Watching the horrific wildfires in Maui and the people running for their lives might have you wondering what you would do if your home were in imminent danger.
Killexams CEMAP-1 Exam Braindumps includes latest syllabus of Certificate in Mortgage Advice and Practice (CeMAP 1 UK) 2024 exam with up-to-date exam contents | Actual Questions - Mahfia.tv
CEMAP-1 PDF Dump DetailOur products includes CEMAP-1 PDF and VCE;
We offer Financial CEMAP-1 Exam Braindumps containing actual CEMAP-1 exam questions and answers. These Exam Braindumps are very useful in passing the CEMAP-1 exams with high marks. It is money back guarantee by killexams.com
These CEMAP-1 questions and answers are in PDF files, are taken from the actual CEMAP-1 question pool that candidate face in actual test. These real Financial CEMAP-1 exam QAs are exact copy of the CEMAP-1 questions and answers you face in the exam.
CEMAP-1 Practice Test uses the same questions and answers that are provided in the actual CEMAP-1 exam pool so that candidate can be prepared for real test environment. These CEMAP-1 practice tests are very helpful in practicing the CEMAP-1 exam.
CEMAP-1 Exam Braindumps are updated on regular basis to reflect the latest changes in the CEMAP-1 exam. Whenever any change is made in actual CEMAP-1 test, we provide the changes in our CEMAP-1 Exam Braindumps.
Here you can find complete Financial exam collection where Exam Braindumps are updated on regular basis to reflect the latest changes in the CEMAP-1 exam. All the sets of CEMAP-1 Exam Braindumps are completely verified and up to date.
Killexams.com CEMAP-1 Exam Braindumps contain complete question pool, updated in May 2024 including VCE exam simulator that will help you get high marks in the exam. All these CEMAP-1 exam questions are verified by killexams certified professionals and backed by 100% money back guarantee.
A growing number of firms across the U.S. wealth management industry see hiring and developing talent with the certified financial planner (CFP) designation as an important part of their competitive strategy, especially as their clients demand deeper and more personalized planning experiences.
The approach makes a lot of sense, experts agree, as many in the public and in the industry view the CFP mark as one of the most important credentials a professional can attain when it comes to proving and maintaining their knowledge of the most important financial planning skills.
Advisors say that studying for the test and obtaining the CFP designation is a great way to obtain comprehensive planning knowledge that can then be applied toward building a practice or serving clients, depending on which area of the financial services profession one operates in.
In this sense, the focus on getting more CFPs in the door should come as no surprise, nor should the expanding efforts of firms to encourage their staffers to pursue the designation.
In fact, in the view of Penny Pennington, managing partner at Edward Jones, getting more CFP talent into the firm’s many branches is an essential strategy for the future, so much so that the firm has declared the goal of becoming the advisory organization with the most CFPs under one brand in the United States.
“We managed to get 600 CFPs through the program last year,” Pennington recently told ThinkAdvisor. “We have more than that are registered this year, and our goal is to have more than 4,000 CFPs on board by the end of the year.”
Pennington says she is particularly proud of the racial and gender diversity of the firm’s CFP talent, and she counts herself among the group of industry leaders who see the CFP Board’s efforts to improve the diversity of certificants as a critical initiative for the advisor industry as a whole.
“We all know from the pace of demographic change in our country that the next two generations of investors are going to be so much more diverse, and the advisory industry must change to reflect that,” Pennington says.
See the slideshow for information about eight firms that responded to an informal survey from ThinkAdvisor with information about their CFP representation. Rather than providing an apples-to-apples comparison, the list instead demonstrates the broad and deepening interest in the CFP designation among leading advisory shops.
CHF 10 MILLION IN FINANCIAL SUPPORT FOR SIKA’S INNOVATIVE CONCRETE RECYCLING TECHNOLOGY
Sika’s innovative reCO2ver® technology is now receiving targeted support as part of a climate protection program. The technology involves a novel concrete recycling process that allows old concrete to be entirely reused while facilitating the sequestration of CO2. To support the use of the technology, Switzerland’s Climate Cent Foundation is guaranteeing the purchase
of CO2 certificates from the program for an initial amount of CHF 10 million.
Almost 40% of global CO2 emissions are attributable to the construction and building sector. Around 30 billion tons of concrete are produced each year, with demand continuing to increase. Although cement as a binding agent and concrete as a composite are important construction materials, producing them has an impact on climate change. According to estimates, the cement industry alone is responsible for more than 8% of global greenhouse gas emissions. With reCO2ver®, Sika has developed an innovative technology that is unique in the concrete sector and makes it possible to completely recycle concrete demolition waste. reCO2ver® is one of Sika’s many research and development activities focused on advancing the transformation of the construction industry toward greater sustainability.
17,000 TONS OF CO2 SEQUESTRATION IN WASTE CONCRETE BY END 2030
Sika’s reCO2ver® technology not only separates old concrete into the high-quality individual components of gravel, sand, and cement stone; it can also bind additional CO2 through a chemical process. Around 15 kilograms of CO2 per tons of concrete demolition waste can be stored over the long term. On top of this, the performance of the cement stone powder produced during this process is optimized using Sika additives. This allows it to be repurposed as a substitute for cement in concrete production. A pilot facility has been operating in Switzerland since October 2021, and the test phase has now been completed successfully.
In order to be able to document the climate-added-value benefits of the reCO2ver® facilities on a standardized basis, Sika is working with South Pole on the development of a climate protection program aligned with the requirements of the Federal Office for the Environment (FOEN). A significant milestone in the implementation and use of this technology for CO2 capture and storage has now been achieved: Switzerland’s Climate Cent Foundation is guaranteeing the purchase of CO2 certificates from the program for an initial amount of CHF 10 million by the end of 2030.
The implementation of the industrial facilities is a central pillar of the certified climate protection program. By the end of 2030, the aim is to have stored approximately 17,000 tons of CO2 in concrete demolition waste. This is roughly equivalent to the amount of CO2 emissions produced during the construction of 850 concrete single-family homes.
Philippe Jost, Head Construction Sika: “Thanks to our innovative strength and sustainable technologies, we enable our customers in the construction and automotive sectors to reduce their ecological footprint. This drives the transformation toward greater sustainability. We are delighted that the reCO2ver® technology is being recognized through targeted support, and we are convinced that we are delivering significant added value to the construction industry, the environment, and future generations.”
CONTACT
Dominik Slappnig
Corporate Communications &
Investor Relations
+41 58 436 68 21
slappnig.dominik@ch.sika.com
SIKA CORPORATE PROFILE
Sika is a specialty chemicals company with a globally leading position in the development and production of systems and products for bonding, sealing, damping, reinforcing, and protecting in the building sector and motor vehicle industry. Sika has subsidiaries in 103 countries, manufactures in over 400 factories, and develops innovative technologies for customers around the world that facilitate the sustainable transformation of the construction and transportation industries. With more than 33,000 employees, the company generated annual sales of CHF 10.5 billion in 2022.
The media release can be downloaded from the following link:
Media Release
It's no secret that many physicians question the value of Maintenance of Certification (MOC) requirements and are concerned about the amount of time, effort, and money the process takes. Now, they and at least two cardiology societies are starting to speak up.
MOC is an initiative from the American Board of Internal Medicine (ABIM) that requires an initial certification that costs thousands of dollars and must be repeated every 10 years. Annual MOC requirements involve tests that cost $220 for the first certificate a physician holds and about $120 for each subsequent one.
Interventional cardiologists (ICs) and other subspecialists have additional fees and requirements.
On July 21, hematologist-oncologist Aaron Goodman, MD, an associate professor at the University of California, San Diego, posted a petition on behalf of ABIM diplomates. It calls on ABIM to eliminate the MOC requirement because it is "burdensome," "costly," and "complex and time-consuming."
As of August 22, the petition had garnered more than 18,000 signatures.
Goodman recently debated ABIM President and Chief Executive Officer Richard J. Baron, MD, in a Healthcare Unfiltered podcast. Before the debate, host Chadi Nabhan, MD, MBA, tweeted that he could not find a single physician who would defend the MOC and recertification.
The debate touched on Topics such as fees, evidence of value, the certification test format, and the cost and requirements to maintain more than one board certification. Overall, Goodman made the analogy to giving a patient chemotherapy: Because there are harms, he better know that there are also benefits. He cited that the harms associated with MOC include "financial toxicity, time toxicity, and stress toxicity," with the latter being particularly toxic to him personally.
Though the podcast gave both participants ample opportunities to express their views, it's not clear that either participant persuaded the other.
Cardiologists who are unhappy with MOC are speaking up on X (formerly Twitter). IC Matthew Sample, MD, listed five things he's done to Improve his practice since IC graduation, for which he received no MOC points.
In response, internist Artem Minalyan, MD, asked, "Hypothetically, if Dr Baron required an IC procedure, I wonder if he would request you to get all your MOC points prior to consenting."
Some professional societies have responded to the ABIM's threat to revoke the certifications of cardiologists who don't participate in periodic MOC activities.
The Society for Cardiovascular Angiography & Interventions (SCAI) published its "Position on ABIM Revocation of Certification for Not Participating in MOC." In it, SCAI states that ABIM diplomates who pass their exams and report procedural volumes as required should be "indisputably" recognized as "certified" for the relevant time frame (eg, 10 years), regardless of whether they participate in any other MOC activities.
SCAI President George D. Dangas, MD, PhD, told theheart.org | Medscape Cardiology that "Many of our members have expressed their frustration surrounding the confusion regarding their MOC requirements, including myself. We felt that this confusion could endanger the certified status of members, which would inevitably impact patient care, which is our greatest concern."
The society has received an "overwhelmingly positive response" to its statement, he said. "Our hope is that ABIM will consider simpler, transparent regulations that are reflective of the feedback received from their constituents."
In response to the COVID-19 pandemic, ABIM extended the deadline for diplomates whose certificate expired in 2020 or 2021 until the end of 2022; Dangas suggests that ABIM further extend the deadline to enroll in or renew your MOC to the end of 2024 and that ABIM should "develop a recertification program that can be explained in a single slide/page."
Other subspecialty groups are following SCAI's lead including the EP Advocacy Foundation, and the Heart Rhythm Society (HRS).
The ABIM touts the value of MOC on its website, stating: "There is compelling evidence showing that MOC improves value of care without sacrificing quality and that board certified physicians command higher salaries."
Alternative options that are arguably less arduous are available.
In collaboration with ABIM, the American College of Cardiology (ACC) launched the ABIM/ACC Collaborative Maintenance Pathway (CMP) in 2019 as an alternative MOC assessment option.
The CMP "focuses on one or a small group of Topics within cardiology each year, incorporating learning activities as well as a pre-/post-formative knowledge assessment," Janice Sibley, ACC's executive vice president of Education and Publishing told theheart.org | Medscape Cardiology. The program continues to evolve, she said.
In 2022, she noted that the ACC increased the flexibility of the CMP by removing the 7-hour learning engagement requirement, allowing users to choose how much time to spend learning in the CMP program. They also extended the performance assessment windows from 7 to 9 days each, covering 2 weekends for each.
She said that to date, more than "6400 learners" are enrolled in the CMP program.
Though the collaboration seems to make MOC less onerous, some cardiologists think it makes the ACC "complicit."
