Group 1 - The stock price of Qiji Automotive (CJET) increased by 11.4% on August 6, reaching $2.785 per share, with a total market capitalization of $90.4778 million [1] - As of December 31, 2024, Qiji Automotive reported total revenue of $6.915 million, a year-on-year decrease of 27.08%, and a net profit attributable to shareholders of -$46.895 million, an increase of 31.15% year-on-year [1] - Qiji Automotive is a high-tech company engaged in the research, production, and sales of new energy vehicles (NEVs), including pure electric vehicles, plug-in hybrid electric vehicles (PHEVs), and fuel cell electric vehicles [1] Group 2 - The company's mission is to produce market-leading, efficient emissions vehicles that benefit users and the environment [1]

8月5日，旗际汽车(CJET)盘中上涨8.8%，截至22:39，报2.72美元/股，成交3484.0美元，总市值8836.61 万美元。 本文源自：金融界 作者：行情君 财务数据显示，截至2024年12月31日，旗际汽车收入总额691.5万美元，同比减少27.08%；归母净利 润-4689.5万美元，同比增长31.15%。 资料显示，旗际汽车公司是一家从事新能源汽车(nev)研发、生产和销售的高科技企业,也称插电式电动 汽车,包括纯电动汽车、插电式混合动力汽车(PHEV)和燃料电池电动汽车。旗际汽车的使命是生产市场 领先的高效尾气排放汽车,造福用户和环境。 ...

[Introduction](index=4&type=section&id=INTRODUCTION) Chijet Motor Company, Inc. is a Cayman Islands holding company engaged in the research, development, production, and sales of new energy vehicles (NEVs) - Chijet Motor Company, Inc. is a Cayman Islands holding company engaged in the research, development, production, and sales of new energy vehicles (NEVs)[17](index=17&type=chunk) - The company conducts its operations in mainland China primarily through its majority-owned subsidiaries, Shandong Baoya New Energy Vehicle Co., Ltd. and FAW Jilin Automobile Co., Ltd[17](index=17&type=chunk) - The company became public in June 2023 following a reorganization and a business combination with Jupiter Wellness Acquisition Corp. (JWAC)[18](index=18&type=chunk) [PART I](index=6&type=section&id=PART%20I) This section provides a comprehensive overview of the company's business, financial performance, governance, and market risks, detailing its operations as a Cayman Islands holding company with PRC subsidiaries [Key Information](index=6&type=section&id=Item%203.%20Key%20Information) This section details the company's holding structure, significant legal and operational risks from its China-based operations, regulatory landscape including PRC government permissions and cybersecurity reviews, and the implications of the U.S. HFCAA, alongside restrictions on cash and asset flows from PRC subsidiaries - Chijet Motor is a Cayman Islands holding company, not a direct operating company in China, with operations conducted through PRC-based subsidiaries, exposing it to significant risks from PRC laws and potential government intervention[27](index=27&type=chunk)[28](index=28&type=chunk) - The company is subject to PRC regulations on overseas securities offerings, including the CSRC's Filing Rules effective March 31, 2023, and cybersecurity reviews by the Cyberspace Administration of China (CAC) if it possesses personal information of more than **one million users**[30](index=30&type=chunk)[32](index=32&type=chunk) - The Holding Foreign Companies Accountable Act (HFCAA) poses a risk of delisting from U.S. exchanges if the PCAOB is unable to inspect the company's China-based auditor for **two consecutive years**, although the PCAOB regained inspection access in December 2022, this status is subject to annual review[34](index=34&type=chunk) - Cash and asset transfers from PRC subsidiaries are restricted, with restricted amounts, including paid-up capital and statutory reserves, totaling **US$148.31 million** as of December 31, 2024[35](index=35&type=chunk)[36](index=36&type=chunk) Inter-company Cash Transfers (in thousands USD) | Description | 2024 (thousands USD) | 2023 (thousands USD) | 2022 (thousands USD) | | :--- | :--- | :--- | :--- | | Cash transferred to subsidiaries from Shandong Baoya | $3,202 | $3,917 | $7,744 | | Cash transferred to Shandong Baoya from its subsidiaries | $1,251 | $4,406 | $9,612 | [Risk Factors](index=10&type=section&id=3.D.%20Risk%20Factors) The company faces substantial risks including operating losses, a going concern warning, loan agreement breaches, operational challenges, evolving PRC regulatory and cybersecurity risks, U.S. HFCAA delisting threats, and financial constraints - The company has a history of significant operating losses and has received an explanatory paragraph from its independent auditor regarding its ability to continue as a going concern[54](index=54&type=chunk)[55](index=55&type=chunk) Net Loss History (in millions USD) | Year Ended December 31 | Net Loss (millions USD) | | :--- | :--- | | 2024 | $69.01 | | 2023 | $98.50 | | 2022 | $111.52 | - The company is in breach of several loan agreements, including failing to meet conditions for two interest-free loans totaling approximately **US$95.16 million** with a penalty of **US$716,781**, and subsidiary FAW Jilin defaulting on payments with an outstanding principal and interest of **US$189.26 million** as of May 15, 2025[64](index=64&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - The business is exposed to risks from the Holding Foreign Companies Accountable Act (HFCAA), which could lead to delisting from U.S. exchanges if the PCAOB is unable to inspect its China-based auditor[205](index=205&type=chunk)[206](index=206&type=chunk)[208](index=208&type=chunk) - Operations are subject to PRC government intervention, evolving cybersecurity laws, and complex regulations for overseas listings, which could materially impact business and share value[209](index=209&type=chunk)[214](index=214&type=chunk)[217](index=217&type=chunk) [Information on the Company](index=61&type=section&id=Item%204.%20Information%20on%20the%20Company) This section details Chijet Motor's history, corporate structure, and business operations, including its NEV product lines, technological innovations, manufacturing, sales, R&D, intellectual property, and the complex Chinese regulatory environment [History and Development of the Company](index=66&type=section&id=4A.%20History%20and%20Development%20of%20the%20Company) Chijet Motor, a Cayman Islands holding company, was incorporated in 2022, operates through PRC subsidiaries, completed a business combination with JWAC in 2023, and adopted a dual-class share structure in 2025 - The company was incorporated in the Cayman Islands on June 14, 2022, and operates in China through its majority-owned subsidiaries, Shandong Baoya and FAW Jilin[312](index=312&type=chunk)[313](index=313&type=chunk) - A business combination with Jupiter Wellness Acquisition Corp. (JWAC) was completed in June 2023, making Chijet Motor a public company[321](index=321&type=chunk) - In January 2025, the company adopted a dual-class share structure, creating Class A ordinary shares (**1 vote** per share) and Class B ordinary shares (**20 votes** per share)[327](index=327&type=chunk) [Business Overview](index=69&type=section&id=4B.%20Business%20Overview) Chijet develops, produces, and sells NEVs and traditional fuel vehicles, including R7, V80, and T80 models, focusing on innovations like in-wheel motors and solid-state batteries, with sales through distributors and a portfolio of 110 patents - The company's main business includes the design, development, production, and sales of new energy vehicles (NEVs) and traditional fuel vehicles, with passenger vehicles like the R7 SUV and commercial vehicles like the T80 and V80 trucks[332](index=332&type=chunk)[334](index=334&type=chunk)[337](index=337&type=chunk) Revenue Contribution by Vehicle Model (as % of total vehicle sales revenue) | Model | 2024 (%) | 2023 (%) | 2022 (%) | | :--- | :--- | :--- | :--- | | R7 SUV | 98% | 79% | 76% | | V80 Truck | 0% | 7% | 5% | | T80 Truck | 2% | 9% | 18% | - Key technological innovations in development include in-wheel motors, solid-state batteries, intelligent cockpits, and domain controllers, in collaboration with partners like Yantai University and Beijing Welion New Energy[338](index=338&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk) - As of December 31, 2024, the company holds **110 granted patents** in the PRC, including **3** for invention, **76** for utility models, and **31** for appearance[370](index=370&type=chunk) - A substantial portion of sales is concentrated among a few key customers, who accounted for **22%** of total sales in 2024, **22%** in 2023, and **48%** in 2022[374](index=374&type=chunk) [Operating and Financial Review and Prospects](index=100&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This section analyzes the company's financial performance, liquidity, and critical accounting policies, highlighting a **27%** revenue decrease, **30%** net loss improvement, severe liquidity challenges, and negative operating cash flow [Operating Results](index=100&type=section&id=A.