Kandi Technologies Group, Inc.

Greetings. Welcome to Candy Technologies' first quarter 2024 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Kiwa Luau, Investor Relations Manager. Thank you. You may begin.

Thank you, operator. Hello, everyone. Thank you for joining us on today's conference call to discuss Candice's results for the first quarter 2024. 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 the Newswire services. On the call with me today are Mr. Xiaoming Hu, Chairman of the Board, Dr. Xueqing Dong, Chief Executive Officer, and Mr. Alan Lin, Chief Financial Officer. Dr. Dong will deliver prepared remarks in Chinese, which I will then translate. After that, we will have a Q&A session. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding these and other and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statement 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, Xueqing Dong. Go ahead, Dr. Dong.

大家好,我是康迪集团CEO董学行。 欢迎大家参加今天的会议。 我们很高兴地和大家报告,我们今年开局晚限, 第一季度总收入约为2,070万美元, 净收入约为80万美元。 鉴于我们销售策略的调整, Although the sales and overall income of the first quarter have fluctuated, we have successfully expanded and progressed in the North American market through large-scale supermarket cooperation. At the same time, we have also made progress in Southeast Asia and the European market, and have fully prepared for the long-term big sale. What is worth proud of is that our assets are in good condition and the financial situation is good. At the same time, we have repurchased 564,302 shares this quarter, which shows our confidence in the future development of the company.

Hello, everyone. I'm Xueqing Dong, the CEO of Candid Technologies Group. Welcome to today's conference call. We are pleased to report a solid start to the year with total revenue for the first quarter approximately $20.7 million and net income around $0.8 million. Despite some fluctuations in sales and overall income, Due to the adjustments in our sales strategy, our expansion in the North American market is progressing smoothly through collaboration with large nationwide chains. We have also been advances in the Southeast Asian and European markets, laying the groundwork for robust sales in upcoming peak season. It is with pride that we highlight our stable balance sheet and healthy financial addition. Additionally, we have repurchased 564,302 shares this quarter, reflecting our confidence in the company's future growth.

Next, we will also launch starting batteries and many more competitive pure electric off-road vehicle products and pure electric water sports products, etc. The launch of these products is likely to greatly improve our sales revenue. At the same time, we are going to launch a new golf club with the same name as the 32-year-old American olive team. This strategy not only shows our confidence in the future growth of the company, but also shows that we are

Currently, we are actively refining our product portfolio. Already in the first quarter, we have begun rolling out our rechargeable AA batteries to the market. Looking ahead, we are excited to introduce starter batteries and a more competitive lineup of all electric off-road vehicles and electric water sports products. We anticipate these new products will significantly drive our sales revenue upward. At the same time, we are gearing up to launch our limited edition golf card collection. These unique series, created in partnership with the National Football League and Lowe's, will feature branding for all 32 NFL teams. This initiative is a clear indication of our confidence in our future growth and our steadfast commitment to delivering value to our shareholders. I am confident that our strategic adjustments will garner the understanding and support of our shareholders.

Now we will move on to the Q&A session. Tianmen Hu Xiaoming and I will answer your questions, and Ms. Kewa and Mr. Allen will provide translation for English questions. Please go ahead and ask your questions.

If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Michael Pfeiffer with Oppenheimer and Company. Please proceed.

Hi, thanks for taking my question. On the year-end 10K press release, it was good to see the CEO for the first time mentioning lows and making what appears to be an attempt at a very positive comment for the balance of this year. However, I assume due to a translation error, which should have been a positive statement, ended up putting a negative spin on the stock that started the severe price decline. Management was immediately notified of the error, which should have been immediately corrected. but instead chose to ignore it. Here is an excerpt from the PR that contained the confusing error. Do you want to just translate that quickly?

Sure. 这问题说是在年末10K的新闻稿中, 首次有看到CEO提到Lowes并对今年一下时间做出的非常积极的评价, 这是很令人欣慰的。 但是我猜想可能是因为发音的错误, Go ahead. Thanks.

Dr. Dong, CEO of Candy, commented, we acquired Northern Group to expand our sales channels. Moreover, we further strengthen our partnership with Lowe's, expanding to more than 10 super centers in 2024, thereby broadening our market coverage in North America. We're proud to return a profitability in 2023, marking an important milestone in our development journey. Lowe's refers to each of its 2,500 stores as super centers in their advertising and promotions. The PR in question was the first time Candy has even admitted in a PR that Candy was stealthily doing business with Lowe's since mid-22. Without correcting that error in the PR, it gives an impression that Candy is excited about Lowe's adding another 10 of its super centers, when in reality, Candy at that time had long since opened up all of its 2,500 stores based on store managers' discretion by last year's end. Please translate that. Thank you.

