UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to__________

Commission file number: 0-30351

SPI ENERGY CO., LTD.

(Exact Name of Registrant as Specified in Its Charter)

Cayman Islands

20-4956638

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

4803 Urbani Ave., Mc Clellan Park, CA		95652
(Address of Principal Executive Offices)		(Zip Code)

(408) 919-8000

(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

4677 Old Ironsides Drive, Suite 190

Santa Clara, CA 95054
(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Ordinary Shares, par value $0.0001 per share		SPI		NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☒
Non-Accelerated Filer ☐	Smaller Reporting Company ☒
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 15, 2022, 28,555,522 ordinary shares, par value $0.0001 per share, were issued and outstanding.

TABLE OF CONTENTS

		Page
Part I.	Financial Information	2
	Item 1. Interim Financial Statements	2
	Condensed Consolidated Balance Sheets as of June 30, 2022 (Unaudited) and December 31, 2021	2
	Unaudited Condensed Consolidated Statements of Operations for the Six and Three Months Ended June 30, 2022 and 2021	3
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Six and Three Months Ended June 30, 2022 and 2021	4
	Unaudited Condensed Consolidated Statements of Equity for the Six and Three Months Ended June 30, 2022 and 2021	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	25
	Item 4. Controls and Procedures	25
Part II.	Other Information	28
	Item 1. Legal Proceedings	28
	Item 1A. Risk Factors	28
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28
	Item 3. Defaults Upon Senior Securities	28
	Item 4. Mine Safety Disclosures	28
	Item 5. Other Information.	28
	Item 6. Exhibits	28
Signatures		29

PART I

Item 1. Interim Financial Statements

SPI ENERGY CO., LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)


	June 30, 2022			December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	13,624		$	9,765
Restricted cash		7,629			8,080
Accounts receivable, net		19,209			22,599
Contract asset		1,129			1,621
Inventories		23,707			23,242
Project assets held for sale		10,120			8,946
Prepaid expenses and other current assets, net		11,775			9,584
Amount due from related parties		412			230
Total current assets		87,605			84,067
Intangible assets, net		3,035			3,433
Goodwill		4,896			4,896
Other receivable, noncurrent		1,982			268
Property and equipment, net		31,400			35,750
Project assets, noncurrent		16,116			15,969
Investment in affiliates		69,606			69,606
Operating lease right-of-use assets		13,697			13,923
Deferred tax assets, net		130			168
Total assets	$	228,467		$	228,080
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	25,058		$	25,612
Accrued liabilities		11,583			10,094
Income taxes payable		2,440			1,684
Advance from customers		3,077			4,924
Short-term borrowings and current portion of long-term borrowings		9,537			9,120
Amount due to an affiliate		10,544			10,603
Convertible bonds		46,435			48,603
Accrued warranty reserve		829			628
Amount due to related parties		300			–
Operating lease liabilities, current		1,283			1,351
Consideration payable		59,120			61,219
Total current liabilities		170,206			173,838
Long-term borrowings, excluding current portion		6,913			12,800
Deferred tax liabilities, net		2,680			2,970
Operating lease liabilities, non-current		12,001			12,522
Total liabilities		191,800			202,130
Equity:
Ordinary shares, par $0.0001, 500,000,000 shares authorized, 27,992,567 and 25,352,060 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		3			3
Additional paid in capital		715,062			695,073
Accumulated other comprehensive loss		(36,930	)		(35,257	)
Accumulated deficit		(646,548	)		(637,390	)
Total equity attributable to the shareholders of SPI Energy Co.,Ltd.		31,587			22,429
Noncontrolling interests		5,080			3,521
Total equity		36,667			25,950
Total liabilities and equity	$	228,467		$	228,080

The accompany notes are an integral part of these condensed consolidated financial statements.