%20Operating%20Results) In fiscal year 2024, revenues decreased by **27%** to **$6.92 million**, while net loss improved by **30%** to **$69.01 million**, driven by significant reductions in R&D and SG&A expenses Consolidated Results of Operations (in thousands USD) | Metric | 2024 (thousands USD) | 2023 (thousands USD) | 2022 (thousands USD) | | :--- | :--- | :--- | :--- | | Total Revenues | $6,915 | $9,483 | $14,961 | | Gross Loss | ($24,826) | ($32,763) | ($38,325) | | R&D Expenses | $1,478 | $8,398 | $13,772 | | SG&A Expenses | $30,864 | $47,281 | $65,324 | | Loss from Operations | ($57,280) | ($88,725) | ($118,263) | | Net Loss | ($69,005) | ($98,501) | ($111,518) | - Revenues decreased by **27%** in 2024 compared to 2023, driven by a **17%** decline in vehicle sales and a **71%** drop in sales of vehicle parts and accessories[526](index=526&type=chunk) - R&D expenses decreased by **82%** in 2024 to **$1.48 million**, as some projects were completed in 2023 and spending was adjusted to match financing progress[531](index=531&type=chunk) - Net loss decreased by **30%** in 2024 to **$69.01 million**, primarily due to significant reductions in operating expenses[536](index=536&type=chunk) [Liquidity and Capital Resources](index=107&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The company faces severe liquidity constraints with a **$510.89 million** working capital deficit and insufficient cash for future operations, raising substantial doubt about its going concern ability - As of December 31, 2024, the company had a working capital deficit of **US$510.89 million** and cash and cash equivalents of **US$3.71 million**[549](index=549&type=chunk) - Management has concluded that available cash is insufficient to meet working capital and capital expenditure requirements for at least the next **12 months**, indicating a need for additional financing[552](index=552&type=chunk)[553](index=553&type=chunk) Summary of Consolidated Cash Flows (in thousands USD) | Cash Flow Activity | 2024 (thousands USD) | 2023 (thousands USD) | 2022 (thousands USD) | | :--- | :--- | :--- | :--- | | Net cash (used in) / provided by operating activities | ($25,464) | ($40,017) | $22,383 | | Net cash (used in) investing activities | ($1,058) | ($1,762) | ($13,245) | | Net cash provided by financing activities | $13,638 | $5,225 | $1,380 | [Directors, Senior Management and Employees](index=111&type=section&id=Item%206.%20Directors,%20Senior%20Management%20and%20Employees) This section details the company's leadership, compensation, board structure, and employee base, including executive officers, director compensation of **$480,853** in 2024, a 2023 Share Incentive Plan, and **1,389** employees with **74%** in production - The company's leadership includes founders Mu Hongwei (CEO & Director), Zhang Jiannong (Director), and Wu Lichun (Director)[578](index=578&type=chunk) - Aggregate compensation paid to executive officers and directors for the fiscal year ended December 31, 2024, was **$480,853**, with an additional **$41,100** in social benefits for executive officers[599](index=599&type=chunk) - In May 2023, the company adopted a Share Incentive Plan, reserving **5%** of the aggregate number of ordinary shares issued and outstanding for awards to officers, employees, directors, and consultants[604](index=604&type=chunk)[607](index=607&type=chunk) Employee Breakdown by Function (as of Dec 31, 2024) | Functions | Number | Percentage (%) | | :--- | :--- | :--- | | Research and Development | 85 | 6.12% | | Production | 1,028 | 74.01% | | Sales and Marketing | 42 | 3.02% | | General and Administrative Support | 234 | 16.85% | | **Total** | **1,389** | **100%** | [Major Shareholders and Related Party Transactions](index=122&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section identifies major shareholders, including Euroamer Kaiwan and Chijet Holdings, who collectively control approximately **57%** of voting power, and details significant related party transactions, including substantial outstanding and defaulted loans - As of April 22, 2025, executive officers and directors as a group beneficially own approximately **56.99%** of the company's voting power, primarily through holdings by Euroamer Kaiwan Technology Company Limited (controlled by director Wu Lichun) and Chijet Holdings Limited (controlled by CEO Mu Hongwei)[644](index=644&type=chunk)[645](index=645&type=chunk) - The company has significant loan agreements with related parties, including an outstanding loan from Yantai Public Transportation Co., Ltd with a principal of **US$101.38 million**, which has resulted in the freezing of land use rights valued at **US$25.64 million**[657](index=657&type=chunk) - Subsidiary FAW Jilin is in default on loans from FAW Finance Co., Ltd., an affiliate of its non-controlling shareholder, with an outstanding principal of **US$157.75 million** as of December 31, 2024, secured by assets valued at **US$107.53 million**[660](index=660&type=chunk) - On March 24, 2025, the company issued **1,600,000 Class B shares** (**20 votes** per share) to major shareholders Chijet Holdings Limited and Euroamer Kaiwan Technology Company Limited in exchange for **1,624,910 Class A shares**, consolidating their voting control[664](index=664&type=chunk) [Financial Information](index=125&type=section&id=Item%208.%20Financial%20Information) This section confirms the inclusion of consolidated financial statements, notes ongoing legal proceedings, states no dividends have been paid, and highlights the planned acquisition of 'Too Express' as a significant subsequent event - The company has never declared or paid any dividends on its Class A ordinary shares and does not anticipate doing so in the future[670](index=670&type=chunk) - A significant change is expected in the next **six months** due to the planned acquisition of "Too Express," a delivery business company, which is intended to create business synergy and improve the company's financial situation starting in 2025[671](index=671&type=chunk) [The Offer and Listing](index=125&type=section&id=Item%209.%20The%20Offer%20and%20Listing) The company's Class A ordinary shares are listed and traded on the Nasdaq Capital Market under the ticker symbol "CJET", commencing on June 1, 2023 - The company's Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol "CJET" and began trading on June 1, 2023[672](index=672&type=chunk) [Additional Information](index=125&type=section&id=Item%2010.%20Additional%20Information) This section details the company's corporate structure, dual-class share rights, PRC exchange controls, and comprehensive tax considerations for investors, including risks of being classified as a PRC resident enterprise or a PFIC - The company has a dual-class share structure consisting of Class A ordinary shares (**1 vote** per share) and Class B ordinary shares (**20 votes** per share, with **30,887,525 Class A** and **1,600,000 Class B** shares outstanding as of May 15, 2025)[678](index=678&type=chunk)[679](index=679&type=chunk) - PRC regulations impose strict controls on foreign currency exchange, particularly for capital account items, which may limit the ability to transfer funds out of China for dividends or other purposes[732](index=732&type=chunk)[733](index=733&type=chunk) - There is a risk that the company could be classified as a PRC "resident enterprise" for tax purposes, which would subject it to a **25%** tax on its worldwide income and could result in PRC withholding tax on dividends paid to foreign shareholders[742](index=742&type=chunk)[744](index=744&type=chunk) - The company may be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, which could result in adverse tax consequences for U.S. shareholders[287](index=287&type=chunk)[773](index=773&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=143&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate risk from floating-rate loans, managed by monitoring debt structure, and inflation risk in China, which could increase future operating costs - The company's market risk exposure is primarily related to interest rate risk from floating-rate loans and inflation risk in China[800](index=800&type=chunk)[802](index=802&type=chunk) - Interest rate risk is managed by monitoring the balance between fixed and floating-rate loans, while inflation has not been a material factor to date but could increase future operating costs[800](index=800&type=chunk)[802](index=802&type=chunk) [PART II](index=145&type=section&id=PART%20II) This section addresses the company's defaults on indebtedness, material modifications to security holder rights, effectiveness of controls and procedures, and corporate governance practices, including cybersecurity risk management [Defaults, Dividend Arrearages and Delinquencies](index=145&type=section&id=Item%2013.%20Defaults,%20Dividend%20Arrearages%20and%20Delinquencies) As of May 15, 2025, the company was in default on approximately **$284.84 million** of outstanding indebtedness, including loans by subsidiary FAW Jilin and for the Xiangyang electric vehicle project - As of May 15, 2025, the company was in default on approximately **US$284.84 million** of outstanding indebtedness[810](index=810&type=chunk) - Subsidiary FAW Jilin defaulted on loan payments due on November 1, 2022, 2023, and 2024, with an aggregate outstanding principal and interest of **US$189.26 million** as of May 15, 2025[814](index=814&type=chunk) - The company defaulted on a **US$95.16 million** loan for its Xiangyang project after missing the July 2022 repayment deadline, resulting in a penalty of **US$716,781** and the pledging of assets worth **US$37.74 million**[814](index=814&type=chunk) [Material Modifications to the Rights of Security Holders and Use of Proceeds](index=145&type=section&id=Item%2014.