In the news, this is what the original text says. The CEO of Conduit, Dr. Qin, commented that at the same time, we have also acquired a northern group and expanded our sales channel. In 2024, on the basis of strengthening cooperation with Lowe's, we expanded our cooperation with more than 10 supermarkets and expanded our market coverage in the North American market. In 2023, we achieved a turning point all year round. This is an important milestone on our development path. In its advertising and promotion, Lowe's calls its 2,500 stores a super center. The above news is the first time Condi has admitted that it has been secretly running its business in Lowe's since the end of 2022. Due to the mistake of timely correction, the outside world may have mistakenly thought that Condi was excited about Lowe's adding 10 super centers. Also on the last conference call, Mr. Hu, in response to a question, stated,

So for this year, on top of what we are working with the Lowe's Superstores, we have now added the corporation with more than a dozen or so of the retail chains with different scales. Currently, we are working on child sales in those superstores. In addition, on top of the cooperation of the supermarket, we are working with the dealership with more than 300 partnerships during 2023. And in this upcoming 2024, we are trying to work with more than 1,000 dealerships in the U.S. market. If you could just translate that, and I'll get to my questions quickly. Thank you.

I'm so I know that something how we don't don't do you go when he who says he's down for that as well in speaking and truly we're making your day you know how do you sound in the huddle family by home I had some show them jala you should be yeah who don't blame all the links oh yeah so the huddle who can woman can die they say how do you sound yet we want our home time to sell so who's a tool are you trying to the huddle to buy woman's on the other than me Okay, so questions. Since candy products were already available in all Lowe's super centers at the time of the prior PR quote, what specifically was the CEO attempting to refer to

with his partnership with Lowe's expanding to more than 10 supercenters in the 2024 quote to broaden market coverage.

So, first of all, when we are in the last conference call,

When we meant about the over 10 of the, you know, retail partners we are talking about, Lowe's is one of the retail partners. And, you know, and then speaking of Lowe's, just want to clarify that we actually don't have the access to all 2,500 of them, but rather this portion of it is still expanding based on our negotiation and collaboration.

He was asking about all the 2,500 companies. It's not like that. At that time, we were selling through Common. We were selling through Common's brand. After we directly cooperated with Condi, we expanded from 200, 250, and 300 companies to 500 this year. In June,

好的,胡总,我刚才跟他已经受证了,我再把您再细跟他回复好吗? 我刚才反正跟他讲过这个说法,没有联储百家那么多的。 And Mr. Hu would also like to add more color that, you know, as I just mentioned just now, we don't really have access to all these 2,500. of retail stores of Lowe's. Currently, we have roughly 500 stores, although maybe not every 500 stores will carry all of our products. It depends on the category of the products and type as well. By next few months, we hopefully will expand the retail stores working with Lowe's up to 600 or 900, or maybe by the end of the year. We expect the stores that will cover our products will be over 1,000. And, of course, that's our plan for now. So you can be clear, you know, the collaboration scale with them.

Okay. Thank you. That gives some clarity. Thank you. Regarding Mr. Hu's comment on the last conference call, was this dozen or so of the retail chains with different sales, currently child sales, confused with the CEO's comments about the Lowe's Superstore sales in the year-end PR. So can you just kind of explain a little bit more about that comment related to the child sales on the Lowe's Superstores?

Okay. His second question is that he also wants to ask Mr. Hu to clarify. He also said that there are more than 10 superstores First of all,

There are more than 10 companies. This is not a matter of marketing. More than 10 companies are one of them. It's already been made clear. We haven't talked about selling children's products. We are selling our products, that is, the products that are being sold now, are products for various non-road use vehicles, not children's products. More than 10 companies are selling non-road use vehicles produced by us. As for our cooperation with more than 10 supermarkets, I can't tell you which supermarkets. You can see it on the website of our SC. You can see which supermarkets our products have been sold in. You can see it on the website.

So, first of all, I believe that, you know, there will be no such confusion because we keep stressing that, you know, there are over 10 of the retail partners that we are working with, and Lowe's is one of them. As for the list of those retail partners of the magic retailers that we're working with, you can refer to the list on our, you know, KMD America website. And speaking of the child cells, we are not quite sure, do you mean the scale of the cells being small, or do you mean the cells of the children's products? Currently, we are selling all kinds of our outdoor off-road golf carts, the UTVs, and ATVs with those partners.

Hope this can address your question.

I think the child sales was sort of your quote, so I guess trying to understand maybe what type of products are the child sales. Can you delineate that, or is that not what you meant by child sales?

Can you remind us where the quote is when you're referring to the child sales?

I'll have to find that.

Okay.

Yeah, I think it's a quote. So I said it. On the last conference call, Mr. Hu, in response to a question, stated, so for this year, on top of what we're working with the low superstores, we have now added that corporation with more than a dozen or so of the retail chains with different scales. Currently, we're working on child sales in those superstores. I believe that's a quote from Mr. Hu. If I'm wrong, I'm wrong, but that's what I said.

Okay, during the call, not in the presentation.

I think we meant trial, not the trout. Trial. The trial sales.

Trial. Oh, that clears it up. Trial sales. Understood.

Okay. That's right.

All right. Well, that makes it clear. Thank you very much. Maybe it was translated incorrectly in that quote. Thank you.