SPI ENERGY CO., LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share data)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2022			2021			2022			2021

Net sales	$	48,584		$	45,818		$	87,119		$	79,440
Cost of revenue		44,712			40,589			80,538			72,073
Gross profit		3,872			5,229			6,581			7,367
Operating expenses:
General and administrative		7,625			7,674			16,753			17,269
Sales, marketing and customer service		1,368			1,209			2,611			2,246
Provision (reversal) for credit losses		474			319			(209	)		319
Total operating expenses		9,467			9,202			19,155			19,834
Operating loss		(5,595	)		(3,973	)		(12,574	)		(12,467	)

Other income (expense):
Interest expense, net		(1,637	)		(1,259	)		(3,038	)		(2,702	)
Net foreign exchange gain (loss)		2,262			(792	)		3,324			710
Others		3,207			103			3,995			752
Total other income (expense), net		3,832			(1,948	)		4,281			(1,240	)
Net loss before income taxes		(1,763	)		(5,921	)		(8,293	)		(13,707	)
Income tax expense		455			546			711			860
Net loss	$	(2,218	)	$	(6,467	)	$	(9,004	)	$	(14,567	)
Less: Net income attributable to noncontrolling interests		95			103			154			342
Net loss attributable to shareholders of SPI Energy Co., Ltd.	$	(2,313	)	$	(6,570	)	$	(9,158	)	$	(14,909	)
Net loss per ordinary share:
Basic and Diluted	$	(0.08	)	$	(0.27	)	$	(0.34	)	$	(0.64	)
Weighted average shares outstanding
Basic and Diluted		27,428,544			23,989,039			26,604,944			23,434,015

The accompany notes are an integral part of these unaudited condensed consolidated financial statements.

SPI ENERGY CO., LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2022			2021			2022			2021
Net loss	$	(2,218	)	$	(6,467	)	$	(9,004	)	$	(14,567	)
Other comprehensive income (loss), net of tax of nil:
Foreign currency translation adjustments		(2,427	)		(72	)		(2,362	)		(286	)
Total comprehensive loss		(4,645	)		(6,539	)		(11,366	)		(14,853	)
Comprehensive loss attributable to noncontrolling interests		69			98			(535	)		89
Comprehensive loss attributable to shareholder of SPI Energy Co., Ltd.	$	(4,714	)	$	(6,637	)	$	(10,831	)	$	(14,942	)

The accompany notes are an integral part of these unaudited condensed consolidated financial statements.

SPIENERGY CO., LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except for share and per share data)


	Ordinary Shares				Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Equity Attributable to Shareholders of SPI Energy			Noncontrolling			Total
	Shares		Amount		Capital		Deficit			Loss			Co., Ltd.			Interests			Equity
Balances at December 31, 2021		25,352,060	$	3	$	695,073	$	(637,390	)	$	(35,257	)	$	22,429		$	3,521		$	25,950
Net loss		–		–		–		(6,845	)		–			(6,845	)		59			(6,786	)
Foreign currency translation adjustments		–		–		–		–			728			728			(663	)		65
Issuance of restricted share units to employees		229,888		–		623		–			–			623			–			623
Settlement of convertible debt with ordinary shares		752,393		–		1,750		–			–			1,750			–			1,750
Issuance of ordinary shares for settlement of consideration related to Acquisition of Phoenix		42,442		–		–		–			–			–			–			–
Share-based compensation expense		–		–		595		–			–			595			–			595
Balances at March 31, 2022		26,376,783	$	3	$	698,041	$	(644,235	)	$	(34,529	)	$	19,280		$	2,917		$	22,197
Net loss		–		–		–		(2,313	)		–			(2,313	)		95			(2,218	)
Foreign currency translation adjustments		–		–		–		–			(2,401	)		(2,401	)		(26	)		(2,427	)
Settlement of convertible debt with ordinary shares		1,615,784		–		5,337		–			–			5,337			–			5,337
Issuance of ordinary shares of Phoenix in its IPO		–		–		11,344		–			–			11,344			2,094			13,438
Share-based compensation expense		–		–		340		–			–			340			–			340
Balances at June 30, 2022		27,992,567	$	3	$	715,062	$	(646,548	)	$	(36,930	)	$	31,587		$	5,080		$	36,667

