Quanergy Systems, Inc. (QNGY)

Fintel reports that venture investor Tamer Hassanein has filed a 13D/A form with the SEC disclosing ownership of 319,645 shares of Quanergy Systems Inc (QNGY).

Quanergy Systems, Inc. (OTCPK:QNGY) Q3 2022 Earnings Conference Call November 14, 2022 4:30 PM ET Company Participants Ryan Gardella - Vice President of Investor Relations Kevin Kennedy - Chairman & Chief Executive Officer Patrick Archambault - Chief Financial Officer Conference Call Participants Operator Good evening and welcome to the Quanergy Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Quanergy Systems, Inc. (OTC: QNGY) (“Quanergy” or the “Company”), a leading provider of LiDAR sensors and smart 3D solutions, today announced financial results for the three months ended September 30, 2022. Third Quarter 2022 Highlights Last 12 month bookings1 increased 154% year-over-year to $10.8 million Third quarter revenue of $2.3 million, near the top end of the Company’s guidance range, and up 104% year-over-year Third quarter GAAP net loss of $17.7 million compared to $19.0 million in the third quarter of 2021 Third quarter adjusted EBITDA loss of $12.3 million compared to $6.1 million in the third quarter of 2021, an increase driven primarily by investments to support growth and public company costs Ended the third quarter with cash, cash equivalents and restricted cash of $7.1 million, which does not include proceeds from an underwritten public offering (the “Offering”) completed on November 2, 2022 and a drawdown under the Global Emerging Markets Group share subscription facility (the “GEM Facility”), each of which was completed after the end of the quarter Liquidity and Capital Markets Activities On October 3, 2022, the Company settled a drawdown under the GEM Facility which resulted in cash proceeds of $1.7 million. On November 2, 2022, the Company completed the Offering, resulting in net proceeds of approximately $15.4 million after deducting underwriting discounts and commissions and offering expenses. The net proceeds of the offering will be used primarily for general corporate purposes. On November 9, 2022, trading in the Company’s shares was transferred to the over-the-counter (“OTC”) market after the Company no longer met NYSE listing requirements. The Company intends to apply to have the common stock quoted on the OTCQB, a higher market tier operated by the OTC Markets Group, Inc. 1 Bookings are defined as non-cancellable orders expected to be delivered within 12 months of purchase order receipt. “The third quarter evidenced improving demand conditions and reduced lead times which supported year-over-year growth in bookings and revenue, driven by demand from the security, smart spaces and industrial markets. We believe the demand environment and improved supply chain dynamics will continue to support our growth and scale moving forward,” said Kevin Kennedy, Chairman and CEO of Quanergy. Third Quarter 2022 Financial Results Revenue for the third quarter of 2022 totaled $2.3 million, compared with $1.1 million in the same period of 2021, representing year-over-year growth of 104%. The year-over-year increase was driven by strength from the security, smart spaces and industrial markets as well as improved conversion of bookings to revenue resulting from improvements in supply chain conditions. GAAP gross profit was negative $167 thousand for the quarter, compared to positive $149 thousand in the third quarter of 2021. Excluding stock-based compensation expense, non-GAAP adjusted gross profit was $12 thousand for the quarter, compared to $165 thousand in the third quarter of 2021. Non-GAAP adjusted gross profit in the third quarter of 2022 was adversely impacted by $0.7 million of expenses related to transient material purchasing surcharges. GAAP net loss was $17.7 million for the quarter compared to $19.0 million for the same period in 2021. Adjusted EBITDA loss for the third quarter of 2022 was $12.3 million compared with $6.1 million for the same period in 2021, a decrease primarily driven by increased headcount, investments to support growth and public company costs. As of September 30, 2022, the Company had $7.1 million in cash, cash equivalents and restricted cash on its balance sheet. This amount does not include $15.4 million of net proceeds from the Offering and $1.7 million of proceeds from a drawdown under the GEM Facility – both completed after the end of the third quarter. Net cash from operating activities was negative $11.6 million in the third quarter of 2022 compared to negative $7.6 million in the third quarter of 2021. Free cash flow was negative $11.6 million in the third quarter of 2022 compared to negative $7.6 million in the prior year period. On October 3, 2022, the Company implemented a restructuring plan, including a reduction in staff, in order to reduce operating expenses and extend the Company’s cash runway. Key Operational Highlights Expanded security customer base with key critical infrastructure wins in data centers, power utilities, police stations, transportation authorities and international airports Demonstrated continued traction in the industrial automation market with several large orders booked and new design wins secured Announced QORTEX 2.3, which adds motion-based noise reduction, occlusion filter and anti-masking capabilities to the Company’s proprietary QORTEX platform Partnered with Fabrinet to expand Quanergy’s global manufacturing production of LiDAR sensors Continued expansion of Quanergy’s broad technology partner ecosystem including: Integration of Quanergy’s M-Series sensors and QORTEX DTC 3D perception software with Hanwha’s Techwin’s video management software, Wisenet WAVE VMS, which enables advanced sensing capabilities to help reduce false alarm rates and operational costs for security Advancis integration of Quanergy’s LiDAR-based solutions into WinGuard PSIM Software to provide enhanced perimeter intrusion detection and people-counting applications Nx Meta selection of Quanergy’s Security and Flow Management solution to provide LiDAR integration with Network Optix Integration of Quanergy’s M-Series sensors and QORTEX DTC 3D perception software with Hanwha’s Techwin’s video management software, Wisenet WAVE VMS, which enables advanced sensing capabilities to help reduce false alarm rates and operational costs for security Advancis integration of Quanergy’s LiDAR-based solutions into WinGuard PSIM Software to provide enhanced perimeter intrusion detection and people-counting applications Nx Meta selection of Quanergy’s Security and Flow Management solution to provide LiDAR integration with Network Optix Outlook for 2022 Quanergy reiterates 2022 bookings guidance of $14.0 - $18.0 million, representing 121% year-over-year growth at the midpoint. The timing and number of large deals will be a key driver of the 2022 bookings results. The Company reiterates full year 2022 revenue guidance of $7.0 - $9.0 million, representing 104% year-over-year growth at the midpoint. The Company plans to implement additional measures to reduce its cash burn rate to be executed prior to year-end. The Company’s expectations with respect to Q4 2022 and full year 2022 are estimated. Actual revenues for Q4 2022 and full year 2022 are subject to completion of the Company’s financial closing procedures for the period, and the actual and reported financial results for Q4 2022 and full year 2022 may materially differ. As such, the Company’s expectations with respect to Q4 2022 and full year 2022 are inherently unpredictable and actual results and outcomes could differ materially for a variety of reasons, including the factors discussed below under “Forward-Looking Statements.” 