Thank you. Hu Zong, let me translate this first. Hu Zong, he just said that the sales of this child may be OK. I'm sorry, operator. Yes, we can take next question.

Thank you. Our next question is from Steve Miller, private investor. Please proceed.

Good morning, Kiwa. Just with regard to the previous question that you guys fielded, if you would resume putting out a transcript of the Q&A call rather than rely on third parties, that would give you an opportunity to clear up any misstatements or mistranslations. Otherwise, this is what happens. People are taking statements that, in fact, aren't accurate. My first question is regarding the Lowe's NFL Cup. Last week, Lowe's added some promotional material on their Google-sponsored ads, as well as adding a new website landing page on their e-commerce site. promoting a new line of candy golf carts as part of Lowe's 100 million a year NFL exclusivity sponsorship program. From the posting, each of the 36 NFL teams would have their own custom-branded candy golf carts going on sale in August for the fall season. Could you go ahead and translate that?

Okay. First of all, he said that the question he asked from the investor was about the mix-up of a single word. It's a very good explanation. That is, the company should have its own phone conference documents to expose, rather than relying on the third party to expose directly through AI. In this way, the company can to correct some of the errors in the translation and avoid some confusion. The problem is that last week, Lowe's added a new landing page in Google Advertising to promote a new series of golf balls under the exclusive sponsorship plan of the $100 million U.S. National Volleyball Federation. Go ahead. Continue. So this weekend, I assure you, all shareholders were truly excited when they saw three pages on the Lowe's website showing the candy customized carts for the 36th

NFL teams, inviting advance orders for delivery in August. However, sometime on Sunday or Monday, it appears Lowe's took down those three landing pages. Clearly, Lowe's had been working on this web design for this project for some time, and rightly so, as it's a terrific idea. Seeing it suddenly taken down was a surprise, as was the taken down post on Candy America's own Twitter homepage. Yet today, you proudly reveal the Lowe's NFL link-up in your press release. Go ahead and translate that.

So when I saw this advertisement, it said that it would start selling in August. And our shareholders also saw the information saying that they can now accept pre-order orders for pre-payment. But it seems that since Monday, Lowe's has removed these three logins. And County America has also removed the previous tweets and other information on the social media. So this is very surprising. I don't know what's going on. But today I saw the morning news that the company posted, and it was mentioned again about this cooperation with NFL and Lowe's.

Continue. Great. So my question is, what's the status of this new Lowe's NFL golf cart offering? It's a terrific idea and should be heavily promoted by Candy as well as Lowe's as it's a huge attention getter. Not only will it help Candy's sales, but just as important, your credibility. That's my question.

So my question is, what's going on? So my question is, what's going on? This is a very big thing. The company should spread this cooperation a lot. This will not only help the company's sales, but also help the company to improve its popularity. I want to know how far this cooperation has progressed and what the situation is.

As far as we know, last week, the boss tried it on this website. There are still some small problems on the website that are currently being adjusted. I believe that next week, you will be able to see all the related products of the 32 teams. This, of course, is a very big deal. I believe that this will be of great help to the improvement and growth of the Condi brand and the growth of sales. Here I want to explain First of all, there are actually only 32 teams in the NFL, and Lowe's is the exclusive partner of the NFL to sell the golf carts branded by Candy.

As far as the website you mentioned, we believe that there are some adjustments to be taken care of, and we estimate that all the information on the website will be shown again with such news and probably information by next week. Indeed, that is a very big deal for us, Candy, and hopefully that can promote our brand even more and better.

Great. And then a related question.

Then my related question, what other products can we expect Candy to be selling through the Lowe's-Candy-NSL relationship?

我的下一个问题是,就是公司期待通过跟Lowe's还有橄榄球联盟的合作, 还会销售什么其他的相关产品呢?

Currently, the product being sold between Lowe's and NFL of the brand under Candy is the golf cards. And we will see how it develops in the future. But that's the product for golf cards for now. Thank you.

My next question is regarding your consultant and regarding the proposed spinoff. On the past two conference calls, questions were asked about a statement in your 10-K disclosing a consultant who was hired back in May of 2023 with the contract to terminate this month. The consultant was paid 300,000 shares of Candy stock worth a million dollars. Alan had responded that the consultant was hired for your planned spinoff the U.S. subsidiaries as one separately listed public company.

Nothing else is said.

Go ahead and translate that.

Continue, please.

If I understand your intent, it would be a NASDAQ listing. Candy would retain a majority share position. The spinoff would release value of candy not represented in the current share price and allow it to book as a separate company, its own sales and P&L. Based on NASDAQ minimum prices and market cap, however, logic would seem to make it mandatory The candy stock price would have to be trading at least three or four times higher than currently to get an underwriting sponsor firm to manage the IPO. Candy shares have done nothing but going down since the consultant was hired. Can you go ahead and translate that?

Thank you. If I understand correctly, we want to separate Condi from the U.S. and become an independent Nasdaq listed company. This way, we can release the true value of Condi as an independent manufacturer. We can also have our own independent accounting system and our own loss records. However, it seems that since we hired this consultant, our stock has been declining.

