EX-99.1 2 ea159581ex99-1_kanditech.htm PRESS RELEASE DATED MAY 9, 2022

Exhibit 99.1

 

Kandi Technologies Reports First Quarter 2022 Financial Results

 

- Revenue of $24.9 million, up nearly 56% year-over-year

- Off-road vehicles and lithium-ion cells were primary revenue contributors

- Quarter-end cash balance1 of $229.2 million

 

JINHUA, CHINA-- (May 9, 2022) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the first quarter of 2022.

 

First Quarter Highlights

 

●Total revenues increased by 55.8% to $24.9 million, from $16.0 million in the same period of 2021.

 

●EV parts sales were $3.7 million, compared to $6.4 million in the same period of 2021.

 

●EV products sales increased by 179.8% to $0.3 million, compared to $0.1 million in the same period of 2021.

 

●Off-road vehicles sales increased by 90.7% to $10.7 million, compared to $5.6 million in the same period of 2021.

 

●Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $2.1 million, compared with $3.9 million in the same period of 2021.

 

●Lithium-ion cells sales were $8.0 million. There were no comparable sales for the same period of 2021 since Jiangxi Huiyi New Energy CO., Ltd. (“Jiangxi Huiyi”), the entity that manufactures Lithium-ion cells, was acquired by the Company in October 2021.

 

●Gross margin was 9.6%, compared to 27.3% for the same period of 2021.

 

●Net loss was $1.6 million, or $0.02 loss per fully diluted share, compared to a net loss of $6.4 million, or $0.08 loss per fully diluted share for the same period of 2021.

 

●As of March 31, 2022, working capital was $276.4 million; cash, cash equivalents, restricted cash and certificate of deposit totaled $229.2 million.

  

Mr. Hu Xiaoming, Chairman and CEO of Kandi commented, “We kicked off 2022 with solid revenue growth. One highlight was our all-electric off-road vehicles, which we developed last year in response to the growing demand we observed. Our team made substantial progress in the quarter. In February 2022, we established Hainan Kandi Holding New Energy Technology Co., Ltd. in Hainan province (“Hainan Kandi Holding”), which produces ‘crossover’ electric golf carts (“golf carts”). On February 22, 2022, SC Autosports and Coleman Powersports Inc. signed a memorandum of understanding (“MOU”) regarding the sales of $29 million (equivalent to 5,000 units) golf carts. In addition, on March 3, 2022, SC Autosports signed a sales MOU of $39 million (equivalent to 5,000 units) luxury golf carts with more than twenty dealers. Hainan Kandi Holding is already manufacturing the vehicles. By the end of April, a total of 778 units were shipped from Hainan province to SC Autosports. We are planning to deliver another 2,000 units in May this year.”

 

 

1Includes cash, cash equivalents, restricted cash, and certificate of deposit.

 

 

 

 

Hu continued, “Lithium-ion battery cells also contributed meaningfully to revenue. This is the principal product of Jiangxi Huiyi, the leading battery manufacturer that we acquired last fall. That acquisition is making an immediate revenue contribution from production of batteries, strengthening our battery business. Also, it boosts our capability of integrating the supply chain of battery-powered vehicle products, which can be leveraged to generate substantial growth in the electric off-road vehicles and other battery-powered vehicle products.”

 

Q1 2022 Financial Results

 

Net Revenues and Gross Profit (in USD millions)

 

   Q1 2022   Q1 2021   Y-o-Y% 
Net Revenues  $24.9   $16.0    55.8%
Gross Profit  $2.4   $4.4    -45.2%
Gross Margin%   9.6%   27.3%   - 

 

Net revenues of $24.9 million in the first quarter 2022 increased 55.8% from the same period of 2021. Revenue growth was primarily due to higher sales of off-road vehicles and the addition of lithium-ion cell sales, which were generated from the Jiangxi Huiyi acquisition in October 2021. Gross margin declined due to a mix shift to lower margin products such as the lithium-ion cells. Furthermore, margin was impacted by the introduction of the new off-road vehicles into the US market, where value pricing was used to promote sales.

 

Operating Income/Loss (in USD millions)

 

   Q1 2022   Q1 2021   Y-o-Y% 
Operating Expenses  ($8.1)  ($27.2)   -70.3%
Loss from Operations  ($5.7)  ($22.8)   -75.0%
Operating Margin%   -22.9%   -143.0%   - 

 

Total operating expenses in the first quarter of 2022 were $8.1 million, compared with $27.2 million for the same period of 2021. The decrease was primarily due to lower R&D expense, as the Company’s R&D expenditure for new products was largely incurred in the first quarter of 2021.

 

Net Income/Loss (in USD millions)

 

   Q1 2022   Q1 2021   Y-o-Y% 
NetLoss  ($1.6)  ($6.4)   -74.7%
Net Loss per Share, Basic and Diluted  ($0.02)  ($0.08)   - 

 

Net loss of $1.6 million in the first quarter of 2022 compares to a net loss of $6.4 million for the same period of 2021, with the decrease primarily coming from lower R&D expense.

