Financial Performance - Net product sales for the three months ended June 30, 2021, were $120.6 million, an increase of $37.4 million or 45.0% compared to $83.2 million in the same period in 2020[124]. - Net sales of traditional steering products and parts reached $97.4 million, up $29.7 million or 43.9% from $67.7 million in the same period last year[124]. - Net sales of electric power steering (EPS) were $23.2 million, representing an increase of $7.7 million or 49.7% compared to $15.5 million in the same period in 2020[124]. - Total net product sales for the six months ended June 30, 2021, reached $250.9 million, a 60.1% increase from $156.7 million in the same period of 2020[146]. - Net product sales for the six months ended June 30, 2021, were $250.9 million, an increase of $94.2 million or 60.1% compared to $156.7 million for the same period in 2020, primarily due to market recovery from COVID-19[149]. - Net sales of traditional steering products and parts reached $203.0 million, up $69.9 million or 52.5% from $133.1 million in the same period of 2020[149]. - Net sales of electric power steering (EPS) increased to $47.9 million, a rise of $24.3 million or 103.0% compared to $23.6 million in the same period of 2020, with EPS accounting for 19.1% of net sales[149]. Cost and Expenses - The cost of products sold for the three months ended June 30, 2021, was $104.8 million, an increase of $29.4 million or 39.0% from $75.4 million in the same period in 2020[122]. - The cost of products sold for the six months ended June 30, 2021, was $215.4 million, an increase of $77.6 million or 56.3% from $137.8 million in the same period of 2020[157]. - Selling expenses increased by $1.5 million or 49.3% to $4.4 million for the three months ended June 30, 2021, compared to $3.0 million in the same period in 2020[122]. - Selling expenses rose to $10.1 million, an increase of $5.0 million or 98.0% compared to $5.1 million for the same period in 2020, driven by increased sales volume and higher air freight charges[164]. - General and administrative expenses rose by $1.3 million or 27.4% to $6.1 million for the three months ended June 30, 2021, compared to $4.8 million in the same period in 2020[122]. - General and administrative expenses increased to $10.7 million, up $2.5 million or 30.5% from $8.2 million in the same period of 2020, mainly due to higher payroll expenses[164]. - Research and development expenses for the three months ended June 30, 2021, were $5.9 million, a slight decrease of $0.2 million or 3.2% from $6.1 million in the same period in 2020[122]. - Research and development expenses were $12.6 million, an increase of $1.3 million or 11.5% compared to $11.3 million for the same period in 2020, primarily due to increased expenditures on EPS product development[165]. Profitability - The company reported a net income of $2.9 million for the three months ended June 30, 2021, compared to a net loss of $4.2 million in the same period in 2020, representing a turnaround of $7.2 million[122]. - Net income attributable to parent company's common shareholders was $3.1 million for the three months ended June 30, 2021, compared to a net loss of $4.1 million in the same period of 2020, an increase of $7.2 million[144]. - Net income attributable to parent company's common shareholders increased by $10.5 million, reaching $6.4 million for the six months ended June 30, 2021, compared to a net loss of $4.1 million for the same period in 2020[167]. Cash Flow and Financial Position - The company reported cash and cash equivalents and short-term investments of $100.9 million as of June 30, 2021, a decrease of $6.5 million, or 6.0%, from $107.4 million as of December 31, 2020[168]. - Working capital increased by $16.6 million, or 13.7%, to $137.8 million as of June 30, 2021, compared to $121.2 million as of December 31, 2020[168]. - Net cash provided in operating activities decreased by $25.9 million to $5.5 million for the six months ended June 30, 2021, compared to $31.4 million for the same period in 2020[185]. - The company had short-term loans of $36.4 million and bankers' acceptances of $82.9 