PROSPECTUS SUPPLEMENT |
Filed pursuant to Rule |
|
424(b)(5) |
(To Prospectus dated August 6, 2014) |
File No. 333-196938
|
4,127,908 Shares of Common Stock
743,024 Warrants to purchase
up to 743,024 Shares of Common Stock and 743,024 Shares of Common Stock
underlying the Warrants
Option to purchase up to 1,744,186 Shares of Common Stock,
1,744,186 Shares of Common Stock underlying
the Option, the
accompanying Warrants to purchase 313,954 Shares of Common Stock and 313,954
Shares of
Common Stock underlying the Warrants
Kandi Technologies Group, Inc.
Pursuant
to this prospectus supplement and the accompanying prospectus, we are offering
to investors 4,127,908 shares of our common stock (the Shares) together with
743,024 warrants to purchase an aggregate of 743,024 shares of common stock at
an exercise price of $21.50 per share (the Warrants). The Warrants have a term
of seventeen months and are exercisable by the holders at any time after the
date of issuance. In connection with this offering, we will also issue, as
additional compensation, to FT Global Capital, Inc., our exclusive placement
agent, placement agent warrants to purchase up to 5% of the Shares placed in
this offering, at an exercise price of 120% of the purchase price of the Shares,
which warrants are also being offered pursuant to this prospectus supplement
(the Placement Agent Warrants).
The
Shares and Warrants will be sold together as a unit consisting of one Share and
a Warrant (to purchase 0.18 shares of our common stock for each Share included
in the unit). The purchase price per unit will be $17.20 (the Purchase Price).
The Shares and the Warrants will be issued separately but can only be purchased
together in this offering. The shares of common stock issuable from time to time
pursuant to the exercise of the Warrants and the Placement Agent Warrants are
also being offered pursuant to this prospectus supplement and the accompanying
prospectus.
Any
investor that invests more than $30 million in the initial offering of Shares
and Warrants will have an option to purchase its pro rata share of up to a $30
million of Shares, or 1,744,186 shares of common stock and its pro rata share of
Warrants to purchase an aggregate of up to 313,954 shares of our comment stock
at the Purchase Price for a period commencing after the initial closing date and
ending on November 17, 2014 (the Option Period).
Our
common stock trades on the NASDAQ Global Select Market under the symbol KNDI.
The last reported sale price of our common stock on the NASDAQ Global Select
Market on August 28, 2014 was $19.12 per share. There is no established public
trading market for the Warrants and we do not expect a market to develop. In
addition, we do not intend to apply for listing of the Warrants on any national
securities exchange. As of August 28, 2014, the aggregate market value of our
outstanding common stock held by non-affiliates was approximately $545,288,882
based on 42,136,947 shares of outstanding common stock, of which 13,617,654
shares were held by affiliates as of such date, and a price of $19.12 per share,
which was the last reported sale price of our common stock as quoted on the
NASDAQ Global Select Market on August 28, 2014.
|
|
Per Unit |
|
|
Total |
|
Public offering price of units |
$ |
17.20 |
|
$ |
71,000,000.00 |
|
Placement agent fees* |
$ |
0.86 |
|
$ |
3,550,000.00 |
|
Proceeds, before other expenses, to us |
$ |
16.34 |
|
$ |
67,450,000.00 |
|
*Does not include any Placement Agent Warrants or any
compensation that would be received if the investors exercise their rights to
purchase additional units pursuant to this prospectus supplement.
We have retained FT Global Capital, Inc. to act as exclusive placement agent in
connection with this offering. The placement agent has no obligation to buy any of the
securities from us or to arrange for the purchase or sale of any specific number
of dollar amount of securities. See Plan of Distribution beginning on page S-8
of this prospectus supplement for more information regarding these
arrangements.
_____________________________________________
Investing
in our securities involves a high degree of risk. See the section entitled
Risk Factors beginning on page S-5 of this prospectus
supplement and in the documents we incorporate by reference in this prospectus
supplement and the accompanying prospectus. In addition, see Risk
Factors in our Annual Report on Form 10-K for the year ended
December 31, 2013, as amended, which has been filed with the Securities and
Exchange Commission and is incorporated by reference into this prospectus
supplement and the accompanying prospectus. You should carefully consider these
risk factors, as well as the information contained in this prospectus supplement
and the accompanying prospectus, before you invest.
Neither
the Securities and Exchange Commission (the SEC) nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
_____________________________________________
We
estimate the total expenses of this offering, excluding the placement agency
fees and cost reimbursements, will be approximately $200,000. Because there is
no minimum offering amount required in this offering, the actual offering
amount, the placement agent fees and net proceeds to us, if any, in this
offering may be substantially less than the total offering amounts set forth
above. We are not required to sell any specific number or dollar amount of the
securities offered in this offering, but the placement agent will use its
reasonable efforts to arrange for the sale of all of the securities offered. The
closing of the sale of securities will take place on or around September 4,
2014.
The date of this prospectus supplement is August 29, 2014
TABLE OF CONTENTS
PROSPECTUS
SUPPLEMENT |
|
FORWARD-LOOKING
STATEMENTS |
S-2 |
PROSPECTUS
SUPPLEMENT SUMMARY |
S-2 |
RISK
FACTORS |
S-5 |
USE
OF PROCEEDS |
S-6 |
DESCRIPTION
OF SECURITIES |
S-6 |
PLAN
OF DISTRIBUTION |
S-8 |
LEGAL
MATTERS |
S-10 |
EXPERTS |
S-10 |
WHERE
YOU CAN FIND MORE INFORMATION |
S-10 |
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE |
S-11 |
PROSPECTUS |
|
ABOUT THIS PROSPECTUS |
2 |
FORWARD-LOOKING STATEMENTS |
2 |
THE COMPANY |
3 |
RISK FACTORS |
5 |
USE OF PROCEEDS |
6 |
RATIO OF EARNINGS TO FIXED CHARGES |
6 |
DESCRIPTION OF CAPITAL STOCK |
6 |
DESCRIPTION OF COMMON STOCK |
7 |
DESCRIPTION OF PREFERRED STOCK |
8 |
DESCRIPTION OF DEBT SECURITIES |
9 |
DESCRIPTION OF WARRANTS |
11 |
DESCRIPTION OF RIGHTS |
13 |
DESCRIPTION OF UNITS |
14 |
PLAN OF DISTRIBUTION |
14 |
LEGAL MATTERS |
16 |
EXPERTS |
16 |
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE |
16 |
WHERE YOU CAN FIND MORE INFORMATION |
17 |
ABOUT THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement is a supplement to the accompanying prospectus that is
also a part of this document. This prospectus supplement and the accompanying
prospectus, dated August 29, 2014, are part of a registration statement on Form
S-3 (File No. 333-196938) that we filed with the Securities and Exchange
Commission, or the SEC, utilizing a shelf registration process. Under this
shelf registration process, we may offer and sell from time to time in one or
more offerings the securities described in the accompanying prospectus.
This
document is in two parts. The first part is this prospectus supplement, which
describes the securities we are offering and the terms of the offering and also
adds to and updates information contained in the accompanying prospectus and the
documents incorporated by reference into the accompanying prospectus. The second
part is the accompanying prospectus, which provides more general information,
some of which may not apply to the securities offered by this prospectus
supplement. Generally, when we refer to this prospectus, we are referring to
both documents combined. To the extent there is a conflict between the
information contained in this prospectus supplement, on the one hand, and the
information contained in the accompanying prospectus or any document
incorporated by reference therein, on the other hand, you should rely on the
information in this prospectus supplement. We urge you to carefully read this
prospectus supplement and the accompanying prospectus and any related free
writing prospectus, together with the information incorporated herein and
therein by reference as described under the heading Where You Can Find
Additional Information, before buying any of the securities being offered.
You
should rely only on the information that we have provided or incorporated by
reference in this prospectus supplement and the accompanying prospectus and any
related free writing prospectus that we may authorize to be provided to you. We have not, and the placement agent has
not, authorized anyone to provide you with different information. No other
dealer, salesperson or other person is authorized to give any information or to
represent anything not contained in this prospectus supplement and the
accompanying prospectus or any related free writing prospectus that we may
authorize to be provided to you. You must not rely on any unauthorized
information or representation. This prospectus supplement is an offer to sell
only the securities offered hereby, and only under circumstances and in
jurisdictions where it is lawful to do so. You should assume that the
information in this prospectus supplement and the accompanying prospectus or any
related free writing prospectus is accurate only as of the date on the front of
the document and that any information we have incorporated by reference is
accurate only as of the date of the document incorporated by reference,
regardless of the time of delivery of this prospectus supplement and the
accompanying prospectus or any related free writing prospectus, or any sale of a
security.
S-1
This
prospectus supplement contains summaries of certain provisions contained in some
of the documents described herein, but reference is made to the actual documents
for complete information. All of the summaries are qualified in their entirety
by the actual documents. Copies of some of the documents referred to herein have
been filed, will be filed or will be incorporated by reference as exhibits to
the registration statement of which this prospectus supplement is a part, and
you may obtain copies of those documents as described below under the heading
Where You Can Find More Information.
FORWARD-LOOKING STATEMENTS
This prospectus supplement, accompanying prospectus and the
documents that we have filed with the SEC that are incorporated by reference in
this prospectus supplement contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
Securities Act), and Section 21E of the Exchange Act and may involve material
risks, assumptions and uncertainties. Forward-looking statements typically are
identified by the use of terms such as may, will, should, believe,
might, expect, anticipate, intend, plan, estimate, and similar
words, although some forward-looking statements are expressed differently.