%20Material%20Modifications%20to%20the%20Rights%20of%20Security%20Holders%20and%20Use%20of%20Proceeds) Effective March 24, 2025, the company materially modified security holder rights by implementing a dual-class stock structure with Class B shares carrying **twenty votes** per share - Effective March 24, 2025, the company implemented a dual-class common stock structure, creating Class A shares (**one vote** per share) and Class B shares (**twenty votes** per share)[811](index=811&type=chunk) [Controls and Procedures](index=145&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2024 - Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[813](index=813&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2024[815](index=815&type=chunk)[816](index=816&type=chunk) [Corporate Governance and Other Disclosures](index=146&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Disclosures) This section covers corporate governance, including the change of certifying accountant to Assentsure PAC, adherence to Cayman Islands home country practices as a foreign private issuer, and implementation of a board-overseen cybersecurity risk management program - On January 28, 2024, the company changed its independent registered public accounting firm from UHY, LLP to Assentsure PAC[826](index=826&type=chunk) - On February 21, 2025, the company entered into an agreement to acquire **80%** of Too Express Group Inc., a delivery business, for **23,255,814 Class A Ordinary Shares** valued at **US$40 million**, with the transaction closing on March 14, 2025[825](index=825&type=chunk) - As a foreign private issuer, the company follows certain home country (Cayman Islands) corporate governance practices, exempting it from some Nasdaq requirements, such as certain shareholder approval rules and committee composition standards[831](index=831&type=chunk)[832](index=832&type=chunk)[833](index=833&type=chunk) - The company has established a cybersecurity risk management framework, with oversight from the board of directors and management-level responsibility for assessing and managing cyber risks[839](index=839&type=chunk)[842](index=842&type=chunk)[843](index=843&type=chunk) [PART III](index=150&type=section&id=PART%20III) This section presents the company's audited consolidated financial statements, including the independent auditor's report with a going concern doubt, balance sheets, statements of operations, and notes on significant accounting policies and subsequent events [Financial Statements](index=150&type=section&id=Item%2018.%20Financial%20Statements) This section presents the audited consolidated financial statements, including the independent auditor's report expressing substantial doubt about the company's going concern ability due to a **$69.01 million** net loss and **$510.89 million** capital deficiency in 2024 - The independent auditor's report expresses substantial doubt about the company's ability to continue as a going concern, citing a net loss of **US$69.01 million** for the year ended December 31, 2024, and a capital deficiency of **US$510.89 million**[859](index=859&type=chunk) Consolidated Balance Sheet Highlights (in thousands USD) | Account | Dec 31, 2024 (thousands USD) | Dec 31, 2023 (thousands USD) | | :--- | :--- | :--- | | **Total Assets** | **$470,785** | **$536,451** | | Total Current Assets | $62,419 | $90,828 | | Property, plant and equipment, net | $155,818 | $181,377 | | **Total Liabilities** | **$616,271** | **$615,325** | | Total Current Liabilities | $573,309 | $525,054 | | **Total Deficit** | **($145,486)** | **($78,874)** | - The business combination with JWAC on June 1, 2023, was accounted for as a "reverse recapitalization," with Chijet Motor treated as the accounting acquirer[885](index=885&type=chunk) - Subsequent to year-end, the company acquired **80%** of Too Express Group Inc. on March 14, 2025, for **23,255,814 Class A shares** valued at **US$40 million**[1104](index=1104&type=chunk)

Core Viewpoint - Chijet Motor Company, Inc. is facing delisting from Nasdaq due to non-compliance with market value requirements, specifically failing to maintain a minimum market value of $50 million for its listed securities and $15 million for publicly held shares [1][2] Group 1: Delisting Notification - On February 13, 2025, Chijet received a determination letter from Nasdaq regarding its delisting due to failure to meet market value requirements [1] - Trading of Chijet's Common Stock will be suspended on February 25, 2025, unless an appeal is filed [2] Group 2: Appeal Process - The company plans to appeal the delisting decision to a Hearings Panel, which will allow its Common Stock to continue trading while awaiting the Panel's decision [3] - Chijet intends to present a compliance plan during the hearing and request additional time to meet Nasdaq's listing requirements [3] Group 3: Company Overview - Chijet is engaged in the development, manufacture, sales, and service of traditional fuel vehicles and new energy vehicles (NEVs) [4] - The company has a modern vehicle production base in Jilin, China, and is constructing a factory in Yantai dedicated to NEV production [4] - Chijet's management team consists of industry veterans with extensive experience in various fields including engineering, design, and financial management [4]

[Condensed Interim Consolidated Financial Statements](index=3&type=section&id=Condensed%20Interim%20Consolidated%20Financial%20Statements) Overview of Chijet Motor's interim financial performance and position for the period ended June 30, 2024 [Condensed Interim Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Interim%20Consolidated%20Balance%20Sheets) Total assets decreased to $500,313 thousand by June 30, 2024, with shareholders' deficit increasing to $(108,407) thousand Balance Sheet Summary | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---| | Total Assets | 500,313 | 536,451 | | Total Liabilities | 608,720 | 615,325 | | Total Shareholders' Deficit | (108,407) | (78,874) | - Current assets decreased from **$90,828 thousand** at December 31, 2023, to **$77,725 thousand** at June 30, 2024, primarily due to a significant reduction in cash and cash equivalents[5](index=5&type=chunk) - Current liabilities remained high at **$523,606 thousand** as of June 30, 2024, slightly down from **$525,054 thousand** at December 31, 2023[5](index=5&type=chunk) [Condensed Interim Consolidated Statements of Income](index=5&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Income) Net loss improved to $(31,523) thousand for H1 2024, with increased revenues and reduced operating expenses Income Statement Summary | Metric | Six Months Ended June 30, 2024 (US$'000) | Six Months Ended June 30, 2023 (US$'000) | |:---|:---|:---| | Total Revenues | 3,407 | 2,615 | | Cost of Revenues | (8,172) | (3,410) | | Cost of Revenues - Idle Capacity | (7,567) | (16,725) | | Gross Loss | (12,332) | (17,520) | | Total Operating Expenses | 14,651 | 34,975 | | Loss from Operations | (26,983) | (52,495) | | Net Loss | (31,523) | (57,591) | | Net Loss Attributed to Ordinary Shareholders | (21,622) | (39,826) | | Basic and Diluted Net Loss Per Share | (3.93) | (7.71) | - Total revenues increased by **30.3%** from **$2,615 thousand** in H1 2023 to **$3,407 thousand** in H1 2024, driven by higher vehicle sales[9](index=9&type=chunk) - Cost of revenues – idle capacity decreased significantly by **54.7%** from **$(16,725) thousand** in H1 2023 to **$(7,567) thousand** in H1 2024, contributing to a reduced gross loss[9](index=9&type=chunk) [Condensed Interim Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive loss improved to $(29,533) thousand for H1 2024, driven by net loss and foreign currency adjustments Comprehensive Income Summary | Metric | Six Months Ended June 30, 2024 (US$'000) | Six Months Ended June 30, 2023 (US$'000) | |:---|:---|:---|\n| Net Loss | (31,523) | (57,591) | | Other Comprehensive Income, Net of Tax: | | | | Changes in Post-Employment and Termination Benefits | (94) | (22) | | Foreign Currency Adjustments | 2,084 | 1,688 | | Comprehensive Loss | (29,533) | (55,925) | | Comprehensive Loss Attributable to Ordinary Shareholders | (21,152) | (39,492) | - Foreign currency adjustments contributed positively to other comprehensive income, increasing from **$1,688 thousand** in H1 2023 to **$2,084 thousand** in H1 2024[15](index=15&type=chunk) [Condensed Interim Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' deficit increased from $(78,874) thousand to $(108,407) thousand due to net loss and currency adjustments Shareholders' Equity Summary | Metric | January 1, 2024 (US$'000) | June 30, 2024 (US$'000) | |:---|:---|:---|\n| Total Shareholders' Deficit | (78,874) | (108,407) | | Accumulated Deficit | (314,235) | (335,857) | | Accumulated Other Comprehensive Loss | 6,100 | 6,570 | | Non-controlling Interest | 53,960 | 45,579 | - The accumulated deficit increased by **$21,622 thousand**, reflecting the net loss attributable to ordinary shareholders for the six months ended June 30, 2024[18](index=18&type=chunk) - Foreign currency translation adjustment positively impacted equity by **$2,084 thousand** during the six months ended June 30, 2024[18](index=18&type=chunk) [Condensed Interim Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to $(16,261) thousand, with lower investing and higher financing cash flows Cash Flow Summary | Cash Flow Activity | Six Months Ended June 30, 2024 (US$'000) | Six Months Ended June 30, 2023 (US$'000) | |:---|:---|:---|\n| Net Cash Used in Operating Activities | (16,261) | (27,050) | | Net Cash Used in Investing Activities | (1,061) | (4,005) | | Net Cash Provided by Financing Activities | 3,164 | 3,985 | | Net Change in Cash, Cash Equivalents, and Restricted Cash | (14,158) | (27,070) | | Cash, Cash Equivalents, and Restricted Cash, End of Period | 1,457 | 21,785 | - The reduction in net cash used in operating activities was primarily driven by a lower net loss and favorable changes in certain operating assets and liabilities[24](index=24&type=chunk) - Cash, cash equivalents, and restricted cash at the end of the period significantly decreased from **$21,785 thousand** in H1 2023 to **$1,457 thousand** in H1 2024[25](index=25&type=chunk) [Notes to Condensed Interim Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Interim%20Consolidated%20Financial%20Statements) Detailed notes providing context and breakdown for the condensed interim consolidated financial statements [1. Organization and Business Overview](index=11&type=section&id=1.