2022 Third Quarter Conference Call and Webcast Quanergy is hosting a conference call and webcast today, November 14, 2022, beginning at 4:30 p.m. ET to discuss the Company’s third quarter 2022 results and other matters. Both the call and the webcast are open to the general public. The conference call number is 412-317-6060 and the conference ID number is 10173300 (domestic or international). Please call five minutes prior to the presentation to ensure that you are connected. About Quanergy Systems, Inc. Quanergy’s (OTC: QNGY) mission is to create powerful, affordable smart LiDAR solutions for IoT and automotive applications to enhance people’s experiences and safety. Through Quanergy’s smart LiDAR solutions, businesses can now leverage real-time, advanced 3D insights to transform their operations in a variety of industries including industrial automation, physical security, smart cities, smart spaces and much more. Quanergy solutions are deployed by nearly 400 customers across the globe. For more information, please visit us at www.quanergy.com. Non-GAAP Financial Measures In addition to its results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), Quanergy believes the non-GAAP measures of non-GAAP adjusted gross profit, adjusted EBITDA and free cash flow are useful in evaluating its operating performance. Quanergy calculates non-GAAP adjusted gross profit as gross profit adding back stock-based compensation expense included in cost of goods sold. Quanergy calculates non-GAAP adjusted EBITDA as net loss adding back stock-based compensation expense, depreciation and amortization, interest expense and income, change in fair value of derivatives, gain on forgiveness of PPP loan and income tax provision (benefit). Quanergy believes that non-GAAP adjusted gross profit and non-GAAP adjusted EBITDA may be helpful to investors because they provide consistency and comparability with past financial performance and may be helpful in comparing with other companies, some of which use similar non-GAAP information to supplement their GAAP results. Free cash flow is a non-GAAP financial measure. Management believes, however, that free cash flow is an important financial measure for use in evaluating the Company’s financial performance, as it measures the Company’s ability to generate additional cash from its business operations. Quanergy defines free cash flow as cash flow from operations less capital expenditures. Free cash flow should be considered in addition to, rather than as a substitute for, net loss as a measure of Quanergy’s performance or net cash provided by operating activities as a measure of liquidity. Therefore, Quanergy believes it is important to view free cash flow as supplemental to the entire statement of cash flows. The non-GAAP financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures are included at the end of this press release. Forward-Looking Statements This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” “project,” “will likely result” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. All statements, other than statements of present or historical fact included in this press release, are forward-looking statements, including statements regarding: the demand environment and supply chain dynamics and their impact on the growth and scale of Quanergy’s business, extension of Quanergy’s cash runway, Quanergy’s continued traction in the industrial automation market, Quanergy’s relationship with Fabrinet, the expansion of Quanergy’s technology partner ecosystem, and all information included in the section titled “Outlook for 2022”. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside Quanergy’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: changes in domestic and foreign business, market, financial, political and legal conditions; the overall level of consumer demand for Quanergy’s products; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; disruption and volatility in the global currency, capital, and credit markets; the financial strength of Quanergy’s customers; Quanergy’s ability to implement its business strategy; changes in governmental regulation, Quanergy’s exposure to litigation claims and other loss contingencies; disruptions and other impacts to Quanergy’s business, as a result of the COVID-19 global pandemic and government actions and restrictive measures implemented in response; stability of Quanergy’s suppliers and the impact of supply chain constraints, as well as consumer demand for its products, in light of disease epidemics and health-related concerns such as the COVID-19 global pandemic; the impact that global climate change trends may have on Quanergy and its suppliers and customers; Quanergy’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, or interruptions in, Quanergy’s information systems; fluctuations in the price, availability and quality of electricity and other raw materials and contracted products as well as foreign currency fluctuations; Quanergy’s ability to utilize potential net operating loss carryforwards; changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks; and other risks and uncertainties indicated in Quanergy’s filings with the U.S. Securities and Exchange Commission (“SEC”), including under the “Risk Factors” heading of Quanergy’s quarterly report on Form 10-Q for the quarter ended June 30, 2022 and in Quanergy’s quarterly report on Form 10-Q for the quarter ended September 30, 2022, being filed with the SEC later today. In addition, forward-looking statements reflect Quanergy’s expectations, plans or forecasts of future events and views only as of the date of this press release. Quanergy anticipates that subsequent events and developments will cause its assessments to change. However, while Quanergy may elect to update these forward-looking statements at some point in the future, Quanergy specifically disclaims any obligation to do so, except as required by law. Quanergy is a registered trademark of Quanergy Systems. All other trademarks and trade names contained herein may be those of their respective owners. © 2022, Quanergy Systems, Inc. All rights reserved. - Financial tables follow – Quanergy Systems, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (unaudited) September 30, 2022 December 31, 2021 Assets Current assets: Cash and cash equivalents $ 7,064 $ 26,106 Restricted cash 70 70 Accounts receivable, net of allowance for doubtful accounts of $224 at September 30, 2022 and December 31, 2021 2,700 645 Inventory 5,593 3,242 Prepaid expenses and other current assets (includes related party assets of $8,801 at September 30, 2022) 10,709 1,138 Total current assets 26,136 31,201 Property and equipment, net 1,664 1,908 Other long-term assets (includes related party assets of $8,557 at September 30, 2022) 12,575 3,539 Total assets $ 40,375 $ 36,648 Liabilities and stockholders’ equity / (deficit) Current liabilities Accounts payable $ 5,556 $ 2,375 Accrued expenses 4,153 2,435 Accrued settlement liability 2,750 2,500 Other current liabilities 5,793 737 Short-term debt — 34,311 Related party payable 1,070 — Total current liabilities 19,322 42,358 Long-term debt — 16,153 Long-term debt - related party — 16,670 Derivative liability 241 26,017 Other long-term liabilities 9,335 803 Total liabilities 28,898 102,001 Commitments and contingencies Stockholders’ equity / (deficit): Common stock, $0.0001 par value. 