EZGO Technologies (EZGO) Risk Analysis

Our amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions include a staggered Board of Directors and the ability of the Board of Directors to designate the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our shares.

We are a BVI company and substantially all of our assets are located outside of the United States. Substantially all of our current operations are conducted in China. In addition, certain of our directors and officers reside outside the United States. As a result, it may be difficult for you to effect service of process within the United States or elsewhere outside China upon these persons. It may also be difficult for you to enforce in China or BVI courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in the United States and the substantial majority of whose assets are located outside of the United States. It may be difficult or impossible for you to bring an action against us in the BVI if you believe your rights under the U.S. securities laws have been infringed. In addition, there is uncertainty as to whether the courts of the BVI or China would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state and it is uncertain whether such BVI or China courts would hear original actions brought in the BVI or China against us or such persons predicated upon the securities laws of the United States or any state.

EZGO is a company incorporated under the laws of the BVI. As a result, it may be difficult for investors to enforce judgments obtained in the United States courts against our directors or officers. Our corporate affairs are governed by our amended and restated memorandum and articles of association, the BVI Act and the common law of the BVI. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under BVI law are governed by the BVI Act and the common law of the BVI. The common law of the BVI is derived from English common law, and while the decisions of the English courts are of persuasive authority, they are not binding on a court in the BVI. The rights of EZGO's shareholders and the fiduciary responsibilities of our directors under BVI law may not be as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the BVI has a less developed body of securities laws as compared to the United States, and some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law. In addition, while statutory provisions do exist in BVI law for derivative actions to be brought in certain circumstances, shareholders in BVI companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be available with respect to any such action, may result in the rights of shareholders of a BVI company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The BVI courts are also unlikely: - to recognize or enforce against us judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws where that liability is in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company; and - to impose liabilities against us, in original actions brought in the BVI, based on certain civil liability provisions of U.S. securities laws that are penal in nature. There is no statutory recognition in the BVI of judgments obtained in the United States, although the courts of the BVI will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary provided that: - the U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process;- The judgement is final and for a liquidated sum;- the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company;- in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the U.S. court;- recognition or enforcement of the judgment would not be contrary to public policy in the BVI; and - the proceedings pursuant to which judgment was obtained were not contrary to natural justice. As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our Board of Directors, management or controlling shareholders than they would as public shareholders of a U.S. company.

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller's interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality.

We may require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If our cash resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities or equity-linked debt securities could result in additional dilution to EZGO's shareholders. The incurrence of indebtedness would result in debt service obligations and could result in operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or terms acceptable to us, if at all.

Sales of substantial amounts of EZGO's Ordinary Shares in the public market in the future, or the perception that these sales could occur, could adversely affect the market price of EZGO's Ordinary Shares and could materially impair our ability to raise capital through equity offerings in the future. EZGO's Ordinary Shares are freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the "Securities Act"), and shares held by EZGO's existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lock-up agreements. We cannot predict what effect, if any, market sales of securities held by EZGO's significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of EZGO's Ordinary Shares.

The trading market for EZGO's Ordinary Shares will be influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts who cover us downgrade EZGO's Ordinary Shares, the market price for EZGO's Ordinary Shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for EZGO's Ordinary Shares to decline.

EZGO's Ordinary Shares are listed on Nasdaq. We cannot assure you that EZGO's Ordinary Shares will continue to be listed on Nasdaq in the future. In order to continue listing EZGO's securities on Nasdaq, we must maintain certain financial, distribution and share price levels. Generally, we must (i) maintain a minimum amount in shareholders' equity (generally above $2,500,000), maintain a minimum market value of listed securities (generally above $35,000,000) or have a minimum net income from operations for the prior year of for two of the preceding years (generally above $500,000); and (ii) a minimum number of publicly held shares (generally greater than 500,000) and a minimum number of public shareholders (generally greater than 300 shareholders). EZGO's Ordinary Shares also cannot have a bid price of less than $1.00. Moreover, we must comply with certain listing standards regarding the independence of our Board of Directors and members of our audit committee. We intend to fully comply with these requirements, but we may not be able to meet these requirements in the future. If Nasdaq delists EZGO's securities from trading on its exchange and we are not able to list EZGO's securities on another national securities exchange, we expect EZGO's securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including: - a limited availability of market quotations for EZGO's securities;- reduced liquidity for EZGO's securities;- a determination that EZGO's Ordinary Shares are "penny stocks" which will require brokers trading in EZGO's Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for EZGO's securities;- a limited amount of news and analyst coverage; and - a decreased ability to issue additional securities or obtain additional financing in the future. The National Securities Markets Improvement Act of 1996, which is a U.S. federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as "covered securities." Because EZGO's Ordinary Shares are listed on Nasdaq, such securities will be covered securities. Although the states are preempted from regulating the sale of EZGO's securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, EZGO's securities would not be covered securities and we would be subject to regulations in each state in which we offer EZGO's securities.

