Kandi Technologies Group, Inc. (NASDAQ:KNDI) Q2 2023 Earnings Conference Call August 8, 2023 8:00 AM ET Company Participants Kewa Luo - Investor Relations Director Xueqin Dong - Chief Executive Officer Xiaoming Hu - Chairman of the Board Alan Lim - Chief Financial Officer Conference Call Participants Frank Blatterman - Private Investor Joel Kramer - Private Investor Michael Pfeffer - Oppenheimer Arthur Porcari - Corporate Strategies Francis Forte - Private Investor Operator Greetings and welcome to Kandi Te ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Delaware 90-0363723 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Jinhua New Energy Vehicle Town Jinhua, Zhejiang Province People's Republic of China 321016 (Address of principal executive offices) (Zip Code) Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock KNDI NASDAQ Global Select Market FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 ...

Kandi Technologies Group, Inc. (NASDAQ:KNDI) Q1 2023 Earnings Conference Call May 10, 2023 8:00 AM ET Company Participants Kewa Luo - Director, IR Xueqin Dong - President and CEO Hu Xiao Ming - Chairman of the Board Jehn Ming Lim - CFO Conference Call Participants Unidentified Analyst - Private Investor Unidentified Analyst - Private Investor Michael Pfeffer - Oppenheimer Walter Hill - Carty & Co. Arthur Porcari - Corporate Strategies Operator Good morning and welcome to Kandi Technologies First Quarter 202 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2023 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______to______ Commission File Number 001-33997 KANDI TECHNOLOGIES GROUP, INC. (Exact name of registrant as specified in charter) | --- | |------------------------------ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 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 001-33997 KANDI TECHNOLOGIES GROUP, INC. (Exact name of registrant as specified in charter) | --- | --- | --- | |------------ ...

Kandi Technologies Group, Inc. (NASDAQ:KNDI) Q4 2022 Results Conference Call March 15, 2023 8:00 AM ET Company Participants Kewa Luo - Manager-Investor Relations Xueqin Dong - CEO Hu Xiao Ming - Chairman of the Board Conference Call Participants Mike Pfeffer - Oppenheimer Arthur Porcari - Corporate Strategies Operator Hello and welcome to Kandi Technologies Full Year 2022 Financial Results Conference Call and Webcast. [Operator instructions] As a reminder this conference is being recorded. It is now my plea ...

Financial Data and Key Metrics Changes - Kandi Technologies reported a revenue increase of 100% year-over-year, reaching $33.7 million in Q3 2022 compared to $16.8 million in Q3 2021, marking the highest quarterly sales since early 2021 [6] - The company achieved a positive net income for the quarter, attributed to improved gross margins and disciplined operating expense control [7] - Gross margin improved significantly due to higher margins from off-road vehicles and associated parts [7] Business Line Data and Key Metrics Changes - Off-road vehicles and associated parts accounted for over 60% of total revenue in Q3 2022, driven by a strategic pivot and new sales channels established in the U.S. [7] - The sales of golf carts, UTVs, and other off-road vehicles are expected to increase in 2023 due to rising consumer interest [7] Market Data and Key Metrics Changes - The company is experiencing a resurgence in consumer interest for its off-road vehicles, particularly in the U.S. market [7] - Despite potential economic weaknesses affecting consumer demand, Kandi plans to launch new electric vehicle products to capture market share [8] Company Strategy and Development Direction - Kandi Technologies is focused on a diversified and resilient business model, aiming for top-line growth through new product launches in the electric vehicle sector [8] - The company is refining its production workflow to meet market demand and has started normal shipping processes for the K32 off-road truck [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance despite global economic challenges and ongoing supply chain issues [6] - The company anticipates higher sales and net income in 2023, supported by a healthy cash position and strategic initiatives [8] Other Important Information - Kandi's revenue from the acquired company Jiangxi Huiyi in Q3 was approximately $6.3 million [14] - The company is transitioning its gas-powered go-karts to electric models in response to market trends [11] Q&A Session Summary Question: Status of Kandi's off-road products and electric go-karts - Management confirmed that production for the K32 off-road truck has started, and they are transitioning gas-powered go-karts to electric models [11] Question: Airbag issue for K23 and K27 - The airbag issue remains unresolved, and updates will be provided as they become available [14] Question: Contribution of acquired company to revenue - The revenue contribution from Jiangxi Huiyi in Q3 was about $6.3 million [14] Question: Relationship with Hengrun for battery swap vehicles - Kandi produces key components, while Hengrun is responsible for final assembly, with revenue generated from parts sold to Hengrun [19][24] Question: Future product variations and partnerships - Management is still working on details regarding new product variations and partnerships in the U.S. market [38] Question: Reorganization plan and its impact - The reorganization plan is in progress, and the company will maintain its NASDAQ listing while ensuring regular communication with shareholders [54]

