6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

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For the month of August 2021

Commission File Number: 001-40405

JIUZI HOLDINGS INC.

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No.168 Qianjiang Nongchang Gengwen Road, 15thFloor

Economic and Technological Development Zone

Xiaoshan District, Hangzhou City

Zhejiang Province 310000

People’s Republic of China

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒	Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

In this report, as used herein, and unless the context suggests otherwise, the terms “Jiuzi,” “Company,” “we,” “us” or “ours” refer to the combined business of Jiuzi Holdings Inc., its subsidiaries and other consolidated entities. “NEVs” refers to new energy vehicles. References to “dollar” and “$” are to U.S. dollars, the lawful currency of the United States, and references to “Renminbi” and “RMB” are to the legal currency of China. References to “SEC” are to the Securities and Exchange Commission.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited consolidated financial statements and the related notes included elsewhere in this report on Form 6-K. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those identified elsewhere in this report on Form 6-K.

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Results of Operations

The tables in the following discussion summarize our consolidated statements of operations for the periods indicated. This information should be read together with our consolidated financial statements included elsewhere in this press release. The operating results in any period are not necessarily of the results that may be expected for any future period.

	For the six months ended
	April 30,						Changes
	2021			2020			Amount		%
Net revenue	$	4,609,353		$	1,277,236		$	3,332,117		260.88	%
Cost of revenue		1,486,613			791,213			695,400		87.89	%
Gross profit		3,122,740			486,023			2,636,717		542.51	%
Selling, general and administrative expenses		1,312,510			530,907			781,603		147.22	%
Income from operations		1,810,230			(44,884	)		1,855,114		(4,133.13	)%
Interest income (expense), net		357			(1,465	)		1,822		(124.37	)%
Other income (expense), net		(53,407	)		18,554			71,961		(-387.85	)%
Income before income tax provision		1,757,180			(27,795	)		1,784,975		(6,421.93	)%
Provision for income taxes		445,726			16			445,710		2,785,687.50	%
Net income		1,311,454			(27,811	)		1,339,265		(4,815.59	)%

Net Revenue

The following table lists the calculation methods of gross profit and gross profit margin of each type of revenue:

	For the six months ended<br> <br>April 30,						Changes
	2021			2020			Amount			%
New energy vehicle sales
Net revenue	$	22,230			299,572			(277,342	)		(92.58	)%
Cost of revenue		5,613			296,140			(290,527	)		(98.10	)%
Gross profit	$	16,617			3,432			13,185			384.18	%
Gross profit margin		74.75	%		1.15	%		73.60	%		6400	%
Franchise initial fees
Net revenue	$	4,587,123			977,663			3,609,460			369.19	%
Cost of revenue		1,481,000			495,073			985,927			199.15	%
Gross profit	$	3,106,123			482,591			2,623,532			543.63	%
Gross profit margin		67.71	%		49.36	%		18.35	%		37.18	%
Franchisees’ royalties
Net revenue	$	-			-			-			-
Cost of revenue		-			-			-			-
Gross profit	$	-			-			-			-
Gross profit margin
Total
Net revenue	$	4,609,353			1,277,235			3,332,118			260.89	%
Cost of revenue		1,486,613			791,213			695,400			87.89	%
Gross profit	$	3,122,740			486,023			2,636,717			542.51	%
Gross profit margin		67.75	%		38.05	%		29.7	%		78.06	%

1

Our net revenues were $4,609,353 for the six months ended April 30, 2021 as compared to $1,277,236 in 2020, an increase of $3,332,117 or 260.88%. The increase was mostly due to the pandemic has been effectively controlled in China, and the increase of revenues from the initial franchise fees.

New Energy Vehicle (NEV) sales

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Our NEVs sales include the sales of NEVs in our Shangli store and sales of NEVs to our franchisees. For the six months ended April 30, 2021, our NEVs sales decreased by $277,342 or 92.58%, from $299,572 for the six months ended April 30, 2020 to $22,230 for the six months ended April 30, 2021. The decrease was mostly due to we organized a lot of training to improve the quality of employees, and spent more time on the maintenance and development of franchisees, Shangli Store have been adjusted as a service center which mainly provides demonstration and training for franchisees. Vehicle sales are mainly concentrated in other franchisees’ stores, which resulted in a decline in the sales of NEVs in our Shangli store.

Cost of revenue was $5,613 for the six months ended April 30, 2021, a decrease of $290,527 or 98.10%, from $296,140 for the six months ended April 30, 2020 which resulted from the decline in sales for the period.

Gross profit and gross profit margin were $16,617 and 74.75% for the six months ended April 30, 2021 as compared to $3,432 and 1.15% for the same period in 2020, respectively. The decrease resulted from decline in sales price of the vehicles as the overall market price of NEVs decreased.

Franchise initial fees

The initial franchise fee revenue increased by $3,609,460 or 369.19%, from $977,663 for the six months ended April 30, 2020 to $4,587,123 for the six months ended April 30, 2021. As of April 30, 2021 and April 30, 2020 we have entered into franchise agreements with 86 and 47 franchisees, respectively. The increase was mostly due to the pandemic has been effectively controlled in China, and people’s interest in investment and consumption has generally increased. At the same time, the new energy vehicle sector has renewed investor interest in market and companies. we have received more and more attention from investors.

Cost of revenue was $1,481,000 for the six months ended April 30, 2021, an increase of $985,927 or 199.15%, from $495,073 for the six months ended April 30, 2020.

Gross profit and gross profit margin were $3,106,123 and 67.71% for the six months ended April 30, 2021 as compared to $482,591 and 49.36% for the same period in 2020, respectively. The increase was mainly due to an increase in revenue.

Franchisees’ royalties

We may collect royalties based on 10% of net incomes from our franchisees. As of April 30, 2021, we did not generate any revenues through franchisees’ royalties as our franchisees have yet to generate net income for the period. The revenues from our franchisees are dependent on the sales of the NEVs which were still small as they mostly just started operation in these two years and comparably large expenses such as administrative and overhead expenses. Due to COVID-19, the franchisees temporally closed their stores in the first half of 2020 and the revenues from the sales of NEVs decreased significantly in the first half of 2021. Even though the franchise stores are currently re-opened for business, the franchisees still face obstacles in increasing their sales   and may continue to before we might be in a position to generate revenues in the future.

2

Selling, General and Administrative Expenses

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We incurred selling, general and administrative expenses of $1,312,510 for the six months ended April 30, 2021, as compared to $530,907 for the six months ended April 30, 2020, an increase of $781,603, or 155.11%. The increase is due to the COVID-19 outbreak is effectively under control. We organize a lot of staff training, the market was able to develop smoothly, and employees’ travel expenses, training expense, performance bonuses and basic social insurance have been increased.

Interest Expenses

Interest charges and bank charges are mainly from bank transfer charges and deposit interest offset. Interest expense as of April 30, 2021 and 2020 was approximately $354 and $1,465, respectively.

Provision for Income Taxes

Provision for income tax was $445,726 forg the six months ended April 30, 2021, an increase of $445,710 or 2,785,687%, as compared to $16 for the six months ended April 30, 2020. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. The increase in provision for income taxes was mainly due to the increase in income before income tax provision which was $1,757,180. for the six months ended April 30, 2021 as compared to $-27,795 for the six months ended April 30, 2020.

Net Income

Our net income increased by1,339,265 $ or 4,813.59%, to $ 1,311,454 for the six months ended April 30, 2021, from $-27,811 for the six months ended April 30, 2020. Such change was the result of the combination of the changes as discussed above.

Foreign currency translation

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Our consolidated financial statements are expressed in U.S. dollars but the functional currency of our operating subsidiaries is RMB. Results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period and equity is translated at historical exchange rates. Translation adjustments resulting from the process of translating the financial statements denominated in RMB into U.S. dollars are included in determining comprehensive income. Our foreign currency translation gain for the six months ended April 30, 2021 was $321,708, compared to a currency translation gain of $23,652 for the six months ended April 30, 2020, an increase of $298,056. The increased gain is primarily due to the appreciation of RMB against the U.S. dollars.

Liquidity and Capital Resources

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For the six months ended April 30, 2021 and2020

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As of April 30, 2021, we had $665,871 in cash. The Company’s working capital and other capital needs mainly come from shareholders’ equity contribution and operating cash flow. Cash is needed to pay for inventory, wages, sales expenses, rent, income taxes, other operating expenses, and purchases to service debts.

Although the Company’s management believes that cash generated from operations will be sufficient to meet the Company’s normal working capital requirements, its ability to service its current debt will depend on its future realization of its current assets for at least the next 12 months. Management took into account historical experience, the economy, trends in the automotive industry, the collectability of accounts receivable as of April 30, 2021, and the realization of inventory. Based on these considerations, the Company’s management believes that the Company has sufficient funds to meet its working capital requirements and debt obligations, as they will be due at least 12 months from the date of financial reporting. However, there is no guarantee that management’s plan will succeed. There are a number of factors that can arise and cause the company’s plans to fall short, such as demand for NEV vehicles, economic conditions, competitive pricing in the industry, and the continued support of banks and suppliers. If future cash flow from operations and other capital resources are insufficient to meet its liquidity needs, the Company may be forced to reduce or delay its anticipated expanding plans, sell assets, acquire additional debt or equity capital, or refinance all or part of its debt.

3

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The following table summarizes the company’s cash flow data as of April 30, 2021 and April 30, 2020:

	For the six months ended<br> <br>April 30,
	2021			2020
Net cash (used in) provided by operating activities	$	(132,848	)	$	(170,772	)
Net cash used in investing activities		(1,742	)		(12,536	)
Net cash provided by (used in) financing activities		(23,749	)		(158,494	)
Effect of exchange rate on cash		59,718			4,903
Net decrease in cash and cash equivalents	$	(158,339	)	$	(341,802	)

Operating Activities

Net cash provided by operating activities consists primarily of net income adjusted for non-cash items, including depreciation and amortization, accounts receivable and contractual liabilities, and is adjusted for the impact of changes in working capital. Net cash used in operations as of April 30, 2021 was approximately $132,848, representing a decrease of $37,924, compared to net cash used in operating activities of $170,772 for the six months ended April 30, 2020.

Investing Activities

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Net cash used in investing activities was approximately $1,742 for the six months ended April 30, 2021, a decrease of $1,0794, as compared to $12,536 net cash used in investing activities for the six months ended April 30, 2020. The Company has acquired fixed assets for the periods ended.