300,000,000 and 4,003,595 shares authorized as of September 30, 2022 and December 31, 2021, respectively; 7,077,402 and 2,850,876 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively. 1 — Additional paid-in capital 467,185 242,305 Accumulated other comprehensive loss (104 ) (61 ) Accumulated deficit (455,605 ) (307,597 ) Total stockholders’ equity / (deficit) 11,477 (65,353 ) Total liabilities and stockholders’ equity / (deficit) $ 40,375 $ 36,648 Quanergy Systems, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share data) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net sales $ 2,324 $ 1,137 $ 4,880 $ 2,425 Cost of goods sold 2,491 988 6,797 2,245 Gross profit (loss) (167 ) 149 (1,917 ) 180 Operating expenses: Research and development 6,504 3,953 25,769 12,050 Sales and marketing 3,738 1,913 15,026 5,881 General and administrative 6,839 3,950 54,850 13,142 Operating expenses 17,081 9,816 95,645 31,073 Loss from operations (17,248 ) (9,667 ) (97,562 ) (30,893 ) Other income (expense): Interest income (expense), net 34 (5,911 ) (40,020 ) (14,872 ) Other expense, net (438 ) (3,416 ) (10,420 ) (8,400 ) Loss before income taxes (17,652 ) (18,994 ) (148,002 ) (54,165 ) Income tax provision — (5 ) (6 ) (15 ) Net loss $ (17,652 ) $ (18,999 ) $ (148,008 ) $ (54,180 ) Net loss attributable per share to common stockholders, basic and diluted $ (2.59 ) $ (5.49 ) $ (25.55 ) $ (16.32 ) Weighted-average shares used to compute net loss attributable per share to common stockholders, basic and diluted 6,824,212 3,463,403 5,793,554 3,320,498 Quanergy Systems, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Nine Months Ended September 30, 2022 2021 Cash flows from operating activities Net loss $ (148,008 ) $ (54,180 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 61,520 10,654 Non-cash interest expense 40,071 14,641 Change in fair value of derivative liabilities 771 10,916 Change in fair value of share-settled forward asset 9,649 — Non-cash bonus expense 2,310 — Depreciation and amortization 697 720 Non-cash lease expense 446 — Paid-in-kind interest and accrued interest on repayment of 2022 Notes (9,341 ) — Gain on extinguishment of debt — (2,515 ) Other — (69 ) Changes in operating assets and liabilities: Accounts receivable (2,055 ) (80 ) Inventory (2,351 ) 958 Prepaid expenses and other current assets (769 ) 123 Other long-term assets (461 ) (2,717 ) Accounts payable 2,916 192 Accrued expenses (22 ) (290 ) Accrued settlement liability 250 — Other current liabilities (661 ) (41 ) Other long-term liabilities 87 (360 ) Net cash used in operating activities (44,951 ) (22,048 ) Cash flows from investing activities Purchases of property and equipment (454 ) (18 ) Net cash used in investing activities (454 ) (18 ) Cash flows from financing activities Related party proceeds from PIPE financing 36,950 — Proceeds from Business Combination and PIPE financing 13,414 — Proceeds from draw down on GEM Agreement 9,900 — Payments of offering costs (8,188 ) — Repayment of 2022 Notes (25,813 ) — Proceeds from exercise of stock options 73 74 Proceeds from exercise of common stock warrants 70 — Proceeds from issuance of convertible notes — 37,130 Proceeds from issuance of convertible notes to related parties — 11,475 Net cash provided by financing activities 26,406 48,679 Effect of exchange rate changes on cash, cash equivalents and restricted cash (43 ) (12 ) Net increase (decrease) in cash, cash equivalents and restricted cash (19,042 ) 26,601 Cash, cash equivalents and restricted cash at beginning of period 26,176 7,668 Cash, cash equivalents and restricted cash at end of period $ 7,134 $ 34,269 Supplemental disclosures of cash flow information: Cash paid during the period for interest $ 9,326 $ 289 Supplemental schedule of noncash investing and financing activities: Conversion of redeemable convertible preferred stock to common stock $ 152,978 $ — Conversion of 2023 Notes into equity $ 101,978 $ — Issuance of common stock warrants $ 17,602 $ 21,970 Assumption of net liabilities from Business Combination $ 15,956 $ — Issuance of share-settled forward asset 10,027 - Offering costs paid in common stock $ 9,531 $ — GEM commitment fee $ 2,500 $ — $ $ — Fair value of debt derivative liabilities related to issuance of convertible notes $ — $ 17,540 Quanergy Systems, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Non-GAAP Adjusted Gross Profit Gross profit (loss) $ (167 ) $ 149 $ (1,917 ) $ 180 Stock-based compensation expense 179 16 1,016 57 Non-GAAP adjusted gross profit $ 12 $ 165 $ (901 ) $ 237 Adjusted EBITDA Net loss (17,652 ) (18,999 ) (148,008 ) (54,180 ) Stock-based compensation expense 4,708 3,348 61,520 10,654 Depreciation and amortization 225 230 697 720 Interest expense 25 5,912 40,096 14,876 Interest income (59 ) (1 ) (76 ) (4 ) Change in fair value of derivatives 438 3,417 10,420 10,916 Gain on forgiveness of PPP loan — — — (2,515 ) Income tax provision (benefit) — 5 6 15 Adjusted EBITDA (12,315 ) (6,088 ) (35,345 ) (19,518 ) Free Cash Flow Net cash used in operating activities (11,622 ) (7,582 ) (44,951 ) (22,048 ) Less: Purchase of property and equipment (23 ) (13 ) (454 ) (18 ) Free Cash Flow (11,645 ) (7,595 ) (45,405 ) (22,066 ) [1] Bookings defined as non-cancellable orders expected to be delivered in the 12 months of PO receipt

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SUNNYVALE, Calif.--(BUSINESS WIRE)--Quanergy Systems, Inc. (NYSE: QNGY) (“Quanergy”), a leading provider of LiDAR sensors and smart 3D solutions, today announced financial results for the three months ended June 30, 2022. Second Quarter 2022 Highlights Last 12 month bookings1 increased 100% year-over-year to $8.8 million Second quarter revenue of $1.2 million, within the guidance range, and up 31% year-over-year Second quarter GAAP net loss of $25.7 million compared to $20.5 million in the second quarter of 2021 Second quarter adjusted EBITDA loss of $12.5 million compared to $6.6 million in the second quarter of 2021, an increase driven primarily by purchasing surcharges, growth investments and public company costs Ended the second quarter with cash, cash equivalents and restricted cash of $18.8 million “The second quarter marked a continuation of our growth trajectory with the company posting its fifth consecutive year-over-year increase in quarterly revenue. Our business is in a growth mode, supported by strong increases in bookings, deal sizes and our customer pipeline,” said Kevin Kennedy, Chairman and CEO. “We expect our bookings and revenues to continue seeing the benefit of increased market fit, repeatability and scale, driven by the superior accuracy, performance and total cost of ownership of our security, industrial and flow management solutions.” 