Okay, my question is, what value has the $1 million consultant contract brought to Candy, given where Candy's share price stands today, and what is the contract's current status, and has the consultant been retained again, or will be in the near future?

What is the value of hiring this consultant? It didn't help the company's stock, and now we don't know the status quo. Have we rescheduled with this consultant? Can you tell us what the current situation is like? We don't need to reschedule this contract.

Although the contract is about to expire, the relevant business is still advancing.

Even though maybe the contract is expired, however, the related process keeps moving, and the whole process is being proceeded. So we don't think those consultant fees will be wasted.

Do you anticipate the spinoff will be finalized this year?

So first of all, you know, the plan is to do the dual listing instead of spin-off, which is two separate concepts.

And the related process is being, you know, proceeded in orderly.

If things go smoothly, hopefully the whole process can be completed by the end of this year.

Are you anticipating any new Candy America acquisitions to be made before the spinoff will be consummated? For example, additional distribution of manufacturing facilities?

We don't have such plan or consideration for now.

Out of curiosity, was the consultant Patrick Koh in his company or is it someone else? And why didn't you disclose that in the SEC filings?

Are you asking... Who is this consultant, right? How come we don't disclose him in the SEC filings?

Yes. Yes.

Yes.

Actually, you know, as per the SEC disclosing guidance, we don't have to disclose them and the party of our consultant because they are not the underwriter.

So hopefully they can address your question.

I understand. Can you comment on the impact of any of the recently announced tariffs on EVs and lithium batteries?

I'm sorry, Steve. You're a little bit skipping. Can you repeat your question?

Sure. Can Mr. Hu comment on the impact, if any, of the recently announced tariffs on EVs and lithium batteries that was recently announced?

Okay. He said, Mr. Hu, can you talk about the fact that the U.S. just announced that the Chinese electric vehicles and lithium batteries will receive tariffs? Can you tell us what your thoughts are and what your strategy is with the company?

First of all, our company's high-flying cross-country bike, because we now have 70-80% high-flying cross-country bikes, so this is not affected, not within this range. So our Li battery was originally 7.5. Now it has reached...

So first of all, our golf cart product, which is one of our major revenue assumes right now, is not under the scope of the electric vehicles, so that the 100% terabit will not impact the sales of our golf cart product. Secondly, the tariff of lithium batteries has increased from 7.5% to 25%. We will try to respond by reducing the cost and some other expense cutting in order to make our products being the same in the competitive. Finally, as for the UTV products, even though the tariff has not been announced yet at the moment, that we will consider using the CKD approach to produce and manufacture the electric UDP products in the United States in order to avoid the tariff impact.

I hope that can address your question. Thank you. Thank you.

And then the picture on Twitter that Candy America put up on their site It showed Candy America folks posing with the mayor of Laredo, Texas, with other locals in the middle of the field. Got my curiosity. Why did Candy America post that image, and what should we take from it?

Can you repeat the picture with who?

There was a Twitter Candy America post. They posted an image of Candy America folks posing with the mayor of Laredo, Texas.

Okay.

With other local officials.

Okay. I got you. He said he saw a photo on Candy America's Twitter. It was a photo of a employee of Candy America and a local mayor and some related photos. He said, what does this mean?

I see y'all you'll show me on there she saw that I'm so I'm in town I got y'all I got I said it is it's not just a lot man now I'm in Dallas to time Paul I got government you know her so the kind of thing don't let her to time policy to come and see mom I can't I'm a little bit ginger

Well, actually, it just was to explore the opportunities and possibilities. And currently, there's not very many concrete developments for now.

Okay, my last quick question. Go ahead.

Okay, and my last quick question is, this sounds odd. Who currently is the CEO of Candy America?

My next question is, who is the CEO of Candy America right now?

The CEO of Candy America is Johnny Tai, and I believe that such information is also disclosed online on our website.

Okay, thank you. Yeah, DeBerry Golf Cars had put out a press release and had referred to someone else. Thank you very much for your responses.

Appreciate it. Thank you.

Our next question is from Terry McLemore with Lickmore and Associates. Please proceed.

Yes, thank you. Two quick questions. First one is, can you give us an update on sales that are international, such as the retailers internationally that we're selling our golf carts through? That's the first question. And then the second question, can you give us guidance for the rest of 2024, and I know I'm just asking for a best guess here, and maybe also for the calendar year 2025. Thank you.

Hang on. Let's go one by one.

Your first question is... Yeah, international sales, who the retailers are, what percentage... International sales? International sales? Yes.

Okay. He has two questions. The first question is that he wants to know how our international sales are doing. Now we are making progress in Southeast Asia and Europe.

We are continuously purchasing, but the quantity is not very high.

Currently, we are trying to expand ourselves to the regions such as Southeast Asia and then the European regions. However, the scale is not big, but we are trying to expand down the road.

So no names that you can give us on that? 老师,你现在不能把一些我们合作的名字,这些经销商的名字,合作的合作伙伴的人,这个名称能够披露给大家吗?

