Good morning and welcome to the Kandi Technologies Third Quarter 2021 Financial Results call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Kewa Luo, please go ahead.

Thank you, Operator. Hello, everyone. Thank you all for joining us on today's conference call to discuss Kandi's results for the Third Quarter of year 2021. Earlier today, we issued a Press Release. Covering the results, you can find the Press Release on the company's website, as well as from newswire services. On the call with me today are Mr. Hu Xiaoming, Chief Executive Officer, and Mr. Alan Lim, Chief Financial Officer. Mr. Hu will deliver prepared remarks in Chinese, which I will then translate. After that, we will have a Q&A session. .: The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please note that, unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, let me now turn the call over to our CEO, Hu Xiaoming. Go ahead, Mr. Hu.

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Thank you, Kewa. Hello, everyone, and welcome to our conference call today. I'm happy to share our business and the financial results for the third quarter. The most important highlights of the quarter was the impressive growth of revenue in the electric scooter, electric cell balancing scooter, and associated [Indiscernible] of business. This segment accounted for nearly 40% of total quarterly sales, growing approximately, 600% over the same period last year. These strong results reflects the strategic initiative we undertook a year ago when COVID was depressing the EV markets. We looked for opportunities with these addressable markets in which we could leverage our core capabilities. The scooter business was a great fit and we directed substantial resources to quickly pursue it. Our results today testify to the wisdom of this approach.

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Leading consultants McKenzie and Company estimates that by 2030, the micro mobility market, including e-scooters in the electric self-balancing scooters will reach annual sales of $200 to $300 billion in the U.S. alone. Ensuring this segment was always in our strategic plan, where the COVID crisis accelerated both our entries and the growth of the industry, because they reduce contact points and encouraged social distancing. Micro mobility vehicles such as East quarters and electric itself, Alan Lim quarters are a natural and less risky alternative to the public transportation, such as local buses and subways. Amid public transportation shutdown during the COVID, demand became urgent for micro mobility vehicles and associated [Indiscernible]

More over the flexibility and simplicity of micro mobility vehicles means that this mode of transportation [Indiscernible] faster than others. In our third quarter when delta variant to original outbreak were occurring around the world, we saw the strategic advantage of pursuing this opportunity in e-scooters and electric self-balancing scooters and associated apart.

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Looking at other lines lines of business. [Indiscernible] tax sales decreased, which impacted overall sales of electric vehicle parts. We were constrained by supply chain tension affecting the whole industry and by the restructuring of our pure EV business. Also vehicle sales declined versus last year, but were up 25% sequentially, accounting for more than 40% of total revenue. Consumer demand for off-road vehicles including ATV, UTV, and other models is increasing. We mentioned last quarter that our analysis of market interest in high performance in larger explore will drive UTV led us to give up the model K32. The K32 is a intelligence, fully in close to pure electrics, four wheel drive multi-purpose UTV. Prototypes of the K32 were delivered to the U.S. will display last month and initial feedback from dealers was positive. We plan to formally launch the K32 soon.

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Looking at our financial position. In the third Quarter, we received the final payment from theory of our sale of 22% position in the Jiangxi Huiyi joint venture. At the end of the quarter, we had a working capital of about $289 million, the best included status in our history. This level of liquidated capital opens many new opportunities for us. So we boosted our R&D spending in the Third Quarter, restructuring and recovery of RPO [Indiscernible] and the related businesses will take time. But we believe that as we finish the reset of these businesses, our electric vehicle and EV associated product line, will again achieve solid growth. A recovery in EV, combined with the strong growth of e-scooters and huge potential for off-road vehicles makes us excited and confident about our future.

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Let's now Q&A session. Kewa will take any questions and translate for me. And our CFO Alan will answer in English. Operator, please go ahead.

We will now begin the question-and-answer session. [Operator Instructions]. At this time, we will pause momentarily to assemble our roster. The first question today comes from Frank Blatterman, who's a private investor. Please go ahead.

