UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14(a)-12
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Kandi Technologies Group, Inc.
(Name of Registrant as Specified in Charter)
Payment of filing fee (check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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KANDI TECHNOLOGIES GROUP, INC.
November 18, 2021
To the Shareholders of Kandi Technologies Group,
Inc.:
You are cordially invited
to attend the Annual Meeting of Shareholders of Kandi Technologies Group, Inc., a Delaware corporation (the “Company” or “Kandi”),
to be held at our executive office, located at Building 11, West Floor 1, 1 Jiaogong Road, Xihu District, Hangzhou City, Zhejiang Province,
China on December 28, 2021, at 7:00 a.m. E. T. (8:00 p.m. local time).
The Notice of Annual Meeting
of Shareholders and Proxy Statement describe the formal business to be transacted at the annual meeting. We are providing our shareholders
access to our proxy materials and our Annual Report on Form 10-K, for the fiscal year ended December 31, 2020, over the Internet. This
allows us to provide you with information relating to our 2021 Annual Meeting of Shareholders in a fast and efficient manner. On or about
November 18, 2021, we will mail to our shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how
to access our proxy materials and Annual Report on Form 10-K for the fiscal year ended December 31, 2020 online and how to vote online.
If you receive this notice by mail, you will not receive a printed copy of the materials unless you specifically request one. Included
within this notice will be instructions on how to request and receive printed copies of these materials and a proxy card by mail.
As discussed in the enclosed
Proxy Statement, the Annual Meeting will be devoted to approve the election of seven (7) directors, the ratification of the appointment
of Benjamin & Ko as our independent auditor for the fiscal year ended December 31, 2021, the approval of an amendment to our Certificate
of Incorporation, as amended, to increase the number of authorized shares of common stock from 100,000,000 shares to 1,000,000,000 shares,
and to correspondingly increase the number of authorized shares of preferred stock from 10,000,000 to 100,000,000 shares, the approval,
for purposes of complying with Nasdaq Listing Rule 5635(d), of any future adjustments of exercise prices of the warrants below their floor
prices in accordance with the terms of such warrants, the conduct of an advisory “say-on-pay” vote regarding the compensation
of our named executive officers, and any other business matters properly brought before the Annual Meeting.
Whether or not you plan to
attend the meeting, please vote as soon as possible. If you request a printed copy of the proxy materials, please complete, sign, date,
and return the proxy card you will receive in response to your request as soon as possible or you can vote via the Internet or by telephone.
This will ensure that your shares will be represented and voted at the meeting, even if you do not attend. If you attend the meeting,
you may revoke your proxy and personally cast your vote. Attendance at the meeting does not of itself revoke your proxy.
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Sincerely,
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/s/ Hu Xiaoming
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Hu Xiaoming
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Chairman of the Board of Directors, President and
Chief Executive Officer
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Neither the Securities
and Exchange Commission nor any state securities commission has determined if this attached proxy statement is truthful or complete. Any
representation to the contrary is a criminal offense.
This proxy statement is dated
November 18, 2021, and is first being mailed to the shareholders of Kandi with a form of proxy card or voting instructions on or about
November 18, 2021.
KANDI TECHNOLOGIES GROUP, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held December 28, 2021
To the Shareholders of Kandi Technologies Group,
Inc.:
NOTICE HEREBY IS GIVEN that
the 2021 Annual Meeting of Shareholders of Kandi Technologies Group, Inc., a Delaware corporation, will be held at our principal executive
office, located at Building 11, West Floor 1, 1 Jiaogong Road, Xihu District, Hangzhou City, Zhejiang Province, China on December 28,
2021, at 7:00 a.m. E. T. (8:00 p.m. local time), to consider and act upon the following:
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To elect seven directors, each to serve until the 2021 Annual Meeting of Shareholders;
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To ratify the appointment of Benjamin & Ko as the Company’s independent auditor for the fiscal year ended December 31, 2021;
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To approve an amendment to our Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock from 100,000,000 shares to 1,000,000,000 shares, and to correspondingly increase the number of authorized shares of preferred stock from 10,000,000 to 100,000,000 shares;
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To approve, for purposes of complying with Nasdaq Listing Rule 5635(d), any future adjustments of exercise prices of the warrants below their floor prices in accordance with the terms of such warrants;
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To conduct an advisory vote on the compensation of our named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission; and
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To transact such other business as properly may come before the annual meeting or any adjournments thereof.
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Shareholders of record at
the close of business on November 4, 2021 are entitled to receive notice of and to vote at the Annual Meeting and any adjournments thereof.
We are furnishing proxy materials to our shareholders on the Internet, rather than mailing printed copies of those materials to each shareholder.
If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials
unless you request them. Instead, the Notice of Internet Availability of Proxy Materials will instruct you as to how you may access and
review the proxy materials, and vote your proxy, on the Internet or by telephone.
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By Order of the Board of Directors
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/s/ Hu Xiaoming
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Hu Xiaoming
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Chief Executive Officer and
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Chairman of the Board of Directors
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Jinhua, Zhejiang Province, China
November 18, 2021
Important Notice Regarding the Availability
of Proxy Materials for the
Annual Meeting of Shareholders to be held on December 28, 2021:
WHETHER OR NOT YOU PLAN
TO ATTEND THE ANNUAL MEETING, YOUR VOTE IS IMPORTANT. PLEASE FOLLOW THE INSTRUCTIONS ON THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS
TO VOTE YOUR PROXY VIA THE INTERNET OR BY TELEPHONE OR REQUEST AND PROMPTLY COMPLETE, EXECUTE AND RETURN THE PROXY CARD BY FOLLOWING THE
INSTRUCTIONS ON THE PROXY CARD. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU SO DESIRE.
TABLE OF CONTENTS
CONVENTIONS
In this proxy statement,
we refer to Kandi Technologies Group, Inc., the Delaware corporation whose shares you currently own (together with its subsidiaries, the
variable interest entity (“VIE”) and the VIE’s subsidiary, unless the context otherwise indicates), as “Kandi.”
Additionally, we sometimes refer to Kandi as the “Company”, “we,” “us,” or “our.” “You”
refers to the shareholders of Kandi. In addition, we refer to the People’s
Republic of China as “PRC” or “China.” References to “Renminbi” and “RMB” are to the legal
currency of China and references to “U.S. dollars,” “dollars,” “US$” and “$” are to the
legal currency of the United States. Unless otherwise noted, all monetary amounts are stated in U.S. Dollars.
Our reporting currency is
the US$. The functional currency of our entities located in China is the RMB. For the entities whose functional currency is the RMB, results
of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the
unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to
assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances
on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into
US$ are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional
currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated
into the functional currencies at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise
from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results
of operations as incurred.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Please note that this proxy
statement contains or incorporates by reference “forward-looking statements” and “forward-looking information”
under applicable securities laws. These forward-looking statements include, but are not limited to, statements about the Merger and reorganization
and our plans, objectives, expectations and intentions with respect to future operations, including the benefits or impact described in
this proxy statement that we expect to achieve as a result of the Merger and reorganization. You can find many of these statements by
looking for words such as “anticipate,” “believe,” “could,” “estimate,” “expect,”
“intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,”
“will,” “would” or similar expressions in this proxy statement or in the documents included and delivered herewith.
Any forward-looking statements
in this proxy statement reflect only expectations that are current as of the date of this proxy statement or the date of any document
included and delivered with this document, as the case may be, are not guarantees of performance, and are inherently subject to significant
business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and generally beyond
our ability to control. These risks and uncertainties include, but are not limited to, the factors described in the section captioned
“Risk Factors” below.
Further, these forward-looking
statements are based on assumptions with respect to business strategies and decisions that are subject to change. Actual results or performance
may differ materially from those we express in our forward-looking statements. Except as may be required by applicable securities laws,
we disclaim any obligation or undertaking to disseminate any updates or revisions to our statements, forward-looking or otherwise, to
reflect changes in our expectations or any change in events, conditions or circumstances on which any such statements are based.
ABOUT THIS PROXY STATEMENT
This document constitutes
a proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules thereunder,
and a notice of meeting, with respect to the annual meeting of the shareholders of Kandi Technologies Group, Inc. at which such shareholders
will be asked to consider and vote upon, among other proposals, a proposal to approve the merger described herein.
This proxy statement does
not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction
to or from any person to whom it is not lawful to make any such offer or solicitation in such jurisdiction.
ADDITIONAL INFORMATION
This proxy statement incorporates
important business and financial information about Kandi from documents Kandi has filed with the U.S. Securities and Exchange Commission,
or SEC, that are incorporated by reference in or delivered in connection with this proxy statement. Please see the section entitled “Where
You Can Find Additional Information.”
KANDI TECHNOLOGIES GROUP, INC.
INFORMATION ABOUT THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held December 28, 2021
We are providing this proxy
statement to the shareholders of Kandi Technologies Group, Inc., a Delaware corporation, in connection with the solicitation, by the
Board of Directors of Kandi Technologies Group, Inc. (the “Board”), of proxies to be voted at our 2021 Annual Meeting of
Shareholders (the “Annual Meeting”) to be held at our executive office, located at Building 11, West Floor 1, 1 Jiaogong
Road, Xihu District, Hangzhou City, Zhejiang Province, China on December 28, 2021, at 7:00 a.m. E. T. (8:00 p.m. local time), and at
any adjournments or postponements of the Annual Meeting.
On or about November 18,
2021, we will mail to our shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our
proxy materials and Annual Report on Form 10-K, for the fiscal year ended December 31, 2020 online and how to vote online. You will be
eligible to vote your shares electronically via the Internet, by telephone or by mail by following the instructions on the Notice of Internet
Availability of Proxy Materials. If you receive Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed
copy of the materials unless you specifically request one. Included within this notice will be instructions on how to request and receive
printed copies of these materials and a proxy card by mail.
This proxy statement, our
Annual Report on Form 10-K for fiscal year ended December 31, 2020, and other proxy materials, including the Proxy Card and the Notice
of Annual Meeting, are available free of charge online at www.proxyvote.com. Directions to our Annual Meeting are available by
calling +86-579-8223-9856 or by written request to Board Secretary, Kandi Technologies Group, Inc. at Jinhua New Energy Vehicle Town,
Jinhua, Zhejiang Province, China, 321016.
ABOUT THE ANNUAL MEETING
General: Date, Time and Place
We are providing this proxy
statement to you in connection with the solicitation, on behalf of our Board, of proxies to be voted at our Annual Meeting or any postponement
or adjournment of that meeting. The Annual Meeting will be held on December 28, 2021, at 7:00 a.m. E.T. (8:00 p.m. local time) at our
executive office, located at Building 11, West Floor 1, 1 Jiaogong Road, Xihu District, Hangzhou City, Zhejiang Province, China.
Matters to be Considered and Voted Upon
At the Annual Meeting, shareholders
will be asked to consider and vote to elect the nominees named herein as directors to serve until the 2021 Annual Meeting of Shareholders;
to ratify the appointment of Benjamin & Ko as the Company’s independent auditor for the fiscal year ending December 31, 2021;
to approve an amendment to our Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock from
100,000,000 shares to 1,000,000,000 shares, and to correspondingly increase the number of authorized shares of preferred stock from 10,000,000
to 100,000,000 shares; to approve, for purposes of complying with Nasdaq Listing Rule 5635(d), of any future adjustments of exercise prices
of the warrants below their floor prices in accordance with the terms of such warrants; and to conduct an advisory vote on the compensation
of our named executive officers. The Board does not know of any matters to be brought before the Annual Meeting other than as set forth
in the notice of meeting. If any other matters properly come before the Annual Meeting, the persons named in the form of proxy or their
substitutes will vote in accordance with their best judgment on such matters.