This area was bought by domestic foreign trade companies. The foreign trade companies are selling the imported goods directly to us.

As for the sales to those regions we just mentioned earlier, actually we deal with them through the trading companies and agencies in China. So we don't really work with those channels directly.

Okay. Well, then can you give me any kind of guidance, best-guess guidance for the rest of 2024 and 2025? I know last year you talked about maybe doing $500 million in sales. in 2025, but that may be a stretch at this point.

We believe that the total sales of the whole fiscal year 2024 will be better compared to last year.

As for the

you know, the target for the 2025, we still try to impound the target to be $500 million, and we're trying very hard to achieve such goal. Thank you.

Okay.

All right. Thank you very much.

Thank you. Our next question is from Fred Bratcher with Comcor Investments. Please proceed.

Thank you. Last week, Candy America gave a peek on its homepage and Twitter page under golf carts of the new $9,900 Candy Smile. Similar, by the way, to a modern-looking Candy Coco. What markets do you anticipate this new candy will attract, and how big a market do you expect this vehicle to grow in both golf and LSEV configuration. I have another question after that. Thank you.

Okay. 它这个问题呢是关于就是上星期康迪美国呢 有在推特上面展示一款 叫康迪微笑康迪smile的一款新车 价格为9900美元 这个外观呢非常明显 This is our new production car.

Thank you.

So, first of all, this is a new type of a product. It's in convertible format, and it is really mostly for recreational usage as cross-border golf course utilization. For further specs and other details of the product, you may refer and stay tuned to the information to be disclosed on our website. Thank you.

Okay, thank you. Also, are there other legacy vehicles such as Coco that can be resurrected as new generation EVs over the next few years?

我就想问公司的其他一些经典的老款,就类似像康迪Coco这样的车,是否会进行调整改观,再来重新升级到其他的电动车?

uh ongoing uh we will

primarily focused on our newly developed pure electric vehicles in the categories such as the golf carts, ADV, and UDV.

Okay, thank you.

Thank you. A quick question. Any intention to keep buying Candy shares?

You mean for the company? Yes. Continuous buyback shares? Okay. Correct.

We will continue to do so until we purchase the shares of Candy. Thank you. Okay.

Thank you very much.

Our next question is from Arthur Procari with Corporate Strategies. Please proceed.

Thank you. Well, aside from the awesome news about the Lowe's NFL candy collaboration announced today, what if any new breaking news products surprises does candy have for us for this year that we don't already know about? On the last conference call, no less than three times when criticized by shareholders for not sharing news on new products through press releases and also questioned about why candy doesn't follow the current trends reporting both gap and non-gap numbers as most analysts prefer, we were told all this would be taken into future consideration. On each case, management reiterated that it could and would do better in the future. However, not only has it not done better in putting out breaking news, but has also now extended the time since the last breaking news PR to over six months. The last breaking news PR on Candy actually put out by corporate was the NASDAQ news retrieval. If you go to NASDAQ news retrieval service, you'll see it was titled Candy Technology Board Authorizes Stock Repurchase. Though I must admit, the Kandy NFL announcement today was certainly breaking news and is much appreciated. Go ahead and pass that on, if you would, please. Okay.

This question says, Kandy saw explosive information in Kandy's news today about the Lowe's cooperation. What other surprises does Kandy have that we don't know? He asked. At the last phone call, the shareholders at least three times expressed their opinions, saying that the company's management team did not share the information released by the new product. And they questioned why Condi did not report at the same time as most analysts reported the data of the US GAAP's general accounting standard and the data of the non-general accounting standard. Under all circumstances, the management will do better. However, the company has not fulfilled its promise and has not released any good news. There has been no improvement in this regard. I read on Nasdaq that the last time the news was to pass historical news, Continue, please.

Since the last November PR, Candy has expanded its currently available products from the original single Coleman model to now more than a dozen conventional golf-slash-LSCV carts, plus new patented mini and midi-sized carts, along with at least two UTVs, a $3,000 go-kart, and three high-end e-bikes. And that's only locations and products that shareholders have found from the retailers' own ads on the Internet. with no help from the Candy IR department. New products and locations are only discovered through internet searches of sponsored ads. As witnessed by the current stock price, which has in the past traded at over $20 a share on little cash and a third of current revenues, management has lost a large amount of respect on Wall Street from its current and past shareholders due to the lack of giving updated information. For example, Candy's added Walmart in Q4 of 23 with potentially 4,400 outlets, Campers World, 2,200 outlets. That's a New York Stock Exchange company. Costco Canada, approximately 190 potential outlets. PV Corp, 290 outlets. And Rural King, 190 outlets.

Go ahead and read that to them.

And the company's current stock price has also dropped to 2 yuan, which means that the value of the company's stock is constantly decreasing. And we see that in addition to having many stores in Los Angeles, in the fourth quarter of 2023, it also increased, for example, it has 4,400 Walmart stores, Go ahead, continue. Okay.