million as of June 30, 2021[170]. - The total outstanding principal under the company's credit facilities and lines of credit was $173 million, with $81.7 million used as of June 30, 2021[173]. - The company expects a reduction in the value of mortgages securing bank loans and acceptances by approximately $16.6 million over the next 12 months[171]. - The company has complied with financial covenants as of June 30, 2021, and expects to meet its anticipated cash needs for at least twelve months following the report[169]. - The company intends to indefinitely reinvest funds from its PRC subsidiaries, except for expected dividend distributions to fund a one-time transition tax due to U.S. Tax Reform[169]. - The company has pledged assets with an aggregate assessed value of $138.5 million to secure its credit facilities as of June 30, 2021[174]. - Net cash used in investing activities for the six months ended June 30, 2021 was $6.7 million, a decrease of $23.9 million compared to $30.6 million for the same period in 2020[186]. - Net cash used by financing activities for the six months ended June 30, 2021 was $10.8 million, an increase of $11.0 million compared to net cash provided of $0.2 million for the same period in 2020[187]. Other Information - The company aims to improve overall margins and long-term operating profitability by leveraging its innovative technology and geographic strengths[111]. - The company has business relationships with over sixty vehicle manufacturers, including major domestic and foreign automobile manufacturers[110]. - Henglong's net product sales increased to $49.1 million for the three months ended June 30, 2021, up 37.5% from $35.7 million in the same period of 2020[128]. - Jiulong's net product sales decreased to $25.4 million for the three months ended June 30, 2021, down 3.4% from $26.3 million in the same period of 2020[129]. - Hubei Henglong's net product sales surged to $31.9 million for the three months ended June 30, 2021, representing a 179.8% increase from $11.4 million in the same period of 2020[132]. - Gross margin improved to 13.1% for the three months ended June 30, 2021, compared to 9.4% for the same period in 2020, an increase of 3.7%[141]. - Gross margin improved to 14.2% for the six months ended June 30, 2021, compared to 12.1% for the same period in 2020, reflecting a 2.1% increase[163]. - Other income, net was $1.5 million for the three months ended June 30, 2021, consistent with $1.3 million for the same period in 2020[143]. - Other income, net was $3.2 million, an increase from $1.4 million in the same period of 2020, mainly due to government subsidies[166]. - Interest expense decreased to $0.6 million for the six months ended June 30, 2021, compared to $0.8 million for the same period in 2020[166]. - There were no significant off-balance sheet arrangements as of June 30, 2021 and December 31, 2020[188]. - No material changes were reported regarding market risk disclosures from the Company's Annual Report on Form 10-K for the year ended December 31, 2020[189].

China Automotive Systems, Inc. (NASDAQ:CAAS) Q1 2021 Earnings Conference Call May 12, 2021 8:00 AM ET Company Participants Kevin Theiss - Investor Relations Qizhou Wu - Chief Executive Officer Conference Call Participants Operator Greetings, and welcome to the China Automotive Systems First Quarter 2021 Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being re ...

Financial Performance - Net product sales for the three months ended March 31, 2021, were $130,341,000, representing a 77.2% increase from $73,555,000 in the same period of 2020[126]. - Net income for the three months ended March 31, 2021, was $3,231,000, a significant improvement from a net loss of $628,000 in the same period of 2020[126]. - Net product sales increased to $130.3 million for Q1 2021, up 77.0% from $73.6 million in Q1 2020, driven by market recovery post-COVID-19[130]. - Other income net was $1.7 million, significantly up from $0.1 million in Q1 2020, driven by government subsidies[147]. - Net income attributable to non-controlling interests was $0.02 million for Q1 2021, compared to a net loss