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Kandi Technologies Reports First Quarter 2021 Financial Results

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--Revenue of $16 million, +151% y/y--

--Working Capital of $244 million—

JINHUA, China, May 10, 2021 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced financial results for the first quarter of 2021.

First Quarter Highlights

  • Total revenues increased by 150.7% to $16.0 million, from $6.4 million in the same period of 2020.

  • EV parts sales increased by 206.0% to $6.4 million, compared to $2.1 million in the same period of 2020.

  • Off-road vehicles sales increased by 39.2% to $5.6 million, compared to $4.0 million in the same period of 2020.

  • Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $3.9 million. As a new business, there was no revenue in the same period of 2020.

  • Gross margin was 27.3%, compared to 18.3% for the same period of 2020.

  • Net loss was $6.4 million, or $0.08 loss per fully diluted share due to investment in R&D for new products, compared to a net loss of $1.6 million, or $0.03 loss per fully diluted share for the same period of 2020.

  • As of March 31, 2021, working capital was $244.1 million; cash, cash equivalents, restricted cash and certificate of deposit totaled $162.5 million.

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented: “The most promising EV opportunities we see today are short-distance small EVs in China and high-end electric Utility Terrain Vehicles in the U.S. We are focused on mass markets by developing vehicles for these segments with a cost of RMB 30,000 (approximately US$4,663) or less. For China we are developing a ‘neighborhood EV’. For the U.S., we are working on a fully enclosed high-end air-conditioned electric 4WD UTV. We expect to launch both products this year.”

Hu continued, “We intend to pursue the EV market more aggressively now that we are no longer constrained by the non-compete restrictions of our affiliation with Fengsheng. We spent a lot on R&D in the quarter, as we start to develop a new EV model. We are also considering EV product line expansion through acquisition, and are in various stages of discussions with several potential target companies.”

Turning to Kandi’s facility strategy, Hu elaborated, “In China our Jinhua facility relocation work was completed in the first quarter. We finished relocating production and offices to the new industrial park and vacated the old factory property. In early April, officials of the Jinhua Development Zone inspected and approved the work. We expect to soon receive the remaining payment of RMB 162 million, or approximately USD 25 million. Meanwhile, in late April our U.S. subsidiary SC Autosports moved its team to our newly purchased building in Dallas.”

Mr. Hu concluded, “Although our net loss grew in the first quarter, this was due to our extensive investment in R&D. Sales were solid and the EV product segment should soon recover as we execute our growth plan. We are well-funded, having collected payments for Fengsheng and the relocation. With our strong balance sheet and leading technologies, we intend to pursue exciting EV opportunities such as battery swap and the ride-sharing platform, among others.”

Q1 2021 Financial Results

Net Revenues and Gross Profit (in USD millions)

1Q21

1Q20

Y/Y%

Net Revenue

$16.0

$6.4

150.7%

Gross Profit

$4.4

$1.2

273.0%

Gross Margin

27.3%

18.3%

-

Net revenues of $16.0 million increased 150.7% from the first quarter of 2020. The increase in revenue was primarily due to growth in EV parts and the new segment of Electric Scooters, Electric Self-Balancing Scooters and associated parts.

Operating Income/Loss (in USD millions)

1Q21

1Q20

Y/Y%

Operating Expenses

($27.2)

($4.6)

493.2%

Operating Loss

($22.8)

($3.4)

568.4%

Operating Margin

-143%

-54%

-

Total operating expenses were $27.2 million, compared with $4.6 million in the first quarter of 2020. The increase was due to R&D spending to develop new products.

Net Loss (in USD millions)

1Q21

1Q20

Y/Y%

Net Loss

($6.4)

($1.6)

306.6%

Loss per Weighted Average Common Share

($0.08)

($0.03)

-

Loss per Weighted Average Diluted Share

($0.08)

($0.03)

-

Net loss was $6.4 million, compared with a net loss of $1.6 million in the same period of 2020. The greater loss was primarily attributable to increased R&D expense for new products.

Conference Call Details

The Company has scheduled a conference call and live webcast to discuss its financial results at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time) on Monday, May 10, 2021. Management will deliver prepared remarks to be followed by a question and answer session.

The dial-in details for the conference call are as follows:

The live audio webcast of the call can also be accessed by visiting Kandi's Investor Relations page on the Company's website at http://www.kandivehicle.com. An archive of the webcast will be available on the Company's website following the live call.

About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (KNDI), headquartered in Jinhua Economic Development Zone, Zhejiang Province, is engaged in the research, development, manufacturing, and sales of various vehicular products. Kandi conducts its primary business operations through its wholly-owned subsidiary, Zhejiang Kandi Technologies Group Co., Ltd. (“Zhejiang Kandi Technologies”), formerly, Zhejiang Kandi Vehicles Co., Ltd.) and its subsidiaries including Zhejiang Kandi Smart Battery Swap Technology Co., Ltd, and SC Autosports, LLC (d/b/a Kandi America), the wholly-owned subsidiary of Kandi in the United States, and its wholly-owned subsidiary, Kandi America Investment, LLC. Zhejiang Kandi Technologies has established itself as one of China's leading manufacturers of pure electric vehicle parts and off-road vehicles.