This despite its brilliant redefining of its conversion from EV autos to electric off-road business model into a primary player in especially potential trillion dollar electric space. Actually, more than incredible, considering it's been less than two years since Candy introduced that first single golf cart and is already positioned in the top five of North America and growing internationally. Shareholders are upset due to seemingly indifference by management and promises with competing, or should I say, not caring about competing for new Wall Street investors. The fact is that based on year-end 2023 five-year record results, Candy has by far the most fundamentally undervalued and profitable NASDAQ listed stock, now trading at a 30% discount to its $2.90 cash, 60% discount to its book value, and 35% discount to its networking capital. My questions.

Go ahead and read that, and I'll hit you with the questions.

Okay. Okay. In fact, they achieved a very good performance on the road. In fact, since Condi launched the first golf car, it has been less than two years since the first five in North America. These are all hard to believe. But the shareholder management is very dissatisfied with the performance of investors who can attract Wall Street investors. According to the year-end financial report of Conde in 2023, Conde is the most underestimated profit stock in Nasdaq. Its trading price has more than 30% discount on the cash value of 2.9 yuan, 60% discount on the value of the account, and 35% discount on the operating capital. I have the following question. Go ahead.

Okay.

I've got four questions here and a couple of just add-ons. Does management who cumulatively own only 17% of candy stock feel any concern at all that some Chinese entity could come make a buyout tender offer at double the current $2.30 price and still end up buying candy, the whole company, at a discount to its $5 share book value and additionally accomplish Most of it's heavy lifting by using Candy's own $2.90 a share cash to steal that control.

I want to ask you, Candy's management is now holding 17% of Candy's shares. Are you worried that at a certain time in China, they may use twice the price of $2.3 a day to start acquiring the company? In fact, even if it's twice the price, every share is worth less than $5. You can buy the entire company. Thank you very much for your concern and reminder. We will carefully evaluate and take appropriate measures to avoid such risks.

So, thank you very much for your concern, and a reminder, we will carefully evaluate and take appropriate measures to avoid such risk.

Thank you. Okay.

That's not much of an answer, but let's go on to the next question. Why is management wasting shareholder value by paying for three different IR groups each month, but not taking the good advice that I'm sure each has at times offered? And if that's not true, they haven't offered that, then that's a good reason to fire them all. Pass that one on.

这个问题,他说刚才你的回答没有提供什么问题,但是我们问下一个问题。 为什么管理层在浪费股东的股东价值支付三个不同的IR团队的费用,而又却不接受他们有时提供的价值的建议? 那如果... If the fact is not so, then you have more reason to solve it for all of them.

The three AR teams you mentioned, I don't know who they are, but we currently only have one AR team in Lantengshan. In the past two years, the company has taken a strategic adjustment period. We are still based on the idea of storytelling. Currently, we only employ one IL firm, that is the Blue Shirt Group.

So, actually, we don't have three separate IL teams. And because currently, the company is in a period of the strategic adjustments to be more focused on the golf course, of the auto vehicles in the U.S. market. We still adhere to the idea that just to do more and talk less. As our strategic adjustment gradually takes shape, we will be more proactive in making the related adjustments in our pronouncement and the IR approach. Thank you.

Actually, I think you do. Well, you certainly have two, if not three, because Candy America seems to use a trade IR group. And sometimes that pops up as press releases, but most of the time doesn't as far as Wall Street news services are concerned. Pass that on just as a response.

You said American Trade? Is that the name of the IR? I don't know. There's an IR firm that Candy America uses. That's their own team, I think. We didn't invite them. Ellen.

We believe that there are some separate IL team. We work in a contract basis for U.S. entities. But, you know, in the group level, we employ one IL firm that takes care of our, you know, public information and we invest in relationship purpose.

Well, I just find it hard to believe that with everything good that's going on after 15 years with CandyNow, where we used to do 40 press releases a year, Now we're doing almost none when it comes to breaking news, and I think it has to do with splitting up of the IR responsibilities. It seems like the parent company should be the one to put out the IR. Just an opinion. Pass that on, please.

And now, there is almost no announcement about the company's business. I just think the company should put the focus of IR in the company headquarters. A lot of news should be issued by the listed company, Condi, to integrate this IR market promotion effort.

I think we will do the related adjustments on the road, and you will see the results ongoing. Thank you.

Okay, on to the rest of my questions. Several years ago, management promised shareholders that once Candy had a predictable growing revenue stream, the company would start giving revenue and earnings guidance. mandatory to attract analysts and institutions, particularly in this competitive stock market. Over the past three years, despite a much stronger balance sheet, Kennedy's institutional holdings has dropped from a peak of 15% to 3.6%. Can management give any reason why it refuses to conform to the Wall Street desire for guidance and also non-GAAP in addition to GAAP numbers, as it did in the last two quarters, I'm sorry, as it did in the last two years of the prior CFO's term?

