GlobeNewswire Inc | Nov 9, 2021 07:00AM EST

November 09, 2021

-- Revenue ~$17 million --Working Capital of ~$289 million, cash1balance $211 million--- Sales into e-Scooter-related markets surge nearly 600% --

JINHUA, China, Nov. 09, 2021 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the Company, we or Kandi) (NASDAQ GS: KNDI), today announced financial results for the third quarter of 2021.

Third Quarter Highlights

-- Total revenues decreased by 10.3% to $16.8 million, from $18.7 million in the same period of 2020. -- EV parts sales were $3.2 million, compared to $8.4 million in the same period of 2020. -- Off-road vehicles sales were $6.8 million, compared to $8.9 million in the same period of 2020. -- Electric Scooters, Electric Self-Balancing Scooters and associated parts sales were $6.3 million, compared to $0.9 million in the same period of 2020. -- Battery exchange equipment and battery exchange service sales were $0.2 million. This new business had no revenue in the same period of 2020. -- Gross margin was 16.4%, compared to 20.9% for the same period of 2020. -- Net loss was $7.9 million, or ($0.10) per fully diluted share due to decreased sales and increased investment in R&D, compared to net loss of $1.5 million, or ($0.03) per fully diluted share for the same period of 2020. -- As of September 30, 2021, working capital was $289.4 million. Cash, cash equivalents, restricted cash, and a certificate of deposit totaled $211.0 million.

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

Hu Xiaoming, Chairman and CEO of Kandi commented: Sales are surging in the segment of e-Scooters, electric self-balancing scooters and associated parts sales. With explosive growth again this quarter, we are increasingly confident that our traction in this market can continue. Our strategic entry into this market last year represents a great success in identifying and developing intelligent transportation products to counteract the impact to EV market demand caused by the COVID-19 outbreak in 2020. We expect the EV-related business recovery to take time. Our restructuring of this business segment resulted in lower sales of EV products and parts.

Hu continued, Compared to the second quarter, our sales mix had a couple of notable shifts. Within EV parts, battery pack sales were impacted by supply chain constraints hitting the whole industry. Meanwhile, off-road vehicles sales grew more rapidly, indicating burgeoning customer demand for off-road and ATV recreation. We are excited about the new products we are introducing for this segment.

Turning to the balance sheet, Hu commented, During the quarter we received the final payment related to the sale of our 22% equity position in Fengsheng. Our liquidity has never been better. We are well-capitalized to pursue the most promising market opportunities: those that show high demand, are not oversupplied, and play to our competitive strengths. After we finish the reset of our electric vehicle business, we can again achieve substantial growth.

Q3 2021 Financial Results

Net Revenues and Gross Profit (in USD millions)

?? 3Q21 3Q20 Y/Y%Net Revenue $16.8 $18.7 -10.3%Gross Profit $2.7 $3.9 -29.7%Gross Margin 16.4% 20.9% -

Net revenues of $16.8 million decreased 10.3% from the third quarter of 2020. The decrease in revenue was primarily due to lower sales of EV parts. Gross margin was 16.4%, lower than the 20.9% recorded in the same period of 2020, primarily attributable to a lower proportion of revenue generated from off-road vehicles, which offers higher gross margin.

Operating Income/Loss (in USD millions)

?? 3Q21 3Q20 Y/Y%Operating Expenses ($11.8) ($6.3) 87.2%Loss from Operations ($9.0) ($2.4) 279.3%Operating Margin -53.7% -12.7% -

Operating expenses were $11.8 million, compared with expenses of $6.3 million in the third quarter of 2020. The greater expense was primarily attributable to increased R&D spending for new product development.

Net Loss (in USD millions)

?? 3Q21 3Q20 Y/Y%Net Loss ($7.9) ($1.5) 439.6%Net Loss per Share, Basic and Diluted ($0.10) ($0.03) -

Net loss was $7.9 million, compared with a net loss of $1.5 million in the same period of 2020. The greater loss was primarily attributable to higher R&D spending and decreased revenue generated by certain EV parts.