The trading price of EZGO's Ordinary Shares may be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States. A number of Chinese companies have listed or are in the process of listing their securities on U.S. stock markets. The securities of some of these companies have experienced significant volatility, including price declines in connection with their initial public offerings. The trading performances of these Chinese companies' securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of EZGO's Ordinary Shares, regardless of our actual operating performance. In addition to market and industry factors, the price and trading volume for EZGO's Ordinary Shares may be highly volatile for factors specific to our own operations, including the following: - variations in our revenues, earnings, cash flow and data related to our user base or user engagement;- announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;- announcements of new product and service offerings, solutions and expansions by us or our competitors;- changes in financial estimates by securities analysts;- detrimental adverse publicity about us or our industry;- additions or departures of key personnel;- release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and - potential litigation or regulatory investigations. Any of these factors may result in large and sudden changes in the volume and price at which EZGO's Ordinary Shares will trade. In the past, shareholders of public companies often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management's attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

We cannot assure you that a liquid public market for EZGO's Ordinary Shares will continue. If an active public market for EZGO's Ordinary Shares does not continue, the market price and liquidity of EZGO's Ordinary Shares may be materially and adversely affected. We can provide no assurance that the trading price of EZGO's Ordinary Shares will not decline. As a result, EZGO's shareholders and potential investors in EZGO's securities may experience a significant decrease in the value of their Ordinary Shares.

The SEC has adopted a number of rules to regulate "penny stock" that restricts transactions involving stock which is deemed to be penny stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Exchange Act. These rules may have the effect of reducing the liquidity of penny stocks. "Penny stocks" generally are equity securities with a price of less than $5.00 per share (other than securities registered on certain national securities exchanges or quoted on Nasdaq if current price and volume information with respect to transactions in such securities is provided by the exchange or system). EZGO's Ordinary Shares could be considered to be a "penny stock" within the meaning of the rules. The additional sales practice and disclosure requirements imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions in shares of EZGO's Ordinary Shares, which could severely limit the market liquidity of such Ordinary Shares and impede their sale in the secondary market. A U.S. broker-dealer selling a penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with a net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the "penny stock" regulations require the U.S. broker-dealer to deliver, prior to any transaction involving a "penny stock", a disclosure schedule prepared in accordance with SEC standards relating to the "penny stock" market, unless the broker-dealer or the transaction is otherwise exempt. A U.S. broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative and current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to the "penny stock" held in a customer's account and information with respect to the limited market in "penny stocks". The market for "penny stocks" has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting in losses to EZGO's shareholders. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to EZGO's securities.