A few years ago, the management promised that once Condi has a predictable income growth, Condi will start to provide income and profit predictions. This also attracts the necessary conditions of analysts and institutional investors, especially in this competitive market. Although the financial situation of Condi has improved greatly in the past three years, the share price ratio of Condi's institutions has also dropped from 15% to 3.6%. to see if the management could explain why they refused to follow the non-commercial accounting standards that are more favored by Wall Street to present the company's business. And two years ago, the CFO of the previous company also tried to provide financial predictions.

Thank you for your suggestions.

We'll further evaluate and complain about your suggestion and opinion and implement procedures. Thank you.

Okay. Last conference call saw a response from Mr. Hu that some management would be considered personally buying back shares in the open market as they did three years ago when they paid more than double the current price personally, and at the time cash in the bank was but a fraction where it is today. Open market companies' share buybacks are appreciated, but due to Candy's low daily volume, the 20% average volume maximum number of shares that can be purchased under the current 10B5 plan has been limited to maybe 15,000 or 20,000 shares per day. Why doesn't the company just make a straight $3.50 a share tender offer for at least 10 million shares of stock, which would only use 15% of its cash. I doubt it would be fully subscribed due to the stock quickly jumping above that price once shareholders realize management is serious about increasing shareholder value. Most importantly, such an action by an EV-related company in this specific market would get a lot of attention that one could not afford to pay for. Okay, pass that on.

At the last call, Mr. Hu said that some regulators might consider like in the past three years, to buy back shares in the public market. At that time, the price was more than twice the current price. At that time, the bank's cash flow was only a small part of what it is now. Although the company bought back shares in the public market, it was very popular, but the daily trading volume of Condi was very low. According to the plan of 10B5, the amount of shares that can be bought on average per day is limited to about 20,000 shares. Why can't the company directly start to buy at least 10 million shares, which is equivalent to using 15% of cash and then buying at a price of 3.5 yuan? And I suspect that in fact, I don't think we will be able to fully accept the offer. Because once the shareholders realize that the management is working hard to increase the value of the shares, the price of the shares will probably exceed the price of the $3.50 that we were given. The most important thing is that for a company related to the electric vehicle industry, such a move will be very much sought after by the market. Thank you for your suggestions, and we appreciate that.

We'll take it into consideration and evaluate and react properly.

Thank you.

Okay, well, that ends my presentation.

formal questions that I had for you, but I have just a few questions on what was recently announced today and what we've said on the conference call. I might add that, as I addressed earlier in my comments, we keep getting the same thing. We'll take under consideration, take under consideration. We've been hearing that for years now. But, yeah, go ahead and pass that on, and I'll go on to some follow-ups on news that just came out.

He said, I have some questions, but I just want to Continue, please.

Okay. Now, again, these are just some follow-ups of what's been said. Regarding the Lowe's 500 stores, I've polled personally down in my Houston area at least three Lowe's stores, and two of them I actually know the managers in that department, and they were under the impression that Lowe's had all 2,500 stores or whatever it is, all 2,400 stores available to be, you know, buying Candy's products. But I guess it's good news if we've been doing what we have with only 500 stores. I can't believe that this NFL thing that we're doing now isn't going to probably expand to almost all the stores. Pass that on. 我刚刚听到就是公司说现在已经和Lowes的500家店合作。 就从我所在的德州来讲吧,我有去...

I have talked to the managers of these three stores. According to them, I don't know the exact number, but about 2,000 Lowe's stores can sell Condi products. Of course, I am very happy to hear that Condi is doing this now. And now the cooperation with NFL is also very exciting. Please continue.

Well, that was actually a question, but okay.

What's the question you said?

Well, that was a question I had specifically about that subject that I was talking about, about the 500 stores, if they had any further comment. They probably don't have any further comment on that, but anyway, that's just what I've heard from the Lowe's managers. Okay. This one's interesting. You know, I've said over the past few years, like, chiding the company into how soon they think they would be able to pass Polaris. I think Mr. Hu even made a comment on that a few years ago once we got involved in this industry. But what fascinates me is the missing link to Polaris is water sports. Today's press release actually mentioned we're getting into water sports. So I'd like more explanation what that's all about.

I'm sorry, can you repeat your question one more time?

Okay. What I'm saying is that in the past, I had chided management by kiddingly asking them how soon they could pass Polaris in this off-road vehicle industry. But the missing link at that time to Polaris is Polaris is well known also for its water sports. So my question is, today's press release specifically mentioned water sports as being a new product line you're getting into. Can you expand more on what that water sports is about?

Oh, okay, okay. A long time ago, when I was talking to the management team, the management team mentioned the American company, Plurry, and we were very excited to see today's news. You also mentioned that we are now going to add some water-based products. Now, the management team is going to compete with Plurry in the future, and even surpass them. What can you say and share with us?

We haven't said that we want to go beyond the North Pole or compete with it. We will introduce it. In the U.S. market, pure electric water products are still very small. So we are now making pure electric products. We will make some developments in non-rural vehicles and water, such as individual ships and fishing boats. It should not be limited to who competes with whom or more than who. We are going to innovate a new product, which is pure electric. Because especially in fishing boats, you see, the sound of the gasoline and the blue gas is very small. This will affect the effect of fishing. If we are pure electric, the sound is very light. This is good for the whole thing. So we are going to launch some new products.