Any forward looking statements contained in this prospectus
supplement, accompanying prospectus and the documents that we have filed with
the SEC that are incorporated by reference in this prospectus supplement are
only estimates or predictions of future events based on information currently
available to our management and managements current beliefs about the potential
outcome of future events. Whether these future events will occur as management
anticipates, whether we will achieve our business objectives, and whether our
revenues, operating results, or financial condition will improve in future
periods are subject to numerous risks. There are a number of important factors
that could cause actual results to differ materially from the results
anticipated by these forward-looking statements. These important factors include
those that we discuss under the heading Risk Factors and in other sections of
our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as
amended, as well as in our other reports filed from time to time with the SEC
that are incorporated by reference into this prospectus supplement and the
accompanying prospectus. You should read these factors and the other cautionary
statements made in this prospectus supplement, the accompanying prospectus and
in the documents we incorporate by reference into this prospectus supplement and
the accompanying prospectus as being applicable to all related forward-looking
statements wherever they appear in this prospectus supplement or the documents
we incorporate by reference into this prospectus supplement and the accompanying
prospectus. If one or more of these factors materialize, or if any underlying
assumptions prove incorrect, our actual results, performance or achievements may
vary materially from any future results, performance or achievements expressed
or implied by these forward-looking statements. We undertake no obligation to
publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law.
PROSPECTUS SUPPLEMENT SUMMARY
This summary is not complete and does not contain all of the
information that you should consider before investing in the securities offered
by this prospectus. You should read this summary together with the entire
prospectus supplement and accompanying prospectus, including our risk factors
(as provided for herein and incorporated by reference), financial statements, the notes
to those financial statements and the other documents that are incorporated by
reference in this prospectus supplement, before making an investment decision.
You should carefully read the information described under the heading Where You
Can Find More Information. We have not authorized anyone to provide you with
information different from that contained in this prospectus. The information
contained in this prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or of any sale of our
securities.
S-2
Unless the context otherwise requires, the terms KNDI,
the Company, we, us, and our in this prospectus each refer to Kandi
Technologies Group, Inc., our subsidiaries, and our consolidated entities.
China and the PRC refer to the Peoples Republic of China.
The Company
We
were incorporated under the laws of the State of Delaware on March 31, 2004. On
August 13, 2007, we changed our name from Stone Mountain Resources, Inc. to
Kandi Technologies, Corp. On December 21, 2012, we changed our name from Kandi
Technologies, Corp. to Kandi Technologies Group, Inc. Headquartered in the
Zhejiang Province, we are a producer and manufacturer of electrical vehicle
products, all-terrain vehicles, go-karts, specialized utility vehicles and a
variety of other specialty vehicles for sale in the PRC and global markets.
Our Business
Our
products include EV products, off-road vehicles (which include ATVs, utility
vehicles (UTVs), and go-karts), motorcycles, refitted cars and automobile
parts. According to our market research on consumer demand trends, we have
adjusted our production line strategically and continue to develop and
manufacture new products in an effort to meet market demands and better serve
our customers.
|
|
Year Ended December 31, |
|
|
|
2013 |
|
|
2012 |
|
|
|
Units |
|
|
Revenue |
|
|
Units |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All-terrain Vehicles (ATVs) |
|
18,295 |
|
$ |
10,407,858 |
|
|
14,467 |
|
$ |
6,402,753 |
|
Electric Vehicle Products |
|
4,694 |
|
|
46,619,203 |
|
|
3,915 |
|
|
19,034,936 |
|
Go-Karts |
|
36,499 |
|
|
33,187,877 |
|
|
34,517 |
|
|
30,794,415 |
|
Utility Vehicles (UTVs) |
|
440 |
|
|
1,155,221 |
|
|
93 |
|
|
319,014 |
|
Three-Wheeled Motorcycles (TT) |
|
243 |
|
|
383,760 |
|
|
1,060 |
|
|
1,272,898 |
|
Refitted Cars |
|
39 |
|
|
1,058,095 |
|
|
115 |
|
|
3,172,417 |
|
Auto Generator |
|
51,588 |
|
|
1,724,031 |
|
|
93,881 |
|
|
3,517,237 |
|
Total |
|
111,798 |
|
$ |
94,536,045 |
|
|
148,048 |
|
$ |
64,513,670 |
|
Our
current business is primarily conducted through our wholly-owned subsidiary,
Zhejiang Kandi Vehicles Co., Ltd. (Kandi Vehicles), and the partial and
wholly-owned subsidiaries of Kandi Vehicles.
The Offering
Units offered by us |
|
4,127,908 units |
|
|
|
Common stock offered by us (Not including the Shares
issuable upon the exercise of investor options) |
|
4,127,908 Shares |
|
|
|
Common stock to be outstanding after this offering
(assuming no exercise of the warrants offered by us) |
|
46,264,855 Shares |
|
|
|
Shares to be issued upon the full exercise of investor
options (assuming no exercise of the warrants offered by us) |
|
1,744,186 Shares |
S-3
Common stock to be outstanding after the full exercise of the
investor options |
|
48,009,041 Shares |
(assuming no exercise of the warrants offered by us) |
|
|
|
|
|
Warrants offered by us |
|
Warrants to purchase an aggregate of 743,024 Shares
(1,056,978 Shares if including 313,954 shares underlying the warrants
issuable upon the full exercise of the investor options) at an exercise
price of $21.50 per share. The Warrants have a term of seventeen months
and are exercisable by the holders at any time after the date of issuance.
|
|
|
|
|
|
This prospectus also relates to the offering of the
Shares of Common Stock issuable upon exercise of the Warrants. |
|
|
|
Use of proceeds |
|
We intend to use the net proceeds from this offering
solely for working capital and other general corporate purposes. There is
no assurance that any of the Warrants will ever be exercised for cash, if
at all. See Use of Proceeds on page S-6. |
|
|
|
Market for the Shares and Warrants |
|
Our common stock is quoted and traded on the NASDAQ
Global Select Market under the symbol KNDI. However, there is no
established public trading market for the Warrants, and we do not expect a
market to develop. In addition, we do not intend to apply to list the
Warrants on any securities exchange. The warrants are immediately
separable from the Shares being offered as part of the units. |
|
|
|
Risk factors |
|
You should read the Risk Factors section on page S- 5
of this prospectus supplement, the Risk Factors section on page
5 of the
accompanying prospectus, and the Risk Factors section in our Annual
Report for the year ended December 31, 2013 on Form 10-K, for a discussion
of factors to consider before deciding to purchase our securities.
|
The
number of shares of Common Stock to be outstanding after this offering
(46,264,855) is based on the actual number of shares outstanding as of August
28, 2014, which was 42,136,947 and does not include, as of that date:
|
1,793,310 Shares being held in reserve by the Company for
its future issuance of shares underlying the warrants and/or options that
were outstanding prior to the date hereto; |
|
949,419 Shares issuable upon the exercise of the Warrants
and the Placement Agent Warrants in connection with the initial closing;
|
|
401,163 Shares issuable upon the exercise of the Warrants
and the Placement Agent Warrants issuable upon the full exercise of the
investor options; |
|
Shares available for future issuance under our 2008
Omnibus Long Term Incentive Plan. |
Unless
otherwise stated, outstanding share information throughout this prospectus
supplement excludes the above.
S-4
RISK FACTORS
An
investment in our securities involves a high degree of risk. Before making any
investment decision, you should carefully consider the risk factors set forth in
this prospectus supplement, the accompanying prospectus and the information
incorporated by reference herein and therein, including under the caption Risk
Factors in our most recent annual report on Form 10-K and our subsequent
quarterly reports on Form 10-Q, which are incorporated by reference in this
prospectus, as well as in any applicable prospectus supplement, as updated by
our subsequent filings under the Securities Exchange Act of 1934, as amended
(the Exchange Act).
These
risks could materially affect our business, results of operation or financial
condition and affect the value of our securities. Additional risks and
uncertainties that are not yet identified may also materially harm our business,
operating results and financial condition and could result in a complete loss of
your investment. You could lose all or part of your investment. For more
information, see Where You Can Find More Information.
Risks Related to This Offering
Management will have broad discretion as to the use of
the proceeds from this offering, and we may not use the proceeds effectively.
Subject
to certain limited exceptions set forth in the offering documents, we have
agreed to use the net proceeds from this offering solely for general corporate
purposes. Our management will have significant flexibility in applying the net
proceeds of this offering for general corporate purposes. You will be relying on
the judgment of our management with regard to the use of these net proceeds, and
subject to any agreed upon contractual restrictions under the terms of the
subscription agreements, you will not have the opportunity, as part of your
investment decision, to assess whether the proceeds are being used
appropriately. It is possible that the net proceeds will be invested in a way
that does not yield a favorable, or any, return for us. The failure of our
management to use such funds effectively could have a material adverse effect on
our business, financial condition, operating results and cash flow.
You will experience immediate dilution in the book value
per share of the common stock you purchase.
Because
the price per share of our Common Stock being offered is higher than the book
value per share of our Common Stock, you will suffer substantial dilution in the
net tangible book value of the common stock you purchase in this offering. Based
on the initial offering price of $17.20 per Share, if you purchase the Shares
offered in this offering, you will suffer immediate and substantial dilution per
Share in the net tangible book value of the common stock.
There is no public market for the warrants to purchase
common stock in this offering.
There
is no established public trading market for the Warrants being sold in this
offering, and we do not expect a market to develop. In addition, we do not
intend to apply to list the Warrants on any securities exchange. Without an
active market, the liquidity of the warrants will be limited.
Future sales or other dilution of our equity could
depress the market price of our Common Stock.
Sales
of our Common Stock, preferred stock, warrants, debt securities or any
combination of the foregoing in the public market, or the perception that such
sales could occur, could negatively impact the price of our Common Stock. We
have a number of institutional and individual shareholders that own significant
blocks of our Common Stock. If one or more of these shareholders were to sell
large portions of their holdings in a relatively short time, for liquidity or
other reasons, the prevailing market price of our Common Stock could be
negatively affected.
In
addition, the exercise by the investors of their option to purchase an
additional $30 million of Shares and the accompanying Warrants or any other
issuance of additional shares of our Common Stock, securities convertible into
or exercisable for our Common Stock, other equity-linked securities, including
preferred stock or warrants, debt securities or any combination of the
securities pursuant to this prospectus will dilute the ownership interest of our
common shareholders and could depress the market price of our Common Stock and
impair our ability to raise capital through the sale of additional equity
securities.
S-5
We
may need to seek additional capital. If this additional financing is obtained
through the issuance of equity securities, debt convertible into equity or
options or warrants to acquire equity securities, our existing shareholders
could experience significant dilution upon the issuance, conversion or exercise
of such securities.
