GlobeNewswire Inc | Aug 25, 2021 06:00AM EDT

August 25, 2021

- Achieved Quarterly Positive Operating Cash Flow Again-Maintained High Quarterly Gross Margin

GUANGZHOU, China, Aug. 25, 2021 (GLOBE NEWSWIRE) -- EHang Holdings Limited (EHang or the Company) (Nasdaq: EH), the worlds leading autonomous aerial vehicle (AAV) technology platform company, today announced its unaudited financial results for the first quarter ended March 31, 2021.

First Quarter 2021 Financial and Operational Highlights

-- Total revenues were RMB23.0 million (US$3.5 million), up 22.1% year-over-year, with growth mainly in air mobility solutions. Revenues from air mobility solutions contributed 98.4% of the total revenues in the first quarter of 2021. -- Gross margin was 63.2%, an increase of 3.9 percentage points year-over-year, driven by continuous optimization of cost structure of air mobility products and the change in revenue mix. -- Operating loss was RMB66.2 million (US$10.1 million), compared with operating loss of RMB21.1 million in the first quarter of 2020. The change in operating loss was mainly due to the increase in share-based compensation expenses charged to operating expenses. -- Adjusted operating loss1 (non-GAAP) was RMB17.3 million (US$2.6 million), compared with adjusted operating loss of RMB19.2 million in the first quarter of 2020. -- Net loss was RMB62.5 million (US$9.5 million), compared with net loss of RMB20.4 million in the first quarter of 2020. -- Adjusted net loss2 (non-GAAP) was RMB13.7 million (US$2.1 million), compared with adjusted net loss of RMB18.5 million in the first quarter of 2020. -- Net cash from operating activities was RMB16.2 million (US$2.5 million), a significant growth compared to negative RMB29.1 million in the first quarter of 2020. -- Cash and cash equivalents and short-term investments amounted to RMB480.5 million (US$73.3 million) as of March 31, 2021, mainly due to the US$40 million investment from Carmignac and the positive net cash from operating activities achieved. -- Sales of the EHang 216 series of passenger-grade AAVs, were 15 units, compared with 9 units in the first quarter of 2020.

First Quarter 2021 Business Highlights

-- Trial Flights to Initiate an Urban Air Mobility (UAM) Plan in the Hengqin New Area in Southern China

In January, EHang announced strategic partnerships with local partners to jointly initiate trial air mobility operations in the Hengqin New Area (Hengqin), the largest of the islands surrounding Zhuhai city in the Guangdong-Hong Kong-Macao Greater Bay Area of China. A total of 36 passengers experienced trial flights for aerial sightseeing in Hengqin on the announcement date. In February, the local partner further carried out the first trial flights of the EHang 216 over the sea of southern China from Hengqin to Dongao Island, a tourist destination island, showcasing its potential application in air mobility use cases such as aerial sightseeing.

-- Trial Flights of Passenger-grade AAVs for the First Time in Beijing

In February, EHang completed trial flights of the EHang 216 in Beijing in a cold weather at an air temperature of minus 14 degrees Celsius to demonstrate the safety, reliability and environmental adaptability of its cutting-edge AAV technologies. This was also the first time that passenger-grade AAVs flew in Beijing, the capital city of China.

-- Participation in a Series of UAM Projects Supported by the European Union

In January and February, as a pioneer of cutting-edge AAV products and technological solutions, EHang was selected to participate in a series of UAM projects supported by the European Union to demonstrate ways to achieve safe, sustainable, socially acceptable, and effective UAM. These projects include: 1) the Air Mobility Urban - Large Experimental Demonstration (AMU-LED) project in Spain, the United Kingdom and the Netherlands; 2) the Re-Invent Air Mobility initiative in France; 3) the Safe and Flexible Integration of Advanced U-Space Services for Medical Air Mobility (SAFIR-Med) project in Belgium, Germany, the Netherlands, Greece and Czech Republic; and 4) the GOF 2.0 Integrated Urban Airspace VLD.

-- Partnership with Giancarlo Zema Design Group to Build an Eco-sustainable Vertiport in Italy

In March, EHang entered into a partnership with Giancarlo Zema Design Group (GZDG), a leading Italian architecture firm. GZDG has designed and intends to build an eco-sustainable vertiport in Italy using EHangs passenger-grade AAV technologies and air mobility solutions. The vertiport will use green design and construction materials and can generate energy to recharge the EHang 216 AAVs.