1 Bookings are defined as non-cancellable orders expected to be delivered within 12 months of purchase order receipt. Second Quarter 2022 Financial Results Revenue for the second quarter of 2022 totaled $1.2 million, compared with $905 thousand in the same period of 2021, representing year-over-year growth of 31%. The conversion of bookings to revenue during the quarter was constrained primarily by the ramping of the company’s manufacturing capacity and the timing of certain bookings that were received late in the quarter. GAAP gross profit was negative $1.3 million for the quarter, compared to $145 thousand in the second quarter of 2021. Excluding stock-based compensation expense, non-GAAP adjusted gross profit was negative $1.1 million for the quarter, compared to $166 thousand in the second quarter of 2021. Non-GAAP adjusted gross profit in the second quarter of 2022 was adversely impacted by $1.1 million of purchasing surcharges expensed during the quarter, ongoing supply chain constraints and transitory manufacturing costs. GAAP net loss was $25.7 million for the quarter compared to $20.5 million for the same period in 2021. Adjusted EBITDA loss for the second quarter of 2022 was $12.5 million compared with $6.6 million for the same period in 2021, an increase driven primarily by purchasing surcharges, increased investments to support growth and public company costs. As of June 30, 2022, the Company had $18.8 million in cash, cash equivalents and restricted cash on its balance sheet. During the second quarter, $9.9 million was drawn from the GEM share subscription facility leaving $115 million outstanding under the facility. Net cash from operating activities was negative $10.6 million in the second quarter of 2022 versus negative $7.8 million in the second quarter of 2021. Free cash flow was negative $10.8 million in the second quarter of 2022 compared with negative $7.9 million in the prior year period. Key Operational Highlights Signed a multi-million-dollar deal with Prime Secured to enhance surveillance and access control at a major casino Audio Technology selected Quanergy’s M Series sensors and QORTEX DTC perception software to provide perimeter intrusion detection for a critical military site in Egypt The Nanjing Port Group selected Quanergy’s M Series sensors to help the busy Chinese port reduce accidents and false alarms Quanergy and PARIFEX partnered on the first 3D LiDAR-based highway monitoring and enforcement system which was certified by a French testing body Introduced the M1 Edge PoE sensor – the world’s first 2D 360° POE LiDAR sensor – offering higher detection accuracy at a lower price than competing solutions for Perimeter Intrusion Detection and industrial applications Welcomed Lori Sundberg as Chief Human Resources Officer; Lori is an accomplished HR professional that has served in senior positions with Western Digital, Jacobs, American Express, among others Appointed Lisa Kelley to the Board of Directors in August 2022; Lisa is an experienced finance and operations executive, with more than 25 years of success across multiple industries including electronics and manufacturing Outlook for 2022 Customer demand for Quanergy’s solutions is constructive, evidenced by robust bookings growth and other indicators, including pipeline growth and land-and-expand trends Quanergy currently expects 2022 bookings of $14.0 - $18.0 million, consistent with prior revenue guidance and representing 121% year-over-year growth at the midpoint Due to the ramping of manufacturing capacity and ongoing supply chain limitations, Quanergy is guiding to Q3 2022 revenues of $1.75 - $2.5 million and full year 2022 revenues of $7.0 - $9.0 million The Company’s expectations with respect to Q3 2022 and full year 2022 are estimated. Actual revenues for Q3 2022 and full year 2022 are subject to completion of the Company’s financial closing procedures for the period, and the actual and reported financial results for Q3 2022 and full year 2022 may materially differ. As such, the Company’s expectations with respect to Q3 2022 and full year 2022 are inherently unpredictable and actual results and outcomes could differ materially for a variety of reasons, including the factors discussed below under “Forward-Looking Statements.” 2022 Second Quarter Conference Call and Webcast Quanergy is hosting a conference call and webcast today, August 11, 2022, beginning at 4:30 p.m. ET to discuss the Company’s preliminary second quarter 2022 results and other matters. Both the call and the webcast are open to the general public. The conference call number is 201-389-0920 and the conference ID number is 13731117 (domestic or international). Please call five minutes prior to the presentation to ensure that you are connected. About Quanergy Systems, Inc. Quanergy’s (NYSE: QNGY and QNGY.WS) mission is to create powerful, affordable smart LiDAR solutions for automotive and IoT applications to enhance people’s experiences and safety. Quanergy has developed the only true 100% solid-state CMOS LiDAR sensor built on optical phased array (OPA) technology to enable the mass production of low-cost, highly reliable 3D LiDAR solutions. Through Quanergy’s smart LiDAR solutions, businesses can now leverage real-time, advanced 3D insights to transform their operations in a variety of industries including industrial automation, physical security, smart cities, smart spaces and much more. Quanergy solutions are deployed by nearly 400 customers across the globe. For more information, please visit us at www.quanergy.com. Non-GAAP Financial Measures In addition to its results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), Quanergy believes the non-GAAP measures of non-GAAP adjusted gross profit, adjusted EBITDA and free cash flow are useful in evaluating its operating performance. Quanergy calculates non-GAAP adjusted gross profit as gross profit adding back stock-based compensation expense included in cost of goods sold. Quanergy calculates non-GAAP adjusted EBITDA as net loss adding back stock-based compensation expense, depreciation and amortization, interest expense and income, change in fair value of derivatives, gain on forgiveness of PPP loan, and income tax provision (benefit). Quanergy believes that non-GAAP adjusted gross profit and non-GAAP adjusted EBITDA may be helpful to investors because they provide consistency and comparability with past financial performance and may be helpful in comparing with other companies, some of which use similar non-GAAP information to supplement their GAAP results. Free cash flow is a non-GAAP financial measure. Management believes, however, that free cash flow is an important financial measure for use in evaluating the Company’s financial performance, as it measures the Company’s ability to generate additional cash from its business operations. Quanergy defines free cash flow as cash flow from operations less capital expenditures. Free cash flow should be considered in addition to, rather than as a substitute for, net loss as a measure of performance or net cash provided by operating activities as a measure of liquidity. Therefore, Quanergy believes it is important to view free cash flow as supplemental to the entire statement of cash flows. The non-GAAP financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures are included at the end of this press release. Forward-Looking Statements This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” “project,” “will likely result” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. All statements, other than statements of present or historical fact included in this press release, are forward-looking statements, including statements regarding the trajectory and growth of our business, our customer pipeline, expectations regarding bookings and revenues and the benefit of market fit, repeatability and scale, our projects with Prime Secured, Audio Technology, Nanjing Port Group, and PARIFEX, and all information included in the section titled “Outlook for 2022”. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside Quanergy’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: changes in domestic and foreign business, market, financial, political and legal conditions; the overall level of consumer demand for Quanergy’s products; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; disruption and volatility in the global currency, capital, and credit markets; the ability to maintain the listing of Quanergy’s securities on the New York Stock Exchange; the financial strength of Quanergy’s customers; Quanergy’s ability to implement its business strategy; changes in governmental regulation; Quanergy’s exposure to litigation claims and other loss contingencies; disruptions and other impacts to Quanergy’s business, as a result of the COVID-19 global pandemic and government actions and restrictive measures implemented in response; stability of Quanergy’s suppliers and the impact of supply chain constraints, as well as consumer demand for its products, in light of disease epidemics and health-related concerns such as the COVID-19 global pandemic; the impact that global climate change trends may have on Quanergy and its suppliers and customers; Quanergy’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, or interruptions in, Quanergy’s information systems; fluctuations in the price, availability and quality of electricity and other raw materials and contracted products as well as foreign currency fluctuations; Quanergy’s ability to utilize potential net operating loss carryforwards; changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks; and other risks and uncertainties indicated in Quanergy’s filings with the U.S. Securities and Exchange Commission. In addition, forward-looking statements reflect Quanergy’s expectations, plans or forecasts of future events and views only as of the date of this press release. Quanergy anticipates that subsequent events and developments will cause its assessments to change. However, while Quanergy may elect to update these forward-looking statements at some point in the future, Quanergy specifically disclaims any obligation to do so, except as required by law. Quanergy is a registered trademark of Quanergy Systems. All other trademarks and trade names contained herein may be those of their respective owners. © 2022, Quanergy Systems, Inc. All rights reserved. Quanergy Systems, Inc. Condensed Consolidated Balance Sheet (in thousands, except share and per share data) (unaudited) June 30, 2022 December 31, 2021 Assets Current assets: Cash and cash equivalents $ 18,719 $ 26,106 Restricted cash 70 70 Accounts receivable, net of allowance for doubtful accounts of $224 at June 30, 2022 and December 31, 2021 820 645 Inventory 5,521 3,242 Prepaid expenses and other current assets 12,915 1,138 Total current assets 38,045 31,201 Property and equipment, net 1,867 1,908 Other long-term assets 11,116 3,539 Total assets $ 51,028 $ 36,648 Liabilities and stockholders’ equity / (deficit) Current liabilities Accounts payable $ 4,475 $ 2,375 Accrued expenses 3,317 2,435 Accrued settlement liability 2,750 2,500 Other current liabilities 5,086 737 Short-term debt — 34,311 Related party payable 1,070 — Total current liabilities 16,698 42,358 Long-term debt — 16,153 Long-term debt - related party — 16,670 Derivative liability 496 26,017 Other long-term liabilities 9,026 803 Total liabilities 26,220 102,001 Commitments and contingencies (Note 15) Stockholders’ equity / (deficit): Common stock, $0.0001 par value. 300,000,000 and 80,071,901 shares authorized as of June 30, 2022 and December 31, 2021, respectively; 129,613,549 and 57,020,151 shares issued and outstanding as of June 30, 2022 and December 31, 2021 respectively. 13 6 Additional paid-in capital 462,827 242,299 Accumulated other comprehensive loss (79 ) (61 ) Accumulated deficit (437,953 ) (307,597 ) Total stockholders’ equity / (deficit) 24,808 (65,353 ) Total liabilities and stockholders’ equity $ 51,028 $ 36,648 Quanergy Systems, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net sales $ 1,189 $ 905 $ 2,556 $ 1,288 Cost of goods sold 2,453 760 4,306 1,257 Gross loss (1,264 ) 145 (1,750 ) 31 Operating expenses: Research and development 6,441 3,740 19,265 8,097 Sales and marketing 4,092 2,223 11,288 3,968 General and administrative 6,219 6,699 48,011 9,192 Operating expenses 16,752 12,662 78,564 21,257 Loss from operations (18,016 ) (12,517 ) (80,314 ) (21,226 ) Other income (expense): Interest expense, net (10 ) (5,277 ) (40,054 ) (8,961 ) Other income (expense), net (7,645 ) (2,667 ) (9,982 ) (4,984 ) Loss before income taxes (25,671 ) (20,461 ) (130,350 ) (35,171 ) Income tax provision (3 ) (6 ) (6 ) (10 ) Net loss $ (25,674 ) $ (20,467 ) $ (130,356 ) $ (35,181 ) Net loss attributable per share to common stockholders, basic and diluted $ (0.22 ) $ (0.30 ) $ (1.27 ) $ (0.54 ) Weighted-average shares used to compute net loss attributable per share to common stockholders, basic and diluted 117,864,896 67,111,977 102,868,390 65,096,986 Quanergy Systems, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended June 30, 2022 2021 Cash flows from operating activities Net loss $ (130,356 ) $ (35,181 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 56,812 7,306 Non-cash interest expense 40,071 8,727 Change in fair value of derivative liabilities 1,025 7,499 Change in fair value of share-settled forward asset 8,956 Non-cash bonus expense 1,412 — Depreciation and amortization 472 490 Non-cash lease expense 333 — Paid-in-kind interest and accrued interest on repayment of 2022 Notes (9,341 ) — Gain on extinguishment of debt — (2,515 ) Other — (70 ) Changes in operating assets and liabilities: Accounts receivable (175 ) 290 Inventory (2,279 ) 446 Prepaid expenses and other current assets (1,907 ) 166 Other long-term assets (1 ) (1,780 ) Accounts payable 1,835 629 Accrued expenses (61 ) (222 ) Accrued settlement liability 250 — Other current liabilities (452 ) — Other long-term liabilities 77 (251 ) Net cash used in operating activities (33,329 ) (14,466 ) Cash flows from investing activities Purchases of property and equipment (431 ) (5 ) Net cash used in investing activities (431 ) (5 ) Cash flows from financing activities Related party proceeds from PIPE financing 36,950 — Proceeds from Business Combination and PIPE financing 13,414 — Proceeds from draw down on GEM agreement 9,900 Payments of offering costs (8,188 ) — Repayment of 2022 Notes (25,813 ) — Proceeds from exercise of stock options 58 74 Proceeds from exercise of common stock warrants 70 — Proceeds from issuance of convertible notes — 37,130 Proceeds from issuance of convertible notes to related parties — 11,475 Net cash provided by financing activities 26,391 48,679 Effect of exchange rate changes on cash, cash equivalents and restricted cash (18 ) (6 ) Net increase (decrease) in