A certification program that is independent of the ABIM launched in 2015. The National Board of Physicians and Surgeons (NBPAS) is a nonprofit organization led by an advisory board of unpaid physicians (including Medscape's editor-in-chief, Eric Topol, MD). NBPAS seems to be gaining momentum and acceptance.
Cardiologist Melissa Walton-Shirley, MD, recounted her recertification experience with the NBPAS late last year. She now maintains a "hybrid" certification with both ABIM and NBPAS. Though she wants to support the latter, she found that the alternative certification option still requires an initial ABIM certification and is not recognized in all states or by many insurers and hospitals.
Will MOC ever disappear? Sibley said that the ACC is always looking to Improve and enhance their offerings. "It is time to lead a change in the conversation from certification to continuous competency, from punitive to supportive options, from random knowledge testing to focused assessing knowledge gaps and lifelong learning. This will require innovation, technology, and new ways of thinking that offer cardiologists flexibility, relevance, and value and ultimately benefit the patients they serve."
Many physicians, including cardiologists, are hoping that the Goodman petition and further pressure from professional societies may finally translate into action.
Medscape LLC provides educational content including MOC. Medscape's editorial content, including news, features is developed independently of the educational content available on Medscape.
Follow Marilynn Larkin on Twitter: @MarilynnL.
For more from the heart.org | Medscape Cardiology, follow us on Twitter and Facebook
Climate change has put many people in the path of major natural disasters. Fires, floods, hurricanes and wind storms are devastating communities.
As of Tuesday, there had been 15 confirmed weather/climate disaster events in the United States this year with losses exceeding $1 billion each, according to the National Centers for Environmental Information. Damage from 2022 disasters totaled $165.1 billion.
Swift-moving wildfires, fanned by winds from Hurricane Dora, have killed dozens in Maui. Video and photos show burned homes and businesses. Lahaina, a popular tourist destination in western Maui, was hard hit.
Right now, displaced residents are focusing on their basic needs — shelter and food.
However, many may soon face a new challenge — recovering pay stubs, insurance papers, bank statements and any of the other financial records that are the bane of our modern-day existence. Many businesses have been destroyed, raising the possibility of lost work records, too.
The disaster in Hawaii is just the latest reminder to get our financial houses in order. Here’s what you should do.
Get a safe that’s waterproof, fire-resistant and light enough to carry. Keep all your household’s important financial documents in this box, including your passport; insurance policies; extra checks; a copy of your driver’s license; your Social Security card (or at least write down the number); bank, investment and credit card account numbers; and key legal documents such as wills, marriage and birth certificates, and the titles to your home and vehicles.
You should include some cash or traveler’s checks. If the electricity goes out, as it has in many areas in Maui, ATMs may not work and you might not be able to use a credit or debit card to make purchases.
Keep the original receipts of major purchases in the safe, as proof of what you spent.
In addition to keeping your paperwork in a safe, make photocopies of your documents and place them in a safe-deposit box or deliver them to a trusted relative or friend who does not live in the same area you do.
You can also back up your data to cloud-based services such as Google Drive or Apple’s iCloud. Be sure to consistently back up your data to the cloud.
With your smartphone, take pictures of your big-screen televisions, computers, furniture, heirlooms, etc. You want proof of the expensive stuff you own.
You might also want to record a video of the items in your home. Record model and serial numbers. Then, of course, download it for safekeeping in the event you have to prove to an insurance company what items you lost in a disaster.
Part of your disaster plan should be determining whether you’re carrying the right amount of insurance.
Now is the time to evaluate whether you have enough coverage. Call your insurance agent. Will your policy replace the full value of your possessions?
Do you have life insurance?
Many people neglect to get disability insurance. If you were injured in a natural disaster, would you be able to live off your savings? Buy enough disability insurance to replace 60 to 70 percent of your income.
What if your home is flooded?
Homeowners and renters insurance do not typically cover flood damage; coverage must be purchased separately. Even if you’re not in a high-flood-risk area, you may still need supplemental coverage.
The National Flood Insurance Program, managed by the Federal Emergency Management Agency, helps you purchase flood insurance from an insurance company or agent. If you need help finding a provider, go to floodsmart.gov/find or call 877-336-2627.
Just one inch of floodwater can cause up to $25,000 in damage, according to the NFIP.
On average, flooding causes more than $5 billion in damage nationwide each year, according to the NFIP. Hurricane Ian alone resulted in more than 46,000 claims and $1.5 billion in policy coverage.
You have to plan ahead, because typically there is a 30-day waiting period for an NFIP policy to go into effect, unless the coverage is mandated.
For information on flood insurance, go to floodsmart.gov.
Homeowners with mortgages have to carry homeowners insurance, but renters often neglect to protect themselves.
If you are renting, get renters insurance — the insurance your landlord carries does not cover damage to your personal possessions.
Natural disasters are only getting worse with climate change. It’s wise to be prepared in case your home or community is hit.
Q: My neighbor donated some books and videos to the library. Can my neighbor take a deduction on the Michigan tax return?
A: There is no tax credit or deduction for donations to a library on the Michigan tax return.
Q: Is there a maximum age at which I will be forced to file for my Social Security benefits?
A: No, the Social Security Administration will not compel you to take your benefits. Taking benefits ahead of full retirement age (FRA) will result in a permanent reduction, postponing benefits past your FRA will increase your benefits by 8% per year up to age 70. Waiting beyond age 70 makes no sense because you could lose some monthly benefits. If you forget to file upon turning 70, you can apply for retroactive benefits up to six months.
Q: Can my Social Security check be garnished by a creditor?
A: Private creditors cannot garnish Social Security checks but the federal government can. If you defaulted on a VA or student loan or you owe money to the IRS or Medicare or are required to pay child support, then the federal government can garnish part of your Social Security check. The garnishment is usually 15% but could be as high as 60% for child support.
Q: What is the definition of the primary insurance amount (PIA) that the Social Security Administration calculates?
A: The primary insurance amount (PIA) is the Social Security benefit that you would receive at your full retirement age (FRA). Your benefits are reduced if you receive benefits earlier and are increased by 8% per year up to age 70 if you start benefits after your FRA.
Q: I am applying for a mortgage and need my tax returns for the last two years. How do I get them from the Internal Revenue Service?
A: Copies of your tax returns are generally available for the current tax year and as far back as six years. The fee per tax year is $43. Complete and mail form 4506 to request a copy of your tax return. Most lenders will accept a tax return transcript. A tax return transcript shows most line items and is free. You can request a transcript online, by phone or mail.
Q: Can I borrow money from my IRA?
A: No, there is no such thing as an IRA loan.
Q: If I lose Social Security benefits due to the earnings test, are they permanently lost?
A: No, the Social Security benefits are not permanently lost. The withheld amount will be restored as a delayed retirement credit, which will increase your Social Security benefits once you reach full retirement age (FRA).
Q: What is the earnings test for Social Security benefits?
A: The earnings test determines how much of your Social Security benefits are reduced when you have wages. The reduction depends on your age. If you are under full retirement age (FRA) for all of 2023, you would forfeit $1 in benefits for every $2 earned over $21,240. For example, if you applied for Social Security at 62 and earned $40,000 this year, you would lose $9,380 in benefits ($40,000 – $21,240 = $18,760 ; $18,760/2 = $9,380). There is no earnings test for wages after you reached FRA.
Q: When are estimated taxes due?
A: The year is divided into four payment periods, or due dates. Those dates generally are April 15, June 15, Sept. 15 and Jan. 15 (next tax year). Form 1040ES provides the instructions, worksheets, schedules and payment vouchers. The easiest way to pay estimated taxes is electronically through the Electronic Federal Tax Payment System or EFTPS. You can also pay estimated taxes by check or money order using the payment voucher that comes with form 1040ES.
Q: My uncle passed away two years ago and I believe there is an unclaimed insurance policy covering my uncle. How do I check for the missing insurance policy? If it exists how do I make a claim?
A: If you know the name of the insurance company contact them. If you do not know the name contact the large insurance companies, AIG, John Hancock, MetLife, Nationwide and Prudential. Several insurance companies have online tools for finding lost policies. Use the site, missingmoney.com, to search for missing insurance policies. After a lost policy is found, you need to provide a death certificate and proper beneficiary proof to claim the insurance.
Q: I have a ROTH IRA valued at $166,000. My total contributions were $77,000 with the balance being investment earnings. Can I take out the $77,000 anytime without penalty?
A: Yes, your contributions can be taken anytime without penalty. The investment earnings would incur a 10% penalty and be taxable if withdrawn before 59½ or if the account is under five years old. There are some exceptions to the 10% penalty such as payment for education, paying for a first-time home purchase and if you become disabled. If you’ve met the five-year holding requirement, and you are older than 59½ you can withdraw money from a Roth IRA with no taxes or penalties.
• IRS Help (800) 829-1040 • MI Help (517) 636-4486
• IRS Forms (800) 829-3676 • MI Forms (517) 636-4486
• IRS Refund Info. (800) 829-4477 • MI Refund Info. (517) 636-4486
• irs.gov
• michigan.gov/incometax
Richard Rysiewski, a Certified Financial Planner, welcomes all questions on tax and financial matters. Please send to Richard Rysiewski, Financial Doctor, 3001 Hartford Lane, Shelby Twp., MI 48316.
Section 871(m) treats payments under equity derivative contracts that reference U.S.-source dividends as if they are equivalent to U.S.-source dividends, potentially triggering a U.S. withholding tax.
Reg. section 1.871-15(q) interprets section 871(m) to exempt qualified derivatives dealers (QDDs) from tax and withholding requirements if overwithholding would occur. Published September 12, 2022, Notice 2022-37, 2022-37 IRB 234, delays the applicability date of some of the QDD provisions.
Dividend equivalents treated as U.S.-source dividend income are subject to a 30 percent U.S. tax when received by nonresident alien individuals and foreign corporations. The tax must be withheld by the dividend equivalent payer.
Final regs published in T.D. 9734 on September 18, 2015, generally became effective on that date. Those regs were revised and supplemented by final regs published January 24, 2017 (T.D. 9815), and December 17, 2019 (T.D. 9887).
The regs provide guidance to NRAs and foreign corporations holding financial products that provide for payments contingent upon, or determined by reference to, U.S.-source dividend payments. They also provide guidance to withholding agents responsible for withholding U.S. tax on dividend equivalent payments.
This article covers the guidance for QDDs in reg. section 1.871-15(q). Previous articles covered:
Section 871(m)nder section 871(a)(1), U.S.-source income of an NRA (other than capital gains) that is not connected with a U.S. business is subject to a 30 percent tax. This includes U.S.-source dividend income. Section 871(m)(1)-(7) addresses treatment under section 871(a) of dividend equivalents paid to an NRA. Reg. section 1.881-2(b)(3) directs taxpayers to section 871(m) and regs for rules applicable to dividend equivalents paid to foreign corporations.
The general rule in paragraph (m)(1) is that a dividend equivalent is treated as a U.S.-source dividend subject to the 30 percent tax. Paragraph (m)(2) generally defines a dividend equivalent as a payment contingent upon, or determined by reference to, a U.S.-source dividend. The descriptions in subparagraphs (m)(2)(A)-(C) are:
(A) any substitute dividend made under a securities lending or sale-repurchase transaction that is directly or indirectly contingent on, or determined by reference to, the payment of a dividend from U.S. sources;
(B) any payment made under a specified notional principal contract (NPC) that is directly or indirectly contingent on, or determined by reference to, the payment of a dividend from U.S. sources; and
(C) any other payment determined by the secretary to be substantially similar to a payment described in subparagraph (A) or (B).