-- Partnership with Dongfeng USharing to Co-develop a Solution for Seamlessly-Connected Mobility Services Leveraging AAV Technologies

In March, EHang entered into a partnership with Dongfeng USharing Technology Co., Ltd., a subsidiary of Dongfeng Motor Corporation (a Fortune Global 500 company and one of the largest auto makers in China) to co-develop a solution for Seamlessly Connected Mobility Services for logistics using EHangs AAV technologies.

CEO Remarks

We started the year of 2021 with a 22.1% year-over-year revenue growth in the first quarter, achieved again quarterly positive operating cash flow and maintained high quarterly gross margin at 63.2%. All of these reflected our growing competitive strengths, said Mr. Huazhi Hu, EHangs Founder, Chairman and Chief Executive Officer. Upon entering 2021, we focused more on our core business in air mobility solutions through expanding our trial operation programs and industrywide partnerships for UAM powered by our cutting-edge AAV products and technologies to gain robust growth momentum into the near future.

First Quarter 2021 Financial Results

Revenues

Total revenues were RMB23.0 million (US$3.5 million), up 22.1% year-over-year, with growth mainly in air mobility solutions. Revenues from air mobility solutions represented 98.4% of the total revenues in the first quarter of 2021. Sales of the EH216, the Companys flagship passenger-grade AAV, were 15 units (including 1 unit of the customized EH216L) in the first quarter of 2021, compared with 9 units in the same period of 2020.

Costs of revenues

Costs of revenues were RMB8.5 million (US$1.3 million), up 10.3% year-over-year, primarily due to the change in the sales volume of AAV products.

Gross profit

Gross profit was RMB14.5 million (US$2.2 million), up 30.2% from RMB11.2 million in the first quarter of 2020.

Gross margin was 63.2%, up 3.9 percentage points from 59.3% in the first quarter of 2020. The increase in gross margin was mainly due to the continuous optimization of cost structure of air mobility products.

Operating expenses

Total operating expenses were RMB83.4 million (US$12.7 million), up 152.4% from RMB33.0 million in the first quarter of 2020. Operating expense as a percentage of total revenues was 363.0%, compared with 175.6% in the first quarter of 2020. The increase in operating expenses was primarily due to an increase of RMB46.9 million (US$7.2 million) in share-based compensation expenses and the charges to sales and marketing expenses, general and administration expenses and research and development expenses were RMB4.6 million (US$0.7 million), RMB34.9 million (US$5.3 million) and RMB7.4 million (US$1.2 million), respectively.

Adjusted operating expenses3 (non-GAAP)

Adjusted operating expenses were RMB34.5 million (US$5.3 million), representing an increase of 11.0% from RMB31.1 million in the first quarter of 2020. Adjusted operating expenses as a percentage of total revenues was 150.3%, compared with 165.3% in the first quarter of 2020.

-- Adjusted sales and marketing expenses were RMB4.9 million (US$0.8 million), down 15.9% from RMB5.8 million in the first quarter of 2020. The decrease was mainly due to the decrease in market promotion and professional expenses in the first quarter of 2021. -- Adjusted general and administration expenses were RMB9.7 million (US$1.5 million), up 6.2% from RMB9.2 million in the first quarter of 2020. -- Adjusted research and development expenses were RMB19.9 million (US$3.0 million), up 23.3% from RMB16.2 million in the first quarter of 2020. The increase was mainly due to increased R&D material and personnel expenses in the first quarter of 2021.

Operating loss

Operating loss was RMB66.2 million (US$10.1 million), compared with operating loss of RMB21.1 million in the first quarter of 2020. Operating loss as a percentage of total revenues was negative 288.1%, compared with negative 112.2% in the first quarter of 2020.

Adjusted operating loss (non-GAAP)

Adjusted operating loss was RMB17.3 million (US$2.6 million), compared with adjusted operating loss of RMB19.2 million in the first quarter of 2020. Adjusted operating loss as a percentage of total revenues was negative 75.4%, compared to negative 102.0% in the first quarter of 2020.

Net loss

Net loss was RMB62.5 million (US$9.5 million), compared with net loss of RMB20.4 million in the first quarter of 2020.

Adjusted net loss (non-GAAP)

Adjusted net loss was RMB13.7 million (US$2.1 million), compared with adjusted net loss of RMB18.5 million in the first quarter of 2020.

Adjusted net loss attributable to EHangs ordinary shareholders was RMB13.3 million (US$2.0 million).