of $0.6 million in Q1 2020[147]. - Net income attributable to parent company's common shareholders was $3.2 million for Q1 2021, an increase of $3.2 million compared to a net loss of $0.03 million in Q1 2020[148]. Costs and Expenses - The cost of products sold increased to $110,593,000, up 77.2% from $62,403,000 year-over-year[126]. - Research and development expenses rose to $6,680,000, reflecting a 28.6% increase compared to $5,193,000 in the prior year[126]. - Selling expenses surged to $5,609,000, marking a 164.8% increase from $2,118,000 in the previous year[126]. - General and administrative expenses increased to $4,615,000, a 34.6% rise from $3,429,000 year-over-year[126]. - Cost of products sold rose to $110.6 million, an increase of 77.2% from $62.4 million in Q1 2020, primarily due to increased sales volumes[138]. - Research and development expenses increased to $6.7 million, up 28.8% from $5.2 million in Q1 2020, reflecting higher R&D activities for EPS products[146]. - Selling expenses rose to $5.6 million, a 166.7% increase from $2.1 million in Q1 2020, attributed to higher sales volume and increased air freight charges[145]. - General and administrative expenses increased by 35.3% to $4.6 million from $3.4 million in Q1 2020, mainly due to higher payroll expenses[145]. Employee and Business Relationships - The company has approximately 4,566 employees dedicated to design, development, manufacture, and sales of its products as of March 31, 2021[116]. - The company has business relationships with over sixty vehicle manufacturers, including major domestic and foreign automobile manufacturers[115]. Cash and Working Capital - As of March 31, 2021, the company had cash and cash equivalents and short-term investments of $105.2 million, a decrease of $2.2 million or 2.0% from $107.4 million as of December 31, 2020[150]. - Working capital increased to $130.5 million as of March 31, 2021, up by $9.3 million or 7.7% from $121.2 million as of December 31, 2020[150]. - The company had short-term loans of $46.2 million and bankers' acceptances of $86.6 million as of March 31, 2021[152]. - Total outstanding credit facilities amounted to $173.1 million, with $88.1 million used as of March 31, 2021[156]. - The company has complied with financial covenants as of March 31, 2021, and expects to meet its cash needs for at least the next twelve months[151][164]. Cash Flow Activities - Net cash used in operating activities for Q1 2021 was $0.8 million, a decrease of $30.0 million compared to $29.2 million net cash provided in Q1 2020[167]. - Net cash used in investing activities for Q1 2021 was $5.8 million, an increase of $7.5 million compared to $1.7 million net cash provided in Q1 2020[169]. - Net cash provided by financing activities for Q1 2021 was $1.4 million, an increase of $4.3 million compared to net cash used of $2.9 million in Q1 2020[170]. - The increase in operating cash outflows was primarily due to a $5.7 million increase in net income excluding non-cash items and a $37.4 million decrease in cash inflows from accounts and notes receivable[167]. - Cash outflows from movements of accounts and notes payable decreased by $19.6 million, contributing to the overall increase in cash outflows[167]. - Payments to acquire property, plant, and equipment increased by $1.3 million in investing activities[169]. - The net effect of cash inflows from short-term investments increased by $14.7 million, offset by a $4.1 million increase in cash received from maturities of investments[169]. Other Financial Information - The company has issued notes payable totaling $86.6 million, which were repaid in full on their respective due dates[165]. - The company has pledged assets with an aggregate assessed value of $138.0 million as security for its credit facilities[158]. - The company anticipates being able to obtain similar bank loans in the future if adequate mortgage security is provided[153]. - There were no significant off-balance sheet arrangements as of March 31, 2021[170]. - The company did not report any material changes to market risk disclosures from the previous annual report[171].