The definition of specified NPC in paragraph (m)(3) is divided between payments made before and those made after the date that is two years after the March 18, 2010, enactment date of subsection (m) in the Hiring Incentives to Restore Employment Act.
Under the temporary definition in subparagraph (m)(3)(A) for payments made before March 18, 2012, a specified NPC has one of the following characteristics described in clauses (i)-(v):
(i) for entering into the contract, a long party transfers the underlying security to a short party;
(ii) for terminating the contract, a short party transfers the underlying security to a long party;
(iii) the underlying security is not readily tradable on an established securities market;
(iv) for entering into the contract, the underlying security is posted as collateral by a short party with a long party; or
(v) the contract is identified by the secretary as a specified NPC.
Under the definition in subparagraph (m)(3)(B) for payments made after March 18, 2012, all NPCs are specified NPCs unless the secretary determines that the contract does not have the potential for tax avoidance.
Subparagraph (m)(4)(A) defines long party as a party to the contract entitled to receive a payment that is contingent upon, or determined by reference to, the payment of a dividend from sources within the United States on the underlying security. Subparagraph (m)(4)(B) defines short party as a party to the contract that is not a long party.
Subparagraph (m)(4)(C) defines underlying security as the security requiring the dividend payment referred to in subparagraph (m)(2)(B). An index or fixed basket of securities is treated as a single security.
Under paragraph (m)(5), a payment includes a gross amount used in computing the net amount that is transferred to or from the taxpayer.
To prevent overwithholding on a chain of dividends or dividend equivalents, paragraph (m)(6) allows the secretary to reduce tax to the extent the taxpayer can establish that tax has been paid on another dividend equivalent in the chain, is not otherwise due, or is appropriate to address the role of financial intermediaries in the chain. This concern is addressed by the QDD provisions in reg. section 1.871-15(q)(1)-(5).
Paragraph (m)(7) describes coordination with withholding requirements under chapters 3 (sections 1441-1464) and 4 (sections 1471-1474). Each person that is a party to a contract or other arrangement that provides for the payment of a dividend equivalent is treated as having control of the payment.
The practical effect of section 871(m) is to change the source of a dividend equivalent payment from non-U.S. to U.S. The payment’s source is determined by the underlying U.S. security rather than the long party’s residence.
Reg. Section 1.871-15Reg. section 1.871-15(a)-(r) interprets section 871(m). The guidance includes:
Subparagraphs (a)(1)-(15) provide definitions, some of which are particularly relevant to the application of the QDD rules in paragraph (q).
Subparagraph (a)(1) defines a broker by cross-reference to its meaning in section 6045(c), except that it does not include any corporation that is a broker solely because it regularly redeems its own shares.
Subparagraph (a)(4) defines an ELI as a financial transaction (other than a securities lending transaction, sale-repurchase transaction, or NPC) that references the fair market value of one or more underlying securities — for example, a futures contract, forward contract, option, debt instrument, or other contractual arrangement that references the FMV of one or more underlying securities.
Subparagraph (a)(5) defines an initial hedge as the number of underlying security shares that a short party would need to fully hedge an NPC or ELI (whether the NPC or ELI is a complex contract or simple a contract benchmark within the meaning of subparagraph (h)(2)) at the calculation time for the NPC or ELI, even if the short party does not, in fact, fully hedge the NPC or ELI.
Subparagraph (a)(7) defines an NPC by cross-reference to its meaning in reg. section 1.446-3(c).
Subparagraph (a)(9) provides a multifaceted definition of transaction parties. A long party is entitled to receive a dividend equivalent, and a short party is obligated to pay a dividend equivalent. A party includes a long or short party, an agent acting on behalf of a long or short party, and a transaction intermediary.
If a potential section 871(m) transaction references more than one underlying security, the long party and short party are determined separately for each underlying security. A person is both a long and a short party when it is:
Subparagraph (a)(12) defines a section 871(m) transaction as a securities lending transaction, sale-repurchase transaction, specified NPC, or specified ELI. A potential section 871(m) transaction is a securities lending or sale-repurchase transaction, NPC, or ELI that references one or more underlying securities.
Subparagraph (a)(14) distinguishes between simple and complex contracts. A simple contract is an NPC or ELI that, for each underlying security, allows all amounts to be paid or received on the maturity, exercise, or other payment date to be calculated by reference to a single, fixed number of shares.
This assumes that the number of shares can be ascertained at the calculation time of the contract and that there is a single maturity or exercise date for which all amounts (other than upfront or periodic payments) are required to be calculated for the underlying security. A complex contract is generally an NPC or ELI that is not a simple contract.
Subparagraph (a)(15) defines an underlying security as an interest in an entity if that interest could deliver rise to a U.S.-source dividend under reg. section 1.861-3. If a potential section 871(m) transaction references an interest in more than one entity or different interests in the same entity, each referenced interest is a separate underlying security.
Paragraph (b) repeats the general rule in section 871(m)(1) that treats a dividend equivalent as a dividend from sources within the United States in applying:
Subparagraph (c)(1) describes payments that are dividend equivalents, and subparagraph (c)(2) provides exceptions.
Subdivisions (c)(1)(i)-(iv) define a dividend equivalent as a payment that:
Specified NPCs. Paragraph (d) defines specified NPCs. Subparagraph (d)(1) generally repeats the conditions in the temporary definition in section 871(m)(3)(A) and applies them to payments made after March 18, 2012, and before January 1, 2017.
Subparagraph (d)(2) applies to specified NPCs entered into on or after January 1, 2017, and treats simple and complex NPCs differently.
Under subdivision (d)(2)(i), a simple NPC that has a delta of 0.8 or greater in an underlying security at the calculation time is a specified NPC. Under subdivision (d)(2)(ii), a complex NPC that meets the substantial equivalence test in paragraph (h) at the calculation time is a specified NPC.
Specified ELIs. Paragraph (e) defines specified ELIs. Under subparagraph (e)(1), a simple ELI that has a delta of 0.8 or greater at the calculation time is a specified ELI. Under subparagraph (e)(2), a complex ELI that meets the substantial equivalence test in paragraph (h) at the calculation time is a specified ELI.
The delta calculation applies to determine whether simple NPCs and ELIs are specified. The substantial equivalence test applies to make this determination for complex NPCs and ELIs.
Delta. The delta calculation covered in subparagraphs (g)(1)-(5) determines whether a simple contract is a specified contract and therefore a section 871(m) transaction. The delta reveals the extent to which a derivative instrument traces its underlying security’s value. The higher a derivative’s delta, the more economically equivalent it is and the more closely its FMV tracks that of the underlying security. A delta-one derivative tracks the underlying security on a dollar-for-dollar basis.
A derivative instrument with a delta of 0.8 means that for every $1 the underlying security’s FMV varies, the derivative instrument’s FMV varies by $0.80. Simple contracts with a delta of at least 0.8 (and complex contracts meeting the substantial equivalence test) are replicating the economic benefits of holding U.S. securities and are subject to section 871(m).
Delta is the ratio of change in the FMV of an NPC or ELI to a small change in the FMV of the number of shares of the underlying security (as determined under subparagraph (j)(3)):
delta = change in FMV of NPC or ELI/change in FMV of underlying security sharesSubstantial Equivalence. The substantial equivalence test covered in subparagraphs (h)(1)-(7) applies to determine whether a complex contract is a specified contract and therefore a section 871(m) transaction. The test assesses whether a complex contract substantially replicates the economic performance of the underlying security by comparing at various testing prices for the security:
The complex contract is a section 871(m) contract if, when the substantial equivalence test is applied at the calculation time for the complex contract, the expected change in the FMV of the complex contract and its initial hedge is equal to or less than the expected change in the FMV of the simple contract benchmark and its initial hedge.
Subdivisions (c)(2)(i)-(v) provide exceptions to dividend equivalent status for:
Paragraph (k) of the regs provides an exception for payments related to corporate acquisition transactions that, as part of a plan, obligate the long party to acquire underlying securities representing more than 50 percent of the issuer’s FMV.
Paragraph (l) provides that payments under contracts that reference qualified indexes are generally not subject to U.S. tax withholding under section 871(m). Qualified indexes are widely used passive indexes based on a diverse basket of publicly traded securities.
Paragraph (n) operates to combine potential section 871(m) transactions to determine whether they collectively meet the tests for being subject to section 871(m). The goal of these rules is to prevent taxpayers from splitting a section 871(m) transaction into component transactions to avoid dividend equivalent treatment.
The QDD rules are intended to prevent multiple withholdings on the same dividend stream. For example, if a foreign corporation owns U.S. stock and enters into a short forward contract with another foreign corporation, it generally will be subject to withholding on dividends paid on the stock. It will also have to withhold on dividend equivalent payments under the forward contract. The withholding tax on the dividend equivalent payments is effectively a second withholding tax.
Foreign financial institutions and clearing houses can receive U.S.-source dividends and dividend equivalent payments without being subject to withholding tax if they certify to the withholding agent that they are receiving the payments as custodians and not beneficial owners and they have entered into a qualified intermediary agreement with the IRS under which they assume primary withholding responsibility.
However, absent the QDD rules, dealers cannot act as QIs if they received the payments as beneficial owners of a hedge to transactions in which they are short parties. The regs address potential overwithholding by expanding the QI regime in section 1441 regs to include QDDs.
Therefore, regs under sections 871 and 1441 govern dividends and dividend equivalents received by a QDD. This article covers the section 871 provisions.
Reg. section 1.871-15(q) addresses taxation of dividend and dividend equivalent payments made to a QDD.
The guidance in subparagraphs (q)(1)-(5) include:
Sections 881 and 1441. Section 881 generally taxes income of foreign corporations that is not connected to a U.S. business. Section 881(a)(1) imposes a 30 percent tax on U.S.-sourced interest, dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income.
Section 1441 generally requires the payers of these types of income to deduct and withhold the 30 percent tax when the income recipient is an NRA. Section 1442 requires payers to comply with the section 1441 withholding requirements when the income recipient is a foreign corporation.
Reg. section 1.1441-1(e)(5) provides guidance on QIs and withholding certificates, agreements, and statements. Reg. section 1.1441-1(e)(6) provides guidance on QDDs and prescribes the circumstances in which a QI can act as a QDD.
Reg. section 1.1441-1(b)(4)(xxii) provides that a withholding agent making a payment to a QI acting as a QDD is not required to withhold on specific payments if the agent can associate the payment with a valid QI withholding certificate (as described in reg. section 1.1441(e)(3)(ii)). Withholding is not required on a payment:
QDD Tax Liability. Under reg. section 1.871-15(q)(1), a QDD described in reg. section 1.1441-1(e)(6) that receives a dividend equivalent payment in its equity derivatives dealer capacity will not be liable for tax under section 881 on that payment, provided that the dealer complies with its obligations under the QI withholding agreement described in reg. section 1.1441-1(e)(5)-(6).
A QDD is liable for tax under section 881(a)(1) on its section 871(m) amount for each dividend on each underlying security. This tax liability is reduced (but not below zero) by the amount of tax paid by the QDD under section 881(a)(1) on dividends it receives on that underlying security on that same dividend in its capacity as an equity derivatives dealer.
