue was $68,553 and $8,512 for the year ended December 31, 2018 and 2017, respectively. The increased amount of $60,041 is because the Company started bus advertising service business in October 2017, and started to generate revenue in October 2017. We expect revenue from our business services segment to increase as we continue to grow our business and expand into new territories.

 

Cost of Revenues

 

Total cost of revenues was $138,163 and $3,272 for the year ended December 31, 2018 and 2017, respectively. The increased amount of $134,891 is because the Company started bus advertising service business in October 2017, and started to generate revenue in October 2017. It is also because the Company entered into an agreement with Changsha Zhongwang Bus Co., Ltd (“CZB”) in 2018 and started to pay rental fees annually. In 2017, CZB offered a rent-free period to the Company.

 

The overall gross profit (loss) for the Company was negative $69,610 and positive $5,240 for the year ended December 31, 2018 and 2017, respectively. Gross loss as a percentage of total revenues was negative 83.68% and positive 61.56% for the same period ended December 31, 2018 and 2017, respectively. The negative gross profit was due to sunk cost and low revenue generated for the year ended December 31, 2018. The Company started bus advertising service business in October 2017, and started to generate revenue in October 2017. CZB, one of the Company’s vendors, offered a rent-free period during year 2017 to the Company. And during year 2018, the Company entered into several agreements with different vendors. The Company has a fixed cost once entered an agreement with a vendor. Cost of revenue includes bus media terminal rental fees, bus monitors maintenance fees, bus screen installation fees and internet data fees, therefore, cost of revenue for the year ended December 31 2017 is much lower than that for the year ended December 31, 2018.

 

Operating Expenses

 

General and administrative expenses

 

General and administrative expenses were $953,561 and $103,536 for    the year ended December 31, 2018 and 2017, respectively. The general and administrative expenses consist primarily of salary and wages, professional consulting fee, rental fee, traveling fee and maintenance fee. The high increase of $850,025 in general and administrative expense is due to increase in salary and wages, professional consulting fee, office rental fee    , traveling fee and bus screens maintenance fee. We expect our general and administrative expense to continue to increase as we deepen our existing businesses.

 

Net Loss

 

The net loss was $1,017,506 for the year ended December 31, 2018 and the net loss was $ 98,296 for the year ended December 31, 2017. The increase in net loss is due to low revenue generated and increase in cost of revenue and general and administrative expenses.

 

There were no seasonal aspects that had a material effect on the financial condition or results of operations of the Company.

 

Other than as disclosed elsewhere in this prospectus, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2018 that are reasonably likely to have a material adverse effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

 

Liquidity and Capital Resources

 

Cash Used in Operating Activities

 

For the year ended December 31, 2018, net cash used in operating activities was $1,034,735 compared to net cash used in    operating activities of $124,317 for the year ended December 31, 2017. The cash used in operating activities was mainly for cost of revenue, general and administrative expenses and increased receivables from a customer.

 

Cash Used in Investing Activities

 

For the year ended December 31, 2018, net cash used in investing activities was $731 compared to net cash used in investing activities of $0 for the year ended December 31, 2017. The cash used in investing activities was mainly for purchase of property and equipment.

 

Cash Provided from Financing Activities

 

For the year ended December 31, 2018, net cash provided from financing activities was $1,782,283 compared to net cash provided by financing activities of $135,811 for the year ended December 31, 2017. The cash used in financing activities was mainly issuance of capital, additional capital, advances from a director and advance from related parties.

 

In regards to all of the above transactions we claim an exemption from registration afforded by Regulation S of the Securities Act of 1933, as amended (“Regulation S”) for the above sales of the stock since the sales of the stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

 

- 15- 


Table of Contents

 

INDUSTRY OVERVIEW

 

This section includes market and industry data that we have developed from publicly available information; various industry publications and other published industry sources and our internal data and estimates. Although we believe the publications and reports are reliable, we have not independently verified the data. Our internal data, estimates and forecasts are based upon information obtained from trade and business organizations and other contacts in the market in which we operate and our management’s understanding of industry conditions.

 

As of the date of the preparation of this section, these and other independent government and trade publications cited herein are publicly available on the Internet without charge. Upon request, the Company will also provide copies of such sources cited herein.

 

Advertising Industry

 

At present, Ezagoo Limited aims to solely provide services to consumers in China, although the Company may evaluate this focus in the future and may consider expanding into other countries. Given the demand for our services will be limited to China, at least initially, we will focus primarily on the Digital Advertising Industry as it pertains to China.

 

Advertising Industry Worldwide and In China

 

Since 2011, the global advertising market has grown steadily, with the growth rate remaining between 4% and 5%. It is expected that the advertising market will maintain this growth rate until 2018. Spending on advertising worldwide has been increasing steadily and is expected to reach almost 557.99 billion U.S. dollars in 2018, up from 534.8 billion in 2017, which amounts to an annual growth rate of 4.3 percent.  In terms of digital advertising, spending is expected to grow from 229.25 billion U.S. dollars in 2017 to around 335.5 billion by 2020.  

 

In China, the advertising industry has experienced tremendous growth and profitability. Currently, China is the second largest advertising market in the world. In terms of e-commerce advertisement, China has ranked first in search advertising. In 2012, China's digital advertising market was about 77.31 billion Chinese Yuan and by 2016 it had nearly quadrupled in size. From 2015 to 2021,  the digital video adverting revenue in China is expected to grow from 3.37 billion to 11.03 billion U.S. dollars.

 

- 16 - 


Table of Contents

FORWARD LOOKING STATEMENTS

 

This prospectus contains forward-looking statements that involve risk and uncertainties. We use words such as “anticipate”, “believe”, “plan”, “expect”, “future”, “intend”, and similar expressions to identify such forward-looking statements. Investors should be aware that all forward-looking statements contained within this filing are good faith estimates of management as of the date of this filing. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us as described in the “Risk Factors” section and elsewhere in this prospectus.

 

DESCRIPTION OF BUSINESS

 

Corporate History

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 President, Secretary, Treasurer, and Director of the Company.

On May 9, 2018, our President, Tan Xiaohao, purchased 90,050,500 shares of restricted common stock at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $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 3,591,000 and 1,358,500 shares of restricted common stock respectively at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $495, have gone directly to the Company for initial working capital.

In regards to all of the above transaction we claim an exemption from registration afforded by Regulation S of the Securities Act of 1933, as amended ("Regulation S") for the above sale of the stock since the sale of the stock were made to non-U.S. person (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

On June 6, 2018 Ezagoo Holding Limited, a Seychelles Company, acquired Ezagoo Limited, A Hong Kong Company, in consideration of HK$1 (Hong Kong Dollar).

Ezagoo Limited, a Nevada Company, acquired Ezagoo Holding Limited, a Seychelles Company, on June 25, 2018 in consideration of $1 (USD). 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 (“Changsha Ezagoo”), whereas it is owned entirely (100%) by Ezagoo Limited, the Hong Kong Company. There was no consideration exchanged per the transaction.

On July 20, 2018, Changsha Ezagoo Technology Limited, a 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 Hunan 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 Hunan Ezagoo Zhicheng Internet Technology Limited. Hunan 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”.

 

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 Hunan Ezagoo Zhicheng Internet Technology Limited (HEZL) and its shareholders. The contractual arrangements between CETL, HEZL and shareholders of HEZL allow us to:

 

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

   

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.

 

We believe that the contractual arrangements among CETL, HEZL and the shareholders of HEZL 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 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 Hunan Ezagoo Zhicheng Internet Technology Limited. This gives management of CETL the ability to conduct and control company affairs of Hunan 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.”

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 Hunan Ezagoo Zhicheng Internet Technology Limited. CETL is to be compensated with 100% of all profits generated by Hunan Ezagoo Zhicheng Internet Technology Limited. This Agreement is effective as of July 20, 2018 and will continue in effect for a period of ten (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. Hunan 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.”

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 Hunan 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$100,000 (Chinese Yuan) to BESH and RFLL, all of which shall be used for the benefit of Hunan Ezagoo Zhicheng Internet Technology Limited. The total amount of the loan is due on, or before, December 31, 2018. More information regarding this agreement can be found in exhibit 10.5, titled, “Loan Agreement.”

Hunan Ezagoo Zhicheng Internet Technology Limited is the company through which we operate, and which shares our business plan to provide video advertising on buses.

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

Business Information

 

Hunan Ezagoo Zhicheng Internet Technology Limited ("HEZL") is the company through which we operate, and which shares our business plan to provide video advertising on buses. Prior to December 31, 2016, Hunan Ezagoo Zhicheng Internet Technology Limited (HEZL) was initially a startup stage company engaged in e-commerce, offering electronics products for sale such as, but not limited to, mobile phones, tablets and related accessories. Due to continued losses from their e-commerce business activities, and high competition in the industry, HEZL discontinued all e-commerce business activities and sold off any remaining inventories relating to such e-commerce activities. Following December 31, 2016, the Company adopted its current business plan.

 

At present, the Company operates within the Chinese digital advertising network through advertisements displayed on flat-panel audiovisual television displays located on the vast network of urban bus lines in Changsha City. On February 10, 2018, HEZL entered into an agreement with Changsha Zhongwang Bus Co., Ltd. (“CZB”) wherein CZB will provide HEZL with Seven Hundred Forty-Two (742) buses to display media advertising within the interior of the buses. This agreement will be valid until February 9, 2021 and HEZL shall pay CZB a rental fee of 800 Chinese Yuan per bus, for a total of One Million Seven Hundred Eighty Thousand Eight Hundred (1,780,800) Chinese Yuan as well as a semi-annual rental fee of Two Hundred Ninety Six Thousand Eighty Hundred (296,800) Chinese Yuan.

 

Our TV audio visual advertising network. displayed on the rented buses, provides an opportunity for brands to break through the advertising clutter and effectively reach a large audience of bus passengers. On October 1, 2017 Hunan Ezagoo Limited Co., Ltd. entered into an agreement with HEZL, in which HEZL will lease 3,000 LED screens from Hunan Ezagoo Limited Co., Ltd. This agreement will terminate on September 30, 2020. Per the terms of the agreement there is a rent-free period between October 1, 2017 and July 31, 2018. Subsequent to the rent-free period HZT will pay Hunan Ezagoo Limited Co., Ltd. Six Hundred Fifty (650) Chinese Yuan per screen as an annual fee. The first rental payment is due on or before August 31, 2018, and rent will be paid semi-annually from that point forward. HEZL will install these LED displays in the buses rented from CZB, and it is through these LED screens that advertisements will be displayed.

 

Through our special media portal (digital TV Screen advertising), we help connect sellers with buyers and ultimately reach their ideal target audiences. We anticipate a growing need for our services in Mainland China because of our ability to provide access to a wide range of consumers at cost effective prices. In today’s complex corporate landscape there is an increasing need for enterprises, in all industries, to maximize their performance and profitability while keeping costs low. We believe that our officers’ and director’s academic background and business experience, and our competitive fees, will provide us with a competitive advantage over our competitors and lead to increased demand for our services.

 

Corporate Services

 

The Company’s primary business activity is to display advertisements for its clients on TV screens mounted on public buses that move throughout Changsha City. At present the advertisements may be displayed solely on 22-inch audiovisual screens that are mounted behind the bus driver’s seat, with speakers placed throughout the buses so that all passengers on the bus are able to both see and hear the advertisements. This placement of screens and speakers will ensure that all passengers inside the bus are subjected to the advertisements of our clients throughout the full duration of their bus journey.

 

On an average day, 1600 screens in 800 buses make just under 10-hour journeys while traveling around close to three quarters of Changsha City. To date, there are three main kinds of bus advertising promotion, consisting of the following:

 

l A majority of advertisements are displayed on bus TV screen which are broadcast repeatedly approximately 20 times per day in a 15-minute cycle.

 

Bus advertisements are highly visible and are displayed daily while the buses travel along the same routes daily, offering advertisers massive impact and high frequency to targeted audiences. With 10 hours of uninterrupted TV audiovisual display, quality ready-made video commercials advertisements maximize the exposure of bus audiences during their daily journeys. The TV screen promotion of brand, products and services can be undertaken using a wide range of bus TV channels in several different bus lines while offering a chance to directly reach bus passengers living in different areas throughout the city. Additionally, through the bus’s background system, the TV display flashes upcoming bus-stop information along with various ads on the TV screens. This ensures that passengers often look at the screen to grasp information about the next stop while they are exposed to the brand messages and advertisements of our clients. This grants advertisers the assurance it is highly likely that their message will be seen by the consumers.

 

l Some bus advertisements allow brands to directly target desirable passengers travelling along a specific bus route.

 

Certain advertisements may be of more interest to, and thus be considered more effective, when directed to specific consumer groups. Furthermore, d ue to the nature of the bus advertisements we offer we can place advertisements along certain bus routes, for example on a bus travelling from a residential location to a commercial hub. This allows advertisers to display their message in front of viewers who are more likely to have an interest in their products or services. This is a highly targeted and cost-effective way for brand clients to reach their ideal consumer groups. It is the belief of the company that this could produce higher consumer recall rate of ads than when those same ads are displayed randomly.

 

l Bus TV screens can also set a time slot and allow the advertising content to be updated remotely over a WIFI connection .

 

We have the ability to plan campaigns and focus on consumers at specific times of the day by scheduling a time segment during which specific advertisements will play. This can also be further customized by selecting certain bus lines on which to display client advertisements. If appropriate, we could coordinate advertising campaigns so that o nly one, or perhaps several, commercial brands are placed on TV screens of each bus or specific bus line. This would allow these clients to guarantee their advertisement will be seen in a certain timeslot and physical location, granting them an advantage over potential competitors. Advertisements scheduled to run during commuter traffic, for example, could generate far more leads than at other, less congested, times of day. Our bus TV display background system enables access to independently monitor and adjust performance, frequency and playback times of advertisements daily on each bus. These TV screens can display a fully customized range of content such as ads, videos, promotional content, news, sports, etc. for passengers. Additionally, this system enables us to upload new advertisements anywhere and anytime with 3G/ 4G or Wi-Fi connection.

  

- 17 - 


Table of Contents

 

Standard Advertisement Pricing

 

 

 

Marketing Plan

 

We expect to increase our marketing efforts through our President’s personal networks and industry association channels which have not, at this point in time, been fully identified. Additionally, we intend to bolster our professional reputation and image by showcasing our knowledge and industry expertise via marketing campaigns through various forms of media. We have undefined plans to initially market our services through webinars, the creation of a wide variety of white papers, newsletters, books, and other information offerings. Furthermore, we plan to begin a social media campaign utilizing blogs, twitter, Facebook, and LinkedIn. A targeted campaign is intended to be made to focus on start-ups and small to mid-size businesses in various industries. 

 

Competition

 

We compete primarily with several different groups of competitors:

 

l Advertising companies that operate public transport advertising companies, especially Bus line advertising networks, such as Bus Online Co. Ltd.

 

l Out-of-home digital advertising networks beyond the Bus Line sector, such as Focus Media;

 

l Other advertising media companies, such as Internet, street furniture displays, billboards, and with traditional advertising media, such as newspapers, television, magazines and radio, some of which may advertise on the Buses in which we have exclusive contract rights to operate digital TV screens.

 

The digital advertising industry our company operates in is extremely competitive and there are limited barriers to entry, thus new competitors frequently enter the market. We believe that existing and new competitors will continue to improve their services and introduce new services with competitive pricing and performance characteristics. In periods of reduced demand for our services, we can either choose to maintain market share by reducing our prices to meet competition or maintain prices, which would likely sacrifice market share. Sales and overall profitability could be reduced in either case.

 

Future Plans

 

It is our goal to optimize the efficiency of city services and connect to residents by creating the largest bus TV advertising network in China. We aim to be a promoter and participator of a ‘smart city’ concept. At present, we solely focus on Changsha city, but in the future, we plan to allocate funds to integrate advertisement, digital TV devices and new communication technology regionally. At the same time, we plan to create a commercial APP for both our bus advertising clients and bus travelers, thus c reating a meaningful connection between people, brands and cities. We anticipate that our company will install more than 10 thousand screens and expand into 300 cities throughout all of China from south to north over the next three to five years. However, we do not have distinct and detailed expansion plans as of this point in time. In the future, a full range of local and international brand advertisements are intended to be displayed on our bus TV digital screens and broadcast throughout large-scale regional bus networks. We will play a role, as a medium between brand and citizen, in laying a foundation for consuming attitudes and trends in Asia and then promoting future consumption behavior.

 

However, without an appropriate budget and intensive research, plans referring to development, expansion, potential unidentified acquisitions and concrete timescales cannot be determined at present.

 

Employees

 

As of May 3, 2019, we have two employees comprised of our President Tan Xiaohao and Chief Financial Officer Xin Yang. Our company plans to employ 10 more employees by June of 2019. These individuals will ideally hold relevant professional degrees for the positions they serve and will have above average Mandarin language proficiency.

 

We do not presently have pension, health, annuity, insurance, stock options, profit sharing, or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our employee, Officer and/or Director.

 

Hunan Ezagoo Zhicheng Internet Technology Limited is the company through which we operate, and which shares our business plan to provide video advertising on buses. Hunan Ezagoo Zhicheng Internet Technology has a total of 27 employees. These employees include but are not limited to our President Tan Xiaohao and Chief Financial Officer Xin Yang .

 

- 18 -  


Table of Contents

 

USE OF PROCEEDS

 

Our offering is being made on a self-underwritten basis: no minimum number of shares must be sold in order for the offering to proceed. The offering price per share is $0.10. The following table sets forth the uses of proceeds assuming the sale of 100%, 75%, 50% and 25% of the securities offered for sale by the Company. There is no assurance that we will raise the full $3,000,000 as anticipated.

 

If 30,000,000 shares (100%) are sold: 

Next 12 months

 

Planned Actions Estimated Cost to Complete
Expenses related to Website Development $25,000
Expenses related to Applications Development $50,000
Office Equipment $25,000
Recruiting personnel and hiring staff $1,000,000
Training new staff $50,000
IT Support $25,000
Market Research $25,000
Hire Independent Consultants to Assist with Business Development $50,000
Advertising Expenses $750,000
Marketing efforts to acquire new customers $500,000
Pay for Reporting Requirements $25,000
Accounting Expenses $50,000
Legal Expenses $50,000
Working capital and other general corporate purposes $306,021
Offering Expenses $68,979
TOTAL $3,000,000

 

If 22,500,000 shares (75%) are sold: 

Next 12 months

Planned Actions Estimated Cost to Complete
Expenses related to Website Development $18,750
Expenses related to Applications Development $37,500
Office Equipment $18,750
Recruiting personnel and hiring staff $750,000
Training new staff $37,500
IT Support $18,750
Market Research $18,750
Hire Independent Consultants to Assist with Business Development $37,500
Advertising $562,500
Marketing efforts to acquire new customers $375,000
Pay for Reporting Requirements $18,750
Accounting Expenses $37,500
Legal Expenses $37,500
Working Capital and Other General Corporate Purposes $212,271
Offering Expenses $68,979
TOTAL $2,250,000

 

If 15,000,000 shares (50%) are sold: 

Next 12 months

Planned Actions Estimated Cost to Complete
Expenses related to Website Development $12,500
Expenses related to Applications Development $25,000
Office Equipment $12,500
Recruiting personnel and hiring staff $500,000
Training new staff $25,000
IT Support $12,500
Market Research $12,500
Hire Independent Consultants to Assist with Business Development $25,000
Advertising $375,000
Marketing efforts to acquire new customers $250,000
Pay for Reporting Requirements $12,500
Accounting Expenses $25,000
Legal Expenses $25,000
Working Capital and Other General Corporate Purposes $118,521
Offering Expenses $68,979
TOTAL $1,500,000

  

If 7,500,000 shares (25%) are sold: 

Next 12 months

Planned Actions Estimated Cost to Complete
Expenses related to Website Development $6,250
Expenses related to Applications Development $12,500
Office Equipment $6,250
Recruiting personnel and hiring staff $250,000
Training new staff $12,500
IT Support $6,250
Market Research $6,250
Hire Independent Consultants to Assist with Business Development $12,500
Advertising $187,500
Marketing efforts to acquire new customers $125,000
Pay for Reporting Requirements $6,250
Accounting Expenses $12,500
Legal Expenses $12,500
Working Capital and Other General Corporate Purposes $24,771
Offering Expenses $68,979
TOTAL $750,000

 

The above figures represent only estimated costs.

 

The above figures represent only estimated costs for the next 12 months. Funds may be allocated in differing quantities should the Company decide at a later date it would be in the Company’s best interests. The company may decide to all ocate funds in differing quantities if any of the third party products we offer for resale are no longer available on terms the Company deems to be appropriate and/or if we are able to achieve any of our planned actions at a price lesser than our predictions. It is possible that some of our estimated expenditures may not be as costly as we believe, in which case any surplus capital would be allocated towards working capital for the funding of day to day operations.

 

DETERMINATION OF OFFERING PRICE

 

Since our shares are not listed or quoted on any exchange or quotation system, the offering price of the shares of common stock was arbitrarily determined. The offering price was determined by us and is based on our own assessment of our financial condition and prospects, limited offering history, and the general condition of the securities market. It does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the OTCQB concurrently with the filing of this prospectus. In order to be quoted on the OTCQB, a market maker must file an application on our behalf in order to make a market for our common stock.

 

There is no assurance that our common stock will trade at market prices in excess of the initial public offering price as prices for the common stock in any public market which may develop will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for the common stock, investor perception of us and general economic and market conditions.  

 

- 19 -  


Table of Contents

 

DILUTION

 

The price of the current offering is fixed at $0.10 per share.

Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainly as a result of our arbitrary determination of the offering price of the shares being offered. Dilution of the value of the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders. The following tables compare the differences of your investment in our shares with the investment of our existing stockholders.

 

Note: “Net increase to original shareholder” below is based upon a par value of $0.0001.

 

      (25% of the shares are sold in the offering)     (50% of the shares are sold in the offering      (75% of the shares are sold in the offering       (100% of shares are sold in the offering)
Offering Price Per Share   $ 0.02   $ 0.02   $ 0.02   $  0.02
Book Value Per Share Before the Offering   $ (0.01)   $ (0.01)   $ (0.01)   $  (0.01)  
Book Value Per Share After the Offering   $ (0.00)   $ 0.01   $ 0.01   $  0.02
Net Increase to Original Shareholder (based on par value)   $ 0.00   $ 0.01   $ 0.01   $  0.02
Decrease in Investment to New Shareholders   $ 0.10   $ 0.09   $ 0.09   $  0.08
Dilution to New Shareholders (%)     100.00%      94.00%      88.00%     83.00%

 

Net Value Calculation

 

If 100% of the shares in the offering are sold

 

Numerator:        
Net tangible book value before the offering   $ (834,365)  
Net proceeds from this offering     3,000,000  
    $ 2,165,635  
Denominator:        
Shares of common stock outstanding prior to this offering     95,000,000  
Shares of common stock to be sold in this offering (100%)     30,000,000  
      125,000,000  

 

 

Net Value Calculation

 

If 75% of the shares in the offering are sold 

 

Numerator:        
Net tangible book value before the offering   $ (834,365)  
Net proceeds from this offering     2,250,000  
    $ 1,415,635  
Denominator:        
Shares of common stock outstanding prior to this offering     95,000,000  
Shares of common stock to be sold in this offering (50%)     22,500,000  
      117,500,000

 

 

Net Value Calculation

 

If 50% of the shares in the offering are sold 

 

Numerator:        
Net tangible book value before the offering   $ (834,365)  
Net proceeds from this offering     1,500,000  
    $ 665,635  
Denominator:        
Shares of common stock outstanding prior to this offering     95,000,000  
Shares of common stock to be sold in this offering (50%)     15,000,000  
      110,000,000  

  

 Net Value Calculation

 

If 25% of the shares in the offering are sold

 

 

Numerator:        
Net tangible book value before the offering   $ (834,365)  
Net proceeds from this offering     750,000  
    $ (84,365)  
Denominator:        
Shares of common stock outstanding prior to this offering     95,000,000  
Shares of common stock to be sold in this offering (25%)     7,500,000
      102,500,000

 

- 20 -  


Table of Contents

 

SELLING SHAREHOLDERS

 

The shares being offered for resale by the selling stockholders listed below co nsists of 9,500,000 shares of our common stock.

 

The following table sets forth the name of the selling stockholders , the number of shares of common stock beneficially owned by the selling stockholders as of May 3, 2019 and the number of shares of common stock being offered by the selling stockholders . The shares being offered hereby are being registered to permit public secondary trading, and the selling stockholders may offer all or part of the shares for resale from time to time. However, the selling stockholders are under no obligation to sell all or any portion of such shares nor are the selling stockholders obligated to sell any shares immediately upon effectiveness of this prospectus. All information with respect to share ownership has been furnished by the selling stockholders .

 

Note: “The Percent of common stock owned after offering (if all shares are sold)” is calculated under the assumption 100% of the shares are sold herein pursuant to the offering by the selling shareholders and also that of the Company.