First of all, we try to focus on our own development of the new products, especially the pure electric off-road and then the water sports products. We try not to compete with anyone, but try to focus on our own development. As for the water sports, primarily now in the market, you may see the sports yacht or the fishing yacht, they are running in the gas. which is noisy, and they will hurt the fishing, you know, the ambience. So we try to research and development into the new products of the pure electric water sports product, and hopefully we can have more update to share when we have more concrete development.

Are we talking wave runners here like Polaris has, or are we just talking like Motors for electric motors for fishing boats. What are we specifically talking about in motorsports or both?

Alan. I said, please translate what he just asked. He said what he meant was what we meant. He wanted to ask what we meant. He asked what kind of products are on the water.

Is it fishing, or your own small boats, or fast boats, etc. Or maybe those bigger ones. Do you have any ideas at the moment? At the moment, we are developing fishing boats.

So currently we are focused in developing those water sports in rather small scale, like the fishing boat or the yacht for individual, you know, one man, you know, yacht kind of scale of the product.

I assume you mean by one-man yacht, wave runners or jet skis? Yeah, rather jet ski kind of style. Oh, that's great. That's super.

Okay. Alan, did you translate everything I just said?

It may not be clear to you, right? Because what we produce is a new type of personal fast food sitting inside. We are not from China. We are creating new things, pure electric. He asked if it is the same as the one used in the market now.

For example, it is the same as the model of a food truck on the water. Yes, the model is the same.

This is called a motorboat. We call it a speedboat. A speedboat is a person sitting in it. He said this is a motorboat. A motorboat is riding on it. Two horses. We are innovative products. It's different from those.

Mm-hmm. So to be more specific, the jet ski you mentioned, that's the common style we have in the market. But what we try to do is rather not the jet ski, but rather it's like kind of the speedboat or the yacht kind of thing. So we can actually sit in there, but that's only for one person size. Is it clear? So it's not really jet ski, but rather the style of the boat or the speedboat kind of thing. Okay. For only one person capacity.

Well, that sounds like a whole new product line.

Yeah, that's the new product that we try to innovate for the market. Correct. That's a new style other than the common order sports product in the market right now.

So it would probably be a patented situation like the Mini was that you released earlier this year.

I'm sorry. That will be our own pattern, our own pattern. Another one of our own patterns. Okay, I'm just about done here.

The potential of this NFL collaboration to me is just incredible. I can't imagine

maybe you should take off a six passenger golf cart and whack off the back seat in it and put a barbecue grill back there. You know, it's, uh, people like, like, uh, doing that type of stuff at the sports events in the United States over here. Uh, but anyway, uh, that's just a comment. Uh, so let's see here. Uh, well, uh, I guess the highlight of this was, I'm glad to hear that, uh, that 2025 estimate of $500 million is still a target of candy. Sorry about this. I'm sorry about the phone ringing over here. Anyway, as I said, I think that that $500 million 2025 number should make a dramatic difference in the stock price. If we can just get the story out. Oh, one last question, too. You've mentioned that you're already in 10 more, 10 big box chains already, if I understood earlier. We only know about five, at least that I'm aware of. So at some point in time, will we be disclosed to the other five R?

Okay. He just said so much. He mainly said that he was very happy to see us working with AFL and Lowe's. Maybe we can put our... It's a golf cart with a seven-seater in the back. Remove it. You can put an oven on it. Because of the sports activities in the U.S., a lot of people like to drive out and have a barbecue. That's just my opinion. Also, he was very happy to hear that the company was reborn in 2025. five billion dollars in revenue. I think this will help the stock market to pay attention to the stock market and increase the stock price. And the last question, he said he heard that the stock market is now connected to ten large supermarket chains. We have already started to cooperate. In fact, we can't see who we are cooperating with on the SC website. Because it's big and small. We are working with Laos, Costco, etc.

You know, for now, we actually start working with those 10 different, more than 10 different retail partners at the moment, but then the scale may vary. Some are larger, some are rather relatively smaller. So we try not to disclose one by one, but actually on our Candy America website, you can still see it on the vendor list. on the channel list. So, you know, for information, place a website. And down the road, we will try to disclose such information like the search channel, the retail partners we have more frequently and in more details. Thank you.

Okay. Well, thank you very much. A little bit disappointed in the revenues this quarter, but you've done a big expansion and there's a lot involved in getting this stuff to roll out, but this NFL thing sticks in my mind as being something very huge for the latter part of this year and the future years. But other than that, pretty good job. Thank you.

There are no further questions at this time. I would like to turn the conference back over to management for closing remarks.

Thank you again for joining today's conference call. If you have any further questions, please don't hesitate to contact our IR. blueshirt at gary at blueshirtgroup.co or you can contact us directly at ir at candygroup.com. We look forward to updating you on our next earnings call. This concludes our call for today. Thank you very much. You may now all disconnect.