Good evening, Mr. Hu. My 2 questions involve the EV part of Kandi's business. Number 1, is the factory on Hainan Island presently active and making cars? And if so, how many employees are actually making cars there? Question number 2, the K23 and K27 were originally introduced to the U.S. over a year ago. But presently can only be sold as neighborhood electric vehicles with a reduced maximum speed. Have they've been upgraded and approved for highway travel in the U.S. at this time or are they presently in production? When do you expect them to be shipped? Will it be before the the end of the year?

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So first of all, thank you so much for your questions. As for the first question. At present, the production of the EV product is still being adjusted and find factory. As you may know, in the past few years, the electric vehicles for this by Kandi, we have used that Geely's production qualifications. Since this year, we completely withdrew from the cooperation with Geely's and we tried looking for other partnerships in our production. Currently, we are filing the product announcement to the state government for those EV products. And we can only go into the mass-production after development, further announcements and qualifications are in place. As for the 2nd question regarding the K23 and K27, at that moment, the regular models have not yet the DOT requirements for the safety standards. We are still working on the improvement. And however currently, we cannot really provide a very accurate estimate of when the requirements will be met. As you may know, such requirements for the safety standards in U.S. is much higher, like for Airbag Safety and other standards much higher than those in China and European countries. Currently, there is no any Chinese company have the EV meeting such safety standards in U.S. We are working very hard to achieve this goal. and thank you.

Our next question comes from Rotten Bozrah with [Indiscernible] Please go ahead.

Good day, Mr. Hu, and everybody on the call. I was wondering since it has been brought up before, are you still contemplating a share buyback? And since I understand there was a board resolution to authorize this, what share price would be inducing such a buyback?

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Thank you for your question. Yes, we are considering during such process. And based on the market development and condition, we will execute that share buyback at the appropriate moment and condition. Thank you.

Heading onto Frank Blatterman 's question. By what time do you expect to have a production license for EVs?

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So as for your question, we expect that until March or April next year, 2022, we will kick up the mass production and sales of our EV models for that domestic market.

Thank you.

Our next question comes from George Kyriakos, who is a Private Investor, please go ahead.

Hi, thanks for taking my questions. You can correct me if I'm wrong, I see the focus in Kandi is shifting to the sports equipment as in EV, and nevertheless there are heavy competition coming from inside China and outside China for the EV sector. My question is, what appropriate focus or ways can be taken in advance to eliminate this competition or to be one of their competitors with heavy competition coming in the markets for the EV or is your focus is go towards the sports models? Thank you.

I'm sorry, can you repeat the first part?

Yeah. Is your focus as the sports equipment for the EV? Since I see most of their revenue coming from the EV equipment, sports equipment, more than 40%, or your focus as the car and what appropriate steps you're taking to eliminate the competition or the heavy competition coming in the market?

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Thank you for your question. Is really a great 1 onboard? First of all, as for the scooters, it's adding as a supplemental to our business. However, our focus is always on the EV and related products. So in the EV market we are trying to divide into 2 streams. 1 is in such a competitive market, we try to focus in the car hailing platform especially for the domestic market. With our events, battery swap technology, you definitely be [Indiscernible] the market and meeting order demand from the hailing platform users. So we expect there will be mass productions from our such models that facilitate the car hailing platform with the better swap in next April or May, I mean, March or April in 2022. Apart from our focus on the covenant platform. We also try to enter the market for the electronic UTV and ATV. As you may know, currently, primarily of those models for the UTV and ADP are using Cashlink. Because of the upcoming requirement and standard for the emission limit, most of them orders were shift to electronic mode. With our technology we tried to enter this market and tried to be one of the pioneer and events market supplier in a couple of years. So that's our plan and goal, and thank you again for your questions.

[Operator Instructions]. There being no questions at this time, this will conclude our question-and-answer session. I would like to turn the conference back over to Xiaoming Hu for any closing remarks.

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Thank you again for attending today's conference call. We are confident that we are going closer to the multiple targets spreading over EV products, battery swap business, e-scooters, and market expansion. I look forward to sharing with you more positive news in our next call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.