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

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





Company Overview



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.





Results of Operation


For the Three and Nine Months Ended September 30, 2021

For the three ended September 30, 2021, we realized revenue in amount of $386,634, while for the three months ended September 30, 2020, we realized revenues in the amount of $64,481.

For the nine ended September 30, 2021, we realized revenue in amount of $1,279,170, while for the nine months ended September 30, 2020, we realized revenues in the amount of $108,825. The increase in revenue is the Company's business development is on track, and the cost-effective services have price advantage in market that can attract more customers.

Result of operation for the three months ended September 30, 2021, we realized cost of revenue in amount of $129,263, while for the three months ended September 30, 2020, we realized cost of revenues in the amount of $33,022.

Result of operation for the nine months ended September 30, 2021, we realized cost of revenue in amount of $447,328, while for the nine months ended September 30, 2020, we realized cost of revenues in the amount of $92,891. The advertising production costs increased when the revenue was increased, since the customers' materials were not fit for the standards for displaying the bus advertising & APP advertising, so the Company need to edit and produce the advertisements.

The overall gross profit for the Company was $257,371 and $31,459 for the three months ended September 30, 2021 and 2020, respectively. Gross profit as a percentage of total revenues was 67% and 49% for the same period ended September 30, 2021 and 2020, respectively.

The overall gross profit for the Company was $831,842 and $15,934 for the nine months ended September 30, 2021 and 2020, respectively. Gross profit as a percentage of total revenues was 65% and 15% for the same period ended September 30, 2021 and 2020, respectively. During year 2021, the Company entered into more agreements with more customers than during year 2020.

Our net loss for the three months ended September 30, 2021 were $50,867, while net loss for the three months ended September 30, 2020 were $187,981.

And the net profit for the nine months ended September 30, 2021 were $49,674, while net loss for the nine months ended September 30, 2020 were $595,516. We attribute this increase due to the increasing in revenue.

Liquidity and Capital Resources

As of September 30, 2021, we had cash and cash equivalents of $581,843. We have negative operating cash flows and our working capital has been and will continue to be significant. As a result, we depend substantially on our previous financing activities to provide us with the liquidity and capital resources we need to meet our working capital requirements and to make capital investments in connection with ongoing operations. The Company expects its current capital resources to meet our basic operating requirements for approximately twelve months.





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Operating Activities



For the nine months ended September 30, 2021, net cash used in operating activities was $817,268, compared to net cash used in operating activities of $525,513 for the nine months ended September 30, 2020. The increase in cash provided by operating activities was mainly for deferred revenue.





Investing Activities


For the nine months ended September 30, 2021 and 2020, net cash used in investing activities was $0 and $0, respectively.





Financing Activities


For the nine months periods ended September 30, 2021 and 2020, net cash provided by financing activities was $581,763 and $117,481, respectively, which were resulted from borrowed from director and related parties.





Credit Facilities


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

Contractual Obligations, Commitments and Contingencies

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

Off-balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of September 30, 2021.

Recent accounting pronouncements

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





Additional Information


VIE STRUCTURE AND ARRANGEMENTS

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

1. exercise effective control over BEZL whereby having the power to direct BEZL's

activities that most significantly drive the economic results of BEZL

2. receive substantially all of the economic benefits and residual returns, and

absorb substantially all the risks and expected losses from BEZL as if it was

their sole shareholder; and

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

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.





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

1. exercise effective control over BEZL whereby having the power to direct BEZL's

activities that most significantly drive the economic results of BEZL;

2. receive substantially all of the economic benefits and residual returns, and

absorb substantially all the risks and expected losses from BEZL as if it was

their sole shareholder;

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

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

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

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

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

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