More information about KNDI is available on the Company's corporate website at http://www.kandivehicle.com. The Company routinely posts important information on its website.

Safe Harbor Statement

This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the applicable securities laws, the Company does not assume a duty to update these forward-looking statements.

Follow us on Twitter: @ Kandi_Group

Contacts:

Kandi Technologies Group, Inc.
Ms. Kewa Luo
+1 (212) 551-3610
IR@kandigroup.com

The Blueshirt Group
Mr. Gary Dvorchak, CFA
gary@blueshirtgroup.com

- Tables Below –

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,
2021

December 31,
2020

(UNAUDITED)

Current assets

Cash and cash equivalents

$

146,714,469

$

142,078,190

Restricted cash

480,604

442,445

Certificate of deposit

15,258,789

-

Accounts receivable (net of allowance for doubtful accounts of $109,833 and
$110,269 as of March 31, 2021 and December 31, 2020, respectively)

49,888,350

38,547,137

Inventories

20,481,613

19,697,383

Notes receivable

18,409,729

31,404,630

Other receivables

38,596,446

1,875,245

Prepayments and prepaid expense

14,910,522

13,708,149

Advances to suppliers

16,731,376

36,733,182

Amount due from the Affiliate Company

-

21,742,226

Amount due from related party

883,484

886,989

TOTAL CURRENT ASSETS

322,355,382

307,115,576

NON-CURRENT ASSETS

Property, plant and equipment, net

69,203,628

65,402,680

Intangible assets, net

3,056,720

3,232,753

Land use rights, net

3,222,094

3,257,760

Construction in progress

16,864,585

16,317,662

Deferred taxes assets

8,473,546

8,964,946

Long term investment

152,588

45,958

Investment in the Affiliate Company

-

28,892,638

Goodwill

29,621,966

29,712,383

Other long term assets

31,621,451

32,307,484

TOTAL NON-CURRENT ASSETS

162,216,578

188,134,264

TOTAL ASSETS

$

484,571,960

$

495,249,840

CURRENT LIABILITIES

Accounts payable

$

29,846,891

$

34,257,935

Other payables and accrued expenses

4,648,178

7,218,395

Notes payable

92,079

92,445

Income tax payable

1,355,094

1,313,754

Advance receipts

38,078,159

38,229,242

Amount due to related party

500,000

500,000

Other current liabilities

3,742,741

2,185,654

TOTAL CURRENT LIABILITIES

78,263,142

83,797,425

NON-CURRENT LIABILITIES

Deferred taxes liability

3,483,171

3,483,171

Contingent consideration liability

3,386,000

3,743,000

Other long-term liabilities

457,764

459,580

TOTAL NON-CURRENT LIABILITIES

7,326,935

7,685,751

TOTAL LIABILITIES

85,590,077

91,483,176

STOCKHOLDER'S EQUITY

Common stock, $0.001 par value; 100,000,000 shares authorized; 77,308,499 and
77,298,499 shares issued and 75,387,555 and 75,377,555 outstanding at March
31,2021 and December 31,2020, respectively

75,387

75,377

Additional paid-in capital

442,343,280

439,549,338

Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at March
31,2021 and December 31,2020, respectively)

(33,482,620

)

(27,079,900

)

Accumulated other comprehensive loss

(9,954,164

)

(8,778,151

)

TOTAL STOCKHOLDERS' EQUITY

398,981,883

403,766,664

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

484,571,960

$

495,249,840


KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

Three Months Ended

March 31,
2021

March 31,
2020

REVENUES FROM UNRELATED PARTIES, NET

$

15,976,170

$

6,372,424

REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTIES, NET

1,584

-

REVENUES, NET

15,977,754

6,372,424

COST OF GOODS SOLD

(11,623,403

)

(5,205,165

)

GROSS PROFIT

4,354,351

1,167,259

OPERATING EXPENSES:

Research and development

(21,624,597

)

(640,240

)

Selling and marketing

(1,146,866

)

(878,306

)

General and administrative

(4,430,123

)

(3,066,735

)

TOTAL OPERATING EXPENSES

(27,201,586

)

(4,585,281

)

LOSS FROM OPERATIONS

(22,847,235

)

(3,418,022

)

OTHER INCOME (EXPENSE):

Interest income

528,592

338,944

Interest expense

(126,348

)

(982,934

)

Change in fair value of contingent consideration

357,000

3,792,000

Government grants

234,793

11,099

Gain from sale of equity in the Affiliate Company

17,700,260

-

Share of loss after tax of the Affiliate Company

(2,579,497

)

