Kandi Expands Battery Cell Business with Acquisition of Jiangxi Huiyi
July 19 2021 - 9:00AM
Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”)
(NASDAQ GS: KNDI), today announced the expansion of its battery
cell business with the acquisition of a leading cell producer in
Jiangxi Province, China. Kandi is a leader in electric vehicles and
associated parts, including the cell business of subsidiary Ankao
and the intelligent battery exchange system, so this acquisition is
a natural fit to its vertical integration strategy. The company to
be acquired, Jiangxi Province Huiyi New Energy Co., Ltd. (“Jiangxi
Huiyi”), produces approximately 90 million 18650 lithium-ion
rechargeable cells annually. The cells have a variety of
applications, especially in consumer products. Kandi intends to
further grow its cell business by using the newly acquired
technology to address many new applications, eventually including
EV battery packs.
Mr. Hu Xiaoming, Chairman and CEO of Kandi
commented, “With the rapid growth of new forms of electric
propulsion mobility, the battery industry is literally in its
infancy. Whether it is classic pure-EV automobiles, recreational
products like hoverboards, or the air transportation of the future,
eVTOLS, the need for powerful, safe, and reliable battery storage
will grow exponentially over the coming decades. Kandi already has
significant expertise in electric propulsion, so this acquisition
is the first step to take our expertise and market presence to the
next level. Jiangxi Huiyi is already a high volume, profitable
producer. Under Kandi’s ownership, we intend to grow volume and
market share by leveraging their technology to address many
emerging applications.”
Mr. Liao Zongjiang, Chairman of Jiangxi Huiyi
added, “We are honored to join the Kandi family. We are confident
that Jiangxi Huiyi can achieve a net annual profit of no less than
RMB 15 million (approximately $2.3 million) with no extra
investment. With the resources of Kandi behind us and with
incremental investment, we will endeavor to increase our targeted
net profits to RMB 35 million (approximately $5.4 million) in 2023
and RMB 100 million ($15.4 million) by 2025.”
Deal Terms
On July 13, 2021 (“Signing Date”), Kandi’s
wholly owned subsidiary Zhejiang Kandi Technologies Group Co., Ltd.
(“Zhejiang Kandi Technologies”) signed a Share Transfer Agreement
and a Supplementary Agreement with the shareholders of Jiangxi
Huiyi to purchase all its equity shares. Consummation of the
transactions contemplated in the Share Transfer Agreement and
Supplementary Agreement is expected to take place no later than
thirty business days and no later than three years after the
Signing Date respectively.
Pursuant to the terms of the Share Transfer
Agreement, Zhejiang Kandi Technologies will acquire all the equity
interests of Jiangxi Huiyi with a purchase price of RMB 50 million
(approximately $7.7 million) in cash. Zhejiang Kandi Technologies
is obligated to pay half of the price no later than five business
days after the Signing Date, with the remaining half paid upon
consummation of the transaction (the “Closing Date”). Pursuant to
the Supplementary Agreement, the Company may issue up to 858,770
shares of registered stock each year for the next three years to
the shareholders of Jiangxi Huiyi, conditioned on the fulfillment
of the condition that Jiangxi Huiyi achieve no less than RMB 15
million (approximately $2.3 million) net income over the course of
each of the following three years.
About Jiangxi
Huiyi
Located in Jiangxi Province, China, Jiangxi
Huiyi is a leading battery producer with daily output of 250,000
units of 18650 lithium-ion cells. The Company possesses many safety
and efficiency certifications, such as ISO9001, ISO14001,
OHSAS18001, and is certified for export. Jiangxi Huiyi participates
in many industry trade associations: it currently holds a
vice-presidential role in the China Lithium Battery Industry
Association, is a member of the China Chemical and Physical Power
Supply Industry Association, vice president role of China Lithium
Battery Hundreds Association, and has joined the Lithium-ion
Battery Safety Standard Working Group in formulating industry
standards, Furthermore, it is an Observer of the National Bicycle
Standardization Committee and a member of the working group for the
drafting of the quality group standard for electric
scooters. Jiangxi Huiyi won China's Lithium Battery
Industry's Most Commercially Valuable Investment Award, China's
Lithium Battery Industry Annual Best New Brand Award, and Golden
Globe Award for Advanced Engineering Lithium Electric Vehicles 2017
Customer Trusted Brand. The company has a total of 47 patent and
applications, including 14 invention patents (5 authorized), 25
utility model patents (16 authorized), and 8 appearance patents (5
authorized).
About Kandi Technologies Group,
Inc.
Kandi Technologies Group, Inc. (KNDI),
headquartered in Jinhua Economic Development Zone, Zhejiang
Province, is engaged in the research, development, manufacturing,
and sales of various vehicular products. Kandi conducts its primary
business operations through its wholly-owned subsidiary, Zhejiang
Kandi Technologies Group Co., Ltd. (“Zhejiang Kandi Technologies”),
formerly, Zhejiang Kandi Vehicles Co., Ltd.) and its subsidiaries
including Zhejiang Kandi Smart Battery Swap Technology Co., Ltd,
and SC Autosports, LLC (d/b/a Kandi America), the wholly-owned
subsidiary of Kandi in the United States, and its wholly-owned
subsidiary, Kandi America Investment, LLC. Zhejiang Kandi
Technologies has established itself as one of China's leading
manufacturers of pure electric vehicle parts and off-road
vehicles.
Safe Harbor Statement
This press release contains certain statements
that may include "forward-looking statements." All statements other
than statements of historical fact included herein are
"forward-looking statements." These forward-looking statements are
often identified by the use of forward-looking terminology such as
"believes," "expects" or similar expressions, involving known and
unknown risks and uncertainties. Although the Company believes that
the expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. You should not
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including the risk factors discussed in the Company's
periodic reports that are filed with the Securities and Exchange
Commission and available on the SEC's website (http://www.sec.gov).
All forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their
entirety by these risk factors. Other than as required under the
applicable securities laws, the Company does not assume a duty to
update these forward-looking statements.
Follow us on Twitter: @ Kandi_Group
Contacts:
Kandi Technologies Group,
Inc.Ms. Kewa Luo+1 (212) 551-3610IR@kandigroup.com
The Blueshirt
GroupMr. Gary Dvorchak,
CFAgary@blueshirtgroup.com
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