Also, a QDD is liable for tax under section 881(a)(1) for all dividend equivalents not received in its equity derivatives dealer capacity. A QDD is also liable for tax under section 881(a)(1) for all dividends it receives, other than dividends received in 2017, in its equity derivatives dealer capacity.
Paragraph (q) does not apply to a QDD that is a foreign branch of a U.S. financial institution (within the meaning of reg. section 1.1471-5(e)).
Capacity Presumption. Under subparagraph (q)(2), in determining the QDD’s tax liability, transactions properly reflected in a QDD’s equity derivatives dealer book are presumed to be held by the dealer in its equity derivatives dealer capacity. To determine whether a dealer is acting in its equity derivatives dealer capacity, only the dealer’s activities as an equity derivatives dealer are taken into account.
A dividend or dividend equivalent is treated as received by a QDD not acting in its equity derivatives dealer capacity if received by a QDD acting as a proprietary trader.
Section 871(m) Amount. Under subparagraph (q)(3), for each dividend on each underlying security, the section 871(m) amount is the product of:
Net Delta Exposure. Under subdivisions (q)(4)(A)-(B), the net delta exposure to an underlying security is based on the aggregate number of shares of an underlying security to which the QDD has exposure because of positions in the security (including owning the security). The net delta exposure measured in the number of shares compares the long and short positions and equals:
The net delta exposure calculation only includes long positions and short positions that the QDD holds in its equity derivatives dealer capacity (as described in subparagraph (q)(2)). Any long positions or short positions that are treated as effectively connected with the QDD’s U.S. trade or business are excluded from the net delta exposure calculation.
The net delta exposure to an underlying security is determined at the end of the day on the date provided in subparagraph (j)(2) for the applicable dividend. This is the earlier of:
For example, if a specified NPC provides for a payment at settlement that takes into account an earlier dividend payment, the amount of the dividend equivalent is determined on the earlier of the record date or the day before the ex-dividend date for that dividend.
Net delta must be determined in a commercially reasonable manner. If a QDD calculates net delta for nontax business purposes, the net delta ordinarily will be the delta used for that purpose, subject to the modifications required by this definition.
Each QDD must determine its net delta exposure separately only taking into account transactions that are recognized and attributable to that QDD under U.S. tax law.
Examples. Subparagraph (q)(5) provides three examples that illustrate the rules of paragraph (q). Example 1 illustrates the results of a forward contract between a foreign equity derivatives dealer and a foreign customer that is hedged with a total return swap between the foreign dealer and a U.S. broker.
Foreign bank FB is a QI that acts as a QDD. On April 1, year 1, FB enters into a cash settled forward contract initiated by a foreign customer that:
FB hedges the forward contract by entering into a total return swap contract with a domestic broker that is maintained as a hedge for the duration of the forward contract. The swap contract:
Stock X pays a quarterly dividend of $0.25 per share.
At the end of the day on the date provided in subparagraph (j)(2) for the dividend, FB owns the forward contract and the total return swap. FB does not own any shares of stock X or any other transactions that reference stock X.
FB provides valid documentation to the broker that FB will receive payments under the swap contract in its capacity as a QDD, and FB contemporaneously enters both the swap contract with the broker and the forward contract with the customer on its equity derivatives dealer books.
At the end of the day on the date provided in subparagraph (j)(2) for the dividend, FB is a long party on a delta-one contract (the total return swap with the broker) and also a short party on a delta-one contract (the forward contract with the customer). Under reg. section 1.1441-1(b)(4)(xxii), the broker is not obligated to withhold tax on the dividend equivalent payments to FB on the swap contract referenced to stock X dividends because the broker may rely upon valid documentation to treat the payment as made to FB acting as a QDD.
Under subparagraph (q)(1), FB is not liable for tax under sections 871(m) and 881 on the payments it receives from the broker referenced to stock X dividends because FB’s net delta exposure on the 100 shares of stock X is zero at the end of the day on the date provided in subparagraph (j)(2) for the dividend.
The net delta exposure is zero because the taxpayer has:
FB is required to withhold tax on dividend equivalent payments to the customer on the forward contract in accordance with reg. section 1.1441-2(e)(7).
Example 2 illustrates an at-the-money call option contract (meaning the contract price is close or equal to the spot price) entered into by a foreign equity derivatives dealer that is hedged with a total return swap. The facts are the same as in Example 1, but the customer purchases from FB an at-the-money call option on 100 shares of stock X with a term of one year. The call option has a delta of 0.5, and FB hedges the call option by entering into a total return swap that references 50 shares of stock X with the broker.
At the end of the day on the date provided in subparagraph (j)(2) for the dividend, the call option has a delta of 0.6, FB hedges the call option with a total return swap that references 60 shares of stock X with the broker, and FB has no shares of stock X or other transactions that reference stock X.
At the end of the day on the date provided in subparagraph (j)(2) for the dividend, FB is a long party on 60 shares of stock X through the total return swap and a short party on the call option. Because the option has a delta of less than 0.8 at the calculation time, it is not a section 871(m) transaction. Therefore, there will be no dividend equivalent payments made by FB to the customer that are subject to withholding.
Under reg. section 1.1441-1(b)(4)(xxii), the broker is not obligated to withhold tax on the dividend equivalents on stock X paid to FB because the broker has valid documentation that it may rely upon to treat the dividend equivalents as paid to FB acting as a QDD.
The net delta exposure is zero at the end of the day on the date provided in subparagraph (j)(2) for the dividend because:
Example 3 illustrates an in-the-money call option contract (meaning the contract price is less than the spot price) entered into by a foreign equity derivatives dealer that is hedged by ownership of the underlying security. The facts are the same as Example 2, but the customer purchases from FB an in-the-money call option on 100 shares of stock X with a term of one year. The call option has a delta of 0.8, and FB hedges the call option by purchasing 80 shares of stock X, which are held in an account with the broker, who also acts as paying agent.
The price of stock X declines substantially and the option lapses unexercised. At the end of the day on the date provided in subparagraph (j)(2) for the dividend, the call option has a delta of 0.48 and FB has reduced its hedge to 50 shares of stock X with the broker. Also on that date, FB owns no other shares of stock X or any other transactions that reference stock X in its equity derivatives dealer capacity.
At the end of the day on the date provided in subparagraph (j)(2) for the dividend, FB is a long party on 50 shares of stock X and a short party on an option. Because the option has a delta of 0.8 at the calculation time, it is a section 871(m) transaction. Therefore, FB is required to withhold tax on dividend equivalent payments to the customer on the option contract in accordance with reg. section 1.1441-2(e)(7).
The broker is required to withhold tax on the dividends paid to FB. Assuming that FB is a qualified resident of a country with a treaty that allows withholding on dividends at a 15 percent rate, the broker is required to withhold tax on the dividends paid on the 50 shares of stock X held by FB.
FB’s net delta exposure is two shares of stock X at the end of the day on the date provided in subparagraph (j)(2) because:
FB’s section 871(m) amount is $0.50 ($0.50 = net delta exposure of two shares * $0.25 dividend per share). FB’s section 881 tax on the $0.50 is reduced (but not below zero) by the section 881 tax paid by the QDD.
Notice 2022-37 extends transition relief provided in Notice 2020-2, 2020-3 IRB 327, for two years through 2024. The notice provides a useful summary of the history of regs under section 871(m) and successive extensions of their applicability dates.
Published June 14, 2010, Notice 2010-46, 2010-24 IRB 757, addresses potential overwithholding on securities lending and sale-repurchase agreements. It provides a two-part solution to the problem of overwithholding on a chain of dividends and dividend equivalents.
First, it provides an exception from withholding for payments to a qualified securities lender (QSL). Second, it provides a proposed framework to credit forward prior withholding on a chain of substitute dividends paid on a chain of securities lending, or stock repurchase agreements.
The QSL regime requires the person that agrees to act as a QSL to comply with withholding and documentation requirements. Treasury and the IRS permitted withholding agents to rely on transition rules provided in Part III of Notice 2010-46 until guidance was developed that would include documentation and substantiation of withholding.
The preamble to the 2015 temporary regs (published with the 2015 final regs and finalized in 2017) indicated that final QDD regs would supplant the framework proposed in Notice 2010-46. Published July 18, 2016, Notice 2016-42, 2016-29 IRB 67, contained a proposed QI agreement that included provisions relating to the QDD regime and reiterated the intent to replace the framework proposed in Notice 2010-46 with the QDD regime.
Published December 19, 2016, Notice 2016-76, 2016-51 IRB 1, provided for the phased-in application of some provisions of the section 871(m) regs to allow for their orderly implementation and announced that taxpayers may continue to rely on Notice 2010-46 until January 1, 2018. The applicability dates in the 2017 final regs reflect the phased-in application described in Notice 2016-76 (see reg. section 1.871-15(r)).
Published January 17, 2017, Rev. Proc. 2017-15, 2017-3 IRB 437, sets forth the final QI agreement (2017 QI agreement), including the requirements and obligations applicable to QDDs, and provided that taxpayers may continue to rely on Notice 2010-46 during 2017.
Consistent with Notice 2016-76, the 2017 final regs’ preamble made Notice 2010-46 obsolete as of January 1, 2018. In response to a comment requesting that the QSL regime remain, the preamble noted that while the QSL regime was administratively more convenient for taxpayers than the QI regime, it created administrability problems for the IRS, especially verification. The QSL regime was replaced by incorporating the QDD rules into the existing QI framework, including rules for pooled reporting on Form 1042-S and the QI requirements for compliance review and certification.
Published August 21, 2017, Notice 2017-42, 2017-34 IRB 212, extended some of 2016 transition relief. Published February 5, 2018, Notice 2018-5, 2018-6 IRB 341, permits withholding agents to apply the transition rules from Notice 2010-46 in 2018 and 2019.
Published October 1, 2018, Notice 2018-72, 2018-40 IRB 522, further extended transition relief and permitted withholding agents to apply the transition rules from Notice 2010-46 in 2020. Published January 13, 2020, Notice 2020-2, extended the phase-in period described in Notice 2018-72 through 2022. This most recent Notice 2022-37 further extends that phase-in period through 2024.
Part V of Notice 2022-37 is dedicated to describing the extension of phase-in relief for QDDs. In 2015 reg. section 1.871-15T(q)(1) provided that when a QDD received a dividend or dividend equivalent payment and was obligated to make an offsetting dividend equivalent payment on the same underlying security in an amount that was less than the amount received, the QDD would be liable for tax under section 871(a) or 881 for the difference.
Reg. section 1.1441-1(b)(4)(xxii) of the 2015 final regs provided that a withholding agent who made a payment of a dividend to a QI acting as a QDD was not required to withhold on that payment if the withholding agent reliably associated the payment with a valid QI withholding form containing a certification described in reg. section 1.1441-1(e)(3)(ii)(E). The 2017 final regs adopted the net delta exposure method.
In adopting the net delta exposure method, however, Treasury and the IRS were concerned that the exemption from withholding on dividends paid to a QDD combined with the net delta exposure method could cause U.S.-source dividends to escape U.S. tax completely. Therefore, the 2017 final regs revised reg. sections 1.871-15(q)(1) and 1.1441-1(b)(4)(xxii) to provide that a QDD remains liable for tax under section 881(a)(1) and subject to withholding under chapters 3 and 4 on dividends.