	Ordinary Shares				Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Equity Attributable to Shareholders of SPI Energy			Noncontrolling			Total
	Shares		Amount		Capital			Deficit			Loss			Co., Ltd.			Interests			Equity
Balances as of December 31, 2020		22,340,689	$	2	$	670,101		$	(591,899	)	$	(32,947	)	$	45,257		$	3,129		$	48,386
Net loss		–		–		–			(8,339	)		–			(8,339	)		239			(8,100	)
Foreign currency translation adjustments		–		–		–			–			34			34			(248	)		(214	)
Issuance of ordinary shares in offering		1,365,375		–		13,591			–			–			13,591			–			13,591
Share-based compensation		–		–		3,074			–			–			3,074			–			3,074
Exercise of share option		157,000		–		600			–			–			600			–			600
Balances as of March 31, 2021		23,863,064	$	2	$	687,366		$	(600,238	)	$	(32,913	)	$	54,217		$	3,120		$	57,337
Net loss		–		–		–			(6,570	)		–			(6,570	)		103			(6,467	)
Foreign currency translation adjustments		–		–		–			–			(67	)		(67	)		(5	)		(72	)
Settlement of convertible debt with ordinary shares		74,659		–		350			–			–			350			–			350
Share-based compensation		–		–		(837	)		–			–			(837	)		–			(837	)
Exercise of share option		128,500		–		491			–			–			491			–			491
Issuance of ordinary shares for purchasing services		5,000		–		34			–			–			34			–			34
Balances at June 30, 2021		24,071,223	$	2	$	687,404		$	(606,808	)	$	(32,980	)	$	47,618		$	3,218		$	50,836

The accompany notes are an integral part of these unaudited condensed consolidated financial statements.

SPI ENERGY CO., LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	For the Six Months Ended June 30,
	2022			2021
Cash flows from operating activities:
Net cash used in operating activities	$	(11,539	)		(17,097	)

Cash flows from investing activities:
Acquisitions of property and equipment		(2,022	)		(930)
Acquisitions of PDI		–			(8,003	)
Proceeds from disposal of property and equipment		1,635			102
Net cash used in investing activities		(387)			(8,831	)

Cash flows from financing activities:
Proceeds from issuance of ordinary shares		–			13,591
Repayment of borrowings		(82,296)			(78,383	)
Proceeds from borrowings		82,714			80,786
Proceeds from issuance of convertible bond		2,000			8,000
Repayment of convertible bonds		–			(13,750	)
Proceeds from exercise of options issued to Lighting Charm Limited during disposition of SPI China		–			1,091
Proceeds from IPO of a subsidiary		13,438			–
Net cash generated from financing activities		15,856			11,335

Effect of exchange rate changes on cash		(522)			(105	)

Increase (decrease) in cash, cash equivalents and restricted cash		3,408			(14,698	)
Cash, cash equivalents and restricted cash at beginning of period		17,845			39,782
Cash, cash equivalents and restricted cash at end of period	$	21,253		$	25,084

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents		13,624			22,846
Restricted cash		7,629			2,238
Total cash, cash equivalents, and restricted cash	$	21,253		$	25,084

Supplemental cash flow information:
Interest paid	$	1,458		$	1,338
Non-cash activities:
Right of use assets obtained in exchange for operating lease obligations	$	428		$	2,834
Settlement of convertible debt with ordinary shares	$	7,087		$	350

The accompany notes are an integral part of these unaudited condensed consolidated financial statements.

SPI ENERGY CO., LTD.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in US$ thousands, except share and per share data)

1.	Description of Business and Organization

Description of Business

SPI Energy Co., Ltd. (“SPI Energy” or the “Company”) and its subsidiaries (collectively the “Group”) is engaged in the provision of photovoltaic (“PV”), roofing and solar energy systems installation, and electric vehicle (“EV”) solutions for business, residential, government and utility customers and investors.