Record Date; Stock Outstanding and Entitled
to Vote
Our Board established November 4, 2021 as the record date. Only holders
of shares of the Company’s common stock, par value $0.001 per share, as of the record date, are entitled to notice of, and to vote
at, the Annual Meeting. Each share of common stock entitles the holder thereof to one vote per share on each matter presented to our shareholders
for approval at the Annual Meeting. At the close of business on the record date, we had 77,385,130 shares of our common stock outstanding.
Internet Availability of Proxy Materials and
Annual Report
These proxy solicitation
materials are available at www.proxyvote.com on or about November 18, 2021 to all shareholders entitled to vote at the Annual
Meeting. A copy of the Company’s Annual Report on Form 10-K will be made available at www.proxyvote.com concurrently with these
proxy solicitation materials.
The Company is furnishing proxy materials to our shareholders primarily
via the Internet, rather than mailing printed copies of these materials to each shareholder. We believe that this process should expedite
shareholders’ receipt of proxy materials, lower the costs incurred by us for the Annual Meeting and help to conserve natural resources.
On or about November 18, 2021, we will mail to each shareholder of record and beneficial owners (other than those who previously requested
electronic or paper delivery) a Notice of Internet Availability of Proxy Materials, in the form of a mailing titled “Important Notice
Regarding the Availability of Proxy Materials”, that contains instructions on how to access and review the proxy materials, including
this proxy statement and the Company’s Annual Shareholders Report, including a letter to the shareholders and the annual report
on Form 10-K, on a website referred to in such notice and how to access a proxy card to vote on the Internet or by telephone. The Notice
of Internet Availability of Proxy Materials also contains instructions on how to receive a paper copy of the proxy materials. If you receive
a Notice of Internet Availability of Proxy Materials by mail, you should not expect to receive a printed copy of the proxy materials unless
you request one. If you received a Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy
of our proxy materials, currently or on an ongoing basis, please follow the instructions included in the Notice of Internet Availability
of Proxy Materials.
Quorum; Required Vote
A quorum of shareholders
is required for the transaction of business at the Annual Meeting. The presence of at least a majority of all of our shares of common
stock issued and outstanding and entitled to vote at the Annual Meeting, present in person or represented by proxy, will constitute a
quorum at the Annual Meeting. Votes cast by proxy or in person at the Annual Meeting will be tabulated by an election inspector appointed
for the Annual Meeting and will be taken into account in determining whether or not a quorum is present. Abstentions and broker non-votes,
which occur when a broker has not received customer instructions and indicates that it does not have the discretionary authority to vote
on a particular matter on the proxy card, will be included in determining the presence of a quorum at the Annual Meeting.
Assuming that a quorum is
present, our shareholders may take action at the annual meeting with the votes described below.
Election of Directors.
Under Delaware law and the Company’s Bylaws, the affirmative vote of a plurality of the votes cast by the holders of our shares
of common stock is required to elect each director. Consequently, only shares that are voted in favor of a particular nominee will be
counted toward such nominee’s achievement of a plurality. Shareholders do not have any rights to cumulate their votes in the election
of directors. Abstentions and broker non-votes will not be counted toward a nominee’s total.
Approval of the Appointment
of the Independent Auditor. Under Delaware law and the Company’s Bylaws, the required vote to approve the appointment of Benjamin
& Ko as the Company’s independent auditor for the fiscal year ending December 31, 2021, is the affirmative vote of a majority
of the shares present in person or represented by proxy and entitled to vote at the annual meeting.
Approval of Increase in
the Authorized Shares. Under Delaware law and the Company’s Bylaws, the required vote to approve an amendment to our Certificate
of Incorporation, as amended, to increase the number of authorized shares of common stock from 100,000,000 shares to 1,000,000,000 shares,
and to correspondingly increase the number of authorized shares of preferred stock from 10,000,000 to 100,000,000 shares, is the affirmative
vote of a majority of the outstanding shares entitled to vote at the annual meeting.
Approval of any future
adjustments of exercise prices of the warrants below their floor prices. Under Delaware law and the Company’s Bylaws, the required
vote to approve, for purposes of complying with Nasdaq Listing Rule 5635(d), any future adjustments of exercise prices of the warrants
below their floor prices in accordance with the terms of such warrants, is the affirmative vote of a majority of the shares present in
person or represented by proxy and entitled to vote at the annual meeting.
Non-Binding Advisory Vote
on Executive Compensation. Under Delaware law and the Company’s Bylaws, the required vote to approve the compensation of our
named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC, is the affirmative
vote of a majority of the shares present in person or represented by proxy and entitled to vote at the annual meeting.
Abstentions and Broker Non-Votes
Under applicable regulations,
if a broker holds shares on your behalf, and you do not instruct your broker how to vote those shares on a matter considered “routine”,
the broker may generally vote your shares for you. A “broker non-vote” occurs when a broker has not received voting instructions
from you on a “non-routine” matter, in which case the broker does not have authority to vote your shares with respect to such
matter. Rules that govern how brokers vote your shares have recently changed. Unless you provide voting instructions to a broker holding
shares on your behalf, your broker may no longer use discretionary authority to vote your shares on any of the matters to be considered
at the Annual Meeting other than the ratification of our independent registered public accounting firm. Please vote your proxy so your
vote can be counted.
Voting Procedure; Voting of Proxies; Revocation
of Proxies
Shareholders of Record
If your shares are registered
directly in your name with our transfer agent, Equiniti Trust Company, you are considered the “shareholder of record” with
respect to those shares. As the shareholder of record, you may vote in person at the Annual Meeting or vote, most conveniently vote by
telephone, Internet or mail. Whether or not you plan to attend the annual meeting, we urge you to vote by proxy to ensure your vote is
counted. You may still attend the Annual Meeting and vote in person even if you have already voted by proxy.
By Internet – shareholders
may vote on the internet by logging on to www.proxyvote.com and following the instructions given.
By Telephone – shareholders
may vote by calling 1-800-690-6903 (toll-free) with a touch tone telephone and following the recorded instructions.
By Mail – shareholders
must request a paper copy of the proxy materials to receive a proxy card and follow the instructions given for mailing. A paper copy
of the proxy materials may be obtained by logging to www.proxyvote.com and following the instructions given. To vote using the proxy
card, simply print the proxy card, complete, sign and date it and return it promptly to Vote Processing, c/o Broadridge, 51 Mercedes
Way, Edgewood, New York 11717. In the alternative, the proxy card can be mailed directly to the Company: Board Secretary, Kandi Technologies
Group, Inc. located in Jinhua New Energy Vehicle Town, Jinhua, Zhejiang Province, China, 321016 or to Kewa Luo at Kandi Technologies
Group, Inc., The Helmsley Building, 230 Park Avenue, 3rd & 4th Floor West, New York, NY 10169. Our Board has
selected each of Hu Xiaoming and Jehn Ming Lim to serve as proxies.
If you vote by telephone
or via the Internet, you do not need to return your proxy card. Telephone and Internet voting are available 24 hours a day and will close
at 11:59 P.M. Eastern Time on December 27, 2021.
In Person - shareholders
may vote in person at the Annual Meeting. To vote in person, come to the Annual Meeting and we will give you a ballot when you arrive.
The Board recommends that
you vote using one of the other voting methods, since it is not practical for most shareholders to attend the Annual Meeting.
Shares of our common stock
represented by proxies properly voted that are received by us and are not revoked will be voted at the Annual Meeting in accordance with
the instructions contained therein. If instructions are not given, such proxies will be voted FOR election of each nominee for
director named herein, FOR verification of Benjamin & Ko as Independent auditor for the fiscal year ended December 31, 2021,
FOR approval of the amendment to our Certificate of Incorporation to increase the authorized shares of common stock and preferred
stock, FOR approval, for purposes of complying with Nasdaq Listing Rule 5635(d), of any future adjustments of exercise prices of
the warrants below their floor prices in accordance with the terms of such warrants, and FOR approval of the compensation of our
named executive officers described in this proxy statement. In addition, we reserve the right to exercise discretionary authority to vote
proxies, in the manner determined by us, in our sole discretion, on any matters brought before the Annual Meeting for which we did not
receive adequate notice under the proxy rules promulgated by the SEC.
Street Name Shareholders
If you hold your shares in
“street name” through a stockbroker, bank or other nominee rather than directly in your own name, you are considered the “beneficial
owner” of such shares. Because a beneficial owner is not a shareholder of record, you may not vote these shares in person at the
Annual Meeting unless you obtain a “legal proxy” from the broker, bank or nominee that holds your shares, giving you the right
to vote those shares at the Annual Meeting. The Board recommends that you vote using one of the other voting methods, since it is not
practical for most shareholders to attend the Annual Meeting.
If you hold your shares in
“street name” through a stockbroker, bank or other nominee rather than directly in your own name, you can most conveniently
vote by telephone, Internet or mail. Please review the voting instructions on your voting instruction form.
Your proxy is revocable at
any time before it is voted at the Annual Meeting in any of the following three ways:
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You may submit another properly completed proxy bearing a later date.
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You may send a written notice that you are revoking your proxy to Board Secretary, Kandi Technologies Group, Inc., located in Jinhua New Energy Vehicle Town, Jinhua, Zhejiang Province, China, 321016 or to Kewa Luo located at Kandi Technologies Group, Inc., The Hemsley Building, 230 Park Avenue, 3rd/4th Floor West, New York, NY 10169.
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You may attend the Annual Meeting and vote in person. However, simply attending the Annual Meeting will not, by itself, revoke your proxy.
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Dissenters’ Right of Appraisal
Under the Delaware General
Corporation Law and the Company’s Certificate of Incorporation, shareholders are not entitled to any appraisal or similar rights
of dissenters with respect to any of the proposals to be acted upon at the Annual Meeting.
Proxy Solicitation
We will pay for the entire
cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone
or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may
also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
Householding
SEC rules permit us to deliver
a single Notice of Internet Availability of Proxy Materials or, if applicable, a paper copy of our annual report and proxy statement,
to one address shared by two or more of our shareholders. This delivery method is referred to as “householding” and can result
in significant cost savings. To take advantage of this opportunity, we have delivered only one Notice of Internet Availability of Proxy
Materials or, if applicable, a paper copy of the annual report and proxy statement, to multiple shareholders who share an address, unless
we received contrary instructions from the impacted shareholders prior to the mailing date. If you received a householded mailing this
year and you would like to have additional copies of our Notice of Internet Availability of Proxy Materials or, if applicable, additional
copies of our annual report and proxy statement mailed to you or you would like to opt out of this practice for future mailings, contact
Board Secretary located in Jinhua New Energy Vehicle Town, Jinhua, Zhejiang Province, China, 321016 or to Kewa Luo located at Kandi Technologies
Group, Inc., The Helmsley Building, 230 Park Avenue, 3rd/4th Floor West, New York, NY 10169. We agree to deliver promptly, upon written
or oral request, a separate copy of this proxy statement and annual report to any shareholder at the shared address to which a single
copy of those documents were delivered.
Shareholder List
For at least ten days prior
to the Annual Meeting, a list of shareholders entitled to vote at the Annual Meeting, arranged in alphabetical order, showing the address
of and number of shares registered in the name of each shareholder, will be open for examination by any shareholder, for any purpose related
to the Annual Meeting, during ordinary business hours at our principal executive office. The list will also be available for examination
at the Annual Meeting.
Other Business
The Board is not aware of
any other matters to be presented at the Annual Meeting other than those mentioned in this proxy statement and our accompanying Notice
of Annual Meeting of Shareholders. If, however, any other matters properly come before the Annual Meeting, the persons named in the accompanying
proxy will vote in accordance with their best judgment.
Proposals of Shareholders for 2021 Annual Meeting
of Shareholders
Shareholder proposals will
be considered for inclusion in the proxy statement for our 2021 Annual Meeting of Shareholders in accordance with Rule 14a-8 under Securities
Exchange Act of 1934, as amended (the “Exchange Act”), if they are received by the Company, on or before September 29, 2022.