However, to allow taxpayers time to implement the net delta exposure method, the 2017 QI agreement and final regs provided that dividends and dividend equivalents received by a QDD in its equity derivatives dealer capacity in 2017 will not be subject to tax under section 881(a)(1) or withholding under chapters 3 and 4.
Notices 2017-42, 2018-72, and 2020-2 announced that Treasury and the IRS intend to amend reg. sections 1.871-15(q)(1) and (r)(3), and 1.1441-1(b)(4)(xxii)(C) to provide that a QDD will not be subject to tax on dividends and dividend equivalents received in 2017-2022 in its equity derivatives dealer capacity or withholding on those dividends (including deemed dividends).
This notice again announces that Treasury and the IRS intend to amend those provisions to provide that a QDD will not be subject to tax on dividends and dividend equivalents received in 2023 and 2024 in its equity derivatives dealer capacity or withholding on those dividends (including deemed dividends).
Section 4.01(1) of Rev. Proc. 2017-15 provides that a QDD will be required to compute its section 871(m) amount using the net delta exposure method beginning in 2018. Notices 2017-42, 2018-72, and 2020-2 provided that a QDD would be required to compute its section 871(m) amount using the net delta exposure method beginning in 2023. This notice provides that a QDD will be required to compute its section 871(m) amount using the net delta exposure method beginning in 2025.
A QDD will remain liable for tax under section 881(a)(1) on dividends and dividend equivalents that it receives in any capacity other than as an equity derivatives dealer and on any other U.S.-source fixed, determinable, annual, and periodic payments that it receives (whether or not in its equity derivatives dealer capacity). Also, a QDD is responsible for withholding on dividend equivalents it pays to a foreign person on a section 871(m) transaction, whether acting in its capacity as an equity derivatives dealer or otherwise.
Finally, section 10.01(C) of the 2017 QI agreement provides that, for calendar year 2017, a QDD is not required to perform a periodic review of its QDD activities (as required by section 10.04 of the agreement) or provide the factual information specified in Appendix I. Notices 2017-42, 2018-72, and 2020-2 provide that a QDD is not required to perform a periodic review of its QDD activities for 2017-2022.
This notice provides that a QDD is not required to perform a periodic review of its QDD activities for 2023 or 2024. Treasury and the IRS anticipate including in the 2023 QI agreement the waiver of a QDD’s periodic review and the other transitional provisions for QDDs for 2023 and 2024.
Notices 2018-5, 2018-72, and 2020-2 provide that, notwithstanding the 2017 regs’ preamble rendering Notice 2010-26 obsolete, withholding agents may apply the QSL transition rules in Notice 2010-46 for payments made in 2018-2022. This notice provides that withholding agents may also apply those QSL transition rules for payments made in 2023 and 2024.
- All Planned Tests for EH216-S Type Certification Completed 100%
- Strategic UAM Operational Partnership with Shenzhen Bao’an District
- US$23 Million Strategic PIPE Investment to Strengthen Liquidity
GUANGZHOU, China, Aug. 17, 2023 (GLOBE NEWSWIRE) -- EHang Holdings Limited (“EHang” or the “Company”) (Nasdaq: EH), the world’s leading autonomous aerial vehicle (“AAV”) technology platform company, today announced its unaudited financial results for the second quarter ended June 30, 2023.
Financial and Operational Highlights for the Second Quarter 2023
Business Highlights for the Second Quarter 2023 and recent Developments
The Company has achieved a significant milestone for EH216-S TC by successfully completing all of the planned tests and flights in the last phase of demonstration and verification of compliance, and also completed the definitive TC Flight Test by the Civil Aviation Administration of China (“CAAC”), with unwavering endeavors throughout past 31 months since the CAAC officially accepted the Company’s TC application in January 2021. After finishing the remaining procedures, the Company expects to obtain the type certificate of EH216-S Unmanned Aerial Vehicle (“UAV”) System from the CAAC soon.
In the second quarter of 2023, EHang established a joint venture with Xiyu Tourism (300859.SZ), a Shenzhen-listed leading tourism company in China and delivered 5 units of EH216-S AAVs to the joint venture. The customer aims to develop low-altitude tourism and sightseeing projects with EHang AAVs in the Heavenly Lake of Tianshan, a national 5A-class tourist attraction, and other scenic areas in Northwestern China. The partnership consists of plans to operate a minimum of 120 units of EH216-S or EHang’s comparable passenger-carrying AAVs within the next five years.
In July 2023, EHang reached a Memorandum of Understanding (“MOU”) with the Bao’an District Government of Shenzhen municipality on a strategic partnership for urban air mobility (“UAM”) operations after the certification of EH216-S. Both parties will jointly develop UAM use cases, systems, and routes to build Shenzhen as a national low-altitude economy development demonstration city. EHang plans to establish a UAM Operation Demonstration Center at the OH Bay in Shenzhen and launch aerial tourism and sightseeing experience services with EH216-S AAVs.
Under the CAAC’s guidance and the Company’s 100 Air Mobility Route Initiative, EHang, along with its customers and partners, have developed a total of 20 trial operation sites across 18 cities in China during the two years prior to the end of July 2023. More than 9,300 safety-ensured operational trial flights for low-altitude tourism and aerial sightseeing have been conducted by EH216-S at these sites, which paves the way for future commercial operations following the certification.
In April 2023, EHang was inducted as a member of Japan’s Public-Private Committee for Advanced Air Mobility. In June 2023, EHang extended its flight footprints to Okinawa with EH216-S, making the 7th Japanese city that it has flown. It also demonstrated Japan’s first island-hopping flights by an unmanned electric vertical take-off and landing aircraft (“eVTOL”).
As part of the Israel National Drone Initiative and supported by Dronery and Cando Drones, test flights were conducted for EH216-S and EH216-L in Caesarea and Tel Aviv, Israel in June and August 2023 successively.
In July 2023, test flights to transport blood bags in Belgium using EH216-S were conducted with the supports of Helicus, DronePort and Blood Services of the Belgian Red Cross. This marked the Europe’s first unmanned flight for medical transportation by an unmanned large-payload eVTOL.
As of the end of July 2023, the flight footprints of EH216 series AAVs have extended to 14 countries across Asia, Europe and Americas, with a total of more than 39,000 demo and trial flights.
In July 2023, EHang secured a new round of US$23 million of equity investment through a private placement from several strategic investors led by Mr. Lee Soo Man (“Mr. Lee”), a renowned K-Pop music mogul. Additionally, EHang and Mr. Lee will collaborate to drive the development of UAM business in Asian Pacific regions by leveraging each other’s complementary strengths. The gross proceeds from the placement will be allocated by EHang for working capital and general corporate purposes, enabling acceleration of strategic plans for technology advancement, business development, and post-certification commercial operations.
CEO Remarks
Mr. Huazhi Hu, EHang’s Founder, Chairman and Chief Executive Officer, commented, “We’ve made remarkable progress in our pursuit of long-term growth. Notably, we are thrilled to announce that we have successfully completed all the planned tests for EH216-S type certification. This achievement marks a significant unprecedented milestone in the global emerging eVTOL industry, underscoring our unwavering dedication and pioneering advantages. Additionally, this sets the stage for us to secure the type certificate soon and proceed with our endeavors to initiate commercial operations.”
“We’ve also witnessed positive policy developments for the industry recently. Specifically in June, China issued regulations governing UAVs, the first of this kind in the nation, which could propel growth of the sector and provide a clear guidance for UAV flight operations in China, including for our passenger-carrying eVTOL. Furthermore, our global initiatives to expand orders and collaborations have continued to gain traction. This includes conducting additional demonstration and tests flights and exploring various business opportunities at home and abroad. Our strategic partnership with Shenzhen Bao’an Government will stand out as a pivotal step after we obtain the type certificate. For our execution of the post-certification commercial plans, we have further strengthened our liquidity position with a new round of US$23 million investments from long-term strategic investors in July 2023. As a trailblazer in the sector, we are committed to continuously enhancing our products and technologies to offer a secure, efficient, and sustainable aerial experience for our customers and partners. In doing so, we are well-positioned to seize the abundant market opportunities that lie ahead.”
Financial Results for the Second Quarter 2023
Revenues
Total revenues were RMB10.0 million (US$1.4 million), compared with RMB22.2 million in the first quarter of 2023, as some deliveries have been extended to be post TC of EH216-S per customers’ requests in light that the TC process is approaching the end.
Costs of revenues
Costs of revenues were RMB4.0 million (US$0.6 million), compared with RMB8.0 million in the first quarter of 2023.
Gross profit and gross margin
Gross profit was RMB6.0 million (US$0.8 million), compared with RMB14.2 million in the first quarter of 2023.
Gross margin was 60.2%, down 3.7 percentage points from 63.9% in the first quarter of 2023. The decrease in gross margin was mainly due to changes in revenue mix.
Operating expenses
Total operating expenses were RMB82.0 million (US$11.3 million), representing a decrease of 10.4% compared with RMB91.5 million in the first quarter of 2023.
Adjusted operating expenses4 (non-GAAP)
Adjusted operating expenses were RMB58.1 million (US$8.0 million), compared with RMB50.1 million in the first quarter of 2023. Adjusted sales and marketing expenses, adjusted general and administration expenses, and adjusted research and development expenses were RMB8.9 million (US$1.2 million), RMB20.4 million (US$2.8 million) and RMB28.8 million (US$4.0 million) in the second quarter of 2023, respectively. The changes in adjusted operating expenses were primarily due to the same reasons discussed under the heading “Operating expenses” above.
Operating loss
Operating loss was RMB75.3 million (US$10.4 million), compared with RMB75.7 million in the first quarter of 2023.
Adjusted operating loss (non-GAAP)5
Adjusted operating loss was RMB51.3 million (US$7.1 million), compared with RMB34.3 million in the first quarter of 2023.
Other income
Other income was RMB1.2 million (US$0.2 million), compared with RMB11.2 million of other expenses in the first quarter of 2023. This was primarily due to the non-cash expenses of amortization of debt discounts incurred in the first quarter of 2023, which relates to the interim funding recognized as short-term debt provided by an investor in the private placement entered in December 2022. The Company accounted for a significant portion of the funds as short-term debt and the remaining portion as warrants under additional paid-in capital. In addition, the Company has repaid the interim funding of short-term debt in full and, with the warrants exercised, the Company concurrently received US$10 million as purchase price of Class A ordinary shares.
Net loss
Net loss was RMB75.7 million (US$10.4 million), compared with RMB87.0 million in the first quarter of 2023.
Adjusted net loss (non-GAAP)6
Adjusted net loss was RMB51.8 million (US$7.1million), compared with RMB33.6 million in the first quarter of 2023.
Adjusted net loss attributable to EHang’s ordinary shareholders was RMB51.6 million (US$7.1million), compared with RMB33.4 million in the first quarter of 2023.
Loss per share and per ADS
Basic and diluted net loss per ordinary share were both RMB0.63 (US$0.09). Adjusted basic and diluted net loss per ordinary share7 (non-GAAP) were both RMB0.43 (US$0.06).
Basic and diluted net loss per ADS were both RMB1.26 (US$0.18). Adjusted basic and diluted net loss per ADS8 (non-GAAP) were both RMB0.86 (US$0.12).