 

Name of selling stockholder Shares of Common stock owned prior to offering Shares of Common stock to be sold     Shares of Common stock owned after offering (if all shares are sold)  Percent of common stock owned after offering (if all shares are sold)
Tan Xiaohao* 90,050,500 9,005,000 81,045,000 64.84%
Greenpro Asia Strategic SPC- Greenpro Asia Strategic Fund SP 1,358,500 135,900 1,222,600 0.98%
Zhang Qianwen 3,591,000 359,100 3,231,900 2.59%
TOTAL 95,000,000 9,500,000 85,500,000 68.4%

 

* Tan Xiaohao is our President, Treasurer, Secretary, and Director. He is also our controlling shareholder.

 

- 21 - 


Table of Contents

 

PLAN OF DISTRIBUTION

 

The Company has 95,000,000 shares of common stock issued and outstanding as of the date of this prospectus. Pursuant to this offering the Company is registering for resale 9,500,000 shares of our common stock held by one existing shareholder, our President, Tan Xiaohao, at a fixed price of $0.10 per share for the duration of the offering. The Company is also registering an additional 30,000,000 shares of its common stock for sale at the fixed price of $0.10 per share for the duration of the offering.

 

There is no arrangement to address the possible effect of the offering on the price of the stock.

 

In connection with the Company’s selling efforts in the offering, Tan Xiaohao will not register as a broker-dealer pursuant to Section 15 of the Exchange Act, but rather will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer’s securities. Tan Xiaohao is not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Tan Xiaohao will not be compensated in connection with his participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Mr. Tan Xiaohao is not, nor has he been within the past 12 months, a broker or dealer, and he is not, nor has he been within the past 12 months, an associated person of a broker or dealer. At the end of the offering, Mr. Tan Xiaohao will continue to primarily perform substantial duties for the Company or on its behalf otherwise than in connection with transactions in securities. Tan Xiaohao will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).

 

The Company will receive all proceeds from the sale of the 30,000,000 shares being offered on behalf of the Company itself. The proceeds from the 9,500,000 shares held by the selling shareholders, if sold, will not go to the Company, but will go to the shareholders directly. The price per share is fixed at $0.10 for the duration of this offering. Although our common stock is not listed on a public exchange or quoted over-the counter, we intend to seek to have our shares of common stock quoted on the OTC Marketplace. In order to be quoted on the OTC Marketplace a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, nor can there be any assurance that such an application for quotation will be approved. However, sales by the Company and selling shareholders must be made at the fixed price of $0.10 for the duration of this offering. The Company will not offer its shares for sale through underwriters, dealers, agents or anyone who may receive compensation in the form of underwriting discounts, concessions or commissions from the Company and/or the purchasers of the shares for whom they may act as agents. The shares of common stock sold by the Company and the selling shareholders may be occasionally sold in one or more transactions; all shares sold under this prospectus will be sold at a fixed price of $0.10 per share.

 

In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those states only if they have been registered or qualified for sale; an exemption from such registration or if qualification requirement is available and with which the Company has complied.

 

In addition, and without limiting the foregoing, the Company will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during the period of time when this Registration Statement is effective.

 

The Company will pay all expenses incidental to the registration of the shares (including registration pursuant to the securities laws of certain states), which we expect to be no more than $69,000. At this time the Company only has plans to sell to non U.S. citizens outside of the United States.

 

*Mr. Tan Xiaohao will be selling shares of common stock on behalf of the Company simultaneously to selling shares of his own personal stock from his own account. A conflict of interest may arise between Mr. Tan Xiaohao ’s interest in selling shares for his own account and in selling shares on the Company’s behalf. Please note that at this time Mr. Tan Xiaohao intends to sell the Company’s shares prior to selling his own shares, although he is under no obligation to do so. Mr. Tan Xiaohao will decide whether shares are being sold by the Company or by Mr. Tan Xiaohao himself.

 

Procedures for Subscribing (Shares offered by us, “The Company”)

 

If you decide to subscribe for any shares in this offering that are offered by us, “The Company”, you must

 

- Execute and deliver a subscription agreement; and

- Deliver a check or certified funds to us for acceptance or rejection.

 

All checks for subscriptions must be either made payable to (i) “Ezagoo Limited”, (ii) a subsidiary of the Company, or (iii) escrow agent as agreed by the Company. Wire transfer and telegraphic transfer are also accepted. The Company will deliver stock certificates attributable to shares of common stock purchased directly to the purchasers within ninety (90) days of the close of the offering.

 

Right to Reject Subscriptions (Shares offered by us, “The Company”)

 

We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected with letter by mail within 48 hours after we receive them.

 

In Regards to Shares sold by the Selling Shareholders

 

If you decide to subscribe for any shares in this offering that are offered by the selling shareholders named herein, the selling shareholders will inform you, “the purchaser”, of their preferred method of payment and the procedures they have for subscribing. It should be noted that we will in no way be affiliated with any private transactions in which our selling shareholders sell shares of their own common stock. The selling shareholders may or may not decide to reject subscriptions. This is at their own discretion. The Selling Shareholders will be responsible for following any applicable laws or regulations in regards to the sale(s) of their own shares of common stock.

 

- 22 -


Table of Contents

 

DESCRIPTION OF SECURITIES

 

We have authorized capital stock consisting of 600,000,000 shares of common stock, $0.0001 par value per share (“Common Stock”) and 200,000,000 shares of preferred stock, $0.0001 par value per share (“Preferred Stock”). As of the date of this filing we have 95,000,000 shares of Common Stock and no shares of Preferred Stock issued and outstanding.

 

Common Stock

 

The holders of outstanding shares of Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine. Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders. There is no cumulative voting of the election of directors then standing for election. The Common Stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of our Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors.

 

Preferred Stock

 

At this time we have no preferred stock issued and outstanding. Preferred stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title prior to the issuance of any shares thereof. The voting powers, designations, preferences, limitations, restrictions, conversion rights, cumulative, relative, participating, optional, and other right, the qualification, limitations or restrictions thereof, of the Preferred shall hereinafter by prescribed by resolution of the board of directors.

 

Options and Warrants

 

None.

 

Convertible Notes  

 

None.  

 

Dividend Policy

 

We have not paid any cash dividends to shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, general economic conditions, and other pertinent conditions.  It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

 

Transfer Agent

 

At this time we do not have a transfer agent.

 

Penny Stock Regulation

 

The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share. Such securities are subject to rules that impose additional sales practice requirements on broker-dealers who sell them. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchaser of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prepared by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, among other requirements, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. As the Shares immediately following this Offering will likely be subject to such penny stock rules, purchasers in this Offering will in all likelihood find it more difficult to sell their Shares in the secondary market.

 

- 23 - 


  Table of Contents

 

INTERESTS OF NAMED EXPERTS AND COUNSEL

 

The validity of the shares of common stock offered hereby will be passed upon for us by Carl Ranno Esq. of 2733 East Vista Dr. Phoenix, Arizona 85032.

 

The financial statements included in this prospectus and the registration statement have been audited by TAAD, LLP, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

 

REPORTS TO SECURITIES HOLDERS

 

We will and will continue to make our financial information equally available to any interested parties or investors through compliance with the disclosure rules of Regulation S-K for a smaller reporting company under the Securities Exchange Act. In addition, we will file Form 8-K and other proxy and information statements from time to time as required. The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

 

DESCRIPTION OF FACILITIES

Our office space is located at Yijiaren Business Hotel No. 168, Tong Zi Po Xi Lu, Yuelu District Changsha, Hunan 410205, China. Our office space is provided to us rent free by our President and Director Tan Xiaohao.  

- 24 -  


Table of Contents

 

LEGAL PROCEEDINGS

 

From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.

 

PATENTS AND TRADEMARKS

 

We do not own any patents or trademarks.

 

DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Biographical information regarding the officers and directors of the Company, who will continue to serve as officers and directors of the Company are provided below:

 

Officer Biographies

 

NAME AGE POSITION
Tan Xiaohao 48 President, Secretary, Treasurer, Director
Xin Yang 42 Chief Financial Officer

 

Tan Xiaohao - President, Secretary, Treasurer, Director

 

Tan Xiaohao earned his Masters degree in Business Administration (MBA) from Hunan Business College in 2003. From 1999 to 2000, Mr. Tan worked at China Pacific Insurance (Group) Co., Ltd. as a marketing officer and shortly thereafter, was promoted to senior manager. His major responsibilities were to manage clients' portfolios, maintain customer relationships, design and implement effective marketing strategies to sell new insurance contracts or adjust existing, contact potential clients and then build up a team, lead the team to implement a plan and achieve team goals etc. In 2001 Mr. Tan founded Hunan Homestead Asset Management Co., Ltd. (formerly known as Changsha City Leaders Trading Co. Ltd.). Since then, Mr. Tan has been serving as the Chairman and General Manager of this company and his major responsibilities have included, but have not been limited to obtaining profit contributions by managing staff, and establishing and accomplishing business objectives. In 2010, Mr. Tan founded Hunan Ezagoo Shopping Co. Ltd. and continues to serve as the President, CEO, Secretary, Treasurer, and Director. In August of 2014, Mr. Tan founded "Hunan Ezagoo Zhicheng Internet Technology Limited,” a Company operating out of Changsha, China. Mr. Tan serves as the President, Secretary, Treasurer and Director of Hunan Ezagoo Zhicheng Internet Technology Limited. Mr. Tan has also served as President and Director of Ezagoo Inc., a Nevada blank check shell company, from inception, September 13, 2013, to present. Ezagoo Inc. is not currently conducting any business activity.

 

Mr. Tan has received several awards which include "Best Electronic Commerce Innovation Model Award", "China's Outstanding Entrepreneurs of Good Faith", "2012 China E-Commerce Most Investment Value Award", "2015 China Advertising Great Wall Awards", "Enterprise Credit AAA Grade Enterprise" in 2017 and "Brand Reputation AAA Grade Enterprise" in 2017.

 

Due to Mr. Tan's over 18 years of experience in top management of various businesses, in May of 2018, the Board of Directors elected to appoint him to the positions of President, Secretary, Treasurer and Chairman of Board of Directors of Ezagoo Limited.

 

Xin Yang - Chief Financial Officer

 

Mr Yang obtained a bachelor's degree in accounting from Central South University in 1998. Then, in 2006, he obtained a processional account qualification certificate, a mid-level accountant certificate, in China.

 

From 1998 to 2005, he served as an accountant at Hunan Schlumberger Equipment Co., Ltd. and was subsequently promoted to Accounting Manager. His major responsibilities were providing financial information to management by researching and analyzing data, and preparing financial reports. Then, from 2005 to 2006, he joined Changsha Qixi Computer Co., Ltd. and served as accounting Manager. He was responsible for managing and overseeing daily operations of the accounting department, monitoring and analyzing accounting data and producing financial reports or statements. Subsequently, Mr Yang joined Li & Fung Limited from June 2006 to December 2009 and Hunan Hanlian Machinery Equipment Co., Ltd. from January 2010 to May 2016. At those two companies, he, as a financial manager, was responsible for the financial health of those companies. Specifically, he produced financial reports, direct investment activities, and developed strategies and plans for the long-term financial goals of those companies. Since June 2016, he has joined Hunan Ezagoo Zhicheng Internet Technology Limited and now serves as the Chief Financial Officer (CFO) of the Company. Mr. Yang’s primary responsibilities are to manage the company’s finances, including financial planning, financial projections and accounting services, management of financial risks, and develop strategies and financial growth plans for the long-term financial goals of the company.

 

Due to Mr. Yang’s status as a qualified expert in finances and his academic background, along with his 20 years of professional working experience, the Board of Directors has determined it best to appoint him to the position of Chief Financial Officer of the Company.

 

Corporate Governance

 

The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.

 

In lieu of an Audit Committee, the Company’s Board of Directors, is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements and other services provided by the Company’s independent public accountants. The Board of Directors, the President and the Chief Financial Officer of the Company review the Company's internal accounting controls, practices and policies.

 

- 25 -  


Table of Contents

 

Committees of the Board

 

Our Company currently does not have nominating, compensation, or audit committees or committees performing similar functions nor does our Company have a written nominating, compensation or audit committee charter. Our Directors believe that it is not necessary to have such committees, at this time, because the Director(s) can adequately perform the functions of such committees.

 

Audit Committee Financial Expert

 

Our Board of Directors has determined that we do not have a board member that qualifies as an “audit committee financial expert” as defined in Item 407(D)(5) of Regulation S-K, nor do we have a Board member that qualifies as “independent” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the FINRA Rules.

 

We believe that our Director(s) are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The Director(s) of our Company does not believe that it is necessary to have an audit committee because management believes that the Board of Directors can adequately perform the functions of an audit committee. In addition, we believe that retaining an independent Director who would qualify as an " audit committee financial expert " would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash flows from operations to date.

 

Involvement in Certain Legal Proceedings

 

Our Directors and our Executive officers have not been involved in any of the following events during the past ten years:

 

1. bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:(i) Any Federal or State securities or commodities law or regulation; or(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Independence of Directors

 

We are not required to have independent members of our Board of Directors, and do not anticipate having independent Directors until such time as we are required to do so.

 

Code of Ethics

 

We have not adopted a formal Code of Ethics. The Board of Directors evaluated the business of the Company and the number of employees and determined that since the business is operated by a small number of persons, general rules of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines. In the event our operations, employees and/or Directors expand in the future, we may take actions to adopt a formal Code of Ethics.

 

Shareholder Proposals

 

Our Company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for Directors. The Board of Directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. The Board of Directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

 

A shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this Registration Statement .

 

EXECUTIVE COMPENSATION

 

Summary Compensation Table:

Name and principal position

(a)

Year ended December 31 st (b)  

Salary ($)

(c)

   

Bonus ($)

(d)

 

Stock Compensation ($)

(e)

   

Option Awards ($)

(f)

   

Non-Equity Incentive Plan Compensation ($)

(g)

   

Nonqualified Deferred Compensation Earnings ($)

(h)

   

All Other Compensation ($)

(i)

 

Total ($)

(j)   

 
Tan Xiaohao, President, Secretary, Treasurer, Director 2018 -     - -   -     -     -     -   $ -  
                                           
Tan Xiaohao, President, Secretary, Treasurer, Director 2017 -     - -   -     -     -     -   $ -  
                                                               
Xin Yang, Chief Financial Officer 2018 -     - -   -     -     -     -   $ -  
                                           
Xin Yang, Chief Financial Officer 2017 -     - -   -     -     -     -   $ -  
                                                               

- 26 - 


  Table of Contents

 

  Summary of Compensation

 

Stock Option Grants

We have not granted any stock options to our executive officers since our incorporation.

 

Employment Agreements

We do not have an employment or consulting agreement with any officers or Directors.

 

Compensation Discussion and Analysis

Director Compensation

 

Our Board of Directors does not currently receive any consideration for their services as members of the Board of Directors. The Board of Directors reserves the right in the future to award the members of the Board of Directors cash or stock-based consideration for their services to the Company, which awards, if granted shall be in the sole determination of the Board of Directors.

 

Executive Compensation Philosophy

 

Our Board of Directors determines the compensation given to our executive officers in their sole determination. Our Board of Directors reserves the right to pay our executive or any future executives a salary, and/or issue them shares of common stock issued in consideration for services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive officer’s performance. This package may also include long-term stock-based compensation to certain executives, which is intended to align the performance of our executives with our long-term business strategies. Additionally, while our Board of Directors has not granted any performance base stock options to date, the Board of Directors reserves the right to grant such options in the future, if the Board in its sole determination believes such grants would be in the best interests of the Company.

 

Incentive Bonus

 

The Board of Directors may grant incentive bonuses to our executive officer and/or future executive officers in its sole discretion, if the Board of Directors believes such bonuses are in the Company’s best interest, after analyzing our current business objectives and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and ability of such executives.

 

Long-term, Stock Based Compensation

 

In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy we may award our executive and any future executives with long-term, stock-based compensation in the future, at the sole discretion of our Board of Directors, which we do not currently have any immediate plans to award.

 

- 27 -


Table of Contents

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

As of May 3, 2019, the Company has 95,000,000 shares of common stock issued and outstanding, which number of issued and outstanding shares of common stock have been used throughout this report.

 

Name and Address of Beneficial Owner Shares of Common Stock Ben eficially Owned Common Stock Voting Percentage Beneficially Owned Voting Shares of Preferred Stock Preferred Stock Voting Percentage Beneficially Owned Total Voting Percentage Beneficially Owned
Executive Officers and Directors          
Tan Xiaohao, President, Secretary, Treasurer and Director 90,050,500 94.79% n/a n/a 94.79 %
           
Xin Yang, Chief Financial Officer 0 0.00% n/a n/a 0.00%
           
5% or greater Shareholders          
none

n/a n/a n/a n/a n/a

 

Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of a n option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

On May 9, 2018, our President, Tan Xiaohao, purchased 90,050,500 shares of restricted common stock at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $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 3,591,000 and 1,358,500 shares of restricted common stock respectively at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $495, have gone directly to the Company for initial working capital.

In regards to all of the above transaction we claim an exemption from registration afforded by Regulation S of the Securities Act of 1933, as amended ("Regulation S") for the above sale of the stock since the sale of the stock were made to non-U.S. person (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

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

On June 6, 2018 Ezagoo Holding Limited, a Seychelles Company, acquired Ezagoo Limited, a Hong Kong Company, in consideration of HK$1 (Hong Kong Dollar).

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 (100%) by Ezagoo Limited, the Hong Kong Company. There was no consideration exchanged per the transaction.

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 Hunan 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 Hunan Ezagoo Zhicheng Internet Technology Limited. Hunan 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 Hunan Ezagoo Zhicheng Internet Technology Limited. This gives management of CETL the ability to conduct and control company affairs of Hunan 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.”

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 Hunan Ezagoo Zhicheng Internet Technology Limited. CETL is to be compensated with 100% of all profits generated by Hunan Ezagoo Zhicheng Internet Technology Limited. This Agreement is effective as of July 20, 2018 and will continue in effect for a period of ten (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. Hunan 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.”

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 Hunan 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$100,000 (Chinese Yuan) to BESH and RFLL, all of which shall be used for the benefit of Hunan Ezagoo Zhicheng Internet Technology Limited. The total amount of the loan is due on, or before, December 31, 2018. More information regarding this agreement can be found in exhibit 10.5, titled, “Loan Agreement.”

Review, Approval and Ratification of Related Party Transactions

 

Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officer(s), Director(s) and significant stockholders. We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof. On a movi ng forward basis, our Directors will continue to approve any related party transaction.

 

PRINCIPAL ACCOUNTING FEES AND SERVICES

 

Below is the aggregate amount of fees billed for professional services rendered by our principal accountants with respect to the period set forth in the table.

 

        For the Year    Ended December 31, 2018 and 2017
  Audit fees   $ 67,000
  Audit related fees     -
  Tax fees     -
  All other fees     -
  Total   $ 67,000    

 

All of the professional services rendered by principal accountants for the audit of our annual financial statements that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for last two fiscal years were approved by our board of directors.

 

MATERIAL CHANGES

 

None

 

- 28 - 


Table of Contents

 

FINANCIAL STATEMENTS AND EXHIBITS

 

INDEX TO FINANCIAL STATEMENTS

 

    Page  
Report of Independent Registered Public Accounting Firm    F-2
     
Consolidated Balance Sheets as of December 31, 2018 and December 31, 2017 (audited)   F-3
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2018 and 2017 (audited)   F-4
Consolidated Statements of Changes In Stockholders’ Deficit for the Years Ended December 31, 2018 and 2017 (audited)   F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017 (audited)   F-6
Notes to Consolidated Financial Statements   F-7 - F-15

- F1 -


 

 

HTTPS:||WWW.SEC.GOV|ARCHIVES|EDGAR|DATA|1723187|000159991618000110|IMAGE_001.JPG

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To: The Board of Directors and Stockholders of

Ezagoo Limited

 

Opinion on the Consolidated Financial Statements

 
We have audited the accompanying consolidated balance sheets of Ezagoo Limited and subsidiaries (the "Company") as of December 31, 2018 and 2017, the related statements of operations and comprehensive loss, stockholders' deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

 
Going Concern Matter

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

 

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ TAAD LLP

We have served as the Company's auditor since 2018

Diamond Bar, California

April 29, 2019

 

- F2 -


Table of Contents

 

EZAGOO LIMITED

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2018, AND 2017

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

 

    December 31, 2018     December 31, 2017
     Audited      Audited
ASSETS          
    CURRENT ASSETS          
        Cash and cash equivalents   795,618     10,612  
        Account receivables, net   47,916     -
Prepaid expenses and other receivables   58,596     32,219
     Total Current Assets   902,130     42,831
           
NON-CURRENT ASSETS          
Property and equipment, net   650     375
      Total Non-Current Assets   650     375
           
TOTAL ASSETS $ 902,780   $ 43,206
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
CURRENT LIABILITIES          
Account payables   10,160     -
Other payables and accrued liabilities   58,198     10,801  
Due to related parties   1,178,996     153,995
Due to director   109,024     109,048
Total Current Liabilities   1,356,378     273,844
           
TOTAL LIABILITIES $ 1,356,378   $ 273,844
           
STOCKHOLDERS’ DEFICIT          
Common stock, $0.0001 par value, 600,000,000 shares authorized, 95,000,000 and 0 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively   9,500     -
Additional paid in capital   774,007     39,368
Accumulated other comprehensive income   56,550     6,143
Accumulated deficit   (1,293,655)     (276,149)
TOTAL STOCKHOLDERS’ DEFICIT $ (453,598)   $ (230,638)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 902,780   $ 43,206

 

See accompanying notes to the consolidated financial statements.

 

- F3 -


Table of Contents

 

EZAGOO LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018, AND 2017

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

 

      December 31, 2018     December 31, 2017
             
SERVICE REVENUE $   68,553   $ 8,512
             
COST OF REVENUE     (138,163)     (3,272)
             
GROSS PROFIT     (69,610)     5,240
             
OPERATING EXPENSES     (953,561)     (103,536)
             
LOSS FROM OPERATIONS     (1,023,171)     (98,296)
             
Other income/(expense)     6,405     -   
             
Interest expense     (736)     -
             
LOSS BEFORE INCOME TAX     (1,017,502)     (98,296)
             
Income tax expense     (4)     -
             
NET LOSS $   (1,017,506)   $ (98,296)
             
 Other comprehensive income/(loss):           -
 -  Foreign currency translation adjustment     50,407     (9,040)
             
COMPREHENSIVE LOSS     (967,099)     (107,336)
             
Net loss per share- Basic and diluted     (0.02)     (0.00)
             
Weighted average number of common shares outstanding - Basic and diluted     60,979,798     -

 

 

See accompanying notes to the consolidated financial statements.

 

- F4 -


Table of Contents

 

EZAGOO LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

For the years ended December 31, 2018 and 2017

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

 

  COMMON STOCK   ADDITIONAL PAID IN CAPITAL    

ACCUMULATED OTHER

COMPREHENSIVE INCOME

  ACCUMULATED DEFICIT   TOTAL STOCKHOLDERS’ DEFICIT
  Number of shares   Amount                    
Balance as of January 1, 2017 - $ - $ -   $ 15,183 $ (177,853) $ (162,670)   
Foreign currency translation adjustment -   -         (9,040)   -   (9,040)
Additional paid-in capital -   -   39,368   $ -   -   39,368
Net loss -   -   -     -   (98,296)   (98,296)
                         
Balance as of December 31, 2017 -   - $ 39,368   $ 6,143 $ (276,149) $ (230,638)
                         
Shares issued for founder's shares 90,050,500    $ 9,005   -      $ - 9,005
Shares issued for founder's shares 4,949,500   495                 495
Additional paid in capital  - capital contribution         734,639             734,639
Foreign currency translation adjustment               50,407       50,407  
Net loss -   -   -     -   (1,017,506)   (1,017,506)

 

Balance as of December 31,    2018

95,000,000 $    9,500 $ 774,007   $ 56,550 $ (1,293,655) $ (453,598)

 

See accompanying notes to the consolidated financial statements.

 

- F5 -


Table of Contents  

Ezagoo Limited

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2018 and 2017

(Currency expressed in Unite d States Dollars (“USD”), except for number of shares)

 

        December 31, 2018     December 31, 2017
               
CASH FLOWS FROM OPERATING ACTIVITIES:              
Net loss from operating activities     $ (1,017,506)   $ (98,296)
Adjustments to reconcile net loss to net cash used in operating activities:              
      Depreciation       440     900
Changes in operating assets and liabilities:              
  Other payables and accrued liabilities       47,867       4,032
  Prepaid expenses and other receivables       (27,780)       (30,953)
  Account receivables       (47,916)     -
  Account payables       10,160     -
Net cash used in operating activities       (1,034,735)     (124,317)
               
CASH FLOWS FROM INVESTING ACTIVITIES:              
  Purchase of property and equipment       (731)     -
Net cash used in investing activities       (731)     -
               
 CASH FLOWS FROM FINANCING ACTIVITIES:              
Issuance of share capital       9,500     39,368
Additional paid in capital- capital contribution       736,353        -
Advances from/ (Payment to) director       (325)       832
Advances from related parties       1,036,755     95,611
Net cash provided by financing activities       1,782,283     135,811
               
Effect of exchange rate changes on cash and cash equivalents       38,189     (895)
               
Net increase in cash and cash equivalents       785,006     10,599
Cash and cash equivalents, beginning of period       10,612     13
CASH AND CASH EQUIVALENTS, END OF PERIOD     795,618   $ $10,612

 

SUPPLEMENTAL CASH FLOWS INFORMATION

             
Income taxes paid     $ -   $ -
Interest paid     $ -   $ -
               

 

See accompanying notes to the consolidated financial statements.