Shareholders who intend to
present a proposal at the 2021 Annual Meeting of Shareholders without inclusion of such proposal in our proxy materials for the 2021 Annual
Meeting of Shareholders are required to provide notice of such proposal not less than ninety (90) days nor more than one hundred twenty
(120) days prior to the one-year anniversary of the preceding year’s annual meeting; provided, however, that if the date of the
annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the shareholder
to be timely must be so delivered, or mailed and received, not earlier than the one hundred and twentieth (120th) day prior
to such annual meeting, and not later than the ninetieth (90th) day prior to such meeting or tenth (10th) day following
the day on which public disclosure of the date of such annual meeting was first made. Therefore, shareholder proposals must be received
by us no earlier than August 30, 2022, but no later than September 29, 2022, and must otherwise comply with the notice requirements set
forth under all applicable Exchange Act and SEC rules. The chairman of our 2021 Annual Meeting of Shareholders may refuse to allow the
transaction of any business or acknowledge the nomination of any person not made in compliance with the requisite procedures.
Shareholder notice shall
set forth as to each matter the shareholder proposes to bring before the annual meeting: (i) a brief description of the business desired
to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address,
as they appear on our books, of the shareholder proposing such business, (iii) the class and number of shares of the Company, which are
beneficially owned by the shareholder, (iv) any material interest of the shareholder in such business and (v) any other information that
is required to be provided by the shareholder pursuant to Regulation 14A under the Exchange Act, in his capacity as a proponent to a shareholder
proposal.
A shareholder’s notice
relating to nomination for directors shall set forth as to each person, if any, whom the shareholder proposes to nominate for election
or re-election as a director: (i) the name, age, business address and residence address of such person, (ii) the principal occupation
or employment of such person, (iii) the class and number of shares of the Company, which are beneficially owned by such person, (iv) a
description of all arrangements or understandings between the shareholder and each nominee and any other person(s) (naming such person(s))
pursuant to which the nominations are to be made by the shareholder and (v) any other information relating to such person that is required
to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Exchange Act (including without limitation such person’s written consent to being named in our Proxy Statement, if any,
as a nominee and to serving as a director if elected).
Proposals and notices of
intention to present proposals at the Annual Meeting of Shareholders for the year ended December 31, 2020 should be addressed to Board
Secretary at Jinhua New Energy Vehicle Town, Jinhua, Zhejiang Province, People’s Republic of China 321016.
Voting Results of Annual Meeting
Voting results will be published
in a Current Report on Form 8-K issued by us within four (4) business days following the Annual Meeting.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
Our Bylaws provide that the
Board shall consist of not less than one (1) nor more than eleven (11) directors. Vacancies on the Board may be filled only by persons
elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy (including a vacancy created by an
increase in the Board) will serve for the remainder of the one year term in which the vacancy occurred and until the director’s
successor is elected and qualified. This includes vacancies created by an increase in the number of directors.
Our Board currently consists
of seven (7) members. All of our current directors will stand for re-election at the Annual Meeting. The seven nominees were previously
elected by our shareholders at the Annual Meeting of Shareholders for the year ended December 31, 2019. If elected as a director at the
Annual Meeting, each of the nominees will serve a one-year term expiring at the 2021 Annual Meeting of Shareholders and until his successor
has been duly elected and qualified. Biographical information regarding each of the nominees is set forth below. No family relationships
exist among any of our director nominees or executive officers.
Each of the nominees has
consented to serve as a director if elected. If any nominee should be unavailable to serve for any reason (which is not anticipated),
the Board may designate a substitute nominee or nominees (in which event the persons named on the enclosed proxy card will vote the shares
represented by all valid proxy cards for the election of such substitute nominee or nominees), allow the vacancies to remain open until
a suitable candidate or candidates are located, or by resolution provide for a lesser number of directors.
Executive Officers and Directors
The following table sets forth certain information regarding our executive
officers and directors as of November 4, 2021:
|
Name
|
|
Age
|
|
Position
|
|
Served From
|
|
Hu Xiaoming
|
|
64
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
June 2007
|
|
Chen Liming (1), (2), (3)
|
|
84
|
|
Director (Independent)
|
|
May 2012
|
|
Lin Yi (2), (3)
|
|
68
|
|
Director (Independent)
|
|
May, 2017
|
|
Jerry Lewin (1)
|
|
66
|
|
Director (Independent)
|
|
November 2010
|
|
Henry Yu (1),(2),(3)
|
|
67
|
|
Director (Independent)
|
|
July 2011
|
|
Sun Chenming
|
|
57
|
|
Director
|
|
December 2019
|
|
Wang Lin
|
|
33
|
|
Director
|
|
December 2019
|
|
|
(1)
|
Member
of Audit Committee
|
|
|
(2)
|
Member
of Compensation Committee
|
|
|
(3)
|
Member
of Nominating and Corporate Governance Committee
|
All directors hold office
until the next annual meeting of shareholders and until their successors have been duly elected and qualified. There are no membership
qualifications for directors. There are no arrangements or understandings pursuant to which our directors are selected or nominated.
Biographical Information of the Director Nominees
Hu Xiaoming was
appointed as our Chief Executive Officer, President and Chairman of the Board in June 2007. Prior to joining the Company, from October
2003 to April 2005, Mr. Hu served as the Project Manager (Chief Scientist) in the WX Pure Electric Vehicle Development Important Project
of Electro-vehicle in the State 863 Plan. From October 1984 to March 2003, Mr. Hu served as: (i) Factory Director of the Yongkang Instrument
Factory, (ii) Factory Director of the Yongkang Mini Car Factory, (iii) Chairman and General Manager of the Yongkang Vehicle Company, (iv)
General Manager of the Wan Xiang Electric Vehicle Developing Center and (v) the General Manager of the Wan Xiang Battery Company. Mr.
Hu personally owned 4 invention patents and 7 utility model patents, which he transferred to the Company in fiscal year 2012. Mr. Hu’s
experience as our Chief Executive Officer and President, as well as Chairman of the Board, and extensive scientific and operational knowledge
and expertise qualifies him to serve as Chairman of the Board and led the Board to conclude that he should be nominated to serve another
term as a director.
Dong Xueqin, born
in 1981, received a Doctor Engineering degree in Vehicle Engineering from Shanghai Tongji University. Mr. Dong has rich practical experience
and extensive knowledge and expertise in the fields of automotive engineering, automotive safety and others. He has successively served
as the General Manager of Jiangsu Xingchi Electric Power Technology Co., Ltd , the Deputy General Manager of Jiangsu Yixing Vehicles Co.,
Ltd , the General Manager of Yijue Automobile (Shanghai) Co., Ltd, the Deputy General Manager of business department of Automobile Design
and Research Institute Co., Ltd. of Shanghai Tongji University, and the R & D Engineer of Jiangling Automobile Co., Ltd. In addition,
Mr. Dong has also participated in multiple technology R & D projects, including the research and development of Class AO small urban
pure electric vehicle, and test, evaluation and standard technology related to whole electric vehicle and its parts as well as infrastructures
in the "863" Project of China Ministry of Science and Technology; safety technology of electric vehicles in typical crash mode
in the Project of Shanghai Bureau of Quality and Technical Supervision; and so on. Furthermore, he has published 11
papers on automobile and electric vehicle engineering technology. Mr.Dong also owns 18 utility model patents, 2 invention patents and
1 appearance design patent.
Wang Lin has been
serving as Chief Financial Officer Assistant of the Company since June 2015. Before joining the Company, Ms. Wang served as Fund Accountant
of State Street Technology (Zhejiang) Co., Ltd. from December 2014 to June 2015. At the Company, Ms. Wang is responsible for the preparation
of consolidated financial statements in accordance with the U.S. GAAP standards, and the preparation of SEC reports, including the Annual
Reports on Form 10-K and the Quarterly Reports on Form 10-Q. Ms. Wang has knowledge of the basic U.S. GAAP standards and SEC regulations.
She is also familiar with the culture and business process of the Company. Mastering good communication and coordination skills, Ms. Wang
also has financial management experience of U.S. listed companies. Ms. Wang received her Bachelor degree in Finance from Zhejiang Gongshang
University in 2011 and received her Master degree in Accounting from Hofstra University in 2014. Ms. Wang’s accounting knowledge
and excellent management and communication skills qualify her to serve on our Board and led the Board to conclude that she should be nominated
to serve another term as a director.
Chen Liming was
appointed as a director of the Company on May 1, 2012. Mr. Chen serves as an advisor to AA Wind & Solar Energy Development Group,
LLC. Prior to his current position, from February 2009 to October 2010, Mr. Chen participated in a joint venture with Mr. Qiu Youmin,
the former designer of Geely Automobile Co., Ltd., and assisted in the development of super mini three seat pure electric vehicles. From
June 2008 to July 2009, he participated in the development of Lithium Iron Phosphate Battery with Shanghai Yuankai Group. Mr. Chen served
as a Professor of Electrical Engineering at Zhejiang University from 1983 to 1997. In addition, Mr. Chen served as a visiting scholar
in the Electrical Engineering Department at Columbia University in New York City from 1981 to 1983 and as a professor in Electrical Engineering
at Zhejiang University from 1960 to 1981. Mr. Chen received his bachelor degree from Southeast University in Jiangsu, China in 1960. Mr.
Chen’s experience in the automobile and mini-car industries, extensive electrical engineering experience and knowledge, and knowledge
of current corporate finance and accounting techniques and market activities qualifies him to serve on our Board and led the Board to
conclude that he should be nominated to serve another term as a director.
Lin Yi was appointed
as a director of Kandi on May 4, 2017. He has extensive experience in automotive engineering and multi-body system dynamics research.
Throughout his career, he has been awarded numerous high-ranking national science and technology rewards. He served several key senior
roles in academic and industrial organizations and was given Special Government Allowances from the State Council in 1992. Additionally,
he was named an “Expert of China’s Machinery Industry” in 1995 and elected to the “Outstanding Young Science Talents
in China’s Automobile Industry” in 1998. From 2007 to 2015, he served as a deputy chief engineer at Beijing Automotive Group
Co., Ltd., as an executive director of Beijing Automotive New Energy Vehicle Co., Ltd., and as the executive vice president of Beijing
Automotive Research Institute. Prior to that, he was a part-time professor at Beijing University of Technology, Beijing University of
Aeronautics and Astronautics, Institute of Electrical Engineering at China Academy of Sciences, Shanghai Jiaotong University, and Hunan
University. He was appointed as the dean of Automotive Engineering at Jilin University of Technology in 1996 and remained in that position
until 2000. Mr. Lin’s extensive engineering experience, as well as his machinery and technical expertise, qualifies him to serve
on our Board and led the Board to conclude that he should be nominated to serve another term as a director. Mr. Lin’s experience
in the automotive engineering and multi-body system dynamics research qualifies him to serve on our Board and led the Board to conclude
that he should be nominated to serve another term as a director.
Jerry Lewin was
appointed as a director of the Company in November 2010. Jerry Lewin became Senior Vice President of Field Profitability Globally of Hyatt
Hotels Corporation in January of 2015. In his new responsibilities he and his team are to move the company forward with new initiatives
to be the best operator in the Hospitality Industry. Prior to this promotion, he served as Senior Vice President of Field Operations for
Hyatt Hotels Corporation and is responsible for managing the hotels in North American continent. Mr. Lewin has been with Hyatt since 1987.
In his past capacity as Senior Vice President of Operation Lewin supervised a number of areas, including finance, sales and marketing,
public relations, customer service, engineering, and human resources. Lewin serves as a member of the Hyatt Hotels Corporation’s
Managing Committee and sits on the board of directors of the New York City Hotel Association. Since July 2009, Mr. Lewin has served as
a director of several companies in the past. Lewin currently serves as the President of the New York Law Enforcement Foundation and as
the President of the NY State Troopers PBA Signal 30 Fund. Mr. Lewin has served in various management capacities for several hotel companies
in San Francisco, Oakland, Los Angeles, San Diego and Las Vegas. Mr. Lewin received his Bachelor of Science degree from Cornell University
and completed the Executive Development Program at J.L. Kellogg Graduate School of Management at Northwestern University. Mr. Lewin’s
leadership skills and extensive management experience qualifies him to serve on our Board and led the Board to conclude that he should
be nominated to serve another term as a director.