Loss per share and per ADS

Basic and diluted net loss per ordinary share were both RMB0.56 (US$0.09). Adjusted basic and diluted net loss per ordinary share4 (non-GAAP) were both RMB0.12 (US$0.02).

Basic and diluted net loss per ADS were both RMB1.12 (US$0.18). Adjusted basic and diluted net loss per ADS5 (non-GAAP) were both RMB0.24 (US$0.04). Each ADS represents two Class A ordinary shares.

Balance Sheet and Cash Flow

The cash, cash equivalents, restricted cash and short-term investments balances were RMB480.5 million (US$73.3 million) as of March 31, 2021, compared to RMB189.4 million as of December 31, 2020. The increases were mainly due to the US$40 million investment from Carmignac and the positive net cash from operating activities of RMB16.2 million (US$2.5 million), a significant growth compared to negative RMB29.1 million in the first quarter of 2020.

Business Outlook

The Companys revenue forecast for 2021 remains between RMB130 million and RMB180 million, as the Company strategically transitions into a more operation platform-oriented model and the commercialization of the EHang 216F, the firefighting model, among other AAVs.

The above outlook is based on information available as of the date of this press release and reflects the Companys current and preliminary expectations regarding its business situation and market conditions. The outlook is subject to change, especially considering uncertainties and situations related to how the COVID-19 pandemic further develops.

Conference Call

EHangs management team will host an earnings conference call at 8:00 AM on Wednesday, August 25, 2021, U.S. Eastern Time (8:00 PM on August 25, 2021, Beijing/Hong Kong Time).

Please register in advance for the conference using the link provided below and dial in 10 minutes before the conference is scheduled to begin. Conference access information will be provided upon registration.

Participant Online Registration: http://apac.directeventreg.com/registration/event/8598052.

A replay of the conference call may be accessed by phone at the following numbers until September 2, 2021. To access the replay, please reference the conference ID 8598052.

Phone NumberInternational +61 2 8199 0299United States +1 855 452 5696 +1 646 254 3697Hong Kong +852 800963117Mainland China +86 4006322162 +86 8008700205

A live and archived webcast of the conference call will be available on the companys investors relations website at http://ir.ehang.com/.

About EHang

EHang (Nasdaq: EH) is the world's leading autonomous aerial vehicle (AAV) technology platform company. EHangs mission is to make safe, autonomous, and eco-friendly air mobility accessible to everyone. EHang provides customers in various industries with AAV products and commercial solutions: urban air mobility (including passenger transportation and logistics), smart city management, and aerial media solutions. As the forerunner of cutting-edge AAV technologies and commercial solutions in the global Urban Air Mobility (UAM) industry, EHang continues to explore the boundaries of the sky to make flying technologies benefit our life in smart cities. For more information, please visit www.ehang.com.

Safe Harbor Statement

This press release contains statements that may constitute forward-looking statements pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as will, expects, anticipates, aims, future, intends, plans, believes, estimates, likely to and similar statements. Management has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While they believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond management's control. These statements involve risks and uncertainties that may cause EHang's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.

Non-GAAPFinancial Measures

The Company uses adjusted gross profit, adjusted gross margin, adjusted operating loss, adjusted net loss, adjusted operating expenses, adjusted basic and diluted loss per ordinary share and adjusted basic and diluted loss per ADS (the Non-GAAP Financial Measures) in evaluating its operating results and for financial and operational decision-making purposes. There was no income tax impact on the Companys non-GAAP adjustments because the non-GAAP adjustments are usually recorded in entities located in tax-free jurisdictions, such as the Cayman Islands.

The Company believes that the Non-GAAP Financial Measures help identify underlying trends in its business that could otherwise be distorted by the effects of items such as share-based compensation expenses that are included in their comparable GAAP measures. The Company believes that the Non-GAAP Financial Measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management members in their financial and operational decision-making.

Each of the Non-GAAP Financial Measures should not be considered in isolation or construed as an alternative to its comparable GAAP measure, operating profit margin and net margin or any other measure of performance or as an indicator of the Companys operating performance. Investors are encouraged to review the Companys most directly comparable GAAP measures in conjunction with the Non-GAAP Financial Measures. The Non-GAAP Financial Measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Companys data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. For more information on the Non-GAAP Financial Measures, please see the table captioned "Condensed Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars (USD) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.5518 to US$1.00, the noon buying rate in effect on March 31, 2021 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to could be converted into USD or RMB, as the case may be, at any particular rate or at all.

