KNDI Kandi Technolgies Group Inc

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 14, 2016

KANDI TECHNOLOGIES GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware	001-33997	90-0363723
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification)

Jinhua City Industrial Zone
Jinhua, Zhejiang Province
People’s Republic of China
Post Code 321016
(Address of principal executive offices)

(86-579) 8223-9700
Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

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Item 2.02

Results of Operations and Financial Condition.

On March 14, 2016, Kandi Technologies Group, Inc., a corporation incorporated in the State of Delaware (the “Company”), issued a press release announcing certain financial results for the fourth quarter and full fiscal year ended December 31, 2015, and the outlook for the first quarter and full fiscal year of 2016. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits

Exhibit	Description
99.1	Press Release, dated March 14, 2016.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	KANDI TECHNOLOGIES GROUP, INC.
Date: March 14, 2016	By: /s/ Hu Xiaoming
	Name: Hu Xiaoming
	Title: Chief Executive Officer

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Kandi Technologies Reports Fourth Quarter and Full Year 2015
Financial Results

- Q4 EV parts sales increased 51.6% year-over-year to $57.5 million
- 2015 EV parts sales increased 68.4% year-over-year to $196.1 million
- Q4 the JV Company sold 12,100 EV products, a 231.0% increase year-over-year
- 2015 the JV Company sold 24,220 EV products, a 121.5% increase year-over-year

JINHUA, CHINA-- (March 14, 2016) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the fourth quarter and year ended December 31, 2015.

Fourth Quarter Highlights

•	Total revenues grew 11.2% to $58.8 million for the fourth quarter of 2015, from $52.9 million for the same period of 2014.
•	Electric Vehicle (“EV”) parts sales increased 51.6% to $57.5 million for the fourth quarter of 2015, compared with $37.9 million in the same period of 2014.
•	Kandi Electric Vehicles Group Co., Ltd. (the "JV Company"), sold 12,100 EV products in the fourth quarter, a 231.0% increase compared with the same period last year. Total EV products sales comprised 6,474 EV products to the Micro Public Transportation (“MPT”) program and 5,626 EV products through the distribution channel under the direct sales program.
•	GAAP net income for the fourth quarter of 2015 was $0.8 million, or $0.02 per fully diluted share, compared with $1.7 million, or $0.07 per fully diluted share in the same period of 2014.
•	Non-GAAP adjusted net income1, which excludes stock award expenses and changes in the fair value of financial derivatives, was $13.9 million in the fourth quarter of 2015, compared with $4.0 million of the same period of 2014.

Full Year 2015 Highlights

•	Total revenues grew 18.1% to $201.1 million in 2015, from $170.2 million in 2014.
•	EV parts sales increased 68.4% to $196.1 million in 2015, compared with $116.4 million in 2014.
•	The JV Company sold 24,220 EV products in 2015, a 121.5% increase compared with 2014. Total EV products sales comprised 14,947 EV products to the MPT program and 9,273 EV products through the distribution channel under the direct sales program. Total EV products sold in 2015 included 11,801 units of model K10, 10,472 units of model K11, 1,945 units of model K17 and 2 units of model K30.

^{_________________________________________
1} Non-GAAP measures, including the Non-GAAP net income and Non-GAAP EPS are defined as the financial measures excluding the change of the fair value of financial derivatives and the effects of the stock award expense. We supply non-GAAP information because we believe it allows our investors to obtain a clearer understanding of our operations. Any non-GAAP measures should not be considered as a substitute for, and should only be read in conjunction with, measures of financial performance prepared in accordance with GAAP.

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•	GAAP net income in 2015 was $14.7 million, or $0.31 per fully diluted share, compared with $12.3 million, or $0.29 per fully diluted share in 2014.
•	Non-GAAP adjusted net income1, which excludes stock award expenses and changes in the fair value of financial derivatives, was $28.5 million in 2015, compared with $14.2 million in 2014.
•	Working capital surplus was $59.9 million as of December 31, 2015. Cash, cash equivalents and restricted cash totaled $32.9 million as of December 31, 2015.