%20ORGANIZATION) Chijet Motor, a NEV and traditional vehicle enterprise, faces going concern doubts due to losses and deficit - Chijet Motor is a Cayman Islands exempted company, with main operating entities including Shandong Baoya New Energy Vehicle Co., Ltd. and FAW Jilin Automobile Co., Ltd., focusing on NEVs and traditional fuel vehicles in China[27](index=27&type=chunk) - A **1-for-30** reverse stock split became effective on July 8, 2024, reducing issued ordinary shares from **160,707,171** to **5,471,661** and retroactively adjusting all share-related information[28](index=28&type=chunk)[29](index=29&type=chunk) - The company consummated a reverse recapitalization on June 1, 2023, with Jupiter Wellness Acquisition Corp. (JWAC), where Chijet Motor was treated as the accounting acquirer for financial reporting purposes[30](index=30&type=chunk)[36](index=36&type=chunk) - The company incurred net losses of **$(31,523) thousand** and **$(57,591) thousand** for the six months ended June 30, 2024 and 2023, respectively, and had a working capital deficit of approximately **$(445,881) thousand** as of June 30, 2024, raising substantial doubt about its going concern ability[46](index=46&type=chunk) [ (a) Principal activities](index=11&type=section&id=1.a%20Principal%20activities) Chijet Motor focuses on new energy and traditional fuel vehicles in China through key operating entities - Chijet Motor Company, Inc. (Chijet Motor) is a high-tech enterprise focused on the development, manufacture, sales, and service of new energy vehicles (NEV) and traditional fuel vehicles in China[27](index=27&type=chunk) - Key operating entities include Shandong Baoya New Energy Vehicle Co., Ltd. and FAW Jilin Automobile Co., Ltd[27](index=27&type=chunk) [ (b) Reverse Stock Split](index=11&type=section&id=1.b%20Reverse%20Stock%20Split) A 1-for-30 reverse stock split became effective July 8, 2024, retroactively adjusting all share data - A **1-for-30** reverse stock split became effective on July 8, 2024, converting every **30** outstanding ordinary shares into one[28](index=28&type=chunk) - The number of authorized shares increased from **500,000,000** to **10,000,000,000**, while issued shares decreased from **160,707,171** to **5,471,661**[28](index=28&type=chunk) - All share and share-related information in the financial statements has been retroactively adjusted to reflect the split[29](index=29&type=chunk) [ (c) Reverse Recapitalization](index=11&type=section&id=1.c%20Reverse%20Recapitalization) Chijet Motor completed a reverse recapitalization with JWAC on June 1, 2023, treated as the accounting acquirer - On June 1, 2023, Chijet Motor consummated a business combination with Jupiter Wellness Acquisition Corp. (JWAC) through a merger, with JWAC becoming a wholly-owned subsidiary of Chijet Motor[30](index=30&type=chunk)[31](index=31&type=chunk) - The transaction was accounted for as a 'reverse recapitalization' under U.S. GAAP, with Chijet Motor treated as the accounting acquirer, based on its shareholders holding a majority of voting power and its management representing the ongoing operations[36](index=36&type=chunk) - Net assets acquired from JWAC amounted to **US$4,490 thousand**, recorded as an increase in additional paid-in capital[38](index=38&type=chunk) [ (d) History of the Company and Reorganization](index=13&type=section&id=1.d%20History%20of%20the%20Company%20and%20Reorganization) The company's business originated in 2009, followed by a reorganization and subsidiary acquisitions by 2022 - The business originated under Shandong Baoya and its subsidiaries in April 2009[39](index=39&type=chunk) - Chijet Inc. completed a reorganization by June 2022, establishing several subsidiaries in BVI, Hong Kong, and PRC, and acquiring an **85.172%** stake in Shandong Baoya[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) [ (e) Liquidity and going concern](index=15&type=section&id=1.e%20Liquidity%20and%20going%20concern) Recurring net losses and a significant working capital deficit raise substantial doubt about going concern - The Company incurred net losses of **US$31,523 thousand** and **US$57,591 thousand** for the six months ended June 30, 2024 and 2023, respectively[46](index=46&type=chunk) - As of June 30, 2024, the Company had a working capital deficit of approximately **US$445,881 thousand** and a cash outflow from operating activities of approximately **US$16,261 thousand** for the six months ended June 30, 2024[46](index=46&type=chunk) - Management is evaluating strategies including financing plans, increasing sales, expanding overseas markets, and implementing cost controls, but substantial doubt exists regarding the Company's ability to continue as a going concern[47](index=47&type=chunk) [2. Summary of Significant Accounting Policies](index=16&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines significant accounting policies including basis of presentation, consolidation, estimates, and revenue recognition - The Company is an 'emerging growth company' and has elected not to opt out of the extended transition period for new or revised financial accounting standards, which may affect comparability with other public companies[51](index=51&type=chunk)[52](index=52&type=chunk) - Revenue is recognized when control of goods or services is transferred to customers, either over time or at a point in time, with specific policies for vehicle sales and parts/accessories[100](index=100&type=chunk)[101](index=101&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) - Government grants are recognized as other income when conditions are met, or systematically over the depreciable lives of related assets, with **US$1,706 thousand** recognized in H1 2024[119](index=119&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [ (a) Basis of presentation](index=16&type=section&id=2.a%20Basis%20of%20presentation) Financial statements are prepared under U.S. GAAP, with the company qualifying as an 'emerging growth company' - The consolidated financial statements are prepared in accordance with U.S. GAAP[50](index=50&type=chunk) - The Company qualifies as an 'emerging growth company' under the JOBS Act, allowing it to take advantage of certain exemptions from reporting requirements[51](index=51&type=chunk) - The Company has elected not to opt out of the extended transition period for new accounting standards, which means it adopts new standards at the same time as private companies[52](index=52&type=chunk) [ (b) Principles of consolidation](index=16&type=section&id=2.b%20Principles%20of%20consolidation) Consolidated financial statements include Chijet Motor and its controlled subsidiaries, with inter-company eliminations - Consolidated financial statements include Chijet Motor and its subsidiaries, where Chijet Motor directly or indirectly controls more than half of the voting power[53](index=53&type=chunk) - All inter-company transactions and balances are eliminated in consolidation[54](index=54&type=chunk) [ (c) Use of estimates](index=17&type=section&id=2.c%20Use%20of%20estimates) Financial statement preparation involves management estimates for fair value, warranty costs, and impairment assessments - Preparation of financial statements requires management to make estimates and assumptions, including fair value of acquired net assets, performance obligations, warranty costs, inventory valuation, impairment assessments, and deferred tax assets[56](index=56&type=chunk) [ (d) Functional currency and foreign currency translation](index=17&type=section&id=2.d%20Functional%20currency%20and%20foreign%20currency%20translation) Reporting currency is US$, with PRC subsidiaries using RMB, and translation adjustments in OCI - The Company's reporting currency is US$, while functional currencies of PRC subsidiaries are RMB[58](index=58&type=chunk) - Foreign currency translation adjustments are recorded in other comprehensive income or loss[60](index=60&type=chunk) [ (e) Fair value of financial instruments](index=17&type=section&id=2.e%20Fair%20value%20of%20financial%20instruments) Fair value is determined using a hierarchy of inputs, with carrying values approximating fair values - Fair value is determined using a hierarchy (Level I, II, III) based on observable and unobservable inputs, and approaches like market, income, and cost[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - The carrying values of the Company's financial instruments (cash, receivables, payables, etc.) approximated their fair values as of June 30, 2024, and December 31, 2023[68](index=68&type=chunk) [ (f) Cash and cash equivalents](index=18&type=section&id=2.f%20Cash%20and%20cash%20equivalents) Cash and cash equivalents include unrestricted cash and demand deposits with maturities of three months or less - Cash and cash equivalents include cash and demand deposits with original maturities of three months or less, all unrestricted[69](index=69&type=chunk) [ (g) Restricted cash](index=18&type=section&id=2.g%20Restricted%20cash) Restricted cash includes amounts frozen by court order and deposits for notes payable, totaling $387 thousand - Restricted cash represents cash frozen due to a court order and deposits for notes