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Financing Activities

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Net cash used in financing activities was approximately $23,749 for the six months ended April 30, 2020, a decrease of $134,745, or 85.02%, as compared to net cash used in $158,494 for the six months ended April 30, 2020. The decrease in cash used was due to capital injection by owner in 2021.

Subsequent Event

On May 20, 2021, the Company completed an initial public offering pursuant to which it sold 5,200,000 ordinary shares to the investors for $5.00 per shares for an aggregate offering proceed of $26,000,000. The Company also issued to the underwriter warrants to purchase 260,000 ordinary shares at an exercise price of $6.25 per share, exercisable for a period of five (5) years following the offering. On May 25, 2021, the warrants were exercised on a cashless basis for an aggregate of 226,844 ordinary shares.

Statement Regarding Unaudited Financial Information

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The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on the Company’s year-end financial statements, which could result in significant differences from this unaudited financial information.

Safe Harbor Statement

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may, “will, “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following:  the Company’s goals and strategies; the Company’s future business development; product and service demand and acceptance; changes in technology; economic conditions; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission.  For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

4

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Jiuzi Holdings, Inc.

Consolidated Balance Sheets

As of April 30, 2021 and October 31, 2020

	April 30, <br><br>2021		October 31, <br><br>2020
ASSETS
Current assets
Cash and cash equivalents	$	665,871	$	764,492
Accounts receivable		15,377		14,875
Accounts receivable – related party		887,278		1,518,264
Due from related parties		242,037		173,643
Inventories		134,649		154,586
Advances to suppliers		159,980		569,023
Loans receivable from related parties, net		4,081,132		2,999,261
Other receivables and other current assets		292,539		280,789
Total current assets		6,478,863		6,474,933
Non-current asset
Property, plant and equipment, net		88,046		101,877
Intangible asset, net		16,991		16,436
Other non-current assets		-		2,349
Loans receivable from related parties, net		7,932,213		5,308,919
Total non-current assets		8,037,250		5,429,581
TOTAL ASSETS	$	14,516,113	$	11,904,514
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accruals and other payables	$	467,751	$	82,182
Accounts payable – related party		40,902		102,411
Accounts payable		21,609		872
Taxes payable		3,559,015		2,772,447
Contract liability		90,972		116,977
Contract liability – related party		449,188		614,449
TOTAL LIABILITIES	$	4,629,437	$	3,689,338
COMMITMENTS AND CONTINGENCIES
Shareholders’ equity
Ordinary shares (150,000,000 shares authorized, par value $0.001, 15,000,000 shares issued and outstanding as of April 30, 2021 and October 31, 2020)*	$	15,000	$	15,000
Additional paid in capital		347,277		308,939
Statutory reserve		738,072		690,624
Retained earnings		8,123,220		6,846,609
Accumulated other comprehensive loss		257,431		(60,426	))
Total equity attributable to Jiuzi		9,481,000		7,800,746
Equity attributable to noncontrolling interests		405,676		414,430
Total Stockholders’ equity	$	9,886,676	$	8,215,176
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	14,516,113	$	11,904,514
*	Giving<br>retroactive effect for the Share Subdivision and 2-for-1 stock dividend on post-Share Subdivision basis
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See accompanying notes to financial statements.

5

Jiuzi Holdings, Inc.

Consolidated Statements of Income and ComprehensiveIncome

For the years ended April 30, 2021 and 2020

	April 30, <br><br>2021			April 30, <br><br>2020
Revenues, net	$	22,230		$	174,986
Revenues – related party, net		4,587,123			1,102,250
Total Revenues		4,609,353			1,277,236
Cost of revenues		41,375			154,171
Cost of revenues – related party		1,445,238			637,042
Total cost of revenues		1,486,613			791,213
Gross profit		3,122,740			486,023
Selling and marketing expense		11,886			18,127
General and administrative expenses		1,300,624			512,780
Operating income (loss)		1,810,230			(44,884	)
Non-operating income (expense) items:
Other income (expense), net		(53,407	)		18,554
Interest income (expense)		357			(1,465	)
		(53,050	)		17,089
Earnings (Loss) before tax		1,757,180			(27,795	)
Income tax		445,726			16
Net income (loss)		1,311,454			(27,811	)
Less: loss attributable to non-controlling interest		(12,605	)		(10,779	)
Net income (loss) attributable to Jiuzi	$	1,324,059		$	(17,032	)
Earnings (Loss) per share
Basic	$	0.09		$	(0.02	)
Diluted	$	0.09		$	(0.02	)
Weighted average number of ordinary shares outstanding*
Basic		15,000,000			15,000,000
Diluted		15,000,000			15,000,000
	April 30, <br><br>2021		April 30, <br><br>2020
---	---	---	---	---	---
Net income (loss)	$	1,311,454	$	(27,811	)
Other comprehensive income (loss):
Foreign currency translation (loss) income		321,708		23,652
Total comprehensive income (loss)	$	1,633,162	$	(4,159	)
*	Giving<br>retroactive effect for the Share Subdivision and 2-for-1 stock dividend on post-Share Subdivision basis
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See accompanying notes to financial statements.

6

Jiuzi Holdings, Inc.

Consolidated Statements of Changes in Shareholders’Equity

For the years ended April 30, 2021 and 2020

												Accumulated			Equity
	Ordinary shares*,**				Additional							Other			attributable			Non-
	No. of		Par		Paid in		Statutory		Retained			Comprehensive			to			Controlling			Total
	Shares		Value		Capital		Reserves		Earnings			Loss			Jiuzi			interest			Equity
Balance, October 31, 2019		15,000,000		15,000		299,893		426,414		3,659,892			(206,729	)		4,194,470			460,627			4,655,097
(Distribution) / Contribution in capital		-		-		-		-		-			-			-			-			-
Net loss		-		-		-		-		(17,032	)		-			(17,032	)		(10,779	)		(27,811	)
Appropriations to statutory reserves		-		-		-		-		-			-			-			-			-
Foreign currency translation adjustment		-		-		-		-		-			23,652			23,652			-			23,652
Balance, April 30, 2020		15,000,000		15,000		299,893		426,414		3,642,860			(183,077	)		4,201,090			449,848			4,650,938
Balance, October 31, 2020		15,000,000		15,000		308,939		690,624		6,846,609			(60,426	)		7,800,746			414,430			8,215,176
Contribution in capital		-		-		38,338		-		-			-			38,338			-			38,338
Net income		-		-		-		-		1,324,059						1,324,059			(12,605	)		1,311,454
Appropriations to statutory reserves								47,448		(47,448	)
Foreign currency translation adjustment		-		-		-		-		-			317,857			317,857			3,851			321,708
Balance, April 30, 2021		15,000,000		15,000		347,277		738,072		8,123,220			257,431			9,481,000			405,676			9,886,676
*	Giving<br>retroactive effect for the Share Subdivision and 2-for-1 stock dividend on post-Share Subdivision basis
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See accompanying notes to financial statements.

7

Jiuzi Holdings, Inc.

Consolidated Statements of Cash Flows

For the years ended April 30, 2021 and 2020

	April 30, 2021			April 30, 2020
Cash flows from operating activities
Net income	$	1,311,454		$	(27,811	)
Depreciation and amortization		18,887			7,991
Provision/(Recovery) for doubtful accounts		(7,894	)		-
Provision for credit losses		274,403			-
Imputed interest expense		493,933			-
Changes in assets and liabilities
(Increase) decrease in accounts receivable		-			(4,667	)
(Increase) decrease in accounts receivable – related party		685,203			(207,179	)
(Increase) decrease in inventories		24,972			64,107
(Increase) decrease in loans to related parties		(4,168,893	)		(70,155	)
(Increase) decrease in other assets		425,315			(130,647	)
(Decrease) increase in accrued and other liabilities		380,048			(329	)
(Decrease) increase in account payable		20,559			-
(Decrease) increase in accounts payable – related party		(64,497	)		20,220
(Decrease) increase in taxes payable		688,054			57,102
(Decrease) increase in contract liability		(29,737	)		(3,006	)
(Decrease) increase in contract liability – related party		(184,655	)		123,602
Net cash generated by (used in) operating activities		(132,848	)		(170,772	)
Cash flows from investing activities
Purchase of fixed assets		(1,742	)		(12,536	)
Purchase of intangible assets		-			-
Refund of security deposits		-			-
Net cash generated by (used in) investing activities		(1,742	)		(12,536	)
Cash flows from financing activities
Proceeds from owner’s injection of capital		38,338			-
Proceeds from (Repayment to) related party		(62,087	)		(158,494	)
Net cash provided by (used in) financing activities		(23,749	)		(158,494	)
Net increase (decrease) of cash and cash equivalents		(158,339	)		(341,802	)
Effect of foreign currency translation on cash and cash equivalents		59,718			4,930
Cash, cash equivalents, and restricted cash – beginning of period		764,492			442,214
Cash, cash equivalents, and restricted cash – end of period	$	665,871		$	105,342
Supplementary cash flow information:
Interest received	$	-		$	-
Interest paid	$	-		$	1,465
Income taxes paid	$	-		$	-

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See accompanying notes to financial statements.

8

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Jiuzi Holdings, Inc.

Notes to the Financial Statements

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NOTE 1 – ORGANIZATION AND BASISOF PRESENTATION

Jiuzi Holdings, Inc. (“Company” or “Jiuzi”) was incorporated in the Cayman Islands on October 10, 2019. The Company in an investment holding company; its primary operations are conducted through subsidiaries and variable interest entities as described below.

Jiuzi (HK) Limited (“Jiuzi HK”) was incorporated in Hong Kong on October 25, 2019. It is wholly owned subsidiary of the Company.

Zhejiang Navalant New Energy Automobile Co., Ltd. (“Jiuzi WFOE”) was incorporated on June 5, 2020 as wholly foreign owned entity in the People’s Republic of China (“PRC”). Jiuzi WFOE is a wholly owned subsidiary of Jiuzi HK.

Zhejiang Jiuzi (“Zhejiang Jiuzi”) was incorporated on May 26, 2017 in the PRC. Zhejiang Jiuzi’s scope of business includes the sale of new energy vehicles (“NEVs”) and NEV components and parts, and the related development of products and services for the NEV industry. Zhejiang Jiuzi generates revenues by both selling NEVs and NEV components and parts to Jiuzi branded licensed NEV dealerships, and by rendering professional services to new Jiuzi NEV dealerships, such as initial setup, NEV product procurement services, and specialized marketing campaigns. The Zhejiang Jiuzi also provides short term financing solutions to the new Jiuzi NEV dealerships for the procurement of NEVs.