Balance Sheets
Liquidity
The Company has been incurring losses from operations since inception. For the six months ended June 30, 2023, the Company had net loss of RMB162.8 million (US$22.4 million). As of December 31, 2022 and June 30, 2023, accumulated deficit amounted to RMB1,450.4 million and RMB1,615.2 million (US$222.7 million), respectively.
The Company’s liquidity and continuous operation depend on its ability to enhance its operating cash flows and financial position, which is currently largely dependent on when the Company will obtain the type certificate of EH216-S to launch commercial sales of EH216-S AAVs, and the Company’s capability to raise additional funds through debt financings or equity offerings. The Company expects to obtain the type certificate soon as it has already completed all the planned tests in the final phase of Demonstration and Verification of Compliance for EH216-S type certification as of the date of this earnings release. In July 2023, the Company has also secured a round of US$23 million of equity investment through private placement from several strategic investors. The gross proceeds from the placement has strengthened the Company’s liquidity status. Therefore, we believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements and material cash requirements for at least the next 12 months. However, we may need additional cash resources in the future if we experience changes in business conditions or other developments, or if we pursue opportunities for investment, acquisition, capital expenditure or similar actions.
Management Transition
The Company also announced today that Mr. Richard Jian Liu tendered his resignation from his position as the Chief Financial Officer (“CFO”) of the Company for personal reasons, which resignation will become effective on August 31, 2023 and will serve as a senior advisor to the Company effective on September 1, 2023. In addition, the Board has appointed Mr. Conor Chia-hung Yang, currently a director of the Company, as the new Chief Financial Officer while keeping his directorship, effective on September 1, 2023. Mr. Liu’s resignation did not result from any dispute or disagreement with the Board or the Company.
Mr. Huazhi Hu, EHang’s Founder, Chairman and Chief Executive Officer, commented, “On behalf of the Board and the management team, I would like to thank Richard for his wholehearted dedication and tremendous contributions to EHang’s growth during his 8-year tenure with the Company. As a founding member, his foresight and leadership have been instrumental in leading the Company in going public and navigating the capital markets as the pioneer in the global eVTOL/UAM industry. We would also like to warmly welcome Conor to join our management team, who has more than 30 years of professional experience in financial management, investor relations, capital markets and corporate governance at many listed companies, and served as a director in our Board for more than 3 years since our listing on Nasdaq, demonstrating his deep understanding and confidence in the Company. We look forward to continuing working with Conor in his new capacities to take EHang into a new stage with bright prospect.”
Mr. Liu said, “I would like to sincerely thank the Board, Huazhi and the investment communities for all your trust and supports in the past 8 years. I have witnessed and experienced the Company’s development and every milestone from an innovative startup into an industry leading listed company and believe the Company has built a solid foundation for its sustainable long-term growth.”
Mr. Yang said, “I feel privileged to join the management team of EHang, a trailblazer in global UAM industry, and take over CFO’s responsibilities at this pivotal and exhilarating stage. Leveraging my extensive finance experience and my enthusiasm for the UAM sector, I am dedicated to forging strong collaborations with our talented team to drive financial excellence and maximize value for the Company’s stakeholders.”
Prior to this appointment as CFO, Mr. Yang has served as an independent director, the chair of Audit Committee, and a member of Compensation Committee of the Board of EHang since December 2019. From 2007 to 2023, Mr. Yang served in several chief financial officer positions, including Tuniu Corporation (Nasdaq: TOUR), E-Commerce China Dangdang Inc., and AirMedia Group Inc. Mr. Yang was the chief executive officer of Rock Mobile Corporation from 2004 to 2007, and the chief financial officer of the Asia Pacific region for CellStar Asia Corporation from 1999 to 2004. Prior to that, Mr. Yang was a senior banker at Goldman Sachs (Asia) L.L.C., Lehman Brothers Asia Limited and Morgan Stanley Asia Limited from 1992 to 1999. Mr. Yang currently also serves as an independent director of I-Mab, iQIYI, Inc., Tongcheng Travel Holdings Limited, UP Fintech Holding Ltd and Smart Share Global Limited. Mr. Yang received his master’s degree in business administration from the University of California, Los Angeles (UCLA).
Board Change
The Company also announced today that it has appointed Mr. Wing Kee Lau (“Mr. Lau”) as a new independent director to the Board, effective on August 16, 2023. Mr. Lau was also concurrently appointed as the chair of Audit Committee, and a member of Compensation Committee, to succeed Mr. Yang’s prior roles in the Board. The Board has reviewed and determined that Mr. Lau meets all the “independence” requirements under Rule 10A-3 of the United States Exchange Act of 1934 and Listing Rule 5605 of the Nasdaq Stock Market Rules and qualifies as an audit committee financial expert as defined in the instructions to Item 16A of the Form 20-F.
Following this appointment, the Board will be comprised of six members, including four independent non-executive directors and two executive directors.
Mr. Huazhi Hu, EHang’s Founder, Chairman and Chief Executive Officer, commented, “On behalf of the Board and the management team, I would like to express our warm welcome to Mr. Lau to join us. I am confident that his extensive background of over 30 years in financial management and accounting will enrich us with a wealth of valuable experience and expertise, further fortifying our dedication to robust governance and strategic oversight.”
Mr. Lau said, “I am honored to join the Company’s Board, Audit Committee and Compensation Committee. I look forward to collaborating closely with my fellow Board members and the management team to uphold the principles of sound financial stewardship and contribute to the Company’s continued success.”
Mr. Lau has been serving as the chief financial officer of RoboSense Technology Co., Ltd. since August 2022. From 2000 to 2022, Mr. Lau served in several chief financial officer and senior financial positions at listed or industry-leading companies, including Perfect World Co., Ltd. (SHE: 002624), Ogilvy & Mather Advertising Ltd. Beijing Branch, Tarena International Inc. (Nasdaq: TEDU), Beijing Media Corporation Ltd. (HKEX: 01000), and Square Panda Inc. Prior to that, Mr. Lau was a senior manager at PricewaterhouseCoopers (“PwC”) Shanghai and Beijing from 1994 to 2000, and a senior accountant at PwC Hong Kong from 1990 to 1994. Mr. Lau currently also serves as an independent director at Genetron Holding Ltd. since June 2020. Mr. Lau received his bachelor’s degree in business administration (finance) from Hong Kong Baptist University in 1990, and an EMBA degree from Cheung Kong Graduate School of Business in 2011. Mr. Lau is a member of the Association of Chartered Certified Accountants, and a member of the Hong Kong Institution of Certified Public Accountants.
Business Outlook
The Company continues to receive increasing inquiries, demands, and orders from customers for AAV uses in aerial tourism, urban transportation, emergency rescue, and smart city management, which are driven by its first-mover advantages, favorable policies in the UAM sector, and expected upcoming commercialization. The Company’s EH216-S order pipeline in China has reached more than 100 units and continues growing. Most of these orders are conditional upon the Company’s completion of the type certification.
The above outlook is based on information available as of the date of this press release and reflects the Company’s current and preliminary expectations regarding its business situation and market conditions. The outlook is subject to changes, especially uncertainties and situations related to EH216-S certification, political and economic landscape, etc.
Conference Call
EHang’s management team will host an earnings conference call at 8:00 AM on Thursday, August 17, 2023, U.S. Eastern Time (8:00 PM on Thursday, August 17, 2023, Beijing/Hong Kong Time).
To join the conference call via telephone, participants must use the following link to complete an online registration process. Upon registering, each participant will receive email instructions to access the conference call, including dial-in information and a PIN number allowing access to the conference call.
Participant Online Registration:
https://register.vevent.com/register/BId28c5673b2f747f68e3a7042f02cf7f1
A live and archived webcast of the conference call will be available on the Company’s investors relations website at https://ir.ehang.com/.
About EHang
EHang (Nasdaq: EH) is the world’s leading autonomous aerial vehicle (“AAV”) technology platform company. EHang’s mission is to make safe, autonomous, and eco-friendly air mobility accessible to everyone. EHang provides customers in various industries with AAV products and commercial solutions: urban air mobility (including passenger transportation and logistics), smart city management, and aerial media solutions. As the forerunner of cutting-edge AAV technologies and commercial solutions in the global Urban Air Mobility (“UAM”) industry, EHang continues to explore the boundaries of the sky to make flying technologies benefit our life in smart cities. For more information, please visit www.ehang.com.
Safe Harbor Statement
This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to” and similar statements. Statements that are not historical facts, including statements about management’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause real results to differ materially from those contained in any forward-looking statement, including but not limited to those relating to EH216-S type certification, our expectations regarding demand for, and market acceptance of, our AAV products and solutions and the commercialization of UAM services, our relationships with strategic partners, and current litigation and potential litigation involving us. Management has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While they believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond management’s control. These statements involve risks and uncertainties that may cause EHang’s real results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.
Non-GAAPFinancial Measures
The Company uses adjusted gross profit, adjusted operating expenses, adjusted sales and marketing expenses, adjusted general and administration expenses, adjusted research and development expenses, adjusted operating loss, adjusted net loss, adjusted net loss attributable to ordinary shareholders, adjusted basic and diluted loss per ordinary share and adjusted basic and diluted loss per ADS (collectively, the “Non-GAAP Financial Measures”) in evaluating its operating results and for financial and operational decision-making purposes. There was no income tax impact on the Company’s non-GAAP adjustments because the non-GAAP adjustments are usually recorded in entities located in tax-free jurisdictions, such as the Cayman Islands.
The Company believes that the Non-GAAP Financial Measures help identify underlying trends in its business that could otherwise be distorted by the effects of items of (i) share-based compensation expenses and (ii) certain non-operational expenses, such as provisions for legal proceedings and amortization of debt discounts, which are included in their comparable GAAP measures. The Company believes that the Non-GAAP Financial Measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management members in their financial and operational decision-making.
The Non-GAAP Financial Measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The Non-GAAP Financial Measures have limitations as analytical tools. One of the key limitations of using the Non-GAAP Financial Measures is that they do not reflect all items of expense that affect the Company’s operations. Share-based compensation expenses have been and may continue to be incurred in the business and are not reflected in the presentation of the Non-GAAP Financial Measures. Further, the Non-GAAP Financial Measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the Non-GAAP Financial Measures to the nearest U.S. GAAP measures, all of which should be considered when evaluating the Company’s performance.
Each of the Non-GAAP Financial Measures should not be considered in isolation or construed as an alternative to its comparable GAAP measure or any other measure of performance or as an indicator of the Company’s operating performance or financial results. Investors are encouraged to review the Company’s most directly comparable GAAP measures in conjunction with the Non-GAAP Financial Measures. The Non-GAAP Financial Measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.
For more information on the Non-GAAP Financial Measures, please see the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.
Exchange Rate
This press release contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB7.2513 to US$1.00, the noon buying rate in effect on June 30, 2023 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to in this press release could have been converted into USD or RMB, as the case may be, at any particular rate or at all.
Investor Contact: ir@ehang.com
Media Contact: pr@ehang.com
________________________________
1 Adjusted operating loss is a non-GAAP financial measure, which is defined as operating loss excluding share-based compensation expenses. See “Non-GAAP Financial Measures” below.
2 Adjusted net loss is a non-GAAP financial measure, which is defined as net loss excluding share-based compensation expenses and certain non-operational expenses. See “Non-GAAP Financial Measures” below.