“Our outstanding results in 2015 include exceeding revenue and EV sales targets with the JV Company by selling 24,220 EV products, a 121.5% increase year-over-year,” commented Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi, “As the JV Company became China’s top seller for pure EV products in 2015, its EV products received extremely positive market recognition, highlighted by model K17 named as China 2015 Pure Electric Passenger Vehicle of the Year at the 6th Global New Energy Vehicle Conference. The direct sales program was launched in the second quarter and achieved 9,273 in EV products sales in 2015 through the distribution channel under this program, accounting for 38.3% of total EV products sold during the year. We are confident in being able to increase the contribution of direct sales as a percentage of total sales in 2016.”

“China’s government has continued to strongly support the growth of the EV industry,” Mr. Hu continued. “Most recently through an industry-wide subsidy investigation, the government is committed to maintaining the healthy development of the EV industry, which will benefit scaled EV products manufacturers like the JV Company. Meanwhile, the central government has extended its continuous support and confidence in developing the new energy vehicle (NEV) industry by enacting additional policies, including reducing traffic controls and purchase quotas on NEVs, encouraging government purchases and promoting EV car-share programs. By focusing on our unique growth engines, which are the rapid expansion of the Micro Public Transportation program and the direct sales program through the distribution channel, we look forward to leading the growth of China’s EV industry in 2016.”

“Our significant achievements in 2015 include excellent financial results, particularly with sales and gross margin meeting our expectation,” added Mr. Wang Cheng, Chief Financial Officer of Kandi, “During the year, key milestones, including the successful launch of the direct sales program and the expansion of the MPT program to 16 cities were accomplished. With a solid foundation built for our EV business, we believe that the Company will continue to achieve strong financial performance in 2016.”

Fourth Quarter and Full Year 2015 Financial Results

Net Revenues and Gross Profit

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Net revenues for the fourth quarter increased 16.4% sequentially, and 11.2% from the year-ago period. The increase in net revenues was mainly due to growth of EV products sales from the JV Company. Gross margin in the fourth quarter increased to 14.4%, compared with 11.0% in the same quarter last year. Margin increase was a result of cost control from battery packing production.

Net revenues for the full year 2015 increased 18.1% from 2014. The increase in net revenues was mainly due to growth of EV products sales from the JV Company. Gross margin for the full year 2015 increased to 14.1%, compared with 13.7% in 2014. Margin increase was a result of cost control from battery packing production.

Operating Income (Loss)

Total operating expenses in the fourth quarter were $13.9 million, compared with $3.0 million in the third quarter of 2015. The increase in total operating expenses was due to increased stock compensation expense, which was $9.8 million in the fourth quarter, compared with $2.0 million in the same quarter last year. Excluding stock compensation, operation expenses in the fourth quarter of 2015 were $4.0 million, compared with $1.0 million in the same quarter last year. The increase was mainly due to research and development expenses for new EV product models, such as K12 and K17, and for new battery packs, as well as the accrual for compensation expense.

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Total operating expenses in 2015 were $32.4 million, compared with $18.2 million in 2014. The significant increase in total operating expenses was due to increased stock compensation expense in 2015, which was $22.4 million, compared with $8.5 million in 2014. Excluding stock compensation, operation expenses in 2015 were $10.0 million, slightly higher than $9.7 million in 2014.

GAAP Net Income

Net income was $0.8 million in the fourth quarter, compared with $1.7 million in the same quarter of 2014. Net income was affected by significant increases in stock compensation expense and the change of the fair value of financial derivatives, which together were $10.8 million more in the fourth quarter of 2015 than in the fourth quarter of 2014. Non-GAAP net income in the fourth quarter was $13.9 million, a 250.9% increase from $4.0 million in the same quarter of 2014, mainly due to revenue growth, margin improvement, and the increased net income contribution from the JV Company.

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Net income in 2015 was $14.7 million, compared with $12.3 million in 2014. The increase in net income was mainly due to revenue growth and margin improvement, increased net income contribution from the JV Company, and gain from financial derivatives, offset by the increase from stock compensation expense. Non-GAAP net income in 2015 was $29.9 million, a 110.5% increase from $14.2 million in 2014, mainly due to revenue growth, margin improvement, and increased net income contribution from the JV Company.

JV Company Financial Results

In the fourth quarter, the JV Company sold 12,100 EV products, a 231.0% increase from the same period last year. Total EV product sales comprised 6,474 EV products to the MPT program and 5,626 EV products through the distribution channel under the direct sales program, with the latter being a significant sequential increase over the 3,004 EV products sold through the distribution channel under the direct sales program in the third quarter.