Financial Data and Key Metrics Changes - In Q4 2020, net sales increased by 26.4% to $146.5 million from $115.9 million in Q4 2019, driven by a change in product mix and higher demand for domestic automobiles [17] - Gross profit rose by 35.7% to $22.8 million compared to $16.8 million in Q4 2019, with gross margin increasing to 15.6% from 14.5% [17][8] - For the full year 2020, net sales decreased by 3.2% to $417.6 million from $431.4 million in 2019, primarily due to a 27.1% decrease in the first half of 2020 due to COVID-19 [25][22] - The net loss attributable to parent company's common shareholders was $5 million in 2020 compared to net income of $10 million in 2019, largely due to lower sales and a one-time $4.5 million expected credit loss provision [25][10] Business Line Data and Key Metrics Changes - Sales of steering gears for passenger vehicles decreased by 7.8%, while sales for commercial vehicles increased by 12.1% in 2020 compared to 2019 [9] - EPS sales represented 14.8% of total revenue in 2020, down from 19.1% in 2019, with total EPS systems declining by 24.8% [22] - Hydraulic product sales increased by 1.9% in 2020, indicating a shift in product demand [22] Market Data and Key Metrics Changes - Overall automobile sales in China for 2020 were 25.3 million vehicles, a decline of 1.9% year-over-year, with passenger vehicle sales down by 6% [7] - In Q4 2020, overall automobile sales rose by 12.5% year-over-year, marking a recovery trend in the market [6] - In the first two months of 2021, commercial vehicle sales rose by 86.2%, and Chinese brand passenger vehicles sold 1.4 million units, representing an 87.5% year-over-year growth [16] Company Strategy and Development Direction - The company is focusing on developing advanced products to address changes in automotive technologies, including new EPS systems for electric vehicles [11] - A new steering system for autonomous vehicles is being developed, with a dedicated assembly line installed for intelligent RCB steering systems [12] - The company aims to capture growth in the electric vehicle market, with the Chinese government targeting that EVs should be 20% of all new cars by 2025 [11] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the automotive market and the company's positioning for future growth, supported by a strong customer base and new technology products [16] - The company anticipates revenue guidance of $470 million for the full year 2021, based on current market conditions [26] Other Important Information - The company generated positive cash flows from operating activities, with cash flow from operations increasing nearly 90% to $57.4 million in 2020 [14] - Total cash and cash equivalents increased to $138.2 million as of December 31, 2020, compared to $112.2 million in 2019 [15] Q&A Session Summary Question: What is the working relationship with Brilliance Auto since their restructuring announcement? - The company is closely monitoring Brilliance Auto's restructuring and actively collecting receivables, having already recovered some amounts [29] Question: What is the expected G&A amount going forward, excluding write-offs? - Excluding the one-time write-off, G&A expenses are in line with 2019 levels, and cost management measures are being implemented to streamline expenses [30][33] Question: What is the status of the joint venture for EPS products? - Production is managed by the joint venture, but CAAS leads the R&D for new-generation EPS products, focusing on high-end product development [35]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 Or ¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission file number: 000-33123 China Automotive Systems, Inc. (Exact name of registrant as specified in its charter) Delaware 33-0885775 (Sta ...

China Automotive Systems, Inc. (NASDAQ:CAAS) Q2 2020 Earnings Conference Call August 14, 2020 8:00 AM ET Company Participants Kevin Theiss - Investor Relations Qizhou Wu - Chief Executive Officer Jie Li - Chief Financial Officer Conference Call Participants William Gregozeski - Greenridge Global Operator Greetings. Welcome to China Automotive Systems' Second Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal pres ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 Or ¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission file number: 000-33123 China Automotive Systems, Inc. (Exact name of registrant as specified in its charter) Delaware 33-0885775 (State or ...