payable[70](index=70&type=chunk) Restricted Cash Breakdown | Type | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Frozen amount | 104 | 1,378 | | Security amount | 283 | - | | Total restricted cash | 387 | 1,378 | [ (h) Current expected credit losses](index=19&type=section&id=2.h%20Current%20expected%20credit%20losses) The company adopted CECL on January 1, 2023, estimating allowance for credit losses based on various factors - The Company adopted ASU **2016-13** (CECL) on January 1, 2023, using the modified retrospective transition method[73](index=73&type=chunk) - Allowance for credit losses is estimated based on historical losses, market conditions, customer financial condition, and payment patterns[74](index=74&type=chunk)[75](index=75&type=chunk) Allowance for Credit Losses | Metric | Six Months Ended June 30, 2024 (US$'000) | Six Months Ended June 30, 2023 (US$'000) | |:---|:---|:---|\n| Balance as of January 1 | 129 | 73 | | Reversal | (8) | - | | Balance as of June 30 | 121 | 73 | [ (i) Inventory](index=20&type=section&id=2.i%20Inventory) Inventories are valued at the lower of cost or net realizable value, with write-downs for excess or obsolete items - Inventories are stated at the lower of cost or net realizable value, with cost calculated on a weighted average basis[80](index=80&type=chunk) - Write-downs are recorded for excess or obsolete inventories based on demand forecasts and estimated selling prices[80](index=80&type=chunk) [ (j) Property, plant and equipment, net](index=20&type=section&id=2.j%20Property,%20plant%20and%20equipment,%20net) Property, plant and equipment are stated at cost less depreciation and impairment, with significant assets pledged - Property, plant and equipment are stated at cost less accumulated depreciation and impairment, depreciated using the straight-line method over estimated useful lives (e.g., Buildings: **20 years**, Machinery: **3-25 years**)[81](index=81&type=chunk)[82](index=82&type=chunk) - Gain on disposal of property, plant and equipment was **US$1,271 thousand** for H1 2024, significantly higher than **US$21 thousand** for H1 2023[85](index=85&type=chunk) [ (k) Intangible assets, net](index=21&type=section&id=2.k%20Intangible%20assets,%20net) Intangible assets include finite-lived software/patents and indefinite-lived manufacturing permission/trademark - Intangible assets include computer software, patents (finite lives), and automotive manufacturing permission and trademark (indefinite lives)[86](index=86&type=chunk)[87](index=87&type=chunk) - Finite-lived intangible assets are amortized using the straight-line method (e.g., Patent: **5-10 years**, Computer software: **2-10 years**)[86](index=86&type=chunk) - Indefinite-lived intangible assets are tested for impairment annually or when circumstances indicate, with no impairment recognized for H1 2024 and H1 2023[87](index=87&type=chunk) [ (l) Land use rights, net](index=21&type=section&id=2.l%20Land%20use%20rights,%20net) Land use rights are lease prepayments amortized over 40-50 years, with a portion pledged as collateral - Land use rights are lease prepayments to local government authorities, identified as operating lease right-of-use assets under ASC **842**[88](index=88&type=chunk) - Amortization is provided on a straight-line basis over **50** and **40 years**[88](index=88&type=chunk) [ (m) Long-term investments](index=21&type=section&id=2.m%20Long-term%20investments) Long-term investments primarily consist of a 30% equity interest in Baosteel, accounted for using equity method - Long-term investments primarily consist of a **30%** equity interest in Jilin FAW Baosteel Auto Steel Parts Co., Ltd. (Baosteel)[89](index=89&type=chunk) - The Company uses the equity method of accounting for investments where it has significant influence but not control[91](index=91&type=chunk) - No impairment loss was recorded for long-term investments during H1 2024 and H1 2023[92](index=92&type=chunk) [ (n) Goodwill](index=22&type=section&id=2.n%20Goodwill) Goodwill from the FAW Jilin acquisition is tested for impairment annually, with no impairment recognized - Goodwill is initially measured at cost, representing the excess of purchase price over the fair value of net assets acquired[93](index=93&type=chunk) - The Company adopted ASU **2017-04**, simplifying the goodwill impairment test by comparing the fair value of each reporting unit to its carrying amount[94](index=94&type=chunk) [ (o) Impairment of long-lived assets](index=22&type=section&id=2.o%20Impairment%20of%20long-lived%20assets) Long-lived assets are evaluated for impairment when circumstances indicate carrying amounts may not be recoverable - Long-lived assets are evaluated for impairment when events or changes in circumstances indicate that the carrying amount may not be fully recoverable[95](index=95&type=chunk) - An impairment loss is recognized if the sum of expected future undiscounted cash flows is less than the carrying value, based on the excess of carrying value over fair value[95](index=95&type=chunk) [ (p) Warranties](index=23&type=section&id=2.p%20Warranties) A warranty reserve is accrued for vehicles sold, based on estimated repair costs, recorded as cost of sales - The Company accrues a warranty reserve for vehicles sold, based on estimated costs to repair or replace items under warranties and recalls[97](index=97&type=chunk) - Warranty expense is recorded as a component of cost of sales[97](index=97&type=chunk) Accrued Warranty Rollforward | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Accrued warranty - beginning of period/year | 204 | 319 | | Warranty costs incurred | 46 | (106) | | Accrued warranty - end of period/year | 244 | 204 | [ (q) Revenue recognition](index=23&type=section&id=2.q%20Revenue%20recognition) Revenue is recognized upon transfer of control of goods or services, allocated based on standalone selling prices - Revenue is recognized when control of goods or services is transferred to customers, either over time or at a point in time[100](index=100&type=chunk)[101](index=101&type=chunk) - For contracts with multiple performance obligations, the overall contract price is allocated based on relative standalone selling prices[103](index=103&type=chunk) Revenue by Type | Revenue Type | H1 2024 (US$'000) | H1 2023 (US$'000) | |:---|:---|:---|\n| Vehicle sales (Third Parties) | 3,161 | 2,041 | | Sales of vehicle parts and accessories (Related Parties) | 245 | 508 | | Total Revenues | 3,407 | 2,615 | [ (r) Cost of revenues](index=25&type=section&id=2.r%20Cost%20of%20revenues) Cost of revenue includes direct costs, manufacturing overhead, warranty reserves, and inventory write-downs - Cost of revenue includes direct parts, material, labor, manufacturing overhead, and reserves for estimated warranty costs[112](index=112&type=chunk) - It also includes charges to write-down inventory when its carrying value exceeds net realizable value or for obsolete/excess inventory[112](index=112&type=chunk) [ (s) Cost of revenues – idle capacity](index=25&type=section&id=2.s%20Cost%20of%20revenues%20%E2%80%93%20idle%20capacity) Idle capacity costs, expensed as incurred, significantly decreased from US$16,725 thousand in H1 2023 - Idle capacity costs are production-related costs in excess of charges allocated to finished goods, expensed in the period incurred[113](index=113&type=chunk) - Idle capacity expenses decreased from **US$16,725 thousand** in H1 2023 to **US$7,567 thousand** in H1 2024[113](index=113&type=chunk) [ (t) Research and development expenses](index=26&type=section&id=2.t%20Research%20and%20development%20expenses) All R&D costs are expensed as incurred, decreasing significantly to US$1,078 thousand in H1 2024 - All R&D costs are expensed as incurred, primarily consisting of employee compensation, design and development, materials, and supplies[115](index=115&type=chunk) - R&D expenses decreased significantly from **US$5,504 thousand** in H1 2023 to **US$1,078 thousand** in H1 2024[115](index=115&type=chunk) [ (u) Selling, general and administrative expenses](index=26&type=section&id=2.u%20Selling,%20general%20and%20administrative%20expenses) Selling, general, and administrative expenses decreased, with G&A seeing a substantial reduction in H1 2024 - Selling and marketing expenses were **US$738 thousand** in H1 2024, down from **US$782 thousand** in H1 2023[116](index=116&type=chunk) - General and administrative expenses decreased from **US$28,689 thousand** in H1 2023 to **US$12,835 thousand** in H1 2024[117](index=117&type=chunk) [ (v) Employee benefits](index=26&type=section&id=2.v%20Employee%20benefits) PRC employees participate in government-mandated defined contribution plans, with total expenses decreasing - PRC full-time employees participate in government-mandated defined contribution plans for pension, injury, maternity, medical, and housing benefits[118](index=118&type=chunk) - Total employee benefit expenses were approximately **US$1,999 thousand** in H1 2024, down from **US$2,915 thousand** in H1 2023[118](index=118&type=chunk) [ (w) Government grants](index=26&type=section&id=2.w%20Government%20grants) Government grants are recognized as other income when conditions are met or over asset depreciable lives - Subsidies from local governments are recognized as other income when conditions are met or over the depreciable lives of related assets[119](index=119&type=chunk) Government Grants Received | Type of Subsidies | H1 2024 (US$'000) | H1 2023 (US$'000) | |:---|:---|:---|\n| Compensating for expenses or losses | 1,426 | 1,542 | | Related to fixed assets | 