Financial Data and Key Metrics Changes - Kandi Technologies reported solid results despite challenges from COVID-19 and geopolitical tensions, indicating resilience in its financial performance [6] - The company experienced significant supply chain disruptions, particularly in Shanghai, but managed to adapt its business strategy effectively [6][7] - The off-road vehicle revenue increased by 84% year-over-year, showcasing a strong growth trajectory in this segment [7] Business Line Data and Key Metrics Changes - The introduction of all-electric golf crossovers led to a monthly production increase to 2,000 units from double digits in March, reflecting strong customer demand [7] - The company plans to expand its product offerings in the all-electric off-road vehicle sector, including UTVs and ATVs, to capture market growth [8] Market Data and Key Metrics Changes - The off-road vehicle market is projected to grow by 19% annually, reaching a market size of $2.2 billion by 2028, presenting a substantial opportunity for Kandi [8] - The battery exchange service is facing challenges due to the competitive landscape in the Chinese EV market, which is currently experiencing unhealthy growth [9] Company Strategy and Development Direction - Kandi aims to become a market leader in the all-electric off-road vehicle sector by strategically adjusting its business model and enhancing its marketing and distribution capabilities [8] - The company is focused on diversifying its business strategy to remain competitive in the evolving EV market [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the severe and uncertain economic conditions due to COVID-19 and the Ukraine-Russia conflict, which have influenced their strategic decisions [26] - The management believes that the share price is undervalued and expects gradual improvements in financial performance to reflect this in the stock price [26][28] Other Important Information - Kandi's cooperation with Hengrun for EV production is aimed at compliance with production and sales regulations in the Chinese market, which is expected to enhance sales [13] - The company is exploring options for share buybacks but remains cautious due to the current economic environment [28] Q&A Session Summary Question: What is the significance of the relaunch of Kandi K23 in China? - Management explained that the relaunch under the Henghe brand is part of a cooperation with Hengrun, focusing on production compliance and expected to increase EV sales [12][13] Question: What is Kandi's relationship with the small EV sold in the U.S.? - The company clarified that the U.S. version is limited in speed due to unmet airbag safety requirements, which are more stringent than in China [14][15] Question: How is the battery swap project with Hengrun progressing? - Management confirmed that the project is progressing well, with necessary approvals completed for the Henghe H23 model [18][19] Question: Why hasn't Kandi been more aggressive with share buybacks? - Management cited the uncertain economic environment as a reason for a conservative approach, despite recognizing the stock's undervaluation [25][26] Question: What are the expectations for the golf cart business? - Management expressed confidence in the growth of the golf cart business, with consistent production expected to exceed 2,000 units per month [32][34] Question: How do tariffs affect Kandi's products? - Management indicated that there are no significant tariffs impacting exports, but U.S. tariffs do affect pricing [40][41] Question: What modifications are needed for Kandi's vehicles to be highway legal in the U.S.? - The primary obstacle is meeting U.S. airbag safety requirements, which are more stringent than those in China [45][46] Question: Why hasn't Kandi prioritized meeting U.S. safety standards? - Management explained that meeting these standards requires a comprehensive industry effort, and they are currently focusing on NEV sales in the U.S. [48][49]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Kandi Technologies Group, Inc. and its subsidiaries, including balance sheets, statements of operations and comprehensive income (loss), statements of changes in stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's accounting policies, financial position, and operational results for the periods ended June 30, 2022, and December 31, 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and equity as of specific dates | Metric | June 30, 2022 (Unaudited) | December 31, 2021 | | :---------------------- | :------------------------ | :------------------ | | Total Current Assets | $330,951,772 | $342,608,136 | | Total Non-Current Assets| $165,924,825 | $177,552,136 | | **Total Assets** | **$496,876,597** | **$520,160,272** | | Total Current Liabilities| $66,800,880 | $64,162,690 | | Total Non-Current Liabilities| $11,094,644 | $12,797,255 | | **Total Liabilities** | **$77,895,524** | **$76,959,945** | | Total Stockholders' Equity| $418,981,073 | $443,200,327 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This statement details the company's revenues, expenses, and net income or loss over specific periods | Metric (USD) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues, Net | $20,841,183 | $29,875,835 | $45,732,587 | $45,853,589 | | Cost of Goods Sold | $(18,122,316) | $(23,778,053) | $(40,626,557) | $(35,401,456) | | Gross Profit | $2,718,867 | $6,097,782 | $5,106,030 | $10,452,133 | | (Loss) Income from Operations | $(6,281,583) | $44,369,455 | $(11,985,236) | $21,522,220 | | Net (Loss) Income | $(1,875,652) | $40,929,474 | $(3,494,665) | $34,526,754 | | Net (Loss) Income Attributable to Kandi Stockholders | $(1,937,271) | $40,929,474 | $(3,553,327) | $34,526,754 | | Basic and Diluted EPS | $(0.02) | $0.54 | $(0.05) | $0.46 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%20Equity) This statement tracks changes in the company's equity accounts, including net income, dividends, and stock transactions - **Total Stockholders' Equity decreased** from **$443,200,327** as of December 31, 2021, to **$418,981,073** as of June 30, 2022. This change was **primarily driven** by a **net loss** of **$1,616,056** and **$1,937,271** for the periods ended March 31, 2022 and June 30, 2022 respectively, **significant** foreign currency translation adjustments, and stock buybacks totaling **$(3,580,628)** for the six months ended June 30, 2022[11](index=11&type=chunk)[20](index=20&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (USD) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------------- | :----------------------------- | :----------------------------- | | Operating Activities | $23,103,164 | $(11,661,935) | | Investing Activities | $(23,417,837) | $16,082,801 | | Financing Activities | $(2,293,129) | $250,000 | | Net (Decrease) Increase in Cash & Restricted Cash | $(2,607,802) | $4,670,866 | | Effect of Exchange Rate Changes | $(6,734,387) | $997,982 | | Cash & Restricted Cash at End of Period | $159,333,818 | $148,189,483 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES](index=12&type=section&id=NOTE%201%20-%20ORGANIZATION%20AND%20PRINCIPAL%20ACTIVITIES) Kandi Technologies Group, Inc. is a Delaware-incorporated company headquartered in Jinhua City, China, operating as a leading producer of EV products, EV parts, and off-road vehicles for Chinese and global markets through its wholly-owned and partially-owned subsidiaries. The company recently established Hainan Kandi Holding New Energy Technology Co., Ltd. as a joint venture - Kandi Technologies Group, Inc. is a Delaware-incorporated company (March 31, 2004) headquartered in Jinhua City, Zhejiang Province, PRC[31](index=31&type=chunk)[32](index=32&type=chunk) - The company is a **leading producer** and manufacturer of electric vehicle (EV) products, EV parts, and off-road vehicles for Chinese and global markets[32](index=32&type=chunk) - In February 2022, Kandi Hainan and Jiangsu Xingchi Electric Technology Co., Ltd. formed a joint venture, Hainan Kandi Holding New Energy Technology Co., Ltd., with Kandi Hainan owning **66.7%**[32](index=32&type=chunk) [NOTE 2 - LIQUIDITY](index=13&type=section&id=NOTE%202%20-%20LIQUIDITY) The Company's working capital decreased by $14.3 million to $264.2 million as of June 30, 2022, compared to December 31, 2021. Cash and cash equivalents also decreased, while restricted cash and certificates of deposit increased. The Company primarily finances operations through short-term commercial bank loans from Chinese banks and operating activities, with sufficient cash for existing needs | Metric (USD) | June 30, 2022 | December 31, 2021 | | :---------------------- | :------------ | :---------------- | | Working Capital | $264,150,892 | $278,445,446 | | Cash and Cash Equivalents | $87,098,779 | $129,223,443 | | Restricted Cash | $72,235,039 | $39,452,564 | | Certificates of Deposit | $73,173,646 | $55,041,832 | - **Working capital decreased** by **$14,294,554** from December 31, 2021, to June 30, 2022[34](index=34&type=chunk) - The Company finances operations through short-term commercial bank loans from Chinese banks and ongoing operating activities, with **sufficient cash** to meet existing operational needs[35](index=35&type=chunk) [NOTE 3 - BASIS OF PRESENTATION](index=13&type=section&id=NOTE%203%20-%20BASIS%20OF%20PRESENTATION) The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim information, following SEC instructions for Form 10-Q. They include normal adjustments for fair presentation and are not necessarily indicative of full fiscal year results. The December 31, 2021 balance sheet is derived from audited statements - Financial statements are prepared in accordance with U.S. GAAP for interim information and SEC rules for Form 10-Q[36](index=36&type=chunk) - Interim operating results are not necessarily indicative of full fiscal year results[36](index=36&type=chunk) [NOTE 4 - PRINCIPLES OF CONSOLIDATION](index=13&type=section&id=NOTE%204%20-%20PRINCIPLES%20OF%20CONSOLIDATION) The Company's consolidated financial statements include Kandi Technologies Group, Inc. and its wholly-owned and partially-owned subsidiaries, such as Zhejiang Kandi Technologies, Kandi New Energy, Kandi Hainan, and SC Autosports. Kandi New Energy became a wholly-owned subsidiary in March 2022, and Hainan Kandi Holding, a new subsidiary, includes non-controlling interests - The consolidated financial statements reflect the accounts of Kandi Technologies Group, Inc. and its subsidiaries, including Continental Development Limited, Zhejiang Kandi Technologies, Kandi New Energy Vehicle Co. Ltd., Kandi Electric Vehicles (Hainan) Co., Ltd., Zhejiang Kandi Smart Battery Swap Technology Co., Ltd, Yongkang Scrou Electric Co, Ltd., SC Autosports (d/b/a Kandi America), China Battery Exchange (Zhejiang) Technology Co., Ltd., Kandi America Investment, LLC, Jiangxi Province Huiyi New Energy Co., Ltd., and Hainan Kandi Holding New Energy Technology Co., Ltd[37](index=37&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - **Effective** March 14, 2022, Kandi New Energy became a **wholly-owned subsidiary** of Zhejiang Kandi Technologies[39](index=39&type=chunk) - Hainan Kandi Holding, established February 15, 2022, has non-controlling interests of **33.3%** held by Jiangsu Xingchi[40](index=40&type=chunk) [NOTE 5 - USE OF ESTIMATES](index=15&type=section&id=NOTE%205%20-%20USE%20OF%20ESTIMATES) The preparation of financial statements requires management to make estimates and assumptions, including allowances for doubtful accounts, inventory valuation, impairment assessments, deferred tax assets, contingent consideration, and share-based compensation. These estimates are based on historical experience and other reasonable assumptions, and actual results may differ - Management makes **significant** accounting estimates for financial statements, including allowances for doubtful accounts, inventory valuation, impairment of long-lived and intangible assets, deferred tax assets, contingent consideration, and share-based compensation[42](index=42&type=chunk) - Estimates are based on historical experience and reasonable assumptions, but actual results may differ[43](index=43&type=chunk) [NOTE 6 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=15&type=section&id=NOTE%206%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The Company's significant accounting policies are detailed in 'Note 6 - Summary of Significant Accounting Policies' of its 2021 Form 10-K/A - **Significant** accounting policies are detailed in the Company's 2021 Form 10-K/A[44](index=44&type=chunk) [NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS](index=15&type=section&id=NOTE%207%20-%20NEW%20ACCOUNTING%20PRONOUNCEMENTS) The FASB issued ASU 2021-08, effective for fiscal years beginning after December 15, 2022, which requires contract assets and liabilities acquired in business combinations to be recognized and measured per Topic 606. The Company is currently evaluating