Shangli Jiuzi was incorporated on May 10, 2018 in the PRC. Its scope of business is similar to Zhejiang Jiuzi. Zhejiang Jiuzi owns 59.0% equity interest in Shangli Jiuzi, and the remaining 41% equity interest is owned by unrelated third-party investors; as such Shangli Jiuzi is accounted as a subsidiary of Zhejiang Jiuzi.

Contractual Arrangementsbetween Jiuzi WFOE and Zhejiang Jiuzi

Due to PRC legal restrictions on foreign ownership, the Company and its subsidiaries do not own any direct equity interest in Zhejiang Jiuzi. Instead, the Company and its subsidiaries control and receive the economic benefits of Zhejiang Jiuzi’s business operation through a series of contractual arrangements.

Jiuzi WFOE, Zhejiang Jiuzi and the Zhejiang Jiuzi Shareholders entered into a series of contractual arrangements, 1) Exclusive Option Agreement, 2) Exclusive Business Cooperation Agreement, and 3) Share Pledge Agreement, known as VIE Agreements, on June 15, 2020. The VIE agreements are designed to provide Jiuzi WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Zhejiang Jiuzi, including absolute control rights and the rights to the assets, property and revenue of Zhejiang Jiuzi.

Each of the VIE Agreements is described in detail below:

Exclusive Option Agreement

Under the Exclusive Option Agreement, the Zhejiang Jiuzi Shareholders irrevocably granted Jiuzi WFOE (or its designee) an exclusive right to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, a portion or whole of the equity interests or assets in Zhejiang Jiuzi held by the Zhejiang Jiuzi Shareholders. The purchase price is RMB 10 and subject to any appraisal or restrictions required by applicable PRC laws and regulations.

The agreement takes effect upon parties signing the agreement, and remains effective for 10 years, extendable upon Jiuzi WFOE or its designee’s discretion.

Exclusive Business Cooperation Agreement

Pursuant to the Exclusive Business Cooperation Agreement between Zhejiang Jiuzi and Jiuzi WFOE, Jiuzi WFOE provides Zhejiang Jiuzi with technical support, consulting services and other management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, business management and information. For services rendered to Zhejiang Jiuzi by Jiuzi WFOE under this agreement, Jiuzi WFOE is entitled to collect a service fee that shall be calculated based upon service hours and multiple hourly rates provided by Jiuzi WFOE. The service fee should approximately equal to Zhejiang Jiuzi’s net profit.

The Exclusive Business Cooperation Agreement shall remain in effect for ten years unless earlier terminated upon written confirmation from both Jiuzi WFOE and Zhejiang Jiuzi before expiration. Otherwise, this agreement can only be extended by Jiuzi WFOE and Zhejiang Jiuzi does not have the right to terminate the agreement unilaterally.

9

Jiuzi Holdings, Inc.

Notes to the Financial Statements

Share Pledge Agreement

Under the Share Pledge Agreement between Jiuzi WFOE and certain shareholders of Zhejiang Jiuzi together holding 1,000,000 shares, or 100% of the equity interests, of Zhejiang Jiuzi (“Zhejiang Jiuzi Shareholders”), the Zhejiang Jiuzi Shareholders pledged all of their equity interests in Zhejiang Jiuzi to Jiuzi WFOE to guarantee the performance of Zhejiang Jiuzi’s obligations under the Exclusive Business Cooperation Agreement. Under the terms of the Share Pledge Agreement, in the event that Zhejiang Jiuzi breaches its contractual obligations under the Exclusive Business Cooperation Agreement, Jiuzi WFOE, as pledgee, will be entitled to certain rights, including, but not limited to, the right to dispose of dividends generated by the pledged equity interests. The Zhejiang Jiuzi Shareholders also agreed that upon occurrence of any event of default, as set forth in the Share Pledge Agreement, Jiuzi WFOE is entitled to dispose of the pledged equity interest in accordance with applicable PRC laws. The Zhejiang Jiuzi Shareholders further agree not to dispose of the pledged equity interests or take any actions that would prejudice Jiuzi WFOE’s interest.

The Share Pledge Agreement shall be effective until the full payment of the service fees under the Business Cooperation Agreement has been made and upon termination of Zhejiang Jiuzi’s obligations under the Business Cooperation Agreement.

The purposes of the Share Pledge Agreement are to (1) guarantee the performance of Zhejiang Jiuzi’s obligations under the Exclusive Business Cooperation Agreement, (2) ensure the shareholders of Zhejiang Jiuzi do not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice Jiuzi WFOE’s interests without Jiuzi WFOE’s prior written consent and (3) provide Jiuzi WFOE control over Zhejiang Jiuzi.

---

The Company has concluded that the Company is the primary beneficiary of Zhejiang Jiuzi and its subsidiaries, and should consolidate financial statements. The Company is the primary beneficiary based on the VIE Agreements that each equity holder of Zhejiang Jiuzi pledged their rights as a shareholder of Zhejiang Jiuzi to Jiuzi WFOE. These rights include, but are not limited to, voting on all matters of Zhejiang Jiuzi requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Zhejiang Jiuzi, oversee and review Zhejiang Jiuzi’s operation and financial information. As such, the Company, through Jiuzi WFOE, is deemed to hold all of the voting equity interest in Zhejiang Jiuzi and its subsidiaries.

For the periods presented, the Company has not provided any financial or other support to either Zhejiang Jiuzi or its subsidiaries. However, pursuant to the Exclusive Business Cooperation Agreement, the Company may provide complete technical support, consulting services and other services during the term of the VIE agreements. Though not explicit in the VIE agreements, the Company may provide financial support to Zhejiang Jiuzi and its subsidiaries to meet its working capital requirements and capitalization purposes. The terms of the VIE Agreements and the Company’s plan of financial support to the VIEs were considered in determining that the Company is the primary beneficiary of the VIEs. Accordingly, the financial statements of the VIEs are consolidated in the Company’s consolidated financial statements.

Based on the foregoing VIE Agreements, Jiuzi WFOE has effective control of Zhejiang Jiuzi and its subsidiaries, which enables Jiuzi WFOE to receive all of their expected residual returns and absorb the expected losses of the VIE and its subsidiaries. Accordingly, the Company consolidates the accounts of Zhejiang Jiuzi and its subsidiaries for the periods presented herein, in accordance with Accounting Standards Codification, or ASC, 810-10, Consolidation.

10

Jiuzi Holdings, Inc.

Notes to the Financial Statements

NOTE 2 – SUMMARY OF SIGNIFICANTACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. Significant inter-company transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. In particular, the novel coronavirus (“COVID-19”) pandemic and the resulting adverse impacts to global economic conditions, as well as our operations, may impact future estimates including, but not limited to, our allowance for loan losses, inventory valuations, fair value measurements, asset impairment charges and discount rate assumptions. Certain prior year amounts have been reclassified to conform to the current year’s presentation. Amounts and percentages may not total due to rounding.

Functional and presentation currency

The functional currency of the Company is the currency of the primary economic environment in which the Company operates which is Chinese Yuan (“RMB”).

Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in income statement of the period.

For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.

Exchange rate used for the translation as follows:

US$ to RMB

---

	Period End		Average
April 30, 2021		6.4741		6.5209
April 30, 2020		7.0636		7.0078
October 31, 2020		6.6925		6.4164
October 31, 2019		7.0992		6.8905

Fair Values of Financial Instruments

The Company adopted ASC 820 “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available.  The three levels are defined as follow:

●	Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
●	Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
---	---
●	Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value.
---	---

11

Jiuzi Holdings, Inc.

Notes to the Financial Statements

As of the balance sheet date, the estimated fair values of the financial instruments approximated their fair values due to the short-term nature of these instruments. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates the hierarchy disclosures each year.

Related parties

The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Cash and Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are recorded at the net value less estimates for expected credit losses. Management regularly reviews outstanding accounts and provides an allowance for doubtful accounts. When collection of the original invoice amounts is no longer probable, the Company will either partially or fully write-off the balance against the allowance for doubtful accounts.

Loans Receivable

Loans receivable are recorded at origination at the fair value less estimates for expected credit losses. Management regularly reviews outstanding accounts and provides an allowance for credit losses. When collection of the original amounts is no longer probable, the Company will either partially or fully write-off the balance against the allowance for credit losses.

Revenue Recognition

In 2014, the FASB issued guidance on revenue recognition (“ASC 606”), with final amendments issued in 2016. The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. 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 has concluded that the new guidance did not require any significant change to its revenue recognition processes.

The Company’s revenues consist of sales of vehicle by the Company’s own corporate retail store to third party customers, sales of vehicle to franchisees as a supplier, and fees from retail stores operated by franchisees. Revenues from franchised stores include initial franchise fees and annual royalties based on a percent of net incomes.

The Company recognizes sales of vehicle revenues at the point in time when the Company has transferred physical possession of the goods to the customer and the customer has accepted the goods, therefore, indicating as control of the goods has been transferred to the customer. The transaction price is determined and allocated to the product prior to the transfer of the goods to the customer.

The initial franchise services include a series of performance obligations and an indefinite license to use the Company’s trademark. The series of performance obligations are specific services and deliverables that are set forth in the agreement and are billed and receivable as delivered and accepted by the franchisee. These services and deliverables may be customized and are not transferable to other third parties.

The royalty revenues are distinct from the initial franchise services. The Company recognizes royalty revenues only when the franchisee has generated positive annual net income, at which point the Company has the contractual right to request for payment of the royalty. The royalty is calculated as a percentage of the franchisees’ annual net income.

The Company estimates potential returns and records such estimates against its gross revenue to arrive at its reported net sales revenue. The Company has not experienced any sales returns.

Inventory

Inventories, which are primarily comprised of finished goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out method. The Company evaluates the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis. Only defects products can be return to our suppliers.

12

Jiuzi Holdings, Inc.

Notes to the Financial Statements

Advertising

The Company expenses advertising costs as incurred and includes it in selling expenses. The Company recorded$nil and $nil of advertising and promotional expenses for the years ended April 30, 2021 and 2020, respectively.

Income Taxes

Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes.  A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the years of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that the relevant taxing authority that has full knowledge of all relevant information will examine each uncertain tax position. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals.

Earnings (loss) per share

Basic income (loss) per share is computed by dividing net income (loss) attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted income (loss) per share is calculated by dividing net income (loss) attributable to the holders of ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. However, ordinary share equivalents are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.