 

- F6 - 


Table of Contents

 

EZAGOO LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2018 AND 2017

 

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

 

  1. DESCRIPTION OF BUSINESS AND ORGANIZATION

 

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 90,050,500 shares of restricted common stock at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $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 3,591,000 and 1,358,500 shares of restricted common stock respectively at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $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 $0.13.

Ezagoo Limited, a Nevada Company, acquired Ezagoo Holding Limited, a Seychelles Company, on June 25, 2018 in consideration of $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 (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 Hunan 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 Hunan Ezagoo Zhicheng Internet Technology Limited. Hunan 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 Hunan Ezagoo Zhicheng Internet Technology Limited. This gives management of CETL the ability to conduct and control company affairs of Hunan 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.”

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 Hunan Ezagoo Zhicheng Internet Technology Limited. CETL is to be compensated with 100% of all profits generated by Hunan Ezagoo Zhicheng Internet Technology Limited. This Agreement is effective as of July 20, 2018 and will continue in effect for a period of ten (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. Hunan 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.”

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 Hunan 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$100,000 (Chinese Yuan) to BESH and RFLL, all of which shall be used for the benefit of Hunan Ezagoo Zhicheng Internet Technology Limited. The total amount of the loan is due on, or before, December 31, 2018. More information regarding this agreement can be found in exhibit 10.5, titled, “Loan Agreement.”

Hunan Ezagoo Zhicheng Internet Technology Limited is the company through which we operate, and which shares our business plan to provide video advertising on buses.

 

Consolidation of Variable Interest Entities

 

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 Hunan Ezagoo Zhicheng Internet Technology Limited (HEZL) and its shareholders. The contractual arrangements between CETL, HEZL and shareholders of HEZL allow us to:

 

  1. exercise effective control over HEZL whereby having the power to direct HEZL’s activities that most significantly drive the economic results of HEZL;

 

  2. receive substantially all of the economic benefits and residual returns, and absorb substantially all the risks and expected losses from HEZL as if it was their sole shareholder; and

 

  3. have an exclusive option to purchase all of the equity interests in HEZL.

 

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, HEZL and shareholders of HEZL allow us to:

 

  1. exercise effective control over HEZL whereby having the power to direct HEZL’s activities that most significantly drive the economic results of HEZL;

 

  2. receive substantially all of the economic benefits and residual returns, and absorb substantially all the risks and expected losses from HEZL as if it was their sole shareholder;

 

  3. and have an exclusive option to purchase all of the equity interests in HEZL.

 

We believe that the contractual arrangements among CETL, HEZL and the shareholders of HEZL 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 Yijiaren Business Hotel No. 168, Tong Zi Po Xi Lu, Yuelu District Changsha, Hunan 410205, China.

 

  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

 

The Company has adopted its fiscal year-end to be December 31. 

 

- F7 -


Table of Contents

Basis of consolidation

 

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation.

 

Use of estimates

 

Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.

 

Revenue recognition

 

Effective January 1, 2018, the Company adopted the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. The implementation of ASC 606 did not have a material impact on the Company’s consolidated financial statements. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

 

The Company’s revenue mainly from providing advertising services (“service revenue”).

 

Prior to year 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 605 for revenue recognition. In   accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605,  “Revenue Recognition” , the Company recognizes revenue when the following four revenue criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable.

 Revenue from provision of advertising services is recognized when there is (i) an existence of contract or an arrangement (ii) services are rendered, (iii) the service price is fixed or determinable, and (iv) collectability is reasonable assured.    

 

Cost of revenue

 

Cost of revenue on provision of services primarily consist of other professional fees, bus screens terminal rental fees, bus screens installation fees and other related administrative costs directly attributable to cost in related to the services.

 

- F8 -


Table of Contents

 

Cash and cash equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

    

Accounts receivable

 

Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. We make estimates for the allowance for doubtful accounts and allowance for unbilled receivables based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from customers.

 

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of property and equipment are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows:

 

     

Classification

 

Estimated useful lives

Office equipment   3 years

Expenditures for maintenance and repairs are expensed as incurred.

 

Income taxes

 

Income taxes are determined in accordance with the provisions of ASC Topic 740, “ Income Taxes ” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

- F9 -


Table of Contents

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

The Company conducts major businesses in China and Hong Kong, and is subject to tax in these jurisdictions. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.

 

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.

 

Net income/(loss) per share

 

The Company calculates net income/(loss) per share in accordance with ASC Topic 260,  “Earnings per Share.”  Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income/(loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

Foreign currencies translation

 

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$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s subsidiary in People’s Republic of China maintains its books and record in its local currency, Chinese Yuan (“CNY”), 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 within the statements of stockholders’ equity.

 

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

    As of and for the year ended   As of and for the year ended
    December 31, 2018   December 31, 2017
         
Period-end CNY: US$1 exchange rate   6.89   6.59
Period-average CNY: US$1 exchange rate   6.63   6.65
Period-end HK$: US$1 exchange rate   7.8   7.8
Period-average HK$: US$1 exchange rate   7.8   7.8

 

Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the year ended December 31, 2018, the Company incurred a net loss of $1,017,506 and used cash in operating activities of $1,034,735, and at December 31, 2018, the Company had a working capital deficiency of $454,248.

 

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company’s profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. 

 

The Company expects to finance its operations primarily through cash flow from revenue and continuing financial support from a shareholder. In the event that we require additional funding to finance the growth of the Company’s current and expected future operations as well as to achieve our strategic objectives, the shareholder has indicated the intent and ability to provide additional financing.

 

No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stock holders, in the case of equity financing.

 

- F10 -


Table of Contents

Fair value of financial instruments:

 

The carrying value of the Company's financial instruments: cash and cash equivalents, and accounts payable and approximate at their fair values because of the short-term nature of these financial instruments.

 

The Company also follows the guidance of the ASC Topic 820-10, “ Fair Value Measurements and Disclosures ” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

  Level 1 : Observable inputs such as quoted prices in active markets;

 

   Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

 

Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to

develop its own assumptions.

 

Segment reporting

 

ASC Topic 280, “ Segment Reporting ” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the years ended December 31, 2018, and 2017, the Company operates in one reportable operating segment in China.

 

Recent accounting pronouncements

  

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases, which was subsequently amended in 2018 by ASU 2018-10, ASU 2018-11 and ASU 2018-20 (collectively, Topic 842). Topic 842 will require the recognition of a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, for all leases with terms longer than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. Topic 842 is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. Topic 842 allows for a cumulative-effect adjustment in the period the new lease standard is adopted and will not require restatement of prior periods. The Company is in the process of evaluating the impact of Topic 842 on the Company's financial statements and disclosures, though the adoption is expected to result in an increase in the assets and liabilities reflected on the Company's balance sheets.

 

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 for us for the year ending March 31, 2021 and interim reporting periods during the year ending March 31, 2021. 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.

 

- F11 -


Table of Contents

 

3. PROPERTY AND EQUIPMENT

 

Property, equipment and software as of December 31, 2018 and December 31, 2017 are summarized below:

 

           
    2018     2017
Office equipment   3,315     2,701
Total property and equipment $ 3,315     2,701
Accumulated depreciation   (2,665)     (2,326)
Property and equipment, net 650     375

 

The depreciation expense is $440 and $900 for the years ended December 31, 2018 and December 31, 2017. Accumulated depreciation for the years ended December 31, 2018 and December 31, 2017 were $2,665 and $2,326, respectively.

     

4. ACCOUNT RECEIVABLES, NET

 

As of December 31, 2018 and 2017, our account receivables are $47,916 and nil, respectively. And account receivables allowance is nil as of December 31, 2018 and 2017. The account receivables were collected in January 2019.

 

5. RELATED PARTY RECEIVABLE

 

    December 31, 2018     December 31, 2017    
Receivable from Related Party A $ 14,285     $ -    
Total receivables from related party $ 14,285     $ -  
                       

 

Related party A is Hunan Ezagoo Joyful Vehicles International Travelling Development Limited, Ms. Weihong Wan, Assistant and Secretary of Mr. Xiaohao Tan, owns 1% of this company, and is the Legal Company Representative of this company. As of December 31, 2018, the Company loaned $14,285 to Related Party A as working capital, which is unsecured, interest-free with no fixed payment term. The amount was collected in April 2019.

 

6. PREPAID EXPENSES AND OTHER RECEIVABLES

 

Prepaid expenses and other receivables consisted of the following at December 31, 2018 and December 31, 2017:

 

    2018     2017  
Prepaid expenses $ 38,622     $ 5,630  
Other receivables   5,689       26,589  
Total prepaid expenses and other receivables $ 44,311        $ 32,219  

 

As of December 31, 2017, the balance $32,219 represented an outstanding prepaid expenses and other receivables    which included social security fee and management fee and employee receivables. The employee receivables were subsequently collected. $1,517 was collected in February 2018, $185 was collected in March 2018, and $24,886 was collected in November 2018.

 

As of December 31, 2018, the balance $44,311 represented an outstanding prepaid expenses which included social security fee, bus monitors maintenance fee, management fee and employee receivables. The employee receivables of $5,689 was subsequently collected in April 2019.

 

- F12 -


Table of Contents

 

7. ACCOUNT PAYABLES   

 

Accounts payable consists of the following:

 

    As of December 31,  
    2018   2017  
Account payables   $ 10,160  $ -  
           
Total   $ 10,160   -  

 

The account payables balance of $10,160 includes payables to a vendor and bus screen terminal maintenance fee. $9,870 was paid by the Company in January 2019. And $290 was expected to be paid in the first half year in 2019.

 

8. OTHER PAYABLES AND ACCRUED LIABILITIES 

 

Other payables consisted of the following at December 31, 2018 and December 31, 2017:

 

    2018   2017 
Other payables      $ 19,519 $ 10,801
Accrued payroll and benefits   12,030   -
Advances from customers   26,649   -
Total other payables and accrued liabilities   $ 58,198 $ 10,801

 

Other payables include accrued social security fee and housing fund, bus screen repair fee, accrued property management fee and employee payables. Advances from customers are advertisement service fee paid by customers.

 

9. DUE TO RELATED PARTIES   

 

    As of December 31,  
    2018     2017  
             
Amount due to related party B   $ 216,116     $ 103,971  
Amount due to related party C     23,395       24,460  
Amount due to related party D     15,965       16,692  
Amount due to related party E     123,901       485  
Amount due to related party F     436,718       6,056  
Amount due to related party G     263,542       1,975  
Amount due to related party H     34,067       356  
Amount due to related party I     1,431       -  
Amount due to related party J     21,771       -  
Amount due to related party K     42,090       -  
 Total   $ 1,178 , 996     $ 153,995  

 

Related party B is Hunan Ezagoo Shopping Co. Ltd., Mr. Xiaohao Tan owns 2.4% of this company, and is the Legal Company Representative of this company. For the year ended December 31, 2018 and 2017, related party B advanced $216,116 and $103,971 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, which is a shareholder of Hunan Ezagoo Zhicheng Internet Technology Limited. For the year ended December 31, 2018 and 2017, related party C advanced $23,395 and $24,460 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, spouse of Mr. Xiaohao Tan, a director of the Company. Ms. Qianwen Zhang is the Legal Company Representative of Hunan Ezagoo Internet Technology Limited. For the year ended December 31, 2018 and 2017, related party D advanced $15,965 and $16,692 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, 98% of its equity is owned by Mr. Xiaohao Tan, a director of the Company. For the year ended December 31, 2018 and 2017, related party E advanced $123,901 and $485 to the company as working capital, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party F is Hunan Homestead Asset Management Co. Ltd., a shareholder of Beijing Ezagoo Shopping Holding Limited, which is a shareholder of Hunan Ezagoo Internet Technology Limited. For the year ended December 31, 2018 and 2017, related party F advanced $436,718 and $6,056 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 G is Kuaile Motors Camping Site Investment Development Limited. One of the shareholders of Hunan Ezagoo Zhicheng Internet Technology Limited, Beijing Ezagoo Shopping Holding Limited owns 92% of Hunan Kuaile Motors Camping Site Investment Development Limited. Ms. Qianwen Zhang, spouse of Mr. Xiaohao Tan owns 8% of Hunan Kuaile Motors Camping Site Investment Development Limited and is the Legal Company Representative of this company. For the year ended December 31, 2018 and 2017, related party G advanced $263,542 and $1,975 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. One of the shareholders of Hunan Ezagoo Zhicheng Internet Technology Limited, Beijing Ezagoo Shopping Holding Limited owns 90% of Hunan Yijiaren Hotel Limited, and Ms. Qianwen Zhang, spouse of Mr. Xiaohao Tan owns 10% of this company. For the year ended December 31, 2018 and 2017, related party H advanced $34,067 and $356 to the company as working capital, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

Related party I is Hunan Bright Lionrock Mountain Resort Limited. Beijing Ezagoo Industrial Development Group Holding Limited, formerly named Beijing Ezagoo Shopping Holding Limited, which is a shareholder of Hunan Ezagoo Zhicheng Internet Technology Limited, owns 80% of Hunan Bright Lionrock Mountain Resort Limited. Mr. Xiao Hao Tan is the Legal Company Representative of this company. For the year ended December 31, 2018 related party I advanced $1,431 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, formerly named Beijing Ezagoo Shopping Holding Limited. It is a shareholder of Hunan Ezagoo Zhicheng Internet Technology Limited. For the year ended December 31, 2018 related party J advanced $21,771 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, which is a shareholder of Hunan Ezagoo Zhicheng Internet Technology Limited. Weihong Wan, Assistant and Secretary of Xiaohao Tan, is a shareholder and Legal Company Representative of related party K. For the year ended December 31, 2018 related party K advanced $42,090 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.

 

The imputed interest for above loans is immaterial.

 

10. DUE TO DIRECTOR

 

For the year ended December 31, 2018 and 2017, a director of the Company advanced $109,024    and $109,048 to the Company, which is unsecured, interest-free with no fixed payment term, for working capital purpose.

 

11. INCOME TAXES    

 

For the years ended December 31, 2018 and December 31, 2017, the local (United States) and foreign components of income/(loss) before income taxes were comprised of the following:

 

        For the year ended     For the year ended
        December 31, 2018     December 31, 2017
               
  Tax jurisdictions from:              
-    Local   $   (19,864)   $ -
-    Foreign, representing              
Seychelles       -     -
Hong Kong       -     -
China (CETL)       (17)     -
China       (997,655)     (98,296)
               
Income/(loss) before income tax   $   (1,017,502)         $ (98,296)

 

The provision for income taxes consisted of the following:

 

        For the year ended       For the year ended  
        December 31, 2018       December 31, 2017  
Current:                  
-    Local    

 

$

-   $

 

 

-  
-    Foreign (China)       -       -  
                   
Deferred:                  
-    Local       -       -  
-    Foreign       -       -  
                   
Income tax expense     $ -   $   -  

 

- F13 -


Table of Contents

 

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States, Seychelles, Hong Kong and China that are subject to taxes in the jurisdictions in which they operate, as follows:

 

United States of America

 

The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America.

 

Seychelles

 

Under the current laws of the Seychelles, Ezagoo Holding Limited is registered as an international business company which governs by the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.

 

Hong Kong

 

Ezagoo (HK) Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income rate of 16.5% on its assessable income.

 

People’s Republic of China

 

Changsha Ezagoo Technology Limited and Hunan Ezagoo Zhicheng Internet Technology Limited are operating in the People’s Republic of China (“PRC”) subject to the Corporate Income Tax governed by the Income Tax Law of the People’s Republic of China with a unified statutory income tax rate of 25%.

 

    As of     As of  
    December 31, 2018     December 31, 2017  
Deferred tax assets:                
Net operating loss carryforwards                
– United States of America   $ 4,172         -  
– Hong Kong     -       -  
– The PRC (CETL)     (3)          -  
– The PRC     318,451         69,037  
                 
Less: valuation allowance     (322,620)       (69,037)  
Deferred tax assets   $ -     $ -  

 

- F14 -


Table of Contents

 

  12. CONCENTRATIONS OF RISK  

 

The Company is exposed to the following concentrations of risk:

 

  (a) Major customers

 

For year ended December 31, 2018 and 2017, the customers who accounted for 10% or more of the Company’s revenues and its outstanding receivable balance at period-end are presented as follows:

 

    2018 2017   2018 2017   2018 2017
    Revenues   Percentage of revenues   Accounts receivable, trade
                   
Customer A $ 9,605 3,547   13% 42% $ - -
Customer B   47,656 3,547   70% 42%   47,656 -
Customer C   7,485 1,418   11% 16%   - -
  $ 64,746 8,512   94% 100% $ 47,656 -

 

All customers are located in China.

 

  (b) Major vendors

 

For year ended December 31, 2018 and 2017, the vendors who accounted for 10% or more of the Company’s purchases and its outstanding payable balance at period-end are presented as follows:

 

    2018 2017   2018 2017   2018 2017
    Bus Terminal Rental Fee   Percentage of bus terminal rental fees   Accounts payable, trade
                   
Vendor A $ 69,927 -   51% - $ 16,096 -
Vendor B   35,294 -   26% -   23,530 -
  $ 105,221 -   77% - $ 39,626 -

 

All vendors are located in China.  

 

For year ended December 31, 2017, the Company has no vendor who accounted for 10% or more of the Company’s cost of revenues.

 

  (c) Exchange rate risk

 

The Company cannot guarantee that the current exchange rate will remain stable, therefore there is a possibility that the Company could post the same amount of income for two comparable periods and because of the fluctuating exchange rate actually post higher or lower income depending on exchange rate of CNY converted to US$ and HK$ converted into US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

 

  13.   COMMITMENTS AND CONTINGENCIES     

 

From November 16, 2017 to November 15, 2020, the Company entered into an agreement with an independent third party to lease office premises in China on a monthly basis, for the operations of the Company. From January 1, 2017 to November 15, 2017, office was provided by Mr. Xiaohao Tan, a director of the Company, without charge. The rent expense for the years ended December 31, 2018 and December 31, 2017 were $50,031 and $2,144 respectively.

 

As of December 31, 2018, the Company has the aggregate minimal rent payments due in the next two years as follow.

 

Year ending December 31,      
2019                                64,556  
2020                                    56,486  

 

  14. ADDITIONAL PAID-IN CAPITAL - CAPITAL CONTRIBUTION

 

As of December 31, 2018, the Company has a total additional paid-in capital - capital contribution balance of $774,007. It includes $725,690 capital contribution from related party J and $8,949 for service contracts where the performance obligation is not able to recognize, capital contribution is recorded for any payments received in 2018 and $39,368 capital contribution as the performance obligation is not able to recognize in 2017.

 

Related party J is Beijing Ezagoo Industrial Development Group Holding Limited, formerly named Beijing Ezagoo Shopping Holding Limited. It is a shareholder of Hunan Ezagoo Zhicheng Internet Technology Limited.

     

  15. COMMON STOCK

 

The holders of outstanding shares of Common Stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends of such times and in such amounts as the board from time to time may determine. Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of shareholders. There is no cumulative voting of the election of directors then standing for election. The Common Stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of our Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the Common Stock after payment of liquidation preferences, if any, on any outstanding payment of other claims of creditors.

 

All outstanding securities including common stock and restricted shares issued, do not have any pertinent rights and privileges that are not disclosed in this registration statements, including dividend, and liquidation preferences, participation rights, call process and dates, conversion or exercise process and significant terms of contracts to issue additional shares.

 

On May 9, 2018, our President, Tan Xiaohao, purchased 90,050,500 shares of restricted common stock at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $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 3,591,000 and 1,358,500 shares of restricted common stock respectively at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $495, have gone directly to the Company for initial working capital.

 

As of December 31, 2018    , the Company has 95,000,000 shares issued and outstanding. There are no shares of preferred stock issued and outstanding.

 

  16. SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2018 up through the date the Company issued the audited financial statements. During the period, there was no subsequent event that required recognition or disclosure. 

 

- F15 -


Table of Contents

 

   PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

 

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

 

The estimated costs (assuming all shares are sold) of this offering are as follows:

 

SEC Registration Fee  $ $95.75
Auditor Fees and Expenses $ 67,000.00   
Consulting Fees and Related Expenses $ 23,500
Transfer Agent Fees  $ 5,000
TOTAL   $ 95,595.75

 

(1) All amounts are estimates, other than the SEC’s registration fee. The above expenses are to be paid by the Company, rather than the selling shareholders.

  

INDEMNIFICATION OF DIRECTOR AND OFFICERS

 

Under our Bylaws of the corporation, every person who was or is a party to, or is threatened to be made a party to, or is involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he, or a person of whom he is the legal representative, is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer of another Corporation, or as its representative in a partnership, joint venture, trust, or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability, and loss (including attorneys’ fees judgments, fines, and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. Such right of indemnification shall be a contract right, which may be enforced in any manner desired by such person. The expenses of Officers and Directors incurred in defending a civil or criminal action, suit, or proceeding must be paid by the Corporation as they are incurred and in advance of the final disposition of the action, suit, or proceeding, upon receipt of an undertaking by or on behalf of the Director or Officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the Corporation. Such right of indemnification shall not be exclusive of any other right which such Directors, Officers, or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of Stockholders, provision of law, or otherwise, as well as their rights under this Article.

 

Without limiting the application of the foregoing, the Board of Directors may adopt bylaws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer of another Corporation, or as its representative in a partnership, joint venture, trust, or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. The indemnification provided in this Article shall continue as to a person who has ceased to be a Director, Officer, Employee, or Agent, and shall inure to the benefit of the heirs, executors and administrators of such person.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

 - 29 - 


Table of Contents

 

RECENT SAL ES OF UNREGISTERED SECURITIES 

 

On May 9, 2018, our President, Tan Xiaohao, purchased 90,050,500 shares of restricted common stock at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $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 3,591,000 and 1,358,500 shares of restricted common stock respectively at a purchase price of $0.0001 (par value) per share. The proceeds from the sale, which were in the amount of $495, have gone directly to the Company for initial working capital.

In regards to all of the above transaction we claim an exemption from registration afforded by Regulation S of the Securities Act of 1933, as amended ("Regulation S") for the above sale of the stock since the sale of the stock were made to non-U.S. person (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

EXHIBITS TO REGISTRATION STATEMENT

 

Exhibit No.   Description
     
3.1   Certificate of Incorporation, as filed with the Nevada Secretary of State on May 9, 2018 (1)
3.2   By-laws (1)
5.1   Legal Opinion Letter (1)
10.1   Call Option Agreement (1)
10.2   Shareholder’ Voting Rights Proxy Agreement (1)
10.3   Management Services Agreement (1)
10.4   Equity Pledge Agreement (1)
10.5   Loan Agreement (1)
23.1   Consent of Independent Accounting Firm “TAAD, LLP” (1)
99.1   Sample Subscription Agreement (1)

____________________

(1) Filed herewith.

 

 - 30 -


Table of Contents

UNDERTAKINGS

The undersigned Registrant hereby undertakes:

 

(a)(1) To file, during any period in which offers or sales of securities are being made, a post-effective amendment to this registration statement to:

 

(i) Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

 

(i) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

 

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or our securities provided by or on behalf of the undersigned registrant; and

 

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

 

In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.

- 31 -


Table of Contents

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, at the location of Tong Zi Po Xi Lu, Yuelu District Changsha, Hunan, China on May 3, 2019.

 

  Ezagoo Limited
   
  By: /s/ Tan Xiaohao
  Name: Tan Xiaohao
 

Title: President, Secretary, Treasurer, Director

Date: May 3, 2019

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

Name: Tan Xiaohao   Signature: /s/ Tan Xiaohao   Title: President, Secretary, Treasurer, Director (Principal Executive Officer; Principal Accounting Officer)

Date: May 3, 2019

 

Name: Xin Yang   Signature: /s/ Xin Yang   Title: Chief Financial Officer (Principal Financial Officer)

Date: May 3, 2019

 

- 32 - 


BY-LAWS

 

OF

 

EZAGOO LIMITED

(a Nevada corporation)

 

ARTICLE I

 

CERTIFICATES OF STOCK

 

Section 1.     Certificates Representing Stock

 

(a)  Certificates representing stock in the corporation shall be signed by, or in the name of, the corporation by the Chairman or Vice-Chairman of the Board of Directors, if any, or by the President or a Vice-President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation. Any or all the signatures on any such certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.