its impact - ASU 2021-08, 'Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,' requires contract assets and liabilities acquired in business combinations to be recognized and measured in accordance with Topic 606[45](index=45&type=chunk) - The ASU is **effective** for fiscal years beginning after December 15, 2022, with early adoption permitted[45](index=45&type=chunk) - The Company is currently assessing the impact of this standard on its consolidated financial statements[45](index=45&type=chunk) [NOTE 8 - CONCENTRATIONS](index=15&type=section&id=NOTE%208%20-%20CONCENTRATIONS) The Company's revenue and purchases show customer and supplier concentrations. For Q2 2022, Customer A accounted for 10% of sales. For Q2 2021, Customers B, C, D, and E were significant. For H1 2022, no single customer exceeded 10% of revenue, while for H1 2021, Customers B and C were major. Supplier concentration was noted for Zhejiang Kandi Supply Chain Management Co., Ltd. and Massimo Motor Sports, LLC in H1 2021, but no single supplier exceeded 10% of purchases in Q2 2022 **Major Customers (Sales % of Consolidated Revenue)** | Customer | Q2 2022 | Q2 2021 | H1 2021 | | :------- | :------ | :------ | :------ | | Customer A | 10% | - | - | | Customer B | - | 24% | 18% | | Customer C | - | 22% | 16% | | Customer D | - | 12% | - | | Customer E | - | 10% | - | **Major Suppliers (Purchases % of Total Purchases)** | Supplier | Q2 2021 | H1 2022 | H1 2021 | | :------------------------------------------- | :------ | :------ | :------ | | Zhejiang Kandi Supply Chain Management Co., Ltd. | 60% | - | 57% | | ODES USA, Inc. | - | 13% | - | | Massimo Motor Sports, LLC | - | - | 12% | - For the six-month period ended June 30, 2022, there were no customers that **accounted for** more than **10%** of the Company's consolidated revenue[49](index=49&type=chunk) - For the three-month period ended June 30, 2022, there were no suppliers that **accounted for** more than **10%** of the Company's **total** purchases[51](index=51&type=chunk) [NOTE 9 - EARNINGS PER SHARE](index=17&type=section&id=NOTE%209%20-%20EARNINGS%20PER%20SHARE) The Company calculates basic and diluted earnings (loss) per share in accordance with ASC 260. For the three and six months ended June 30, 2022, approximately 900,000 options and 8,131,332 warrants were excluded from diluted EPS calculation because their average market price was below the exercise price - Basic and diluted earnings (**loss**) per share are calculated in accordance with ASC 260[55](index=55&type=chunk) - Approximately **900,000** options and **8,131,332** warrants were excluded from diluted EPS calculation for the three-month and six-month periods ended June 30, 2022, due to the average market price being below their exercise price[55](index=55&type=chunk) [NOTE 10 - ACCOUNTS RECEIVABLE](index=17&type=section&id=NOTE%2010%20-%20ACCOUNTS%20RECEIVABLE) Net accounts receivable decreased to $37.8 million as of June 30, 2022, from $52.9 million at December 31, 2021. The allowance for doubtful accounts remained stable at $2.9 million. The Company is currently involved in a lawsuit to collect approximately $19.4 million in overdue accounts receivable from a Former Affiliate Company, with the court having frozen sufficient capital | Metric (USD) | June 30, 2022 | December 31, 2021 | | :---------------------------- | :------------ | :---------------- | | Accounts Receivable | $40,698,376 | $55,949,582 | | Less: Allowance for Doubtful Accounts | $(2,903,505) | $(3,053,277) | | Accounts Receivable, Net | $37,794,871 | $52,896,305 | - In May 2022, Zhejiang Kandi Technologies and its subsidiaries filed a lawsuit against Former Affiliate Company for approximately **$19.4 million** in overdue accounts receivable[58](index=58&type=chunk) - The Company estimates a **high likelihood** of recovering the overdue amount, supported by the court freezing **sufficient capital**[58](index=58&type=chunk) [NOTE 11 - INVENTORIES](index=18&type=section&id=NOTE%2011%20-%20INVENTORIES) Total inventories increased to $41.9 million as of June 30, 2022, from $33.2 million at December 31, 2021. This increase was primarily in finished goods, which rose from $14.8 million to $24.1 million. Approximately $5.8 million of off-road vehicles and EV inventory held by SC Autosports was pledged as collateral for a short-term loan | Inventory Type (USD) | June 30, 2022 | December 31, 2021 | | :------------------- | :------------ | :---------------- | | Raw Material | $10,917,397 | $9,291,441 | | Work-in-Progress | $6,882,626 | $9,116,194 | | Finished Goods | $24,137,686 | $14,764,338 | | **Total Inventories**| **$41,937,709** | **$33,171,973** | - Approximately **$5.8 million** of off-road vehicles and EVs inventory held by SC Autosports was pledged as collateral for a **$1,450,000** short-term loan as of June 30, 2022[59](index=59&type=chunk) [NOTE 12 - PROPERTY, PLANT AND EQUIPMENT, NET](index=18&type=section&id=NOTE%2012%20-%20PROPERTY,%20PLANT%20AND%20EQUIPMENT,%20NET) Net property, plant, and equipment decreased to $102.7 million as of June 30, 2022, from $111.6 million at December 31, 2021. The Jinhua factory, which manufactures off-road vehicles, EV battery packs, and smart battery swap systems, completed relocation in April 2021. The Hainan factory is in trial production for EV products and off-road vehicles, with an expected annual output of 100,000 units | Metric (USD) | June 30, 2022 | December 31, 2021 | | :---------------------------- | :------------ | :---------------- | | Gross Cost | $143,267,317 | $148,894,701 | | Less: Accumulated Depreciation| $(40,531,399) | $(37,317,290) | | **Property, Plant and Equipment, Net** | **$102,735,918** | **$111,577,411** | - The Jinhua factory completed relocation in April 2021 and manufactures off-road vehicles, EV battery packs, electric scooters battery packs, smart battery swap systems, and some EV parts[62](index=62&type=chunk) - The Hainan factory is in trial production for EV products, EV parts, and electrical off-road vehicles, with an expected annual output of **100,000** units[62](index=62&type=chunk) [NOTE 13 - INTANGIBLE ASSETS](index=19&type=section&id=NOTE%2013%20-%20INTANGIBLE%20ASSETS) Net