Conference Call Details

The Company has scheduled a conference call and live webcast to discuss its financial results at8:00 A.M.Eastern Time (9:00 P.M. Beijing Time) onTuesday, November 9, 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: +1-844-825-9789 -- International dial-in number: + 1-412-317-5180 -- Webcast and replay: https://viavid.webcasts.com/starthere.jsp?ei=1511452&tp_key=9297e2ff2a

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.

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(UNAUDITED)

September 30, December 31, 2021 2020 Current assets Cash and cash equivalents $ 132,866,957 $ 142,078,190 Restricted cash 23,903,418 442,445 Certificate of deposit 54,207,258 - Accounts receivable (net of allowance fordoubtful accounts of $111,481 and $110,269 43,998,755 38,547,137 as of September 30, 2021 and December 31,2020, respectively)Inventories 27,346,751 19,697,383 Notes receivable 106,514 31,404,630 Other receivables 23,754,321 1,875,245 Prepayments and prepaid expense 19,371,962 13,708,149 Advances to suppliers 12,506,543 36,733,182 Amount due from the Affiliate Company - 21,742,226 Amount due from related party - 886,989 TOTAL CURRENT ASSETS 338,062,479 307,115,576 NON-CURRENT ASSETS Property, plant and equipment, net 90,461,708 65,402,680 Intangible assets, net 2,770,152 3,232,753 Land use rights, net 3,224,185 3,257,760 Construction in progress 8,306,311 16,317,662 Deferred taxes assets 7,852,209 8,964,946 Long term investment 154,878 45,958 Investment in the Affiliate Company - 28,892,638 Goodwill 29,963,965 29,712,383 Other long term assets 11,946,463 32,307,484 TOTAL NON-CURRENT ASSETS 154,679,871 188,134,264 TOTAL ASSETS $ 492,742,350 $ 495,249,840 CURRENT LIABILITIES Accounts payable $ 26,177,367 $ 34,257,935 Other payables and accrued expenses 3,000,136 7,218,395 Short-term loans 2,630,000 - Notes payable 371,707 92,445 Income tax payable 11,660,654 1,313,754 Advance receipts 601,644 38,229,242 Amount due to related party 500,000 500,000 Other current liabilities 3,682,386 2,185,654 TOTAL CURRENT LIABILITIES 48,623,894 83,797,425 NON-CURRENT LIABILITIES Deferred taxes liability 602,435 3,483,171 Contingent consideration liability - 3,743,000 Other long-term liabilities 464,634 459,580 TOTAL NON-CURRENT LIABILITIES 1,067,069 7,685,751 TOTAL LIABILITIES 49,690,963 91,483,176 STOCKHOLDER?S EQUITY Common stock, $0.001 par value; 100,000,000shares authorized; 77,462,516 and77,298,499 shares issued and 77,152,972 and 77,153 75,377 75,377,555 outstanding at September 30,2021and December 31,2020, respectivelyAdditional paid-in capital 448,591,602 439,549,338 Accumulated deficit (the restricted portionis $4,422,033 and $4,422,033 at September (421,965 ) (27,079,900 )30,2021 and December 31,2020, respectively)Accumulated other comprehensive loss (5,195,403 ) (8,778,151 )TOTAL STOCKHOLDERS? EQUITY 443,051,387 403,766,664 TOTAL LIABILITIES AND STOCKHOLDERS? EQUITY $ 492,742,350 $ 495,249,840

