GlobeNewswire Inc | May 10, 2021 07:00AM EDT

May 10, 2021

--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 Kandis 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 at8:00 A.M.Eastern Time (8:00 P.M. Beijing Time) onMonday, 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:

-- Toll-free dial-in number: +1-877-407-3982 -- International dial-in number: + 1-201-493-6780 -- Webcast and replay: http://public.viavid.com/index.php?id=144859

The live audio webcast of the call can also be accessed by visitingKandi'sInvestor 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) 551-3610IR@kandigroup.com

The Blueshirt GroupMr. Gary Dvorchak, CFAgary@blueshirtgroup.com

- Tables Below

KANDI TECHNOLOGIES GROUP, INC.AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS

March31, December31, 2021 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 allowancefor doubtful accounts of $109,833 and 49,888,350 38,547,137 $110,269 as of March 31, 2021 andDecember 31, 2020, respectively)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 and77,298,499 shares issued and 75,387 75,377 75,387,555 and 75,377,555 outstandingat March31,2021 and December 31,2020,respectivelyAdditional paid-in capital 442,343,280 439,549,338 Accumulated deficit (the restrictedportion is $4,422,033 and $4,422,033at March (33,482,620 ) (27,079,900 )31,2021 and December 31,2020,respectively)Accumulated other comprehensive loss (9,954,164 ) (8,778,151 )TOTAL STOCKHOLDERS' EQUITY 398,981,883 403,766,664 TOTAL LIABILITIES AND STOCKHOLDERS' $ 484,571,960 $ 495,249,840 EQUITY

KANDI TECHNOLOGIES GROUP, INC.AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE INCOME (LOSS)(UNAUDITED)

Three Months Ended March 31, March 31, 2021 2020 REVENUES FROM UNRELATED PARTIES, NET $ 15,976,170 $ 6,372,424 REVENUES FROM THE AFFILIATE COMPANY 1,584 - AND RELATED PARTIES, NET 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 357,000 3,792,000 considerationGovernment grants 234,793 11,099 Gain from sale of equity in the 17,700,260 - Affiliate CompanyShare of loss after tax of the (2,579,497 ) (1,102,770 )Affiliate CompanyOther 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 (1,176,013 ) (3,523,065 )adjustment COMPREHENSIVE LOSS $ (7,578,733 ) $ (5,097,711 ) WEIGHTED AVERAGE SHARES OUTSTANDING 75,383,777 52,361,077 BASIC AND DILUTED NET LOSS PER SHARE, BASIC AND DILUTED $ (0.08 ) $ (0.03 )

KANDI TECHNOLOGIES GROUP, INC.AND SUBSIDIARIESCONDENSEDCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY(UNAUDITED)

Number of Additional Accumulated Outstanding Common Treasury Paid-in Accumulated Other Total Shares Stock Stock Capital Deficit Comprehensive LossBalance,December 52,839,441 $ 52,839 $ (2,477,965 ) $ 259,691,370 $ (16,685,736 ) $ (22,723,581 ) $ 217,856,927 31, 2019Stockissuance 10,000 10 - 22,290 - - 22,300 and awardNet loss - - - - (1,574,646 ) - (1,574,646 )Foreigncurrency - - - - - (3,523,065 ) (3,523,065 )translation Balance,March 31, 52,849,441 $ 52,849 $ (2,477,965 ) $ 259,713,660 $ (18,260,382 ) $ (26,246,646 ) $ 212,781,516 2020

Number of Additional Accumulated Accumulated Outstanding Common Treasury Paid-in Earning Other Total Shares Stock Stock Capital (Deficit) Comprehensive IncomeBalance,December 75,377,555 $ 75,377 $ - $ 439,549,338 $ (27,079,900 ) $ (8,778,151 ) $ 403,766,664 31, 2020Stockissuance 10,000 10 - 22,290 - - 22,300 and awardNet loss - - - - (6,402,720 ) - (6,402,720 )Foreigncurrency - - - - - (1,176,013 ) (1,176,013 )translationReversal ofreductionin theAffiliateCompany?s - - - 2,771,652 - - 2,771,652 equity (netoff taxeffect of$491,400) Balance,March 31, 75,387,555 $ 75,387 $ - $ 442,343,280 $ (33,482,620 ) $ (9,954,164 ) $ 398,981,883 2021

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

Three Months Ended March31, March31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (6,402,720 ) $ (1,574,646 )Adjustments to reconcile net incometo net cash provided by operating activitiesDepreciation and amortization 2,212,965 2,037,045 Impairments - 24,316 Share of loss after tax of the 2,579,497 1,102,770 Affiliate CompanyGain from equity sale in the (17,700,260 ) - Affiliate CompanyChange in fair value of contingent (357,000 ) (3,792,000 )considerationStock 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 18,807,547 (8,311,506 )and prepaid expensesAmount due from the Affiliate Company - 4,187,038 Increase (Decrease) In: Accounts payable (340,133 ) (2,575,446 )Other payables and accrued 107,011 (781,409 )liabilitiesNotes 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 (5,866,207 ) (1,355 )equipment, netPayment 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 23,758,099 11,461,646 the Affiliate CompanyLong Term Investment (107,991 ) - Net cash provided by investing $ 11,130,031 $ 11,460,291 activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from short-term loans - 8,452,964 Net cash provided by financing $ - $ 8,452,964 activities NET INCREASE (DECREASE) IN CASH ANDCASH EQUIVALENTS AND $ 5,112,751 $ (6,612,814 )RESTRICTED CASHEffect of exchange rate changes $ (438,313 ) $ (145,928 )CASH AND CASH EQUIVALENTS ANDRESTRICTED CASH AT $ 142,520,635 $ 16,512,635 BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AND $ 147,195,073 $ 9,753,893 RESTRICTED CASH AT END OF PERIOD-CASH AND CASH EQUIVALENTS AT END OF 146,714,469 3,719,142 PERIOD-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 inthe Affiliate Company due to changein its $ 2,807,696 - equity (net off tax effect of$491,400)Increase of other receivable forequity transfer payment of the $ 23,758,099 - Affiliate Company