 

(b)  Whenever the corporation shall be authorized to issue more than one class of stock or more than one series of any class of stock, and whenever the corporation shall issue any shares of its stock as partly paid stock, the certificates representing shares of any such class or series or of any such partly paid stock shall set forth thereon the statements prescribed by the Nevada Revised Statutes. Any restrictions on the transfer or registration of transfer of any shares of stock of any class or series shall be noted conspicuously on the certificate representing such shares.

 

(c)  The corporation may issue a new certificate of stock or uncertificated shares in place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Board of Directors may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the Corporation a bond sufficient to indemnify the corporation against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate or uncertificated shares.

 

Section 2.     Uncertificated Shares . Subject to any conditions imposed by the Nevada Revised Statutes, the Board of Directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of the stock of the corporation shall be uncertificated shares. Within a reasonable time after the issuance or transfer of any uncertificated shares, the corporation shall send to the registered owner thereof any written notice prescribed by the Nevada Revised Statutes.

  

Section 3.     Fractional Share Interests . The corporation may, but shall not be required to, issue fractions of a share. If the Corporation does not issue fractions of a share, it shall (1) arrange for the disposition of fractional interests by those entitled thereto, (2) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined, or (3) issue scrip or warrants in registered form (either represented by a certificate or uncertificated) or bearer form (represented by a certificate) which shall entitle the holder to receive a full share upon the surrender of such scrip or warrants aggregating a full share. A certificate for a fractional share or an uncertificated fractional share shall, but scrip or warrants shall not unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the Corporation in the event of liquidation. The Board of Directors may cause scrip or warrants to be issued subject to the conditions that they shall become void if not exchanged for certificates representing the full shares or uncertificated full shares before a specified date, or subject to the conditions that the shares for which scrip or warrants are exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of scrip or warrants, or subject to any other conditions which the Board of Directors may impose.

 

Section 4.     Stock Transfers . Upon compliance with provisions restricting the transfer or registration of transfer of shares of stock, if any, transfers or registration of transfers of shares of stock of the corporation shall be made only on the stock ledger of the corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation or with a transfer agent or a registrar, if any, and, in the case of shares represented by certificates, on surrender of the certificate or certificates for such shares of stock properly endorsed and the payment of all taxes due thereon.

 

Section 5.     Record Date For Stockholders . In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining the stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by the Nevada Revised Statutes, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Nevada, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meeting of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Nevada Revised Statutes, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion, or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

Section 6.     Designation of Stocks . When the corporation is authorized to issue shares of more than one class or more than one series of any class, there shall be set forth upon the face or back of the certificate, or the certificate shall have a statement that the corporation will furnish to any stockholders upon request and without charge, a full or summary statement of the designations, preferences and relative, participating, optional or other special rights of the various classes of stock or series thereof and the qualifications limitations or restrictions of such rights, and, if the corporation shall be authorized to issue only special stock, such certificate shall   set forth in full or summarized the rights of the holders of such stock. The voting powers, designations, preferences, limitations, restrictions, and relative, participating, optional and other rights, and the qualifications, limitations, or restrictions thereof, of the shares of any class of stocks, shall hereinafter be prescribed by resolution of the Board of Directors.

 

ARTICLE II

 

STOCKHOLDERS

 

Section 1.     Meaning of Certain Terms . As used herein in respect of the right to notice of a meeting of stockholders or a waiver thereof or to participate or vote thereat or to consent or dissent in writing in lieu of meeting, as the case may be, the term "share" or "shares" or "share of stock" or "shares of stock" or "stockholder" or "stockholders" refers to an outstanding share or shares of stock and to a holder or holders of record of outstanding shares of stock when the corporation is authorized to issue only one class of shares of stock, and said reference is also intended to include any outstanding share or shares of stock and any holder or holders of record of outstanding shares of stock of any class upon which or upon whom the articles of incorporation confers such rights where there are two or more classes or series of shares of stock or upon which or upon whom the Nevada Revised Statutes confers such rights notwithstanding that the articles of incorporation may provide for more than one class or series of shares of stock, one or more of which are limited or denied such rights thereunder; provided, however, that no such right shall vest in the event of an increase or a decrease in the authorized number of shares of stock of any class or series which is otherwise denied voting rights under the provisions of the articles of incorporation, except as any provision of law may otherwise require.

 

Section 2.     Stockholder Meetings .

 

(a)  Time . The annual meeting shall be held on the date and at the time fixed, from time to time, by the directors, provided that the first annual meeting shall be held on a date within thirteen months after the organization of the corporation, and each successive annual meeting shall be held on a date within thirteen months after the date of the preceding annual meeting. A special meeting shall be held on the date and at the time fixed by the directors.

 

(b)  Place . Annual meetings and special meetings shall be held at such place, within or without the State of Nevada, as the directors may, from time to time, fix. Whenever the directors shall fail to fix such place, the meeting shall be held at the registered office of the corporation in the State of Nevada, the principal place of business, or a place designated by the resolution of Board of Directors.

  

(c)  Call . Annual meetings and special meetings may be called by the directors or by any officer instructed by the directors to call the meeting.

 

(d)  Notice or Waiver of Notice . Written notice of all meetings shall be given, stating the place, date, hour of the meeting and stating the place within the city or other municipality or community at which the list of stockholders of the corporation may be examined. The notice of an annual meeting shall state that the meeting is called for the election of directors and for the transaction of other business which may properly come before the meeting, and shall (if any other action which could be taken at a special meeting is to be taken at such annual meeting) state the purpose or purposes. The notice of a special meeting shall in all instances state the purpose or purposes for which the meeting is called. The notice of any meeting shall also include, or be accompanied by, any additional statements, information, or documents prescribed by the Nevada Revised Statutes. Except as otherwise provided by the Nevada Revised Statutes, a copy of the notice of any meeting shall be given, personally or by mail, not less than ten days nor more than sixty days before the date of the meeting, unless the lapse of the prescribed period of time shall have been waived, and directed to each stockholder at his record address or at such other address which he may have furnished by request in writing to the Secretary of the corporation. Notice by mail shall be deemed to be given when deposited, with postage thereon prepaid, in the United States Mail. If a meeting is adjourned to another time, not more than thirty days hence, and/or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting unless the directors, after adjournment, fix a new record date for the adjourned meeting. Notice need not be given to any stockholder who submits a written waiver of notice signed by him before or after the time stated therein. Attendance of a stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, not the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice.

 

(e)  Stockholder List . The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city or other municipality or community where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this section or the books of the corporation, or to vote at any meeting of stockholders.

 

(f)  Conduct of Meeting . Meetings of the stockholders shall be presided over by one of the following officers in the order of seniority and if present and acting-the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, the President, a Vice-President, or, if none of the foregoing is in office and present and acting, by a chairman to be chosen by the stockholders. The Secretary of the corporation, or in his absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present the Chairman of the meeting shall appoint a secretary of the meeting.

 

(g)  Proxy Representation . Every stockholder may authorize another person or persons to act for him by proxy in all matters in which a stockholder is entitled to participate, whether by waiving notice of any meeting, voting or participating at a meeting, or expressing consent or dissent without a meeting. Every proxy must be signed by the stockholder or by his attorney-in-fact. No proxy shall be voted or acted upon after three years from its date unless such proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that is irrevocable and, if, and only as long as it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally.

 

(h)  Inspectors . The directors, in advance of any meeting, may, but need not, appoint one or more inspectors of election to act at the meeting or any adjournment thereof. If any inspector or inspectors are not appointed, the person presiding at the meeting may, but need not appoint one or more inspectors. In case any person who may be appointed as an inspector fails to appear or act, the vacancy may be filled by appointment made by the directors in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, if any, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspectors at such meeting with strict impartiality and according to the best of his ability. The inspectors, if any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots, or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots, or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the person presiding at the meeting, the inspector or inspectors, if any, shall make a report in writing of any challenge, question, or matter determined by him or them and execute a certificate of any fact found by him or them. Except as otherwise required by subsection (e) of Section 231 of the Nevada Revised Statutes, the provisions of that Section shall not apply to the corporation.

(i)  Quorum . The holders of at least one third of the outstanding voting shares of stock shall constitute a quorum at a meeting of stockholders for the transaction of any business. Once a quorum is established at any meeting of the stockholders, the voluntary withdrawal of any stockholder from the meeting shall not affect the authority of the remaining stockholders to conduct any business which properly comes before the meeting. In the absence of a quorum, the chairman of the meeting or stockholders present at the meeting may adjourn the meeting from day to day or time to time without further notice other than announcement at such meeting of such date, time and place of the adjourned meeting. At an adjourned meeting of the stockholders at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally noticed.

 

(j)  Voting . Each share of stock shall entitle the holder thereof to one vote. At each meeting of the stockholders, each stockholder entitled to vote thereat may vote in person or by proxy duly appointed by an instrument in writing subscribed by such stockholder. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Any other action shall be authorized by a majority of the votes cast except where the Nevada Revised Statutes prescribes a different percentage of votes and/or a different exercise of voting power, and except as may be otherwise prescribed by the provisions of the articles of incorporation and these Bylaws. In the election of directors, and for any other action, voting need not be by ballot.

 

Section 3.     Stockholder Action Without Meetings . Any action required by the Nevada Revised Statutes to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Action taken pursuant to this paragraph shall be subject to the provisions of Section 78.320 of the Nevada Revised Statutes.

 

ARTICLE III

 

DIRECTORS

 

Section 1.     Functions and Definition . The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors of the corporation. The Board of Directors shall have the authority to fix the compensation of the members thereof. The use of the phrase "whole board" herein refers to the total number of directors which the corporation would have if there were no vacancies. The business of the corporation shall be managed by its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the articles of incorporation or by these by-laws directed or required to be exercised or done by the stockholders.

 

Section 2.     Qualifications and Number . A director need not be a stockholder, a citizen of the United States, or a resident of the State of Nevada. The initial Board of Directors shall consist of two (2) persons. Thereafter, the number of directors may be increased or decreased from time to time by action of the stockholders or of the directors.

 

Section 3.     Election and Term . The first Board of Directors, unless the members thereof shall have been named in the articles of incorporation, shall be elected by the incorporator or incorporators and shall hold office until first annual meeting of stockholders and until their successors are elected and qualified or until their earlier resignation or removal. Any director may resign at any time upon written notice to the corporation. Thereafter, directors who are elected at an annual meeting of stockholders, and directors who are elected in the interim to fill vacancies and newly created directorships, shall hold office until the next annual meeting resignation or removal. Except as the Nevada Revised Statutes may otherwise require, in the interim between annual meetings of stockholders or of special meetings of stockholders called for the election of directors and/or for the removal of one or more directors and for the filling of any vacancy in that connection, newly created directorships and any vacancies in the Board of Directors, including unfilled vacancies resulting from the removal of directors for cause or without cause, may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum, or by the sole remaining director. 

 

Section 4.     Meetings .  

 

(a)   Time . Meetings shall be held at such time as the Board shall fix, except that the first meeting of a newly elected Board shall be held as soon after its election as the directors may conveniently assemble.

 

(b)   Place . Meetings shall be held at such place within or without the State of Nevada as shall be fixed by the Board.

 

(c)   Call . No call shall be required for regular meetings for which the time and place have been fixed. Special meetings may be called by or at the direction of the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, of the President, or of a majority of the directors in office.

 

(d)   Notice or Actual or Constructive Waiver . No notice shall be required for regular meetings for which the time and place have been fixed. Written, oral, or any other mode of notice of the time and place shall be given for special meetings in sufficient time for the convenient assembly of the directors thereat. Notice need not be given to any director or to any member of a committee of directors who submits a written waiver of notice signed by him before or after the time stated therein. Attendance of any such person at a meeting shall constitute a waiver of notice of such meeting, except when he attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors need be specified in any written waiver of notice.

 

(e)  Quorum and Action . A majority of the whole Board shall constitute a quorum except when a vacancy or vacancies prevents such majority, whereupon a majority of the directors in office shall constitute a quorum, provided, that such majority shall constitute at least one-third of the whole Board. A majority of the directors present, whether or not a quorum is present, may adjourn a meeting to another time and place. Except as herein otherwise provided, and except as otherwise provided by the Nevada Revised Statutes, the vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. The quorum and voting provisions herein stated shall not be construed as conflicting with any provisions of the Nevada Revised Statutes and these Bylaws which govern a meeting of the directors held to fill vacancies and newly created directorships in the Board or action of disinterested directors.

 

Any member or members of the Board of Directors or of any committee designated by the Board, may participate in a meeting of the Board, or any such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other.

 

(f)   Chairman of the Meeting . The Chairman of the Board, if any and if present and acting, shall preside at all meetings. Otherwise, the Vice-Chairman of the Board, if any and if present and acting, or the President, if present and acting, or any other director chosen by the Board, shall preside.

 

Section 5.     Removal of Directors . Except as may otherwise be provided by the Nevada Revised Statutes, any director or the entire Board of Directors may be removed, with or without cause, by the resolutions of the Board of Directors.

 

Section 6.     Committees . The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of any such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the corporation with the exception of any authority the delegation of which is prohibited by the Nevada Revised Statutes, and may authorize the seal of the corporation to be affixed to all papers which may require it.

 

Section 7.     Written Action . Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.

 

Section 8.     Board of Advisors.   The Board of Directors, in its discretion, may establish a Board of Advisors, consisting of individuals who may or may not be stockholders or directors of the Corporation. The purpose of the Board of Advisors would be to advise the officers and directors of the Corporation with respect to such matters as such officers and directors shall choose, and any other matters which the members of such Board of Advisors deem appropriate in furtherance of the best interest of the Corporation. The Board of Advisors shall meet on such basis as the members thereof may determine. The Board of Directors may eliminate the Board of Advisors at any time. No member of the Board of Advisors, nor the Board of Advisors itself, shall have any authority of the Board of Directors or any decision-making power and shall be merely advisory in nature. Unless the Board of Directors determines another method of appointment, the President shall recommend possible members of the Board of Advisors to the Board of Directors, who shall approve such appointments or reject them.

 

ARTICLE IV

 

OFFICERS

 

The officers of the corporation shall consist of a President, a Secretary, a Treasurer, and, if deemed necessary, expedient, or desirable by the Board of Directors, a Chairman of the Board, a Vice-Chairman of the Board, an Executive Vice- President, one or more other Vice-Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers with such title as the resolution of the Board of Directors choosing them shall designate. Except as may otherwise be provided in the resolution of the Board of Directors choosing him, no officer other than the Chairman or Vice-Chairman of the Board, if any, need be a director. Any number of offices may be held by the same person, as the directors may determine.

 

Unless otherwise provided in the resolution choosing him, each officer shall be chosen for a term which shall continue until the meeting of the Board of Directors following the next annual meeting of stockholders and until his successor shall have been chosen and qualified.

 

All officers of the corporation shall have such authority and perform such duties in the management and operation of the corporation as shall be prescribed in the resolutions of the Board of Directors designating and choosing such officers and prescribing their authority and duties, and shall have such additional authority and duties as are incident to their office except to the extent that such resolutions may be inconsistent therewith. The Secretary or an Assistant Secretary of the corporation shall record all of the proceedings of all meetings and actions in writing of stockholders, directors, and committees of directors, and shall exercise such additional authority and perform such additional duties as the Board shall assign to him. Any officer may be removed, with or without cause, by the Board of Directors. Any vacancy in any office may be filled by the Board of Directors.

 

ARTICLE V

 

INDEMNIFICATION

 

Every person who was or is a party to, or is threatened to be made a party to, or is involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he, or a person of whom he is the legal representative, is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer of another Corporation, or as its representative in a partnership, joint venture, trust, or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Nevada from time to time against all expenses, liability, and loss (including attorneys’ fees judgments, fines, and amounts paid or to be paid in settlement) reasonably incurred or suffered by him in connection therewith. Such right of indemnification shall be a contract right, which may be enforced in any manner desired by such person. The expenses of Officers and Directors incurred in defending a civil or criminal action, suit, or proceeding must be paid by the Corporation as they are incurred and in advance of the final disposition of the action, suit, or proceeding, upon receipt of an undertaking by or on behalf of the Director or Officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified by the Corporation. Such right of indemnification shall not be exclusive of any other right which such Directors, Officers, or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of Stockholders, provision of law, or otherwise, as well as their rights under this Article.

 

Without limiting the application of the foregoing, the Board of Directors may adopt bylaws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Nevada, and may cause the Corporation to purchase and maintain insurance on behalf of any person who is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer of another Corporation, or as its representative in a partnership, joint venture, trust, or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not the Corporation would have the power to indemnify such person. The indemnification provided in this Article shall continue as to a person who has ceased to be a Director, Officer, Employee, or Agent, and shall inure to the benefit of the heirs, executors and administrators of such person.

 

ARTICLE VI

 

CORPORATE SEAL

 

The corporate seal shall be in such form as the Board of Directors shall prescribe.

 

ARTICLE VII

 

FISCAL YEAR

 

The fiscal year of the corporation shall be fixed and initially be December 31, and shall be subject to change, by the Board of Directors.

 

ARTICLE VIII

 

AMENDMENT

 

These Bylaws may be adopted, amended or repealed at any time by the unanimous written consent of the Board of Directors.

 

 
 

 

CERTIFICATE OF SECRETARY

 

I, the undersigned, do hereby certify:

 

1.         That I am the duly elected and acting secretary of EZAGOO LIMITED, a Nevada corporation; and

 

2.         That the foregoing Bylaws, comprising nine (9) pages, constitute the Bylaws of said corporation as duly adopted and approved by the board of directors of said corporation by a Unanimous Written Consent dated as of May 9, 2018.

 

IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of said corporation this 9th day of May, 2018.

 

 

 

    /s/ XIAOHAO TAN  
    XIAOHAO TAN  
    Secretary  

 

 

Exhibit 5.1

 

Carl P. Ranno

Attorney at Law

2733 East Vista Dr.

Phoenix, Arizona 85032

Voice 602.493.0369

Email carlranno@cox.net

 

 

 

December 6, 2018

 

Board of Directors

 

EZAGOO LIMITED

YIJIAREN BUSINESS HOTEL NO. 168,

TONG ZI PO XI LU, YUELU DISTRICT CHANGSHA,

HUNAN 410205, CHINA  

 

RE: Opinion to be filed with an S-1 Registration statement filed by Ezagoo Limited a Nevada Corporation.

 

Dear Ladies and Gentlemen:

 

This Opinion is in connection with a registration statement to be filed by Ezagoo Limited, a Nevada corporation on Form S-1 (the “Registration Statement”) with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), in connection with registration of 30,000,000 newly issued shares of the Company's common stock, $0.0001 par value, for public sale by the issuer, and 9,500,000 shares being offered by the Selling Shareholders.

 

You have requested my opinion as to the matters set forth below in connection with the Registration Statement.  For purposes of this opinion, I have examined the Registration Statement, the Company’s Articles of Incorporation filed May 9, 2018, the Company’s Bylaws dated May 9, 2018, the Exhibits attached to the Registration Statement, including the Subscription Agreements executed by the selling shareholders and s uch other documents and matters of law as I have deemed necessary for the expression of the opinion herein contained.   

 

I have made assumptions that are customary in opinions of this kind, including the assumptions of the genuineness of all signatures on original documents, the authenticity of all documents submitted to me, the conformity to originals of all documents submitted as copies thereof, and the due execution and delivery of all documents where due execution and delivery are prerequisites to the effectiveness thereof.  

 

Based upon and subject to the foregoing, it is my opinion with respect to the registration of 9,500,000 shares of the Company's common stock, $0.0001 par value (the “Shares”), for public sale by the Company’s selling shareholders as disclosed in the S-1 Registration Statement , the subject shares are validly issued, fully paid, non-assessable and owned by the 3 selling shareholders. In connection with the registration of 30,000,000 newly issued shares of the Company's common stock, $0.0001 par value, for public sale by the issuer it is my opinion that the Shares have been duly authorized and when issued and paid for as described in the Registration Statement and Prospectus, will be, validly issued, fully paid and non-assessable.

 

This opinion is limited to the Federal laws of the United States, and the applicable statutory provisions of the Nevada Revised Statutes of the State of Nevada, including all applicable provisions of the Nevada Constitution and all regulations related to and all reported judicial decisions interpreting those laws and provisions.  We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference made to this firm in the Registration Statement under the heading “Legal Matters.”

   

In all such examinations, I have assumed the genuineness of all signatures on original documents, and the conformity to the originals of all copies submitted to me by the parties herein. In passing upon certain corporate records and documents of the Company, I have necessarily assumed the correctness and completeness of the statements made or included therein by the Company, and I express no opinion thereon. As to the various questions of fact material to this opinion, I have relied, to the extent I deemed reasonably appropriate, upon representations or of officers or directors of the Company and upon documents, records and instruments furnished to me by the Company, without verification except where such verification was readily ascertainable.

 

Based on the foregoing, I am of the opinion that the Shares, when issued according to the terms of the prospectus contained in this registration statement, will be duly and validly issued, duly authorized, fully paid and non-assessable.

 

I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of my name under the caption "Interests of Named Experts and Counsel" in the prospectus comprising part of the Registration Statement.

 

This opinion is rendered pursuant to Item 601(b)(5)(i) of Regulation S-K under the Act and may not be used or relied upon for any other purpose. This opinion is given as of the effective date of the Registration Statement, and I assume no obligation to update or supplement the opinions contained herein to reflect any facts or circumstances which may hereafter come to our attention or any changes in laws which may hereafter occur.

 

 

Sincerely,

 

/s/ Carl P. Ranno

Carl P. Ranno

Attorney at Law

 

 

 

 

 

CALL OPTION AGREEMENT

 

AMONG

 

BEIJING EZAGOO SHOPPING HOLDING LIMITED

 

RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED

 

CHANGSHA EZAGOO TECHNOLOGY LIMITED

 

AND

 

HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED

 

 

 

 

 

 

 

 

 

 

JULY 20, 2018

 
 

CALL OPTION AGREEMENT

 

 

This CALL OPTION AGREEMENT (this "AGREEMENT") is entered into in China as of July 20, 2018 by and among the following Parties:

 

(1) BEIJING EZAGOO SHOPPING HOLDING LIMITED (“BESH”)

 

ADDRESS: ROOM 308, FLOOR 3, BUILDING 3, NO. 46, DONGSIXI AVENUE, DONGCHENG DISTRICT, BEIJING CIT

 

UNIFIED SOCIAL CREDIT CODE: 91110116339693336B

 

(2) RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED (“RFLL”)

 

ADDRESS: ROOM 201, BUILDING A, NO. 1, QIANWANYI ROAD, SHENGANG COOPERATIVE DISTRICT, QIANHAI, SHENZHEN CITY

 

UNIFIED SOCIAL CREDIT CODE: 91440300MA5DFU2A6H

 

(3) CHANGSHA EZAGOO TECHNOLOGY LIMITED (“CETL”)

 

REGISTERED ADDRESS: ROOM 201, BUILDING 5, NANFENG SHIGUANGYUAN, NO.168 TONGZIPO WEST ROAD, YUELU DISTRICT, CHANGSHA, HUNAN 410205, CHINA

 

UNIFIED SOCIAL CREDIT CODE: 91430100MA4PQE488X

 

(4) HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED ("HEZL")

 

REGISTERED ADDRESS: YIJIAREN BUSINESS HOTEL NO. 168 , UNIFIED SOCIAL CREDIT CODE:

 

TONGZIPO WEST ROAD, YUELE DISTRICT, CHANGSHA, HUNAN 410205, CHINA

 

UNIFIED SOCIAL CREDIT CODE: 91430100395212760W

 

(The above parties shall hereinafter be individually referred to as a "PARTY" and collectively, "PARTIES".)

 

 

WHEREAS

 

(1)   BESH and RFLL are the enrolled Shareholder of the HEZL, legally holding all of the equity of the HEZL as of the execution date of this Agreement.

 

(2)   As of the date of this Agreement, BESH and RFLL are the enrolled Shareholder of HEZL, legally holding all the equity in HEZL, of which BESH holding 80% interest, RFLL holding 20%.

 

(3)   The Shareholders intend to transfer to CETL, and CETL is willing to accept, all his respective equity interest in the HEZL, to the extent not violating laws of China.

 

(4)   In order to conduct the above equity transfer, the Shareholders agree to grant CETL an irrevocable call option for equity transfer (hereinafter the "CALL OPTION"), under which and to the extent permitted by laws of China, the Shareholder shall on demand of CETL transfer the Option Equity (as defined below) to CETL in accordance with the provisions contained herein.

 

(5)   HEZL intends to transfer to CETL all of its assets and liabilities to the extent not violating laws of China. In order to conduct the above asset transfer, HEZL agrees to grant CETL an irrevocable call option for assets (hereinafter the

1

 
 

"ASSET CALL OPTION"), under which and to the extent as permitted by laws of China, HEZL shall on demand of CETL transfers the assets and liabilities to CETL in accordance with the provisions contained herein.

 

THEREFORE, the Parties hereby have reached the following agreement upon mutual consultations:

 

ARTICLE 1 - DEFINITION

 

“RMB” shall mean the Renminbi, the lawful currency of China.