280 | 281 | | Total | 1,706 | 1,823 | [ (x) Income taxes](index=27&type=section&id=2.x%20Income%20taxes) Income taxes are accounted for under ASC 740, with PRC subsidiaries subject to a 25% CIT rate - Income taxes are accounted for under the asset and liability method (ASC **740**), recognizing deferred tax assets and liabilities for temporary differences[124](index=124&type=chunk) - PRC subsidiaries are subject to a Corporate Income Tax (CIT) statutory rate of **25%**[132](index=132&type=chunk) - No significant interest and penalties associated with uncertain tax positions were recognized for H1 2024 and H1 2023[126](index=126&type=chunk) [ (y) Warrants](index=28&type=section&id=2.y%20Warrants) Warrants are classified as equity if they meet specific physical or net-share settlement criteria - Warrants are classified as equity if they require physical or net-share settlement, or if the Company has a choice of net-cash or share settlement[127](index=127&type=chunk)[128](index=128&type=chunk) - Warrants indexed to the Company's stock and meeting equity classification requirements under ASC **815-40** are initially measured at fair value, with no subsequent changes recognized[128](index=128&type=chunk) [ (z) Value-added tax](index=28&type=section&id=2.z%20Value-added%20tax) The company is subject to PRC VAT rates of 13%, 6%, and 9% for various sales and services - The Company is subject to statutory VAT rates of **13%**, **6%**, and **9%** for revenue from sales of vehicles, spare parts, and other services in PRC, respectively[130](index=130&type=chunk) [ (aa) Statutory reserves](index=28&type=section&id=2.aa%20Statutory%20reserves) PRC subsidiaries are required to appropriate after-tax profits to non-distributable statutory reserve funds - PRC subsidiaries are required to make appropriations to non-distributable reserve funds (statutory surplus reserve, staff bonus and welfare fund) from after-tax profit determined under PRC GAAP[131](index=131&type=chunk)[132](index=132&type=chunk) - The general reserve fund can offset losses or increase capital but is not distributable as cash dividends[133](index=133&type=chunk) [ (bb) Comprehensive income (loss)](index=29&type=section&id=2.bb%20Comprehensive%20income%20(loss)) Comprehensive loss includes net loss, foreign currency translation adjustments, and actuarial loss - Comprehensive loss includes net loss and other comprehensive loss, primarily foreign currency translation adjustments and actuarial loss from defined contribution plans[135](index=135&type=chunk) [ (cc) Leases](index=29&type=section&id=2.cc%20Leases) The company adopted ASC 842, with short-term operating leases having no ROU assets or lease liabilities - The Company adopted ASC **842**, Leases, on January 1, 2022, using a modified retrospective transition approach and elected practical expedients[136](index=136&type=chunk) - As of June 30, 2024, and December 31, 2023, right-of-use assets and corresponding lease liabilities for existing operating leases were nil due to their short-term nature[137](index=137&type=chunk) - Land use rights are separately presented as operating lease right-of-use assets[139](index=139&type=chunk) [ (dd) Loss per share](index=29&type=section&id=2.dd%20Loss%20per%20share) Basic and diluted loss per share are calculated based on net loss attributable to ordinary shareholders - Basic loss per share is calculated by dividing net loss attributable to ordinary shareholders by weighted-average ordinary shares outstanding[140](index=140&type=chunk) - Potentially dilutive shares are excluded from diluted loss per share calculation when their effect is anti-dilutive, resulting in basic and diluted loss per share being the same for the periods presented[142](index=142&type=chunk) - Earnout Shares issued to Chijet Inc. sellers are classified in equity and do not affect earnings per share calculation as of June 30, 2024[150](index=150&type=chunk) [ (ee) Segment reporting](index=31&type=section&id=2.ee%20Segment%20reporting) The company operates as one segment, with all long-lived assets and sales primarily located in the PRC - The Company operates in one operating segment, with the Chief Executive Officer identified as the Chief Operating Decision Maker (CODM)[151](index=151&type=chunk) - All long-lived assets and sales are substantially located in and derived from the PRC, so no geographical segments are presented[151](index=151&type=chunk) [3. Recent Accounting Pronouncements](index=32&type=section&id=3.%20RECENT%20ACCOUNTING%20PRONOUNCEMENT) Details recently adopted and issued accounting pronouncements, with no material impact expected from new ASUs - The Company adopted ASU **2020-06** (Accounting for Convertible Instruments and Contracts in an Entity's Own Equity) in fiscal 2024, with no significant impact on consolidated financial statements[153](index=153&type=chunk) - ASU **2022-06** (Deferral of the Sunset Date of Reference Rate Reform) was adopted in fiscal 2024, also without a material impact[154](index=154&type=chunk) - The Company will adopt ASU **2023-07** (Improvements to Reportable Segment Disclosures) in fiscal 2024 and does not expect a material impact[156](index=156&type=chunk) - ASU **2023-09** (Improvements to Income Tax Disclosures) is effective for annual reporting periods beginning after December 15, 2025, and the Company is evaluating its effect[157](index=157&type=chunk) [4. Concentration of Risk](index=33&type=section&id=4.%20CONCENTRATION%20OF%20RISK) Exposed to credit, customer concentration, and foreign currency exchange rate risks due to PRC operations - Credit risk is concentrated in cash, cash equivalents, restricted cash, accounts and notes receivable, and accounts and notes payable, with most cash held in PRC banking institutions[159](index=159&type=chunk) - As of June 30, 2024, four third-party customers accounted for **20%**, **20%**, **12%**, and **11%** of total accounts and notes receivable, respectively[161](index=161&type=chunk) - During H1 2024, two customers accounted for **23%** and **11%** of total revenue, respectively[162](index=162&type=chunk) - The Company is exposed to foreign currency exchange rate risk as PRC operations are in RMB, while overseas financing is in US$[163](index=163&type=chunk) [5. Accounts and Notes Receivable, Net](index=34&type=section&id=5.%20ACCOUNTS%20AND%20NOTES%20RECEIVABLE,%20NET) Accounts and notes receivable, net, decreased from $2,241 thousand to $1,241 thousand by June 30, 2024 Accounts and Notes Receivable Breakdown | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Accounts receivable | 3 | 20 | | Notes receivable | 1,238 | 2,221 | | Less: allowance for credit losses | - | - | | Accounts and notes receivable, net | 1,241 | 2,241 | - Notes receivable, which are non-interest bearing and due within six to twelve months, decreased by **$983 thousand**[165](index=165&type=chunk) - The Company reported no allowance for credit losses as of June 30, 2024, and December 31, 2023, based on its CECL model[166](index=166&type=chunk) [6. Inventory, Net](index=34&type=section&id=6.%20INVENTORY,%20NET) Net inventory increased from $14,785 thousand to $16,719 thousand, driven by finished goods Inventory Breakdown | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Finished goods | 6,316 | 3,665 | | Raw materials | 15,803 | 15,720 | | Work-in-process | 6,963 | 7,517 | | Inventory, subtotal | 29,082 | 26,902 | | Less: inventory impairment provision | (12,363) | (12,117) | | Inventory, net | 16,719 | 14,785 | - Finished goods increased by **$2,651 thousand** (**72.3%**) from December 31, 2023, to June 30, 2024[167](index=167&type=chunk) - Inventory write-downs to net realizable value were **US$1,772 thousand** for H1 2024, significantly higher than **US$362 thousand** for H1 2023[168](index=168&type=chunk) [7. Other Current Assets](index=35&type=section&id=7.%20OTHER%20CURRENT%20ASSETS) Other current assets increased from $9,951 thousand to $13,028 thousand due to prepayments and VAT input Other Current Assets Breakdown | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Prepayments for materials | 10,104 | 7,509 | | Deductible value-added tax input | 627 | 207 | | Other receivables | 1,715 | 1,662 | | Net balance | 13,028 | 9,951 | - Prepayments for materials increased by **$2,595 thousand** (**34.6%**) from December 31, 2023, to June 30, 2024[170](index=170&type=chunk) - Deductible value-added tax input increased by **$420 thousand** (**202.9%**) due to China's VAT rebates for eligible industries[170](index=170&type=chunk) [8. Property, Plant and Equipment, Net](index=35&type=section&id=8.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT,%20NET) Net property, plant and equipment decreased to $166,413 thousand, partly pledged as collateral for borrowings Property, Plant and Equipment Summary | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Property, plant and equipment, subtotal (at cost) | 548,715 | 565,359 | | Less: accumulated depreciation | (379,298) | (380,090) | | Less: accumulated impairment | (3,004) | (3,892) | | Property, plant and equipment, net | 166,413 | 181,377 | - Depreciation expenses for H1 2024 were **US$10,605 thousand**, a decrease from **US$18,329 thousand** in H1 2023[173](index=173&type=chunk) - Carrying amounts of buildings, molds, tooling, machinery, and land use rights totaling **US$90,424 thousand** were pledged as collateral by FAW Jilin, Xiangyang Yazhi, and Dezhou Yarui as of June 30, 2024[174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - Machinery and equipment of Bijie Yabei that were frozen were sold to repay a loan, with no frozen assets remaining as of June 30, 2024[177](index=177&type=chunk) [9. Intangible Assets, Net](index=36&type=section&id=9.