Financial Data and Key Metrics Changes - In Q1 2020, net sales were $73.6 million, a decline of 32.6% year-over-year from $109.2 million in Q1 2019 [14][19] - Gross profit was $11.2 million in Q1 2020 compared to $14 million in Q1 2019, with gross margin increasing to 15.2% from 12.9% [15][19] - Net income attributable to parent company's common shareholders was $0.05 million in Q1 2020, down from $1.5 million in Q1 2019 [19] Business Line Data and Key Metrics Changes - Sales of hydraulic steering products decreased significantly due to lower sales volume and increased price competition [10][12] - The Henglong KYB joint venture, which provides electric power steering products, also experienced a significant decline in net sales [10] - Despite challenges, sales to Fiat Chrysler and Ford in North America remained steady [11] Market Data and Key Metrics Changes - China's GDP declined by 6.3% in Q1 2020, marking the worst quarterly decline in decades [8] - Passenger car sales in China fell by 45.4% and commercial vehicle sales declined by 28.4% in Q1 2020 [9] - New energy vehicle sales dropped by 56.4% in Q1 2020 due to reduced government subsidies [10] Company Strategy and Development Direction - The company is focusing on improving product quality and revenue mix while managing expenses to maintain profitability during the pandemic [12] - Plans to expand into the electric vehicle market with new steering products targeting commercial vehicles and international markets [32] - The company expects to benefit from government initiatives aimed at stimulating auto purchases and reinstating subsidies for new energy vehicles [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant impact of COVID-19 on operations but noted that all production centers resumed full operations by mid-March 2020 [13] - The outlook remains cautious, but there are signs of economic recovery, with automobile sales increasing in April and May 2020 [14] - The company reiterated its revenue guidance for the full year 2020 at $360 million, subject to changes due to market conditions [20] Other Important Information - Total cash and cash equivalents were $132.6 million as of March 31, 2020, with a net cash flow from operating activities of $29.2 million [12][19] - The company has made progress in development programs for new steering systems for various global customers [11] Q&A Session Summary Question: Potential for brushless motors in electric power steering - Management indicated that brushless motors are crucial for electric power steering systems and will primarily be used internally, with potential sales to other producers in the future [22][23] Question: Communication with shareholders - Management committed to regular updates and communication with shareholders, including video calls and plans for future visits post-pandemic [25][26] Question: Possibility of taking the company private - Management stated there are currently no plans for the chairman to take the company private, with no indications of future intentions [28][29] Question: Involvement in electric vehicle programs - Management clarified that their electric power steering products are applicable for both electric and traditional vehicles, with ongoing developments targeting the EV market [31][32]

[Part I — Financial Information](index=4&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) [Item 1. Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Financial%20Statements.) Presents Q1 2020 and 2019 unaudited consolidated financial statements, showing significant decline in net product sales and net income due to COVID-19 - The filing of this Form 10-Q was delayed until June 29, 2020, due to the COVID-19 epidemic, as the company's headquarters in Wuhan, Hubei Province, was under strict quarantine, leading to a suspension of operations from January 31, 2020, to March 21, 2020[6](index=6&type=chunk) [Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Q1 2020 net product sales decreased by **32.6%** to **$73.6 million**, with net income plummeting to **$45 thousand** from **$1.47 million** Consolidated Statements of Operations Highlights (in thousands of USD) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | **Net product sales** | $73,555 | $109,193 | | **Gross profit** | $11,152 | $14,045 | | **Income from operations** | $1,152 | $1,037 | | **Net income attributable to parent company** | $45 | $1,467 | | **Basic EPS** | $0.00 | $0.05 | | **Diluted EPS** | $0.00 | $0.05 | [Condensed Unaudited Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Unaudited%20Consolidated%20Balance%20Sheets) As of March 31, 2020, total assets decreased to **$629.7 million** from **$660.0 million**, with total liabilities also decreasing Consolidated Balance Sheet Highlights (in thousands of USD) | Metric | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $417,110 | $441,165 | | **Total Assets** | $629,677 | $659,964 | | **Total Current Liabilities** | $281,486 | $303,774 | | **Total Liabilities** | $327,075 | $350,592 | | **Total Stockholders' Equity** | $302,602 | $309,372 | [Condensed Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2020 net cash from operations significantly improved to **$29.2 million**, while investing activities provided **$1.7 million** Consolidated Statements of Cash Flows Highlights (in thousands of USD) | Cash Flow Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | **Net cash provided by/(used in) operating activities** | $29,227 | $(18,214) | | **Net cash provided by/(used in) investing