Organization

The major subsidiaries of the Group as of June 30, 2022 are summarized as below:

Schedule of major subsidiaries
Major Subsidiaries	Abbreviation	Location
SolarJuice Co., Ltd	SJ Cayman	Cayman
Solar Juice Pty Ltd.	SJ Australia	Australia
Solarjuice American Inc.	SJ US	United States
Solarjuice Technology Inc.	SJT	United States
Italsolar S.r.l.	SPI Italy	Italy
SPI Solar Japan G.K.	SPI Japan	Japan
Solar Power Inc UK Service Limited	SPI UK	United Kingdom
SPI Solar Inc.	SPI US	United States
Heliostixio S.A.	Heliostixio	Greece
Heliohrisi S.A.	Heliohrisi	Greece
Thermi Sun S.A.	Thermi Sun	Greece
Knight Holding Corporation	Knight	United States
Edisonfuture Inc.	Edisonfuture	United States
Phoenix Motor Inc.	Phoenix	United States
Phoenix Motorcars Leasing LLC	PML	United States

On January 1, 2017, the Group deconsolidated one of the major subsidiaries, Sinsin Renewable Investment Limited (“Sinsin”) due to loss of control and recognized the investment in Sinsin on the carrying amount of $69,606. Both the Group and the former shareholders of Sinsin, Sinsin Europe Solar Asset Limited Partnership and Sinsin Solar Capital Limited Partnership (collectively, the “Sinsin Group”), failed to fulfill the obligation under the share sale and purchase agreement of Sinsin, which led to that both parties filed petitions to each other (see Note 8(b)). The petitions directly affected the Group’s ability to effectively control Sinsin and make any direct management decisions or have any direct impact on Sinsin’s polices, operations or assets without the agreement of Sinsin Group.

On June 10, 2022, Phoenix completed its initial public offering (“IPO”) and Phoenix’s shares have been listed on NASDAQ under the stock code “PEV” (“Phoenix IPO”). Phoenix issued 2,100,000 ordinary shares at $7.5 per share. Net proceeds from the Phoenix IPO after deducting underwriting commissions, share issuance costs and offering expenses approximately amounted to $13,438.

2.	Going concern

The Group’s condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of the business. The Group had recurring losses from operations. The Group has incurred a net loss of $9,004 during the six months ended June 30, 2022, and the cash flow used in operating activities was $11,539. As of June 30, 2022, there is net working capital deficit of $82,601 and accumulated deficit of $646,548. These factors raise substantial doubt as to the Group’s ability to continue as a going concern. The Group intends to continue implementing various measures to boost revenue and control the cost and expenses within an acceptable level and other measures including: 1) negotiate with potential buyers on PV solar projects; 2) negotiate for postponing of convertible bond payments; 3) improve the profitability of the business in US; 4) strictly control and reduce business, marketing and advertising expenses; 5) obtain equity financing from certain subsidiaries’ initial public offerings; and 6) seek for certain credit facilities. While the Group believes that it will be successful in meeting its liquidity and cash flow requirements, there is no assurance to that effect. The Group’s condensed consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

3.	Summary of Significant Accounting Policies

(a)

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted.

In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for the full year. The condensed consolidated balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

(b)

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Group to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates reflected in the Group’s unaudited condensed consolidated financial statements include the allowance made for credit losses, inventory write-downs, the estimated useful lives of long-lived assets, the impairment of goodwill, long-lived assets and project assets, valuation allowance of deferred tax assets, accrued warranty expenses, the grant-date fair value of share-based compensation awards and related forfeiture rates, the lease discount rate, the purchase price allocation in acquisition, and fair value of financial instruments. Changes in facts and circumstances may result in revised estimates. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions.

(c)

Revenue Recognition

The Group’s accounting practices under Accounting Standards Codification (“ASC”) No. 606 are as followings:

The Group generates revenue from sales of PV components, roofing and solar energy systems installation, electricity revenue with Power Purchase Agreements (“PPAs”), sales and leasing of EV, and others for the six months ended June 30, 2022 and 2021.

Sale of PV components

Revenue on sale of PV components is recognized at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment or acceptance of the customer depending on the terms of the underlying contracts.

Revenue from roofing and solar energy systems installation

Revenue from roofing and solar energy system installation is recognized over time.

For revenue from solar energy system installation, the Company’s principal performance obligation is to design and install a customize solar energy system, sometimes, reinstall the customer’s existing solar energy system that is interconnected to the local power grid and for which permission to operate has been granted by a utility company to the customer. For roofing the Company’s principal performance obligation is to design and build roof system per customer selection.