intangible assets decreased to $11.6 million as of June 30, 2022, from $13.2 million at December 31, 2021. These assets primarily include patents and technology, with amortization expenses of $493,400 for Q2 2022 and $1,007,569 for H1 2022 | Intangible Asset (USD) | June 30, 2022 | December 31, 2021 | | :--------------------- | :------------ | :---------------- | | Gross Carrying Amount | $15,849,185 | $16,648,369 | | Accumulated Amortization | $(4,242,497) | $(3,399,290) | | **Intangible Assets, Net** | **$11,606,688** | **$13,249,079** | - Aggregate amortization expenses were **$493,400** for the three months ended June 30, 2022, and **$1,007,569** for the six months ended June 30, 2022[65](index=65&type=chunk) [NOTE 14 - LAND USE RIGHTS, NET](index=20&type=section&id=NOTE%2014%20-%20LAND%20USE%20RIGHTS,%20NET) Net land use rights decreased to $3.04 million as of June 30, 2022, from $3.25 million at December 31, 2021. Amortization expenses for land use rights were $22,588 for Q2 2022 and $46,126 for H1 2022 | Metric (USD) | June 30, 2022 | December 31, 2021 | | :---------------------------- | :------------ | :---------------- | | Cost of Land Use Rights | $3,923,492 | $4,131,797 | | Less: Accumulated Amortization| $(881,631) | $(881,461) | | **Land Use Rights, Net** | **$3,041,861**| **$3,250,336** | - Amortization expenses for land use rights were **$22,588** for the three months ended June 30, 2022, and **$46,126** for the six months ended June 30, 2022[69](index=69&type=chunk) [NOTE 15 - OTHER LONG TERM ASSETS](index=21&type=section&id=NOTE%2015%20-%20OTHER%20LONG%20TERM%20ASSETS) Total other long-term assets increased slightly to $11.17 million as of June 30, 2022, from $10.99 million at December 31, 2021. This includes prepayments for Hainan land use rights and operating lease right-of-use assets for Jinhua, Jiangxi, and Hangzhou facilities. Amortization expenses for these assets were $53,051 for Q2 2022 and $108,336 for H1 2022 | Asset Type (USD) | June 30, 2022 | December 31, 2021 | | :---------------------------- | :------------ | :---------------- | | Prepayments for Land Use Right| $4,078,683 | $4,341,496 | | Right-of-Use Asset | $6,753,967 | $6,308,374 | | Others | $334,211 | $342,139 | | **Total Other Long-Term Asset** | **$11,166,861** | **$10,992,009** | - Amortization expense for prepayments for Hainan land use right was **$22,246** for Q2 2022 and **$45,429** for H1 2022[73](index=73&type=chunk) - Amortization expense for operating lease right-of-use assets (Jinhua and Jiangxi facilities) was **$30,805** for Q2 2022 and **$62,907** for H1 2022[74](index=74&type=chunk) [NOTE 16 - TAXES](index=22&type=section&id=NOTE%2016%20-%20TAXES) The Company's PRC subsidiaries generally face a 25% corporate income tax (CIT) rate, but several, including Zhejiang Kandi Technologies and Kandi Hainan, qualify as High and New Technology Enterprises (HNTE) or benefit from local preferred rates, reducing their CIT to 15%. The effective tax rate for H1 2022 was a 17.72% tax benefit on a pre-tax loss, compared to a 19.04% tax expense on pre-tax income in H1 2021. The Company has significant Net Operating Loss (NOL) carryforwards in the PRC, U.S., and Hong Kong - PRC subsidiaries generally have a **25%** CIT rate, but Zhejiang Kandi Technologies, Kandi Smart Battery Swap, Jiangxi Huiyi, Kandi Hainan, and Hainan Kandi Holding qualify for a **reduced 15% rate**[76](index=76&type=chunk) | Period (USD) | Effective Tax Rate | Pre-Tax (Loss) Income | | :----------------------- | :----------------- | :-------------------- | | Six Months Ended June 30, 2022 | 17.72% (Benefit) | $(4.2) million | | Six Months Ended June 30, 2021 | 19.04% (Expense) | $42.6 million | - The Company has tax-effected NOLs of **$8.2 million** (2021) and **$3.4 million** (2020) from PRC, Hong Kong, and U.S. entities, with varying carryforward periods[80](index=80&type=chunk) [NOTE 17 - LEASES AND RIGHT-OF-USE-ASSETS](index=23&type=section&id=NOTE%2017%20-%20LEASES%20AND%20RIGHT-OF-USE-ASSETS) The Company's operating lease right-of-use assets totaled $6.75 million and lease liabilities were $0.69 million as of June 30, 2022. This includes land use rights for Jinhua and Jiangxi facilities, and a new Hangzhou office lease. Operating lease expenses were $90,443 for Q2 2022 and $184,693 for H1 2022 - Operating lease right-of-use assets were **$6,753,967** and lease liability was **$693,699** as of June 30, 2022[85](index=85&type=chunk) - Operating lease expenses were **$90,443** for the three months ended June 30, 2022, and **$184,693** for the six months ended June 30, 2022[85](index=85&type=chunk) **Maturities of Lease Liabilities (USD) as of June 30, 2022:** | Year Ended December 31, | Lease Payable | | :---------------------- | :------------ | | 2023 | $222,885 | | 2024 | $231,131 | | 2025 | $239,683 | [NOTE 18 - CONTINGENT CONSIDERATION LIABILITY](index=24&type=section&id=NOTE%2018%20-%20CONTINGENT%20CONSIDERATION%20LIABILITY) The Company's contingent consideration liability, primarily related to the acquisition of Jiangxi Huiyi, was $5.51 million as of June 30, 2022, down from $7.81 million at December 31, 2021. This liability is for future share payments contingent on net income milestones, which were revised in June 2022 due to COVID-19 impacts. The fair value is estimated using the Monte Carlo simulation method and re-measured each reporting period | Metric (USD) | June 30, 2022 | December 31, 2021 | | :-------------------------------- | :------------ | :---------------- | | Contingent Consideration Liability| $5,513,000 | $7,812,000 | - The contingent consideration liability is related to the acquisition of Jiangxi Huiyi, with future share payments contingent on **net income** milestones[90](index=90&type=chunk)[92](index=92&type=chunk) - Conditions for annual profit targets and evaluation periods for Jiangxi Huiyi were revised in June 2022 due to COVID-19[90](index=90&type=chunk) [NOTE 19 - STOCK AWARD](index=25&type=section&id=NOTE%2019%20-%20STOCK%20AWARD) The Company grants restricted common stock to Board members, executives, and key employees as compensation. For Q2 2022, $616,765 