cash, cash equivalents and restricted cash (7,387 ) 34,202 Cash, cash equivalents and restricted cash at beginning of period 26,176 7,668 Cash, cash equivalents and restricted cash at end of period $ 18,789 $ 41,870 Supplemental disclosures of cash flow information: Cash paid during the period for interest $ 9,326 $ 236 Supplemental schedule of noncash investing and financing activities: Conversion of redeemable convertible preferred stock to common stock $ 152,978 $ — Conversion of 2023 Notes into equity $ 101,978 $ — Issuance of common stock warrants $ 17,602 $ 21,970 Assumption of net liabilities from Business Combination $ 15,956 $ — Issuance of share-settled forward asset $ 10,027 Offering costs paid in common stock $ 9,531 $ — GEM commitment fee $ 2,500 $ — Fair value of debt derivative liabilities related to issuance of convertible notes $ — $ 17,540 Quanergy Systems, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Non-GAAP Adjusted Gross Profit Gross profit (loss) $ (1,264 ) $ 145 $ (1,750 ) $ 31 Stock-based compensation expense 154 21 837 41 Non-GAAP adjusted gross profit $ (1,110 ) $ 166 $ (913 ) $ 72 Adjusted EBITDA Net loss (25,674 ) (20,467 ) (130,356 ) (35,181 ) Stock-based compensation expense 5,251 5,725 56,812 7,306 Depreciation and amortization 244 239 472 490 Interest expense 25 5,279 40,071 8,964 Interest income (15 ) (2 ) (17 ) (3 ) Change in fair value of derivatives 7,645 5,182 9,982 7,499 Gain on forgiveness of PPP loan — (2,515 ) — (2,515 ) Income tax provision (benefit) 3 6 6 10 Adjusted EBITDA (12,521 ) (6,553 ) (23,030 ) (13,430 ) Free Cash Flow Net cash used in operating activities (10,583 ) (7,848 ) (33,329 ) (14,466 ) Less: Purchase of property and equipment (229 ) (5 ) (431 ) (5 ) Free Cash Flow (10,812 ) (7,853 ) (33,760 ) (14,471 )

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Immediate cash concerns seem to affect Cepton and Quanergy. Poor revenue and negative gross margins make Velodyne a concern.

Quanergy Systems, Inc. (NYSE:QNGY ) Q1 2022 Earnings Conference Call May 16, 2022 8:30 AM ET Company Participants Ryan Gardella - Vice President of Investor Relations Kevin Kennedy - Chairman & Chief Executive Officer Patrick Archambault - Chief Financial Officer Conference Call Participants Mark Delaney - Goldman Sachs. Brian Gesuale - Raymond James Operator Good afternoon, and welcome to Quanergy Systems First Quarter 2022 Earnings Call.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Quanergy Systems, Inc. (NYSE: QNGY) (“Quanergy”), a leading provider of LiDAR sensors and smart 3D solutions, today announced financial results for the three months ended March 31, 2022. First Quarter 2022 Results Revenue of $1.4 million, an increase of 257% over the same period last year; acceleration from the 113% year-over-year revenue growth rate delivered in the fourth quarter of 2021; slightly exceeded high end of previous guidance range GAAP net loss of $104.7 million vs. $14.7 million in the first quarter of 2021; GAAP results include $51.6 million of non-cash stock-based compensation expense and $36.7 million of non-cash, net interest expense based on the conversion of 2023 Notes to equity Adjusted EBITDA loss of $10.5 million vs $6.9 million in the first quarter of 2021; reflects investments to support growth and transition Quanergy to a publicly listed company Completed business combination transaction on February 8, 2022; began trading on the NYSE under the symbol "QNGY" Strengthened balance sheet by paying off or converting all outstanding convertible debt Ended the first quarter with cash, cash equivalents and restricted cash of $21.2 million; maintains a fully committed and untapped $125 million share subscription facility “The first quarter represented a positive start to the year as evidenced by strong year-over-year revenue growth. The demand environment is constructive, evidenced by our growing pipeline, a transition of customer projects from proof-of-concepts to deployments to expansion and increasing deal sizes. Our business continues to be driven by traction in our core IoT segments, including security, smart cities and industrial,” said Kevin Kennedy, Chairman and CEO of Quanergy. “However, supply chain constraints continue to be a challenge, affecting our conversion of bookings to revenue as well as our gross margins. We are ramping manufacturing in three locations to add capacity and increase supply chain agility to mitigate these constraints.” First Quarter 2022 Financial Results Revenue for the first quarter of 2022 totaled $1.4 million, compared with $383 thousand in the same period of 2021. Growth continued to be driven by Quanergy’s security and smart spaces solutions and by a growing contribution from industrial applications. GAAP gross profit was negative $486 thousand for the quarter implying a GAAP gross margin of negative 35.6%. Excluding $683 thousand of stock-based compensation expense, non-GAAP gross profit was $197 thousand for the quarter, implying non-GAAP gross margins of 14.4%. GAAP net loss was $104.7 million for the quarter compared to $14.7 million for the same period in 2021. GAAP net loss includes $51.6 million of non-cash stock-based compensation expense and $36.7 million of non-cash, net interest expense resulting from the conversion of the 2023 Notes to equity upon the closing of our business combination transaction in February. Adjusted EBITDA loss for the first quarter of 2022 was $10.5 million, compared with $6.9 million for the same period in 2021. The higher EBITDA loss was driven by operating expenses reflecting investments to support growth and transition Quanergy to a publicly listed company. As of March 31, 2022, the Company had $21.2 million in cash, cash equivalents and restricted stock on its balance sheet. In addition, Quanergy has an untapped, fully committed $125 million share subscription facility. Net cash from operating activities was negative $22.7 million in the first quarter of 2022 (including $9.3 million of accrued interest paid off on 2022 Notes), versus negative $6.6 million in the first quarter of 2021. Free cash flow (a non-GAAP measure defined as cash flow from operations less capital expenditures) was negative $22.9 million in the first quarter of 2022, including the $9.3 million accrued interest payoff, compared with negative $6.6 million in the prior year period. Key Operational Highlights M1 LiDAR sensors were chosen by Vecna Robotics to deliver natural feature navigation for Vecna’s new CPJ autonomous co-bot pallet jack Successfully deployed 3D LiDAR Flow Management solution with San Francisco Municipal Transportation Agency to improve travel time of San Francisco’s light rail vehicles in a proof of concept pilot project Quanergy’s Smart LiDAR portfolio was selected by Digital Mortar to provide a broad range of innovative flow management solutions for retail applications Integrated Quanergy’s LiDAR platform with Mirasys to deliver advanced insights and analytics for physical security applications in the government, retail and gaming industries Partnered with Surveill to offer an integrated LiDAR-based video surveillance platform to support the delivery of mission-critical security and business intelligence Introduced three new products targeting the IoT market – a new version of the MQ-8 PoE sensor, the latest version of QORTEX Automated