All per share amounts for all periods presented herein have been adjusted to reflect the Share Subdivision and 2 for 1 stock dividend on post-Share Subdivision basis. See Note 11.

Property and Equipment & Depreciation

Property and equipment are stated at historical cost net of accumulated depreciation. Repairs and maintenance are expensed as incurred. Property and equipment are depreciated on a straight-line basis over the following periods:

Equipment	5 years
Furniture and fixtures	5 years
Motor vehicles	10 years

Intangible Assets & Amortization

Intangible assets are stated at historical cost net of accumulated amortization. Software are amortized on a straight-line basis over the estimated useful life of the software which is 3 years.

Impairment of Long-lived assets

The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value.

13

Jiuzi Holdings, Inc.

Notes to the Financial Statements

New Accounting Pronouncements

In February of 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) “Leases (Topic 842)”. ASU 2016-02 requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted.

For finance leases, a lessee is required to do the following:

●	Recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position
●	Recognize interest on the lease liability separately from amortization of the right-of-use asset in the statement of comprehensive income
---	---
●	Classify repayments of the principal portion of the lease liability within financing activities and payments of interest on the lease liability and variable lease payments within operating activities in the statement of cash flows.
---	---

For operating leases, a lessee is required to do the following:

●	Recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position
●	Recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis
---	---
●	Classify all cash payments within operating activities in the statement of cash flows.
---	---

In July 2018, the FASB issued Accounting Standards Update No. 2018-11 (ASU 2018-11), which amends ASC 842 so that entities may elect not to recast their comparative periods in transition (the “Comparatives Under 840 Option”). ASU 2018-11 allows entities to change their date of initial application to the beginning of the period of adoption. In doing so, entities would:

●	Apply ASC 840 in the comparative periods.
●	Provide the disclosures required by ASC 840 for all periods that continue to be presented in accordance with ASC 840.
---	---
●	Recognize the effects of applying ASC 842 as a cumulative-effect adjustment to retained earnings for the period of adoption.
---	---

In addition, the FASB also issued a series of amendments to ASU 2016-02 that address the transition methods available and clarify the guidance for lessor costs and other aspects of the new lease standard.

The management will review the accounting pronouncements and plan to adopt the new standard on November 1, 2019 using the modified retrospective method of adoption. The transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods will not be restated. The adoption of this ASU will result in the recording of additional lease assets and liabilities each with no effect to opening balance of retained earnings as the Company.

In June 2016, the FASB issued an accounting pronouncement (FASB ASU 2016-13) related to the measurement of credit losses on financial instruments. This pronouncement, along with subsequent ASUs issued to clarify certain provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019.

The management is currently evaluating the impact of this update to the consolidated financial statements. Management will evaluate if the current design for the allowance for loan loss methodology would comply with these new requirements.

In October 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-17) related to related party guidance for variable interest entities. The amendments in this pronouncement are effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The management does not expect it to have a material effect on the consolidated financial statements.

In December 2019, the FASB issued an accounting pronouncement (FASB ASU 2019-12) related to simplifying the accounting for income taxes. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The management does not expect it to have a material effect on the consolidated financial statements.

14

Jiuzi Holdings, Inc.

Notes to the Financial Statements

NOTE 3 – VARIABLE INTEREST ENTITIES ANDOTHER CONSOLIDATION MATTERS

On June 15, 2020, Jiuzi WFOE, Zhejiang Jiuzi and the Zhejiang Jiuzi Shareholders. The key terms of these VIE Agreements are summarized in “Note 1 - Organization and Principal Activities” above.

VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Jiuzi WFOE is deemed to have a controlling financial interest and be the primary beneficiary of Zhejiang Jiuzi and its subsidiaries, because it has both of the following characteristics:

1.	power to direct activities of Zhejiang Jiuzi that most significantly impact its economic performance, and
2.	obligation to absorb losses of the entity that could potentially be significant to Zhejiang Jiuzi or right to receive benefits from the entity that could potentially be significant to Zhejiang Jiuzi.
---	---

In addition, as all of these VIE agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company’s ability to enforce these VIE agreements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these VIE Agreements, it may not be able to exert effective control over Zhejiang Jiuzi and its ability to conduct its business may be materially and adversely affected.

All of the Company’s main current operations are conducted through Zhejiang Jiuzi and its subsidiaries. Current regulations in China permit Zhejiang Jiuzi to pay dividends to the Company only out of its accumulated distributable profits, if any, determined in accordance with their articles of association and PRC accounting standards and regulations. The ability of Zhejiang Jiuzi to make dividends and other payments to the Company may be restricted by factors including changes in applicable foreign exchange and other laws and regulations.

Risks of variable interest entity structure

In the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the VIE Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of WFOE and the VIE are in compliance with existing PRC laws and regulations in all material respects.

However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the VIE Arrangements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s current corporate structure or the VIE Arrangements is remote based on current facts and circumstances.

15

Jiuzi Holdings, Inc.

Notes to the Financial Statements

The following financial information of the VIEs in the PRC are included in the accompanying consolidated financial statements as of and for the six months ended April 30, 2021 and October 31, 2020:

	April 30,<br> 2021		October 31,<br> 2020
Cash and cash equivalents		665,871		764,492
Accounts receivables		15,377		14,875
Accounts receivables – related parties		887,278		1,518,264
Loans receivable from related parties, current portion		4,081,132		2,999,261
Other current assets		829,205		1,178,041
Property, plant and equipment, intangible assets		105,037		118,313
Loans receivable from related parties, noncurrent portion		7,932,213		5,308,919
Other noncurrent assets				-
Total assets of VIE		14,516,113		11,904,514
Accruals and other payables		621,234		302,442
Taxes payable		3,559,015		2,772,447
Contract liability – related party		449,188		614,449
Total liabilities of VIE		4,629,437		3,689,338
	Six Month Ended
---	---	---	---	---	---	---
	April 30,<br> 2021			April 30,<br> 2020
Revenues		4,609,353			1,277,236
Net income		1,311,454			(27,811	)
Net cash (used in) generated by operating activities		(132,848	)		(170,772	)
Net cash (used in) generated by investing activities		(1,742	)		(12,536	)
Net cash provided by financing activities		(23,749	)		(158,494	)

As of April 30, 2021 and 2020, the VIEs have not incurred any amount due from non-VIE subsidiaries of the Company.

As of April 30, 2021 and 2020, the VIEs have not incurred any amount due to non-VIE subsidiaries of the Company.

All material related party transactions are disclosed in Note 9, or elsewhere in these consolidated financial statements. For the six months ended April 30, 2021 and 2020, the VIES have not entered into any transaction with other subsidiaries that are not VIEs. If and when such transaction incurs, such transaction would be eliminated upon consolidation.

Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs and can have assets transferred out of the VIEs under its control. Therefore, the Company considers that there is no asset in any of the VIEs that can be used only to settle obligations of the VIEs, except for registered capital and PRC statutory reserves. As all VIEs are incorporated as limited liability companies under the Company Law of the PRC, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities of the VIEs.

The Company and its directly and indirectly wholly owned subsidiaries, Jiuzi (HK) and Jiuzi WFOE do not have any substantial assets or liabilities or result of operations. They were incorporated for the purpose of providing a tax efficient structure for the Zhejiang Jiuzi to raise additional capital for its development.

16

Jiuzi Holdings, Inc.

Notes to the Financial Statements

NOTE 4 – INVENTORY

---

Inventory, net comprised of the following:

---

	April 30,<br> 2021		October 31,<br> 2020
Finished goods		134,649		154,586
Total, net		134,649		154,586

Inventory write-down expense was $30,749 and $nil for the six months ended April 30, 2021 and 2020, respectively.

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NOTE 5 – ACCOUNTS RECEIVABLES

---

Accounts receivables, net is comprised of the following:

	April 30,<br> 2021		October 31,<br> 2020
Accounts receivables		15,377		14,875
Allowance for doubtful accounts		-		-
Total, net		15,377		14,875
	April 30,<br> 2021			October 31,<br> 2020
---	---	---	---	---	---	---
Accounts receivables-related parties		934,866			1,571,991
Allowance for doubtful accounts		(47,588	)		(53,727	)
Total, net		887,278			1,518,264

The following is a summary of the activity in the allowance for doubtful accounts:

	April 30,<br> 2021			October 31,<br> 2020
Balance at beginning of year		53,727			42,253
Provision		13,860			8,906
Charge-offs		-			-
Recoveries		(21,754	)		-
Effect of translation adjustment		1,755			2,568
Balance at end of year		47,588			53,727

Bad debt (recovery)/expense was ($7,894) and $2,632 for the six months ended April 30, 2021 and 2020, respectively.

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NOTE 6 – LOANS RECEIVABLES

---

Loans receivables include amounts due from related franchisees and are presented net of imputed interest and an allowance for estimated loan losses. The loans are provided in the form of credit line to related franchisee to support their operations. These loans are unsecured with a due date of 18 months upon initial drawing.

Management has determined that the 18-month borrowing rate most appropriately capture the financing cost for these loans. Given that the loans are in the forms of credit lines to the franchisees that may have varying balances over time, as a practical expedient, management has elected to the expense the interest as a cost of revenue at inception rather than amortize over time.

The amounts charged were $497,506 and $425,787 for the six months ended April 30, 2021 and 2020, respectively.

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17

---

Jiuzi Holdings, Inc.

Notes to the Financial Statements

The allowance for loan losses represents an estimate of the amount of net losses inherent in our portfolio of managed receivables as of the applicable reporting date and expected to become evident during the following 12 months.

Each lending request is evaluated by considering the borrower’s financial condition. The Company uses a proprietary model to assign each franchisee a risk rating. This model uses historical franchisee performance data to identify key factors about a franchisee that are considered most significant in predicting a franchisee’s ability to meet its financial obligations. The Company also considers numerous other financial and qualitative factors of the franchisee’s operations, including capitalization and leverage, liquidity and cash flow, profitability, and credit history with the Company and other creditors.

The Company also consider recent trends in delinquencies and defaults, recovery rates and the economic environment in assessing the models used in estimating the allowance for loan losses, and may adjust the allowance for loan losses to reflect factors that may not be captured in the models. In addition, the Company periodically consider whether the use of additional metrics would result in improved model performance and revise the models when appropriate. The provision for loan losses is the periodic expense of maintaining an adequate allowance.