%20INTANGIBLE%20ASSETS,%20NET) Net intangible assets decreased to $124,464 thousand, mostly indefinite-lived trademark and manufacturing licenses Intangible Assets Breakdown | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Total finite-lived intangible assets (net) | 18 | 33 | | Total indefinite-lived intangible assets (net) | 124,446 | 127,378 | | Total intangible assets (net) | 124,464 | 127,411 | - Indefinite-lived intangible assets, primarily trademark and manufacturing licenses, account for over **99%** of total net intangible assets[178](index=178&type=chunk) - Amortization expenses for intangible assets were **US$14 thousand** for H1 2024, down from **US$41 thousand** for H1 2023[180](index=180&type=chunk) [10. Land Use Rights, Net](index=37&type=section&id=10.%20LAND%20USE%20RIGHTS,%20NET) Net land use rights decreased to $121,696 thousand due to amortization, with a significant portion pledged Land Use Rights Summary | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Land use right (cost) | 149,678 | 153,204 | | Less: accumulated amortization | (27,982) | (27,055) | | Land use right, net | 121,696 | 126,149 | - Amortization expenses for land use rights were **US$1,552 thousand** for H1 2024, a slight decrease from **US$1,671 thousand** for H1 2023[184](index=184&type=chunk) - Land use rights with a carrying amount of **US$45,519 thousand** were pledged to lenders by Xiangyang Yazhi and FAW Jilin as of June 30, 2024[183](index=183&type=chunk) [11. Operating Leases (Excluding Land Use Rights)](index=38&type=section&id=11.%20OPERATING%20LEASES%20(EXCLUDING%20LAND%20USE%20RIGHTS)) Operating leases are primarily short-term, with no ROU assets or lease liabilities recorded on the balance sheet - Operating leases mainly comprise short-term leases (**12 months** or less) for plants, warehouses, and machinery[185](index=185&type=chunk)[138](index=138&type=chunk) - No lease-related assets or liabilities were recorded on the consolidated balance sheets as of June 30, 2024, and December 31, 2023[186](index=186&type=chunk) Operating Lease Costs | Metric | H1 2024 (US$'000) | H1 2023 (US$'000) | |:---|:---|:---|\n| Short-term lease cost | 450 | 841 | | Total lease cost | 450 | 841 | [12. Goodwill](index=39&type=section&id=12.%20GOODWILL) Goodwill decreased to $2,633 thousand due to foreign currency adjustments, with no impairment losses recognized - Goodwill originated from the acquisition of FAW Jilin on December 27, 2019, representing the excess of purchase price over the fair value of net assets acquired[188](index=188&type=chunk)[191](index=191&type=chunk) Goodwill Movement | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Beginning balance | 2,695 | 2,774 | | Translation adjustment | (62) | (79) | | Goodwill (end of period) | 2,633 | 2,695 | - The change in goodwill was due to foreign currency translation adjustments, and no accumulated impairment losses were recorded[191](index=191&type=chunk) [13. Other Assets](index=40&type=section&id=13.%20OTHER%20ASSETS) Other assets, mainly long-term deferred expenses, decreased from $4,292 thousand to $3,800 thousand Other Assets Breakdown | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Long-term deferred expenses | 3,800 | 4,292 | | Total | 3,800 | 4,292 | - Long-term deferred expenses are mainly advances to FAW Jilin's suppliers for molds and tool manufacturing, amortized over their expected periods of use[192](index=192&type=chunk) [14. Accounts and Notes Payable](index=40&type=section&id=14.%20ACCOUNTS%20AND%20NOTES%20PAYABLE) Accounts and notes payable increased from $14,824 thousand to $20,001 thousand by June 30, 2024 Accounts and Notes Payable Breakdown | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Accounts payable | 19,718 | 14,824 | | Notes payable | 283 | - | | Total | 20,001 | 14,824 | - Notes payable, consisting of bank acceptance drafts, are generally payable within six months and are guaranteed by banks, often requiring a guaranteed deposit classified as restricted cash[193](index=193&type=chunk) [15. Contract Liabilities](index=41&type=section&id=15.%20CONTRACT%20LIABILITIES) Contract liabilities decreased from $2,525 thousand to $2,639 thousand, reflecting revenue recognition timing - Contract liabilities primarily consist of advance payments from customers before goods or services are transferred[195](index=195&type=chunk) Contract Liabilities Rollforward | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Contract liabilities - beginning of period/year | 5,008 | 3,654 | | A change in time frame for a performance obligation satisfied | (6,405) | (11,747) | | Advance received | 5,511 | 13,205 | | Contract liabilities - end of period/year | 2,639 | 2,525 | - Contract liabilities to related parties decreased from **$2,483 thousand** to **$1,360 thousand**[196](index=196&type=chunk) [16. Accruals and Other Current Liabilities](index=41&type=section&id=16.%20ACCRUALS%20AND%20OTHER%20CURRENT%20LIABILITIES) Accruals and other current liabilities decreased from $47,428 thousand to $45,737 thousand by June 30, 2024 Accruals and Other Current Liabilities Breakdown | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Payroll payable | 6,294 | 6,876 | | Accrued post-employment and termination benefits - current portion | 8,134 | 8,809 | | Accrued expenses | 17,800 | 18,362 | | Other payable | 12,484 | 9,400 | | Total | 45,737 | 47,428 | [17. Long-Term Payables, Current](index=41&type=section&id=17.%20LONG-TERM%20PAYABLES,%20CURRENT) Long-term payables, reclassified as current, decreased to $95,580 thousand due to currency changes and unmet loan conditions - Loans from a government entity for Electric Vehicle industry development, originally non-interest bearing, were reclassified as current due to unmet conditions for government subsidies and repayment[198](index=198&type=chunk)[199](index=199&type=chunk) - The outstanding principal decreased from **US$97,832 thousand** to **US$95,580 thousand**, primarily due to currency exchange rate changes[200](index=200&type=chunk) - The Company faces potential penalties and repossession of land if conditions are not met, and is actively negotiating with lenders[199](index=199&type=chunk)[202](index=202&type=chunk) - Machinery, equipment, buildings, and land use rights with a carrying amount of approximately **US$39,948 thousand** were pledged as collateral for these loans[203](index=203&type=chunk) [18. Promissory Note Payable](index=42&type=section&id=18.%20PROMISSORY%20NOTE%20PAYABLE) A promissory note payable from a 2014 legal dispute was fully settled as of June 30, 2024 - A legal dispute from 2014 regarding a loan of **US$1,376 thousand** with interest was settled[204](index=204&type=chunk) - Fixed assets of Bijie Yabei were sold and transferred to the Plaintiff to offset the loan principal and partial interest[204](index=204&type=chunk) - As of June 30, 2024, there was no outstanding principal owed on the promissory note[204](index=204&type=chunk) [19. Accrued Post-Employment and Termination Benefits](index=42&type=section&id=19.%20ACCRUED%20POST-EMPLOYMENT%20AND%20TERMINATION%20BENEFITS) Net obligation for post-employment and termination benefits decreased to $47,745 thousand by June 30, 2024 - The Company has three defined benefit, non-contributory retirement or termination plans covering qualifying employees[206](index=206&type=chunk) Accrued Post-Employment and Termination Benefits Rollforward | Metric | June 30, 2024 (US$'000) | June 30, 2023 (US$'000) | |:---|:---|:---|\n| Beginning of period | 52,350 | 60,915 | | Service costs | 39 | 32 | | Interest costs | 554 | 745 | | Benefits paid | (4,151) | (4,334) | | Translation adjustment | (1,181) | (2,827) | | End of period | 47,745 | 54,444 | - The net amount due after one year was **US$39,611 thousand** as of June 30, 2024, while the current portion was **US$8,134 thousand**[210](index=210&type=chunk)[212](index=212&type=chunk) [20. Ordinary Shares and Statutory Reserve](index=44&type=section&id=20.%20ORDINARY%20SHARES%20AND%20STATUTORY%20RESERVE) Issued ordinary shares totaled 5,471,661 after a reverse stock split, with outstanding warrants classified as equity - As of June 30, 2024, Chijet Motor had **5,471,661** issued ordinary shares and **5,470,076** outstanding ordinary shares, adjusted for the **1-for-30** reverse stock split[214](index=214&type=chunk) - The Company has GT Warrants and I-Bankers Warrants outstanding, classified as equity, with total prices of **$8,900 thousand** and **$4,968 thousand**, respectively, as of June 30, 2024[216](index=216&type=chunk)[219](index=219&type=chunk) - PRC subsidiaries are required to make appropriations to statutory surplus reserves, which are non-distributable as cash dividends, with an accumulated balance of **US$6,656 thousand** as of June 30, 2024[224](index=224&type=chunk)[225](index=225&type=chunk) [ (a) Warrants](index=45&type=section&id=20.a%20Warrants) GT and I-Bankers Warrants are outstanding, classified as equity, with specific exercise prices Outstanding Warrants | Warrant Type | Number of Warrants | Total Price (US$'000) | |:---|:---|:---|\n| GT Warrants | 148,334 | 8,900 | | I-Bankers Warrants | 13,800 | 4,968 | - GT Warrants were issued to Greentree to purchase shares at an exercise price of **US$60.00** per share, classified as equity[216](index=216&type=chunk) - I-Bankers Warrants were issued to I-Bankers to purchase shares at an exercise price of **$360.00** per share, also classified as equity[219](index=219&type=chunk) [ (b) Treasury stock](index=46&type=section&id=20.b%20Treasury%20stock) The company holds 1,585 shares of treasury stock from a promissory note repayment by JWAC - The Company holds **1,585** shares of treasury stock, resulting from JWAC repaying **US$500 thousand** of promissory notes by delivering its Class A common stock to Chijet Inc[221](index=221&type=chunk) [ (c) Statutory Reserves and Restricted Net Asset](index=47&type=section&id=20.c%20Statutory%20Reserves%20and%20Restricted%20Net%20Asset) PRC subsidiaries maintain statutory surplus reserves, restricting a portion of net assets from distribution - PRC subsidiaries are required to make appropriations to statutory surplus reserve (at least **10%** of after-tax profit until **50%** of registered capital) and discretionary surplus reserve[224](index=224&type=chunk) - The accumulated balance of statutory reserves was **US$6,656 thousand** as of June 30, 2024, and December 31, 2023[225](index=225&type=chunk) - The aggregate amount of paid-in capital and additional paid-in capital of PRC entities, not available for distribution, was **US$148,357 thousand** as of June 30, 2024[227](index=227&type=chunk) [21. Income Taxes](index=47&type=section&id=21.