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

Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2021 2020 2021 2020 REVENUES FROMUNRELATED $ 16,795,712 $ 18,717,212 $ 62,647,714 $ 44,525,756 PARTIES, NETREVENUES FROMTHE AFFILIATECOMPANY AND - 6 1,587 962 RELATEDPARTIES, NET REVENUES, NET 16,795,712 18,717,218 62,649,301 44,526,718 COST OF GOODS (14,046,041 ) (14,806,322 ) (49,447,497 ) (35,911,785 )SOLD GROSS PROFIT 2,749,671 3,910,896 13,201,804 8,614,933 OPERATINGINCOME (EXPENSE):Research and (6,747,934 ) (987,285 ) (31,937,436 ) (2,777,426 )developmentSelling and (1,290,544 ) (2,165,383 ) (3,494,927 ) (3,807,355 )marketingGeneral and (3,733,230 ) (3,212,209 ) (13,522,925 ) (10,186,135 )administrativeGain ondisposal of 2,238 76,159 48,255,905 13,983,733 long-livedassetsTOTALOPERATING (11,769,470 ) (6,288,718 ) (699,383 ) (2,787,183 )EXPENSE (LOSS) INCOMEFROM (9,019,799 ) (2,377,822 ) 12,502,421 5,827,750 OPERATIONS OTHER INCOME (EXPENSE):Interest 1,247,544 558,059 2,750,241 1,118,795 incomeInterest (63,368 ) (788,589 ) (267,785 ) (2,894,579 )expenseChange in fairvalue of - (1,069,000 ) - 1,794,000 contingentconsiderationGovernment 220,967 13,431 570,162 111,329 grantsGain from saleof equity in 822 - 17,734,733 - the AffiliateCompanyShare of lossafter tax of (119 ) (1,550,568 ) (2,584,520 ) (5,631,867 )the AffiliateCompanyOther income, 442,102 988,287 4,768,092 2,051,272 netTOTAL OTHERINCOME 1,847,948 (1,848,380 ) 22,970,923 (3,451,050 )(EXPENSE), NET (LOSS) INCOMEBEFORE INCOME (7,171,851 ) (4,226,202 ) 35,473,344 2,376,700 TAXES INCOME TAX(EXPENSE) (696,968 ) 2,767,939 (8,815,409 ) (1,354,563 )BENEFIT NET (LOSS) (7,868,819 ) (1,458,263 ) 26,657,935 1,022,137 INCOME OTHERCOMPREHENSIVE INCOME (LOSS)Foreigncurrency (116,054 ) 8,216,974 3,582,748 5,171,643 translationadjustment COMPREHENSIVE $ (7,984,873 ) $ 6,758,711 $ 30,240,683 $ 6,193,780 (LOSS) INCOME WEIGHTEDAVERAGE SHARESOUTSTANDING 76,394,573 54,112,981 75,766,749 53,282,066 BASIC ANDDILUTED NET (LOSS)INCOME PER $ (0.10 ) $ (0.03 ) $ 0.35 $ 0.02 SHARE, BASICAND DILUTED

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 2020Stockissuance 1,502,717 1,503 3,164,925 3,166,428 and awardNet income 4,055,043 4,055,043 Foreigncurrency 477,734 477,734 translation Balance,June 30, 54,352,158 $ 54,352 $ (2,477,965 ) $ 262,878,585 $ (14,205,339 ) $ (25,768,912 ) $ 220,480,721 2020Stockissuance 258,600 259 - 870,837 - - 871,096 and awardNet loss - - - - (1,458,263 ) - (1,458,263 )Foreigncurrency - - - - - 8,216,974 8,216,974 translationReductionin theAffiliate - - - (3,144,213 ) - - (3,144,213 )Company?sequityBalance,September 54,610,758 $ 54,611 $ (2,477,965 ) $ 260,605,209 $ (15,663,602 ) $ (17,551,938 ) $ 224,966,315 30, 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 2021Stockissuance 238,600 239 - 1,374,098 - - 1,374,337 and awardNet income - - - - 40,929,474 - 40,929,474 Foreigncurrency - - - - - 4,874,815 4,874,815 translation Balance,June 30, 75,626,155 $ 75,626 $ - $ 443,717,378 $ 7,446,854 $ (5,079,349 ) $ 446,160,509 2021Stockissuance 1,526,817 1,527 - 4,874,224 - - 4,875,751 and awardNet loss - - - - (7,868,819 ) - (7,868,819 )Foreigncurrency - - - - - (116,054 ) (116,054 )translation Balance,September 77,152,972 $ 77,153 $ - $ 448,591,602 $ (421,965 ) $ (5,195,403 ) $ 443,051,387 30, 2021