Holders of the Warrants will have no rights as common
stockholders until they acquire our Common Stock.
Until
you acquire shares of our Common Stock upon exercise of any of the Warrants, you
will have no rights with respect to our Common Stock. Upon exercise of any
Warrants held, you will be entitled to exercise the rights of a common
stockholder only as to matters for which the record date occurs after the
exercise date.
USE OF PROCEEDS
We estimate that the net proceeds we will receive from this offering will be
$71,000,000, after deducting estimated offering expenses of approximately
$200,000. If all the Investors fully exercise their option to subscribe for
additional shares during the Option Period, we would receive additional
aggregate proceeds of $30,000,000. We will not receive any proceeds from the
sale of common stock issuable upon exercise of the Warrants that we are offering
unless and until such Warrants are exercised.
If all of the Warrants (warrants to purchase 949,419
Shares, including the Placement Agent warrant to purchase 206,395 Shares) issued
in connection with the initial closing are fully exercised for cash, would
receive additional aggregate proceeds of $20,412,500. If all of the Warrants
(warrants to purchase 401,163 Shares, including the Placement Agent warrant to
purchase 87,209 Shares) to be issuance upon a full exercise of investor options
during the Option Period, we would receive additional aggregate proceeds of
$8,625,500.
We
intend to use the net proceeds from this offering for general corporate purposes
and working capital, including for research and development, general and
administrative expenses, and potential ordinary course acquisitions of
technologies that complement our business. In the Securities Purchase Agreement
we have entered into with the institutional investors in this offering, we have,
subject to certain exceptions, specifically agreed not to use the proceeds of
this offering to satisfy any existing debt (other than ordinary course trade
payables), to redeem any of our outstanding securities, or to settle any
litigation.
We
have not specifically identified the precise amounts we will spend on each of
these areas or the timing of these expenditures. The amounts actually expended
for each purpose may vary significantly depending upon numerous factors,
including assessments of potential market opportunities and competitive
developments. In addition, expenditures may also depend on the establishment of
new collaborative arrangements with other companies, the availability of other
financing, and other factors. Subject to any agreed upon contractual
restrictions under the terms of the purchase agreement, our management will have
some discretion in the application of the net proceeds from this offering. Our
stockholders may not agree with the manner in which our management chooses to
allocate and spend the net proceeds. Moreover, our management may use the net
proceeds for purposes that may not result in our being profitable or increase
our market value.
DESCRIPTION OF THE SECURITIES
In this offering, we are offering a 4,127,908 units,
which consists of 4,127,908 Shares and 743,024 Warrants to purchase, in the
aggregate, an additional 743,024 shares of our common stock, and an option to
subscribe for, and the securities underlying, an additional $30 million in
shares, or 1,744,186 Shares of our common stock (and up to 313,954 additional
warrants). Such an investor option can be exercised during the Option Period.
The
Shares and Warrants will be sold together as a unit consisting of one Share and
a Warrant (to purchase 0.18 shares of our common stock for each Share included
in the unit).
We
are offering the units at a purchase price of $17.20 per unit. Units will not be
issued or certificated. The Shares and the Warrants are immediately separable
and will be issued separately.
S-6
This prospectus supplement also relates to the
offering of the Placement Agent Warrants and of the 293,605 shares of our common
stock issuable upon exercise, if any, of the Placement Agent Warrants (which
includes an additional Placement Agent warrant to purchase 87,209 Shares if the
investor options are fully exercised during the Option Period).
Common Stock
A
description of the Shares of Common Stock we are offering pursuant to this
prospectus supplement is set forth under the heading Description of Common
Stock, starting on page 7 of the accompanying prospectus. As of August 28,
2014, we had 42,136,947 shares of outstanding Common Stock.
Warrants
The
material terms and provisions of the Warrants being offered pursuant to this
prospectus supplement and the accompanying prospectus are summarized below. The
summary is subject to, and qualified in its entirety by, the form of warrant
which will be provided to each investor in this offering and will be filed as an
exhibit to a Current Report on Form 8-K with the SEC in connection with this
offering.
The
Warrants are exercisable for an aggregate of 743,024 shares (1,056,978 shares if
the investor options are exercised and 313,954 additional Warrants are issued)
of Common Stock at an exercise price of $21.50 per share. The Warrants have a
term of seventeen months and are exercisable by the holders at any time after
the date of issuance.
The
exercise price and the number of shares issuable upon exercise of the Warrants
are subject to an adjustment upon the occurrence of certain events, including,
but not limited to, stock splits or dividends, business combinations, sale of
assets, similar recapitalization transactions, or other similar transactions.
The exercise price the Warrants are also subject to an adjustment in the event
that the Company issues or is deemed to issue shares of Common Stock for less
than the applicable exercise price of such Warrants.
Holders
of the Warrants may exercise their Warrants to purchase shares of our Common
Stock by delivering an exercise notice, appropriately completed and duly signed.
Payment of the exercise price for the number of shares for which the warrant is
being exercised is required to be delivered within one trading day after
exercise of a Warrant. In the event that the registration statement relating to
such warrant shares is not effective, a holder of warrants will have the right
to exercise its Warrants for a net number of warrant shares pursuant to the
cashless exercise procedures specified in the Warrants. The Warrants may be
exercised in whole or in part, and any portion of a warrant not exercised prior
to the termination date shall be and become void and of no value. The absence of
an effective registration statement or applicable exemption from registration
does not alleviate our obligation to deliver Common Stock issuable upon exercise
of a Warrant.
Upon
the holders exercise of a Warrant, we will issue the shares of common stock
issuable upon exercise of such Warrant within three trading days of our receipt
of notice of exercise.
Underlying Shares
The
shares of common stock issuable on exercise of the Warrants will be, when issued
in accordance with the Warrants, duly and validly authorized, issued and fully
paid and non-assessable. We will authorize and reserve at least that number of
shares of common stock equal to the number of shares of common stock issuable
upon exercise of all outstanding Warrants.
Fundamental Transaction
If,
at any time the Warrants are outstanding, we consummate any fundamental
transaction, as described in the Warrants and which generally includes, but is
not limited to the following: (i) any consolidation or merger into another
corporation, (ii) the consummation of a transaction whereby another entity
acquires more than 50% of our outstanding voting stock, (iii) or the sale of all
or substantially all of our assets, the successor entity must assume in writing
all of our obligations to the holders of the Warrants.
S-7
Additionally,
in the event of a fundamental transaction, each Warrant holder will have the
right to require us, or our successor, to repurchase its Warrants for an amount
of cash equal to the Black-Scholes value of the remaining unexercised portion of
the Warrant.
Limitations on Exercise
The
exercisability of the Warrants may be limited in certain circumstances if, upon
exercise, the holder or any of its affiliates would beneficially own more than
4.99% of our Common Stock.
No Stockholder Rights
The
holder of a Warrant will not possess any rights as a stockholder under the
Warrant until the holder exercises such Warrant.
Company Option Redemption Right
If
at any time after the Warrant is issued, the Closing Bid Price of our common
stock is equal or greater than $40.85 per share for a period of seven (7)
consecutive trading days, if the Company satisfies certain Equity Conditions as
such term is defined in the warrant (the following capitalized term follow the
same source of definition), the Company can elect to redeem its outstanding
warrants in the par value price by sending Redemption Notice to the holders of
the Warrants.
No Market for Warrants
There
is no established public trading market for the Warrants, and we do not expect a
market to develop. We do not intend to apply to list the Warrants on any
securities exchange. Without an active market, the liquidity of the Warrants
will be limited. In addition, in the event our Common Stock price does not
exceed the per share exercise price of the Warrants during the period when the
Warrants are exercisable, the Warrants will not have any value.
PLAN OF DISTRIBUTION
Placement Agent Agreement
We
have entered into a Placement Agent Agreement (the Placement Agent Agreement),
dated as of August 11, 2014, with FT Global Capital, Inc. (FT Global Capital),
pursuant to which FT Global Capital agreed to act as our exclusive placement
agent in connection with this offering. The Placement Agent Agreement with FT
Global Capital was attached as Exhibit 10.2 to a Form 8-K, filed August 29,
2014.
The
placement agent is not purchasing or selling any units offered by this
prospectus supplement, nor is it required to arrange the purchase or sale of any
specific number or dollar amount of the units, but the placement agent has
agreed to use its best efforts to arrange for the direct sale of all of the
securities in this offering pursuant to this prospectus supplement and the
accompanying prospectus. There is no requirement that any minimum number of
securities or dollar amount of units be sold in this offering and there can be
no assurance that we will sell all or any of the units being offered. Therefore,
we will enter into a purchase agreement directly with each investor in
connection with this offering and we may not sell the entire amount of units
offered pursuant to this prospectus supplement. We have agreed to indemnify the
placement agent and purchasers against liabilities under the Securities Act and
to contribute to payments that the placement agent may be required to make in
respect of such liabilities.
We
entered into a Securities Purchase Agreement, dated as of August 29, 2014 with
certain institutional investors purchasing the units being issued pursuant to
this offering. The form of the Securities Purchase Agreement is included as an
exhibit to our Current Report on Form 8-K filed with the SEC in connection with
this offering. The closing of this offering will take place on or around
September 4, 2014, and the following will occur:
S-8
|
we will receive funds in the amount of the aggregate
purchase price; |
|
|
|
the placement agent will receive the placement agent fees
and the Placement Agent Warrants in accordance with the terms of the
Placement Agent Agreement; and |
|
|
|
we will deliver the units, consisting of the Shares and
the Warrants. |
We
have also agreed to indemnify the investors against certain losses resulting
from our breach of any of our representations, warranties, or covenants under
agreements with the purchasers as well as under certain other circumstances
described in the Securities Purchase Agreement.
In
connection with this offering, the Placement Agent may distribute this
prospectus supplement and the accompanying prospectus electronically.