 

"LAWS OF CHINA" shall mean the then valid laws, administrative regulations, administrative rules, local regulations, judicial interpretations and other binding regulatory documents of China.

 

"OPTION EQUITY" shall mean, in respect of each of the Shareholder, all of the equity interest held thereby in HEZL registered capital.

 

"HEZL REGISTERED CAPITAL" shall mean the registered capital of HEZL as of the execution date of this Agreement, i.e., RMB50,000,000, which shall include any expanded registered capital as the result of any capital increase within the term of this Agreement.

 

"TRANSFERRED EQUITY" shall mean the equity of HEZL which CETL has the right to require the Shareholder to transfer to it or its designated entity or individual when CETL exercises its Call Option (hereinafter the "EXERCISE OF OPTION") in accordance with Article 3.2 herein, the amount of which may be all or part of the Option Equity and the details of which shall be determined by CETL at its sole discretion in accordance with the then valid Laws of China and from its commercial consideration.

 

"TRANSFER PRICE" shall mean all the consideration that CETL or its designated entity or individual is required to pay to the Shareholder in order to obtain the Transferred Equity upon each Exercise of Option. In spite of any provision herein, in case of CETL exercising the call option in its sole discretion upon the occurrence of the situation in which such call option exercise become feasible under the relevant laws in China, any additional consideration paid other than the RMB 1.00 which may be required under the laws of China to effect such purchase to comply with such legal formalities shall be either cancelled or returned to the company immediately with no additional compensation to the owners. The Shareholder hereby acknowledges the purpose of such provisions and hereby agrees and authorizes the company to take any and all actions to effect such transaction and agrees irrevocably to execute any and all documents and instruments and authorize CETL and its designated entity or individual to sign on his or his behalf and hereby gives the CETL and its designated entity or individual a proxy to execute and deliver such documents and instruments to effect the purpose of this provision and hereby waives any defense or claim of causes of action to challenge or defeat this provision. If there exists any regulatory provision with respect to Transfer Price under the then Laws of China, CETL or its designated entity or individual shall be entitled to determine the lowest price permitted by Laws of China as the Transfer Price.

 

"BUSINESS PERMITS" shall mean any approvals, permits, filings, registrations etc. which HEZL is required to have for legally and validly operating its advertisement designing, producing, agency, publishing and all such other businesses, including but not limited to the Business License of the Cooperate Legal Person, the Tax Registration Certificate, the Permit for Operating Biotechnology Businesses and such other relevant licenses and permits as required by the then Laws of China.

 

"HEZL ASSETS" shall mean all the tangible and intangible assets which such HEZL owns or has the right to use during the term of this Agreement, including but not limited to any immoveable and moveable assets, and such intellectual property rights as trademarks, copyrights, patents, proprietary know-how, domain names and software use rights.

 

"THE MANAGEMENT SERVICES AGREEMENT" shall mean the Management Services Agreement entered into among each party dated July 20, 2018.

 

 

 

 

2

 
 

 

"MATERIAL AGREEMENT" shall mean an agreement to which any HEZL is a party and which has a material impact on the businesses or assets of the HEZL, including but not limited to the Management Services Agreement among the HEZL and CETL, and other agreements regarding the HEZL's business.

 

1.2 The references to any Laws of China herein shall be deemed

 

(1)   to include the references to the amendments, changes, supplements and reenactments of such law, irrespective of whether they take effect before or after the formation of this Agreement; and

 

(2)   to include the references to other decisions, notices or regulations enacted in accordance therewith or effective as a result thereof.

 

1.3 Except as otherwise stated in the context herein, all references to an Article, clause, item or paragraph shall refer to the relevant part of this Agreement.

 

ARTICLE 2 - GRANT OF CALL OPTION

 

The Parties agree that the Shareholder exclusively grant CETL hereby irrevocably and without any additional conditions with a Call Option, under which CETL shall have the right to require the Shareholder to transfer the Option Equity to CETL or its designated entity or individual in such method as set out herein and as permitted by Laws of China. CETL also agrees to accept such Call Option.

 

In case of CETL exercising the call option in its sole discretion upon the occurrence of the situation in which such call option exercise become feasible under the relevant laws in China, any additional consideration paid other than the RMB 1.00 which may be required under the laws of China to effect such purchase to comply with such legal formalities shall be either cancelled or returned to the company immediately with no additional compensation to the HEZL and Shareholder. HEZL and Shareholder hereby acknowledge the purpose of such provisions and hereby agrees and authorizes the company to take any and all actions to effect such transaction and agrees irrevocably to execute any and all documents and instruments and authorize the company's relevant officers to sign on his or his behalf and hereby gives the company and any of its relevant officers a proxy to execute and deliver such documents and instruments to effect the purpose of this provision and hereby waives any defense or claim of causes of action to challenge or defeat this provision.

 

ARTICLE 3 - METHOD OF EXERCISE OF OPTION

 

3.1 To the extent permitted by Laws of China, CETL shall have the sole discretion to determine the specific time, method and times of its Exercise of Option.

 

3.2 At each Exercise of Option by CETL, the Shareholder shall transfer his respective equity in the HEZL to CETL and/or other entity or individual designated by it respectively in accordance with the amount required in the Exercise Notice stipulated in Article 3.4. CETL and other entity or individual designated by it shall pay the Transfer Price to the Shareholder who has transferred the Transferred Equity for the Transferred Equity accepted in each Exercise of Option. CETL shall have the right to elect to pay the purchase price by settlement of certain credits held by it or its affiliates to the Shareholder.

 

3.3 In each Exercise of Option, CETL may accept the Transferred Equity by itself or designate any third party to accept all or part of the Transferred Equity.

 

3.4 On deciding each Exercise of Option, CETL shall issue to the Shareholder a notice for exercising the Call Option (hereinafter the "EXERCISE NOTICE", the form of which is set out as Appendix I hereto). The Shareholder shall, upon receipt of the Exercise Notice, forthwith transfer all the Transferred Equity in accordance with the Exercise Notice to CETL and/or other entity or individual designated by CETL in such method as described in Article 3.2 herein.

 

3.5 The Shareholder hereby undertakes and guarantees that once CETL issues the Exercise Notice in respect to the specific Transferred Equity of the HEZL held by it:

 

 

3

 
 

 

(1)   it shall immediately hold or request to hold a Shareholder' meeting of the HEZL and adopt a resolution through the Shareholder' meeting, and take all other necessary actions to agree to the transfer of all the Call Option to CETL and/or other entity or individual designated by it at the Transfer Price and waive the possible preemption;

 

(2)    it shall immediately enter into an equity transfer agreement with CETL and/or other entity or individual designated by it for transfer of all the Transferred Equity to CETL and/or other entity or individual designated by it at the Transfer Price; and

 

(3) it shall provide CETL with necessary support (including providing and executing all the relevant legal documents, processing all the procedures for government approvals and registrations and bearing all the relevant obligations) in accordance with the requirements of CETL and of the laws and regulations, in order that CETL and/or other entity or individual designated by it may take all the Transferred Equity free from any legal defect.

 

3.6 At the meantime of this Agreement, the Shareholder shall respectively enter into a power of attorney (hereinafter the "POWER OF ATTORNEY", the form of which is set out as Appendix II hereto), authorizing in writing any person designated by CETL to, on behalf of such Shareholder, to enter into any and all of the legal documents in accordance with this Agreement so as to ensure that CETL and/or other entity or individual designated by it take all the Transferred Equity free from any legal defect. Such Power of Attorney shall be delivered for custody by CETL and CETL may, at any time if necessary, require the Shareholder to enter into multiple copies of the Power of Attorney respectively and deliver the same to the relevant government department.

 

ARTICLE 4 - ASSET CALL OPTION

 

HEZL and the Shareholder hereby further undertake to grant CETL irrevocably an option to purchase assets within the term of this Agreement: to the extent not violating the mandatory requirements under Laws of China, HEZL will transfer all of its assets and liabilities to CETL and/or other entity or individual designated by it when required by CETL.

 

In case of the CETL exercising the Asset Call Option in its sole discretion upon the occurrence of the situation in which such call option exercise become feasible under the relevant laws in China, any additional consideration paid other than the RMB 1.00 which may be required under the laws of China to effect such purchase to comply with such legal formalities shall be either cancelled or returned to the company immediately with no additional compensation to the HEZL and Shareholder. HEZL and Shareholder hereby acknowledge the purpose of such provisions and hereby agree and authorize the company to take any and all actions to effect such transaction and agrees irrevocably to execute any and all documents and instruments and authorize the company's relevant officers to sign on his or his behalf and hereby gives the company and any of its relevant officers a proxy to execute and deliver such documents and instruments to effect the purpose of this provision and hereby waives any defense or claim of causes of action to challenge or defeat this provision.

 

ARTICLE 5 - REPRESENTATIONS AND WARRANTIES

 

5.1 Shareholder hereby represents and warrants in respect to itself and the HEZL in which she holds equity as follows:

 

5.1.1 The Shareholder is a Chinese citizen with full capacity, with full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a litigant party.

The Shareholder has full power and authorization to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction referred to herein, and it has the full power and authorization to complete the transaction referred to herein.

 

5.1.2 This Agreement is executed and delivered by Shareholder legally and properly. This Agreement constitutes the legal and binding obligations on Shareholder and is enforceable on it in accordance with its terms and conditions. The Shareholder are the enrolled legal owner of the Option Equity as of the effective date of this Agreement, and except the rights created by this Agreement, the Shareholder' Voting Rights Proxy Agreement entered into by Shareholder, CETL and HEZL dated July 20,2018 (the "PROXY AGREEMENT"), the Equity Pledge Agreement entered into by Shareholder, CETL, the HEZL dated July 20,2018 (the "EQUITY PLEDGE AGREEMENT"), there is no lien, pledge, claim and other encumbrances

 

4

 
 

 

and third party rights on the Option Equity. In accordance with this Agreement, CETL and/or other entity or individual designated by it may, after the Exercise of Option, obtain the proper title to the Transferred Equity free from any lien, pledge, claim and other encumbrances and third party rights.

 

5.1.3 HEZL shall obtain complete Business Permits as necessary for its operations upon this Agreement taking effect, and HEZL shall have sufficient rights and qualifications to operate within China the businesses of producing and selling of biotechnology products and other business relating to its current business structure. HEZL has conducted its business legally since its establishment and has not incurred any cases which violate or may violate the regulations and requirements set forth by the departments of commerce and industry, tax, culture, news, quality technology supervision, labor and social security and other governmental departments or any disputes in respect of breach of contract.

 

 

5.2 HEZL hereby represents and warrants as follows:

 

5.2.1 HEZL is a limited liability company operation duly registered and validly existing under Laws of China, with independent status as a legal person; HEZL has full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a subject of actions.

 

5.2.2 HEZL has full power and authorization to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction referred to herein, and it has the full power and authorization to complete the transaction referred to herein.

 

5.2.3 This Agreement is executed and delivered by HEZL legally and properly. This Agreement constitutes legal and binding obligations on it.

 

5.2.4 The Shareholder is the enrolled legal shareholder of the Option Equity when this Agreement comes into effect, except the rights created by this Agreement, the Proxy Agreement, the Equity Pledge Agreement, there is no lien, pledge, claim and other encumbrances and third party rights on the Option Equity. In accordance with this Agreement, CETL and/or other entity or individual designated by it may, upon the Exercise of Option, obtain the proper title to the Transferred Equity free from any lien, pledge, claim and other encumbrances and third party rights.

 

5.2.5 HEZL shall obtain complete Business Permits as necessary for its Operations upon this Agreement taking effect, and HEZL shall have sufficient rights and qualifications to operate within China the businesses of health and care and other business relating to its current business structure. HEZL has conducted its business legally since its establishment and has not incurred any cases which violate or may violate the regulations and requirements set forth by the departments of commerce and industry, tax, culture, news, quality technology supervision, labor and social security and other governmental departments or any disputes in respect of breach of contract.

 

5.3 CETL hereby represents and warrants as follows:

 

5.3.1 CETL is a company with limited liability properly registered and legally existing under Laws of China, with an independent status as a legal person. CETL has full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a subject of actions.

 

5.3.2 CETL has full power and authorization to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction referred to herein, and it has the full power and authorization to complete the transaction referred to herein.

 

ARTICLE 6 - UNDERTAKINGS BY THE SHAREHOLDER

 

6.1 The Shareholder hereby undertakes within the term of this Agreement that it must take all necessary measures to ensure that HEZL is able to obtain all the Business Permits necessary for its business in a timely manner and all the Business Permits remain in effect at any time.

 

5

 
 

 

6.2 The Shareholder hereby undertakes within the term of this Agreement that without the prior written consent by CETL,

 

6.2.1 no Shareholder shall transfer or otherwise dispose of any Option Equity or create any encumbrance or other third party rights on any Option Equity;

 

6.2.2 it shall not increase or decrease the HEZL Registered Capital or cast affirmative vote regarding the aforesaid increase or decrease in registered capital;

 

6.2.3 it shall not dispose of or cause the management of HEZL to dispose of any of the HEZL Assets (except as occurs during the arm’s length operations);

 

6.2.4 it shall not terminate or cause the management of HEZL to terminate any Material Agreements entered into by HEZL, or enter into any other Material Agreements in conflict with the existing Material Agreements;

 

6.2.5 it shall not cause HEZL to conduct any transactions that may substantively affect the asset, liability, business operation, equity structure, equity of a third party and other legal rights (except those occurring during the arm's length operations or daily operation, or having been disclosed to and approved by CETL in writing);

 

6.2.6 it shall not appoint or cancel or replace any executive directors or members of board of directors (if any), supervisors or any other management personnel of HEZL to be appointed or dismissed by the Shareholder;

 

6.2.7 it shall not announce the distribution of or in practice release any distributable profit, dividend or share profit or cast affirmative votes regarding the aforesaid distribution or release;

 

6.2.8 it shall ensure that HEZL shall validly exist and prevent it from being terminated, liquidated or dissolved;

 

6.2.9 it shall not amend the Articles of Association of HEZL or cast affirmative votes regarding such amendment;

 

6.2.10 it shall ensure that HEZL shall not lend or borrow any money, or provide guarantee or engage in security activities in any other forms, or bear any substantial obligations other than on the arm's length basis; and

 

6.3 The Shareholder hereby undertakes that it must make all its efforts during the term of this Agreement to develop the business of HEZL, and ensure that the operations of HEZL are legal and in compliance with the regulations and that it shall not engage in any actions or omissions which might harm the HEZL Assets or its credit standing or affect the validity of the Business Permits of HEZL.

 

6.4 Without limiting the generality of Article 6.3 above, considering the fact that the Shareholder of HEZL sets aside all the equity interest held thereby in HEZL as security to secure the performance by HEZL of the obligations under the Management Services Agreement, the performance of such Shareholder of the obligations under the Proxy Agreement, the Shareholder undertakes to, within the term of this Agreement, make full and due performance of any and all of the obligations on the part thereof under the Proxy Agreement, and to procure the full and due performance of HEZL of any and all of its obligations under the Management Services Agreement and warrants that no adverse impact on exercising the rights under this Agreement by CETL will be incurred due to the breach by the Shareholder of the Proxy Agreement or the breach of the HEZL of the Management Services Agreement.

 

6.5 HEZL undertakes that, before its Exercise of Option and acquire all equity of HEZL, HEZL shall not do the following:

 

6.5.1 Sell, transfer, mortgage or dispose by other way any assets, business, revenue or other legal rights of HEZL, or permit creating any encumbrance or other third party's interest on such assets, business, revenue

 

6

 
 

 

or other legal rights (except as occurs during the arm's length or operations or daily operation, or as is disclosed to CETL and approved by CETL in writing);

 

6.5.2 conduct any transactions that may substantively affect the asset, liability, business operation, equity structure, equity of a third party and other legal rights (except those occurring during the arm's length operations or daily operation, or having been disclosed to CETL and approved by CETL in writing);

 

6.5.3 release any dividend or share profit to the Shareholder or cause the HEZL to do so in any form.

 

 

 

 

  

 

 

7

 
 

ARTICLE 7 - CONFIDENTIALITY

 

7.1 Notwithstanding the termination of this Agreement, the Shareholder shall be obligated to keep in confidence the following information (hereinafter collectively the "CONFIDENTIAL =INFORMATION"): (i) information on the execution, performance and the contents of this Agreement; (ii) the commercial secret, proprietary information and customer information in relation to CETL known to or received by it as the result of execution and performance of this Agreement; and (iii) the commercial secrets, proprietary information and customer information in relation to HEZL known to or received by it as the shareholder of HEZL.

 

The Shareholder may use such Confidential Information only for the purpose of performing its obligations under this Agreement. The Shareholder shall not disclose the above Confidential Information to any third parties without the written consent from CETL, or they shall bear the default liability and indemnify the losses.

 

7.2 Upon termination of this Agreement, the Shareholder shall, upon demand by CETL, return, destroy or otherwise dispose of all the documents, materials or software containing the Confidential Information and suspend using such Confidential Information.

 

7.3 Notwithstanding any other provisions herein, the validity of this Article shall not be affected by the suspension or termination of this Agreement.

 

ARTICLE 8 - TERM OF AGREEMENT

 

This Agreement shall take effect as of the date of formal execution by the Parties. This Agreement shall terminate when all the Option Equity of HEZL held by the Shareholder is legally transferred under the name of CETL and/or other entity or individual designated by it in accordance with the provisions of this Agreement.

 

ARTICLE 9 - NOTICE

 

9.1 Any notice, request, demand and other correspondences made as required by or in accordance with this Agreement shall be made in writing and delivered to the relevant Party.

 

9.2 The abovementioned notice or other correspondences shall be deemed to have been delivered when it is transmitted if transmitted by facsimile or telex; it shall be deemed to have been delivered when it is delivered if delivered in person; it shall be deemed to have been delivered five (5) days after posting the same if posted by mail.

 

ARTICLE 10 - LIABILITY FOR BREACH OF CONTRACT

 

10.1 The Parties agree and confirm that, if any party (hereinafter the "DEFAULTING PARTY") breaches substantially any of the provisions herein or omits substantially to perform any of the obligations hereunder, or fails substantially to perform any of the obligations under this Agreement, such a breach or omission shall constitute a default under this Agreement (hereinafter a "DEFAULT"), then non-defaulting Party shall have the right to require the Defaulting Party to rectify such Default or take remedial measures within a reasonable period. If the Defaulting Party fails to rectify such Default or take remedial measures within such reasonable period or within ten (10) days of non-defaulting Party's notifying the Defaulting Party in writing and requiring it to rectify the Default, then non-defaulting Party shall have the right at its own discretion to select any of the following remedial measures:

 

(1) to terminate this Agreement and require the Defaulting Party to indemnify it for all the damage; or

 

(2)   mandatory performance of the obligations of the Defaulting Party hereunder and require the Defaulting Party to indemnify it for all the damage.

 

10.2 Without limiting the generality of Article 10.1, any breach of the Proxy Agreement, the Equity Pledge Agreement shall be deemed as having constituted the breach by such Shareholder of this Agreement; and any breach by HEZL of any provision in the Management Services Agreement, if attributable to the failure of the Shareholder to perform the obligations thereof under Article 6.4 hereof, shall be deemed as having constituted the breach by such Shareholder of this Agreement.

 

8

 
 

 

10.3 The Parties agree and confirm that in no circumstances shall the Shareholder request the termination of this Agreement for any reason, except otherwise stipulated by law or this Agreement.

 

10.4 Notwithstanding any other provisions herein, the validity of this Article shall stand disregarding the suspension or termination of this Agreement.

 

ARTICLE 11 - MISCELLANEOUS

 

11.1 This Agreement shall be prepared in English language.

 

11.2 The formation, validity, execution, amendment, interpretation and termination of this Agreement shall be subject to Laws of China.

 

11.3 Any disputes arising from and in connection with this Agreement shall be settled through consultations among the Parties involved, and if the Parties involved fail to reach an agreement regarding such a dispute within thirty (30) days of its occurrence, such dispute shall be submitted to Kuala Lumpur Regional Centre for Arbitration for arbitration in Kuala Lumpur accordance with the arbitration rules of such commission, and the arbitration award shall be final and binding on all the Parties involved.

 

11.4 Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws and other provisions under this Agreement, and the exercise of its rights, powers and remedies by a Party shall not preclude its exercise of its other rights, powers and remedies by such Party.

 

11.5 Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with laws (hereinafter the “PARTY’S RIGHTS”) shall not lead to a waiver of such rights, and the waiver of any single or partial exercise of the Party's Rights shall not preclude such Party from exercising such rights in any other way and exercising the remaining part of the Party's Rights.

 

11.6 The titles of the Articles contained herein shall be for reference only, and in no circumstances shall such titles be used in or affect the interpretation of the provisions hereof.

 

11.7 Each provision contained herein shall be severable and independent from each of other provisions, and if at any time any one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions herein shall not be affected as a result thereof.

 

11.8 Upon execution, this Agreement shall substitute any other legal documents previously executed by the Parties on the same subject.

 

11.9 Any amendments or supplements to this Agreement shall be made in writing and shall take effect only when properly signed by the Parties to this Agreement.

 

11.10 Without prior written consent by CETL, the Shareholder shall not transfer to any third party any of its right and/or obligation under this Agreement, CETL shall have the right to transfer to any third party designated by it any of its right and/or obligation under this Agreement after notice to the Shareholder.

 

11.11 This Agreement shall be binding on the legal successors of the Parties.

 

 

[The remainder of this page is left blank]

 

 

 

 

 

 

 

9

 

 

 

IN WITNESS HEREOF, the Parties have caused this Call Option Agreement to be executed in China as of the date first herein above mentioned.

 

 

 

For and on behalf of

BEIJING EZAGOO SHOPPING HOLDING LIMITED (Company chop)

Signature by:   /s/Tan Xiaohao
Name:  Tan Xiaohao
Position: Authorized Representative

 

 

For and on behalf of

RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED (Company chop)

 

Signature by:   /s/ Wan Weihong
Name:  Wan Weihong
Position: Authorized Representative

 

 

For and on behalf of

CHANGSHA EZAGOO TECHNOLOGY LIMITED (Company chop)

 

 

Signature by:   /s/Tan Xiaohao
Name:  Tan Xiaohao
Position:   Authorized Representative

 

 

For and on behalf of

HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED (Company chop)

 

 

Signed by: /s/ Zhang Qianwan
Name:  Zhang Qianwan
Position: Authorized Representative
 
 

APPENDIX I:

 

FORMAT OF THE OPTION EXERCISE NOTICE

 

To: BEIJING EZAGOO SHOPPING HOLDING LIMITED

 

As our company and you signed a Call Option Agreement as of July 20, 2018 (hereinafter the "OPTION AGREEMENT"), and reached an agreement that you shall transfer the equity you hold in HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED (hereinafter the "HEZL") to our company or any third parties designated by our company on demand of our company to the extent as permitted by Laws of China and regulations, Therefore, our company hereby gives this Notice to you as follows:

 

Our company hereby requires to exercise the Call Option under the Option Agreement and CHANGSHA EZAGOO TECHNOLOGY LIMITED, designated by our company shall accept the equity you hold accounting for 80% of in HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED Registered Capital (hereinafter the "PROPOSED ACCEPTED EQUITY"). You are required to forthwith transfer all the Proposed Accepted Equity to CHANGSHA EZAGOO TECHNOLOGY LIMITED upon receipt of this Notice in accordance with the agreed terms in the Option Agreement.

 

Best regards,

 

For and on behalf of

CHANGSHA EZAGOO TECHNOLOGY LIMITED (Company chop)

 

 

 

 

 

Authorized Representative:

 

Date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 
 

 

 

To: RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED

 

As our company and you signed a Call Option Agreement as of July 20, 2018 (hereinafter the "OPTION AGREEMENT"), and reached an agreement that you shall transfer the equity you hold in HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED (hereinafter the "HEZL") to our company or any third parties designated by our company on demand of our company to the extent as permitted by Laws of China and regulations, Therefore, our company hereby gives this Notice to you as follows:

 

Our company hereby requires to exercise the Call Option under the Option Agreement and CHANGSHA EZAGOO TECHNOLOGY LIMITED, designated by our company shall accept the equity you hold accounting for 20% of in HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED Registered Capital (hereinafter the "PROPOSED ACCEPTED EQUITY"). You are required to forthwith transfer all the Proposed Accepted Equity to CHANGSHA EZAGOO TECHNOLOGY LIMITED upon receipt of this Notice in accordance with the agreed terms in the Option Agreement.

 

Best regards,

 

For and on behalf of

CHANGSHA EZAGOO TECHNOLOGY LIMITED (Company chop)

 

 

 

 

 

Authorized Representative:

 

Date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 
 

APPENDIX II:

 

FORM OF THE POWER OF ATTORNEY

 

I, __________________________________ , hereby irrevocably entrust __________________ [with his/her identity card number of______________], as the authorized representative of me, to sign the Equity Transfer Agreement and other relevant legal documents between me and _________________ regarding the Equity Transfer of HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED .

 

Signature:

 

Date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDER' VOTING RIGHTS PROXY AGREEMENT

 

AMONG

 

 

BEIJING EZAGOO SHOPPING HOLDING LIMITED

 

RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED

 

CHANGSHA EZAGOO TECHNOLOGY LIMITED

 

AND

 

HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED

 

JULY 20, 2018

 
 

SHAREHOLDER' VOTING RIGHTS PROXY AGREEMENT

 

This SHAREHOLDER' VOTING RIGHTS PROXY AGREEMENT (this "AGREEMENT") is entered into in China as of JULY 20, 2018 by and among the following Parties:

 

(1) BEIJING EZAGOO SHOPPING HOLDING LIMITED (“BESH”)

 

ADDRESS: ROOM 308, FLOOR 3, BUILDING 3, NO. 46, DONGSIXI AVENUE, DONGCHENG DISTRICT, BEIJING CIT

 

UNIFIED SOCIAL CREDIT CODE: 91110116339693336B

 

(2) RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED (“RFLL”)

 

ADDRESS: ROOM 201, BUILDING A, NO. 1, QIANWANYI ROAD, SHENGANG COOPERATIVE DISTRICT, QIANHAI, SHENZHEN CITY

 

UNIFIED SOCIAL CREDIT CODE: 91440300MA5DFU2A6H

 

(3) CHANGSHA EZAGOO TECHNOLOGY LIMITED (“CETL”)

 

REGISTERED ADDRESS: ROOM 201, BUILDING 5, NANFENG SHIGUANGYUAN, NO.168 TONGZIPO WEST ROAD, YUELU DISTRICT, CHANGSHA, HUNAN 410205, CHINA

 

UNIFIED SOCIAL CREDIT CODE: 91430100MA4PQE488X

 

(4) HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED ("HEZL")

 

REGISTERED ADDRESS: YIJIAREN BUSINESS HOTEL NO. 168 , UNIFIED SOCIAL CREDIT CODE:

 

TONGZIPO WEST ROAD, YUELE DISTRICT, CHANGSHA, HUNAN 410205, CHINA

 

UNIFIED SOCIAL CREDIT CODE: 91430100395212760W

 

(The above parties shall hereinafter be individually referred to as a "PARTY" and collectively, "PARTIES". BESH and RFLL shall hereinafter be individually referred to as a "SHAREHOLDER".)

 

 

WHEREAS:

 

1.     As of the date of this Agreement, BEIJING EZAGOO SHOPPING HOLDING LIMITED and RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED are the enrolled Shareholder of HEZL , legally holding all the equity in HEZL , of which, BEIJING EZAGOO SHOPPING HOLDING LIMITED holding 80% interest, RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED holding 20%.

 

2.   The Shareholder intends to severally entrust the individual designated by ZATL with the exercises of his voting rights in HEZL while ZATL is willing to designate such an individual.

 

The Parties hereby have reached the following agreement upon friendly consultations:

 

ARTICLE 1 VOTING RIGHTS ENTRUSTMENT

 

1.1 The Shareholder hereby irrevocably undertake to sign the Entrustment Letter after execution of the Agreement to entrust the personnel designated by ZATL ("TRUSTEES") then to exercise the following rights enjoyed by them as Shareholder of HEZL in accordance with the then effective articles of association of HEZL (collectively, the "ENTRUSTED RIGHTS"):

 

 

 

1

 
 

 

(1)   Proposing to convene and attending Shareholder' meetings of HEZL as proxy of the Shareholder according to the articles of association of ZATL;

 

(2)   Exercising voting rights as proxy of the Shareholder, on issues discussed and resolved by the Shareholder' meeting of HEZL, including but not limited to the appointment and election for the directors, general manager and other senior management personnel of HEZL.

 

The above authorization and entrustment is granted subject to the status of trustees as Chinese citizens and the approval by ZATL. Upon and only upon written notice of dismissing and replacing Trustee(s) given by ZATL to the Shareholder, the Shareholder shall promptly entrust another Chinese citizen then designated by ZATL to exercise the above Entrusted Rights, and once new entrustment is made, the original entrustment shall be replaced; the Shareholder shall not cancel the authorization and entrustment of the Trustee(s) otherwise.

 

1.2 The Trustees shall perform the entrusted obligation within the scope of entrustment in due care and prudence and in compliance with laws; the Shareholder acknowledge and assume relevant liabilities for any legal consequences of the Trustees' exercise of the foregoing Entrusted Rights.

 

1.3 The Shareholder hereby acknowledge that the Trustees are not required to seek advice from the Shareholder prior to their respective exercise of the foregoing Entrusted Rights. However, the Trustees shall inform the Shareholder in a timely manner of any resolution or proposal on convening interim Shareholder' meeting after such resolution or proposal is made.

 

ARTICLE 2 RIGHT TO INFORMATION

 

2.1 For the purpose of exercising the Entrusted Rights under this Agreement, the Trustees are entitled to know the information with regard to HEZL 's operation, business, clients, finance, staff, etc., and shall have access to relevant materials of HEZL . HEZL shall adequately cooperate with the Trustees in this regard.

 

ARTICLE 3 EXERCISE OF ENTRUSTED RIGHTS

 

3.1 The Shareholder will provide adequate assistance to the exercise of the Entrusted Rights by the Trustees, including execution of the resolutions of the Shareholder' meeting of HEZL or other pertinent legal documents made by the Trustee when necessary (e.g., when it is necessary for examination and approval of or registration or filing with governmental departments).

 

3.2 If at any time during the term of this Agreement, the entrustment or exercise of the Entrusted Rights under this Agreement is unenforceable for any reason except for default of any Shareholder or HEZL , the Parties shall immediately seek a most similar substitute for the unenforceable provision and, if necessary, enter into supplementary agreement to amend or adjust the provisions herein, in order to ensure the realization of the purpose of this Agreement.

 

ARTICLE 4 EXEMPTION AND COMPENSATION

 

4.1 The Parties acknowledge that ZATL shall not be requested to be liable for or compensate (monetary or otherwise) other Parties or any third party due to exercise of Entrusted Rights by the Trustees designated by ZATL under this Agreement.

 

4.2 HEZL and the Shareholder agree to compensate ZATL for and hold it harmless against all losses incurred or likely to be incurred by it due to exercise of the Entrusted Rights by the Trustees designated by ZATL , including without limitation any loss resulting from any litigation, demand arbitration or claim initiated or raised by any third party against it or from administrative investigation or penalty of governmental authorities.

 

However, the Shareholder and HEZL will not compensate for losses incurred due to willful misconduct or gross negligence of ZATL .

 

ARTICLE 5 REPRESENTATIONS AND WARRANTIES

 

 

2

 
 

5.1 The Shareholder hereby represents and warrants that:

 

5.1.1 The Shareholder is a Chinese citizen with full capacity and with full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a subject of actions.

 

5.1.2 The Shareholder has full right and authorization to execute and deliver this Agreement and other documents that are related to the transaction referred to herein and to be executed by them. They have full right and authorization with respect to consummate the transaction referred to herein.

 

5.1.3 This Agreement shall be executed and delivered by the Shareholder lawfully and properly. This Agreement constitutes the legal and binding obligations on his and is enforceable on his in accordance with its terms and conditions hereof

 

5.1.4 The Shareholder is enrolled and legal Shareholder of HEZL as of the effective date of this Agreement, and except the rights created by this Agreement, the Call Option Agreement entered into by ZATL , HEZL and his on JULY 20, 2018(the "CALL OPTION AGREEMENT"), as well as the Equity Pledge Agreement entered into by ZATL and HEZL and his on JULY 20, 2018 (the "EQUITY PLEDGE AGREEMENT"), there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights in accordance with the then effective articles of association of HEZL .

 

5.1.5 Considering the fact that according to Equity Pledge Agreement, considering the fact that Shareholder will set aside all the equity interest held thereby in relevant HEZL as security to secure the performance by his of his obligations under the Call Option Agreement entered into between his and ZATL as of SEPTEMBER 12 ,2016, Shareholder undertakes to make full and due performance of the obligations under Call Option Agreement during the valid term of this Agreement, and she will not be in conflict with any stipulation under Call Option Agreement, which are likely to have impact on the exercise of the Entrusted Rights the Trustees under this Agreement.

 

5.1.6 Considering the facts that the HEZL entered into the Management Services Agreement (the "SERVICE AGREEMENT") on JULY 20, 2018with ZATL , the Call Option Agreement with ZATL and the Shareholder on SEPTEMBER 12, 2016, and that the Shareholder of HEZL will set aside all equity interest held thereby in HEZL as security to secure the performance of the contractual obligations under the above two agreements by HEZL , the Shareholder undertakes to, during the valid term of this Agreement, procure the full and due performance of HEZL of any and all its obligations under the Service Agreement, the Call Option Agreement, and warrants that no adverse impact on the exercise of the Entrusted Rights hereunder by the Trustees will be incurred due to the breach of the Management Services Agreement, Call Option Agreement by HEZL .

 

5.2 ZATL (excluding the person designated by it) hereby represents and warrants that:

 

5.2.1 it is a company with limited liability properly registered and legally existing under the laws of Hong Kong, with an independent corporate legal person status, and with full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a subject of actions; and

 

5.2.2 it has the full corporate power and authority to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction contemplated hereunder, and has the full power and authority to consummate such transaction.

 

5.3 HEZL hereby represents and warrants that:

 

5.3.1 it is a company with limited liability properly registered and legally existing under laws of China, with an independent legal person status, and with full and independent legal status and legal capacity to execute, deliver and perform this Agreement and may act independently as a subject of actions; and

 

3

 
 

 

5.3.2 it has the full corporate power and authority to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction contemplated hereunder, and has the full power and authority to consummate such transaction.

 

5.3.3 the Shareholder are enrolled Shareholder as of the effective date of this Agreement, legally holding the equity interest in it. Except rights created by this Agreement, the Equity Pledge Agreement and the Call Option Agreement, there exists no third party right on the Entrusted Rights. Pursuant to this Agreement, the Trustees may fully and sufficiently exercise the Entrusted Rights in accordance with the then effective articles of association of HEZL .

 

5.3.4 Considering the fact that the Shareholder of HEZL will set aside all the equity interest held thereby in HEZL as security to secure the performance of the contractual obligations by HEZL under the Management Services Agreement, the Call Option Agreement, HEZL undertakes to, during the valid term of this Agreement, make full and due performance of any and all obligations under the Management Services Agreement, the Call Option Agreement, and warrants that no adverse impact on the exercise of the Entrusted Rights hereunder by the Trustees will be incurred due to the breach of the Management Services Agreement, the Call Option Agreement by HEZL .

 

ARTICLE 6 TERM OF AGREEMENT

 

6.1 This Agreement takes effect from the date of due execution of all the Parties hereto, with the valid term of ten (10) years, unless terminated in advance by written agreement of all the Parties or according to Article 8.1 of this Agreement. This Agreement shall automatically renew for another one (1) year when the term (whether original or extended, if applicable) of this Agreement is due, unless ZATL gives a thirty (30) days notice in writing to the other Parties of the cancellation of such renewal.

 

6.2 In case that the Shareholder transfers all of the equity interest held by it in HEZL with prior consent of ZATL , such Shareholder shall no longer be a Party to this Agreement whilst the obligations and commitments of the other Parties under this Agreement shall not be adversely affected thereby.

 

ARTICLE 7 NOTICE

 

7.1 Any notice, request, demand and other correspondences made as required by or in accordance with this Agreement shall be made in writing and delivered to the relevant Party.

 

7.2 The abovementioned notice or other correspondences shall be deemed to have been delivered when (i) it is transmitted if transmitted by facsimile or telex, or (ii) it is delivered if delivered in person, or (iii) when five (5) days have elapsed after posting the same if posted by mail.

 

ARTICLE 8 DEFAULT LIABILITY

 

8.1 The Parties agree and confirm that, if any of the Parties (the "DEFAULTING PARTY") breaches substantially any of the provisions herein or fails substantially to perform any of the obligations hereunder, such a breach or failure shall constitute a default under this Agreement (a "DEFAULT"). In such event any of the other Parties without default (a "NON-DEFAULTING PARTY") who incurs losses arising from such a Default shall have the right to require the Defaulting Party to rectify such Default or take remedial measures within a reasonable period. If the Defaulting Party fails to rectify such Default or take remedial measures within such reasonable period or within ten (10) days of a Non-defaulting Party's notifying the Defaulting Party in writing and requiring it to rectify the Default, then the relevant Non-defaulting Party shall be entitled to choose at its discretion to (1) terminate this Agreement and require the Defaulting Party to indemnify all damages, or (2) require specific performance by the Defaulting Party of this Agreement and indemnification against all damages.

 

8.2 Without limiting the generality of Article 8.1 above, any breach by any Shareholder of the Call Option Agreement or Equity Pledge Agreement shall be deemed as having constituted the breach by such Shareholder of this Agreement;

 

 

4

 
 

 

any breach by HEZL of the Management Services Agreement or Call Option Agreement shall be deemed as having constituted the breach by HEZL of this Agreement.

 

8.3 The Parties agree and confirm, the Shareholder or HEZL shall not request the termination of this Agreement for whatsoever reason and under whatsoever circumstance, except otherwise stipulated by laws or this Agreement.

 

8.4 Notwithstanding any other provisions herein, the validity of this Article shall not be affected by the suspension or termination of this Agreement.

 

ARTICLE 9 MISCELLANEOUS

 

9.1 This Agreement shall be prepared in English language.

 

9.2 The conclusion, validity, execution, amendment, interpretation and termination of this Agreement shall be governed by laws of the China.

 

9.3 Any disputes arising from and in connection with this Agreement shall be settled through consultations among the Parties involved, and if the Parties involved fail to reach an agreement regarding such a dispute within thirty (30) days of its occurrence, such dispute shall be submitted to be China International Economic and Trade Arbitration Commission for arbitration in China accordance with the arbitration rules of such commission, and the arbitration award shall be final and binding on all the Parties involved.

 

9.4 Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with be China International Economic and Trade Arbitration Commission and other provisions under this Agreement, and a Party's exercise of any of its rights, powers and remedies shall not preclude its exercise of other rights, powers and remedies of it.

 

9.5 Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with laws (the "PARTY'S RIGHTS") shall not lead to a waiver of such rights, and the waiver of any single or partial exercise of the Party's Rights shall not preclude such Party from exercising such rights in any other way or exercising the remaining part of the Party's Rights.

 

9.6 The titles of the Articles contained herein are for reference only, and in no circumstances shall such titles be used for or affect the interpretation of the provisions

 

9.7 Each provision contained herein shall be severable and independent from each of other provisions. If at any time any one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions herein shall not be affected thereby.

 

9.8 Upon execution, this Agreement shall replace any other previous legal documents entered into by relevant Parties on the same subject matter.

 

9.9 Any amendments or supplements to this Agreement shall be made in writing and shall take effect only when properly signed by the Parties to this Agreement.

 

9.10 In respect of the Shareholder and HEZL , they shall not assign any of their rights and/or transfer any of their obligations hereunder to any third parties without prior written consent from ZATL ; ZATL shall have the right to assign any of its rights and/or transfer any of its obligations hereunder to any third parties designated by it after giving notice to the Shareholder.

 

9.11 This Agreement shall be binding on the legal successors of the Parties.

 

[The remainder of this page is left blank]

 

 

 

 

5

 

 

 

IN WITNESS HEREOF, the Parties have caused this Shareholder' Voting Rights Proxy Agreement to be executed in China as of the date first herein above mentioned.

 

 

For and on behalf of

BEIJING EZAGOO SHOPPING HOLDING LIMITED (Company chop)

 

Signature by:   /s/Tan Xiaohao
Name:  Tan Xiaohao
Position: Authorized Representative

 

 

For and on behalf of

RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED (Company chop)

 

 

Signature by:   /s/ Wan Weihong
Name:  Wan Weihong
Position: Authorized Representative

 

 

For and on behalf of

CHANGSHA EZAGOO TECHNOLOGY LIMITED (Company chop)

 

 

 

 

 

Signature by:   /s/Tan Xiaohao
Name:  Tan Xiaohao
Position:   Authorized Representative

 

For and on behalf of

HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED (Company chop)

 

 

 

 

 

Signed by: /s/ Zhang Qianwan
Name:  Zhang Qianwan
Position: Authorized Representative

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MANAGEMENT SERVICES AGREEMENT

 

 

BETWEEN

 

 

 

 

CHANGSHA EZAGOO TECHNOLOGY LIMITED

 

AND

 

 

HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July 20, 2018

 
 

 

MANAGEMENT SERVICES AGREEMENT

 

This MANAGEMENT SERVICES AGREEMENT (“ Agreement ”) is entered into as of July 20, 2018 (the “ Effective Date ”), by and between the following (each a “ Party ” and together the “ Parties ”):

 

(i) HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED ("HEZL") Registered Address: YIJIAREN BUSINESS HOTEL NO. 168, UNIFIED SOCIAL CREDIT CODE: TONGZIPO WEST ROAD, YUELE DISTRICT, CHANGSHA, HUNAN 410205, CHINA

 

(ii) CHANGSHA EZAGOO TECHNOLOGY LIMITED ("CETL")

 

Registered Address: ROOM 201, BUILDING 5, NANFENG SHIGUANGYUAN, NO.168

 

TONGZIPO WEST ROAD, YUELU DISTRICT, CHANGSHA, HUNAN 410205, CHINA

 

 

RECITALS

 

This Agreement is entered into with reference to the following facts:

 

A. HEZL is a limited liability company incorporated under the laws of China. HEZL is 80% owned by BEIJING EZAGOO SHOPPING HOLDING LIMITED and 20% owned by RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED (collectively, the “ Nominee Shareholders ”). HEZL operate digital advertising network in China using flat-panel audiovisual television displays (together with any expansion, contraction or other change to the scope of that business as contemplated by this Agreement, the “ Business ”).

 

B. CETL is a limited liability company incorporated under the laws of China. CETL is 100% owned by EZAGOO LIMITED. CETL has executive and financial management experience and capability relevant to the Business.

 

C. HEZL desires to engage CETL to provide management, financial and other services in connection with the operation of the Business, and CETL desires to provide those services to HEZL. The Parties now desire to memorialize the terms and conditions pursuant to which those services will be provided by CETL to HEZL, and pursuant to which HEZL will compensate CETL therefor.

 

NOW, THEREFORE , in consideration for the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the Parties, and through friendly consultation, under the principle of equality and mutual benefits, in accordance with the relevant laws and regulations of China, the Parties agree as follows:

 

AGREEMENT

 

1.   Management Services. During the Term of this Agreement, CETL will identify and provide to HEZL executive and financial management personnel in sufficient numbers and with expertise and experience appropriate to provide the services identified in Appendix I , as it may be amended from time

to time by written agreement of the Parties (the “Management Services”), and will provide those

 

 

 

1

 
 

 

Services to HEZL. HEZL will take all commercially reasonable actions to permit and facilitate the provision of the Management Services by CETL and accept those Services.

 

2. Compensation to CETL. As compensation for providing the Management Services, CETL will be entitled to receive a fee (the “Management Services Fee”), upon demand, equal to one hundred percent (100%) of the annual Net Profit of HEZL during the Term of this Agreement. At the sole discretion of CETL, the Net Profit of HEZL shall be calculated through the end of the immediately preceding fiscal year of HEZL, and paid by HEZL to CETL within sixty (60) days of demand therefor. Until and unless such demand is made, the Management Services Fee is not due and payable to CETL and it is the intent of the Parties that the Fee represents shall not be accrued by HEZL. Any dispute between the Parties concerning any calculation or payment under this Section 2 will be resolved pursuant to the dispute resolution provisions of Section 15 .

 

For the purpose of this agreement, Net Profit means the net profit of HEZL for the period immediately preceding the date for calculation of Net Profit set out in the Agreement, calculated as follows: (a) all revenue or income accrued by HEZL, less (b) all costs, accrued expenses and taxes paid or accrued and payable.

 

3.   Ad Hoc Payment . The Parties acknowledge that in order to provide the Management Services under this Agreement, CETL may incur expenses and costs from time to time, and the Parties further agree that CETL may request an ad hoc payment every calendar quarter and such payment may be credited against HEZL’s future payment obligations of the Management Services Fee.

 

4.   Credit for Amounts Paid Under Other Agreements . CETL and HEZL are or may be parties to certain other agreements, such as the Technical Service Agreement, some or all of which may require certain payments to be made by HEZL to affiliates and/or designee of CETL in consideration for services, equipment or other items of value provided by affiliates and/or designee of CETL. The Parties agree that any and all such amounts may be (a) separately paid by HEZL and accordingly counted as expenses of HEZL, reducing HEZL’s Net Profit; or (b) included in the aggregate Net Profit of HEZL and not separately paid to CETL.

 

5.   Interest Penalty . If any amounts due and payable under this Agreement are not paid when due, interest will accumulate on such amounts at the rate of four percent (4%) per annum until paid. This interest penalty may be reduced or waived by the Party entitled to receive it in light of actual circumstances, including the reason for any delay in payment.

 

6.   Guarantees . To the extent and only to the extent permitted by applicable law, each Party agrees to act as a guarantor of the indebtedness of the other, as and only as follows:

 

 

 

 

2

 
 

 

(a) HEZL will not incur any indebtedness to any Person not a party to this Agreement without the advance written consent of CETL in the exercise of its obligations to provide comprehensive Management Services under this Agreement.

 

(b) CETL may, in the exercise of its reasonable business judgment, incur indebtedness to any Person not a party to this Agreement, provided that any such indebtedness may only be in connection with the Business. If CETL incurs any indebtedness as contemplated by this Section 6(b), HEZL will act as a guarantor of that indebtedness.

 

7.   Exclusivity. During the Term of this Agreement, (a) HEZL will not contract with any other Person to provide services which are the same or similar to the Management Services. For purposes of this Section 7 only, “Person” does not include any Affiliate of either Party, including other entities that may become affiliated with either Party.

 

8. Operation of Business. During the Term of this Agreement:

 

(a) The HEZL will ensure that:

 

(i)         the business of HEZL, together with all business opportunities presented to or which become available to HEZL, will be treated as part of the Business covered by the Management Services and this Agreement;

 

(ii) all cash of HEZL will be maintained in Company Bank Accounts or disposed of in accordance with this Agreement;

 

(iii)     all business income, working capital, recovered accounts receivable, and any other funds which come into the possession of HEZL or are derived from or related to the operation of the business of HEZL, are deposited into a Company Bank Account;

 

(iv)      all accounts payable, employee compensation and other employment-related expenses, and any payments in connection with the acquisition of any assets for the benefit of HEZL or the satisfaction of any liabilities of HEZL, are paid from amounts maintained in Company Bank Accounts;

 

(v)        CETL or any third party designated by CETL will have full access to the financial records of HEZL and from time to time, CETL may request, at its sole option, to conduct an auditing with regard to the financial status of HEZL;

 

(vi) no action is taken without the prior written consent of CETL that would have the effect of entrusting all or any part of the business of HEZL to any other Person.

 

(b) CETL will ensure that:

 

(i)         it exercises with respect to the conduct of the Business the same level of care it exercises with respect to the operation of its own business and will at all times act in accordance with its Reasonable Business Judgment, including taking no action which it knows, or in the exercise of its Reasonable Business Judgment should have known, would materially

 

3

 
 

 

adversely affect the status of any of permits, licenses and approvals necessary for the conduct of the Business or constitute a violation of all Legal Requirements;

 

(ii)       neither it, nor any of its agents or representatives, takes any action that interferes with, or has the effect of interfering with, the operation of the Business in accordance with this Agreement, or which materially adversely affects its assets, operations, business or prospects;

 

(iii)     use its Best Efforts to cooperate and assist HEZL to maintain in effect all permits, licenses and other authorizations and approvals necessary or appropriate to the conduct of the Business; and

 

(iv)      subject to the provisions of Section 10 relating to the Transition period, it will preserve intact the business and operations of HEZL and take no action which it knows, or in the exercise of its Reasonable Business Judgment should have known, would materially adversely affect the business, operations, or prospects of HEZL.

 

9.   Material Actions . The Parties acknowledge and agree that the economic risk of the operation of the Business is being substantially assumed by HEZL and that the continued business success of HEZL is necessary to permit the Parties to realize the benefits of this Agreement. During the Term of this Agreement, the Parties therefore will ensure that HEZL does not take any Material Action without the advance written consent of CETL, which consent will not be unreasonably withheld or delayed.