The listing of EZGO's Ordinary Shares on the Nasdaq Capital Market is contingent on our compliance with the Nasdaq Capital Market's conditions for continued listing. On October 19, 2023, we announced that we received written notification, or the Notification Letter, from Nasdaq on October 18, 2023 that we were not in compliance with the minimum bid price requirement of US$1.00 per share under the Nasdaq Listing Rules (the "Minimum Bid Price Requirement"). In accordance with Nasdaq Listing Rules, we were required to regain compliance with the Minimum Bid Price Requirement within 180 calendar days, or by April 15, 2024. To regain compliance, EZGO's Ordinary Shares were required to have had a closing bid price of at least US$1.00 for a minimum of 10 consecutive trading days or before April 15, 2024. On March 22, 2024, the Board of Directors of EZGO approved a reverse share split (the "Reverse Share Split") of the Company's Ordinary Shares at a ratio of 1-for-40 so that every forty (40) shares are combined into one (1) share (with the fractional shares rounding off to the nearest whole share). The Company's Ordinary Shares began trading on the Nasdaq Stock Market on a post-split basis on April 12, 2024. As a result of the Reverse Share Split, the par value of the Ordinary Shares of the Company was changed from $0.001 per share to $0.04 per share, and the Company's issued and outstanding Ordinary Shares was reduced from 102,165,549 to approximately 2,554,139. On March 26, 2024, the Company received a delisting determination notice (the "Delisting Notice") from Nasdaq notifying the Company that, as of March 26, 2024, the Ordinary Shares had a closing bid price of $0.10 or less for ten consecutive trading days and that, consistent with Nasdaq Listing Rule 5810(c)(3)(A)(iii), Nasdaq had determined to begin the process to delist the Ordinary Shares from the Nasdaq Stock Market. On April 2, 2024, the Company submitted a request for a hearing before the Nasdaq Hearings Panel to appeal the Delisting Notice, which was scheduled on May 23, 2024. On May 1, 2024, the Company received a written notification from Nasdaq that the Company has regained compliance with the Minimum Bid Price Requirement and the matter was closed. Consequently, the scheduled hearing before the Nasdaq Hearings Panel was cancelled. On December 31, 2024, we announced that we received written notification, or the Notification Letter, from Nasdaq on December 30, 2024 that we were not in compliance with the Minimum Bid Price Requirement. In accordance with Nasdaq Listing Rules, we were required to regain compliance with the Minimum Bid Price Requirement within 180 calendar days, or by June 30, 2025. On July 2, 2025, the Company received a letter from Nasdaq, indicating that the Company is granted an additional 180 calendar days, until December 29, 2025, to regain compliance with the minimum bid price requirement of $1 per share, as stipulated by Nasdaq Listing Rule 5550(a)(2). On November 7, 2025, the Board of Directors of EZGO approved a reverse share split (the "2025 Reverse Share Split") of the Company's Ordinary Shares at a ratio of 1-for-25 so that every twenty-five (25) shares are combined into one (1) share (with the fractional shares rounding off to the nearest whole share). The Company's Ordinary Shares began trading on the Nasdaq Stock Market on a post-split basis on November 21, 2025. Shortly after the 2025 Reverse Share Split, the par value of the Ordinary Shares of the Company was changed from $0.04 per share to US$1.00 per share (as a result of the 2025 Reverse Share Split) and then to no par value per share, and the Company's issued and outstanding Ordinary Shares was reduced from 21,700,706 to approximately 868,029. On December 11, 2025, the Staff determined that, for 13 consecutive business days, from November 21, 2025, through December 10, 2025, the closing bid price of the Company's Ordinary Shares has been at or above US$1.00 per share. Accordingly, the Company has regained compliance with Listing Rule 5550(a)(2), and Nasdaq has confirmed that the matter is now closed. We cannot assure you that we will be able to regain compliance with the Minimum Bid Price Requirement under the Nasdaq Listing Rules, or that we will not receive other deficiency notifications from Nasdaq in the future. A decline in the closing price of EZGO's Ordinary Shares could result in a breach of the requirements for listing on the Nasdaq Capital Market. If we do not maintain compliance, Nasdaq could commence suspension or delisting procedures in respect of EZGO's Ordinary Shares. The commencement of suspension or delisting procedures by an exchange remains at the discretion of such exchange and would be publicly announced by the exchange. If a suspension or delisting were to occur, there would be significantly less liquidity in the suspended or delisted securities. In addition, our ability to raise additional necessary capital through equity or debt financing would be greatly impaired. Furthermore, with respect to any suspended or delisted Ordinary Shares, we would expect decreases in institutional and other investor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers would be willing to execute trades with respect to such Ordinary Shares. A suspension or delisting would likely decrease the attractiveness of EZGO's Ordinary Shares to investors and cause the trading volume of EZGO's Ordinary Shares to decline, which could result in a further decline in the market price of EZGO's Ordinary Shares.

Our corporate affairs are governed by our memorandum and articles of association as amended and restated from time to time, the BVI Business Company Act, 2004 (as amended) ("BVI Act") and the common law of the BVI. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under BVI law are to a large extent governed by the common law of the BVI. The common law of the BVI is derived in part from comparatively limited judicial precedent in the BVI as well as that from English common law, which has persuasive, but not binding, authority on a court in the BVI. The rights of EZGO's shareholders and the fiduciary responsibilities of our directors under BVI law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the BVI has a different body of securities laws than the United States. In addition, some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the BVI. There is no statutory recognition in the BVI of judgments obtained in the United States, although the courts of the BVI will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the Board of Directors or controlling shareholders than they would as shareholders of a U.S. public company.

As a business company incorporated in the BVI that is listed on Nasdaq, EZGO is subject to Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like EZGO to follow the corporate governance practices of its home country. Certain corporate governance practices in the BVI, which is EZGO's home country, may differ significantly from Nasdaq corporate governance listing standards, including, but not limited to, Board of Directors independent requirements, director nomination procedures, compensation committee matters. EZGO is following its home country law instead of the Nasdaq listing rules that require EZGO to obtain shareholder approval for certain dilutive events, such as certain transactions other than a public offering involving issuances of a 20% or greater interest in the company, and acquisitions of the stock or assets of another company. As a result, EZGO's shareholders may be afforded less protection than they otherwise would enjoy under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.