All costs to obtain and fulfill contracts associated with system sales and other product sales are expensed to cost of revenue when the corresponding revenue is recognized.

The Company recognizes revenue using a cost-based input method that recognizes revenue and gross profit as work is performed based on the relationship between actual costs incurred compared to the total estimated cost of the contract. In applying cost-based input method, the Company uses the actual costs incurred to the total estimated cost, to determine the Company’s progress towards contract completion and to calculate the corresponding amount of revenue and gross profit to recognize.

Electricity revenue with PPAs

The Group sells energy generated by PV solar power systems under PPAs. For energy sold under PPAs, the Group recognizes revenue each period based on the volume of energy delivered to the customer (i.e., the PPAs off-taker) and the price stated in the PPAs. The Group has determined that none of the PPAs contains a lease since (i) the purchaser does not have the rights to operate the PV solar power systems, (ii) the purchaser does not have the rights to control physical access to the PV solar power systems, and (iii) the price that the purchaser pays is at a fixed price per unit of output.

Revenue from sales and leasing of EV

The Group recognizes revenue from sales of EV at a point in time following the transfer of control of such products to the customer, which typically occurs upon the delivery to the customer for EV sales. The Group determined that the government grants related to sales of EV should be considered as part of the transaction price because it is granted to the EV buyer and the buyer remains liable for such amount in the event the grants were not received by the Group or returned due to the buyer violates the government grant terms and conditions.

EV leasing revenue includes revenue recognized under lease accounting guidance for direct leasing programs. The Group accounts for these leasing transactions as operating leases under ASC 840 Leases, and revenues are recognized on a straight-line basis over the contractual term.

Other revenue

Other revenue mainly consisted of revenue generated from sales of component and charging stations, sales of forklifts, engineering and maintenance service, shipping and delivery service, and other.

Disaggregation of revenues

The following table illustrates the disaggregation of revenue by revenue stream and by geographical location for the three and six months ended June 30, 2022 and 2021:

Schedule of disaggregation of revenues
By revenue stream	For the six months ended June 30, 2022 (Unaudited)
	Sales of PV components		Revenue from roofing and solar systems installation		Electricity revenue with PPAs		Automotive sales & leasing		Others		Total
Australia	$	59,554	$	–	$	–	$	–	$	442	$	59,996
Italy		–		–		468		–		–		468
United States		1,303		20,153		–		1,063		1,853		24,372
United Kingdom		–		–		932		–		–		932
Greece		–		–		1,351		–		–		1,351
Total	$	60,857	$	20,153	$	2,751	$	1,063	$	2,295	$	87,119

By revenue stream	For the three months ended June 30, 2022 (Unaudited)
	Sales of PV components		Revenue from roofing and solar systems installation		Electricity revenue with PPAs		Automotive sales & leasing		Others		Total
Australia	$	31,530	$	–	$	–	$	–	$	300	$	31,830
Italy		–		–		212		–		–		212
United States		1,303		11,364		–		538		1,712		14,917
United Kingdom		–		–		781		–		–		781
Greece		–		–		844		–		–		844
Total	$	32,833	$	11,364	$	1,837	$	538	$	2,012	$	48,584

By revenue stream	For the six months ended June 30, 2021 (Unaudited)
	Sales of PV components		Revenue from roofing and solar systems installation		Electricity revenue with PPAs		Automotive sales & leasing		Others		Total
Australia	$	60,803	$	–	$	–	$	–	$	632	$	61,435
Italy		–		–		321		–		–		321
United States		–		14,363		–		913		358		15,634
United Kingdom		–		–		671		–		–		671
Greece		–		–		1,379		–		–		1,379
Total	$	60,803	$	14,363	$	2,371	$	913	$	990	$	79,440