(1,102,770

)

Other income, net

498,901

19,650

TOTAL OTHER INCOME, NET

16,613,701

2,075,989

LOSS BEFORE INCOME TAXES

(6,233,534

)

(1,342,033

)

INCOME TAX EXPENSE

(169,186

)

(232,613

)

NET LOSS

(6,402,720

)

(1,574,646

)

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation adjustment

(1,176,013

)

(3,523,065

)

COMPREHENSIVE LOSS

$

(7,578,733

)

$

(5,097,711

)

WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED

75,383,777

52,361,077

NET LOSS PER SHARE, BASIC AND DILUTED

$

(0.08

)

$

(0.03

)


KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)

Number of
Outstanding
Shares

Common
Stock

Treasury
Stock

Additional
Paid-in
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss

Total

Balance, December 31, 2019

52,839,441

$

52,839

$

(2,477,965

)

$

259,691,370

$

(16,685,736

)

$

(22,723,581

)

$

217,856,927

Stock issuance and award

10,000

10

-

22,290

-

-

22,300

Net loss

-

-

-

-

(1,574,646

)

-

(1,574,646

)

Foreign currency translation

-

-

-

-

-

(3,523,065

)

(3,523,065

)

Balance, March 31, 2020

52,849,441

$

52,849

$

(2,477,965

)

$

259,713,660

$

(18,260,382

)

$

(26,246,646

)

$

212,781,516


Number of
Outstanding
Shares

Common
Stock

Treasury
Stock

Additional
Paid-in
Capital

Accumulated
Earning
(Deficit)

Accumulated
Other
Comprehensive
Income

Total

Balance, December 31, 2020

75,377,555

$

75,377

$

-

$

439,549,338

$

(27,079,900

)

$

(8,778,151

)

$

403,766,664

Stock issuance and award

10,000

10

-

22,290

-

-

22,300

Net loss

-

-

-

-

(6,402,720

)

-

(6,402,720

)

Foreign currency translation

-

-

-

-

-

(1,176,013

)

(1,176,013

)

Reversal of reduction in the Affiliate Company’s equity (net off tax effect of $491,400)

-

-

-

2,771,652

-

-

2,771,652

Balance, March 31, 2021

75,387,555

$

75,387

$

-

$

442,343,280

$

(33,482,620

)

$

(9,954,164

)

$

398,981,883


KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

Three Months Ended

March 31,
2021

March 31,
2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(6,402,720

)

$

(1,574,646

)

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

2,212,965

2,037,045

Impairments

-

24,316

Share of loss after tax of the Affiliate Company

2,579,497

1,102,770

Gain from equity sale in the Affiliate Company

(17,700,260

)

-

Change in fair value of contingent consideration

(357,000

)

(3,792,000

)

Stock based compensation expense

22,925

22,925

Changes in operating assets and liabilities:

Accounts receivable

8,916,548

5,540,503

Inventories

(864,177

)

(2,955,178

)

Other receivables and other assets

(13,058,262

)

(8,734,544

)

Advances to supplier and prepayments and prepaid expenses

18,807,547

(8,311,506

)

Amount due from the Affiliate Company

-

4,187,038

Increase (Decrease) In:

Accounts payable

(340,133

)

(2,575,446

)

Other payables and accrued liabilities

107,011

(781,409

)

Notes payable

-

(10,745,294

)

Income tax payable

58,779

29,357

Net cash used in operating activities

$

(6,017,280

)

$

(26,526,069

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment, net

(5,866,207

)

(1,355

)

Payment for construction in progress

(4,339,770

)

-

Repayments of loan to third party

13,113,237

-

Certificate of deposit

(15,427,337

)

-

Cash received from sales of equity in the Affiliate Company

23,758,099

11,461,646

Long Term Investment

(107,991

)

-

Net cash provided by investing activities

$

11,130,031

$

11,460,291

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term loans

-

8,452,964

Net cash provided by financing activities

$

-

$

8,452,964

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND
RESTRICTED CASH

$

5,112,751

$

(6,612,814

)

Effect of exchange rate changes

$

(438,313

)

$

(145,928

)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT
BEGINNING OF YEAR

$

142,520,635

$

16,512,635

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

$

147,195,073

$

9,753,893

-CASH AND CASH EQUIVALENTS AT END OF PERIOD

146,714,469

3,719,142

-RESTRICTED CASH AT END OF PERIOD

480,604

6,034,751

SUPPLEMENTARY CASH FLOW INFORMATION

Income taxes paid

$

110,407

203,256

Interest paid

$

-

345,170

SUPPLEMENTAL NON-CASH DISCLOSURES:

Reversal of decrease in investment in the Affiliate Company due to change in its
equity (net off tax effect of $491,400)

$

2,807,696

-

Increase of other receivable for equity transfer payment of the Affiliate Company

$

23,758,099

-