Henry Yu currently
serves as an independent director of Kandi and chairs its Audit Committee. He is also currently Senior Advisor of AsiaPlus Capital Ltd.
of Shanghai, a boutique investment banking firm engaged in M&A, trade and investments between companies in the United States and Asia.
He is also President of the Hong Kong Association of Atlanta and residing president of the National U.S. Hong Kong Business Associations,
both nonprofit and volunteer services promoting business between HK/China and the U.S. Having 37 years’ experience as a banking
executive, Henry retired from banking in 2015 when he was Managing Director of Fifth Third Bank of Ohio. His previous affiliations included
Standard Chartered Bank China, East West Bank of California, SunTrust Bank of Georgia, Comerica Bank, National City Bank and Bank of America
in HK. Henry also served as Chief Operating Officer of Asian Investors Consortium from 2015 through 2017, a PE Fund that invested in healthcare
and clean energy in Asia. As Global Business Executive, Henry has vast experience in corporate finance, trade finance, domestic and global
lending, compliance, wealth management, treasury management, international banking services and products. Henry has been helping U.S.
firms navigate business in Asia as well as helping Asian firms set up offices/manufacturing plants in the U.S. Henry is also an avid promoter
of U.S./China relationship as well as a trusted advisor to Atlanta and the state of Georgia on Asian business. Through 30 plus years of
doing business globally, Henry’s clients included banks and corporations of most Asian economies and some Emerging Market countries
like Mexico, and Brazil. Henry received his BA in Economics from the University of Michigan and MBA in finance & Accounting from the
University of Detroit.
Biographical Information of Our Other Current
Director and Executive Officer
Mr. Jehn Ming Lim,
aged 39, has extensive experience in providing financial accounting and advisory services to public and private companies and has been
engaging in this profession for more than 15 years. He was the Chief Financial Officer of Takung Art Co., Ltd. (NYSE American: TKAT) from
February 2019 to May 2020. Prior to that, he had been the managing director of Albeck Financial Services, a financial consulting firm
from January 2013 to February 2019, mainly responsible for overseeing SEC reporting, GAAP technical consultation, financial statement
audit preparation, due diligence and internal controls compliance services. He also has extensive experience in auditing private and public
companies in his stints as audit manager and senior auditor of two regional accounting firms in the United States, i.e., Kabani &
Company, Inc. from October 2008 through December 2012 and Stonefield Josephson, Inc. from September 2006 through October 2008, respectively
and as an auditor at Ernst & Young in the United States from September 2004 through to July 2006. Mr. Lim graduated with High Honors
from the University of California, Santa Barbara, with a Bachelor of Arts degree in Business Economics.
The Board of Directors recommends that the
shareholders vote “FOR” the election of each of the director nominees named in this proxy statement.
PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITOR
The Audit Committee has selected
Benjamin & Ko (“BK”) as the Company’s independent auditor for the fiscal year ending December 31, 2021, and has
further directed that management submit the selection of BK for ratification by the shareholders at the Annual Meeting. The shareholders
are being asked to ratify this appointment so that the Audit Committee will know the opinion of the shareholders. However, the Audit Committee
has sole authority to appoint the independent registered public accounting firm.
No representatives of BK
are expected to be present at the Annual Meeting, either in person or by teleconference. The affirmative vote of the holders of a majority
of the shares present in person or represented by proxy and entitled to vote at the annual meeting will be required to ratify the selection
of BK.
The Board of Directors recommends a vote “FOR”
the ratification of the appointment of Benjamin & Ko as the Company’s independent auditor for the fiscal year ending December
31, 2021.
PROPOSAL 3
ADVISORY VOTE ON EXECUTIVE COMPENSATION
(Say-On-Pay)
The Company is seek a non-binding
advisory vote from its shareholders to approve the compensation of the Company’s executive officers as described under “Executive
Compensation” and the tabular disclosure regarding our named executive officers’ compensation (together with the accompanying
narrative disclosure) in this proxy statement.
This proposal, commonly known
as a “say-on-pay” proposal, gives the Company’s shareholders the opportunity to express their views on our executive
officers’ compensation. Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Compensation
Committee will take into account the outcome of the vote when making future executive officer compensation decisions. This vote is not
intended to address any specific item of compensation, but rather the overall compensation of our named executive officers as described
pursuant to applicable SEC rules in this proxy statement.
The Company believes that
its compensation policies and decisions are designed to deliver a performance-based pay philosophy, are aligned with the long-term interests
of the Company’s shareholders and are competitive. Our principal compensation policies, which enable it to attract and retain talented
executive officers to lead the Company in the achievement of our business objectives, include:
|
|
●
|
The Company makes annual cash compensation decisions based on assessment of our performance against measurable financial goals, as well as each executive’s individual performance.
|
|
|
|
|
|
|
●
|
The Company emphasizes long-term incentive compensation awards that collectively reward executive officers based on our performance, external and internal peer equity compensation practices, and the executive officer’s job responsibilities.
|
|
|
|
|
|
|
●
|
The Company designs pay practices to retain a highly talented and experienced senior executive team.
|
|
|
|
|
|
|
●
|
The Company encourages stock ownership by our senior executive officers.
|
As a result, the Company
is presenting this proposal, which gives you as a shareholder the opportunity to approve, on an advisory basis, the Company’s executive
officer compensation as disclosed in this proxy statement under the heading entitled “Executive Compensation” by voting for
or against the following resolution:
“RESOLVED, that the
Company’s shareholders approve the compensation of the named executive officers on an advisory basis, the compensation of the individuals
identified in the Summary Compensation Table, as disclosed in this proxy statement (which disclosure includes the compensation tables
and the accompanying narratives within the Executive Compensation section).”
Vote Required; Board of Directors Recommendation
This Say-on-Pay proposal
is advisory and non-binding. To be approved, on a non-binding advisory basis, this proposal must receive the affirmative vote of a majority
of the shares entitled to vote and present, in person or by properly executed proxy, at the Annual Meeting. However, the approval or disapproval
of this proposal by shareholders will not require the Board or the Compensation Committee to take any action regarding the Company’s
executive compensation practices. The final decision on the compensation and benefits of the Company’s named executive officers
and on whether, and if so, how to address shareholder disapproval remains with the Board and the Compensation Committee. Brokers are prohibited
from giving proxies to vote on executive compensation matters unless the beneficial owner of such shares has given voting instructions
on the matter. This means that if your broker is the record holder of your shares, you must give voting instructions to your broker with
respect to Proposal 3 if you want your broker to vote your shares on Proposal 3.
The Board of Directors believes that the compensation
of the executive officers is appropriate and recommends a vote “FOR” the approval of the executive compensation as described
in the compensation discussion and analysis and the compensation tables and otherwise in this proxy statement.
PROPOSAL 4
AMENDMENT TO CERTIFICATE OF INCORPORATION TO
INCREASE AUTHORIZED SHARES OF COMMON STOCK
Overview
We are asking our shareholders
to approve an amendment to our Certificate of Incorporation, as amended (the “Existing Charter”), to increase the number of
authorized shares of our common stock, par value $0.001 per share, from 100,000,000 shares of common stock, to 1,000,000,000 shares of
common stock, and to correspondingly increase the number of authorized shares of preferred stock from 10,000,000 shares to 100,000,000
(the “Charter Amendment”).
If our shareholders approve
this proposal at the Annual Meeting, then the Fourth section of the Existing Charter would be amended and restated to read in its entirety
as follows:
“The total number of
shares of stock which this corporation is authorized to issue is One Billion One Hundred Million (1,100,000,000), of which One Billion
(1,000,000,000) shares shall be common stock and One Hundred Million (100,000,000) shares shall be preferred stock, each with a par value
of $.001 per share.”
A copy of the proposed Charter
Amendment to our Existing Charter is attached hereto as Annex A, and we urge you to read Annex A in its entirety before casting your vote.
The Board has unanimously
approved, and recommended that our shareholders approve, the Charter Amendment.
General
As of November 4, 2021, the
Company is authorized to issue up to 100,000,000 shares of its common stock, of which, 77,385,130 shares were issued and outstanding,
and 10,000,000 shares of its preferred stock, none of which were or are issued or outstanding. Additional shares of common stock were
reserved for issuance under our equity incentive plan and other outstanding securities, including (collectively, the “Anticipated
Share Reserves”):
|
|
●
|
900,000 shares of common stock issuable upon the exercise of outstanding stock options with a weighted-average exercise price of $9.72 per share;
|
|
|
●
|
13,029,531 shares of common stock reserved for future issuance under the Company’s 2008 Omnibus Long-Term Incentive Plan, as amended (the “Plan”); and
|
|
|
●
|
8,131,332 shares of common stock reserved for future issuance upon the exercise of outstanding warrants.
|
The purpose of the proposed
Charter Amendment is to provide the Company with a sufficient number of shares of common stock available (i) to issue in connection with
raising equity capital, (ii) to give us sufficient authorized shares of common stock to generally support our growth and to provide flexibility
for future corporate needs, and (iii) to issue in connection with the exercise of stock options and warrants, and (iv) for potential future
increases in the number of shares of common stock reserved for issuance under the Plan.
Accordingly, the Board has
declared the proposed Charter Amendment to be advisable and in the best interests of the Company and our shareholders and is submitting
the Charter Amendment to a vote of our shareholders.
Reasons to Approve the Charter Amendment and
Increase Our Authorized Common Stock
The Board believes that the
proposed Charter Amendment and increase in the number of authorized shares of our common stock is desirable to enhance our flexibility
in taking possible future actions, such as raising additional equity capital, exchanging equity for debt or other transactions that have
a similar effect, financings, stock-based acquisitions, stock splits, equity incentive awards, potential strategic transactions, including
mergers, acquisitions, and business combinations, as well as other general corporate transactions.
Additionally, by approving
the increase to the Company’s authorized shares of common stock now, we will be able to act in a timely manner when such a need
arises or when the Board believes it is in the best interests of the Company and our shareholders to take action, without the risk, delay,
and expense that would be required at that time to obtain shareholder approval of such an increase at a special meeting of shareholders.
Other than the reserved shares
of common stock described above, as of the date of this Proxy Statement, we do not currently have any definitive agreements or plans to
issue the additional shares of common stock that would be authorized as a result of approving the proposed Charter Amendment. We review
and evaluate potential capital raising activities, transactions and other corporate actions on an ongoing basis to determine if such actions
would be in the Company’s best interest and the best interest of our shareholders.
Effect of the Charter Amendment and Increase
in Authorized Shares of Common Stock
Increasing the number of
authorized shares of common stock will not alter the number of shares of common stock presently issued and outstanding or reserved for
issuance, and will not change the relative rights of holders of any shares. The additional authorized shares of common stock, if and when
issued, would have the same rights and privileges as the shares of common stock previously authorized, issued and outstanding. Those rights
do not include preemptive rights with respect to the future issuance of any additional shares.
If the proposed Charter Amendment
is adopted, other than with respect to the shares of common stock subject to the Anticipated Share Reserves and the Plan, the newly authorized
shares of common stock would be unreserved and available for issuance. No further shareholder authorization would be required prior to
the issuance of such shares of common stock by the Company, except where shareholder approval is required by our Certificate of Incorporation,
Bylaws, as amended, or law.
The increase in our authorized
shares of common stock would not have any immediate dilutive effect on the proportionate voting power or other rights of our existing
shareholders. However, any subsequent issuance, or the possibility of such issuance, of shares of common stock (including the exercise
of stock options and warrants, and the issuance of shares of our common stock under the Plan) would reduce each shareholder’s proportionate
interest in the Company, and may depress the market price of our common stock.