By revenue stream	For the three months ended June 30, 2021 (Unaudited)
	Sales of PV components		Revenue from roofing and solar systems installation		Electricity revenue with PPAs		Automotive sales & leasing		Others		Total
Australia	$	31,894	$	–	$	–	$	–	$	416	$	32,310
Italy		–		–		160		–		–		160
United States		–		11,333		–		529		115		11,977
United Kingdom		–		–		506		–		–		506
Greece		–		–		865		–		–		865
Total	$	31,894	$	11,333	$	1,531	$	529	$	531	$	45,818

Contract balance

The following table provides information about contract assets and contract liabilities from contracts with customers:


	June 30, 2022 (Unaudited)		December 31, 2021
Contract assets	$	1,129	$	1,621
Advance from customers	$	3,077	$	4,924

The contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at the reporting date, primarily for the revenue from roofing and solar energy systems installation in the United States. The contract assets are transferred to receivables when the rights become unconditional after billing is issued.

Advance from customers, which representing a contract liability, represents mostly unrecognized revenue amount received from customers. Advance from customers is recognized as (or when) the Group performs under the contract. During the six months ended June 30, 2022 and 2021, the Group recognized $4,924 and $1,377 as revenue that was included in the balance of advance from customers at January 1, 2022 and 2021, respectively.

(d)

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This guidance eliminates the beneficial conversion feature and cash conversion models in Accounting Standards Codification (ASC or Codification) 470-20 that require separate accounting for embedded conversion features in convertible instruments. This guidance also eliminates some of the conditions that must be met for equity classification under ASC 815-40-25. The new guidance also requires entities to use the if-converted method to calculate earnings per share (EPS) for all convertible instruments in the diluted EPS calculation and include the effect of potential share settlement (if the effect is more dilutive) for instruments that may be settled in cash or shares, except for liability-classified share-based payment awards. ASU No. 2020-06 is effective for annual periods beginning after December 15, 2021 and interim periods therein. The Group adopted ASU No. 2020-06 on January 1, 2022. The adoption did not have a material impact on the Group’s consolidated financial statements.

Other significant accounting policies are detailed in “Note 3 - Summary of Significant Accounting Policies” of the Company’s consolidated financial statements for the year ended December 31, 2021.

4.	Accounts Receivable, Net

The accounts receivable, net as of June 30, 2022 and December 31, 2021 consisted of the following:

Schedule of accounts receivable
	June 30,			December 31,
	2022 (Unaudited)			2021
Accounts receivable	$	21,805		$	25,419
Less: Allowance for credit losses		(2,596	)		(2,820	)
Accounts receivable, net	$	19,209		$	22,599

5.	Inventories

Inventories as of June 30, 2022 and December 31, 2021 consisted of the following:

Schedule of inventories
	June 30,		December 31,
	2022 (Unaudited)		2021
Finished goods	$	17,076	$	17,108
Goods in transit		2,566		2,846
Work in process		1,019		582
Raw materials		3,046		2,706
Total inventories	$	23,707	$	23,242

6.	Share-based Compensation

The following table summarizes the consolidated share-based compensation expense, by type of awards:


	For the three months Ended					For the six months Ended
	June 30,		June 30,			June 30,		June 30,
	2022		2021			2022		2021
Employee stock options	$	340	$	(837	)	$	935	$	2,237
Restricted share grants		–		–			623		–
Total share-based compensation expense		340		(837	)		1,558		2,237

The following table summarizes the consolidated share-based compensation by line items:


	For the three months Ended						For the six months Ended
	June 30,			June 30,			June 30,		June 30,
	2022			2021			2022		2021
General and administrative	$	343		$	(843	)	$	1,554	$	2,231
Sales, marketing and customer service		(3	)		6			4		6
Total share-based compensation expense, net of nil income taxes	$	340		$	(837	)	$	1,558	$	2,237

7.	Net Loss Per Share

As a result of the net loss for the three and six months ended June 31, 2022 and 2021, there is no dilutive impact to the net loss per share calculation for the period.

For the three months and six months ended June 30, 2022 and 2021, the following securities were excluded from the computation of diluted net loss per share as inclusion would have been anti-dilutive.

For the three months Ended

(Unaudited)

For the six months Ended

(Unaudited)

June 30,

SEC Form 10-Q filed by SPI Energy Co. Ltd.