An account is considered delinquent when the related franchisee fails to make a substantial portion of a scheduled payment 3 months after the due date. For purposes of determining impairment, loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment.

As these loans are non-interest bearing, the Company recorded a discount to the face amount using an imputed interest rate of 8.46% to reflect the fair value of the loan at origination. The imputed interest rate reflects the borrowing rate in the market under similar terms and duration. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred.

	April 30,<br> 2021			October 31,<br> 2020
Loan to related franchisees, gross		14,510,149			9,974,576
Discount based on imputed interest rate of 11.75%		(1,704,525	)		(1,167,634	)
Loan to related franchisees, net of discount		12,805,624			8,806,942

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	April 30,<br> 2021			October 31,<br> 2020
Loan to related franchisees, net of discount		12,805,624			8.806.942
Provision for credit losses		(792,279	)		(498,762	)
Loan to related franchisees, net of discount and allowance		12,013,345			8,308,180

The following is a summary of the activity in the allowance for credit loss:

	April 30,<br> 2021			October 31,<br> 2020
Balance at beginning of year		498,762			193,634
Provision		573,343			293,362
Charge-offs		-			-
Recoveries		(298,640	)		-
Effect of translation adjustment		18,814			11,766
Balance at end of year		792,279			498,762

Credit loss was $274,403 and $61,227 for the six months ended April 30, 2021 and 2020, respectively.

The following is a summary of current and non-current loan receivables, net of allowance for credit losses:

	April 30,<br> 2021		October 31,<br> 2020
Loan to related franchisees, net of discount and allowances, current		4,081,132		2,999,261
Loan to related franchisees, net of discount and allowances, non-current		7,932,213		5,308,919
		12,013,345		8,308,180

Credit Quality

The Company extends credit to related franchisees primarily in the form of lines of credit to purchase vehicles and support their daily operations. Each of the franchisees are assigned to one of nine groups according to risk ratings with Group 1 demonstrating the strongest financial metrics, including performance and repayment ability and Group IX demonstrating the weakest financial metrics.

18

Jiuzi Holdings, Inc.

Notes to the Financial Statements

Generally, the company suspends credit lines and does not extend further funding to franchisee who are unable to repay the balance within 3 months after the 18-month deadline.

The Company regularly reviews the model to confirm the continued business significance and statistical predictability of the model and may make updates to improve the performance of the model. In addition, the Company regularly audits the related franchisee’s inventory and sales records to verify the franchisee’s performance. Based on the results of monitoring the franchisee’s performance, including daily payment verifications and monthly analysis of the franchisee’s financial statements, payoffs, aged inventory, over credit line and delinquency reports, the Company can adjust the franchisee’s risk rating, if necessary.

The credit quality of the loans receivables is evaluated based on our internal risk rating analysis. A franchisee has the same risk rating for its entire financing regardless of the type and timing of financing.

The credit quality analysis of franchisee loan receivables at April 30, 2021 and October 31, 2020 was as follows:

	April 30,<br> 2021		October 31,<br> 2020
Franchisee Financing:
Group I		-		11,030
Group II		41,366		-
Group III		-		107,763
Group IV		-		212,995
Group V		138,089		209,190
Group VI		755,493		667,440
Group VII		5,938,007		4,608,741
Group VIII		7,170		-
Group IX		-		814,780
Group X		430,945		-
Group XI		670,105		445,044
Group XII		542,633		-
Group XIII		169,585		330,210
Group XIV		1,398,045		228,800
Group XV		2,714,186		413,495
Group XVI		-		227,657
Group XVII		-		529,797
Balance at end of year		12,805,624		8,806,942

---

NOTE 7 – PROPERTY & EQUIPMENT

Property and equipment, net comprised of the following:

	April 30,<br> 2021		October 31,<br> 2020
At Cost:
Equipment		44,296		41,152
Motor vehicles		74,022		44,418
Leasehold Improvement		14,505		29,599
Furniture and fixtures		8,242		7,972
		141,065		123,141
Less: Accumulated depreciation		53,019		21,264
Total, net		88,046		101,877

Depreciation expenses was $31,755 and $9,137 for the six months ended April 30, 2021 and 2020, respectively.

---

19

---

Jiuzi Holdings, Inc.

Notes to the Financial Statements

NOTE 8 – INTANGIBLE ASSETS

Intangible assets, net comprised of the following:

	April 30,<br> 2021		October 31,<br> 2020
At Cost:
Financial software		16,991		16,436
		16,991		16,436
Less: Accumulated Amortization		-		-
Total, net		16,991		16,436

---

Amortization expenses was $nil and $nil for the six months ended April 30, 2021 and 2020, respectively.

---

NOTE 9 – RELATED PARTY TRANSACTIONS

---

The franchisees are related parties of the Company due to the nominal, symbolic equity interest ownership in the franchisees. The franchisees were originally incorporated with the Company shown as a 51.0% owner and subsequently as a 1.25% owner. The intent of having such ownership percentage in the franchisees was to enable the franchisees to register their respective individual business name to include the words “Jiuzi” as required by the local business bureau. Subsequent to the successful registration by the franchisees and completion of the Company’s obligations under the franchise and license agreement, the Company will decrease its ownership interest in these franchisees to 0%. The Company’s percentage of shareholding is nominal, inconsequential, and symbolic. The Company’s equity interest of 51.0% and 1.25% in the franchisees were symbolic in nature.

The Company did not and does not control the franchisees, exert significant influence over the franchisees, have the power to direct the use of the franchisee’s assets and the fulfillment of their obligations, appoint or dismiss directors, authorized representatives, or executive officers of the franchisees. Management has also determined that the percentage shareholding in the franchisee is not compensatory to the Company in nature, and accordingly, would not be subject to consideration as income under revenue recognition criteria. The Company did not contribute any permanent equity capital in these franchisees and if these franchisees were to incur substantial losses and accumulate significant liabilities, the Company is not obligated to absorb such losses on behalf of the franchisees. Accordingly, the management has determined that the financial positions and results of operations of these franchisees should not be included as part of the Company’s consolidated financial statements.

In addition, the Company did not and will not receive any actual ownership interest in the franchisees, nor receive any benefits from being a 51% or 1.25% owner in the franchisees. Any after tax profits generated by the franchisees that are potentially distributable to the Company are governed by the royalty agreements between the Company and the franchisee not the shareholding percentage. Accordingly, the management has determined that the ownership interest is not part of the initial franchise fee.

---

Accounts receivable from related franchisees comprised of the following:

	April 30,<br> 2021		October 31,<br> 2020
Pingxiang Jiuzi New Energy Automobile Co., Ltd		99,311		163,310
Yichun Jiuzi New Energy Automobile Co., Ltd		165,467		294,547
Puyang Guozheng New Energy Vehicle Sales Co., Ltd		53,498		51,752
Wanzai Jiuzi New Energy Automobile Co., Ltd		77,447		179,515
Xinyu Jiuzi New Energy Automobile Co., Ltd		149,447		308,934
Liuyang Jiuzi New Energy Automobile Co., Ltd		29,880		133,501
Yudu Jiuzi New Energy Automobile Co., Ltd		16,311		84,393
Gao’an Jiuzi New Energy Automobile Co., Ltd		36,406		35,219
Jiujiang Jiuzi New Energy Automobile Co., Ltd		54,499		52,720
Pingjiang Jiuzi New Energy Automobile Co., Ltd		38,855		37,587
Quanzhou Jiuzi New Energy Automobile Co., Ltd		19,895		34,188
Loudi Jiuzi New Energy Automobile Co., Ltd		85,032		89,728
Guangzhoushi New Energy Automobile Co., Ltd		4,834
Huaihua Jiuzi New Energy Automobile Co., Ltd		-		7,471
Xuzhou Jiuzi New Energy Automobile Co., Ltd		-		17,184
Dongming Jiuzi New Energy Automobile Co., Ltd		61,568		59,560
Yulin Jiuzi New Energy Automobile Co., Ltd		42,416		22,382
Total		934,866		1,571,991

Accounts receivables above derived from sales of vehicles supplied to the Company’s franchisees without any special payment terms. Sales revenues from related parties’ franchisees were $ nil and $124,586 for the six months ended April 30, 2021 and 2020, respectively.

20

Jiuzi Holdings, Inc.

Notes to the Financial Statements

Loan to related franchisees is comprised of the following (see note 6 for details):

	April 30, 2021						October 31, 2020
	Gross		Discount		Net		Gross		Discount		Net
Jiangsu Changshu	$	299,766		35,214		264,552	$	293,197		34,442		258,755
Shandong Dongming		381,798		44,850		336,948		359,627		42,246		317,381
Jiangxi Gao’an		357,973		42,052		315,921		338,048		39,711		298,337
Hunan Huaihua		281,470		33,065		248,405		259,255		30,455		228,800
Jiangxi Jiujiang		349,950		41,109		308,841		333,037		39,122		293,915
Hunan Liuyang		480,896		56,492		424,404		344,683		40,490		304,193
Hunan Loudi		349,632		41,072		308,560		312,224		36,677		275,547
Hunan Pingjiang		384,019		45,111		338,908		334,655		39,312		295,343
Jiangxi Pingxiang		513,207		60,287		452,920		368,137		43,246		324,891
Henan Puyang		976,128		114,667		861,461		432,805		50,842		381,963
Fujian Quanzhou		433,692		50,946		382,746		383,604		45,063		338,542
Jiangxi Wanzai		711,139		83,539		627,600		228,316		26,821		201,495
Jiangxi Xinyu		1,123,517		131,981		991,536		363,489		42,700		320,789
Jiangxi Yichun		46,872		5,506		41,366		380,070		44,647		335,423
Jiangxi Yudu		327,828		38,511		289,317		234,770		27,579		207,191
Guangxi Rongxian		13,902		1,633		12,269		353,381		41,512		311,869
Guangdong Zengcheng		560,285		65,818		494,467		516,780		60,707		456,073
Jiangxi Shanggao		156,470		18,381		138,089		107,165		14,344		92,821
Shandong Heze		780,775		91,719		689,056		401,660		43,091		358,569
Jiangxi Ganzhou		105,920		12,443		93,477		117,406		12,037		105,370
Anhui Fuyang		31,149		3,659		27,490		30,132		3,540		26,593
Hunan Liling		12,757		1,499		11,258		-		-		-
Hunan Zhuzhou		83,030		9,754		73,276		78,826		9,260		69,566
Hunan Changsha		3,518		413		3,105		3,404		400		3,004
Guangxi Guilin		1,467		172		1,295		1,420		167		1,253
Hunan Xiangtan		8,125		954		7,171		-		-		-
Hunan Chenzhou		332,498		39,059		293,439		237,035		27,845		209,190
Jiangxi Ji’an		321,506		37,768		283,738		326,525		38,357		288,167
Guangxi Nanning		179,587		21,096		158,491		164,762		19,355		145,407
Hunan Leiyang		292,899		34,407		258,492		283,849		33,344		250,505
Guangxi Liuzhou		9,299		1,092		8,207		8,995		1,057		7,939
Hunan Ningxiang		4,757		559		4,198		4,602		541		4,062
Guangdong Dongguan Changping		236,322		27,761		208,561		210,863		24,770		186,092
Hunan Changsha County		134,042		15,746		118,296		129,668		15,232		114,436
Henan Zhengzhou		1,467		172		1,295		1,420		167		1,253
Guangdong Dongguan Nancheng		9,329		1,096		8,233		6,784		797		5,987
Anhui Huaibei		3,568		419		3,149		3,452		405		3,046
Guangdong Humen		1,730		203		1,527		1,674		197		1,477
Guizhou Zunyi		136,359		16,018		120,341		130,415		15,320		115,095
Jiangsu Xuzhou		254,800		29,932		224,868		311,006		36,534		274,472
Henan Xinxiang		2,780		327		2,453		2,690		316		2,374
Henan Anyang		20,871		2,452		18,419		5,248		617		4,632
Jiangxi Nanchang		9,300		1,093		8,207		8,997		1,057		7,940
Zhejiang Lishui		3,061		360		2,701		2,962		348		2,614
Guangxi Yulin		405,906		47,682		358,224
Hubei Macheng		9,329		1,096		8,233		9,025		1,060		7,965
Hunan Chenzhou yongxing		279,236		32,802		246,434		289,310		33,986		255,325
Fujian Fuzhou		10,473		1,230		9,243		2,660		312		2,347
Anhui Bozhou		8,124		954		7,170		7,860		923		6,936
Anhui Suzhou		6,611		777		5,834		6,395		751		5,644