The
placement agent may be deemed to be an underwriter within the meaning of Section
2(a)(11) of the Securities Act of 1933, as amended, or the Securities Act, and
any fees or commissions received by it and any profit realized on the resale of
securities sold by it while acting as principal might be deemed to be
underwriting discounts or commissions under the Securities Act. As an
underwriter, the placement agent would be required to comply with the
requirements of the Securities Act and the Exchange Act, including, without
limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and
Regulation M under the Exchange Act. These rules and regulations may limit the
timing of purchases and sales of shares of common stock and warrants by the
placement agent. Under these rules and regulations, the placement agent: (i) may
not engage in any stabilization activity in connection with our securities; and
(ii) may not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities, other than as permitted under the
Exchange Act, until it has completed its participation in the distribution.
Fees
In exchange for these placement agent services, we
have agreed to pay the Placement Agent upon the closing of this offering
(including any additional closings resulting from the investors exercising their
right to purchase additional units pursuant to this prospectus supplement) a cash fee equal to 5% of the
aggregate purchase price of the units sold under this prospectus supplement and
accompanying prospectus. In addition, we agreed to pay additional compensation
in the form of warrants (the Placement Agent Warrants) to purchase that number
of shares which equals 5% of the aggregate number of Shares included in the
units sold in this offering at an exercise price of 120% of the Purchase Price.
Under the Placement Agent Agreement, the placement agent is also entitled to
additional tail compensation for any financings consummated within the twelve
(12) month period following August 29, 2014 to the extent that such financing is
provided to us by investors that the Placement Agent had introduced to us. The
Placement Agent Warrants issuable to the placement agent shall generally be on
the same terms and conditions as the Warrants offered pursuant to this
prospectus supplement, provided that the Placement Agent Warrants will not
provide for certain anti-dilution protections included in the Warrants in
accordance with FINRA Rule 5110, will not be exercisable for a period of six months
and will expire seventeen months after they become exercisable. The Placement Agent Warrants and the shares of
common stock underlying the Placement Agent Warrants are being registered
pursuant to this prospectus supplement.
Pursuant
to FINRA Rule 5110(g), with limited exceptions, neither the Placement Agent
Warrants nor any shares issued upon exercise of the Placement Agent Warrants
shall be sold, transferred, assigned, pledged, or hypothecated, or be the
subject of any hedging, short sale, derivative, put, or call transaction that
would result in the effective economic disposition of the securities by any
person for a period of 180 days immediately following the date of effectiveness
or commencement of sales of this offering.
We
have agreed to indemnify the Placement Agent and purchasers against liabilities
under the Securities Act and to contribute to payments that the Placement Agent
may be required to make in respect of such liabilities.
The
following table shows the per unit and total placement agent fees we will pay to
the Placement Agent in connection with the sale of units offered pursuant to
this prospectus supplement assuming the purchase of all of the units initially
offered hereby:
S-9
|
|
Total |
|
Aggregate Offering Price of units |
$ |
71,000,000 |
|
Placement agent fees* |
$ |
3,550,000 |
|
* Does not include any Placement Agent Warrants or any
compensation that would be received if the investors exercise their rights to
purchase additional units pursuant to this prospectus supplement.
Because
there is no minimum offering amount in this offering, the actual total placement
agent fees are not presently determinable and may be substantially less than the
maximum amount set forth above.
We
estimate the total offering expenses of this offering that will be payable by
us, excluding the placement agent fees, will be approximately $200,000, which
include legal and printing costs, various other fees and reimbursement of the
placement agents expenses. At the closing, our transfer agent will credit the
Shares to the respective accounts of the purchasers. We will mail the Warrants
directly to the purchasers at their respective addresses set forth in the
Securities Purchase Agreement.
The
foregoing does not purport to be a complete statement of the terms and
conditions of the Placement Agent Agreement and the Securities Purchase
Agreement. Copies of the each have previously been included, or will be
included, as exhibits to our current reports on Form 8-K that have been or will
be filed with the SEC and incorporated by reference into the Registration
Statement of which this prospectus supplement forms a part.
LEGAL MATTERS
Selected
legal matters with respect to the validity of the securities offered by this
prospectus supplement will be passed upon for us by Pryor Cashman LLP, New York,
NY. Certain legal matters will be passed upon for the Placement Agent by Schiff
Hardin LLP, Washington, DC.
EXPERTS
The
consolidated financial statements of Kandi Technologies Group, Inc. and its
subsidiaries as of December 31, 2013 and 2012, and for each of the years in the
two-year period ended December 31, 2013, have been incorporated by reference in
this prospectus supplement and the accompanying prospectus in reliance on the
report of Albert Wong & Co., an independent registered public accounting
firm, and upon the authority of said firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a
registration statement on Form S-3 under the Securities Act with respect to the
securities we are offering under this prospectus supplement. This prospectus
supplement and the accompanying prospectus do not contain all of the information
set forth in the registration statement and the exhibits to the registration
statement.
For
further information with respect to us and the securities we are offering under
this prospectus supplement, we refer you to the registration statement and the
exhibits and schedules filed as a part of the registration statement. Statements
contained in this prospectus supplement as to the contents of any contract or
any other document referred to are not necessarily complete, and in each
instance, we refer you to the copy of the contract or other document filed as an
exhibit to the registration statement. Each of these statements is qualified in
all respects by this reference. We file annual, quarterly and current reports,
proxy statements and other information with the SEC. Our SEC filings are
available to the public over the Internet at the SEC's website at
http:/www.sec.gov. You may also read and copy any document we file at the SEC's
public reference room, 100 F Street, N.E., Washington, D.C. 20549. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the public
reference room. Because our Common Stock is listed on the NASDAQ Global Select
Market, you may also inspect reports, proxy statements and other information at
the offices of the NASDAQ Global Select Market Information found on our website
is not part of this prospectus supplement or any other report we file with or
furnish to the Securities and Exchange Commission.
S-10
IMPORTANT INFORMATION INCORPORATED BY REFERENCE
The
SEC allows us to incorporate by reference the information we file with them
into this prospectus supplement. This means that we can disclose important
information about us and our financial condition to you by referring you to
another document filed separately with the SEC instead of having to repeat the
information in this prospectus supplement. The information incorporated by
reference is considered to be part of this prospectus supplement and later
information that we file with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act until this offering is completed:
|
our Annual Report on Form 10-K for the year ended
December 31, 2013 filed on March 17, 2014, as amended by Amendment No. 1
thereto filed on May 16, 2014; |
|
|
|
our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2014 filed on May 12, 2014 and our Quarter Report on Form 10-Q
for the quarter ended June 30, 2014 filed on August 11, 2014; |
|
|
|
our Current Reports on Form 8-K filed on March 18, 2014,
March 19, 2014, March 20, 2014 and August 29, 2014; and |
|
|
|
the description of our Common Stock contained in the
registration statement on Form 8-A12B, dated March 17, 2008, File No.
001-33997, and any other amendment or report filed for the purpose of
updating such description. |
Additionally,
all reports and other documents subsequently filed by us pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Exchange Act after the date of this
prospectus supplement and prior to the termination or completion of this
offering, shall be deemed to be incorporated by reference in this prospectus
supplement and to be part hereof from the date of filing of such reports and
other documents. Any information that we subsequently file with the SEC that is
incorporated by reference as described above will automatically update and
supersede any previous information that is part of this prospectus supplement.
You
may request a copy of the filings incorporated herein by reference, including
exhibits to such documents that are specifically incorporated by reference, at
no cost, by writing or calling us at the following address or telephone
number:
Kandi Technologies Group, Inc.
Jinhua City
Industrial Zone
Jinhua, Zhejiang Province
Peoples Republic
of China
Post Code 321016
Attn: Zhu Xiaoying, Chief
Financial Officer
+86-579-82239856
Statements
contained in this prospectus as to the contents of any contract or other
documents are not necessarily complete, and in each instance you are referred to
the copy of the contract or other document filed as an exhibit to the
registration statement or incorporated herein, each such statement being
qualified in all respects by such reference and the exhibits and schedules
thereto.
S-11
PROSPECTUS
Kandi Technologies Group, Inc.
$300,000,000
Common Stock
Preferred Stock
Debt
Securities
Warrants
Rights
Units
_________________________________________
We
may offer from time to time shares of our common stock, preferred stock, senior
debt securities (which may be convertible into or exchangeable for common
stock), subordinated debt securities (which may be convertible into or
exchangeable for common stock), warrants, rights and units that include any of
these securities. The aggregate initial offering price of the securities sold
under this prospectus will not exceed $300,000,000. We will offer the securities
in amounts, at prices and on terms to be determined at the time of the offering.
Each
time we sell securities hereunder, we will attach a supplement to this
prospectus that contains specific information about the terms of the offering,
including the price at which we are offering the securities to the public. The
prospectus supplement may also add, update or change information contained or
incorporated in this prospectus. We may also authorize one or more free writing
prospectuses to be provided to you in connection with these offerings. You
should read this prospectus, the information incorporated by reference in this
prospectus, the applicable prospectus supplement and any applicable free writing
prospectus carefully before you invest in our securities.
The
securities hereunder may be offered directly by us, through agents designated
from time to time by us or to or through underwriters or dealers. If any agents,
dealers or underwriters are involved in the sale of any securities, their names,
and any applicable purchase price, fee, commission or discount arrangement
between or among them will be set forth, or will be calculable from the
information set forth, in the applicable prospectus supplement. See the section
entitled About This Prospectus for more information.
Our common stock is listed on the NASDAQ Global Select Market under the symbol
KNDI.
Investing
in securities involves certain risks. See Risk Factors beginning on page 4 of
this prospectus and in the applicable prospectus supplement, as updated in our
future filings made with the Securities and Exchange Commission that are
incorporated by reference into this prospectus. You should carefully read and
consider these risk factors before you invest in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
_______________________________
The date of this prospectus
is August 6,
2014.