3 The EH216 series AAVs include EH216-S, the standard model for passenger transportation, EH216-F model for aerial firefighting, and EH216-L model for aerial logistics.
4 Adjusted operating expenses is a non-GAAP financial measure, which is defined as operating expenses excluding share-based compensation expenses. See “Non-GAAP Financial Measures” below.
5 Adjusted operating loss is a non-GAAP financial measure, which is defined as operating loss excluding share-based compensation expenses. See “Non-GAAP Financial Measures” below.
6 Adjusted net loss is a non-GAAP financial measure, which is defined as net loss excluding share-based compensation expenses and certain non-operational expenses, which include amortization of debt discounts. See “Non-GAAP Financial Measures” below.
7 Adjusted basic and diluted net loss per ordinary share is a non-GAAP financial measure, which is defined as basic and diluted loss per ordinary share excluding share-based compensation expenses and certain non-operational expenses, which include amortization of debt discounts. See “Non-GAAP Financial Measures” below.
8 Adjusted basic and diluted net loss per ADS is a non-GAAP financial measure, which is defined as basic and diluted loss per ADS excluding share-based compensation expenses and certain non-operational expenses, which include amortization of debt discounts. See “Non-GAAP Financial Measures” below.
EHANG HOLDINGS LIMITED | |||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | |||||
As of | As of | ||||
December 31, 2022 | June 30, 2023 | ||||
RMB | RMB | US$ | |||
(Unaudited) | (Unaudited) | (Unaudited) | |||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 249,310 | 127,067 | 17,523 | ||
Restricted short-term deposits | - | 33,617 | 4,636 | ||
Accounts receivable, net9 | 20,298 | 16,403 | 2,262 | ||
Inventories | 72,364 | 70,528 | 9,726 | ||
Prepayments and other current assets9 | 45,183 | 48,175 | 6,644 | ||
Total current assets | 387,155 | 295,790 | 40,791 | ||
Non-current assets: | |||||
Property and equipment, net | 47,060 | 43,802 | 6,041 | ||
Operating lease right‑of‑use assets, net | 73,482 | 73,525 | 10,140 | ||
Intangible assets, net | 1,959 | 2,139 | 295 | ||
Long-term loans receivable | 9,980 | 8,000 | 1,103 | ||
Long-term investments10 | 9,839 | 14,142 | 1,950 | ||
Other non-current assets | 1,392 | 1,562 | 215 | ||
Total non-current assets | 143,712 | 143,170 | 19,744 | ||
Total assets | 530,867 | 438,960 | 60,535 | ||
___________________________________
9 On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), using the modified retrospective method and have no material impact on the consolidated financial statements.
10 The Company established a joint venture with Xiyu Tourism, a third party, in the second quarter of 2023 and accounted as an equity method investment.
EHANG HOLDINGS LIMITED | ||||||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONT’D) | ||||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | ||||||||||||
As of | As of | |||||||||||
December 31, 2022 | June 30, 2023 | |||||||||||
RMB | RMB | US$ | ||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Short-term bank loans | 49,794 | 59,338 | 8,183 | |||||||||
Short-term debt11 | 57,838 | - | - | |||||||||
Accounts payable | 35,456 | 33,613 | 4,635 | |||||||||
Contract liabilities | 19,321 | 22,251 | 3,069 | |||||||||
Current portion of long-term bank loans | 13,154 | 1,538 | 212 | |||||||||
Accrued expenses and other liabilities | 97,763 | 93,931 | 12,953 | |||||||||
Current portion of lease liabilities | 5,520 | 6,596 | 910 | |||||||||
Deferred income | 1,495 | 1,551 | 214 | |||||||||
Deferred government subsidies | 1,993 | 2,270 | 313 | |||||||||
Income taxes payable | 7 | 2 | - | |||||||||
Total current liabilities | 282,341 | 221,090 | 30,489 | |||||||||
Non-current liabilities: | ||||||||||||
Long-term bank loans | 3,846 | 3,077 | 424 | |||||||||
Mandatorily redeemable non-controlling interests | 40,000 | 40,000 | 5,516 | |||||||||
Deferred tax liabilities | 292 | 292 | 40 | |||||||||
Unrecognized tax benefit | 5,480 | 5,480 | 756 | |||||||||
Lease liabilities | 69,913 | 70,864 | 9,773 | |||||||||
Deferred income | 2,928 | 2,269 | 313 | |||||||||
Other non-current liabilities | 1,389 | 1,973 | 272 | |||||||||
Total non-current liabilities | 123,848 | 123,955 | 17,094 | |||||||||
Total liabilities | 406,189 | 345,045 | 47,583 | |||||||||
Shareholders’ equity: | ||||||||||||
Ordinary shares | 75 | 77 | 11 | |||||||||
Additional paid-in capital12 | 1,558,356 | 1,687,880 | 232,769 | |||||||||
Statutory reserves | 1,191 | 1,191 | 164 | |||||||||
Accumulated deficit913 | (1,450,374 | ) | (1,615,182 | ) | (222,744 | ) | ||||||
Accumulated other comprehensive income | 15,010 | 19,256 | 2,656 | |||||||||
Total EHang Holdings Limited shareholders’ equity | 124,258 | 93,222 | 12,856 | |||||||||
Non-controlling interests | 420 | 693 | 96 | |||||||||
Total shareholders’ equity | 124,678 | 93,915 | 12,952 | |||||||||
Total liabilities and shareholders’ equity | 530,867 | 438,960 | 60,535 |
___________________________________
11 In December 2022, the Company received interim funding from an investor who has subscribed for certain number of Class A ordinary shares of the Company in a private placement. The funds amounted to US$10 million in total and were made available for use by the Company pending the closing of the private placement. We accounted for a significant portion of the funds as short-term debt and the remaining portion as additional paid-in capital. The closing of the private placement has occurred by the end of first quarter of 2023. The Company has repaid the interim funding in full and concurrently received US$10 million as purchase price of 3,466,204 Class A ordinary shares.
12 Additional paid-in capital reflected the impacts from transactions with non-controlling shareholder. Please refer to the annual report for more details.
13 Accumulated deficit reflected the impacts from adoption of ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) since January 1, 2023 and transactions with non-controlling shareholder. Please refer to the annual report for more details.
EHANG HOLDINGS LIMITED | |||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||||||||||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for per share data and per ADS data) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
June 30, 2022 |
June 30, 2023 |
|||||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Total revenues | 14,618 | 22,201 | 10,006 | 1,380 | 20,408 | 32,207 | 4,442 | ||||||||||||
Costs of revenues | (4,805 | ) | (8,007 | ) | (3,986 | ) | (550 | ) | (6,979 | ) | (11,993 | ) | (1,654 | ) | |||||
Gross profit | 9,813 | 14,194 | 6,020 | 830 | 13,429 | 20,214 | 2,788 | ||||||||||||
Operating expenses: | |||||||||||||||||||
Sales and marketing expenses | (12,243 | ) | (12,474 | ) | (13,526 | ) | (1,865 | ) | (24,940 | ) | (26,000 | ) | (3,586 | ) | |||||
General and administrative expenses | (39,563 | ) | (24,996 | ) | (31,061 | ) | (4,284 | ) | (63,073 | ) | (56,057 | ) | (7,731 | ) | |||||
Research and development expenses | (34,727 | ) | (54,075 | ) | (37,414 | ) | (5,160 | ) | (66,728 | ) | (91,489 | ) | (12,617 | ) | |||||
Total operating expenses | (86,533 | ) | (91,545 | ) | (82,001 | ) | (11,309 | ) | (154,741 | ) | (173,546 | ) | (23,934 | ) | |||||
Other operating income | 2,424 | 1,605 | 676 | 93 | 3,202 | 2,281 | 315 | ||||||||||||
Operating loss | (74,296 | ) | (75,746 | ) | (75,305 | ) | (10,386 | ) | (138,110 | ) | (151,051 | ) | (20,831 | ) | |||||
Other income (expense): | |||||||||||||||||||
Interest and investment income | 1,139 | 983 | 966 | 133 | 2,509 | 1,949 | 269 | ||||||||||||
Interest expenses | (440 | ) | (714 | ) | (816 | ) | (113 | ) | (915 | ) | (1,530 | ) | (211 | ) | |||||
Amortization of debt discounts | - | (12,023 | ) | - | - | - | (12,023 | ) | (1,658 | ) | |||||||||
Foreign exchange loss | (1,018 | ) | (96 | ) | (1,028 | ) | (142 | ) | (1,441 | ) | (1,124 | ) | (155 | ) | |||||
Other non-operating income (expenses), net | 721 | 651 | 2,075 | 286 | (4,768 | ) | 2,726 | 375 | |||||||||||
Total other income (expense) | 402 | (11,199 | ) | 1,197 | 164 | (4,615 | ) | (10,002 | ) | (1,380 | ) | ||||||||
Loss before income tax and income (loss) from equity method investment | (73,894 | ) | (86,945 | ) | (74,108 | ) | (10,222 | ) | (142,725 | ) | (161,053 | ) | (22,211 | ) | |||||
Income tax (expenses) benefits | (1 | ) | (1 | ) | (13 | ) | (2 | ) | 1 | (14 | ) | (2 | ) | ||||||
Loss before income (loss) from equity method investment | (73,895 | ) | (86,946 | ) | (74,121 | ) | (10,224 | ) | (142,724 | ) | (161,067 | ) | (22,213 | ) | |||||
Income (loss) from equity method investment | 30 | (90 | ) | (1,607 | ) | (222 | ) | 43 | (1,697 | ) | (234 | ) | |||||||
Net loss | (73,865 | ) | (87,036 | ) | (75,728 | ) | (10,446 | ) | (142,681 | ) | (162,764 | ) | (22,447 | ) |
EHANG HOLDINGS LIMITED | |||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (CONT’D) | |||||||||||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for per share data and per ADS data) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
June 30, 2022 |
June 30, 2023 |
|||||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Net loss | (73,865 | ) | (87,036 | ) | (75,728 | ) | (10,446 | ) | (142,681 | ) | (162,764 | ) | (22,447 | ) | |||||
Net loss attributable to non-controlling interests | 312 | 211 | 165 | 23 | 467 | 376 | 52 | ||||||||||||
Net loss attributable to ordinary shareholders | (73,553 | ) | (86,825 | ) | (75,563 | ) | (10,423 | ) | (142,214 | ) | (162,388 | ) | (22,395 | ) | |||||
Net loss per ordinary share: | |||||||||||||||||||
Basic and diluted | (0.64 | ) | (0.74 | ) | (0.63 | ) | (0.09 | ) | (1.24 | ) | (1.37 | ) | (0.19 | ) | |||||
Shares used in net loss per ordinary share computation (in thousands of shares): | |||||||||||||||||||
Basic and diluted | 114,410 | 117,549 | 120,159 | 120,159 | 114,385 | 118,286 | 118,286 | ||||||||||||
Loss per ADS (2 ordinary shares equal to 1 ADS) Basic and diluted |
(1.28 | ) | (1.48 | ) | (1.26 | ) | (0.18 | ) | (2.48 | ) | (2.74 | ) | (0.38 | ) | |||||
Other comprehensive income (loss) | |||||||||||||||||||
Foreign currency translation adjustments net of nil tax | 12,444 | (722 | ) | 4,968 | 685 | 11,330 | 4,246 | 586 | |||||||||||
Total other comprehensive income (loss), net of tax | 12,444 | (722 | ) | 4,968 | 685 | 11,330 | 4,246 | 586 | |||||||||||
Comprehensive loss | (61,421 | ) | (87,758 | ) | (70,760 | ) | (9,761 | ) | (131,351 | ) | (158,518 | ) | (21,861 | ) | |||||
Comprehensive loss attributable to non-controlling interests | 312 | 211 | 165 | 23 | 467 | 376 | 52 | ||||||||||||
Comprehensive loss attributable to ordinary shareholders | (61,109 | ) | (87,547 | ) | (70,595 | ) | (9,738 | ) | (130,884 | ) | (158,142 | ) | (21,809 | ) | |||||