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

Nine Months Ended September 30, September 30, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 26,657,935 $ 1,022,137 Adjustments to reconcile net incometo net cash provided by operating activitiesDepreciation and amortization 6,893,192 6,078,070 (Reversal) provision of allowance for - (150,756 )doubtful accountsDeferred taxes (11,970 ) 1,256,167 Share of loss after tax of the 2,584,520 5,631,867 Affiliate CompanyGain from equity sale in the (17,734,733 ) - Affiliate CompanyGain on disposal of long-live assets (48,255,905 ) (13,983,733 )Change in fair value of contingent - (1,794,000 )considerationStock based compensation expense 1,452,381 870,471 Changes in operating assets and liabilities: Accounts receivable 4,289,150 18,165,084 Inventories (7,443,414 ) (1,830,827 )Other receivables and other assets (17,537,034 ) (5,226,968 )Advances to supplier and prepayments 18,776,708 (84,089 )and prepaid expensesAmount due from the Affiliate Company - 4,178,477 Increase (Decrease) In: Accounts payable (4,116,153 ) (15,642,931 )Other payables and accrued 7,052,572 2,675,156 liabilitiesNotes payable (93,278 ) (13,725,855 )Income tax payable 8,053,977 (804,238 )Net cash used in operating activities $ (19,432,052 ) $ (13,365,968 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and (10,948,968 ) (383,568 )equipment, netPrepayments for acquisition of (3,864,346 ) - Jiangxi HuiyiPayment for construction in progress (4,048,889 ) (1,604,427 )Proceeds from disposal of long-lived 23,235,758 51,872,829 assetsLoan to third party 31,687,637 (45,958,247 )Certificate of deposit (54,100,844 ) - Cash received from sales of equity in 47,608,743 42,321,385 the Affiliate CompanyLong Term Investment (108,202 ) - Advance receipts of equity transfer 600,463 - Net cash provided by investing $ 30,061,352 $ 46,247,972 activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from short-term loans 2,630,000 24,163,223 Repayments of short-term loans - (50,042,178 )Repayments of long-term loans - (285,955 )Proceeds from long-term loans - 394,116 Net cash provided by (used in) $ 2,630,000 $ (25,770,794 )financing activities NET INCREASE IN CASH AND CASH $ 13,259,300 $ 7,111,210 EQUIVALENTS AND RESTRICTED CASHEffect of exchange rate changes $ 990,440 $ 535,314 CASH AND CASH EQUIVALENTS AND $ 142,520,635 $ 16,512,635 RESTRICTED CASH AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AND $ 156,770,375 $ 24,159,159 RESTRICTED CASH AT END OF PERIOD-CASH AND CASH EQUIVALENTS AT END OF 132,866,957 23,909,159 PERIOD-RESTRICTED CASH AT END OF PERIOD 23,903,418 250,000 SUPPLEMENTARY CASH FLOW INFORMATION Income taxes paid $ 688,160 901,021 Interest paid $ 17,536 644,724 SUPPLEMENTAL NON-CASH DISCLOSURES: Reversal of decrease in investment inthe Affiliate Company due to change $ 2,813,968 - in its equity (net off tax effect of$491,400)Decrease in investment in theAffiliate Company due to change in - 3,057,540 its equityCommon stock issued for settlement ofpayables related to acquisitions (see $ 4,853,451 3,166,427 Note 21)