The condensed financial income statement of the JV Company in the fourth quarter is as below:

For the full year 2015, the JV Company sold 24,220 EV products, a 121.5% increase from 2014. Total EV product sales comprised 14,947 EV products to the MPT program and 9,273 EV products through the distribution channel. Total EV products sold in 2015 included 11,801 units of model K10, 10,472 units of model K11, 1,945 units of model K17 and 2 units of model K30.

The condensed financial income statement of the JV Company in full year 2015 is as below:

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Gross margin for the full year 2015 was 16.4% compared with 19.4% in 2014. The margin decrease in 2015 was mainly due to the product price decline and the lower selling price to a strategic partner during the year.

Kandi’s investments in the JV Company are accounted for under the equity method of accounting, as Kandi has a 50% ownership interest in the JV Company. As a result, Kandi recorded 50% of the JV Company’s profit for $9.7 million for the fourth quarter and $11.7 million for the full year 2015. After eliminating intra-entity profits and losses, Kandi’s share of the after tax profit of the JV Company was $9.9 million for the fourth quarter and $11.8 million for the full year of 2015.

Outlook

For the first quarter of 2016, Kandi expects net revenues to be in the range of $46.0 million to $48.0 million, with gross margin in the range of 13.5% to 14.5% . For full year 2016, Kandi expects net revenues to be in the range of $270 million to $300 million.

The Company also expects the JV Company to deliver a total of 35,000 or more EV products in the full year of 2016.

This outlook reflects the current view of the management, which is subject to change.

Fourth Quarter and Full Year 2015 Conference Call Details

The Company has scheduled a conference call and live webcast to discuss the financial results at 8:00 AM (U.S. Eastern time) on March 14, 2016 (8:00 PM Beijing time on March 14, 2016). Mr. Hu Xiaoming, Chief Executive Officer and Mr. Wang Cheng (Henry), Chief Financial Officer, will deliver prepared remarks, followed by a question and answer session.

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

•	Toll-free dial-in number: +1 877-407-3982
•	International dial-in number: +1 201-493-6780
•	Conference ID: 13631514
•	Webcast and replay: http://public.viavid.com/index.php?id=118533

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

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About Kandi Technologies Group, Inc.

Kandi Technologies Group, Inc. (KNDI), headquartered in Jinhua, Zhejiang Province, is engaged in the research and development, manufacturing and sales of various vehicle products. Kandi has established itself as one of China's leading manufacturers of pure electric vehicle ("EV") products (through its joint venture), EV parts and off-road vehicles. More information can be viewed at the Company's corporate website at http://www.kandivehicle.com. The Company routinely posts important information on its website.

Safe Harbor Statement

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

Follow us on Twitter: @ Kandi_Group

Company Contact:

Ms. Kewa Luo
Kandi Technologies Group, Inc.
Phone: 1-212-551-3610
Email: IR@kandigroup.com