Statement Regarding Preliminary Unaudited Financial Information

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Companys year-end audit, which could result in significant differences from this preliminary unaudited financial information.

Investor Contact:ir@ehang.comIn the U.S.:Julia@blueshirtgroup.comIn China:Susie@blueshirtgroup.com

Media Contact:pr@ehang.com

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?))

As of As of December March 31, 2020 31, 2021 RMB RMB US$ (Unaudited) (Unaudited)ASSETS Current assets: Cash and cash equivalents 137,840 462,474 70,587Restricted cash 2,333 - -Short-term investments 49,271 18,000 2,747Accounts receivable, net 163,146 95,709 14,608Cost and estimated earnings in excess of 717 717 109billingsInventories, net 47,094 43,399 6,624Prepayments and other current assets 21,421 26,862 4,100Amount due from a related party 2,639 2,639 403Total current assets 424,461 649,800 99,178 Non-current assets: Property and equipment, net 20,869 29,574 4,514Intangible assets, net 1,062 963 147Long term loans receivable 14,934 13,072 1,995Long-term investments 2,919 2,919 446Other non-current assets 20,304 21,762 3,322Total non-current assets 60,088 68,290 10,424 Total assets 484,549 718,090 109,602 LIABILITIES AND SHAREHOLDERS? EQUITY Current liabilities Short-term bank loans 15,000 15,000 2,289Accounts payable 53,147 35,358 5,397Contract liabilities 7,492 21,705 3,313Accrued expenses and other liabilities 81,578 51,092 7,798Deferred income 750 756 115Deferred government subsidies 80 1,969 301Total current liabilities 158,047 125,880 19,213 Non-current liabilities: Long-term bank loans - 20,000 3,053Mandatorily redeemable non-controlling 40,000 40,000 6,105interestsDeferred tax liabilities 292 292 45Unrecognized tax benefit 5,480 5,480 836Deferred income 2,970 2,805 428Deferred government subsidies 60 40 6Total non-current liabilities 48,802 68,617 10,473 Total liabilities 206,849 194,497 29,686

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?)) As of As of December March 31, 2020 31, 2021 RMB RMB US$ (Unaudited) (Unaudited)LIABILITIES AND SHAREHOLDERS? EQUITY (CONTINUED)Shareholders? equity: Class A ordinary shares 44 45 7 Class B ordinary shares 28 28 4 Additional paid-in capital 1,081,299 1,387,114 211,715 Statutory reserves 1,035 1,035 158 Accumulated deficit (808,038 ) (870,202 ) (132,819 )Accumulated other comprehensive income 1,950 4,552 695 Total EHang Holdings Limited 276,318 522,572 79,760 shareholders? equityNon-controlling interests 1,382 1,021 156 Total shareholders? equity 277,700 523,593 79,916 Total liabilities and shareholders? 484,549 718,090 109,602 equity

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?) except fornumber of shares and per share data) Three Months Ended March 31, December March 31, 2020 31, 2021 2020 RMB RMB RMB US$ (Unaudited) (Unaudited) (Unaudited)Total revenues 18,818 54,595 22,977 3,507 Costs of revenues (7,664 ) (22,145 ) (8,451 ) (1,290 )Gross profit 11,154 32,450 14,526 2,217 Operating expenses: Sales and marketing expenses (5,776 ) (13,848 ) (9,486 ) (1,448 )General and administrative (10,608 ) (18,613 ) (46,059 ) (7,030 )expensesResearch and development (16,660 ) (50,945 ) (27,854 ) (4,251 )expensesTotal operating expenses (33,044 ) (83,406 ) (83,399 ) (12,729 ) Other operating income 769 1,750 2,667 407 Operating loss (21,121 ) (49,206 ) (66,206 ) (10,105 ) Other income/(expense): Interest and investment 1,412 671 1,957 299 incomeInterest expenses (488 ) (692 ) (394 ) (60 )Foreign exchange loss (271 ) (107 ) (306 ) (47 )Other income 81 224 2,876 439 Other expense - (1,382 ) (335 ) (51 )Total other income/(expense) 734 (1,286 ) 3,798 580 Loss before income tax andshare of net loss from an (20,387 ) (50,492 ) (62,408 ) (9,525 )equity investeeIncome tax expenses - (351 ) (117 ) (18 )Loss before share of net loss (20,387 ) (50,843 ) (62,525 ) (9,543 )from an equity investeeShare of net loss from an (19 ) - - - equity investeeNet loss (20,406 ) (50,843 ) (62,525 ) (9,543 ) Net loss (20,406 ) (50,843 ) (62,525 ) (9,543 )Net loss attributable to 856 1,657 361 55 non-controlling interestsNet loss attributable to (19,550 ) (49,186 ) (62,164 ) (9,488 )ordinary shareholdersNet loss per ClassA and ClassB ordinary share: Basic and diluted (0.18 ) (0.45 ) (0.56 ) (0.09 )Shares used in net loss perClass A and Class B ordinary share computation (in thousands of shares):Basic and diluted 109,066 109,627 110,475 110,475 Loss per ADS (2 ordinaryshares equal to 1 ADS) (0.36 ) (0.90 ) (1.12 ) (0.18 ) Basic and Diluted