%20INCOME%20TAXES) PRC subsidiaries face a 25% CIT rate, with no income tax expenses due to valuation allowances on deferred tax assets - Cayman Islands and British Virgin Islands subsidiaries are not subject to income or capital gains tax[228](index=228&type=chunk)[229](index=229&type=chunk) - Hong Kong subsidiary is subject to a two-tiered profit tax rate (**8.25%** for first HKD **$2.0 million**, **16.5%** thereafter), but no provisions were made due to no assessable profits[231](index=231&type=chunk) - PRC subsidiaries are subject to a Corporate Income Tax (CIT) statutory rate of **25%**[232](index=232&type=chunk) Income Tax Reconciliation | Metric | H1 2024 (US$'000) | H1 2023 (US$'000) | |:---|:---|:---|\n| Loss before income tax expenses | (31,523) | (57,591) | | Income tax benefits computed at 25% | (7,881) | (14,398) | | Changes in valuation allowance and others | 7,868 | 14,509 | | Income tax expenses | - | - | - A full valuation allowance is provided against deferred tax assets (totaling **US$159,969 thousand** as of June 30, 2024), as it is more-likely-than-not that they will not be utilized[236](index=236&type=chunk)[237](index=237&type=chunk) [22. Related Parties](index=50&type=section&id=22.%20RELATED%20PARTIES) Extensive related party transactions include receivables, payables, contract liabilities, and significant loans - Related parties include entities significantly influenced by the Company (e.g., Jilin FAW Baosteel Auto Steel Parts Co., Ltd.), non-controlling interest shareholders (e.g., China FAW Co., Ltd.), and their affiliates (e.g., Yantai Guofeng Investment Holding Group Co., Ltd.)[239](index=239&type=chunk) Related Party Balances | Metric | June 30, 2024 (US$'000) | December 31, 2023 (US$'000) | |:---|:---|:---|\n| Accounts receivable | 183 | 208 | | Other current assets | 1,662 | 2,786 | | Amounts due from related parties | 43,435 | 48,748 | | Accounts payable | 45,854 | 47,192 | | Contract liabilities | 1,360 | 2,483 | | Accruals and other current liabilities to related parties | 84,791 | 78,495 | | Loans attributable to related parties | 267,256 | 273,412 | Related Party Operations | Metric | H1 2024 (US$'000) | H1 2023 (US$'000) | |:---|:---|:---|\n| Sales of goods | 245 | 559 | | Purchase of goods | 4,448 | 1,101 | | Interest Expense | 8,077 | 7,491 | - Loans attributable to related parties totaled **US$267,256 thousand** as of June 30, 2024, with significant amounts from Yantai Guofeng Investment Holding Group Co., Ltd. and FAW Finance Co., Ltd[247](index=247&type=chunk) - Independent directors received compensation of **US$200 thousand**, split between cash and ordinary shares, for the period[256](index=256&type=chunk) [23. Commitments and Contingencies](index=59&type=section&id=23.%20COMMITMENTS%20AND%20CONTINGENCIES) Capital commitments total $43,524 thousand, with ongoing legal proceedings not expected to have a material effect - Capital commitments totaled **US$43,524 thousand** as of June 30, 2024, with **US$23,291 thousand** due within one year, covering construction, equipment, and molds[258](index=258&type=chunk) - Parts purchase commitments amounted to approximately **US$2,088 thousand** as of June 30, 2024, down from **US$6,029 thousand** at December 31, 2023[260](index=260&type=chunk) - The Company is subject to legal proceedings in the ordinary course of business and is aware of four threatened lawsuits alleging breach of a Non-Redemption Agreement and a Contingent Value Rights Agreement[261](index=261&type=chunk)[262](index=262&type=chunk) - Management does not anticipate a material adverse effect from these legal matters on the consolidated financial statements[261](index=261&type=chunk) [24. Subsequent Events](index=59&type=section&id=24.%20SUBSEQUENT%20EVENT) A 1-for-30 reverse stock split was effective July 8, 2024, and a $200 million shelf registration was filed - A **1-for-30** reverse stock split was approved on June 28, 2024, and became effective on July 8, 2024, reducing issued ordinary shares from **160,707,171** to approximately **5,471,661**[263](index=263&type=chunk)[265](index=265&type=chunk) - The Company filed a shelf registration statement on Form F-3 on August 6, 2024, for up to **$200,000,000** of various securities, which was declared effective by the SEC on August 16, 2024[266](index=266&type=chunk)[267](index=267&type=chunk)

Core Points - Chijet Motor Company, Inc. is issuing 640,850 ordinary shares to holders of contingent value rights (CVRs) based on their holdings as of September 13, 2024 [1][2] - The issuance of shares is a result of two shareholders surrendering the same number of shares for cancellation due to unmet earnout milestones from the Business Combination Agreement [2] - Each CVR holder will receive approximately 0.492694 ordinary shares, with fractional shares rounded down to the nearest whole share [2][3] Company Overview - Chijet specializes in the development, manufacture, sales, and service of traditional fuel vehicles and new energy vehicles (NEVs) [4] - The company operates a large modern vehicle production base in Jilin, China, and is constructing a factory in Yantai, China, dedicated to NEV production [4] - Chijet's management team consists of industry veterans with extensive experience in various fields including engineering, design, and financial management [4]

Core Points - Chijet Motor Company held its annual shareholder meeting on June 28, 2024, where significant corporate actions were approved [1] - A reverse stock split was approved, consolidating every 30 shares into 1 share, changing the par value from US$0.0001 to US$0.003 [1] - The authorized share capital was increased from US$50,000 to US$30,000,000, allowing for 10,000,000,000 authorized ordinary shares [1] - The company presented financial information for the fiscal year ended December 31, 2023, and allowed shareholders to discuss company affairs with management [2]

Core Points - Chijet Motor Company held its annual shareholder meeting on June 28, 2024, where significant corporate actions were approved [1] - A reverse stock split was approved, consolidating every 30 shares into 1 share, changing the par value from US$0.0001 to US$0.003 [1] - The authorized share capital was increased from US$50,000 to US$30,000,000, allowing for 10,000,000,000 authorized ordinary shares at a par value of US$0.003 [1] - The company presented financial information for the fiscal year ended December 31, 2023, and allowed shareholders to discuss company affairs with management [3]

Company Overview - Chijet Motor Company, Inc. is engaged in the development, manufacture, sales, and service of traditional fuel vehicles and new energy vehicles (NEVs) in China [2] - The company has a modern vehicle production base in Jilin, China, and is constructing a factory in Yantai, China, dedicated to NEV production [2] - Chijet Motor's management team consists of industry veterans with decades of experience in various fields including engineering, design, management, and financial management [2] Recent Developments - On June 7, 2024, Chijet's holding subsidiary FAW Jilin Automobile Co., Ltd. signed an intention agreement with the Jilin National High-tech Industrial Development Zone and Haikou BIAOCHI Automobile Culture Development Co., Ltd. for a project focused on automobile culture tourism and race automobile R&D and manufacture [5] - The project will include the construction of a kart, ATV & UTV new energy and fuel automobile manufacturing base at FAW Jilin's factory, as well as a comprehensive cultural tourism base featuring a kart track, off-road track, rallying field, and RV camping [5] - This industrial cultural tourism project aims to integrate automobile racing, development, RV camping, music, and gastronomy, leveraging the northeast ice-snow tourism characteristics [5]

JILIN CITY, China, June 18, 2024 (GLOBE NEWSWIRE) -- Chijet Motor Company, Inc. (Nasdaq: CJET) (the "Company" or "Chijet"), a high-tech enterprise engaged in the development, manufacture, sales, and service of traditional fuel vehicles and new energy vehicles ("NEV") in China announced that on June 7, The holding subsidiary FAW Jilin Automobile Co., Ltd. ("FAW JiLin") of Chijet Motor signed an intention agreement with the administration committee of Jilin National High-tech Industrial Development Zone and H ...