EHANG HOLDINGS LIMITED | |||||||||||||||||||
UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS | |||||||||||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for per share data and per ADS data) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
June 30, 2022 |
June 30, 2023 |
|||||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Gross profit | 9,813 | 14,194 | 6,020 | 830 | 13,429 | 20,214 | 2,788 | ||||||||||||
Plus: Share-based compensation | - | - | - | - | - | - | - | ||||||||||||
Adjusted gross profit | 9,813 | 14,194 | 6,020 | 830 | 13,429 | 20,214 | 2,788 | ||||||||||||
Sales and marketing expenses | (12,243 | ) | (12,474 | ) | (13,526 | ) | (1,865 | ) | (24,940 | ) | (26,000 | ) | (3,586 | ) | |||||
Plus: Share-based compensation | 4,545 | 4,951 | 4,656 | 642 | 8,897 | 9,607 | 1,325 | ||||||||||||
Adjusted sales and marketing expenses | (7,698 | ) | (7,523 | ) | (8,870 | ) | (1,223 | ) | (16,043 | ) | (16,393 | ) | (2,261 | ) | |||||
General and administrative expenses | (39,563 | ) | (24,996 | ) | (31,061 | ) | (4,284 | ) | (63,073 | ) | (56,057 | ) | (7,731 | ) | |||||
Plus: Share-based compensation | 10,726 | 9,163 | 10,693 | 1,475 | 20,979 | 19,857 | 2,738 | ||||||||||||
Adjusted general and administrative expenses | (28,837 | ) | (15,833 | ) | (20,368 | ) | (2,809 | ) | (42,094 | ) | (36,200 | ) | (4,993 | ) | |||||
Research and development expenses | (34,727 | ) | (54,075 | ) | (37,414 | ) | (5,160 | ) | (66,728 | ) | (91,489 | ) | (12,617 | ) | |||||
Plus: Share-based compensation | 7,834 | 27,325 | 8,607 | 1,187 | 15,373 | 35,931 | 4,955 | ||||||||||||
Adjusted research and development expenses | (26,893 | ) | (26,750 | ) | (28,807 | ) | (3,973 | ) | (51,355 | ) | (55,558 | ) | (7,662 | ) | |||||
Operating expenses | (86,533 | ) | (91,545 | ) | (82,001 | ) | (11,309 | ) | (154,741 | ) | (173,546 | ) | (23,934 | ) | |||||
Plus: Share-based compensation | 23,105 | 41,439 | 23,956 | 3,304 | 45,249 | 65,395 | 9,018 | ||||||||||||
Adjusted operating expenses | (63,428 | ) | (50,106 | ) | (58,045 | ) | (8,005 | ) | (109,492 | ) | (108,151 | ) | (14,916 | ) | |||||
Operating loss | (74,296 | ) | (75,746 | ) | (75,305 | ) | (10,386 | ) | (138,110 | ) | (151,051 | ) | (20,831 | ) | |||||
Plus: Share-based compensation | 23,105 | 41,439 | 23,956 | 3,304 | 45,249 | 65,395 | 9,018 | ||||||||||||
Adjusted operating loss | (51,191 | ) | (34,307 | ) | (51,349 | ) | (7,082 | ) | (92,861 | ) | (85,656 | ) | (11,813 | ) |
EHANG HOLDINGS LIMITED | |||||||||||||||||||
UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (CONT’D) | |||||||||||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for per share data and per ADS data) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
June 30, 2022 |
June 30, 2023 |
|||||||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
Net loss | (73,865 | ) | (87,036 | ) | (75,728 | ) | (10,446 | ) | (142,681 | ) | (162,764 | ) | (22,447 | ) | |||||
Plus: Share-based compensation | 23,105 | 41,439 | 23,956 | 3,304 | 45,249 | 65,395 | 9,018 | ||||||||||||
Plus: Amortization of debt discounts | - | 12,023 | - | - | 12,023 | 1,658 | |||||||||||||
Plus: Certain non-operational expenses | - | - | - | - | 5,803 | - | - | ||||||||||||
Adjusted net loss | (50,760 | ) | (33,574 | ) | (51,772 | ) | (7,142 | ) | (91,629 | ) | (85,346 | ) | (11,771 | ) | |||||
Net loss attributable to ordinary shareholders | (73,553 | ) | (86,825 | ) | (75,563 | ) | (10,423 | ) | (142,214 | ) | (162,388 | ) | (22,395 | ) | |||||
Plus: Share-based compensation | 23,105 | 41,439 | 23,956 | 3,304 | 45,249 | 65,395 | 9,018 | ||||||||||||
Plus: Amortization of debt discounts | - | 12,023 | - | - | - | 12,023 | 1,658 | ||||||||||||
Plus: Certain non-operational expenses | - | - | - | - | 5,803 | - | - | ||||||||||||
Adjusted net loss attributable to ordinary shareholders | (50,448 | ) | (33,363 | ) | (51,607 | ) | (7,119 | ) | (91,162 | ) | (84,970 | ) | (11,719 | ) | |||||
Adjusted basic and diluted net loss per ordinary share | (0.44 | ) | (0.28 | ) | (0.43 | ) | (0.06 | ) | (0.80 | ) | (0.72 | ) | (0.10 | ) | |||||
Adjusted basic and diluted net loss per ADS | (0.88 | ) | (0.56 | ) | (0.86 | ) | (0.12 | ) | (1.60 | ) | (1.44 | ) | (0.20 | ) |
Photo Credit: Archer Aviation Inc.
Archer Aviation Inc. (Santa Clara, Calif., U.S.) has made a series of announcements that reinforce its path to Federal Aviation Administration (FAA) certification and commercial operations in 2025. In tandem, the company issued a shareholder letter providing additional details on these updates along with its second quarter operating and financial results and third quarter 2023 estimates, which can be accessed here.
“Over the last quarter, we’ve seen the U.S. government make an unwavering commitment that America will lead the way in commercializing eVTOL [electric vertical takeoff and landing] aircraft, the FAA validated the timeline for eVTOL aircraft to begin operations in the U.S. in 2025 and leaders in the mobility industry, Stellantis, United Airlines and Boeing, have come together to invest in Archer’s future,” Adam Goldstein, Archer’s founder and CEO, says. “The pace at which our industry is advancing is unprecedented. Our team’s hard work and dedication have brought us to this exciting moment, and we can’t wait to see Midnight soar.”
Led by Stellantis (Amsterdam, Netherlands), Archer’s long-term strategic partner, Archer says it has further strengthened its liquidity position with a $215 million equity investment round. This investment round includes an acceleration of $70 million from Stellantis under the strategic funding agreement entered into in January 2023, with $55 million remaining available under that facility. Stellantis has provided the manufacturing expertise and capital needed to accelerate Archer’s business objectives, as well as the strategic vision and steadfast support from CEO Carlos Tavares and chief engineering and technology officer Ned Curic.
Archer continues to make strong progress on Midnight’s certification program with the FAA in support of the company’s planned entry into service in 2025.
The roster of investors from this latest funding round also includes United Airlines and industry giant Boeing, as well as other financial institutions, including ARK Invest. The funds from this round are intended to be used for working capital and general corporate purposes, including Archer’s continued development of its aircraft and related technology, as well as the build out of its manufacturing and test facilities.
Archer and Wisk Aero (Mountain View, Calif., U.S.), along with The Boeing Company (Arlington, Va., U.S.), have also announced a collaboration that looks forward to the growth and development of the advanced air mobility (AAM) industry. Simultaneously, the parties reached a settlement to resolve the federal and state court litigation between them. This collaboration is said to puts Archer in a unique position to be able to source autonomy technology from a leader in the industry. Over the long term, autonomy is seen as one of the keys to achieving scale across all AAM applications, from passenger to cargo and beyond.
This strategic relationship will leverage each company’s respective strengths and competencies with the goal of accelerating the commercialization of autonomous flight. This approach is a natural extension of Archer’s overall strategy of focusing its in-house R&D on the key enabling technologies that cannot be sourced from the existing aerospace supply base, thereby helping Archer potentially avoid hundreds of millions of dollars of spending.
In addition, Archer announces that its Midnight aircraft has received its special airworthiness certificate from the FAA. This certification signals that Archer’s aircraft has successfully met all FAA safety requirements enabling it to begin flight test operations, which Archer expects to commence in the coming weeks.
Archer continues to make strong progress on Midnight’s certification program with the FAA in support of the company’s planned entry into service in 2025. This is an important step as Archer readies to begin its piloted “for credit” testing of the aircraft with the FAA in early 2024 and bring online the company’s high-volume eVTOL production facility in Covington, Ga., U.S. in mid-2024 alongside Stellantis.
As part of Archer’s recently announced landmark agreements with the Department of Defense valued at up to $142 million, the company is on track to deliver the Midnight aircraft to the U.S. Air Force later this year or early next year. Archer believes this would make Midnight the first ever eVTOL aircraft delivered to a customer.
As the advanced air mobility market begins to take shape, market leader Joby Aviation works to industrialize composites manufacturing for its first-generation, composites-intensive, all-electric air taxi.
As advanced air mobility expands and annual shipsets get into the thousands, the demand for composite propeller blades is expected to skyrocket. What are the implications for the composites supply chain?
Composites are ripe for entry into a variety of markets, but advanced air mobility and hydrogen storage are poised to put unprecedented pressure on the supply chain.
Exam Simulator 3.0.9 uses the actual Financial CEMAP-1 questions and answers that make up Exam Braindumps. CEMAP-1 Exam Simulator is full screen windows application that provide you the experience of same test environment as you experience in test center.
We are a group of Certified Professionals, working hard to provide up to date and 100% valid test questions and answers.
We help people to pass their complicated and difficult Financial CEMAP-1 exams with short cut Financial CEMAP-1 Exam Braindumps that we collect from professional team of Killexams.com
We provide actual Financial CEMAP-1 questions and answers in Exam Braindumps that we obtain from killexams.com. These Exam Braindumps contains up to date Financial CEMAP-1 questions and answers that help to pass exam at first attempt. Killexams.com develop Exam Simulator for realistic exam experience. Exam simulator helps to memorize and practice questions and answers. We take premium exams from Killexams.com
Exam Braindumps that we provide is updated on regular basis. All the Questions and Answers are verified and corrected by certified professionals. Online test help is provided 24x7 by our certified professionals. Our source of exam questions is killexams.com which is best certification exam Braindumps provider in the market.
We provide Live Chat and Email Support 24x7. Our certification team is available only on email. Order and Troubleshooting support is available 24x7.
4127 California St,
San Francisco, CA 22401
+1 218 180 22490