IR Contact:
The Piacente Group
Phone: 1-212-481-2050
Email: kandi@tpg-ir.com

- Tables Below -

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

		December 31,			December 31,
		2015			2014
ASSETS
Current assets
Cash and cash equivalents	$	16,738,559		$	26,379,460
Restricted cash		16,172,009			13,000,731
Short term investment		1,613,727			-
Accounts receivable		8,136,421			15,736,805
Inventories (net of provision for slow moving inventory of 485,901 and 315,584 as of December 31, 2015 and December 31, 2014, respectively		17,773,679			15,403,840
Notes receivable		13,033,315			9,060,441
Other receivables		332,922			238,567
Prepayments and prepaid expense		181,534			120,761
Due from employees		34,434			34,475
Advances to suppliers		71,794			6,901,505
Amount due from JV Company, net		76,172,471			51,450,612
Amount due from related party		40,606,162			-
Deferred taxes assets		-			-
TOTAL CURRENT ASSETS		190,867,027			138,327,197
LONG-TERM ASSETS
Plant and equipment, net		20,525,126			26,215,356
Land use rights, net		12,935,121			15,649,152
Construction in progress		54,368,753			58,510,051
Long Term Investment		1,463,182			-
Investment in JV Company		90,337,899			83,309,095
Goodwill		322,591			322,591
Intangible assets		495,306			577,401
Other long term assets		154,019			162,509
TOTAL Long-Term Assets		180,601,997			184,746,155
TOTAL ASSETS	$	371,469,024		$	323,073,352
CURRENT LIABILITIES
Accounts payables	$	73,957,969		$	45,772,481
Other payables and accrued expenses		9,544,909			5,101,740
Short-term loans		36,656,553			35,589,502
Customer deposits		94,026			2,630,723
Notes payable		3,850,478			5,702,121
Income tax payable		624,276			1,835,685
Due to employees		9,423			15,787
Deferred taxes liabilities		2,374,924			230,864
Financial derivate - liability		3,823,590			2,245,610
Deferred income		13,726			-
Total Current Liabilities		130,949,874			99,124,513
LONG-TERM LIABILITIES
Deferred taxes liabilities		1,593,582			2,266,725
Financial derivate - liability		-			10,097,275
Total Long-Term Liabilities		1,593,582			12,364,000
TOTAL LIABILITIES		132,543,456			111,488,513
STOCKHOLDER'S EQUITY
Common stock, $0.001 par value; 100,000,000 shares authorized; 46,964,855 and 46,274,855 shares issued and outstanding at December 31,2015 and December 31,2014, respectively		46,965			46,275
Additional paid-in capital		212,564,334			190,258,037
Retained earnings (the restricted portion is $4,172,324 and $4,172,324 at December 31,2015 and December 31,2014, respectively)		31,055,919			16,390,424
Accumulated other comprehensive income(loss)		(4,741,650	)		4,890,103
TOTAL STOCKHOLDERS' EQUITY		238,925,568			211,584,839
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	371,469,024		$	323,073,352

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

		December 31, 2015			% of Revenue			December 31, 2014			% of Revenue			December 31, 2013			% of Revenue
REVENUES, NET	$	201,069,173			100.0%		$	170,229,006			100.0%		$	94,536,045			100.0%
COST OF GOODS SOLD		172,649,955			85.9%			146,825,073			86.3%			72,793,517			77.0%
GROSS PROFIT		28,419,218			14.1%			23,403,933			13.7%			21,742,528			23.0%
OPERATING EXPENSES:
Research and development		3,482,511			1.7%			2,755,637			1.6%			3,728,730			3.9%
Selling and marketing		633,863			0.3%			1,345,588			0.8%			399,504			0.4%
General and administrative		28,255,267			14.1%			14,058,548			8.3%			16,056,107			17.0%
Total Operating Expenses		32,371,641			16.1%			18,159,773			10.7%			20,184,341			21.4%
INCOME(LOSS) FROM OPERATIONS		(3,952,423	)		-2.0%			5,244,160			3.1%			1,558,187			1.6%
OTHER INCOME(EXPENSE):
Interest income		3,138,717			1.6%			1,701,121			1.0%			1,516,477			1.6%
Interest expense		(2,214,635	)		-1.1%			(3,480, 646	)		- 2.0%			(4,395,353	)		- 4.6%
Change in fair value of financial instruments		8,519,295			4.2%			6,531,308			3.8%			(16,647,283	)		- 17.6%
Government grants		1,645,032			0.8%			288,498			0.2%			228,396			0.2%
Share of profit (loss) in associated								(54,308	)					(69,056	)		-
companies		-			0.0%						0.0%						0.1%
Share of profit after tax of JV		11,841,855			5.9%			4,490,2 66			2.6%			(2,414,354	)		- 2.6%
Other income, net		1,814,882			0.9%			(34,649	)		0.0%			676,257			0.7%
Total other income, net		24,745,146			12. %			9,441,590			5.5%			(21,104,916	)		- 22.3%
INCOME BEFORE INCOME TAXES		20,792,723			10.3%			14,685,750			8.6%			(19,546,729	)		- 20.7%
INCOME TAX EXPENSE		(6,127,228	)		- 3.0%			(2,414,412	)		-1.4%			(1,593,994	)		- 1.7%
NET INCOME		14,665,495			7.3%			12,271,338			7.2%			(21,140,723	)		- 22.4%
OTHER COMPREHENSIVE INCOME
Foreign currency translation		(9,631,753	)					(2,725,143	)					2,112,902
COMPREHENSIVE INCOME(LOSS)	$	5,033,742					$	9,546,195					$	(19,027,821	)
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC		46,744,718						42,583,495						34,707,973
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED		46,925,554						42,715,818						34,707,973
NET INCOME PER SHARE, BASIC	$	0.31					$	0.29					$	(0.61	)
NET INCOME PER SHARE, DILUTED	$	0.31					$	0.29					$	(0.61	)