21

Jiuzi Holdings, Inc.

Notes to the Financial Statements

	April 30, 2021						October 31, 2020
	Gross		Discount		Net		Gross		Discount		Net
Anhui Bengbu		7,553		887		6,666		5,065		595		4,470
Guangdong Foshan		109,127		12,819		96,308		60,740		7,135		53,605
Jiangxi Shangrao		37,503		4,406		33,097		14,105		1,657		12,448
Jiangxi Luxi		-		-		-
Jiangxi Zhangshu		76,818		9,024		67,794		173,358		20,365		152,993
Hunan Hengyang		111,985		13,155		98,830		74,711		8,776		65,934
Hunan Xiangxiang		4,634		544		4,090		4,483		527		3,956
Shandong Heze dingtao		229,870		27,003		202,867		47,098		5,533		41,565
Shandong Jining Liangshan		59,993		7,048		52,945		47,098		5,533		41,565
Shandong Zouping		62,588		7,352		55,236		47,098		5,533		41,565
Shandong Juye		252,546		29,667		222,879		312,859		36,752		276,107
Shandong Juancheng		268,331		31,521		236,810		39,238		4,609		34,629
Shandong Shanxian		205,404		24,129		181,275
Jiangxi Jian yongfeng		16,219		1,905		14,314		13,448		1,580		11,868
Anhui Huaibei Suixi		10,442		1,227		9,215		10,101		1,187		8,914
Shandong Heze yuncheng		383,467		45,047		338,420		241,346		28,351		212,995
Shandong Heze Gaoxinqu		8,125		954		7,171		7,860		923		6,936
Guangdong Zengchengerqu		8,125		954		7,171
Hainan Sanya		8,959		1,052		7,907		7,172		843		6,330
Guangzhou Baiyun		8,125		954		7,171
Hunan Changsha Furong		11,986		1,408		10,578		2,630		309		2,321
Hunan Yongzhou		8,125		954		7,171		7,860		923		6,936
Hunan Changsha Yuhua		274,819		32,283		242,536		118,163		13,881		104,282
Hunan Yiyang		8,125		954		7,171
Anhui Suzhou Lishan		8,125		954		7,171
Hunan Shaoyang		13,902		1,633		12,269
JiangXi  Jingdezhen		24,848		2,919		21,929		7,855		920		6,935
GuangDong Huizhou		13,902		1,633		12,269
Shandong Heze Caoxian		629,649		73,966		555,683
GuangDong Shenjiang		13,902		1,633		12,269
Hunan Hengyang Shigu		13,902		1,633		12,269
Hunan Jishou		13,902		1,633		12,269
Hunan Wangcheng		13,902		1,633		12,269
Hunan zhangjiajie		13,902		1,633		12,269
Hunan changde		13,902		1,633		12,269
Zhejiang Jinhua		13,902		1,633		12,269
Hunan Hengdong		13,902		1,633		12,269
Guangxi Nanning jiangnan		35,526		4,173		31,353
Guangzhou Panyu		13,902		1,633		12,269
Zhejiang Yiwu		13,902		1,633		12,269
Hainan Haikou		23,169		2,722		20,447
Total	$	14,510,149		1,704,525		12,805,624	$	9,974,576		1,167,634		8,806,942

22

Jiuzi Holdings, Inc.

Notes to the Financial Statements

The advances paid above are derived from funds advanced to the Company’s franchisees as working capital to support its operations. Such advances are due within 18 months.

Accounts payable to related parties’ franchisees comprised of the following:

	April 30, <br> 2021		October 31, <br> 2020
Guangzhou		-		16,228
Hunan Liling		-		1,108
Hunan Xiangtan		-		5,588
Jiangxi Tonggu		-		206
Shandong Shanxian		-		5,588
Hunan Yiyang		-		5,588
Guangdong Guangzhou Zengcheng No.2		-		5,588
Guangdong Guangzhou Baiyun		-		5,588
Anhui Suzhou Dangshan		-		5,588
Liuyang		13,732		25,058
Wanzai		8,650		8,368
Huaihua		18,520		17,915
Total		40,902		102,411

Accounts payable above derived from vehicles purchased by the Company from the franchisees as inventory on a needed basis without any special payment terms.

Contract liability – related party comprised of the following:

	April 30, <br> 2021		October 31, <br> 2020
Deferred revenues		449,188		614,449
Potential franchisees		-		-
Total, net		449,188		614,449

23

Jiuzi Holdings, Inc.

Notes to the Financial Statements

Deferred revenues from related franchisees comprised of the following:

	April 30, <br> 2021		October 31, <br> 2020
Jiangxi Yichun
Henan Puyang		10,812		10,460
Jiangxi Wanzai		162,185
Jiangxi Shanggao		155		66,642
Shandong Heze		7,723		-
Jiangxi Ganzhou				1,494
Hunan Zhuzhou				2,690
Shandong Jining Liangshan		2,302
Guangxi Yulin		9,268		-
Hunan Chenzhou		3,552		-
Hunan Chenzhou Yongxing		6,178		5,977
Jiangxi Ji’an		1,236		86,665
Jiangxi Ji’an Yongfeng				1,195
Guangxi Nanning		4,634		5,977
Hunan Leiyang				13,448
Dongguan Changping				127,009
Dongguan Humen		927		897
Guizhou Zunyi		1,699		1,644
Hunan Changsha		3,552		3,437
Hunan Changsha County		3,425		3,313
Dongguan Nancheng		2,780		1,195
Anhui Huaibei				12,701
Hunan Hengyang		7,723		2,391
Guangxi Beihai		7,723		7,471
Hainan Haikou		23,169		22,413
Henan Xinxiang		7,723		7,471
Henan Anyang		15,446		14,942
Henan Wenxian		77		75
Hunan Liling				7,023
Zhejiang Lishui		23,941		23,160
Guangxi Liuzhou		3,861		3,736
Hunan Miluo		4,633		4,483
Guangzhou Panyu				7,471
Hunan Shaoyang				44,827
Hunan Wangcheng				15,839
Hainan Sanya		1,544		1,494
Hunan Xiangxiang		38,615		37,355
Hunan Changsha Furong		2,471		1,195
Guangdong Foshan				2,988
Anhui Suzhou		1,313		1,270
Anhui Suzhou Dangshan		309		299
Anhui Suixi		1,236		1,195
Anhui Bengbu		1,236		1,195
Hunan Zhangjiajie				18,678
Hunan Yueyang		7,723		7,471
Fujian Fuzhou		927		897
Shandong Heze Yuncheng				7,471
Shandong Juancheng				4,184
Jiangxi Zhangshu				1,494
Jiangxi Shangrao		309		6,275
Chengdu Jinniu		7,723
Anhui Mengcheng		7,723
Anhui Xiaoxian		7,723
Guangxi Yulin Yuzhou		7,723
Hunan Changsha Tianxin		30,892
Sichuan Leshan		15,446
Hunan Jishou		1,551
Total		449,188		614,449

24

Jiuzi Holdings, Inc.

Notes to the Financial Statements

The deferred revenues above derived from initial franchise fees payments received in advance for services which have not yet been performed. The initial franchise fees include a series of performance obligations and an indefinite license to use the Company’s trademark. Amounts are recognized as advances when received, and are recognized as deferred revenues when the minimum amount required under the franchise or license agreement is attained. The payments are received in advance progressively and are not refundable once the required amount is attained. Such amounts are recognized as revenues when the Company performed the initial services required under the franchise or license agreement, which is generally when a specific performance obligation is completed or when and if the franchise or license agreement is terminated.

Related parties receivables comprised of the following:

	April 30, <br> 2021		October 31, <br> 2020
Mr. Shuibo Zhang		178,925		147,593
Mr. Qi Zhang		19,275		26,050
Hangzhou zhitongche		43,837
Total		242,037		173,643

As of April 30, 2021 and October 31, 2020, the Company has an outstanding receivable of $178,925 and $147,593, respectively, from Mr. Shuibo Zhang, the Company’s shareholder, director, and office. The amount was advanced to Mr. Zhang for business purposes. The advances were considered due on demand in nature and have not been formalized by a promissory note and are non-interest bearing.

As of April 30, 2021 and October 31, 2020, the Company has an outstanding receivable of $19,275 and $26,505, respectively, from Mr. Qi Zhang, the vice president of marketing department. The amount was advanced to Mr. Zhang for business purposes. The advances were considered due on demand in nature and have not been formalized by a promissory note and are non-interest bearing and due on demand without a specified maturity date.