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands of Renminbi (?RMB?) and US dollars ("US$")) Three Months Ended March 31, December March 31, 2020 31, 2021 2020 RMB RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet loss (20,406 ) (50,843 ) (62,525 ) (9,543 )Adjustments to reconcile netloss to net cash (used in)/ provided by operatingactivities:Depreciation and 1,481 1,452 1,211 185 amortizationDeferred income tax expenses 89 184 108 16 Share-based compensation 1,936 38,571 48,871 7,459 Gain on disposal of - (5 ) - - intangible assetsLoss on disposal of property - 228 - - and equipmentShare of net loss from an 19 - - - equity investeeInvestment income from - - (1,729 ) (264 )short-term investmentsAllowance for doubtful 142 4,794 505 77 accounts Changes in operating assets and liabilities:Accounts receivable (9,091 ) (29,370 ) 54,542 8,325 Unbilled revenue 1,481 2,800 - - Cost and estimated earnings 10,490 3,005 - - in excess of billingsInventories (11,153 ) 9,596 318 49 Prepayments and other (1,761 ) (2,206 ) (7,127 ) (1,088 )current assetsOther non-current assets 22 (16,220 ) - - Amount due from a related - (2,639 ) - - partyAccounts payable 2,696 660 (17,789 ) (2,716 )Contract liabilities (3,343 ) 986 1,613 246 Income taxes payable (5 ) - - - Deferred income - (360 ) 1,730 264 Deferred government (20 ) (20 ) (20 ) (3 )subsidiesUnrecognized tax benefits (29 ) 166 - - Accrued expenses and other (1,603 ) 3,287 (3,534 ) (540 )liabilitiesNet cash (used in)/provided (29,055 ) (35,934 ) 16,174 2,467 by operating activities

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars ("US$")) Three Months Ended March 31, December March 31, 2020 31, 2021 2020 RMB RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and (292 ) (7,414 ) (8,322 ) (1,270 )equipmentAcquisition of intangible (9 ) (59 ) (9 ) (1 )assetsProceeds from maturity of 13,000 35,596 49,271 7,520 short-term investmentsPurchase of short-term (17,200 ) (2,000 ) (18,000 ) (2,747 )investmentsLoans to third parties (53,900 ) - - - Repayment of loan from a 10,000 - - - third partyOthers (54 ) - - - Net cash flow (used in)/provided by investing (48,455 ) 26,123 22,940 3,502 activities CASH FLOWS FROM FINANCING ACTIVITIESProceeds from a short-term 5,000 - 5,000 763 bank loanRepayment of a short-term (5,000 ) - (5,000 ) (763 )bank loanProceeds from long-term - - 20,000 3,053 bank loansRepayment of loans from a - (2,000 ) - - third partyProceeds from issuance ofClass A ordinary sharespursuant to underwriters? 6,797 - - - exercise of over-allotmentoptionProceeds from issuance ofClass A ordinary shares - - 258,836 39,506 pursuant to a privateplacementPayment of issuance ofClass A ordinary sharespursuant to underwriters? - (35 ) - - exercise of over-allotmentoption?s issuance costsPayment of issuance costs (9,119 ) (2,075 ) - - for initial public offeringNet cash (used in)/provided (2,322 ) (4,110 ) 278,836 42,559 by financing activities Effect of exchange ratechanges on cash, cash 3,185 (3,710 ) 4,351 664 equivalents and restrictedcashNet (decrease)/increase incash, cash equivalents and (76,647 ) (17,631 ) 322,301 49,192 restricted cashCash, cash equivalents andrestricted cash at the 321,662 157,804 140,173 21,395 beginning of the period/yearCash, cash equivalents andrestricted cash at the end 245,015 140,173 462,474 70,587 of the period/year