in stock award expenses were recognized, compared to $1,406,531 in Q2 2021. For H1 2022, $639,690 was recognized, compared to $1,429,456 in H1 2021. The fair value of these awards is based on the closing stock price on the grant date and recognized over the service period | Stock Award Expenses (USD) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Employee Stock Award Expenses | $616,765 | $1,406,531 | $639,690 | $1,429,456 | - The Company compensates Board members, executives, and key employees with restricted common stock[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - The fair value of stock awards is determined by the closing price on the grant date and recognized over the requisite service period[95](index=95&type=chunk) [NOTE 20 - SUMMARIZED INFORMATION OF EQUITY METHOD INVESTMENT IN THE FORMER AFFILIATE COMPANY](index=26&type=section&id=NOTE%2020%20-%20SUMMARIZED%20INFORMATION%20OF%20EQUITY%20METHOD%20INVESTMENT%20IN%20THE%20FORMER%20AFFILIATE%20COMPANY) The Company fully divested its 22% equity interest in the Former Affiliate Company to Geely on March 9, 2021, for RMB 308 million (approximately $48 million). Consequently, there was no equity method investment or share of loss from this entity for the six months ended June 30, 2022, compared to a share of loss of $2,584,401 in H1 2021 - Zhejiang Kandi Technologies transferred its remaining **22%** equity interests in the Former Affiliate Company to Geely for RMB **308 million** (approximately **$48 million**) on March 9, 2021[100](index=100&type=chunk) | Metric (USD) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Investment in Former Affiliate Company, beginning of period | $- | $28,892,638 | | Gain from equity sale | $- | $17,733,911 | | Share of loss after tax of Former Affiliate Company | $- | $(2,584,401) | | Investment in Former Affiliate Company, end of period | $- | $- | [NOTE 21 - COMMITMENTS AND CONTINGENCIES](index=26&type=section&id=NOTE%2021%20-%20COMMITMENTS%20AND%20CONTINGENCIES) The Company has a guarantee for a $2.9 million bank loan for Nanlong Group Co., Ltd. (NGCL) but does not expect to incur losses. No Company assets were pledged for third-party loans. Kandi Technologies is involved in several ongoing shareholder class action and derivative lawsuits, primarily related to financial statement restatements and a Hindenburg Research report. While the Company believes these claims lack merit, the ultimate outcome is uncertain and could negatively impact financial condition or results - The Company provided a guarantee for a **$2,986,679** loan for Nanlong Group Co., Ltd. (NGCL) and does not expect to incur losses[102](index=102&type=chunk) - No Company land use rights or plants and equipment were pledged as collateral for third-party bank loans as of June 30, 2022[103](index=103&type=chunk) - Kandi Technologies is involved in ongoing shareholder class action and derivative lawsuits, alleging federal securities law violations related to financial statement restatements and claims from a Hindenburg Research report. The Company believes these claims are without merit but acknowledges the uncertain outcome could have a **negative financial impact**[106](index=106&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) [NOTE 22 - SEGMENT REPORTING](index=29&type=section&id=NOTE%2022%20-%20SEGMENT%20REPORTING) The Company operates as a single segment, with revenues and long-lived assets primarily in China and the US. For Q2 2022, overseas revenue increased while China revenue decreased, and off-road vehicles and lithium-ion cells became major product categories. For H1 2022, overseas revenue increased significantly, while China revenue decreased, with off-road vehicles and lithium-ion cells being the largest contributors - The Company has one operating segment, with revenue and long-lived assets **primarily derived** from and located in China and the US[113](index=113&type=chunk) **Revenue by Primary Geographical Markets (USD)** | Market | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 | | :------- | :----------- | :----------- | :----------- | :----------- | | Overseas | $10,446,475 | $6,180,582 | $21,182,850 | $14,048,008 | | China | $10,394,708 | $23,695,253 | $24,549,737 | $31,805,581 | | **Total**| **$20,841,183**| **$29,875,835**| **$45,732,587**| **$45,853,589**| **Revenue by Major Products (USD)** | Product Type | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 | | :----------------------------------------- | :----------- | :----------- | :----------- | :----------- | | EV parts | $588,775 | $6,680,515 | $4,256,553 | $13,048,846 | | EV products | $2,486,558 | $610,812 | $2,826,513 | $732,306 | | Off-road vehicles | $10,092,141 | $5,473,195 | $20,805,882 | $11,092,199 | | Electric Scooters, Self-Balancing Scooters, parts | $1,217,074 | $16,526,436 | $3,344,439 | $20,395,361 | | Battery exchange equipment and service | $83,153 | $584,877 | $108,664 | $584,877 | | Lithium-ion cells | $6,373,482 | $- | $14,390,536 | $- | | **Total** | **$20,841,183**| **$29,875,835**| **$45,732,587**| **$45,853,589**| [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and operational results, highlighting key performance indicators, strategic adjustments, and future outlook. It details revenue, gross profit, and net income/loss changes for both the three and six months ended June 30, 2022, compared to the prior year, and discusses liquidity and capital resources [Overview](index=30&type=section&id=Overview) This overview summarizes the company's financial performance, strategic initiatives, and market outlook for the period - For the six months ended June 30, 2022, **total revenue decreased** by **0.3%** to **$45,732,587**, **gross profit decreased** by **51.1%** to **$5,106,030**, and the Company recorded a **net loss** of **$3,494,665**, a **110.1% decrease** from **net income** in the prior year[120](index=120&type=chunk) - The Company achieved **steady growth** in pure electric off-road vehicles, developing new models like UTV, ATV, crossover golf carts, and go-karts, with crossover golf cart deliveries **increasing significantly**[121](index=121&type=chunk) - The Company is optimistic