ID Handover and a new version of M1 Edge Recently successfully demonstrated 250 meter detection range for the solid state OPA LiDAR platform operating outdoors in bright sunlight Ramping three manufacturing locations to enhance capacity and supply chain agility Ended the quarter with 134 employees, a 38% increase year-over-year, with 76% of the new hires within R&D and operations in order to align with demand trends Outlook for 2022 Quanergy sees a demand environment for 2022 that is stronger than it was in the Fall of 2021 However, supply chain challenges for electronic components and the ramping of new manufacturing capabilities are constraining the conversion of bookings to revenue Currently expect Q2 2022 revenues of $1.1 - $2.1 million. Currently expect full year 2022 revenues of $14 - $18 million; Quanergy is managing its business to the upper end of the range. The Company’s expectations with respect to Q2 2022 and full year 2022 are estimated. Actual revenues for Q2 2022 and full year 2022 are subject to completion of the Company’s financial closing procedures for the period, and the actual and reported financial results for Q2 2022 and full year 2022 may materially differ. As such, the Company’s expectations with respect to Q2 2022 and full year 2022 are inherently unpredictable and actual results and outcomes could differ materially for a variety of reasons, including the factors discussed below under “Forward-Looking Statements.” 2022 First Quarter Conference Call and Webcast Quanergy is hosting a conference call and webcast today, May 16, 2022, beginning at 8:30 a.m. ET to discuss the Company’s preliminary first quarter 2022 results and other matters. Both the call and the webcast are open to the general public. The conference call number is 212-231-2913 and the conference ID number is 22018641 (domestic or international). Please call five minutes prior to the presentation to ensure that you are connected. About Quanergy Systems, Inc. Quanergy’s (NYSE: QNGY and QNGY.WS) mission is to create powerful, affordable smart LiDAR solutions for automotive and IoT applications to enhance people’s experiences and safety. Quanergy has developed the only true 100% solid-state CMOS LiDAR sensor built on optical phased array (OPA) technology to enable the mass production of low-cost, highly reliable 3D LiDAR solutions. Through Quanergy’s smart LiDAR solutions, businesses can now leverage real-time, advanced 3D insights to transform their operations in a variety of industries including industrial automation, physical security, smart cities, smart spaces and much more. Quanergy solutions are deployed by nearly 400 customers across the globe. For more information, please visit us at www.quanergy.com. Non-GAAP Financial Measures In addition to its results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), Quanergy believes the non-GAAP measures of non-GAAP gross profit, non-GAAP gross margin, adjusted EBITDA and free cash flow are useful in evaluating its operating performance. Quanergy calculates non-GAAP gross profit as gross profit adding back stock-based compensation expense included in cost of goods sold. Quanergy calculates non-GAAP gross margin as GAAP gross margin before the impact of stock-based compensation expense included in cost of goods sold. Quanergy calculates adjusted EBITDA as net loss adding back stock-based compensation expense, depreciation and amortization, interest expense and income, change in fair value of derivative liability, gain on forgiveness of PPP loan, other comprehensive income (net) and income tax provision (benefit). Quanergy believes that non-GAAP gross profit, non-GAAP gross margin and adjusted EBITDA may be helpful to investors because they provide consistency and comparability with past financial performance and may be helpful in comparing with other companies, some of which use similar non-GAAP information to supplement their GAAP results. Quanergy defines free cash flow as cash flow from operations less capital expenditures. Free cash flow is a non-GAAP financial measure. Management believes, however, that free cash flow is an important financial measure for use in evaluating the Company’s financial performance, as it measures the Company’s ability to generate additional cash from its business operations. Quanergy defines free cash flow as cash flow from operations less capital expenditures. Free cash flow should be considered in addition to, rather than as a substitute for, net loss as a measure of our performance or net cash provided by operating activities as a measure of liquidity. Therefore, Quanergy believes it is important to view free cash flow as supplemental to the entire statement of cash flows. The non-GAAP financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures are included at the end of this presentation. Forward-Looking Statements This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” “project,” “will likely result” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. All statements, other than statements of present or historical fact included in this press release, are forward-looking statements, including statements regarding the constructive demand environment and our growing pipeline, the transition of customer projects from proof-of-concepts to deployments to expansion and increasing deal sizes, continued traction in IoT segments including security, smart cities and industrial driving our business, ramping of multiple manufacturing locations to add capacity and increase supply chain agility in response to continued supply chain constraints, access to a committed $125 million share subscription facility, growing contribution to revenues from industrial applications, our planned projects with Vecna Robotics, Digital Mortar, Mirasys and Surveill, and all information included in the section titled “Outlook for 2022”. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside Quanergy’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: changes in domestic and foreign business, market, financial, political and legal conditions; the overall level of consumer demand for Quanergy’s products; general economic conditions and other factors affecting consumer confidence, preferences, and behavior; disruption and volatility in the global currency, capital, and credit markets; the ability to maintain the listing of Quanergy’s securities on the New York Stock Exchange; the financial strength of Quanergy’s customers; Quanergy’s ability to implement its business strategy; changes in governmental regulation, Quanergy’s exposure to litigation claims and other loss contingencies; disruptions and other impacts to Quanergy’s business, as a result of the COVID-19 global pandemic and government actions and restrictive measures implemented in response; stability of Quanergy’s suppliers and the impact of supply chain constraints, as well as consumer demand for its products, in light of disease epidemics and health-related concerns such as the COVID-19 global pandemic; the impact that global climate change trends may have on Quanergy and its suppliers and customers; Quanergy’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, or interruptions in, Quanergy’s information systems; fluctuations in the price, availability and quality of electricity and other raw materials and contracted products as well