TABLE OF CONTENTS
ABOUT
THIS PROSPECTUS |
2 |
|
|
FORWARD-LOOKING
STATEMENTS |
2 |
|
|
THE
COMPANY |
3 |
|
|
RISK
FACTORS |
4 |
|
|
RATIO OF EARNINGS TO FIXED
CHARGES |
6 |
|
|
USE
OF PROCEEDS |
6 |
|
|
DESCRIPTION
OF CAPITAL STOCK |
6 |
|
|
DESCRIPTION
OF COMMON STOCK |
6 |
|
|
DESCRIPTION
OF PREFERRED STOCK |
7 |
|
|
DESCRIPTION
OF DEBT SECURITIES |
8 |
|
|
DESCRIPTION
OF WARRANTS |
10 |
|
|
DESCRIPTION
OF RIGHTS |
12 |
|
|
DESCRIPTION
OF UNITS |
13 |
|
|
PLAN
OF DISTRIBUTION |
13 |
|
|
LEGAL
MATTERS |
16 |
|
|
EXPERTS |
16 |
|
|
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE |
16 |
|
|
WHERE
YOU CAN FIND MORE INFORMATION |
17 |
The
distribution of this prospectus may be restricted by law in certain
jurisdictions. You should inform yourself about and observe any of these
restrictions. If you are in a jurisdiction where offers to sell, or
solicitations of offers to purchase, the securities offered by this document are
unlawful, or if you are a person to whom it is unlawful to direct these types of
activities, then the offer presented in this prospectus does not extend to you.
We
have not authorized anyone to give any information or make any representation
about us that is different from, or in addition to, that contained in this
prospectus, including in any of the materials that we have incorporated by
reference into this prospectus, any accompanying prospectus supplement, and any
free writing prospectus prepared or authorized by us. Therefore, if anyone does
give you information of this sort, you should not rely on it as authorized by
us. You should rely only on the information contained or incorporated by
reference in this prospectus and any accompanying prospectus supplement.
You
should not assume that the information contained in this prospectus and any
accompanying supplement to this prospectus is accurate on any date subsequent to
the date set forth on the front of the document or that any information we have
incorporated by reference is correct on any date subsequent to the date of the
document incorporated by reference, even though this prospectus and any
accompanying supplement to this prospectus is delivered or securities are sold
on a later date. Neither the delivery of this prospectus, nor any sale made
hereunder, shall under any circumstances create any implication that there has
been no change in our affairs since the date hereof or that the information
incorporated by reference herein is correct as of any time subsequent to the
date of such information.
1
ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 we filed with the
Securities and Exchange Commission, or the SEC, using a shelf registration
process. Under this shelf registration process, we may, from time to time, offer
and sell any combination of the securities described in this prospectus in one
or more offerings. The aggregate initial offering price of all securities sold
under this prospectus will not exceed $300,000,000.
This
prospectus provides certain general information about the securities that we may
offer hereunder. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of the
offering and the offered securities. We may also authorize one or more free
writing prospectuses to be provided to you that may contain material information
relating to these offerings. In each prospectus supplement, we will include the
following information:
|
|
the number and type of securities that we
propose to sell; |
|
|
the public offering price; |
|
|
the names of any underwriters, agents or
dealers through or to which the securities will be sold; |
|
|
any compensation of those underwriters, agents
or dealers; |
|
|
any additional risk factors applicable to the
securities or our business and operations; and |
|
|
any other material information about the
offering and sale of the securities. |
In
addition, the prospectus supplement or free writing prospectus may also add,
update or change the information contained in this prospectus or in documents
incorporated by reference in this prospectus. The prospectus supplement or free
writing prospectus will supersede this prospectus to the extent it contains
information that is different from, or that conflicts with, the information
contained in this prospectus or incorporated by reference in this prospectus.
You should read and consider all information contained in this prospectus, any
accompanying prospectus supplement and any free writing prospectus that we have
authorized for use in connection with a specific offering, in making your
investment decision. You should also read and consider the information
contained in the documents identified under the heading Incorporation of
Certain Documents by Reference and Where You Can Find More Information in
this prospectus.
Unless
the context otherwise requires, the terms the Company, we, us, and our
in this prospectus each refer to Kandi Technologies Group, Inc., our
subsidiaries and our consolidated entities. China and the PRC refer to the
Peoples Republic of China.
FORWARD-LOOKING STATEMENTS
Some
of the statements contained or incorporated by reference in this prospectus may
be forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the Securities Act), and Section 21E of
the Exchange Act and may involve material risks, assumptions and uncertainties.
Forward-looking statements typically are identified by the use of terms such as
may, will, should, believe, might, expect, anticipate, intend,
plan, estimate and similar words, although some forward-looking statements
are expressed differently.
Although we believe that the expectations
reflected in such forward-looking statements are reasonable, these statements
are not guarantees of future performance and involve certain risks and
uncertainties that are difficult to predict and which may cause actual outcomes
and results to differ materially from what is expressed or forecasted in such
forward-looking statements. These forward-looking statements speak only as of
the date on which they are made and except as required by law, we undertake no
obligation to publicly release the results of any revision or update of these
forward-looking statements, whether as a result of new information, future
events or otherwise. If we do update or correct one or more forward-looking
statements, you should not conclude that we will make additional updates or
corrections with respect thereto or with respect to other forward-looking
statements. A detailed discussion of risks and uncertainties that could cause
actual results and events to differ materially from our forward-looking
statements is included in our periodic reports filed with the SEC and in the
Risk Factors section of this prospectus.
2
THE COMPANY
We
were incorporated under the laws of the State of Delaware on March 31, 2004. On
August 13, 2007, we changed our name from Stone Mountain Resources, Inc. to
Kandi Technologies, Corp. On December 21, 2012, we changed our name from Kandi
Technologies, Corp. to Kandi Technologies Group, Inc. to better communicate our
current organizational structure to the investment community, our customers and
our business partners.
Headquartered
in Zhejiang Province, we are one of Chinas leading producers and manufacturers
of electric vehicles (EVs), all-terrain vehicles (ATVs), go-karts and a
variety of other specialty vehicles, including specialized utility vehicles, for
the PRC and global markets. In connection with our strategic objective of
becoming a world leader in electric vehicles manufacturing and related services,
we have increased our focus on fuel-efficient, pure EVs, with a particular focus
on expanding our domestic market share in China.
Our Business
Our
primary business is designing, developing, manufacturing and commercializing
EVs, ATVs, go-karts, specialized automobiles and automobile-related products for
the PRC and global markets.
Our
products include EVs, off-road vehicles (which include ATVs, utility vehicles
(UTVs) and go-karts), motorcycles, refitted cars and automobile parts.
According to our market research on consumer demand trends, we have adjusted our
production line strategically and continue to develop and manufacture new
products in an effort to meet market demands and better serve our
customers.
The
following table shows our production by product type and revenues for the years
ended December 31, 2013 and 2012:
|
|
Year
ended December 31, |
|
|
|
2013 |
|
|
2012 |
|
|
|
Units |
|
|
Revenue |
|
|
Units |
|
|
Revenue |
|
All-terrain Vehicles (ATVs) |
|
18,295 |
|
$ |
10,407,858 |
|
|
14,467 |
|
$ |
6,402,753 |
|
Electric Vehicles (EVs) |
|
4,694 |
|
|
46,619,203 |
|
|
3,915 |
|
|
19,034,936 |
|
Go-Kart |
|
36,499 |
|
|
33,187,877 |
|
|
34,517 |
|
|
30,794,415 |
|
Utility vehicles (UTVs) |
|
440 |
|
|
1,155,221 |
|
|
93 |
|
|
319,014 |
|
Three-wheeled motorcycles (TT) |
|
243 |
|
|
383,760 |
|
|
1,060 |
|
|
1,272,898 |
|
Refitted car |
|
39 |
|
|
1,058,095 |
|
|
115 |
|
|
3,172,417 |
|
Auto generator |
|
51,588 |
|
|
1,724,031 |
|
|
93,881 |
|
|
3,517,237 |
|
Total |
|
111,798 |
|
$ |
94,536,045 |
|
|
148,048 |
|
$ |
64,513,670 |
|
Our
current business is primarily conducted through our wholly-owned subsidiary,
Zhejiang Kandi Vehicles Co., Ltd. (Kandi Vehicles), and the partial and
wholly-owned subsidiaries of Kandi Vehicles.
Corporate Structure
Our current corporate structure is set forth in the diagram below:
3
Pursuant
to relevant agreements executed in January 2011, Kandi Vehicles is entitled to
100% of the economic benefits, voting rights and residual interests (100%
profits and loss absorption rate) of Jinhua Kandi New Energy Vehicles Co., Ltd.
(Kandi New Energy), a company in which Kandi Vehicles has a 50% interest.
Jinhua
Three Parties New Energy Vehicles Service Co., Ltd. (Jinhua Service) was
formed as a joint venture, by and among our wholly-owned subsidiary, Kandi
Vehicles, the State Grid Power Corporation and Tianneng Power International. The
Company, indirectly through Kandi Vehicles, has a 30% ownership interest in
Jinhua Service.
In
April 2012, pursuant to a share exchange agreement, we acquired 100% of Yongkang
Scrou Electric Co. (Yongkang Scrou), a manufacturer of automobile and EV
parts.
In
March 2013, pursuant to a joint venture agreement (the JV Agreement) entered
into between Kandi Vehicles and Shanghai Maple Guorun Automobile Co., Ltd.
(Shanghai Maple), a 99% owned subsidiary of Geely Automobile Holdings Ltd.
(Geely), the parties established Zhejiang Kandi Electric Vehicles Co., Ltd.
(the JV Company) to develop, manufacture and sell EVs and related auto parts.
Each of Kandi Vehicles and Shanghai Maple has a 50% ownership interest in the JV
Company. In March 2014, the JV Company changed its name to Kandi Electric
Vehicles Group Co., Ltd.
In
March 2013, Kandi Vehicles formed Kandi Electric Vehicles (Changxing) Co., Ltd.
(Kandi Changxing) in the Changxing (National) Economic and Technological
Development Zone. Kandi Changxing is engaged in the production of EVs. In fourth
quarter of 2013, Kandi Vehicle entered into an ownership transfer agreement with
JV Company to transfer 100% ownership to Kandi Changxing to the JV Company.
Through our wholly-owned subsidiary, Kandi Vehicles, we have a 50% ownership
interest in Kandi Changxing.