NOTE 10 – LEASES

---

The Company has various operating leases for its corporate office and retail store.

---

Operating lease expenses were $44,476 and $22,425 for the six months ended April 30, 2021 and 2020, respectively.

---

As of April 30, 2021 and October 31, 2020, the outstanding operating leases are below the Company’s threshold for capitalizing assets. As such, no right of use assets and liabilities were recognized under ASU 842.

The undiscounted future minimum lease payment schedule as follows:

---

For the six months ending April 30, 2021,
2021 (six months from May 1, 2021 to October 31, 2021)	44,476
2022	7,348
2023	2,480
Total	54,304

25

Jiuzi Holdings, Inc.

Notes to the Financial Statements

---

NOTE 11 – SHAREHOLDERS’ EQUITY

---

As of April 30, 2021 and October 31, 2020, the Company had 15,000,000 shares issued and outstanding.

---

On October 31, 2020, pursuant to a special resolution adopted by its shareholders to amend and restate the memorandum and articles of associations, the Company conducted a subdivision of its par value with each share of a par value of $0.005 of the authorized share capital of the Company (including issued and unissued share capital) be subdivided into 5 shares of a par value of $0.001 each (the “Share Subdivision”). Immediately following the Share Subdivision, the authorized share capital of the Company was $50,000 divided into 50,000,000 shares of a par value of $0.001 each, and the total issued and outstanding shares were 5,000,000.

---

Subsequent to the Share Subdivision, the Company increased its authorized share capital from 50,000,000 shares to 150,000,000 shares with a par value of $0.001 per share, and issued a stock dividend on 2 for 1 on post-Share Subdivision basis, whereby each shareholder holding 1 share of the 5,000,000 shares outstanding immediately preceding this stock dividend was issued an additional 2 shares; therefore, a total of 10,000,000 shares were issued; immediately following this transaction, there were a total of 15,000,000 shares issued and outstanding. All shares and per share amounts for all periods presented herein have been adjusted to reflect the Share Subdivision and stock dividend as if it had occurred at the beginning of the first period presented.

---

NOTE 12 – SEGMENTS AND GEOGRAPHIC INFORMATION

---

The Company believes that it operates in two business segments which comprised of sales of NEVs and franchise services; and it operates in one geographical location China. The Company disaggregates its revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

---

Sales of goods revenues comprised of sales of vehicles to third party customers and to the franchisees. Franchise services revenues comprised of initial fees and ongoing royalties from the franchisees. Under the franchise arrangement, franchisees are granted the right to operate retail store using the Company’s Jiuzi brand and system.

---

Sales revenues comprised of the following:

---

	Six Months Ended
	April 30, <br> 2021				April 30,<br> 2020
NEVs sales		22,230	5	%		299,572	23	%
Franchisees service revenues		4,587,123	95	%		977,664	77	%
Total		4,609,353	100	%		1,277,236	100	%

---

Direct costs comprised of the following:

---

	Six Months Ended
	April 30, <br> 2021				April 30, <br> 2020
NEVs sales		5,613	0.4	%		296,140	37	%
Franchisees service revenues		1,481,000	99.6	%		495,073	63	%
Total		1,486,613	100	%		791,213	100	%

---

Gross profit (loss) comprised of the following:

---

	Six Months Ended
	April 30, <br> 2021				April 30, <br> 2020
NEVs sales		16,617	0.5	%		3,432	1	%
Franchisees service revenues		3,106,123	99.5	%		482,591	99	%
Total		3,122,740	100	%		486,023	100	%

---

NOTE 13 – INCOME TAX

The Company is subject to profits tax rate at 25% for income generated for its operation in China and net operating losses can be carried forward for no longer than five years starting from the year subsequent to the year in which the loss was incurred.

The deferred tax assets are reduced by a valuation allowance as in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized.

---

26

---

Jiuzi Holdings, Inc.

Notes to the Financial Statements

The net taxable income (losses) before income taxes and its provision for income taxes comprised of the following:

	Six Months Ended
	April 30, <br> 2021			April 30,<br> 2020
Income attributed to China		1,757,180			(27,795	)
PRC statutory tax rate		25	%		25	%
Tax expense/(benefit)		439,295			(6,949	)
ASC 747 Valuation allowance		-			(6,949	)
Miscellaneous		6,431			16
Tax expense, net		445,726			16

NOTE 14 – CONCENTRATIONS, RISKS AND UNCERTAINTIES

Credit risk

Cash deposits with banks are held in financial institutions in China, which deposits are not federally insured. Accordingly, the Company has a concentration of credit risk related to the uninsured part of bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk.

Concentration

The Company has a concentration risk related to suppliers and customers. Failure to maintain existing relationships with the suppliers or customers to establish new relationships in the future could negatively affect the Company’s ability to obtain goods sold to customers in a price advantage and timely manner. If the Company is unable to obtain ample supply of goods from existing suppliers or alternative sources of supply, the Company may be unable to satisfy the orders from its customers, which could materially and adversely affect revenues.

The concentration on sales revenues generated by customers type comprised of the following:

	Six Months Ended
	April 30, <br> 2021				April 30, <br> 2020
Third party sales revenues		22,230	0	%		174,986	13	%
Related party sales revenues		-	-			124,586	10	%
Related party franchise revenues		4,587,123	100	%		977,664	77	%
Total		4,609,353	100	%		1,277,236	100	%

The concentration of sales revenues generated by third-party customers comprised of the following:

	Six Months Ended
	April 30,				April 30,
	2021				2020
Customer A		-	-			22,745	13	%
Customer B		-	-			18,701	11	%
Customer C		-	-			18,671	11	%
Customer D		3,366	15	%		-	-	%
Customer E		3,162	14	%		-	-	%
Customer F		1,216	6	%		-	-	%
Customer G						-	-	%
Total		7,744	35	%		60,117	35	%

NOTE 15 – SUBSEQUENT EVENTS

The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. Subsequent to the date the financial statements were available to be issued, the following subsequent event required disclosures and adjustments to the financial statements:

Other than the subsequent event disclosed above, there was no other subsequent event that would require disclosure to or adjustment to the financial statements.

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EXHIBIT INDEX

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Exhibit No.	Description
Exhibit 99.1	Jiuzi Holdings Inc. Reports First Half 2021 Financial Results.

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SIGNATURES

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

Date: August 5, 2021	JIUZI HOLDINGS, INC.
	By:	/s/ Shuibo Zhang
	Name:	Shuibo Zhang
	Title:	Chief Executive Officer

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Exhibit 99.1

Jiuzi Holdings, Inc. Reports First-Half 2021 Financial Results

• Total net revenues grew by 260.88% or $3.33 million year-on-year to $4.61 million

• Gross profit and margin were $3.12 million and 67.75%, respectively

• Net income was $1.31 million, turning around from net loss of $0.03 million for the same period in 2020

HANGZHOU, China, August xx, 2021 /PRNewswire/ -- Jiuzi Holdings, Inc. (NASDAQ: JZXN; the “Company”), a new energy vehicles franchisor and retailer under the brand name “Jiuzi” in China, today reports its financial results for the six months ended April 30, 2021.

First-Half 2021 Highlights:

Total Net revenues increased by 260.88% or $3.33 million from $1.28 million for the six months ended April 30, 2020 to $4.61 million for the six months ended April 30, 2021.

Gross profit and gross profit margin were $3.12 million and 67.75% for the six months ended April 30, 2021, as compared to $0.49 million and 38.05% for the same period in 2020.

Income from operations increased by $1.86 million and was turned around from loss from operations of $0.04 million for the six months ended April 30, 2020 to $1.81 million for the six months ended April 30, 2021.

Initial franchise fee increased by 369.19% or $3.61 million from $0.98 million for the six months ended April 30, 2020 to $4.59 million for the six months ended April 30, 2021.

●	The Company has entered into franchise agreements with 86 franchisees as<br>of April 30, 2021, as compared to 47 as of April 30, 2020.

Net income increased by $1.34 million and was turned around from net loss of $0.03 million for the six months ended April 30, 2020 to net income of $1.31 million for the six months ended April 30, 2021.

	For the six months ended April 30
($ millions, except per share data, differences due to rounding)	2021			2020			% Change
Total net revenues	$	4.61		$	1.28			260.88	%
Cost of revenues	$	1.49		$	0.79			87.89	%
Gross profit	$	3.12		$	0.49			542.51	%
Gross profit margin		67.75	%		38.05	%		29.70	%
Income from operations	$	1.81		$	(0.04	)		4133.13	%
Net income (loss)	$	1.31		$	(0.03	)		4815.59	%
Earnings (loss) per share – Basic and Diluted	$	0.09		$	(0.02	)		550.00	%

Mr. Shuibo Zhang, CEO of JZXN commented: “Thanks to our highly qualified and motivated workforce, the Company managed to deliver an outstanding financial performance and achieved a great turnaround from the period when Covid-19 hit the electric vehicle industry.

“As a dedicated participant in the new energy vehicle sector, JZXN expects that the EV shift is getting closer and will ensure the enduring success of the Company to safeguard its profitability targets. During the half year period, we formed partnerships with industry leaders to boost business development. We also aim to build an online-offline operating system to empower our franchisees to further driving up our sales growth. With an innovative one-stop vehicle sales model, we are convinced that the Company will be successful in the exciting electric vehicle era that is soon coming,” he said.

Mr. Francis Zhang, Chief Financial Officer, commented, “We were able to deliver strong development momentum as we turned net loss to a net income of $1.31 million and our net revenues reached $4.61 million during the six months ended April 30, 2021 despite the fact that the COVID-19 pandemic had an adverse impact on the economic activities in China and the world. Looking ahead, we remain committed to expanding the scale of sales and business operation, promoting new development strategies, and further accelerating the integration of our existing business and new growth points initiated both through our in-house expansion strategies and via partnerships with industry peers. We believe the above measures will lay a solid foundation for our profitability in the long run.”