 

10.   Transition of Business to CETL; Future Expansion . At the sole discretion of CETL, during the Term of this Agreement, CETL may transfer or cause to be transferred from HEZL to CETL or its

 

designee (referred to collectively for purposes of this Section 10 as “CETL”) any part or all of the business, personnel, assets and operations of HEZL which may be lawfully conducted, employed, owned or operated by CETL (the “Transition”), including any of the following:

 

(a) business opportunities presented to, or available to HEZL may be pursued and contracted for in the name of CETL rather than HEZL, and at its discretion CETL may employ the resources of HEZL to secure such opportunities;

 

(b) any tangible or intangible property of HEZL, any contractual rights, any personnel, and any other items or things of value held by HEZL may be transferred to CETL at book value;

 

(c) real property, personal or intangible property, personnel, services, equipment, supplies and any other items useful for the conduct of the Business may be obtained by CETL by acquisition, lease, license or otherwise, and made available to HEZL on terms to be determined by agreement between CETL and HEZL;

 

(d) contracts entered into in the name of HEZL may be transferred to CETL, or the work under such contracts may be subcontracted, in whole or in part, to CETL, on terms to be determined by agreement between CETL and HEZL; and

 

 

4

 
 

 

(e) any changes to, or any expansion or contraction of, the Business may be carried out in the exercise of the sole discretion of CETL, and in the name of and at the expense of, CETL;

 

provided, however , that none of the foregoing, and no other part of the Transition may cause or have the effect of terminating (without being substantially replaced under the name of CETL) or adversely affecting any license, permit or regulatory status of HEZL. Any of the activity contemplated by this Section10 will be deemed part of the “Business.”

 

11.   Ownership of Intellectual Property . All Intellectual Property created by CETL in the course of providing the Management Services will be the sole property of CETL and HEZL will have no right to any ownership or use of such Intellectual Property except under separate written agreement with CETL.

 

12.   Representations and Warranties of HEZL . HEZL hereby makes the following representations and warranties for the benefit of CETL:

 

(a) Corporate Existence and Power . HEZL is a limited liability company duly organized and validly existing under the laws of China, and has all legal or corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and as currently contemplated to be conducted. HEZL has never approved, or commenced any proceeding or made any election contemplating, the dissolution or liquidation of HEZL or the winding up or cessation of the business or affairs of HEZL.

 

(b) Authorization; No Consent . HEZL (i) has taken all necessary corporate and other actions to authorize its execution, delivery and performance of this Agreement and all related documents and has the corporate and other power and authorization to execute, deliver and perform this Agreement and the other related documents; (ii) has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the other related documents and to perform its obligations under this Agreement and the other related documents; (iii) is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the transactions or actions contemplated by any of the Business Cooperation Agreements, except for any notices that have been duly given or Consents that have been duly obtained; and (iv) holds all the governmental authorizations necessary to permit it to lawfully conduct and operate its business in the manner it currently conducts and operates such business and to permit HEZL to own and use its assets in the manner in which it currently owns and uses such assets. To the best knowledge of HEZL, there is no basis for any governmental authority to withdraw, cancel or cease in any manner any of such governmental authorizations.

 

(c) No Conflicts . The execution and perform of this Agreement by HEZL will not contravene, conflict with, or result in violation of (i) any provision of the organizational documents of HEZL; (ii) resolution adopted by the board of directors or the equity holders of HEZL; and

 

 

5

 
 

 

(iii) any laws and regulations to which HEZL or the transactions and relationships contemplated in this Agreement.

 

13.   Representations and Warranties of CETL . CETL hereby makes the following representations and warranties for the benefit of HEZL:

 

(a) Corporate Existence and Power . CETL (i) is a limited liability company duly organized and validly existing under the laws of China, and has all corporate power and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and as currently contemplated to be conducted; and (ii) has not ever approved, or commenced any proceeding or made any election contemplating, the dissolution or liquidation of CETL or the winding up or cessation of the business or affairs of CETL.

 

(b) Authorization; No Consent . CETL (i) has taken all necessary corporate actions to authorize its execution, delivery and performance of this Agreement and all related documents and has the corporate power and authorization to execute, deliver and perform this Agreement and the other related documents; (ii) has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the other related documents and to perform its obligations under this Agreement and the other related documents; (iii) is not required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Business Cooperation Agreements, except for any notices that have been duly given or Consents that have been duly obtained; and (iv) has all the governmental authorizations necessary to permit CETL to lawfully conduct and operate its business in the manner it currently conducts and operates such business and to permit CETL to own and use its assets in the manner in which it currently owns and uses such assets. To the best knowledge of CETL, there is no basis for any governmental authority to withdraw, cancel or cease in any manner any of such governmental authorizations.

 

(c) No Conflicts . The execution and perform of this Agreement by CETL will not contravene, conflict with, or result in violation of (i) any provision of the organizational documents of CETL; (ii) any resolution adopted by the board of directors or the equity holders of CETL; and (iii) any laws and regulations to which CETL or the transactions and relationships contemplated in this Agreement and the Business Cooperation Agreements are subject.

 

14. Liability for Breach; Indemnification and Hold Harmless . Each of the Parties will be liable

 

to the other Party for any damage or loss caused by such Party’s breach of this Agreement. HEZL will indemnify and hold harmless CETL from and against any claims, losses or damages unless caused by a breach by CETL of its obligations under this Agreement or by the willful, reckless or illegal conduct of CETL. CETL will indemnify and hold harmless HEZL from and against any claims, losses or damages

 

 

6

 
 

 

caused by any breach by HEZL of its obligations under this Agreement or by the willful, reckless or illegal conduct of HEZL.

 

15. Dispute Resolution .

 

(a) Friendly Consultations . Any and all disputes, controversies or claims arising out of or relating to the interpretation or implementation of this Agreement, or the breach hereof or relationships created hereby, will be settled through friendly consultations.

 

(b) Arbitration. If any such dispute is not resolved through friendly consultations within sixty (60) days from the date a Party gives the other Parties written notice of a dispute, then it will be resolved exclusively by arbitration under in accordance with the UNCITRAL Arbitration Rules as at present in force and as may be amended by the rest of this clause. The appointing authority shall be China International Economic and Trade Arbitration Commission. The place of arbitration shall be in China at China International Economic and Trade Arbitration Commission. Any arbitration will be conducted in either in English or Chinese languages. The arbitration award will be final and binding on both Parties and will not be subject to any appeal, and the Parties agree to be bound thereby and to act accordingly.

 

(c) Continuation of Agreement . It is not necessary for any Party to declare a breach of this Agreement in order to proceed with the dispute resolution process set out in this Section 15 . Unless and until this Agreement is terminated pursuant to Section 16 , this Agreement will continue in effect during the pendency of any discussions or arbitration under this Section 15 .

 

16.   Term . This Agreement is effective as of the date first set forth above, and will continue in effect for a period of ten (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. The period during which this Agreement is effective is referred to as the “ Term .”

 

(a) Mutual Consent . This Agreement may be terminated at any time by the mutual consent of the Parties, evidenced by an agreement in writing signed by both Parties.

 

(b) Termination by CETL . This Agreement may be terminated by CETL ((i) upon written notice delivered to HEZL no later than ten (10) calendar days before the expiration of the Initial Term or any Subsequent Term; or (ii) at any time by upon ninety (90) calendar days’ written notice delivered to HEZL.

 

(c) Breach or Insolvency . Either of HEZL or CETL may terminate this Agreement immediately

 

(a) upon the material breach by the other of its obligations hereunder and the failure of such Party to cure such breach within thirty (30) working days after written notice from the non-breaching Party; or (b) upon the filing of a voluntary or involuntary petition in bankruptcy by the other or of which the other is the subject, or the insolvency of the other, or the commencement of any proceedings placing the other in receivership, or of any assignment by the other for the benefit of creditors.

 

7

 
 

 

(d) Consequences of Termination . Upon any effective date of any termination of this Agreement:

 

(i) CETL will instruct all management personnel identified or provided by it to HEZL to cease working for HEZL; (ii) CETL will deliver to HEZL all chops and seals of HEZL; (iii) CETL will deliver to HEZL, or grant to HEZL unrestricted access to and control of, all of the financial and other books and records of HEZL, including any and all permits, licenses, certificates and other proprietary and operational documents and instruments; (iv) CETL will cooperate fully in the replacement of any signatories or persons authorized to act on behalf of HEZL with persons appointed by HEZL; and (v) any licenses granted by CETL to HEZL during the Term will terminate unless otherwise agreed by the Parties.

 

(e) Survival . The provisions of Section 14 (Indemnification; Hold Harmless), Section 15 (Dispute Resolution), Section 16(d) (Consequences of Termination) and Section 17 (Miscellaneous) will survive any termination of this Agreement. Any amounts owing from any Party to any other Party on the effective date of any termination under the terms of this Agreement will continue to be due and owing despite such termination.

 

17. Miscellaneous .

 

(a) Headings and Gender . The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to

 

“Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

 

(b) Usage . The words “include” and “including” will be read to include “without limitation.”

 

(c) Severability . Whenever possible each provision and term of this Agreement will be interpreted in a manner to be effective and valid but if any provision or term of this Agreement is held to be prohibited by or invalid, then such provision or term will be ineffective only to the extent of such prohibition or invalidity, without invalidating or affecting in any manner whatsoever the remainder of such provision or term or the remaining provisions or terms of this Agreement. If any of the covenants set forth in this Agreement are held to be unreasonable, arbitrary, or against public policy, such covenants will be considered divisible with respect to scope, time and geographic area, and in such lesser scope, time and geographic area, will be effective, binding and enforceable against the Parties.

 

(d) Waiver . No failure or delay by any Party to exercise any right, power or remedy under this Agreement will operate as a waiver of any such right, power or remedy.

 

(e) Integration . This Agreement supersede any and all prior discussions and agreements (written or oral) between the Parties with respect to cooperation arrangement and other matters contained herein.

 

 

8

 
 

 

(f) Assignments, Successors, and No Third-Party Rights . No Party may assign any of its rights under this Agreement without the prior consent of the other Parties, which will not be unreasonably withheld. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the Parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the Parties to this Agreement and their successors and assigns.

 

(g) Notices . All notices, requests, demands, claims, and other communications under this Agreement will be in writing. Any Party may send any notice, request, demand, claim, or other communication under this Agreement to the intended recipient at the address set forth on the signature page of this Agreement by any means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Refusal by a Party to accept notice that is validly given under this Agreement will be deemed to have been received by such Party upon receipt. Any Party may change the address to which notices, requests, demands, claims, and other communications under this Agreement are to be delivered by giving the other Parties notice in the manner herein set forth. Any notice, request, demand, claim, or other communication under this Agreement will be addressed to the intended recipient as set forth on the signature page hereto.

 

(h) Further Assurances . Each of the Parties will use its best efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement.

 

(i) Governing Law . This Agreement will be construed, and the rights and obligations under this Agreement determined, in accordance with the laws of the China, without regard to the principles of conflict of laws thereunder.

 

(j) Amendment . This Agreement may not be amended, altered or modified except by a subsequent written document signed by all Parties.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

 

 

 

IN WITNESS HEREOF, the Parties have caused this Management Services Agreement to be executed in China as of the date first herein above mentioned.

 

For and on behalf of

BEIJING EZAGOO SHOPPING HOLDING LIMITED (Company chop)

 

Signature by:   /s/Tan Xiaohao
Name:  Tan Xiaohao
Position: Authorized Representative

 

 

For and on behalf of

RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED (Company chop)

 

 

Signature by:   /s/ Wan Weihong
Name:  Wan Weihong
Position: Authorized Representative

 

 

For and on behalf of

CHANGSHA EZAGOO TECHNOLOGY LIMITED (Company chop)

 

 

Signature by:   /s/Tan Xiaohao
Name:  Tan Xiaohao
Position:   Authorized Representative

 

For and on behalf of

HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED (Company chop)

 

 

Signed by: /s/ Zhang Qianwan
Name:  Zhang Qianwan
Position: Authorized Representative

 

 
 

 

 

 

APPENDIX I

 

Management Services

 

For purposes of that certain Management Services Agreement to which this is Appendix A, “ Management Services ” means the following:

 

General Management Services

 

“Management Services” includes the following general management services relating to the operation of the Business, except for those compulsively limited or prohibited by laws of China and regulations otherwise:

 

(a)    All aspects of the day-to-day operations of HEZL, including its relationships with its customers, its performance under agreements or other arrangements with any other parties, its compliance with applicable laws and regulations;

 

(b) The appointment, hiring, compensation (including any bonuses, non-monetary compensation, fringe and other benefits, and equity-based compensation), firing and discipline of all employees, consultants, agents and other representatives of HEZL, including the Executive Director or the Board of Directors of HEZL and all other executive officers or employees of HEZL;

 

(c)   Establishment, maintenance, termination or elimination of any plan or other arrangement for the benefit of any employees, consultants, agents, representatives or other personnel of HEZL;

 

(d)   Management, control and authority over all accounts receivable, accounts payable and all funds and investments of HEZL;

 

(e)   Management, control and authority over HEZL Bank Accounts, in connection with which all seals and signatures will be those of personnel appointed and confirmed by CETL;

 

(f) Any expenditure, including any capital expenditure, of HEZL;

 

(g) The entry into, amendment or modification, or termination of any contract, agreement and/or other arrangement to which HEZL is, was, or would become a party;

 

(h)   The acquisition, lease or license by HEZL of any assets, supplies, real or personal property, or intellectual or other intangible property;

 

(i)   The acquisition of or entry into any joint venture or other arrangement by HEZL with any other Person;

 

(j)   Any borrowing or assumption by HEZL of any liability or obligation of any nature, or the subjection of any asset of HEZL to any Lien;

 

(k)    Any sale, lease, license, retirement or other disposition of any asset owned, beneficially owned or controlled by HEZL;

 

(l)   Applying for, renewing, and taking any action to maintain in effect, any permits, licenses or other authorizations and approvals necessary for the operation of HEZL’s business;

 

(m)   The commencement, prosecution or settlement by HEZL of any litigation or other dispute with any other Person, through mediation, arbitration, lawsuit or appeal;

 

11

 
 

 

(n) The declaration or payment of any dividend or other distribution of profits of

 

(o)   The preparation and filing of all Tax Returns, the payment or settlement of any and all Taxes, and the conduct of any proceedings with any Governmental Authority with respect to any Taxes; and

(p)   The carrying out of the Transition, as defined in Section 10, and any business or corporate restructuring of HEZL or its subsidiaries.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

 

 

 

 

EQUITY PLEDGE AGREEMENT

 

 

AMONG

 

BEIJING EZAGOO SHOPPING HOLDING LIMITED

 

RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED

 

CHANGSHA EZAGOO TECHNOLOGY LIMITED

 

AND

 

HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED

 

 

 

 

 

 

 

 

 

July 20, 2018

 
 

EQUITY PLEDGE AGREEMENT

 

This EQUITY PLEDGE AGREEMENT (hereinafter, this "AGREEMENT") is entered into in China as of July 20, 2018 by and among the following Parties:

 

 

(1) BEIJING EZAGOO SHOPPING HOLDING LIMITED (“BESH”)

 

ADDRESS: ROOM 308, FLOOR 3, BUILDING 3, NO. 46, DONGSIXI AVENUE, DONGCHENG DISTRICT, BEIJING CIT

 

UNIFIED SOCIAL CREDIT CODE: 91110116339693336B

 

(2) RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED (“RFLL”)

 

ADDRESS: ROOM 201, BUILDING A, NO. 1, QIANWANYI ROAD, SHENGANG COOPERATIVE DISTRICT, QIANHAI, SHENZHEN CITY

 

UNIFIED SOCIAL CREDIT CODE: 91440300MA5DFU2A6H

 

(3) CHANGSHA EZAGOO TECHNOLOGY LIMITED (“CETL”)

 

REGISTERED ADDRESS: ROOM 201, BUILDING 5, NANFENG SHIGUANGYUAN, NO.168 TONGZIPO WEST ROAD, YUELU DISTRICT, CHANGSHA, HUNAN 410205, CHINA

 

UNIFIED SOCIAL CREDIT CODE: 91430100MA4PQE488X

 

(4) HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED ("HEZL")

 

REGISTERED ADDRESS: YIJIAREN BUSINESS HOTEL NO. 168 , UNIFIED SOCIAL CREDIT CODE:

 

TONGZIPO WEST ROAD, YUELE DISTRICT, CHANGSHA, HUNAN 410205, CHINA

 

UNIFIED SOCIAL CREDIT CODE: 91430100395212760W

 

(The above parties shall hereinafter be individually referred to as a "PARTY" and collectively, "PARTIES". BESH and RFLL shall hereinafter referred to as an “PLEDGOR” individually, and collectively, the “PLEDGORS”: CETL hereinafter referred to as “PLEDGEE”.)

 

WHEREAS:

 

(1)    As of the date of this Agreement, BESH and RFLL are the enrolled Shareholder of HEZL, legally holding all the equity in HEZL, of which BESH holding 80% interest, RFLL holding 20%.

 

(2)    Pursuant to the Call Option Agreement dated as of JULY 20, 2018 among CETL, HEZL and the Pledgor (hereinafter, the "CALL OPTION AGREEMENT"), the Pledgor shall transfer part or all of the equity interest of the HEZL to CETL and/or any other entity or individual designated by CETL at the request of the CETL.

 

(3)    Pursuant to the Shareholders' Voting Right Proxy Agreement dated as of JULY 20, 2018 among CETL, HEZL and the Pledgor (hereinafter, the "PROXY AGREEMENT"), Pledgor has already irrevocably entrusted the personnel designated by CETL then with full power to exercise on his behalf all of his shareholders' voting rights in HEZL.

 

(4) Pursuant to the Management Services Agreement dated as of JULY 20, 2018 among CETL and HEZL (hereinafter, the "SERVICE AGREEMENT"), HEZL has already engaged CETL exclusively to provide them with relevant management and consultation and other services, for which the HEZL will respectively pay CETL services accordingly.

 
 

 

(5)   As security for performance by the Pledgor of the Contract Obligations (as defined below) and repayment of the Guaranteed Liabilities (as defined below), the Pledgor agrees to pledge all of his HEZL Equity to the Pledgee and grants the Pledgee the right to request for repayment in first priority and HEZL agrees such equity pledge arrangement.

 

THEREFORE, the Parties hereby have reached the following agreement upon mutual consultations:

 

ARTICLE 1 - DEFINITION

 

1.1 Except as otherwise construed in the context, the following terms in this Agreement shall be interpreted to have the following meanings:

 

"CONTRACT OBLIGATIONS" shall mean all contractual obligations of Pledgor under the Call Option Agreement, Proxy Agreement and this Agreement; all contractual obligations of HEZL under the Management Services Agreement, Call Option Agreement, Proxy Agreement and this Agreement.

 

"GUARANTEED LIABILITIES" shall mean all direct, indirect and consequential losses and losses of foreseeable profits suffered by Pledgee due to any Breaching Event (as defined below) of Pledgor, and all fees incurred by Pledgee for the enforcement of the Contractual Obligations of Pledgor.

 

"TRANSACTION AGREEMENTS" shall mean the Call Option Agreement and the Proxy Agreement in respect of Pledgor; the Management Services Agreement, and Proxy Agreement in respect of HEZL.

 

"BREACHING EVENT" shall mean any breach by Pledgor of his Contract Obligations under the Proxy Agreement, Call Option Agreement or this Agreement; any breach by HEZL of its Contract Obligations under the Service Agreement, Call Option Agreement and/or Proxy Agreement.

 

"PLEDGED PROPERTY" shall mean all of the equity interests in HEZL which are legally owned by the Pledgor as of the effective date hereof and is to be pledges by his to the Pledgee according to provisions hereof as the security for the performance by his and HEZL of their Contractual Obligations, and the increased capital contribution and equity interest described in Articles 2.6 and 2.7 hereof;

 

"LAWS OF CHINA" shall mean the then valid laws, administrative regulations, administrative rules, local regulations, judicial interpretations and other binding regulatory documents of China.

 

1.2 The references to any laws of China here in shall be deemed:

 

(1)   to include the references to the amendments, changes, supplements and reenactments of such law, irrespective of whether they take effect before or after the formation of this Agreement; and

 

(2)   to include the references to other decisions, notices or regulations enacted in accordance therewith or effective as a result thereof.

 

1.3 Except as otherwise stated in the context herein, all references to an Article, clause, item or paragraph shall refer to the relevant part of this Agreement.

 

ARTICLE 2 - EQUITY PLEDGE

 

2.1 Pledgor hereby agrees to pledge the Pledged Property, which she legally owns and has the right to dispose of, to Pledgee according to the provisions hereof as the security for the performance of the Contract Obligations and the repayment of the Guaranteed Liabilities. HEZL hereby agrees that the Pledgor legally holding equity interest in it to pledge the Pledged Property to the Pledgee according to the provisions hereof.

 

2.2 Pledgor hereby undertakes that she will be responsible for, recording the arrangement of the equity pledge hereunder (hereinafter, the "EQUITY PLEDGE") on the shareholder register of HEZL on the date hereof, and will do its best endeavor to make registration with registration authorities of industry and commerce of HEZL. HEZL

 
 

 

undertakes that it will do its best to cooperate with the Pledgor to complete the registration with authorities of industry and commerce under this Article.

 

2.3 During the valid term of this Agreement, except for the willful misconduct or gross negligence of Pledgee which has direct cause and effect relationship the reduction in value of the Pledged Property, Pledgee shall not be liable in any way to, nor shall Pledgor have any right to claim in any way or propose any demands on Pledgee, in respect of the said reduction in value of the Pledged Property.

 

2.4 To the extent not violating provision of Article 2.3 above, in case of any possibility of obvious reduction in value of the Pledged Property which is sufficient to jeopardize Pledgee's rights, Pledgee may at any time auction or sell off the Pledged Property on behalf of Pledgor, and discuss with Pledgor to use the proceeds from such auction or sale-off as pre-repayment of the Guaranteed Liabilities, or may submit such proceeds to the local notary institution where Pledgee are domiciled (any fees incurred in relation thereto shall be borne by Pledgor).

 

2.5 CETL as Pledgee shall be deemed to have created the encumbrance of first order in priority on the Pledged Property, and in case of any Breaching Event, Pledgee shall have the right to dispose of the Pledged Property in the way set out in Article 4 hereof.

 

2.6 Only upon prior consent by Pledgee shall Pledgor be able to increase their capital contribution to any or all of the HEZL. Further capital contribution made by Pledgor in HEZL shall also be part of the Pledged Property.

 

2.7 Only upon prior consent by Pledgee shall Pledgor be able to receive dividends or share profits from the Pledged Property. The dividends or the profits received by Pledgor from the Pledged Property shall be deposited into Pledgee's bank account designated by Pledgee respectively, to be under the supervision of Pledgee and used as the Pledged Property to repay in priority the Guaranteed Liabilities.

 

2.8 Pledgor agrees to bear liabilities to Pledgee upon occurrence of any Breaching Event on the HEZL and Pledgee shall have the right, upon occurrence of the Breaching Event, to dispose of any Pledged Property of either of Pledgor in accordance with the provisions hereof.

 

ARTICLE 3 - RELEASE OF PLEDGE

 

In respect of equity interest of HEZL, upon full and complete performance by Pledgor of all of his Contractual Obligations, Pledgee shall, at the request of Pledgor, release the pledge created on HEZL under this Agreement, and shall cooperate with Pledgor to go through the formalities to cancel the record of the Equity Pledge in the shareholder register of HEZL, with the reasonable fees incurred in connection with such release to be borne by Pledgee with the same proportion.

 

ARTICLE 4 - DISPOSAL OF THE PLEDGED PROPERTY

 

4.1 Pledgor, HEZL and Pledgee hereby agree that, in case of any Breaching Event, Pledgee shall have the right to exercise, upon giving written notice to Pledgor, all of the remedial rights and powers enjoyable by them under laws of China, including but not limited to being repayment in priority with proceeds from auctions or sale-offs of the Pledged Property. Pledgee shall not be liable for any loss as the result of their reasonable exercise of such rights and powers.

 

4.2 Pledgee shall have the right to designate in writing its legal counsel or other agents to exercise on their respective behalf any and all rights and powers set out above, and neither Pledgor nor HEZL shall oppose thereto.

 

4.3 The reasonable costs incurred by Pledgee in connection with their exercise of any and all rights and powers set out above shall be borne by Pledgor, and Pledgee shall have the right to deduct the costs actually incurred from the proceeds that they acquire from the exercise of the rights and powers.

 

4.4 The proceeds that Pledgee acquire from the exercise of their respective rights and powers shall be used in the priority order as follows:

 
 

 

-   First, to pay any cost incurred in connection with the disposal of the Pledged Property and the exercise by Pledgee of their respective rights and powers (including remuneration paid to their respective legal counsels and agents);

 

- Second, to pay any taxes and levies payable for the disposal of the Pledged Property; and

 

- Third, to repay Pledgee for the Guaranteed Liabilities.

 

In case of any balance after payment of the above amounts, Pledgee shall return the same to Pledgor according to the relevant laws and rules or submit the same to the local notary institution where Pledgee are domiciled (any fees incurred in relation thereto shall be borne by Pledgor).

 

 

 

 

ARTICLE 5 - FEES AND COSTS

 

All costs actually incurred in connection with the establishment of the Equity Pledge hereunder, including but not limited to stamp duties, any other taxes, all legal fees, etc shall be borne by Pledgee with the same proportion.