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars ("US$")) Three Months Ended March 31, December March 31, 2020 31, 2021 2020 RMB RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited)Non-cash financingactivities:Unpaid Issuance costs forSeries C redeemable 743 48 48 7convertible preferredshares included in Accruedexpenses and otherliabilitiesUnpaid Issuance costs forinitial public offeringincluded in Accrued 5,608 821 821 125expenses and otherliabilitiesUnpaid issuance costs forissuance of Class Aordinary shares pursuant tounderwriters? exercise of 1,046 812 812 124over-allotment optionincluded in Accruedexpenses and otherliabilitiesUnpaid Issuance costs forissuance of Class Aordinary shares pursuant toa private placement - - 1,891 289included in Accruedexpenses and otherliabilities

EHANG HOLDINGS LIMITEDCONDENSED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?) except fornumber of shares and per share data) Three Months Ended March 31, December March 31, 2020 31, 2021 2020 RMB RMB RMB US$ (Unaudited) (Unaudited) (Unaudited)Gross profit 11,154 32,450 14,526 2,217 Plus: Share-based - 2,363 - - compensationAdjusted gross profit 11,154 34,813 14,526 2,217 Adjusted gross margin 59.3 % 63.8 % 63.2 % 63.2 % Sales and marketing (5,776 ) (13,848 ) (9,486 ) (1,448 )expensesPlus: Share-based - 5,601 4,626 706 compensationAdjusted sales and (5,776 ) (8,247 ) (4,860 ) (742 )marketing expenses General and administrative (10,608 ) (18,613 ) (46,059 ) (7,030 )expensesPlus: Share-based 1,445 5,390 36,331 5,545 compensationAdjusted general and (9,163 ) (13,223 ) (9,728 ) (1,485 )administrative expenses Research and development (16,660 ) (50,945 ) (27,854 ) (4,251 )expensesPlus: Share-based 491 25,217 7,914 1,208 compensationAdjusted research and (16,169 ) (25,728 ) (19,940 ) (3,043 )development expenses Operating expenses (33,044 ) (83,406 ) (83,399 ) (12,729 )Plus: Share-based 1,936 36,208 48,871 7,459 compensationAdjusted operating expenses (31,108 ) (47,198 ) (34,528 ) (5,270 )Adjusted operating expenses 165.3 % 86.5 % 150.3 % 150.3 %percentage Operating loss (21,121 ) (49,206 ) (66,206 ) (10,105 )Plus: Share-based 1,936 38,571 48,871 7,459 compensationAdjusted operating loss (19,185 ) (10,635 ) (17,335 ) (2,646 )Adjusted operating margin (102.0 %) (19.5 %) (75.4 %) (75.4 %) Net loss (20,406 ) (50,843 ) (62,525 ) (9,544 )Plus: Share-based 1,936 38,571 48,871 7,459 compensationAdjusted net loss (18,470 ) (12,272 ) (13,654 ) (2,084 )Adjusted net margin (98.2 %) (22.5 %) (59.4 %) (59.4 %) Net loss attributable to (19,550 ) (49,186 ) (62,164 ) (9,489 )ordinary shareholdersPlus: Share-based 1,936 38,571 48,871 7,459 compensationAdjusted net lossattributable to ordinary (17,614 ) (10,615 ) (13,293 ) (2,029 )shareholdersAdjusted net lossattributable to ordinary (93.6 %) (19.4 %) (57.9 %) (57.9 %)shareholders margin Adjusted basic and dilutednet loss per Class A and (0.16 ) (0.10 ) (0.12 ) (0.02 )Class B ordinary shareAdjusted basic and diluted (0.32 ) (0.20 ) (0.24 ) (0.04 )net loss per ADS

______________________1 Adjusted operating loss is a non-GAAP financial measure, which is defined as operating loss excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.2 Adjusted net loss is a non-GAAP financial measure, which is defined as net loss excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.3 Adjusted operating expenses is a non-GAAP financial measure, which is defined as operating expenses excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.4 Adjusted basic and diluted loss per ordinary share is a non-GAAP financial measure, which is defined as basic and diluted loss per ordinary share excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.5 Adjusted basic and diluted loss per ADS is a non-GAAP financial measure, which is defined as basic and diluted loss per ADS excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.