First-Half 2021 Financial Results

Net revenue

The following table lists the calculation methods of gross profit and gross profit margin of each type of revenue:

****	For the six months ended April 30,					****	Changes					****
($ millions, differencesdue to rounding)	2021		****	2020		****	Amount		****	%		****
New energy vehicle sales
Net revenue	$	0.02			0.30			(0.28	)		(92.58	)%
Cost of revenue		0.01			0.30			(0.29	)		(98.10	)%
Gross profit	$	0.02			0.003			0.01			384.18	%
Gross profit margin		74.75	%		1.15	%		73.60	%		6,400	%
Franchise initial fees
Net revenue	$	4.59			0.98			3.61			369.19	%
Cost of revenue		1.48			0.50			0.98			199.15	%
Gross profit	$	3.11			0.48			2.62			543.63	%
Gross profit margin		67.71	%		49.36	%		18.35	%		37.18	%
Franchisees’ royalties
Net revenue	$	-			-			-			-
Cost of revenue		-			-			-			-
Gross profit	$	-			-			-			-
Gross profit margin

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Net revenues were $4.61 million for the six months ended April 30, 2021 as compared to $1.28 million in 2020, an increase of $3.33 million or 260.88%. The increase was mostly due to the pandemic has been effectively controlled in China, and the increase of revenues from the initial franchise fees.

New Energy Vehicle (NEV) sales include the sales of NEVs in JZXN’s Shangli store and sales of NEVs to franchisees. For the six months ended April 30, 2021, NEVs sales decreased by $0.28 million or 92.58%, from $0.30 million for the six months ended April 30, 2020 to $0.02 million for the six months ended April 30, 2021. The decrease was mostly due to the Company organized a lot of training to improve the quality of employees, and spent more time on the maintenance and development of franchisees, which resulted in a decline in the sales of NEVs. Also, Shangli Store has been adjusted as a service center which mainly provides demonstration and training for franchisees. Vehicle sales are mainly concentrated in other franchisees’ stores, which resulted in a decline in the sales of NEVs in our Shangli store.

Gross profit and gross profit margin for NEV sales were $0.02 million and 74.75% for the six months ended April 30, 2021 as compared to $0.003 million and 1.15% for the same period in 2020, respectively.

The initial franchise fee revenue increased by $3.61 million or 369.19%, from $0.98 million for the six months ended April 30, 2020 to $4.59 million for the six months ended April 30, 2021. As of April 30, 2021, April 30, 2020, the Company has entered into franchise agreements with 86 and 47 franchisees, respectively. The increase was mostly due to the pandemic has been effectively controlled in China, and people’s interest in investment and consumption has generally increased. At the same time, the new energy vehicle sector has renewed investor interest in market and companies.

Gross profit and gross profit margin for the segment were $3.11 million and 67.71% for the six months ended April 30, 2021 as compared to $0.48 million and 49.36% for the same period in 2020, respectively. The increase was mainly due to an increase in revenue.

Franchisees’ royalties may be collected based on 10% of net incomes from franchisees. As of April 30, 2021, we did not generate any revenues through franchisees’ royalties as our franchisees have yet to generate net income for the period.

Selling, general and administrative expenses

The Company incurred selling, general and administrative expenses of $1.31 million for the six months ended April 30, 2021, as compared to $0.53 million for the six months ended April 30, 2020, an increase of $0.78 million or 155.11%. The increase is due to the COVID-19 outbreak is effectively under control, JZXN organized a lot of staff training, the market was able to develop smoothly, employees’ travel expenses, training expense, performance bonuses and basic social insurance have been increased.

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Interest Expenses

Interest charges and bank charges are mainly from bank transfer charges and deposit interest offset. Interest expense as of April 30, 2021 and 2020 was approximately $354 and $1465, respectively.

Provision for Income Taxes

Provision for income tax was $0.45 million during the six months ended April 30, 2021, an increase of $0.45 million as compared to $16 for the six months ended April 30, 2020. The increase in provision for income taxes was mainly due to the increase in income before income tax provision.

Net Income

Net income increased by $1.34 million to $1.31 million for the six months ended April 30, 2021, from net loss of $0.03 million for the six months ended April 30, 2020. Such change was the result of the combination of the changes as discussed above.

Basic and diluted earnings (loss) per share

Basic and diluted earnings per share were $0.09 for the six months ended April 30, 2021, compared to net loss per share of $0.02 for the same period of 2020.

Cash and cash equivalents

As of April 30, 2021 the Company had cash and cash equivalents of $0.67 million, compared to $0.11 million as of April 30, 2020.

Recent developments

On July 19, 2021, the Company announced that it entered into a strategic cooperation agreement with Chongqing Ruichi Automobile Industry Co., Ltd. (“Ruichi”) on June 25, 2021. Pursuant to the agreement, Ruichi will supply 500 logistics vehicles to JZXN during the initial term, and conduct sales at the Company’s chain stores. JZXN and Ruichi will seek bilateral gains via resource sharing and forming complementary business advantages.

On July 14, 2021, the Company announced it has signed a letter of intent with China Petrol Technology (Shenzhen) Limited (“CPT”), an innovative “internet

• energy” industrial chain platform, to jointly build battery swap stations and battery management system for electric vehicles (EV) across China. Mr. Shuibo Zhang, Chairman of the Company and Mr. Weizhao Jie, CEO of CPT, attended the signing ceremony.

On June 29, 2021, the Company announced its operating entity Zhejiang Jiuzi New Energy Vehicles Co. Ltd. (“Jiuzi New Energy”) entered into a strategic cooperation agreement with Hemei (Zhejiang) Auto Holdings Co. Ltd. (“Hemei Auto”) on June 2 in Yuyao, of China’s Ningbo City. Pursuant to the agreement, Jiuzi New Energy and Hemei Auto will strive to seek bilateral gains via resources sharing to jointly develop smart logistics system and new city logistics business models that pivot clean, green, safe and efficient logistics services amid robust growth opportunities in this industry.

On May 20, 2021, the Company announced the closing of its initial public offering (“Offering”) of 5,200,000 ordinary shares at a public offering price of $5.00 per share. The Company received aggregate gross proceeds of $26 million from this Offering, before deducting underwriting discounts and other related expenses.

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On May 18, 2021, the Company announced the pricing of its upsized initial public offering of up to 5,200,000 ordinary shares at a public offering price of $5.00 per share. The ordinary shares have been approved for listing on the Nasdaq Capital Market and commenced trading on May 18, 2021 under the ticker symbol “JZXN”.

About Jiuzi Holdings, Inc.

Jiuzi Holdings, Inc., headquartered in Hangzhou, China, and established in 2017, franchises and operates retail stores under the brand name “Jiuzi” to sell New Energy Vehicles (“NEVs”) in third-fourth tier cities in China. The Company majorly sells battery-operated electric vehicles, and sources NEVs through more than twenty NEV manufacturers. It has 37 operating franchise stores and one company-owned store. For more information, visit the Company’s website at http://www.zjjzxny.cn/.

Forward-Looking Statements

All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and in its other filings with the SEC.

For more information, please contact:

Janice Wang

EverGreen Consulting Inc.

Email:	[email protected]
Phone:	+1 571-464-9470 (from U.S.)
	+86 13811768559 (from China)

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Jiuzi Holdings, Inc.

Consolidated Balance Sheets

As of April 30, 2021 and October 31, 2020

	April 30,<br><br> 2021		October 31,<br><br> 2020
ASSETS
Current assets
Cash and cash equivalents	$	665,871	$	764,492
Accounts receivable		15,377		14,875
Accounts receivable – related party		887,278		1,518,264
Due from related parties		242,037		173,643
Inventories		134,649		154,586
Advances to suppliers		159,980		569,023
Loans receivable from related parties, net		4,081,132		2,999,261
Other receivables and other current assets		292,539		280,789
Total current assets		6,478,863		6,474,933
Non-current asset
Property, plant and equipment, net		88,046		101,877
Intangible asset, net		16,991		16,436
Other non-current assets		-		2,349
Loans receivable from related parties, net		7,932,213		5,308,919
Total non-current assets		8,037,250		5,429,581
TOTAL ASSETS	$	14,516,113	$	11,904,514
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accruals and other payables	$	467,751	$	82,182
Accounts payable – related party		40,902		102,411
Accounts payable		21,609		872
Taxes payable		3,559,015		2,772,447
Contract liability		90,972		116,977
Contract liability – related party		449,188		614,449
TOTAL LIABILITIES	$	4,629,437	$	3,689,338
COMMITMENTS AND CONTINGENCIES
Shareholders’ equity
Ordinary shares (150,000,000 shares authorized, par value $0.001, 15,000,000 shares issued and outstanding as of April 30, 2021 and October 31, 2020)*	$	15,000	$	15,000
Additional paid in capital		347,277		308,939
Statutory reserve		738,072		690,624
Retained earnings		8,123,220		6,846,609
Accumulated other comprehensive loss		257,431		(60,426	))
Total equity attributable to Jiuzi		9,481,000		7,800,746
Equity attributable to noncontrolling interests		405,676		414,430
Total Stockholders’ equity	$	9,886,676	$	8,215,176
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	14,516,113	$	11,904,514

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Jiuzi Holdings, Inc.

Consolidated Statements of Income and ComprehensiveIncome

For the years ended April 30, 2021 and 2020

	April 30,<br><br> 2021			April 30,<br><br> 2020
Revenues, net	$	22,230		$	174,986
Revenues – related party, net		4,587,123			1,102,250
Total Revenues		4,609,353			1,277,236
Cost of revenues		41,375			154,171
Cost of revenues – related party		1,445,238			637,042
Total cost of revenues		1,486,613			791,213
Gross profit		3,122,740			486,023
Selling and marketing expense		11,886			18,127
General and administrative expenses		1,300,624			512,780
Operating income (loss)		1,810,230			(44,884	)
Non-operating income (expense) items:
Other income (expense), net		(53,407	)		18,554
Interest income (expense)		357			(1,465	)
		(53,050	)		17,089
Earnings (Loss) before tax		1,757,180			(27,795	)
Income tax		445,726			16
Net income (loss)		1,311,454			(27,811	)
Less: loss attributable to non-controlling interest		(12,605	)		(10,779	)
Net income (loss) attributable to Jiuzi	$	1,324,059		$	(17,032	)
Earnings (Loss) per share
Basic	$	0.09		$	(0.02	)
Diluted	$	0.09		$	(0.02	)
Weighted average number of ordinary shares outstanding*
Basic		15,000,000			15,000,000
Diluted		15,000,000			15,000,000
	April 30,<br><br> 2021		April 30,<br><br> 2020
---	---	---	---	---	---
Net income (loss)	$	1,311,454	$	(27,811	)
Other comprehensive income (loss):
Foreign currency translation (loss) income		321,708		23,652
Total comprehensive income (loss)	$	1,633,162	$	(4,159	)

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