Basis of presentation, management estimates and critical accounting policies

Principal Factors Affecting Our Results of Operations

We believe that the following factors have had, and we expect that they will continue to have, a significant effect on the development of our business, financial condition and results of operations.

In the long term, as PV technology advances and the average system costs of solar projects decrease, we expect the market for electricity in a growing number of countries to achieve grid parity. As the PV industry becomes more competitive against other energy industries and widespread grid parity strengthens demand for solar projects, we expect our costs of sales to decrease and our revenue and profitability to increase.

Government Subsidies and Incentive Policies

Our Solar Power Generation and Operations Capabilities

Results of Operations for the Three Months Ended June 30, 2022 and 2021

Sales, marketing and customer service 1,368 2.8% 1,209

Results of Operations for the Six Months Ended June 30, 2022 and 2021

Net foreign exchange gain - We had a net foreign exchange gain of $3.3 million (3.8% of net sales) and $0.7 million (0.9% of net sales) for the six months ended June 30, 2022 and 2021, respectively.

Historically, we have financed our operations primarily through cash flows from bank borrowings, financing from issuance of convertible bonds, operating activities, and the proceeds from private placements and registered offerings.

As of June 30, 2022, we had $21.3 million in cash and cash equivalents, and restricted cash.

Net decrease in cash, cash equivalents and restricted cash $ 3,408 $ (14,698 )

Net cash used in investing activities was $0.4 million for six months ended June 30, 2022, primarily as a result of cash paid for purchase of property and equipment of $2.0 million, partially offset by proceeds from disposal of equipment of $1.6 million.

Net cash generated from financing activities was $15.9 million for the six months ended June 30, 2022, primarily consisted of (i) proceeds from IPO of Phoenix of $13.4 million, (ii) proceeds from issuance of convertible note of $2.0 million.

For more information on our contractual obligations, commitments and contingencies, see Note 8 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report Form 10-Q.

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