Except as set forth in the
Charter Amendment, all of the remaining provisions of the Existing Charter will remain in full force and effect without change.
Anti-takeover Effects
SEC rules and regulations
require disclosure of the possible anti-takeover effects of an increase in authorized capital stock and other charter and bylaw provisions
that could have an anti-takeover effect. Although the Board has not proposed the Charter Amendment and the increase in the number of authorized
shares of common stock with the intent of using the additional shares to prevent or discourage any actual or threatened takeover of the
Company, under certain circumstances, such shares could have an anti-takeover effect. The additional shares of common stock could be issued
to dilute the stock ownership or voting rights of persons seeking to obtain control of the Company or could be issued to persons allied
with the Board or management and, thereby, have the effect of making it more difficult to remove directors or members of management by
diluting the stock ownership or voting rights of persons seeking to effect such a removal. Accordingly, if the proposed Charter Amendment
and authorized common stock increase is approved, the additional shares of authorized common stock may render more difficult or discourage
a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of common stock, or the replacement or
removal of the Board or management.
This proposal is not prompted
by any specific effort or takeover threat currently perceived by the Board or management.
Timing of the Proposed Charter Amendment
If our shareholders
approve Proposal 4 at the Annual Meeting, we will file the Charter Amendment to our Existing Charter with the office of the
Secretary of State of Delaware to implement the increase in the authorized number of shares of common stock as soon as practicable
following the Annual Meeting. Upon approval and following such filing with the Secretary of State of Delaware, the Charter Amendment
will become effective on the date it is filed.
Vote Required; Board of Directors Recommendation
The affirmative (“For”)
votes from the holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting is required to approve
the increase in the authorized number of shares of common stock.
The Board unanimously recommends
a vote “FOR” the approval of this Proposal 4.
PROPOSAL 5
approval,
for purposes of complying with Nasdaq Listing Rule
5635(d), of any future adjustments of exercise prices of the Warrants below
their floor prices in accordance with the terms of such warrants
The information set
forth in this Proposal 5 is qualified in its entirety by reference to the full text of certain Securities Purchase Agreements and
the form of certain Warrants attached as Exhibits 10.1 and 4.1, respectively, to our Current Reports on Form 8-K filed with the SEC
on November 10, 2020 and November 20, 2020, respectively. Shareholders are urged to carefully read these documents.
Background
On November
10, 2020, we entered into a securities purchase agreement (the “Round I Securities Purchase Agreement”) with certain
institutional investors, pursuant to which we issued and sold, in a registered direct offering, an aggregate of 9,404,392
units (the “Round I Units”), each consisting of one share (the “Round I Shares”) of our common stock, par value
$0.001 per share (“Common Stock”) and 0.4 warrant to purchase a share of our Common Stock (the “Round I Investor Warrants”),
at a purchase price of $6.38 per share..
On November 20, 2020, we
entered into another securities purchase agreement (the “Round II Securities Purchase Agreement”, together with the Round
I Securities Purchase Agreement, the “Securities Purchase Agreements”) with certain institutional investors, pursuant to which
we issued and sold, in a registered direct offering, an aggregate of 8,849,560 units (the
“Round II Units”, together with the Round I Units, the “Units”), each consisting of one share (the “Round
II Shares,” and together with the Round I Sharers, the “Shares”) of our Common Stock and 0.4 warrant to purchase a share
of our Common Stock (the “Round II Investor Warrants”, together with the Round I Investor Warrants, the “Warrants”),
at a purchase price of $11.30 per share.
The exercise price of the
Warrants is subject to customary adjustment in case of stock splits, stock dividends, stock combinations and similar recapitalization
transactions. In addition, if we make certain dilutive issuances (with limited exceptions), the exercise price of the Investor Warrants
would be lowered to the per share price for the dilutive issuances. However, without shareholder approval, the Round I Warrants’
exercise price may not be adjusted to be less than $7.78 (the “Round I Floor Price”) and the Round I Warrants’ exercise
price may not be adjusted to be less than $10.08 (the “Round II Floor Price,” and together with Round I Floor Price, the “Floor
Price”). The exercisability of the Warrants may also be limited if, upon exercise,
the holder and its affiliates would in aggregate beneficially own more than 4.99% or 9.99% of the Common Stock, which percentage was elected
by the holder on or prior to the issuance date.
The closing of the above
offerings (the “Offerings”) occurred on November 12, 2020 and November 24, 2020, respectively. As of the date of this proxy
statement, none of the Warrants have been exercised.
Reasons for Requesting Shareholder Approval
Our Common Stock is listed
on the NASDAQ Global Select Market and trades under the symbol “KNDI.” Nasdaq
Listing Rule 5635(d) requires shareholder approval in connection with a transaction other than a public offering involving the sale or
issuance by the issuer of common stock (or securities convertible into or exchangeable for common stock) equal to 20% or more of the common
stock or 20% or more of the voting power outstanding before the issuance for a price that is less than the lower of: (i) the closing price
of the common stock immediately preceding the signing of the binding agreement for the issuance of such securities; or (ii) the average
closing price of the common stock for the five trading days immediately preceding the signing of the binding agreement for the issuance
of such securities (the “Minimum Price”).
The offering of the Units,
the Shares, the Warrants and the underlying Common Stock of the Warrants did not constitute a public offering under the Nasdaq Listing
Rules. As a result, in order to comply with the Nasdaq Listing Rule 5635(d), the per share offering price of the Shares and the exercise
price of the Investor Warrants were at or above the Minimum Price. In addition, without shareholder approval, the exercise price of the
Investor Warrants may not be reduced to be less than the Floor Price (as adjusted for stock splits, stock dividends, stock combinations,
recapitalizations and similar events). As a result, the Offerings were not subject to the shareholder approval requirement provided in
Nasdaq Listing Rule 5635(d), and we were able to issue an aggregate number of the Shares, together with the shares of Common Stock issuable
upon exercise of the Warrants, in excess of 20% of the outstanding shares of our Common Stock and the voting power thereof prior to the
issuance without obtaining the prior shareholder approval.
Under the Securities Purchase
Agreements, for so long as any Warrants remain outstanding, unless we have obtained the shareholder approval, we may not, in any manner,
enter into or affect any issuance of additional shares at a price lower than the Floor Price.
The shareholder approval
will not increase the number of shares of Common Stock issuable upon exercise of the Warrants. With your approval, we may reduce the exercise
price of the Warrants if and only if during the term of Warrants, we consummate a transaction in which we issue shares of Common Stock
or securities convertible into or exercisable for shares of Common Stock at a consideration per share less than the then applicable exercise
price of the Warrants, subject to certain exceptions.
Possible Effects of Disapproval of this Proposal
Our Board is not seeking
the approval of our shareholders to authorize our entry into the Securities Purchase Agreements. The issuance and sale of the Units, Shares
and Warrants have already occurred and the Securities Purchase Agreements and related transaction documents are binding obligations on
us. The Shares and the Warrants will continue to be outstanding, and the terms of the Warrants will remain outstanding obligations of
ours in favor of the holders of such Warrants. In addition, as described above, the shareholder approval will not result in the increase
of number of shares of Common Stock to be issued or issuable upon exercise of the Warrants. It may reduce the exercise price of Warrants
if in the future we issue shares of Common Stock at a per share price less than the then applicable exercise price of Warrants. However,
if Proposal 5 is not approved by our shareholders, we would not be able to raise additional funds by issuing shares of Common Stock or
other securities in a dilutive issuance at a per share price less than the Floor Price. Our ability to successfully implement our business
plans and ultimately generate value for our shareholders is dependent on our ability to maximize capital raising opportunities. If we
were unsuccessful in raising additional capital, we would be required to curtail our plans to expand our manufacturing and sales capabilities
and instead reduce operating expenses, dispose of assets, as well as seek extended terms on our obligations, the effect of which would
adversely impact future operating results. While we will not necessarily issue any shares of Common Stock or other securities below the
Floor Price in the near future, we need the approval of shareholders in order to maintain maximum flexibility in our capital raising abilities.
In addition, our failure
to receive the shareholder approval of this proposal would result in our inability to issue shares at a price below the Floor Price and
accordingly may prevent holders from exercising the Warrants on a cash basis to the extent the exercise price of the Warrants exceeds
the then applicable market price of our Common Stock. We do not expect that holders of the Warrants will exercise the Warrants in that
case, and, as a result, we would not receive any additional funds.
Vote Required; Board of Directors Recommendation
Approval of Proposal 5 requires
the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote that are actually voted
on the matter (assuming a quorum is present). Abstentions and broker non-votes are not considered votes cast for the foregoing purpose,
and will have no effect on the vote for this proposal.
The Board of Directors recommends a vote “FOR”
the approval, for purposes of complying with Nasdaq Listing Rule 5635(d), of any future adjustments of exercise prices of the warrants
below their floor prices in accordance with the terms of such warrants.
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
Market Information
Kandi’s common stock
is currently traded on the NASDAQ Global Select Market under the symbol “KNDI”.
The closing price per share
for Kandi’s common stock was $4.56 on November 4, 2021.
Shareholders
As of November 4, there were
29 shareholders of record of Kandi’s common stock. This does not include all beneficial holders who hold shares through their brokerage
accounts.
Dividend Policy
We have never declared dividends
or paid cash dividends. Our board of directors will make any future decisions regarding dividends. We currently intend to retain and use
any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the near future.
CORPORATE GOVERNANCE
Leadership Structure and Role in Risk Oversight
Mr. Hu has served as Chairman
of the Board, President and Chief Executive Officer of the Company since June 2007. Our Board continues to believe there are important
advantages to Mr. Hu serving in both roles at this time. Mr. Hu is the director most familiar with our business and industry and is best
situated to propose Board agendas and lead Board discussions on important matters. Mr. Hu provides a strong link between management and
the Board, which promotes clear communication and enhances strategic planning and implementation of corporate strategies. Another advantage
is the clarity of leadership provided by one person representing us to employees, shareholders and other stakeholders. Further, four of
our seven current Board members have been deemed to be independent by our Board; therefore, we believe our board structure provides sufficient
independent oversight of our management.
Our Board is responsible
for oversight of the Company’s risk management practices while management is responsible for the day-to-day risk management processes.
In the Board’s opinion, this division of responsibilities is the most effective approach for addressing the risks facing the Company.
The Board receives periodic reports from management regarding the most significant risks facing the Company. In addition, the Audit Committee
assists the Board in its oversight of our risk assessment and risk management policies. Our Audit Committee is empowered to appoint and
oversee our independent registered public accounting firm, monitor the integrity of our financial reporting processes and systems of internal
controls and provide an avenue of communication among our independent auditors, management, our internal auditing department and our Board.
The Board has not named a
lead independent director.
Diversity
The Board does not have a
formal policy with respect to Board nominee diversity. However, in recommending proposed nominees to the full Board, the Nominating and
Corporate Governance Committee considers diversity in the context of the Board as a whole and considers personal characteristics (gender,
ethnicity and age), skills and experiences, qualifications and the background of current and prospective directors as important factors
in identifying and evaluating potential director nominees, so that the Board, as a whole, will possess what the Board believes are the
appropriate skills, talent, expertise and backgrounds necessary to meet the long-term interests of our shareholders and the goals and
objectives of the Company.
Director Independence
Our Board reviews each nominee’s
relationship with the Company in order to determine whether a director nominee is independent pursuant to the listing rules of NASDAQ.
Our Board has determined that each of Jerry Lewin, Chen Liming, Henry Yu and Lin Yi meets the independence requirements and standards
currently established by NASDAQ. All of the members of each of the Audit Committee, the Compensation Committee and the Nominating and
Corporate Governance Committee are independent as defined in NASDAQ Rule 5605(a)(2).
As required under applicable
NASDAQ listing standards, in the 2020 fiscal year, our independent directors met 4 times in regularly scheduled executive sessions at
which only our independent directors were present.