 

ARTICLE 6 - CONTINUITY AND NO WAIVE

 

The Equity Pledge hereunder is a continuous guarantee, with its validity to continue until the full performance of the Contractual Obligations or the full repayment of the Guaranteed Liabilities. Neither exemption or grace period granted by Pledgee to Pledgor in respect of their breach, nor delay by Pledgee in exercising any of their rights under this Agreement shall affect the rights of Pledgee under this Agreement, relevant laws of China, the rights of Pledgee to demand at anytime thereafter the strict performance of this Agreement by Pledgor or the rights Pledgee may be entitled to due to subsequent breach by Pledgor of the obligations under this Agreement.

 

ARTICLE 7 - REPRESENTATIONS AND WARRANTIES BY PLEDGOR

 

Pledgor hereby represents and warrants to Pledgee as follows:

 

7.1 Pledgor is a Chinese citizen with full capacity, with full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and may act independently as a litigant party. The Pledgor has full power and authorization to execute and deliver this Agreement and all the other documents to be entered into by it in relation to the transaction referred to herein, and it has the full power and authorization to complete the transaction referred to herein.

 

7.2 All reports, documents and information concerning Pledgor and all matters as required by this Agreement which are provided by Pledgor to Pledgee before this Agreement comes into effect are true, correct and effective in all material aspects as of the execution hereof.

 

7.3 At the time of the effectiveness of this Agreement, Pledgor are the sole legal owner of the Pledged Property, with no existing dispute whatever concerning the ownership of the Pledged Property. Pledgor has the right to dispose of the Pledged Property or any part thereof.

 

7.4 Except for the encumbrance set on the Pledged Property hereunder and the rights set under the Transaction Agreements, there is no other encumbrance or third party interest set on the Pledged Property.

 

7.5 The Pledged Property is capable of being pledged or transferred according to the laws, and Pledgor has the full right and power to pledge the Pledged Property to Pledgee according to this Agreement.

 

7.6 This Agreement constitutes the legal, valid and binding obligations on Pledgor when it is duly executed by Pledgor.

 

7.7 Any consent, permission, waive or authorization by any third person, or any approval, permission or exemption by any government authority, or any registration or filing formalities (if required by laws) with any government

 
 

 

authority to be handled or obtained in respect of the execution and performance hereof and the Equity Pledge hereunder have already been handled or obtained, and will be fully effective during the valid term of this Agreement.

 

7.8 The execution and performance by Pledgor of this Agreement are not in violation of or conflict with any laws applicable to them, or any agreement to which they are a party or which has binding effect on their assets, any court judgment, any arbitration award, or any administration authority decision.

 

7.9 The pledge hereunder constitutes the encumbrance of first order in priority on the Pledged Property.

 

7.10 All taxes and fees payable in connection with acquisition of the Pledged Property have already been paid in full amount by Pledgor.

 

7.11 There is no pending or, to the knowledge of Pledgor, threatened litigation, legal process or demand by any court or any arbitral tribunal against Pledgor, or their property, or the Pledged Property, nor is there any pending or, to the knowledge of Pledgor, threatened litigation, legal process or demand by any government authority or any administration authority against Pledgor, or their property, or the Pledged Property, which is of material or detrimental effect on the economic status of Pledgor or their capability to perform the obligations hereunder and the Guaranteed Liabilities.

 

7.12 Pledgor hereby warrants to Pledgee that the above representations and warranties will remain true, correct and effective at any time and under any circumstance before the Contractual Obligations are fully performed or the Guaranteed Liabilities are fully repaid, and will be fully complied with.

 

ARTICLE 8 - REPRESENTATIONS AND WARRANTIES

BY HEZL

 

HEZL hereby represents and warrants to Pledgee as follows:

 

8.1 HEZL is a limited liability corporation duly incorporated and validly existing under laws of China, with full capacity of disposition and has obtained due authorization to execute, deliver and perform this Agreement and can independently be a subject of actions.

 

8.2 All reports, documents and information concerning Pledged Property and all matters as required by this Agreement which are provided by HEZL to Pledgee before this Agreement comes into effect are true, correct and effective in all material aspects as of the execution hereof.

 

8.3 All reports, documents and information concerning Pledged Property and all matters as required by this Agreement which are provided by HEZL to Pledgee after this Agreement comes into effect are true, correct and effective in all material aspects upon provision.

 

8.4 This Agreement constitutes the legal, valid and binding obligations on HEZL when it is duly executed by HEZL.

 

8.5 It has full right and authorization to execute and deliver this Agreement and other documents relating to the transaction as stipulated in this Agreement and to be executed by them. It also has full right and authorization to complete the transaction stipulated in this Agreement.

 

8.6 There is no pending or, to the knowledge of HEZL, threatened litigation, legal process or demand by any court or any arbitral tribunal against HEZL, or their property (including but are not limited to the Pledged Property), nor is there any pending or, to the knowledge of HEZL, threatened litigation, legal process or demand by any government authority or any administration authority against HEZL, or their property (including but are not limited to the Pledged Property), which is of material or detrimental effect on the economic status of HEZL or their capability to perform the obligations hereunder and the Guaranteed Liabilities.

 

8.7 HEZL hereby warrants to Pledgee that the above representations and warranties will remain true, correct and effective at any time and under any circumstance before the Contractual Obligations are fully performed or the Guaranteed Liabilities are fully repaid, and will be fully complied with.

 
 

 

ARTICLE 9 - UNDERTAKINGS BY PLEDGOR

 

Pledgor hereby undertakes to Pledgee as follows:

 

9.1 Without the prior written consent by Pledgee, Pledgor shall not establish or permit to establish any new pledge or any other encumbrance on the Pledged Property.

 

9.2 Without first giving written notice to Pledgee and having Pledgee's prior written consent, Pledgor shall not transfer the Pledged Property, and any attempt by Pledgor to transfer the Pledged Property shall be null and void. The proceeds from transfer of the Pledged Property by Pledgor shall be used to repay to Pledgee in advance the Guaranteed Liabilities or submit the same to the third party agreed with Pledgee.

 

9.3 In case of any litigation, arbitration or other demand which may affect detrimentally the interest of Pledgor or Pledgee under the Transaction Agreements and hereunder or the Pledged Property, Pledgor undertake to notify Pledgee thereof in writing as soon as possible and promptly and shall take, at the reasonable request of Pledgee, all necessary measures to ensure the pledge interest of Pledgee in the Pledged Property.

 

9.4 Pledgor shall not carry on or permit any act or action which may affect detrimentally the interest of Pledgee under the Transaction Agreements and hereunder or the Pledged Property.

 

9.5 Pledgor guarantees that they shall, at the reasonable request of Pledgee, take all necessary measures and execute all necessary documents (including but not limited to supplementary agreement hereof) in respect of ensuring the pledge interest of Pledgee in the Pledged Property and the exercise and realization of the rights thereof.

 

9.6 In case of assignment of any Pledged Property as the result of the exercise of the right to the pledge hereunder, Pledgor guarantee that they will take all necessary measures to realize such assignment.

 

ARTICLE 10 - UNDERTAKINGS BY HEZL

 

10.1 Any consent, permission, waive or authorization by any third person, or any approval, permission or exemption by any government authority, or any registration or filing formalities (if required by laws) with any government authority to be handled or obtained in respect of the execution and performance hereof and the Equity Pledge hereunder will be cooperated to handle or obtain by HEZL to their best and will be ensured to remain full effective during the valid term of this Agreement.

 

10.2 Without the prior written consent by Pledgee, HEZL shall not cooperate to establish or permit to establish any new pledge or any other encumbrance on the Pledged Property.

 

10.3 Without having Pledgee's prior written consent, HEZL shall not cooperate to transfer or permit to transfer the Pledged Property.

 

10.4 In case of any litigation, arbitration or other demand which may affect detrimentally the interest of HEZL or Pledgee under the Transaction Agreements and hereunder or the equity of HEZL as the Pledged Property, HEZL undertake to notify Pledgee thereof in writing as soon as possible and promptly and shall take, at the reasonable request of Pledgee, all necessary measures to ensure the pledge interest of Pledgee in the Pledged Property.

 

10.5 HEZL shall not carry on or permit any act or action which may affect detrimentally the interest of Pledgee under the Transaction Agreements and hereunder or the Pledged Property.

 

10.6 HEZL shall provide Pledgee with the financial statement of the last calendar season within the first month of each calendar season, including but are not limited to the balance sheet, the income statement and the statement of cash flow.

 
 

 

10.7 HEZL guarantee that they shall, at the reasonable request of Pledgee, take all necessary measures and execute all necessary documents (including but not limited to supplementary agreement hereof) in respect of ensuring the pledge interest of Pledgee in the Pledged Property and the exercise and realization of the rights thereof.

 

10.8 In case of assignment of any Pledged Property as the result of the exercise of the right to the pledge hereunder, HEZL guarantee that they will take all necessary measures to realize such assignment.

 

ARTICLE 11 - ENCUMBRANCE OF FIRST ORDER IN PRIORITY

 

11.1 CETL has the encumbrance of first order in priority on any and all Pledged Property. Pursuant to the stipulations of the Transaction Agreement, any Breaching Event under any Transaction Agreement shall result in the occurrence of Breaching Event under other Transaction Agreement, CETL shall claim the pledge interest hereunder to Pledgor relevant to the Breaching Event, and be repaid in priority in the proportion of their respective security amount from the proceeds obtained according to the disposal of Pledged Property stipulated in Article 4 hereof.

 

ARTICLE 12 - CHANGE OF CIRCUMSTANCES

 

12 As supplement and subject to compliance with other terms of the Transaction Agreements and this Agreement, in case that at any time the promulgation or change of any laws of China, regulations or rules, or change in interpretation or application of such laws, regulations and rules, or the change of the relevant registration procedures enables Pledgee to believe that it will be illegal or in conflict with such laws, regulations or rules to further maintain the effectiveness of this Agreement and/or dispose of the Pledged Property in the way provided herein, Pledgor and HEZL shall, at the written direction of Pledgee and in accordance with the reasonable request of Pledgee, promptly take actions and/or execute any agreement or other document, in order to:

 

(1) keep this Agreement remain in effect;
(2) facilitate the disposal of the Pledged Property in the way provided herein; and/or
(3) maintain or realize the intention or the guarantee established hereunder.

 

ARTICLE 13 - EFFECTIVENESS AND TERM OF THIS AGREEMENT

 

13.1 This Agreement shall become effective upon this Agreement is duly executed by Pledgor, HEZL and Pledgee

 

13.2 This Agreement shall have its valid term until the full performance of the Contractual Obligations or the full repayment of the Guaranteed Liabilities.

 

ARTICLE 14 - NOTICE

 

14.1 Any notice, request, demand and other correspondences made as required by or in accordance with this Agreement shall be made in writing and delivered to the relevant Party.

 

14.2 The abovementioned notice or other correspondences shall be deemed to have been delivered when it is transmitted if transmitted by facsimile or telex; it shall be deemed to have been delivered when it is delivered if delivered in person; it shall be deemed to have been delivered five (5) days after posting the same if posted by mail.

 

ARTICLE 15 – MISCELLANEOUS

 

15.1 Pledgee may, upon notice to Pledgor but not necessarily with Pledgor' consent, assign Pledgee's rights and/or obligations hereunder to any third party; provided that Pledgor may not, without Pledgee's prior written consent, assign Pledgor' rights, obligations and/or liabilities hereunder to any third party. Successors or permitted assignees (if any) of Pledgor shall continue to perform the obligations of Pledgor under this Agreement.

 

15.2 This Agreement shall be prepared in English language.

 

15.3 The formation, validity, execution, amendment, interpretation and termination of this Agreement shall be subject to laws of China.

 
 

 

15.4 Any disputes arising from and in connection with this Agreement shall be settled through consultations among the Parties involved, and if the Parties involved fail to reach an agreement regarding such a dispute within thirty (30) days of its occurrence, such dispute shall be submitted to Kuala Lumpur Regional Centre for Arbitration for arbitration in Kuala Lumpur accordance with the arbitration rules of such commission, and the arbitration award shall be final and binding on all the Parties involved.

 

15.5 Any rights, powers and remedies empowered to any Party by any provisions herein shall not preclude any other rights, powers and remedies enjoyed by such Party in accordance with laws and other provisions under this Agreement, and the exercise of its rights, powers and remedies by a Party shall not preclude its exercise of its other rights, powers and remedies by such Party.

 

15.6 Any failure or delay by a Party in exercising any of its rights, powers and remedies hereunder or in accordance with laws (hereinafter, the "PARTY'S RIGHTS") shall not lead to a waiver of such rights, and the waiver of any single or partial exercise of the Party's Rights shall not preclude such Party from exercising such rights in any other way and exercising the remaining part of the Party's Rights.

 

15.7 The titles of the Articles contained herein shall be for reference only, and in no circumstances shall such titles be used in or affect the interpretation of the provisions hereof.

 

15.8 Each provision contained herein shall be severable and independent from each of other provisions, and if at any time any one or more articles herein become invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions herein shall not be affected as a result thereof.

 

15.9 This Agreement shall substitute any other documents on the same subject executed by relevant Parties hereof once duly executed.

 

15.10 Any amendments or supplements to this Agreement shall be made in writing. Except for assignment by Pledgee of its rights hereunder according to Article 15.1 of this Agreement, the amendments or supplements to this Agreement shall take effect only when properly signed by the Parties to this Agreement.

 

15.11 This Agreement shall be binding on the legal successors of the Parties.

 

15.12 At the time of execution hereof, Pledgor shall sign respectively a power of attorney (as set out in Appendix I hereto, hereinafter, the "POWER OF ATTORNEY") to authorize any person designated by CETL to sign on his behalf according to this Agreement any and all legal documents necessary for the exercise by Pledgee of CETL's rights hereunder. Such Power of Attorney shall be delivered to CETL to keep in custody and, when necessary, CETL may at any time submit the Power of Attorney to the relevant government authority.

 

[The remainder of this page is left blank]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IN WITNESS HEREOF, the Parties have caused this Call Option Agreement to be executed in China as of the date first herein above mentioned.

 

 

 

For and on behalf of

BEIJING EZAGOO SHOPPING HOLDING LIMITED (Company chop)

 

Signature by:   /s/Tan Xiaohao
Name:  Tan Xiaohao
Position: Authorized Representative

 

 

For and on behalf of

RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED (Company chop)

 

 

Signature by:   /s/ Wan Weihong
Name:  Wan Weihong
Position: Authorized Representative

 

 

For and on behalf of

CHANGSHA EZAGOO TECHNOLOGY LIMITED (Company chop)

 

 

Signature by:   /s/Tan Xiaohao
Name:  Tan Xiaohao
Position:   Authorized Representative

 

For and on behalf of

HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED (Company chop)

 

 

 

Signed by: /s/ Zhang Qianwan
Name:  Zhang Qianwan
Position: Authorized Representative
 
 

 

APPENDIX I:

 

FORMAT OF THE POWER OF ATTORNEY

 

I, _________________________, hereby entrusts ______________________, [with his/her identity card number ____________,] to be my authorized trustee to sign on my behalf all legal documents necessary or desirous for CHANGSHA EZAGOO TECHNOLOGY LIMITED to exercise their rights under the Equity Pledge Agreement between them, myself and HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED.

 

 

 

 

Signature:

Date:

 

 

Loan Agreement

 

This Loan Agreement (this “Agreement”) is executed on July 20, 2018 by and between CHANGSHA EZAGOO TECHNOLOGY LIMITED, a limited liability company formed under the laws of China(the “ Lender ”) and BEIJING EZAGOO SHOPPING HOLDING LIMITED and RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED(the “ Representative ”), all shareholders of HUNAN EZAGOO ZHICHENG INTERNET TECHNOLOGY LIMITED, a limited liability company organized and existing under the laws of China (the “ Company ”). The Representative and the Lender are collectively referred to herein as “the Parties” and individually “a Party”.

 

WHEREAS:

 

1. Representative is duly authorized by all the shareholders of the Company to secure a loan from the Lender for the purpose of increasing the registered capital of the Company, and Lender agrees to extend such a loan;

 

2.       CHANGSHA EZAGOO TECHNOLOGY LIMITED is the Lender. Pursuant to certain VIE agreements by and among the all the shareholders of the Company, the Company and Lender, Lender effectively controls and assumed management of the business activities of the Company and has the right to receive a service fee approximately equal to 100% of the Company’s net income.

 

NOW, THEREFORE, the Parties have agreed to the terms and conditions with respect to the loan hereunder as follows:

 

1.       THE TOTAL PRINCIPAL AMOUNT AND INTEREST

 

The total principal amount of the loan hereunder (the “Loan”) is CNY$100,000 (the “Total Principal”), and the Loan shall be interest-free.

 

2.       USE OF PROCEEDS

 

The Representative shall use the Total Principal for the sole purpose of increasing the registered capital of the Company.

 

3.         LOAN DRAWDOWN

 

The Lender shall deposit the Total Principal to a designated Company bank account, for the sole purpose of increasing the registered capital of the Company before December 31, 2018.

 

 

4.       LOAN REPAYMENT

 

Repayment of the Loan shall be deemed to have occurred upon the earlier of (i) repayment of the Total Principal to the Lender by the Representative or (ii) when the Total Principal is transferred to a bank account of the Company designated by the Lender to be used to increase the Company’s registered capital.

 

5.         REPRESENTATIONS AND WARRANTIES

 

The Lender and the Representative hereby represent and warrant to the other Party that, as of the date of this Agreement, they are authorized to enter into this Agreement and perform all of their respective rights and obligations under this Agreement and this Agreement is valid, binding and enforceable against them in accordance with its terms.

 

6.       DEFAULT

 
 

 

In the event the Representative uses the Total Principal other than in compliance with the terms of this Agreement, the Lender may, at its option, demand the repayment in full of the Total Principal plus a penalty interest payment at the interest rate of 0.07% per day for the period of the Loan until the Total Principal Amount is repaid in full.

 

7.       Governing Law and Resolution of Disputes

 

7.1. The execution, effectiveness, construction, performance, amendment and termination of this Agreement and the resolution of disputes shall be governed by the laws of China.

 

7.2. In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through friendly negotiations. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Party for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the count of China, in accordance with its then effective regulation. The arbitration shall be conducted in China, and the language used in arbitration shall be either in Chinese or English. The arbitration award shall be final and binding on all Parties.

 

8.         MISCELLANEOUS

 

8.1. The Parties shall take such additional actions as may be required to carry out the terms of this Agreement.

 

8.2. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assigns of the Parties. The Representative shall not transfer or assign any or all of its rights and obligations under this Agreement to any third party without the prior written consent of Lender.

 

8.3. This Agreement may be executed by the Parties in any number of counterparts, all of which together shall constitute one and the same instrument.

 

8.4. This Agreement may be amended or supplemented only through written agreement by the Parties.

 

 

 

 

[Signature pages follow]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IN WITNESS THEREFORE , the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

 

Representative:    

For and on behalf of

BEIJING EZAGOO SHOPPING HOLDING LIMITED

For and on behalf of

RUIYIN (SHENZHEN) FINANCIAL LEASING LIMITED

By:

 

/s/Tan Xiaohao

By:

 

/s/ Wan Weihong

Name: Tan Xiaohao Name: Wan Weihong
Position: Authorized Representative Position: Authorized Representative
       

 

For and on behalf of

CHANGSHA EZAGOO TECHNOLOGY LIMITED

   
By: 

 

/s/Tan Xiaohao

   
Name: Tan Xiaohao                                              
Position: Authorized Representative    

 

 
 

HTTPS:||WWW.SEC.GOV|ARCHIVES|EDGAR|DATA|1723187|000159991618000110|IMAGE_005.JPG  

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT

 

The Board of Directors and Stockholders:

Ezagoo Limited

 

We consent to the inclusion in the foregoing Registration Statement on Form S-1 Amendment No. 2 of our report dated April 29, 2019, relating to our audit of the consolidated balance sheets of Ezagoo Limited as of December 31, 2018 and 2017, the related statements of operations, changes in stockholders' deficit, and cash flows for the years then ended. Our report dated April 29, 2019, relating to the financial statements includes an emphasis paragraph relating to an uncertainty as to the Company's ability to continue as a going concern.

 

We also consent to the reference to us under the caption “Experts” in the Registration Statement.

 

  /s/ TAAD, LLP

 

Diamond Bar, California

April 29, 2019

 

SUBSCRIPTION AGREEMENT

 

The undersigned (the “Subscriber”), desires to become a holder of common shares (the “Shares”) of Ezagoo Limited. , a corporation organized under the laws of the state of Nevada (the “Company”); one share of Common Stock has a par value $0.0001 per share. Accordingly, the Subscriber hereby agrees as follows:

 

1.            Subscription .

 

  1.1 The Subscriber hereby subscribes for and agrees to accept from the Company that number of Shares set forth on the Signature Page attached to this Subscription Agreement (the “Agreement”), in consideration of $0.10 per share.  This offer to purchase is submitted in accordance with and subject to the terms and conditions described in this Subscription Agreement (the "Agreement"). The Subscriber acknowledges that the Company reserves the right, in its sole and absolute discretion, to accept or reject this subscription and the subscription will not be binding until accepted by the Company in writing

 

  1.2 The closing of the Subscription of Shares hereunder (the “Closing”) shall occur immediately upon: (i) receipt and acceptance by the Company of a properly executed Signature Page to this Agreement; and (ii) receipt of all funds for the subscription of shares hereunder.

 

2.            Purchase Procedure .  The Subscriber acknowledges that, in order to subscribe for Shares, he must, and he does hereby, deliver to the Company:

 

  2.1 One (1) executed counterpart of the Signature Page attached to this Agreement together with the passport copy or government ID copy; and

 

  2.2 A check, trade draft or media due bill in the amount set forth on the Signature Page attached to this Agreement, representing payment in full for the Shares desired to be purchased hereunder, either made payable to the order of (i) Ezagoo Limited., (ii) a subsidiary of the Company, or (iii) escrow agent as agreed by the Company. Wire transfer and telegraphic transfer are also accepted.

 

3.            Representations of Subscriber .  By executing this Agreement, the Subscriber makes the following representations, declarations and warranties to the Company, with the intent and understanding that the Company will rely thereon:

 

  3.1 Such Subscriber acknowledges the public availability of the Company’s current prospectus which can be viewed on the SEC Edgar Database, under the CIK number 0001752372. This prospectus is made available in the Company’s most recent S-1 Registration Statement deemed effective on _______, 2019. In this prospectus it makes clear the terms and conditions of the offering of Common Stock and the risks associated therewith are described.

 

  3.2 All information herein concerning the Subscriber is correct and complete as of the date hereof and as of the date of Closing.

 

  3.3 If the Subscriber is purchasing the Shares in a fiduciary capacity for another person or entity, including without limitation a corporation, partnership, trust or any other entity, the Subscriber has been duly authorized and empowered to execute this Subscription Agreement and all other subscription documents.  Upon request of the Company, the Subscriber will provide true, complete and current copies of all relevant documents creating the Subscriber, authorizing its investment in the Company and/or evidencing the satisfaction of the foregoing.

 

4.            Applicable Law .  This Agreement shall be construed in accordance with and governed by the laws applicable to contracts made and wholly performed in the State of Nevada.

 

5.            Execution in Counterparts .  This Subscription Agreement may be executed in one or more counterparts.

 

6.            Persons Bound .  This Subscription Agreement shall, except as otherwise provided herein, inure to the benefit of and be binding on the Company and its successors and assigns and on each Subscriber and his respective heirs, executors, administrators, successors and assigns.

 

7.            Notices .  Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid, to the address of each party set forth herein. Any such notice shall be deemed given when delivered personally, telegraphed, telexed or sent by facsimile transmission or, if mailed, three days after the date of deposit in the United States mails.

 

8.            CERTIFICATION .   THE SUBSCRIBER CERTIFIES THAT HE HAS READ THIS ENTIRE SUBSCRIPTION AGREEMENT AND THAT EVERY STATEMENT MADE BY THE SUBSCRIBER HEREIN IS TRUE AND COMPLETE.

 

[SIGNATURE PAGE FOLLOWS]

 


 

SUBSCRIBER SIGNATURE

 

The undersigned, desiring to subscribe for the number of Shares of Ezagoo Limited., (the “Company”) as is set forth below, acknowledges that he/she has received and understands the terms and conditions of the Subscription Agreement attached hereto and that he/she does hereby agree to all the terms and conditions contained therein.

 

IN WITNESS WHEREOF , the undersigned has hereby executed this Subscription Agreement as of the date set forth below.

 

(PLEASE PRINT OR TYPE)

 

Number of Shares      
       
x  $0.10    Per Share      
Total Amount of Subscription:         
       
Exact name(s) of Subscriber(s):         
       
Signature of Subscriber(s):         
         (Signature)  
       
       
Date:      
       

Residence or Physical Mailing Address (cannot be a P.O. Box):

 

__________________________________

 

__________________________________

 

__________________________________

 

 

Telephone Numbers (include Area Code):

 

Business: (___)_____________                                                      Home: (___)________________

Social Security, Taxpayer, or other type

Identification Number(s):   _______________