In
April 2013, Kandi Electric Vehicles (Wanning) Co., Ltd. (Kandi Wanning) was
formed by Kandi Vehicles and Kandi New Energy in Wanning City of Hainan
Province. Kandi Vehicles has a 90% ownership in Kandi Wanning, and Kandi New
Energy has the remaining 10% interest. However, Kandi Vehicles is, effectively,
entitled to 100% of the economic benefits, voting rights and residual interests
(100% profits and loss absorption rate) of Kandi Wanning because it is entitled
to 100% of the economic benefits, voting rights and residual interests (100%
profits and loss absorption rate) of Kandi New Energy.
4
In
July 2013, Zhejiang ZuoZhongYou Electric Vehicle Service Co., Ltd. (the Service
Company) was formed. The JV Company has a 19% ownership interest in the Service
Company. Through our wholly-owned subsidiary, Kandi Vehicles, we have a 9.5%
ownership interest in the Service Company.
In
November 2013, Zhejiang Kandi Electric Vehicles Jinhua Co., Ltd. (Kandi
Jinhua) was formed by the JV Company. The JV Company has 100% ownership
interest in Kandi Jinhua, and through our wholly-owned subsidiary, Kandi
Vehicles, we have a 50% ownership interest in Kandi Jinhua.
In
November 2013, Zhejiang JiHeKang Electric Vehicle Sales Co., Ltd. (JiHeKang)
was formed by the JV Company. The JV Company has 100% ownership interest in
JiHeKang, and through our wholly-owned subsidiary, Kandi Vehicles, we have a 50%
ownership interest in JiHeKang.
In
December 2013, the JV Company entered into an ownership transfer agreement with
Shanghai Maple in connection with acquiring 100% ownership of Kandi Electric
Vehicles (Shanghai) Co., Ltd. (Kandi Shanghai). Kandi Shanghai is a
wholly-owned subsidiary of the JV Company, and through our 50% ownership
interest in the JV Company, we have a 50% ownership interest in Kandi Shanghai.
In
January 2014, Zhejiang Kandi Electric Vehicles Jiangsu Co., Ltd. (Kandi
Jiangsu) was formed by the JV Company. The JV Company has 100% ownership
interest in Kandi Jiangsu, and the Company, indirectly through its 50% ownership
interest in the JV Company, has a 50% economic interest in Kandi Jiangsu.
Our Corporate Information
We
are headquartered in Zhejiang Province in China. Our principal executive offices
are located at Jinhua City Industrial Zone, Jinhua, Zhejiang Province, Peoples
Republic of China, Post Code 321016, and our telephone number at this location
is +86-579-82239856. Our website address is http://en.kandivehicle.com.
Information contained on our website is not incorporated by reference into
this prospectus and you should not consider information on our website to be
part of this prospectus.
RISK FACTORS
An
investment in our securities involves a high degree of risk. Before making any
investment decision, you should carefully consider the risk factors set forth
below, the information under the caption Risk Factors in any applicable
prospectus supplement, any related free writing prospectus that we may authorize
to be provided to you and the information under the caption Risk Factors in
our annual report on Form 10-K and quarterly report on Form 10-Q that are
incorporated by reference in this prospectus, as updated by our subsequent
filings under the Securities Exchange Act of 1934, as amended, or the Exchange
Act.
These
risks could materially affect our business, results of operation or financial
condition and affect the value of our securities. Additional risks and
uncertainties that are not yet identified may also materially harm our business,
operating results and financial condition and could result in a complete loss of
your investment. You could lose all or part of your investment. For more
information, see Where You Can Find More Information.
5
Risks Related to Our Securities and the Offering
Future sales or other dilution of our equity could depress the
market price of our common stock.
Sales
of our common stock, preferred stock, warrants, rights or convertible debt
securities, or any combination of the foregoing, in the public market, or the
perception that such sales could occur, could negatively impact the price of our
common stock. We have a number of institutional and individual shareholders that
own significant blocks of our common stock. If one or more of these shareholders
were to sell large portions of their holdings in a relatively short time, for
liquidity or other reasons, the prevailing market price of our common stock
could be negatively affected.
In
addition, the issuance of additional shares of our common stock, securities
convertible into or exercisable for our common stock, other equity-linked
securities, including preferred stock, warrants or rights or any combination of
these securities pursuant to this prospectus will dilute the ownership interest
of our common shareholders and could depress the market price of our common
stock and impair our ability to raise capital through the sale of additional
equity securities.
We
may need to seek additional capital. If this additional financing is obtained
through the issuance of equity securities, debt securities convertible into
equity or options, warrants or rights to acquire equity securities, our existing
shareholders could experience significant dilution upon the issuance, conversion
or exercise of such securities.
Our
management will have broad discretion over the use of the proceeds we receive
from the sale our securities pursuant to this prospectus and might not apply the
proceeds in ways that increase the value of your investment.
Our
management will have broad discretion to use the net proceeds from any offerings
under this prospectus, and you will be relying on the judgment of our management
regarding the application of these proceeds. Except as described in any
prospectus supplement or in any related free writing prospectus that we may
authorize to be provided to you, the net proceeds received by us from our sale
of the securities described in this prospectus will be added to our general
funds and will be used for general corporate purposes. Our management might not
apply the net proceeds from offerings of our securities in ways that increase
the value of your investment and might not be able to yield a significant
return, if any, on any investment of such net proceeds. You may not have the
opportunity to influence our decisions on how to use such proceeds.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings
to fixed charges for each of the periods indicated.
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Ended March 31, |
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Years Ended
December 31, |
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2014 |
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2013 |
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2012 |
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2011 |
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2010 |
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2009 |
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RATIO OF EARNINGS TO FIXED CHARGES |
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1.0 |
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2.9 |
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2.5 |
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2.1 |
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2.3 |
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USE OF PROCEEDS
Except
as may be stated in the applicable prospectus supplement and any related free
writing prospectus that we may authorize to be provided to you, we intend to use
the net proceeds we receive from the sale of the securities offered by this
prospectus for general corporate purposes, which may include, among other
things, repayment of debt, repurchases of common stock, capital expenditures,
the financing of possible acquisitions or business expansions, increasing our
working capital and the financing of ongoing operating expenses and overhead.
DESCRIPTION OF CAPITAL STOCK
The
following is a summary of our capital stock and certain provisions of our
certificate of incorporation and bylaws. This summary does not purport to be
complete and is qualified in its entirety by the provisions of our certificate
of incorporation, as amended, our bylaws and applicable provisions of the
Delaware General Corporation Law or the DGCL).
See
Where You Can Find More Information elsewhere in this prospectus for
information on where you can obtain copies of our certificate of incorporation
and our bylaws, which have been filed with and are publicly available from the
SEC. Our authorized capital stock consists of 100,000,000 shares of common
stock, par value $0.001, and 10,000,000 shares of preferred stock, par value
$0.001.
6
DESCRIPTION OF COMMON STOCK
As of
June 16, 2014, there were 41,814,984 shares of
our common stock issued and outstanding, held by approximately 17 stockholders
of record.
Our common stock is currently traded on the NASDAQ Global Select Market under
the symbol KNDI.
The
holders of our common stock are entitled to one vote per share on all matters
submitted to a vote of our stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. The holders of outstanding shares of common stock are
entitled to receive ratably any dividends declared by our board of directors out
of assets legally available. Upon our liquidation, dissolution or winding up,
holders of our common stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference of any
then outstanding shares of preferred stock. Holders of common stock have no
preemptive or conversion rights or other subscription rights. There are no
redemption or sinking fund provisions applicable to our common stock. Corporate
Stock Transfer, 3200 Cherry Creek Drive South, Suite 4301, Denver, Colorado
80209, is the registrar and transfer agent of our common stock.
All
issued and outstanding shares of common stock are fully paid and nonassessable.
Shares of our common stock that may be offered, from time to time, under this
prospectus will be fully paid and nonassessable.
Delaware Anti-Takeover Provisions
We
are subject to Section 203 of the Delaware General Corporation Law, which
prohibits a publicly-held Delaware corporation from engaging in a business
combination, except under certain circumstances, with an interested
stockholder for a period of three years following the date such person became
an interested stockholder unless:
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before such person became an interested stockholder, the
board of directors of the corporation approved either the business
combination or the transaction that resulted in the interested stockholder
becoming an interested stockholder; |
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upon the consummation of the transaction that resulted in
the interested stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced, excluding
shares held by directors who also are officers of the corporation and
shares held by employee stock plans; or |
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at or following the time such person became an interested
stockholder, the business combination is approved by the board of
directors of the corporation authorized at a meeting of stockholders by
the affirmative vote of the holders of 66 2/ % of the
outstanding voting stock of the corporation which is not owned by the
interested stockholder. 3 |
The
term interested stockholder generally is defined as a person who, together
with affiliates and associates, owns, or, within the three years prior to the
determination of interested stockholder status, owned, 15% or more of a
corporations outstanding voting stock. The term business combination includes
mergers, asset or stock sales and other similar transactions resulting in a
financial benefit to an interested stockholder. Section 203 makes it more
difficult for an interested stockholder to effect various business
combinations with a corporation for a three-year period. The existence of this
provision would be expected to have an anti-takeover effect with respect to
transactions not approved in advance by our board of directors, including
discouraging attempts that might result in a premium over the market price for
the shares of common stock held by stockholders. Presently, we have not opted
out of this provision.
7
DESCRIPTION OF PREFERRED STOCK
As of June 16, 2014, no shares of preferred stock had been issued or were
outstanding.
Our
board of directors has the authority to issue up to 10,000,000 shares of
preferred stock in one or more series and to determine the rights and
preferences of the shares of any such series without stockholder approval. Our
board of directors may issue preferred stock in one or more series and has the
authority to fix the designation and powers, rights and preferences and the
qualifications, limitations or restrictions with respect to each class or series
of such class without further vote or action by the stockholders, unless action
is required by applicable law or the rules of any stock exchange on which our
securities may be listed. The ability of our board of directors to issue
preferred stock without stockholder approval could have the effect of delaying,
deferring or preventing a change of control of us or the removal of existing
management. Further, our board of director may authorize the issuance of
preferred stock with voting or conversion rights that could adversely affect the
voting power or other rights of the holders of our common stock. Additionally,
the issuance of preferred stock may have the effect of decreasing the market
price of our common stock.