Board Meetings and Committee Meeting; Annual
Meeting Attendance
During the year ended December
31, 2020, the Board held 3 meetings and acted through unanimous consent on 9 different occasions. In addition, the Audit Committee held
4 meetings and acted through unanimous consent on 0 occasion; the Nominating and Corporate Governance Committee acted through unanimous
consent on 1 occasion; and the Compensation Committee acted through unanimous consent on 1 occasion. During the year ended December 31,
2020, each of the directors attended, in person or by telephone, more than 75% of the Annual Meetings of the Board and the committees
on which he or she served. We encourage our Board members to attend our Annual Meetings, but we do not have a formal policy requiring
attendance.
Audit Committee
The Audit Committee currently
consists of Henry Yu, Jerry Lewin and Chen Liming, each of whom is independent under NASDAQ listing standards. Mr. Yu serves as Chairman
of our Audit Committee. The Board determined that each of Mr. Yu and Mr. Lewin qualifies as an “audit committee financial expert”,
as defined by Item 407 of Regulation S-K and NASDAQ Rule 5605(a)(2). In reaching this determination, the Board made a qualitative assessment
of Mr. Yu’s and Mr. Lewin’s level of knowledge and experience based on a number of factors, including formal education and
business experience.
The Audit Committee has been
established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee is responsible for assisting the Board in
fulfilling its oversight responsibilities with respect to: (i) the financial reports and other financial information provided by us to
the public or any governmental body; (ii) our compliance with legal and regulatory requirements; (iii) our systems of internal controls
regarding finance, accounting and legal compliance that have been established by management and the Board; and (iv) our auditing, accounting
and financial reporting processes generally. In addition, the Audit Committee is responsible for the appointment, retention, compensation
and oversight of the work of any registered public accounting firm employed by the Company (including resolution of disagreements between
management and the accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work
or performing other audit, review or other services. Any such registered public accounting firm must report directly to the Audit Committee.
The Audit Committee has the ultimate authority and responsibility to evaluate and, where appropriate, replace the registered public accounting
firm. The Audit Committee’s policy is to pre-approve all audit and non-audit services by category, including audit-related services,
tax services, and other permitted non-audit services. In accordance with the policy, the Audit Committee regularly reviews and receives
updates on specific services provided by our independent registered public accounting firm. All services rendered by Marcum Bernstein&
Pinchuk LLP (“MBP”), our independent auditor, to the Company are permissible under applicable laws and regulations. During
fiscal year 2020, all services requiring pre-approval and performed by MBP were approved in advance by the Audit Committee in accordance
with the pre-approval policy. The Audit Committee operates under a written charter, a copy of which is available on our website at http://en.kandivehicle.com/
under the link “Investor Relations”.
Principal Accounting Fees and Services
The following table represents the fees paid to
Marcum Bernstein & Pinchuk LLP for the years ended December 31, 2020 and 2019, respectively.
|
|
|
2020
|
|
|
2019
|
|
|
Audit Fees
|
|
$
|
460,000
|
|
|
$
|
410,000
|
|
|
Audit Related Fees
|
|
$
|
93,800
|
|
|
$
|
12,300
|
|
|
Tax Fees
|
|
$
|
-
|
|
|
$
|
-
|
|
|
All other fees
|
|
$
|
715
|
|
|
$
|
-
|
|
|
TOTAL FEES
|
|
$
|
554,515
|
|
|
$
|
422,300
|
|
Audit Fees —This category includes
the audit of our annual financial statements and services that are normally provided by the independent auditors in connection with engagements
for those fiscal years.
Audit-Related Fees — This category
consists of assurance and related services by the independent auditors that are reasonably related to the performance of the audit or
review of our financial statements and are not reported above under “Audit Fees”.
Tax Fees — This category consists
of professional services rendered by the Company’s independent registered public accounting firm for tax compliance and tax advice.
The services for the fees disclosed under this category include tax return preparation and technical tax advice.
All Other Fees — This category
consists of fees for other miscellaneous items.
Pre-Approval Policies and Procedures
All of the services rendered
to us by our independent registered public accountants were pre-approved by the Audit Committee.
Compensation Committee
The Compensation Committee
currently consists of Chen Liming (Chairman), Henry Yu and Lin Yi, each of whom is independent under NASDAQ listing standards. Mr. Chen
currently serves as Chairman of our Compensation Committee. The Compensation Committee is responsible for the administration of all salary,
bonus and incentive compensation plans for our officers and key employees. The Compensation Committee reviews and, as it deems appropriate,
recommends to the Board policies, practices and procedures relating to the compensation of the officers and other managerial employees
and the establishment and administration of employee benefit plans. It advises and consults with the officers of the Company as may be
requested regarding managerial personnel policies. The Compensation Committee has the authority to engage independent advisors to assist
it in carrying out its duties. We believe that the functioning of our Compensation Committee complies with, any applicable requirements
of the NASDAQ Global Select Market and SEC rules and regulations. The Compensation Committee operates under a written charter, which is
available on our website at http://en.kandivehicle.com/ under the link “Investor Relations”.
Compensation Committee Interlocks and Insider
Participation in Compensation Decisions
All members of the Compensation
Committee are independent directors. No member of our Compensation Committee is a current or former officer or employee of the Company
or any of its subsidiaries, and no director or executive officer of the Company is a director or executive officer of any other corporation
that has a director or executive officer who is also a director of the Company.
Compensation Committee Report on Executive
Compensation
The following report has
been submitted by the Compensation Committee of our Board of Directors:
The Compensation Committee
of our Board of Directors has reviewed and discussed our Compensation Discussion and Analysis with management. Based on this review and
discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included
in our definitive proxy statement on Schedule 14A for our Annual Meeting, as filed with the Commission.
|
|
Compensation Committee of the Board of Directors
|
|
|
Respectfully submitted,
|
|
|
|
|
|
/s/ Chen Liming (Chairman)
|
|
|
|
|
|
/s/ Henry Yu
|
|
|
|
|
|
/s/ Lin Yi
|
|
|
|
|
|
November 18, 2021
|
The foregoing Compensation Committee Report
does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any other filing of our company
under the Securities Act or the Exchange Act, except to the extent we specifically incorporate this Compensation Committee Report by reference
therein.
Nominating and Governance Committee
The Nominating and Corporate
Governance Committee (the “Nominating Committee”) currently consists of Lin Yi (Chairman), Henry Yu and Chen Liming, each
of whom is independent under NASDAQ listing standards. During fiscal year ended 2020, Mr. Lin served as Chairman of the Nominating Committee.
The responsibilities of the Nominating Committee include: (i) identifying individuals qualified to serve as directors or fill any interim
vacancies; (ii) recommending to the Board the selection of director nominees for each meeting of the shareholders at which directors are
elected; (iii) advising the Board with respect to the composition, procedures and committees of the Board; and (iv) considering any other
corporate governance issues that may arise from time to time, and developing appropriate recommendations for the Board. In recommending
nominees to the Board, the Nominating Committee considers various criteria, including the ability of the individual to meet the NASDAQ
“independence” requirements, general business experience, general financial experience, knowledge of the Company’s industry
(including past industry experience), education, and demonstrated character and judgment. The Nominating Committee uses its, as well as
the entire Board’s, network of contacts when compiling a list of potential director candidates and has the authority to engage outside
consultants. The Nominating Committee will consider director nominees recommended by a shareholder if the shareholder mails timely notice
to the Secretary of the Company at its principal offices, which notice includes (i) the name, age and business address of such nominee,
(ii) the principal occupation of such nominee, (iii) a brief statement as to such nominee’s qualifications, (iv) a statement that
such nominee consents to his or her nomination and will serve as a director if elected, (v) whether such nominee meets the definition
of an “independent” director under the NASDAQ listing standards and (vi) the name, address, class and number of shares of
capital stock of the Company held by the nominating shareholder. Any person nominated by a shareholder for election to the Board will
be evaluated based on the same criteria as all other nominees. The Nominating Committee operates under a written charter, a copy of which
was filed as an exhibit to a Current Report on a Form 8-K, filed November 5, 2007 and is available on our website at http://en.kandivehicle.com/
under the link “Investor Relations”.
Director Nomination Procedures
The Nominating Committee
is generally responsible for soliciting recommendations for candidates for the Board, developing and reviewing background information
for such candidates, and making recommendations to the Board with respect to candidates for directors proposed by shareholders. The nomination
process involves a careful examination of the performance and qualifications of each incumbent director and potential nominees before
deciding whether such person should be recommended for nomination by the Nominating Committee and nominated by the Board. The Board believes
that the business experience of its directors has been, and continues to be, critical to the Company’s success. Directors should
possess integrity, independence, energy, forthrightness, analytical skills and commitment to devote the necessary time and attention to
the Company’s affairs. Directors must possess a willingness to challenge and stimulate management and the ability to work as part
of a team in an environment of trust.
In selecting candidates for
appointment or re-election to the Board, the Nominating Committee considers the following criteria: (i) personal and professional ethics
and integrity, including a reputation for integrity and honesty in the business community; (ii) experience as an executive officer of
companies or as a senior leader of complex organizations, including scientific, government, financial or technological organizations;
(iii) financial knowledge, including an understanding of finance, accounting, the financial reporting process, and company measures for
operating and strategic performance; (iv) ability to critically and independently evaluate business issues, contributing a diverse perspectives
or viewpoints, and making practical and mature judgments; (v) a genuine interest in the Company, and the ability to spend the time required
to make substantial contributions as a director; and (vi) no conflict of interest or legal impediment that would interfere with the duty
of loyalty to the Company and its shareholders. In addition, the Nominating Committee reviews the qualifications of the directors to be
appointed to serve as members of the Audit Committee to ensure that they meet the financial literacy and sophistication requirements under
the NASDAQ rules and that at least one of them qualifies as an “audit committee financial expert” under the rules of the SEC.
The Board will generally
consider all relevant factors, including, among others, each nominee’s applicable expertise and demonstrated excellence in his or
her field, the usefulness of such expertise to the Company, the availability of the nominee to devote sufficient time and attention to
the affairs of the Company, the nominee’s reputation for personal integrity and ethics, and the nominee’s ability to exercise
sound business judgment. Director nominees are reviewed in the context of the existing membership of the Board (including the qualities
and skills of the existing directors), the operating requirements of the Company and the long-term interests of its shareholders.
There were no arrangements
or understandings between any of our directors and any other person pursuant to which any director was to be selected as a director or
selected as a nominee.
Family Relationships
No family relationships exist
among any of our current director nominees or executive officers.
Involvement in Certain Legal Proceedings
To our knowledge, our directors
and executive officers were not involved in any legal proceedings as described in Item 401(f) of Regulation S-K in the past ten (10) years.
Certain putative shareholder class actions beginning March 2017 and purported shareholder derivative actions beginning May 2017 filed
against the Company and certain of our current and former directors and officers have been disclosed in the Company’s prior quarterly
reports and the Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Shareholder Communications
The Board welcomes communications
from our shareholders, and maintains a process for shareholders to communicate with the Board. Shareholders who wish to communicate with
the Board may send a letter to the Chairman of the Board of Kandi Technologies Group, Inc., at Jinhua New Energy Vehicle Town, Jinhua,
Zhejiang Province, People’s Republic of China 321016. The mailing envelope must contain a clear notation indicating that the enclosed
letter is a “Shareholder-Board Communication”. All such letters should identify the author as a security holder. All such
letters will be reviewed by the Chairman of the Board and submitted to the entire Board no later than the next regularly scheduled Board
meeting.