as foreign currency fluctuations; Quanergy’s ability to utilize potential net operating loss carryforwards; changes in tax laws and liabilities, tariffs, legal, regulatory, political and economic risks; and other risks and uncertainties indicated in Quanergy’s filings with the U.S. Securities and Exchange Commission. In addition, forward-looking statements reflect Quanergy’s expectations, plans or forecasts of future events and views only as of the date of this press release. Quanergy anticipates that subsequent events and developments will cause its assessments to change. However, while Quanergy may elect to update these forward-looking statements at some point in the future, Quanergy specifically disclaims any obligation to do so, except as required by law. Quanergy is a registered trademark of Quanergy Systems. All other trademarks and trade names contained herein may be those of their respective owners. © 2022, Quanergy Systems, Inc. All rights reserved. - Financial tables follow – Quanergy Systems, Inc. Condensed Consolidated Balance Sheets (in thousands) March 31, 2022 (unaudited) December 31, 2021 Assets Current assets: Cash and cash equivalents $ 21,176 $ 26,106 Restricted cash 70 70 Accounts receivable, net of allowance for doubtful accounts of $224 at March 31, 2022 and December 31, 2021 984 645 Inventory 3,295 3,242 Prepaid expenses and other current assets 13,138 1,138 Total current assets 38,663 31,201 Property and equipment, net 1,882 1,908 Other long-term assets 11,718 3,539 Total assets $ 52,263 $ 36,648 Liabilities and stockholders’ equity / (deficit) Current liabilities Accounts payable $ 4,196 $ 2,375 Accrued expenses 2,567 2,435 Accrued settlement liability 2,500 2,500 Other current liabilities 3,320 737 Short-term debt — 34,311 Related party payable 1,070 — Total current liabilities 13,653 42,358 Long-term debt — 16,153 Long-term debt - related party — 16,670 Derivative liability 1,808 26,017 Other long-term liabilities 10,739 803 Total liabilities 26,200 102,001 Commitments and contingencies (Note 15) Stockholders' deficit: Common stock, $0.0001 par value. 300,000,000 and 80,071,901 shares authorized as of March 31, 2022 and December 31, 2021, respectively; 98,498,731 and 57,020,151 shares issued and outstanding as of March 31, 2022 and December 31, 2021 respectively. 10 6 Additional paid-in capital 438,404 242,299 Accumulated other comprehensive loss (72) (61) Accumulated deficit (412,279) (307,597) Total stockholders’ equity / (deficit) 26,063 (65,353) Total liabilities and stockholders’ equity / (deficit) $ 52,263 $ 36,648 Quanergy Systems, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share data) (unaudited) Three Months Ended March 31, 2022 2021 Net sales $ 1,367 $ 383 Cost of goods sold 1,853 497 Gross profit (486) (114) Operating expenses: Research and development 12,824 4,357 Sales and marketing 7,196 1,745 General and administrative 41,792 2,493 Operating expenses 61,812 8,595 Loss from operations (62,298) (8,709) Other income (expense): Interest expense, net (40,044) (3,684) Other expense, net (2,337) (2,317) Loss before income taxes (104,679) (14,710) Income tax provision (3) (4) Net loss $ (104,682) $ (14,714) Net loss attributable per share to common stockholders, basic and diluted $ (1.19) $ (0.23) Weighted-average shares used to compute net loss attributable per share to common stockholders, basic and diluted 87,705,256 62,811,287 Quanergy Systems, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended March 31, 2022 2021 Cash flows from operating activities Net loss $ (104,682) $ (14,714) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 51,561 1,581 Non-cash interest expense 40,046 3,685 Change in fair value of derivative liabilities 2,337 2,317 Non-cash bonus expense 526 Depreciation and amortization 228 251 Non-cash lease expense 174 — Paid-in-kind interest and accrued interest on repayment of 2022 Notes (9,341) — Other — 4 Changes in operating assets and liabilities: Accounts receivable (339) 329 Inventory (52) 146 Prepaid expenses and other current assets (3,199) 153 Other long-term assets (3) (825) Accounts payable 327 1,104 Accrued expenses (196) (567) Other current liabilities (218) (9) Other long-term liabilities 85 (73) Net cash used in operating activities (22,746) (6,618) Cash flows from investing activities Purchases of property and equipment (202) — Net cash used in investing activities (202) — Cash flows from financing activities Related party proceeds from PIPE financing 36,950 — Proceeds from Business Combination and PIPE financing 13,414 — Payments of offering costs (6,609) — Repayment of 2022 Notes (25,813) — Proceeds from exercise of stock options 58 74 Proceeds from exercise of common stock warrants 29 — Proceeds from issuance of convertible notes — 37,186 Proceeds from issuance of convertible notes to related parties — 11,475 Net cash provided by financing activities 18,029 48,735 Effect of exchange rate changes on cash, cash equivalents and restricted cash (11) 5 Net increase (decrease) in cash, cash equivalents and restricted cash (4,930) 42,122 Cash, cash equivalents and restricted cash at beginning of period 26,176 7,668 Cash, cash equivalents and restricted cash at end of period $ 21,246 $ 49,790 Supplemental disclosures of cash flow information: Cash paid during the period for interest $ 9,326 $ — Supplemental schedule of noncash investing and financing activities: Conversion of redeemable convertible preferred stock to common stock $ 152,978 $ — Conversion of 2023 Notes into equity $ 101,978 $ — Issuance of common stock warrants $ 17,602 $ 21,970 Assumption of net liabilities from Business Combination $ 15,955 $ — Offering costs paid in common stock $ 9,531 $ — GEMS commitment fee $ 2,500 $ — Unpaid offering costs $ 1,229 $ — Fair value of debt derivative liabilities related to issuance of convertible notes $ — $ 17,540 Unpaid debt issuance costs $ — $ 46 Quanergy Systems, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (in thousands) Year Ended December 31 Quarter Ended March 31 2020 2021 2021 2022 Non-GAAP Gross Profit and Margin Gross profit (loss) $429 ($11) ($114) ($486) Stock-based compensation expense 100 193 20 683 Non-GAAP gross profit $529 $182 ($94) $197 Net sales 3,015 3,928 383 1,367 Gross margin 14.2% (0.3%) (29.8%) (35.6%) Non-GAAP gross margin 17.5% 4.6% (24.5%) 14.4% Adjusted EBITDA Net loss ($35,835) ($63,544) ($14,714) ($104,682) Stock-based compensation expense 5,443 11,972 1,581 51,561 Depreciation and amortization 1,192 948 251 228 Interest expense 6,380 21,489 3,685 40,046 Interest income (34) (5) (1) (2) Change in fair value of derivative liability (1,402) 3,628 2,317 2,337 Gain on forgiveness of PPP loan -- (2,515) -- -- Other comprehensive income, net (12) -- -- -- Income tax provision (benefit) 7 26 4 3 Adjusted EBITDA ($24,261) ($28,001) ($6,877) ($10,509) Free Cash Flow Net cash used in operating activities ($21,815) ($30,124) ($6,618) ($22,746) Less: Purchase of property and equipment -- (47) -- (202) Free Cash Flow ($21,815) ($30,171) ($6,618) ($22,948)

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Quanergy Systems (QNGY) stock is taking off on Friday following an update about its orders during the fourth quarter of 2021. The post QNGY Stock: Why Lidar Company Quanergy Systems Is Soaring Today appeared first on InvestorPlace.