activities** | $1,704 | $(10,048) | | **Net cash (used in)/provided by financing activities** | $(2,907) | $1,989 | | **Net increase/(decrease) in cash** | $26,173 | $(24,293) | [Notes to Condensed Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Unaudited%20Consolidated%20Financial%20Statements) Details accounting policies, CECL adoption, customer concentration, PRC regulations, and ongoing stockholder derivative complaint - The company adopted the new Current Expected Credit Losses (CECL) model on January 1, 2020, which resulted in a **$0.8 million** reduction to beginning retained earnings[34](index=34&type=chunk) - For the three months ended March 31, 2020, the company's five largest customers accounted for **53.7%** of its consolidated net product sales, with one customer representing **33.7%** of net sales[40](index=40&type=chunk) - The company's operations in China are subject to PRC government controls on currency conversion and remittance, requiring PRC subsidiaries to set aside at least **10%** of after-tax profits to a general reserve until it reaches **50%** of paid-in capital, restricting funds for distribution to the parent company[75](index=75&type=chunk)[76](index=76&type=chunk) - A stockholder derivative complaint was filed against company directors in January 2019, alleging breaches of fiduciary duties related to excessive non-employee director compensation; the case is ongoing, though management expects the financial impact to be immaterial[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Attributes Q1 2020 sales decrease to COVID-19, noting improved gross margin despite lower sales, and sufficient liquidity - The COVID-19 outbreak led to a **33%** decrease in net product sales in Q1 2020 compared to Q1 2019, with the company anticipating continued material adverse effects in Q2 2020 and potentially subsequent periods[99](index=99&type=chunk) Q1 2020 vs Q1 2019 Performance (in thousands of USD) | Metric | Q1 2020 | Q1 2019 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | **Net product sales** | $73,555 | $109,193 | $(35,638) | -32.6% | | **Gross Profit** | $11,152 | $14,045 | $(2,893) | -20.6% | | **Operating Expenses** | $10,600 | $14,277 | $(3,677) | -25.8% | | **Net income attributable to parent** | $45 | $1,467 | $(1,422) | -96.9% | - Net sales of electric power steering (EPS) products decreased by **63.5%** to **$8.1 million** in Q1 2020, accounting for **11.0%** of total net sales, down from **20.3%** in Q1 2019[110](index=110&type=chunk) - As of March 31, 2020, the company had total available credit facilities of **$179.9 million**, with **$73.4 million** used, and was negotiating renewals for several expired facilities[138](index=138&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) No material changes to market risk disclosures from the 2019 Annual Report on Form 10-K - There were no material changes to the company's market risk disclosures from the 2019 Form 10-K[159](index=159&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded disclosure controls were effective as of March 31, 2020, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2020[160](index=160&type=chunk) - No changes occurred in the company's internal control over financial reporting during Q1 2020 that have materially affected or are likely to materially affect these controls[161](index=161&type=chunk) [Part II — Other Information](index=36&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings.) Discusses an ongoing stockholder derivative complaint alleging fiduciary duty breaches by directors, with management expecting immaterial financial impact - A stockholder derivative complaint filed in January 2019 alleges breaches of fiduciary duties by directors regarding excessive compensation and inadequate disclosure; the company's motion to dismiss was denied in July 2019, and the case remains ongoing[162](index=162&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors.) Updates risks including the Holding Foreign Companies Accountable Act and a U.S. Presidential review of Chinese listed companies - A significant new risk is the Holding Foreign Companies Accountable Act (S.945), passed by the U.S. Senate on May 20, 2020, which could lead to the delisting of the company's stock from U.S. exchanges if its auditor cannot be inspected by the PCAOB for three consecutive years[166](index=166&type=chunk) - On June 4, 2020, the U.S. President ordered a review of Chinese companies listed on U.S. exchanges, which could lead to recommendations for actions by the executive branch, SEC, or PCAOB, potentially impacting the company's stock performance and market access[166](index=166&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No unregistered sales of equity securities or use of proceeds occurred during the period - None[167](index=167&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) No defaults upon senior securities occurred during the period - None[167](index=167&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - Not applicable[167](index=167&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information.) No other information to report for the period - None[167](index=167&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits.) Lists exhibits filed with the Form 10-Q, including corporate governance documents, key agreements, and certifications - Exhibits filed include corporate governance documents, key agreements, required CEO/CFO certifications, and financial data in XBRL format[167](index=167&type=chunk)