Kandi Technologies Group, Inc. (the “Company,”
“we” or “Kandi”) (NASDAQ GS: KNDI), announced its financial results
for the full year ended December 31, 2018 today.
Full Year 2018 Highlights
- Total revenues were $112.4 million
in 2018, an increase of 9.4% from total revenues of $102.8 million
in 2017.
- EV parts sales increased by 1.8% to
$99.1 million in 2018, compared with EV parts sales of $97.4
million in 2017.
- Off-road vehicles sales increased
by 144.8% to $13.3 million in 2018, compared with off-road vehicles
sales of $5.4 million in 2017.
- Gross margin for the year ended
December 31, 2018 was 18.0%, compared to 14.0% for the year ended
December 31, 2017.
- Kandi Electric Vehicles Group Co.,
Ltd. (the “JV Company”) sold 10,259 EV products in 2018, compared
to 11,437 EV products sold in 2017, a decrease of 10.3%.
- Income before income taxes in 2018
was $2.08 million, compared with loss before income taxes of $31.61
million in 2017.
- GAAP net loss in 2018 was $5.7
million, or $0.11 loss per fully diluted share, compared with GAAP
net loss of $28.3 million, or $0.59 loss per fully diluted share in
2017.
- Non-GAAP adjusted net loss1 which
excludes stock award expenses and gain of changes in the fair value
of contingent consideration, was $8.8 million in 2018, compared
with non-GAAP adjusted net loss of $23.2 million in 2017. Non-GAAP
adjusted loss per share1 was approximately $0.17 per fully diluted
share for the full year of 2018, compared with non-GAAP adjusted
loss per share of $0.48 per fully diluted share for the full year
of 2017.
- Working capital surplus was $2.5
million as of December 31, 2018. Cash, cash equivalents and
restricted cash totaled $22.4 million as of December 31, 2018.
____________________________1Non-GAAP measures,
including Non-GAAP net income and Non-GAAP EPS are defined as the
financial measures excluding the change of fair value of contingent
consideration and the effects of stock award expenses. We supply
non-GAAP information because we believe it allows our investors to
obtain a clearer understanding of our operations. Any non-GAAP
measure should not be considered as a substitute for, and should
only be read in conjunction with, measures of financial performance
prepared in accordance with GAAP.
Mr. Hu Xiaoming, Chairman and Chief Executive
Officer of Kandi, comments, “Kandi has experienced challenges over
the past few years due to the confusion surrounding the reusable
battery exchange model. However, Kandi has been working diligently
to overcome the downturn and obstacles to resolve these issues.
Early on in 2018, we prepared a three-year plan for 2018 through
2020 based on our company’s and the industry’s situation. 2018 was
to be the year of survival, 2019 of revival, and 2020 will be the
year of prosperity. Through our hard work in 2018, we rebuilt and
refined our practices, and as a result, we are very pleased with
our financial performance. In 2018, our total revenue was up 9.4%
to $112 million; while pre-tax income was $2.1 million compared to
a loss of $31.6 million in 2017. In 2019, we plan to continue this
upwards momentum, and further refine our business model and
execution plan to forge new opportunities moving forward in the
following ways.”
“First, the management team hopes the JV Company
to achieve its projected goals of producing and selling 20,000 EVs
in 2019. Second, the Company is expecting to obtain the approval of
its application for a manufacturing license from the Ministry of
Industry and Information Technology to become an official EV
manufacturing enterprise with “dual production licenses”. Third,
following the U.S. National Highway Traffic Safety Administration’s
(NHTSA) approval of certain Kandi EV models for importation and
registration in the U.S., Kandi EV models are now eligible for up
to $7,500 in federal tax credits in 2019 and 2020. To capitalize on
the opportunity presented by the NHTSA’s approval, we are in the
process of preparing a strategic sales plan for the debut of Kandi
EV models in the American market later this year. Fourth, the car
share program (or Micro Public Transportation) has been upgraded to
an online ride-hailing business model in China, which is expected
to open up a broader market for Kandi electric vehicles. Finally,
the Company is evaluating for the optimal time to restructure the
JV Company’s equity in order to unlock the shareholder value of the
JV Company. We are dedicated in taking full advantage of the
milestones we have reached thus far, achieving stronger business
results in 2019, as well as maximizing our long-term shareholders’
investments,” Mr. Hu concluded.