We
will file as an exhibit to the registration statement of which this prospectus
is a part, or will incorporate by reference from reports that we file with the
SEC, the form of any certificate of designation that describes the terms of the
series of preferred stock we are offering before the issuance of that series of
preferred stock. This description will include, but not be limited to, the
following:
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the title and stated value; |
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the number of shares we are offering; |
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the liquidation preference per share; |
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the purchase price; |
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the dividend rate, period and payment date and method of
calculation for dividends; |
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whether dividends will be cumulative or non-cumulative
and, if cumulative, the date from which dividends will accumulate;
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the provisions for a sinking fund, if any; |
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the provisions for redemption or repurchase, if
applicable, and any restrictions on our ability to exercise those
redemption and repurchase rights; |
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whether the preferred stock will be convertible into our
common stock, and, if applicable, the conversion price, or how it will be
calculated, and the conversion period; |
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whether the preferred stock will be exchangeable into
debt securities, and, if applicable, the exchange price, or how it will be
calculated, and the exchange period; |
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voting rights, if any, of the preferred stock; |
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preemptive rights, if any; |
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restrictions on transfer, sale or other assignment, if
any; |
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a discussion of any material United States federal income
tax considerations applicable to the preferred stock;
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the relative ranking and preferences of the preferred
stock as to dividend rights and rights if we liquidate, dissolve or wind
up our affairs; |
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any limitations on the issuance of any class or series of
preferred stock ranking senior to or on a parity with the series of
preferred stock as to dividend rights and rights if we liquidate, dissolve
or wind up our affairs; and |
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any other specific terms, preferences, rights or
limitations of, or restrictions on, the preferred stock.
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DESCRIPTION OF DEBT SECURITIES
We
may issue debt securities, in one or more series, as either senior or
subordinated debt or as senior or subordinated convertible debt. When we offer
to sell debt securities, we will describe the specific terms of any debt
securities offered from time to time in a supplement to this prospectus, which
may supplement or change the terms outlined below. Senior debt securities will
be issued under one or more senior indentures, dated as of a date prior to such
issuance, between us and a trustee to be named in a prospectus supplement, as
amended or supplemented from time to time. Any subordinated debt securities will
be issued under one or more subordinated indentures, dated as of a date prior to
such issuance, between us and a trustee to be named in a prospectus supplement,
as amended or supplemented from time to time. The indentures will be subject to
and governed by the Trust Indenture Act of 1939, as amended.
Before
we issue any debt securities, the form of indentures will be filed with the SEC
and incorporated by reference as an exhibit to the registration statement of
which this prospectus is a part or as an exhibit to a current report on Form
8-K. For the complete terms of the debt securities, you should refer to the
applicable prospectus supplement and the form of indentures for those particular
debt securities. We encourage you to read the applicable prospectus supplement
and the form of indenture for those particular debt securities before you
purchase any of our debt securities.
We
will describe in the applicable prospectus supplement the terms of the series of
debt securities being offered, including:
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the title; |
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whether or not such debt securities are guaranteed;
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the principal amount being offered, and if a series, the
total amount authorized and the total amount outstanding; |
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any limit on the amount that may be issued; |
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whether or not we will issue the series of debt
securities in global form, the terms and who the depositary will be;
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the maturity date; |
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the annual interest rate, which may be fixed or variable,
or the method for determining the rate and the date interest will begin to
accrue, the dates interest will be payable and the regular record dates
for interest payment dates or the method for determining such dates;
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whether or not the debt securities will be secured or
unsecured, and the terms of any secured debt; |
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the terms of the subordination of any series of
subordinated debt; |
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the place where payments will be payable; |
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restrictions on transfer, sale or other assignment, if
any; |
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our right, if any, to defer payment of interest and the
maximum length of any such deferral period; |
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the date, if any, after which, and the price at which, we
may, at our option, redeem the series of debt securities pursuant to any
optional or provisional redemption provisions and the terms of those
redemption provisions; |
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the date, if any, on which, and the price at which we are
obligated, pursuant to any mandatory sinking fund or analogous fund
provisions or otherwise, to redeem, or at the holders option to purchase,
the series of debt securities and the currency or currency unit in which
the debt securities are payable; |
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any restrictions our ability and/or the ability of our
subsidiaries to: |
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incur additional indebtedness; |
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issue additional securities; |
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create liens; |
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pay dividends and make distributions in respect of our
capital stock and the capital stock of our subsidiaries; |
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redeem capital stock; |
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place restrictions on our subsidiaries ability to pay
dividends, make distributions or transfer assets; |
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make investments or other restricted payments; |
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sell or otherwise dispose of assets; |
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enter into sale-leaseback transactions; |
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engage in transactions with stockholders and
affiliates; |
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issue or sell stock of our subsidiaries; or |
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effect a consolidation or merger; |
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whether the indenture will require us to maintain any
interest coverage, fixed charge, cash flow-based, asset-based or other
financial ratios; |
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a discussion of any material United States federal income
tax considerations applicable to the debt securities; |
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information describing any book-entry features; |
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provisions for a sinking fund purchase or other analogous
fund, if any; |
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the denominations in which we will issue the series of
debt securities; |
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the currency of payment of debt securities if other than
U.S. dollars and the manner of determining the equivalent amount in U.S.
dollars; and |
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any other specific terms, preferences, rights or
limitations of, or restrictions on, the debt securities, including any
additional events of default or covenants provided with respect to the
debt securities, and any terms that may be required by us or advisable
under applicable laws or regulations. |
Conversion or Exchange Rights
We will set forth in the prospectus supplement the terms on which a series of
debt securities may be convertible into or exchangeable for our common stock or
our other securities. We will include provisions as to whether conversion or
exchange is mandatory, at the option of the holder or at our option. We may
include provisions pursuant to which the number of shares of our common stock or
our other securities that the holders of the series of debt securities receive
would be subject to adjustment.
DESCRIPTION OF WARRANTS
We
may issue warrants for the purchase of common stock, preferred stock and/or debt
securities in one or more series. We may issue warrants independently or
together with common stock, preferred stock and/or debt securities, and the
warrants may be attached to or separate from these securities. While the terms
summarized below will apply generally to any warrants that we may offer, we will
describe the particular terms of any series of warrants in more detail in the
applicable prospectus supplement. The terms of any warrants offered under a
prospectus supplement may differ from the terms described below.
We
will file as exhibits to the registration statement of which this prospectus is
a part, or will incorporate by reference from reports that we file with the SEC,
the form of warrant agreement, including a form of warrant certificate, that
describes the terms of the particular series of warrants we are offering before
the issuance of the related series of warrants. The following summaries of
material provisions of the warrants and the warrant agreements are subject to,
and qualified in their entirety by reference to, all the provisions of the
warrant agreement and warrant certificate applicable to the particular series of
warrants that we may offer under this prospectus. We urge you to read the
applicable prospectus supplements related to the particular series of warrants
that we may offer under this prospectus, as well as any related free writing
prospectuses, and the complete warrant agreements and warrant certificates that
contain the terms of the warrants.
General
We
will describe in the applicable prospectus supplement the terms of the series of
warrants being offered, including:
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the offering price and aggregate number of warrants
offered; |
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the currency for which the warrants may be purchased;
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if applicable, the designation and terms of the
securities with which the warrants are issued and the number of warrants
issued with each such security or each principal amount of such security;
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if applicable, the date on and after which the warrants
and the related securities will be separately transferable; |
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in the case of warrants to purchase debt securities, the
principal amount of debt securities purchasable upon exercise of one
warrant and the price at, and currency in which, this principal amount of debt securities may be purchased upon such
exercise;
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in the case of warrants to purchase common stock or
preferred stock, the number of shares of common stock or preferred stock,
as the case may be, purchasable upon the exercise of one warrant and the
price at which these shares may be purchased upon such exercise;
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the effect of any merger, consolidation, sale or other
disposition of our business on the warrant agreements and the warrants;
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the terms of any rights to redeem or call the warrants;
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any provisions for changes to or adjustments in the
exercise price or number of securities issuable upon exercise of the
warrants; |
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the dates on which the right to exercise the warrants
will commence and expire; |
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the manner in which the warrant agreements and warrants
may be modified; |
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a discussion of any material or special United States
federal income tax consequences of holding or exercising the warrants;
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the terms of the securities issuable upon exercise of the
warrants; and |
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any other specific terms, preferences, rights or
limitations of or restrictions on the warrants. |
Before
exercising their warrants, holders of warrants will not have any of the rights
of holders of the securities purchasable upon such exercise, including:
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in the case of warrants to purchase debt securities, the
right to receive payments of principal of, or premium, if any, or interest
on, the debt securities purchasable upon exercise or to enforce covenants
in the applicable indenture; or |
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in the case of warrants to purchase common stock or
preferred stock, the right to receive dividends, if any, or payments upon
our liquidation, dissolution or winding up or to exercise voting rights,
if any. |
Exercise of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in
the applicable prospectus supplement at the exercise price that we describe in
the applicable prospectus supplement. Holders of the warrants may exercise the
warrants at any time up to the specified time on the expiration date that we set
forth in the applicable prospectus supplement. After the close of business on
the expiration date, unexercised warrants will become void.
Holders
of the warrants may exercise the warrants by delivering the warrant certificate
representing the warrants to be exercised together with specified information,
and paying the required amount to the warrant agent in immediately available
funds, as provided in the applicable prospectus supplement. We will set forth on
the reverse side of the warrant certificate and in the applicable prospectus
supplement the information that the holder of the warrant will be required to
deliver to the warrant agent.
If
fewer than all of the warrants represented by the warrant certificate are
exercised, then we will issue a new warrant certificate for the remaining amount
of warrants. If we so indicate in the applicable prospectus supplement, holders
of the warrants may surrender securities as all or part of the exercise price
for warrants.