about the pure electric off-road vehicle market, projecting it to exceed **$2.2 billion** by 2028 with a **19% CAGR**, and plans to continue launching new models[121](index=121&type=chunk) - Due to the persisting COVID-19 situation in China and an unhealthy EV market, the Company will continue small-scale EV operations and expedite progress when the market stabilizes[121](index=121&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue, cost of goods sold, gross profit, and operating expenses for the reported periods [Comparison of the Three Months Ended June 30, 2022 and 2021](index=31&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202022%20and%202021) For Q2 2022, total revenue decreased by 30.2% to $20.8 million, primarily due to reduced sales of Electric Scooters and EV parts, despite significant growth in EV products and off-road vehicles. Gross profit declined by 55.4% to $2.7 million, with gross margin falling to 13.0% due to a higher concentration of lower-margin products like lithium-ion cells and aggressive pricing for new off-road vehicles. The Company reported a net loss of $1.9 million, a substantial decrease from net income in Q2 2021, largely due to the absence of a $48.3 million gain on disposal of long-lived assets recorded in the prior year | Metric (USD) | Q2 2022 | Q2 2021 | Change (Amount) | Change (%) | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------- | | Revenues, Net | $20,841,183 | $29,875,835 | $(9,034,652) | (30.2%) | | Cost of Goods Sold | $(18,122,316) | $(23,778,053) | $5,655,737 | (23.8%) | | Gross Profit | $2,718,867 | $6,097,782 | $(3,378,915) | (55.4%) | | (Loss) Income from Operations | $(6,281,583) | $44,369,455 | $(50,651,038) | (114.2%) | | Net (Loss) Income | $(1,875,652) | $40,929,474 | $(42,805,126) | (104.6%) | - Revenue from EV parts **decreased** by **91.2%** to **$588,775**, while EV products revenue **increased** by **307.1%** to **$2,486,558**, and off-road vehicles revenue **increased** by **84.4%** to **$10,092,141**[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - The **decrease** in **gross margin** to **13.0%** (from **20.4%** in Q2 2021) was **mainly** due to a **higher concentration** of **lower-margin** products like lithium-ion cells (**30.6%** of **total net revenue**) and **aggressive pricing** for new off-road vehicles in the US market[134](index=134&type=chunk)[142](index=142&type=chunk) - Research and development expenses **decreased** by **64.8%** to **$1,253,843** due to the completion of R&D expenditure for new products in the prior period[143](index=143&type=chunk) - General and administrative expenses **increased** by **22.7%** to **$6,574,079**, **primarily** due to **increased** depreciation and amortization expenses, despite **lower** stock compensation expenses[145](index=145&type=chunk) - The **absence** of a **$48,253,667 gain** on disposal of long-lived assets, recognized in Q2 2021 from the Jinhua Facility's relocation, was the **primary reason** for the **significant decrease** in **net income**[146](index=146&type=chunk)[156](index=156&type=chunk) [Comparison of the Six Months Ended June 30, 2022 and 2021](index=39&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202022%20and%202021) For H1 2022, total revenue remained comparable at $45.7 million, a slight decrease of 0.3%. Gross profit decreased by 51.1% to $5.1 million, with gross margin falling to 11.2%, driven by a product mix shift towards lower-margin lithium-ion cells and aggressive pricing for off-road vehicles. The Company reported a net loss of $3.5 million, a significant decline from net income in H1 2021, primarily due to the absence of a $48.3 million gain on disposal of long-lived assets recorded in the prior year. Operating expenses saw a substantial decrease in R&D but increases in selling, marketing, and general and administrative costs | Metric (USD) | H1 2022 | H1 2021 | Change (Amount) | Change (%) | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------- | | Revenues, Net | $45,732,587 | $45,853,589 | $(121,002) | (0.3%) | | Cost of Goods Sold | $(40,626,557) | $(35,401,456) | $(5,225,101) | 14.8% | | Gross Profit | $5,106,030 | $10,452,133 | $(5,346,103) | (51.1%) | | (Loss) Income from Operations | $(11,985,236) | $21,522,220 | $(33,507,456) | (155.7%) | | Net (Loss) Income | $(3,494,665) | $34,526,754 | $(38,021,419) | (110.1%) | - Revenue from EV parts **decreased** by **67.4%** to **$4,256,553**, while EV products revenue **increased** by **286.0%** to **$2,826,513**, and off-road vehicles revenue **increased** by **87.6%** to **$20,805,882**[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Lithium-ion cells generated **$14,390,536** in revenue in H1 2022, **accounting for 31.5%** of **total net revenue**, with no comparable sales in H1 2021 due to the acquisition of Jiangxi Huiyi in October 2021[168](index=168&type=chunk) - **Gross margin decreased** to **11.2%** (from **22.8%** in H1 2021) due to the product mix shift towards **lower-margin** lithium-ion cells and **aggressive pricing** for new off-road vehicles[176](index=176&type=chunk) - Research and development expenses **decreased significantly** by **90.5%** to **$2,394,429**, **primarily** due to the completion of new product R&D expenditure in the prior period[177](index=177&type=chunk) - The **absence** of a **$48,253,667 gain** on disposal of long-lived assets, recognized in H1 2021, was the **primary factor** for the **substantial decrease** in **net income**[180](index=180&type=chunk)[191](index=191&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=47&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) For H1 2022, cash provided by operating activities was $23.1 million, a significant improvement from cash used in H1 2021, driven by an increase in accounts payable. Cash used in investing activities was $23.4 million, mainly due to an increase in certificates of deposit. Cash used in financing activities was $2.3 million, primarily due to stock repurchases and net repayments of short-term loans. Working capital decreased by $14.3 million to $264.2 million | Cash Flow Activity (USD) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :----------------------- | :----------------------------- | :----------------------------- | | Operating Activities | $23,103,164 | $(11,661,935) | | Investing Activities | $(23,417,837) | $16,082,801 | | Financing Activities | $(2,293,129) | $250,000 | | Net (Decrease) Increase in Cash & Restricted Cash | $(2,607,802) | $4,670,866 | - Operating cash inflows in H1 2022 were **primarily driven** by an **increase** in accounts payable of **$32,751,997**[194](index=194&type=chunk) - Investing activities used cash **mainly** due to an **increase** of **$21,617,615** in certificates of deposit[195](index=195&type=chunk) - Financing activities used cash due to repayments of short-term loans (**$4,570,582**) and purchase of treasury stock (**$3,580,628**), partially offset by proceeds from short-term loans (**$5,070,582**)[195](index=195&type=chunk) - **Working capital decreased** by **$14,294,554** to **$264,150,892** as of June 30, 2022[196](index=196&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Company is exposed to various market risks, including foreign exchange risk due to RMB fluctuations, interest rate risk from cash holdings and loans, and inflation rate risk in China. Operations in China also entail economic and political risks. Credit risk is managed through credit approvals and prepayment requirements. The COVID-19 pandemic continues to pose significant risks to operations, supply chains, demand, and overall financial performance - The Company is exposed to foreign exchange risk due to fluctuations between the U.S. dollar and RMB, as most revenues and costs are RMB-denominated[197](index=197&type=chunk) - Interest rate risk **primarily relates** to interest income from cash and notes receivable, and interest expenses from fixed-rate short-term and long-term loans[200](index=200&type=chunk) - The Company faces inflation rate risk in China, with the monthly inflation rate **increasing** to **2.5%** in June 2022[201](index=201&type=chunk) - Operations in China are subject to economic and political risks, including changes in governmental policies and regulations[202](index=202&type=chunk) - Credit risk is managed through credit approvals, limits, monitoring, and requiring prepayments from customers[204](index=204&type=chunk) - The COVID-19 pandemic continues to adversely affect operations, supply chains, demand, and financial performance, with the **full extent** of impact remaining uncertain[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2022, the CEO and CFO concluded that the Company's disclosure controls and procedures were effective, providing reasonable assurance that information required for SEC reports is recorded, processed, summarized, and reported timely. There were no material changes to internal control over financial reporting during the period - As of June 30, 2022, the CEO and CFO concluded that the Company's disclosure controls and procedures were **effective**[208](index=208&type=chunk) - Disclosure controls and procedures are designed to ensure timely and accurate reporting of information required by the Exchange Act[209](index=209&type=chunk) - No **material changes** to internal control over financial reporting occurred during the period covered by the report[210](index=210&type=chunk) [PART II — OTHER INFORMATION](index=52&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section details legal proceedings, risk factors, unregistered equity sales, and a comprehensive list of all filed exhibits [Item 1. Legal proceedings](index=52&type=section&id=Item%201.%20Legal%20proceedings) The Company is involved in legal matters arising in the ordinary course of business. For detailed discussions of legal proceedings, including a lawsuit for overdue accounts receivable and various shareholder actions, refer to Note 10 and Note 21 of the financial statements - The Company is involved in legal matters arising in the ordinary course of business[211](index=211&type=chunk) - **Detailed discussions** of legal proceedings are incorporated by reference from Note 10 (Accounts Receivable) and Note 21 (Commitments and Contingencies) of the financial statements[211](index=211&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) For a comprehensive discussion of risks and uncertainties affecting the Company's business, financial condition, results of operations, cash flows, strategies, or prospects, refer to Item 1A of the 2021 Form 10-K/A - Refer to Item 1A of the 2021 Form 10-K/A for a discussion of risk factors regarding the Company's business and operations[212](index=212&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company repurchased a total of 749,138 shares of common stock at an average price of $2.63 per share during the second quarter of 2022, under a board-authorized program to repurchase up to $20 million worth of common stock - The board of directors authorized the repurchase of up to **$20 million** worth of the Company's common stock on December 1, 2021[213](index=213&type=chunk) **Issuer Purchases of Equity Securities (Q2 2022)** | Period | Total Shares Purchased | Average Price Paid Per Share | | :------------------ | :--------------------- | :--------------------------- | | April 1 to April 30, 2022 | 456,000 | $2.72 | | May 1 to May 31, 2022 | 293,138 | $2.50 | | June 1 to June 30, 2022 | - | $- | | **Total** | **749,138** | **$2.63** | - As of June 30, 2022, **$14,064,215 remained available** for repurchase under the program[214](index=214&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including a supplementary agreement to the share transfer agreement, certifications of principal executive and financial officers, and Inline XBRL documents - Exhibits include the English Translation of the No. 2 Supplementary Agreement to the Share Transfer Agreement dated June 20, 2022[215](index=215&type=chunk) - Certifications of Principal Executive Officer and Principal Financial Officer are provided pursuant to Rule 13a-14(a)/15d-14(a) and 18 U.S.C. § 1350[215](index=215&type=chunk)[216](index=216&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) and the Cover Page Interactive Data File are included[216](index=216&type=chunk)