Full Year 2018 Financial Results
Net Revenues and Gross Profit
|
|
2018 |
|
|
2017 |
|
Y-o-Y% |
|
Net Revenues (US$mln) |
$112.4 |
|
$102.8 |
|
9.4% |
|
Gross Profit (US$mln) |
$20.2 |
|
$14.3 |
|
41.2% |
|
Gross Margin |
|
18.0% |
|
|
14.0% |
|
- |
|
Net revenues for the full year 2018 increased 9.4% from 2017.
The increase in net revenues was mainly due to an increase in sales
of off-road vehicles in 2018. Gross margin for the full year 2018
increased to 18.0%, compared with 14.0% in 2017. The increase in
the gross margin was mainly due to the higher gross margin from
off-road vehicle sales of SC Autosports, a result of its effective
procurement of inventories at discounted prices, as well as
increased gross margin from sales of battery packs.
Operating Income (Loss)
|
|
2018 |
|
|
2017 |
|
Y-o-Y% |
|
Operating Expenses (US$mln) |
$21.9 |
|
$40.4 |
|
-45.9% |
|
Operating Loss (US$mln) |
($1.6) |
|
($26.1) |
|
-93.7% |
|
Operating Margin |
|
-1.5% |
|
|
-25.4% |
|
- |
|
Total operating expenses in 2018 were $21.9
million, compared with $40.4 million in 2017. The decrease in total
operating expenses was due to largely decreased research and
development expenses in 2018.
GAAP Net Loss
|
|
2018 |
|
|
2017 |
|
Y-o-Y% |
|
GAAP Net Loss (US$mln) |
($5.7) |
|
($28.3) |
|
-79.9% |
|
Loss per Weighted Average Common Share |
($0.11) |
|
($0.59) |
|
- |
|
Loss per Weighted Average Diluted Share |
($0.11) |
|
($0.59) |
|
- |
|
Non-GAAP Financial Measures
We make reference to certain non-GAAP financial
measures, i.e., adjusted net income. Management believes that such
adjusted financial results are useful for investors in evaluating
our operating performance because they present a meaningful measure
of corporate performance. See the non-GAAP reconciliation table
below. Any non-GAAP measures should not be considered as a
substitute for, and should only be read in conjunction with,
measures of financial performance prepared in accordance with the
GAAP.
Non-GAAP financial
measure |
|
2018 |
|
|
2017 |
|
Y-o-Y% |
|
GAAP Net Loss (US$mln) |
($5.7) |
|
($28.3) |
|
-79.9% |
|
Stock award expenses (US$mln) |
$0.29 |
|
$5.2 |
|
-94.4% |
|
Change of the fair value of contingent consideration |
$(3.4) |
|
|
- |
|
- |
|
Non-GAAP net Loss (US$mln) |
($8.8) |
|
($23.2) |
|
-61.9% |
|
Net loss in 2018 was $5.7 million, compared with
net loss of $28.3 million in 2017. The decrease in net loss was
primarily attributable to the increased gross profits, the
decreased in R&D expenses and the increased government grand
the Company received this year.
JV Company Financial Results
In the full year 2018, the JV Company sold 10,259 units of EV
products in China.
The condensed financial income statement of the JV Company for
the full year 2018 is as set forth below:
|
|
2018 |
|
|
2017 |
|
Y-o-Y% |
|
Net Revenues (US$mln) |
$122.5 |
|
$192.7 |
|
-36.5% |
|
Gross (Loss) Profit (US$mln) |
($17.7) |
|
$3.6 |
|
-593.1% |
|
Gross Margin |
|
-14.5% |
|
|
1.9% |
|
- |
|
Net Loss (US$mln) |
($36.3) |
|
($22.7) |
|
60.1% |
|
% of Net revenues |
|
-29.7% |
|
|
-11.8% |
|
- |
|
Kandi’s investments in the JV Company are
accounted for under the equity method of accounting, as Kandi has a
50% ownership interest in the JV Company. As a result, Kandi
recorded 50% of the JV Company’s loss for $18.2 million for the
full year 2018. After eliminating intra-entity profits and losses,
Kandi’s share of the after tax loss of the JV Company was $17.9
million for the full year 2018.
Full Year 2018 Conference Call
DetailsThe Company has scheduled a conference call and
live webcast to discuss the financial results at 8:00 AM (U.S.
Eastern Time) on March 15, 2019 (8:00 PM Beijing Time on March 15,
2019). Mr. Hu Xiaoming, the Company’s Chief Executive Officer and
Ms. Emily Zhu, the Company’s Interim Chief Financial Officer, will
deliver prepared remarks, followed by a question and answer
session.