12
DESCRIPTION OF RIGHTS
We
may issue rights to purchase our common stock or preferred stock, in one or more
series. Rights may be issued independently or together with any other offered
security and may or may not be transferable by the person purchasing or
receiving the subscription rights. In connection with any rights offering to our
stockholders, we may enter into a standby underwriting arrangement with one or
more underwriters pursuant to which such underwriters will purchase any offered
securities remaining unsubscribed after such rights offering. In connection with
a rights offering to our stockholders, we will distribute certificates
evidencing the rights and a prospectus supplement to our stockholders on the
record date that we set for receiving rights in such rights offering. The
applicable prospectus supplement or free writing prospectus will describe the
following terms of rights in respect of which this prospectus is being
delivered:
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the title of such rights; |
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the securities for which such
rights are exercisable; |
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the exercise price for such
rights; |
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the date of determining the
security holders entitled to the rights distribution; |
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the number of such rights issued to each security holder;
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the extent to which such rights are transferable;
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if applicable, a discussion of the material United States
federal income tax considerations applicable to the issuance or exercise
of such rights; |
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the date on which the right to exercise such rights shall
commence, and the date on which such rights shall expire (subject to any
extension); |
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the conditions to completion of the rights offering;
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any provisions for changes to or adjustments in the
exercise price or number of securities issuable upon exercise of the
rights; |
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the extent to which such rights include an
over-subscription privilege with respect to unsubscribed securities;
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if applicable, the material terms of any standby
underwriting or other purchase arrangement that we may enter into in
connection with the rights offering; and |
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any other terms of such rights, including terms,
procedures and limitations relating to the exchange and exercise of such
rights. |
Each
right will entitle the holder thereof the right to purchase for cash such amount
of shares of common stock or preferred stock, or any combination thereof, at
such exercise price as shall in each case be set forth in, or be determinable as
set forth in, the prospectus supplement relating to the rights offered thereby.
Rights may be exercised at any time up to the close of business on the
expiration date for such rights set forth in the prospectus supplement. After
the close of business on the expiration date, all unexercised rights will become
void. Rights may be exercised as set forth in the prospectus supplement relating
to the rights offered thereby. Upon receipt of payment and the proper completion
and due execution of the rights certificate at the office of the rights agent,
if any, or any other office indicated in the prospectus supplement, we will
forward, as soon as practicable, the shares of common stock and/or preferred
stock purchasable upon such exercise. We may determine to offer any unsubscribed
offered securities directly to persons other than stockholders, to or through
agents, underwriters or dealers or through a combination of such methods, including pursuant to standby underwriting
arrangements, as set forth in the applicable prospectus supplement.
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DESCRIPTION OF UNITS
As
specified in the applicable prospectus supplement, we may issue, in one more
series, units consisting of common stock, preferred stock, debt securities
and/or warrants or rights for the purchase of common stock, preferred stock
and/or debt securities in any combination. The applicable prospectus supplement
will describe: .
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the securities comprising the units, including whether
and under what circumstances the securities comprising the units may be
separately traded; |
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the terms and conditions applicable to the units,
including a description of the terms of any applicable unit agreement
governing the units; and |
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a description of the provisions for the payment,
settlement, transfer or exchange of the units. |
PLAN OF DISTRIBUTION
The
securities covered by this prospectus may be offered and sold from time to time
pursuant to one or more of the following methods:
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through agents; |
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to or through underwriters; |
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to or through broker-dealers (acting as agent
or principal); |
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in at the market offerings within the meaning of Rule
415(a)(4) of the Securities Act, to or through a market maker or into an
existing trading market, on an exchange, or otherwise; |
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directly to purchasers, through a specific
bidding or auction process or otherwise; or |
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through a combination of any such methods of
sale. |
Agents,
underwriters or broker-dealers may be paid compensation for offering and selling
the securities. That compensation may be in the form of discounts, concessions
or commissions to be received from us, from the purchasers of the securities or
from both us and the purchasers. Any underwriters, dealers, agents or other
investors participating in the distribution of the securities may be deemed to
be underwriters, as that term is defined in the Securities Act, and
compensation and profits received by them on sale of the securities may be
deemed to be underwriting commissions, as that term is defined in the rules
promulgated under the Securities Act.
Each time securities are offered by this prospectus, the prospectus supplement,
if required, will set forth:
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the name of any underwriter, dealer or agent involved in
the offer and sale of the securities; |
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the terms of the offering; |
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any discounts concessions or commissions and other items
constituting compensation received by the underwriters, broker-dealers or
agents; |
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any over-allotment option under which any underwriters
may purchase additional securities from us; and |
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any initial public offering price.
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The
securities may be sold at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices relating to the
prevailing market prices or at negotiated prices. The distribution of securities
may be effected from time to time in one or more transactions, by means of one
or more of the following transactions, which may include cross or block
trades:
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transactions on the NASDAQ Global Select Market or any
other organized market where the securities may be traded; |
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in the over-the-counter market; |
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in negotiated transactions; |
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under delayed delivery contracts or other
contractual commitments; or |
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a combination of such methods of sale.
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If
underwriters are used in a sale, securities will be acquired by the underwriters
for their own account and may be resold from time to time in one or more
transactions. Our securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. If an underwriter or
underwriters are used in the sale of securities, an underwriting agreement will
be executed with the underwriter or underwriters at the time an agreement for
the sale is reached. This prospectus and the prospectus supplement will be used
by the underwriters to resell the shares of our securities.
In
compliance with the guidelines of the Financial Industry Regulatory Authority,
or FINRA, the aggregate maximum discount, commission or agency fees or other
items constituting underwriting compensation to be received by any FINRA member
or independent broker-dealer will not exceed 8% of the offering proceeds from
any offering pursuant to this prospectus and any applicable prospectus
supplement.
If
5% or more of the net proceeds of any offering of our securities made under this
prospectus will be received by a FINRA member participating in the offering or
affiliates or associated persons of such FINRA member, the offering will be
conducted in accordance with FINRA Rule 5121.
To
comply with the securities laws of certain states, if applicable, the securities
offered by this prospectus will be offered and sold in those states only through
registered or licensed brokers or dealers.
Agents,
underwriters and dealers may be entitled under agreements entered into with us
to indemnification by us against specified liabilities, including liabilities
incurred under the Securities Act, or to contribution by us to payments they may
be required to make in respect of such liabilities. The prospectus supplement
will describe the terms and conditions of such indemnification or contribution.
Some of the agents, underwriters or dealers, or their respective affiliates, may
be customers of, engage in transactions with or perform services for us in the
ordinary course of business. We will describe in the prospectus supplement
naming the underwriter the nature of any such relationship.
Certain
persons participating in the offering may engage in over-allotment, stabilizing
transactions, short-covering transactions and penalty bids in accordance with
Regulation M under the Exchange Act. We make no representation or prediction as
to the direction or magnitude of any effect that such transactions may have on
the price of the securities. For a description of these activities, see the
information under the heading Underwriting in the applicable prospectus
supplement.
15
LEGAL MATTERS
The validity of the securities offered in this prospectus will be passed upon
for us by Pryor Cashman LLP.
EXPERTS
Our
consolidated financial statements as of December 31, 2013 and 2012, and for each
of the years in the two-year period ended December 31, 2013, have been
incorporated by reference in the registration statement in reliance on the
report of Albert Wong & Co., an independent registered public accounting
firm, and upon the authority of said firm as experts in accounting and
auditing.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to incorporate by reference the information we file with them
into this prospectus. This means that we can disclose important information
about us and our financial condition to you by referring you to another document
filed separately with the SEC instead of having to repeat the information in
this prospectus. The information incorporated by reference is considered to be
part of this prospectus and later information that we file with the SEC will
automatically update and supersede this information. This prospectus
incorporates by reference any future filings made with the SEC under Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act, between the date of the initial
registration statement and prior to effectiveness of the registration statement
and the documents listed below that we have previously filed with the SEC:
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our Annual Report on Form 10-K for the year ended
December 31, 2013 filed with the SEC on March 17, 2014, as amended by
Amendment No. 1 thereto filed with the SEC on May 16, 2014; |
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our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2014 filed with the SEC on May 12, 2014; |
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our Current Reports on Form 8-K, or amendments thereto,
filed with the SEC on March 18, 2014, March 19, 2014 and March 20, 2014;
and |
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the description of our common stock contained in the
registration statement on Form 8-A, dated March 17, 2008, File No.
001-33997, and any other amendment or report filed for the purpose of
updating such description. |
We
also incorporate by reference all documents that we file with the SEC on or
after the effective time of this prospectus pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act and prior to the sale of all the securities
registered hereunder or the termination of the registration statement. Nothing
in this prospectus shall be deemed to incorporate information furnished but not
filed with the SEC.
Any
statement contained in this prospectus or in a document incorporated or deemed
to be incorporated by reference in this prospectus shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained herein or in the applicable prospectus supplement or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference modifies or supersedes the statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
You
may request a copy of the filings incorporated herein by reference, including
exhibits to such documents that are specifically incorporated by reference, at
no cost, by writing or calling us at the following address or telephone number:
Kandi Technologies Group, Inc.
Jinhua City
Industrial Zone
Jinhua, Zhejiang Province
Peoples Republic
of China
Post Code 321016
Attn: Zhu Xiaoying, Chief Financial
Officer
+86-579-82239856
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Statements
contained in this prospectus as to the contents of any contract or other
documents are not necessarily complete, and in each instance you are referred to
the copy of the contract or other document filed as an exhibit to the
registration statement or incorporated herein, each such statement being
qualified in all respects by such reference and the exhibits and schedules
thereto.
WHERE YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement on Form S-3 that we filed with
the SEC registering the securities that may be offered and sold hereunder. The
registration statement, including exhibits thereto, contains additional relevant
information about us and these securities, as permitted by the rules and
regulations of the SEC, we have not included in this prospectus. A copy of the
registration statement can be obtained at the address set forth below or at the
SECs website as noted below. You should read the registration statement,
including any applicable prospectus supplement, for further information about us
and these securities.
We
file annual, quarterly and current reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SECs website at http:/www.sec.gov. You may also read and copy
any document we file at the SECs public reference room, 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference room. Because our common
stock is listed on the NASDAQ Global Select Market, you may also inspect
reports, proxy statements and other information at the offices of the NASDAQ
Global Select Market.
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