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

		December			December			December
		31, 2015			31, 2014			31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income(loss)	$	14,665,495		$	12,271,338		$	(21,140,723	)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		5,788,780			5,571,465			7,708,923
Assets Impairments		194,366			-			355,876
Deferred taxes		1,446,345			1,579,855			876,255
Change in fair value of financial instruments		(8,519,295	)		(6,531,308	)		16,647,283
Loss (income) in investment in associated companies		-			54,308			69,056
Share of profit after tax of JV Company		(11,841,855	)		(4,490,266	)		2,414,354
Decrease in reserve for fixed assets		-			(302,023	)		-
Stock Compensation cost		22,306,987			-			-
Changes in operating assets and liabilities, net of effects of acquisition:
(Increase) Decrease In:
Accounts receivable		7,052,626			15,445,962			3,251,168
Inventories		(3,497,460	)		(6,280,502	)		(1,287,045	)
Other receivables		(193,954	)		315,071			(38,491	)
Due from employee		(7,596	)		5,139			10,797
Prepayments and prepaid expenses		6,664,779			(5,360,637	)		(3,810,447	)
Amount due from JV Company		(28,519,360	)		(48,593,522	)		(2,877,972	)
Increase (Decrease) In:
Accounts payable		31,814,545			23,095,825			13,699,528
Other payables and accrued liabilities		5,300,095			2,694,689			(746,838	)
Customer deposits		(2,496,382	)		2,588,830			(254,151	)
Income Tax payable		(1,039,187	)		482,020			651,124
Due from related party		(42,249,905	)		-			(841,251	)
Net cash (used in ) provided by operating activities	$	(3,130,976	)	$	(7,453,756	)	$	14,687,446
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchases)/Disposal of plant and equipment, net		(827,059	)		(2,101,355	)		(158,830	)
(Purchases)/Disposal of land use rights and other intangible assets		1,589,165			(1,668,534	)		-
(Purchases)/Disposal of construction in progress		1,128,443			(50,891,170	)		(16,134	)
Deposit for acquisition		-			-			(39,673,000	)
Disposal of associated company		-			(96,299	)		64,535,177
Issuance of notes receivable		(131,852,31 9	)		(24,705,489	)		(4,174,247	)
Repayment of notes receivable		127,226,115			29,354,592			311,844
Long Term Investment		(1,522,411	)		-			(80,668,972	)
Short Term Investment		(1,679,051	)		-			-
Cash acquired in acquisition		-			-			-
Net cash provided by (used in) investing activities	$	(5,937,117	)	$	(50,108,255	)	$	(59,844,162	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash		(4,006,346	)		(13,010,291	)		16,135,044
Proceeds from short-term bank loans		50,640,214			48,306,743			52,918,845
Repayments of short-term bank loans		(47,595,391	)		(46,517,604	)		(52,596,170	)
Proceeds from notes payable		13,781,830			18,718,944			83,251,992
Repayment of notes payable		(15,398,471	)		(29,602,112	)		(92,609,593	)
Proceeds from bond payable		-			-			12,907,035
Repayment of bond payable		-			(13,011,917	)		(12,907,035	)
Fund raising through issuing common stock and warrants		0			78,358,991			26,387,498
Option exercise, stock awards & other financing		-			8,431,247			9,659,103
Warrant exercise		-			21,101,039			3,171,259
Common stock issued for acquisition, net of cost of capital		-			-			-
Net cash (used in) provided by financing activities	$	(2,578,164	)	$	72,775,040		$	46,317,978
NET INCREASE IN CASH AND CASH EQUIVALENTS		(11,646,257	)		15,213,029			1,161,262
Effect of exchange rate changes on cash		2,005,356			(1,595,938	)		(533,989	)
Cash and cash equivalents at beginning of year		26,379,460			12,762,369			12,135,096
CASH AND CASH EQUIVALENTS AT END OF PERIOD		16,738,559			26,379,460			12,762,369

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