 

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First Quarter 2022 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 9, 2022. 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:

 

●Toll-free dial-in number: +1-877-407-3982
  
●International dial-in number: + 1-201-493-6780

 

●Webcast and replay: https://event.choruscall.com/mediaframe/webcast.html?webcastid=sMgsHhtu

 

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.

 

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

 

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

 

   March 31,
2022		   December 31,
2021		 
   (Unaudited)     
Current assets        
Cash and cash equivalents  $99,997,938   $129,223,443 
Restricted cash   58,222,796    39,452,564 
Certificate of deposit   70,957,772    55,041,832 
Accounts receivable (net of allowance for doubtful accounts of $3,065,854 and $3,053,277 as of March 31, 2022 and December 31, 2021, respectively)   40,262,353    52,896,305 
Inventories   30,958,762    33,171,973 
Notes receivable   837,302    323,128 
Other receivables   8,798,534    8,901,109 
Prepayments and prepaid expense   17,275,378    17,657,326 
Advances to suppliers   4,998,703    5,940,456 
TOTAL CURRENT ASSETS   332,309,538    342,608,136 
           
NON-CURRENT ASSETS          
Property, plant and equipment, net   110,004,425    111,577,411 
Intangible assets, net   12,770,134    13,249,079 
Land use rights, net   3,235,497    3,250,336 
Construction in progress   326,641    79,317 
Deferred tax assets   2,219,297    2,219,297 
Long-term investment   157,684    157,262 
Goodwill   36,109,089    36,027,425 
Other long-term assets   11,898,416    10,992,009 
TOTAL NON-CURRENT ASSETS   176,721,183    177,552,136 
           
TOTAL ASSETS  $509,030,721   $520,160,272 
           
CURRENT LIABILITIES          
Accounts payable  $27,966,224   $36,677,802 
Other payables and accrued expenses   7,747,034    9,676,973 
Short-term loans   1,450,000    950,000 
Notes payable   10,548,203    8,198,193 
Income tax payable   1,512,342    1,620,827 
Other current liabilities   6,726,257    7,038,895 
TOTAL CURRENT LIABILITIES   55,950,060    64,162,690 
           
NON-CURRENT LIABILITIES          
Long-term loans   2,210,589    2,210,589 
Deferred taxes liability   2,460,141    2,460,141 
Contingent consideration liability   5,122,000    7,812,000 
Other long-term liabilities   989,018    314,525 
TOTAL NON-CURRENT LIABILITIES   10,781,748    12,797,255 
           
TOTAL LIABILITIES   66,731,808    76,959,945 
           
STOCKHOLDER’S EQUITY          
Common stock, $0.001 par value; 100,000,000 shares authorized; 77,410,130 and 77,385,130 shares issued and 76,271,345 and 76,705,381 outstanding at March 31,2022 and December 31,2021, respectively   77,410    77,385 
Less: Treasury stock (1,138,785 shares with average price of $3.48 and 679,749 shares with average price of $3.52 at March 31,2022 and December 31,2021, respectively )   (3,962,527)   (2,392,203)
Additional paid-in capital   449,559,150    449,479,461 
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at March 31,2022 and December 31,2021, respectively)   (5,832,158)   (4,216,102)
Accumulated other comprehensive loss   1,261,597    251,786 
TOTAL KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS’ EQUITY   441,103,472    443,200,327 
           
Non-controlling interests   1,195,441    - 
TOTAL STOCKHOLDERS’ EQUITY   442,298,913    443,200,327 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $509,030,721   $520,160,272 

 

4

 

 

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

 

   Three Months Ended 
   March 31,
2022		   March 31,
2021		 
         
REVENUES FROM UNRELATED PARTIES, NET  $24,891,404   $15,976,170 
REVENUES FROM THE FORMER AFFILIATE COMPANY AND RELATED PARTIES, NET   -    1,584 
           
REVENUES, NET   24,891,404    15,977,754 
           
COST OF GOODS SOLD   (22,504,241)   (11,623,403)
           
GROSS PROFIT   2,387,163    4,354,351 
           
OPERATING INCOME (EXPENSE):          
Research and development   (1,140,586)   (21,624,597)
Selling and marketing   (1,193,699)   (1,146,866)
General and administrative   (5,756,531)   (4,430,123)
TOTAL OPERATING EXPENSE   (8,090,816)   (27,201,586)
           
EXPENSE FROM OPERATIONS   (5,703,653)   (22,847,235)
           
OTHER INCOME (EXPENSE):          
Interest income   1,222,304    528,592 
Interest expense   (148,144)   (126,348)
Change in fair value of contingent consideration   2,690,000    357,000 
Government grants   244,098    234,793 
Gain from sale of equity in the Former Affiliate Company   -    17,700,260 
Share of loss after tax of the Former Affiliate Company   -    (2,579,497)
Other income, net   43,782    498,901 
TOTAL OTHER INCOME , NET   4,052,040    16,613,701 
           