Code of Ethics
We have adopted a “code
of ethics” as defined by regulations promulgated under the Securities Act of 1933, as amended, and the Exchange Act that applies
to all of our directors and employees worldwide, including our principal executive officer, principal financial officer and principal
accounting officer. A current copy of our Code of Ethics is available on our website (http://en.kandivehicle.com/). A copy of our Code
of Ethics will be provided to you without charge upon written request to Board Secretary, Kandi Technologies Group, Inc., Jinhua New
Energy Vehicle Town, Jinhua, Zhejiang Province, People’s Republic of China, 321016.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets
forth information known to us, as of November 4, 2021, relating to the beneficial ownership of shares of common stock by each person who
is known by us to be the beneficial owner of more than five percent (5%) of the outstanding shares of common stock; each director; each
executive officer; and all executive officers and directors as a group. We believe that all persons named in the table have sole voting
and investment power with respect to all shares of common stock shown as being owned by them. The applicable percentages of ownership
are based on an aggregate of 77,385,130 shares of our Common Stock outstanding on November 4, 2021. Unless indicated otherwise, the mailing
address of each beneficial owner is Jinhua New Energy Vehicle Town, Jinhua City, Zhejiang Province, China 321016.
|
Title of Class
|
|
Name of Beneficial Owner
|
|
Amount and
Nature of
Beneficial
Ownership
|
|
|
Percent of
Class
|
|
|
Named Executive Officers and Directors
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
Hu Xiaoming
|
|
|
14,326,481
|
(1)
|
|
|
18.51
|
%
|
|
Common Stock
|
|
Jehn Ming Lim
|
|
|
1,500
|
|
|
|
*
|
|
|
Common Stock
|
|
Henry Yu
|
|
|
123,500
|
|
|
|
*
|
|
|
Common Stock
|
|
Jerry Lewin
|
|
|
100,000
|
|
|
|
*
|
|
|
Common Stock
|
|
Chen Liming
|
|
|
-
|
|
|
|
-
|
|
|
Common Stock
|
|
Lin Yi
|
|
|
-
|
|
|
|
-
|
|
|
Common Stock
|
|
Sun Chenming
|
|
|
5,000
|
|
|
|
*
|
|
|
Common Stock
|
|
Wang Lin
|
|
|
7,000
|
|
|
|
*
|
|
|
All officers and directors
|
|
|
|
|
14,563,481
|
|
|
|
18.82
|
%
|
|
Other 5% Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
Excelvantage Group Limited (3)
|
|
|
12,821,404
|
(2)
|
|
|
16.57
|
%
|
|
|
(1)
|
Includes
(i) 1,505,077 shares owned directly by Mr. Hu, (ii) 12,821,404 shares owned by Excelvantage Group Limited. As reflected in footnote 2,
Mr. Hu may be deemed to be the beneficial owner of these shares.
|
|
|
(2)
|
On
March 29, 2010, Hu Xiaoming, our Chief Executive Officer, President and Chairman of the Board of Directors, became the sole shareholder
of Excelvantage Group Limited. Through his position as the sole shareholder in Excelvantage Group Limited, Mr. Hu has the power to dispose
of or direct the disposition of the shares of the ordinary shares in Excelvantage Limited Group. As a result, Mr. Hu may, under the rules
of the Securities and Exchange Commission, be deemed to be the beneficial owner of the shares of common stock.
|
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Securities
Exchange Act of 1934 requires that the Company’s directors and executive officers and persons who beneficially own more than ten
percent (10%) of a registered class of its equity securities, file with the SEC reports of ownership and changes in ownership of its common
stock and other equity securities. Executive officers, directors, and beneficial owners of greater than ten percent (10%) of a registered
class of the Company’s equity securities are required by SEC regulation to furnish the Company with copies of all Section 16(a)
reports that they file. Based solely upon a review of the copies of such reports furnished to us or written representations that no other
reports were required, the Company believes that, during fiscal year 2020, all filing requirements applicable to its executive officers,
directors, and greater than ten percent (10%) beneficial owners were met, except for the following: (i) Henry Yu did not timely file Form
4s after acquiring 5,000 shares and 5,000 shares on March 9, 2020 and August 12, 2020, respectively. However, the Form 4s corresponding
to these transactions were subsequently filed on April 27, 2020 and November 23, 2020, respectively. (ii) Jerry Lewin did not timely file
a Form 4 after being issued 5,000 shares on August 12, 2020. The Form 4 corresponding to this transaction was subsequently filed on November
30, 2020. (iii) Sun Chenming did not timely file a Form 4 after his disposal of 13,000 shares on November 18, 2020. The Form 4 corresponding
to such disposal was subsequently filed on December 9, 2020. As of March 30, 2021, all of the filings mentioned above have been made.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes
the compensation earned during the years ended December 31, 2020 and 2019, by the individuals who served as our Chief Executive Officer
and Chief Financial Officer during any part of fiscal year 2020 or any other executive officer with total compensation in excess of $100,000
during fiscal year 2020. The individuals listed in the table below are referred to as the “named executive officers”.
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Non-Equity
Incentive Plan
|
|
|
Nonqualified
Deferred
Compensation
|
|
|
All
Other
|
|
|
|
|
|
Name
and Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Awards
($)(4)
|
|
|
Awards
($)(4)
|
|
|
Compensation
($)
|
|
|
Earnings
($)
|
|
|
Compensation
($)
|
|
|
Total
($)
|
|
|
Hu
Xiaoming (1)
|
|
2020
|
|
$
|
52,173
|
|
|
|
-
|
|
|
|
168,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
220,173
|
|
|
CEO,
President and
|
|
2019
|
|
$
|
52,120
|
|
|
|
-
|
|
|
|
264,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
316,120
|
|
|
Chairman
of the Board
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lim
Jehn Ming (2)
|
|
2020
|
|
|
75,000
|
|
|
|
7,605
|
|
|
|
9,270
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
91,875
|
|
|
CFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zhu
Xiaoying (3)
|
|
2020
|
|
|
27,174
|
|
|
|
-
|
|
|
|
33,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
60,774
|
|
|
Former
CFO
|
|
2019
|
|
$
|
72,388
|
|
|
|
-
|
|
|
|
52,800
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
125,188
|
|
|
|
(1)
|
Mr.
Hu was appointed as CEO and President of the Company on June 29, 2007.
|
|
|
(2)
|
Mr.
Lim was appointed as the Company’s CFO, effective May 15, 2020.
|
|
|
(3)
|
Ms.
Zhu was appointed as the Company’s interim CFO, effective January 29, 2019 and resigned from that position on May 15, 2020. Ms.
Zhu’s compensation disclosed above reflects the compensation she received during her employment with the Company as interim CFO.
|
|
|
(4)
|
The
amounts in this column reflect the aggregate grant date fair value under FASB ASC Topic 718 of awards made during the respective year.
|
Salary and Incentive Compensation
In fiscal 2020, the primary
components of our executive compensation programs were base salary and equity compensation.
Salary
We use base salary to fairly
and competitively compensate our executives, including the named executive officers, for the jobs we ask them to perform. We view base
salary as the most stable component of our executive compensation program, as this amount is not at risk. We believe that the base salaries
of our executives should be targeted at or above the median of base salaries for executives in similar positions with similar responsibilities
at comparable companies, consistent with our compensation philosophy. At the end of the year, each executive’s performance is evaluated
by our Compensation Committee, which takes into account the individual’s performance, responsibilities of the position, adherence
to our core values, experience, and external market conditions and practices.
Incentive Compensation
We believe it is a customary
and competitive practice to include an equity-based element of compensation to the overall compensation package for our named executive
officers. We believe that a significant portion of the compensation paid to our named executive officers should be performance -based
and therefore at risk. Awards made are granted under the Kandi Technologies Group, Inc. Omnibus Long-Term Incentive Plan (the “Plan”).
At our 2008 annual shareholders
meeting, our shareholders approved the adoption of the Plan. As of December 31, 2020, 2,600,000 options have been granted under the Plan
to the Company’s employees and directors, of which 2,593,332 have been exercised, and 6,668 have been forfeited.
Pursuant to Pre-Approved
Award Grant Sub-Plan approved by the Board of Directors December 30, 2013 and modified on July 25, 2014, if the Non-GAAP net income in
one year increases by 10% compared with the previous year, the total of 335,000 shares of the common stock from the Plan (as disclosed
in details in the next paragraph below) to be granted to certain employees (management of the Company is authorized to determine list
of employees and stock amount rewarded based on position adjustment of employees, performance and tenure of each employee in that year)
will be granted for that year; if the Non-GAAP net income in one year is less than the Non-GAAP net income in the previous year, then
no stock will be granted in that year; if the Non-GAAP net income in one year is 10% less than or 10% more than the Non-GAAP net income
in the previous year, then the stock grant amount will decrease or increase according to the Non-GAAP net income decrease or increase
percentage, but the total amount rewarded may not be over 200%.
On May 20, 2015, the shareholders
of the Company approved an increase of 9,000,000 shares under the Plan at its annual meeting. The fair value of each award granted under
the Plan is determined based upon the closing price of the Company’s stock on the date of the grant. To the extent that the performance
goal is not met and so no shares become due, no compensation cost is recognized and any recognized compensation cost during the applicable
year is reversed. The number of shares of common stock granted under the Plan with respect to fiscal 2014 was 670,000 shares based on
the Non-GAAP Net Income of 2014. Compensation expense is recognized in General and Administrative Expenses. On April 23, 2015 and June
7, 2015, the Company granted 550,000 shares and 120,000 shares, respectively, to the senior management and key employee as year 2014 performance
awards. On April 13, 2016, the Company granted 670,000 shares to the senior management and key employee as year 2015 performance awards.
In February 2017, the Board of Directors authorized the Company to grant 246,900 shares to a list of management members as compensation
for their past services pursuant to Section 11 of the Company’s 2008 plan. On September 26, 2016, the Board approved the termination
of the previous Board’s Pre-Approved Award Grant Sub-Plan under the 2008 Plan and adopted a new plan to reduce the total number
of shares of common stock of the stock award for select executives and key employees from 335,000 shares of common stock to 250,000 shares
of common stock for each fiscal year and the other terms were as same as before. There was no grant under the Board’s Pre-Approved
Award Grant Sub-Plan in the years of 2017, 2018, 2019 and 2020.
On May 29, 2015, the Compensation
Committee of the Board of Directors of the Company approved the grant of stock options to purchase 4,900,000 shares of common stock at
an exercise price of $9.72 per share to the Company’s senior executives. The stock options will vest ratably over three years and
expire on the tenth anniversary of the grant date. As of December 31, 2020, 3,000,000 shares have been exercised, and 1,000,000 shares
have been forfeited. The granted stock option to the directors and officers are as below:
|
Name
|
|
stock
options
|
|
|
Hu Xiaoming
|
|
|
900,000
|
|
Outstanding Equity Awards at 2020 Fiscal Year
End
The following table sets
forth information regarding all unexercised, outstanding equity awards held, as of December 31, 2020, by those individuals who served
as our named executive officers during any part of fiscal year 2020.
|
Name
|
|
Number of
Securities
underlying
Unexercised
Exercisable
|
|
|
Number of
Securities
underlying
Unexercised
Options(#)
Unexercisable
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Option
Exercise
Price
($)(1)
|
|
|
Option
Expiration
Date
|
|
Number of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)
|
|
|
Market
Value of
Shares
or Units
of Stock
That
Have
Not
Vested
($)
|
|
|
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
|
|
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)
|
|
|
Hu Xiaoming
|
|
|
900,000
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
9.72
|
|
|
5/28/2025
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1)
|
The
grant date fair value of each share of common stock option is $9.72, calculated in accordance with FASB Topic 718.
|
Employment Agreements
Zhejiang Kandi Technologies
has a three-year-term employment agreement with Mr. Hu, expiring June 9, 2020. The agreement provides an annual salary for Mr. Hu with
bonuses to be decided at the discretion of our Board at the year end.
On May 15, 2020, the Company
and Mr. Lim entered into a three-year-term employment agreement, pursuant to which Mr. Lim shall receive an annual salary in the amount
of $120,000. He will also receive 6,000 shares of the common stock under the Company’s 2008 Omnibus Long-Term Incentive Plan, which
shall be issuable evenly on each six-month anniversary hereof or as otherwise determined by the Board of Directors.
The form of the Mr. Hu’s
agreement was previously filed and incorporated herein by reference from Exhibit 10.2 to the Company’s Annual Report on Form
10-K filed on March 16, 2015. Mr. Lim’s employment agreement was previously attached as Exhibit 10.1 to the Company’s Current
Report on Form 8-K filed on May 21, 2020 and is incorporated herein by reference.
Potential Payments Upon Termination or Change
of Control
Under Chinese law, we may
only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date
on which the employment agreement is scheduled to expire. If we fail to provide this notice or if we wish to terminate an employment agreement
in the absence of cause, as defined in the agreement, then we are obligated to pay the employee one month’s salary for each year
we have employed the employee. We are, however, permitted to terminate an employee for cause without penalty pursuant to the employee’s
employment agreement. If the named executive officer is not terminated for cause, the Company will pay the remaining portion of the executive
officer’s salary.
Director Compensation (excluding Named Executive
Officers)
The following table sets
forth certain information regarding the compensation earned by or awarded during the 2020 fiscal year to each of our non-executive directors:
|
Name
|
|
Fees
Earned or
Paid in
Cash
($)(2)
|
|
|
Stock
Awards
($) (1)(2)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
|
Lin Yi
|
|
$
|
15,942
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
15,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Yu
|
|
$
|
44,000
|
|
|
|
18,100
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
62,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerry Lewin
|
|
$
|
44,000
|
|
|
|
26,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
70,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chen Liming
|
|
$
|
15,942
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
15,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wang Lin
|
|
$
|
37,101
|
|
|
|
6,720
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
43,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sun Chenming
|
|
$
|
28,985
|
|
|
|
16,800
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
45,785
|
|
|
|
(1)
|
The
amounts in these columns represent the aggregate grant date fair value of stock awards granted to our non-named executive officer directors
during the fiscal year ended December 31, 2019, in accordance with ASC Topic 718. In connection with his appointment to the Board of
Directors in July 2011, the Board of Directors authorized the Company to issue to Mr. Yu 5,000 shares of Company’s restricted common
stock every six months, par value $0.001. The closing stock price at the grant date is $2.65 per share. Similarly, in August 2011, the
Board of Directors authorized the Company to issue to Mr. Lewin 5,000 shares of Company’s restricted common stock every six months,
par value $0.001. The closing stock price at the grant date is $1.81 per share. As of December 31, 2019, 80,000 shares of restricted
common stock had been issued to Mr. Lewin and Mr. Yu, respectively.
|
|
|
(2)
|
In
setting director compensation, we consider the significant amount of time that directors spend fulfilling their duties to the Company,
as well as the skill level required to serve as a director and manage the affairs of the Company. Certain directors receive a monthly
fee as follows: (i) Lin Yi receives a monthly fee of RMB5,000 (approximately $740) starting May 2017; (ii) Jerry Lewin receives a monthly
fee of $2,000; (iii) Henry Yu receives a monthly fee of $2,000; and (iv) Chen Liming receives a monthly fee of RMB 5,000 (approximately
$740) starting 2014. During the fiscal year of 2020, Lin Yi and Chen Liming each received a one-time cash bonus of RMB50,000 (approximately
$7,246). Henry Yu and Jerry Lewin each received a one-time cash bonus of $20,000.
|
The aggregate number of stock options and restricted
shares outstanding, as of December 31, 2020, for each of the non-named executive officer directors were as follows:
|
Name
|
|
Options
|
|
|
Restricted
stock
|
|
|
Henry Yu
|
|
|
0
|
|
|
|
90,000
|
(1)
|
|
Chen Liming
|
|
|
0
|
|
|
|
0
|
|
|
Lin Yi
|
|
|
0
|
|
|
|
0
|
|
|
Jerry Lewin
|
|
|
0
|
|
|
|
90,000
|
|
|
Wang Lin
|
|
|
0
|
|
|
|
0
|
|
|
Sun Chenming
|
|
|
0
|
|
|
|
0
|
|
|
|
(1)
|
Besides
the 90,000 shares of restricted common stock, Mr. Yu owns additional 34,146 shares of the Company’s common stock that he purchased
from the open market.
|
RELATED PARTY TRANSACTIONS
Transactions with Related Parties
For the discussion of Transactions
with Related Parties, please refer to NOTE 25 – SUMMARIZED INFORMATION OF EQUITY METHOD INVESTMENT IN THE AFFILIATE COMPANY contained
in the Annual Report on Form 10-K filed with the SEC on March 30, 2021, which is incorporated by reference hereto.
Procedures For Approval of Related Party Transactions
According to the Company
policy on Related-Party Transactions (the “Policy”), a “Related Transaction” is “any transaction, includes,
but not limited to, any financial transaction, arrangement, relationship (including any indebtedness or guarantee of indebtedness) or
any series of similar transactions, arrangements or relationships, since the beginning of the Company’s last fiscal year, or any
currently proposed transaction, and the amount involved exceeds $120,000, and in which any related party had or will have a direct or
indirect material interest”. The Policy’s definition of a “Related Party” is in line with the definition set forth
in the instructions to Item 404(a) of Regulation S-K promulgated by the SEC.
Under the Policy, The Company’s
proposed material related transaction with related persons shall be submitted to the Board for consideration and discussion after an independent
director presents his/her approval opinion beforehand. The Audit Committee shall conduct an audit on the related-party transaction and
prepare a written opinion, and can engage independent financial advisers to issue a report as a basis for its judgment, then submit it
to the Board. The Policy states that the Board meeting can be held as long as non-affiliated directors making up a majority of the Board
attend, and any resolution made by the Board must be approved by a majority of non-affiliated directors.
Director Independence
Messrs. Henry Yu, Chen Liming,
Lin Yi and Jerry Lewin are all non-employee directors, all of whom our Board has determined to be independent pursuant to NASDAQ rules.
All of the members of our Audit Committee, Nominating/Corporate Governance Committee and Compensation Committee are independent pursuant
to NASDAQ rules.
AUDIT COMMITTEE REPORT
The Audit Committee has furnished
the following report on its activities during the fiscal year ended December 31, 2020. The report is not deemed to be “soliciting
material” or “filed” with the SEC or subject to the SEC’s proxy rules or to the liabilities of Section 18 of the
Exchange Act, and the report shall not be deemed to be incorporated by reference into any prior or subsequent filing under the Securities
Act or the Exchange Act except to the extent that the Company specifically incorporates it by reference into any such filing. The Audit
Committee charter sets forth the responsibilities of the Audit Committee. A copy of the Audit Committee charter is available on our website
at http://en.kandivehicle.com/ under the links “Investor Relations -- Corporate Governance”.
The primary function of the
Audit Committee is to assist the Board in its oversight and monitoring of our financial reporting and auditing process. Management has
primary responsibility for our financial statements and the overall reporting process, including maintaining effective internal control
over financial reporting and assessing the effectiveness of our system of internal controls. The independent registered public accounting
firm audits the annual financial statements prepared by management, expresses an opinion as to whether those financial statements fairly
present our financial position, results of operations and cash flows in conformity with U.S. generally accepted accounting principles,
and discusses with the Audit Committee any issues they believe should be raised with the Audit Committee. These discussions include a
discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and
the clarity of disclosures in the financial statements. The Audit Committee monitors our processes, relying, without independent verification,
on the information provided to it and on the representations made by management and the independent registered public accounting firm.
The Audit Committee has reviewed
and discussed the audited financial statements with our management and representatives of Marcum Bernstein & Pinchuk LLP (“MBP”),
our independent registered public accounting firm. The Audit Committee has discussed MBP’s judgments as to the quality, not just
the acceptability, of our accounting principles and such other matters as are required to be discussed with the Audit Committee by Statement
on Auditing Standards No. 114 (which superseded Statement on Auditing Standards No. 61), other standards of the Public Company Accounting
Oversight Board (United States), rules of the SEC, and other applicable regulations. The Audit Committee also received the written disclosures
and the letter from MBP required by applicable requirements of the Public Company Accounting Oversight Board regarding the firm’s
independence from our management and has discussed with MBP its independence. The members of the Audit Committee considered whether the
services provided by MBP, for the year ended December 31, 2020, are compatible with maintaining its independence. The Board has delegated
to the Audit Committee the authority to approve the engagement of our independent registered public accounting firm.
Based upon its reviews and
discussions, the Audit Committee recommended to our Board that the audited financial statements be included in our Annual Report on Form
10-K for the fiscal year ended December 31, 2020 for filing with the SEC and the Board approved that recommendation.
|
|
/s/ Henry Yu (Chairman)
|
|
|
|
|
|
/s/ Jerry Lewin
|
|
|
|
|
|
/s/ Chen Liming
|
November 18, 2021
SUBMISSION OF SHAREHOLDER PROPOSALS
If you wish to have a proposal included in our proxy statement and
form of proxy for next year’s annual meeting in accordance with Rule 14a-8 under the Exchange Act, your proposal must be received
by us at our principal executive office on or before September 29, 2022. A proposal which is received after that date or which otherwise
fails to meet the requirements for shareholder proposals established by the SEC will not be included. The submission of a shareholder
proposal does not guarantee that it will be included in the proxy statement.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Kandi currently files annual,
quarterly and current reports, proxy statements, and other information with the SEC. You may read and copy any reports, statements, or
other information we file at the SEC’s public reference room at 100 F Street, N.E., Washington D.C. 20549. You may obtain information
on the operation of the public reference room by calling the SEC at (800) SEC-0330. Copies of reports and other information regarding
registrants that file electronically are available on the SEC’s web site at http://www.sec.gov.
You may request, and we will provide at no cost, a copy of these filings,
including any exhibits to such filings, by writing or telephoning us at the following address: Attn: Board Secretary, Kandi Technologies
Group, Inc. at Building 11, West Floor 1, 1 Jiaogong Road, Xihu District, Hangzhou City, Zhejiang Province, China. You may also access
these filings at our web site under the investor relations link at http://en.kandivehicle.com/. The information provided on our website
is not part of this proxy statement, and therefore is not incorporated by reference.
Statements contained in this
proxy statement, or in any document included or delivered with this proxy statement, regarding the contents of any contract or other document,
are not necessarily complete and each such statement is qualified in its entirety by reference to that contract or other document filed
as an exhibit with the SEC.
|
|
By
|
Order of the Board of Directors
|
|
|
|
|
|
|
|
/s/ Hu Xiaoming
|
|
|
|
Hu Xiaoming
|
|
|
|
Chairman of the Board, President and
|
|
|
|
Chief Executive Officer
|
ANNEX A
PROPOSED CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
KANDI TECHNOLOGIES GROUP, INC.
KANDI TECHNOLOGIES GROUP,
INC. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware
(the “DGCL”), hereby certifies as follows:
1. The name of the Corporation
is KANDI TECHNOLOGIES GROUP, INC. The Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State
of Delaware on March 31, 2004 and amended on July 11, 2007 and December 21, 2012 (as amended, the “Certificate of Incorporation”).
2. This Certificate of Amendment
amends and restates the FOURTH section of the Certificate of Incorporation to read in its entirety as follows:
“The total number
of shares of stock which this corporation is authorized to issue is One Billion One Hundred Million (1,100,000,000), of which One Billion
(1,000,000,000) shares shall be common stock and One Hundred Million (100,000,000) shares shall be preferred stock, each with a par value
of $.001 per share.”
3. This Certificate of Amendment
was duly adopted in accordance with the provisions of Section 242 of the DGCL by the directors and shareholders of the Corporation.
IN WITNESS WHEREOF, the undersigned
has executed this Certificate of Amendment this ___ day of ______, 2021.
|
|
KANDI TECHNOLOGIES GROUP, INC.
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
Hu Xiaoming
|
|
|
|
Title:
|
President and Chief Executive Officer
|
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