LOSS BEFORE INCOME TAXES   (1,651,613)   (6,233,534)
           
INCOME TAX BENEFIT (EXPENSE)   32,600    (169,186)
           
NET LOSS   (1,619,013)   (6,402,720)
           
LESS: NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTERESTS   2,957    - 
           
NET LOSS ATTRIBUTABLE TO KANDI TECHNOLOGIES GROUP, INC. STOCKHOLDERS   (1,616,056)   (6,402,720)
           
OTHER COMPREHENSIVE INCOME (LOSS)          
Foreign currency translation adjustment   1,009,811    (1,176,013)
           
COMPREHENSIVE INCOME (LOSS)  $(609,202)  $(7,578,733)
           
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED   76,289,846    75,383,777 
           
NET LOSS PER SHARE, BASIC AND DILUTED  $(0.02)  $(0.08)

 

5

 

 

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     Non-controlling interests     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 Former Affiliate Company’s equity (net of 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  

 

    Number of Outstanding Shares     Common Stock     Treasury Stock     Additional Paid-in Capital     Accumulated Earning (Deficit)     Accumulated Other Comprehensive Income     Non-controlling interests     Total  
Balance, December 31, 2021     77,385,130     $ 77,385     $ (2,392,203 )   $ 449,479,461     $ (4,216,102 )   $ 251,786     $      -     $ 443,200,327  
Stock issuance and award     25,000       25       -       92,925       -       -       -       92,950  
Stock buyback                     (1,570,324 )     (13,236 )                             (1,583,560 )
Capital contribution from shareholder     -       -       -       -       -       -       1,198,398       1,198,398  
Net loss     -       -       -       -       (1,616,056 )     -       (2,957 )     (1,619,013 )
Foreign currency translation     -       -       -       -       -       1,009,811       -       1,009,811  
                                                                 
Balance, March 31, 2022     77,410,130     $ 77,410     $ (3,962,527 )   $ 449,559,150     $ (5,832,158 )   $ 1,261,597     $ 1,195,441     $ 442,298,913  

 

6

 

 

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 

    Three Months Ended  
    March 31,
2022		     March 31,
2021		  
             
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net loss   $ (1,619,013 )   $ (6,402,720 )
Adjustments to reconcile net income to net cash provided by operating activities                
Depreciation and amortization     3,294,499       2,212,965  
Provision (reversal) of allowance for doubtful accounts     4,389       -  
Share of loss after tax of the Former Affiliate Company     -       2,579,497  
Loss from equity sale in the Former Affiliate Company     -       (17,700,260 )
Change in fair value of contingent consideration     (2,690,000 )     (357,000 )
Stock based compensation expense     22,925       22,925  
                 
Changes in operating assets and liabilities:                
                 
Accounts receivable     5,197,268       8,916,548  
Notes receivable     1,965,596       -  
Inventories     2,498,914       (864,177 )
Other receivables and other assets     (790,486 )     (13,058,262 )
Advances to supplier and prepayments and prepaid expenses     1,425,684       18,807,547  
                 
Increase (Decrease) In:                
Accounts payable     3,088,095       (340,133 )
Other payables and accrued liabilities     (1,688,414 )     107,011  
Notes payable     (4,401,457 )     -  
Income tax payable     (119,559 )     58,779  
Net cash provided by (used in) operating activities   $ 6,188,441     $ (6,017,280 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of property, plant and equipment, net     (709,881 )     (5,866,207 )
Payment for construction in progress     (246,971 )     (4,339,770 )
Repayment from (loan to) third party     -       13,113,237  
Certificate of deposit     (15,759,448 )     (15,427,337 )
Proceeds from sales of equity in the Former Affiliate Company     -       23,758,099  
Long-term Investment     -       (107,991 )
Net cash (used in) provided by investing activities   $ (16,716,300 )   $ 11,130,031  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from short-term loans     500,000       -  
Contribution from non-controlling shareholder     803,732       -  
Purchase of treasury stock     (1,583,561 )     -  
Net cash used in financing activities   $ (279,829 )   $ -  
                 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH   $ (10,807,688 )   $ 5,112,751  
Effect of exchange rate changes   $ 352,415     $ (438,313 )
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR   $ 168,676,007     $ 142,520,635  
                 
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD   $ 158,220,734     $ 147,195,073  
-CASH AND CASH EQUIVALENTS AT END OF PERIOD     99,997,938       146,714,469  
-RESTRICTED CASH AT END OF PERIOD     58,222,796       480,604  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
Income taxes paid   $ 5,496       110,407  
Interest paid   $ 37,116       -  
                 
SUPPLEMENTAL NON-CASH DISCLOSURES:                
Reversal of decrease in investment in the Former Affiliate Company due to change in its equity (net of tax effect of $491,400)     -       2,807,696  
Increase of other receivable for equity transfer payment of the Former Affiliate Company     -       23,758,099  
Contribution from non-controlling shareholder by inventories and fix assets     393,986       -  

 

 

7