The dial-in details for the conference call are
as follows:
- Toll-free dial-in number:
+1-888-394-8218
- International dial-in number: +
1-323-701-0225
- Webcast and
replay: http://public.viavid.com/index.php?id=133596
A live audio webcast of the call may also be
accessed by visiting Kandi's Investor Relations website at
http://ir.kandivehicle.com. An archive of the webcast will be
available on the Company's website following the live call.
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 Vehicles Co.,
Ltd. ("Kandi Vehicles"), SC Autosports, LLC, the wholly-owned
subsidiary of Kandi Vehicles, and Kandi Electric Vehicles Group
Co., Ltd. (the “JV Company”). Kandi Vehicles has established itself
as one of China's leading manufacturers of pure electric vehicle
parts and off-road vehicles.
In 2013, Kandi Vehicles and Geely Group, China's leading
automaker, jointly invested in the establishment of the JV Company
in order to develop, manufacture and sell pure electric vehicle
("EV") products. As of 2018, each party has invested RMB 1.045
billion in the JV Company, for a total investment of RMB 2.09
billion with each party (including Geely Group’s affiliate) holding
a 50% stake in the JV Company. The JV Company has established
itself as one of the driving forces in the development and the
manufacturing of pure EV products in China.
More information about KNDI is available on the Company's
corporate website at http://www.kandivehicle.com. The Company
routinely posts important information on its website.
Safe Harbor Statement
This press release contains certain statements that may include
"forward-looking statements." All statements other than statements
of historical fact included herein are "forward-looking
statements." These forward-looking statements are often identified
by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, involving known and unknown risks
and uncertainties. Although the Company believes that the
expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. You should not
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including the risk factors discussed in the Company's
periodic reports that are filed with the Securities and Exchange
Commission and available on the SEC's website (http://www.sec.gov).
All forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their
entirety by these risk factors. Other than as required under the
applicable securities laws, the Company does not assume a duty to
update these forward-looking statements.
Follow us on Twitter: @ Kandi_Group
Company Contact: Ms. Kewa Luo Kandi Technologies Group, Inc.
Phone: 1-212-551-3610 Email: IR@kandigroup.com
- Tables Below -
|
|
KANDI TECHNOLOGIES GROUP, INC. AND
SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
15,662,201 |
|
|
$ |
4,891,808 |
|
Restricted cash |
|
|
6,690,870 |
|
|
|
11,218,688 |
|
Accounts receivable
(net of allowance for doubtful accounts of $120,010 and $133,930 as
of December 31, 2018 and December 31, 2017, respectively) |
|
|
34,274,728 |
|
|
|
34,397,858 |
|
Inventories (net of
provision for slow moving inventory of $840,701 and $620,919 as
of December 31, 2018 and December 31, 2017, respectively) |
|
|
21,997,868 |
|
|
|
15,979,794 |
|
Notes receivable |
|
|
72,712 |
|
|
|
- |
|
Notes receivable from
JV Company and related party |
|
|
3,861,032 |
|
|
|
1,137,289 |
|
Other receivables |
|
|
1,264,323 |
|
|
|
2,650,668 |
|
Prepayments and prepaid
expense |
|
|
11,136,408 |
|
|
|
6,536,839 |
|
Due from employees |
|
|
1,001 |
|
|
|
7,070 |
|
Advances to
suppliers |
|
|
4,705,183 |
|
|
|
14,908,385 |
|
Amount due from JV
Company, net |
|
|
67,683,462 |
|
|
|
146,422,440 |
|
Amount due from related
party |
|
|
- |
|
|
|
162,048 |
|
TOTAL CURRENT
ASSETS |
|
|
167,349,788 |
|
|
|
238,312,887 |
|
|
|
|
|
|
|
|
|
|
LONG-TERM
ASSETS |
|
|
|
|
|
|
|
|
Property, plant and
equipment, net |
|
|
82,045,923 |
|
|
|
12,000,971 |
|
Land use rights,
net |
|
|
11,749,728 |
|
|
|
12,666,047 |
|
Construction in
progress |
|
|
- |
|
|
|
53,083,925 |
|
Deferred taxes
assets |
|
|
8,204 |
|
|
|
4,383,425 |
|
Long term
investment |
|
|
- |
|
|
|
1,460,034 |
|
Investment in JV
Company |
|
|
128,929,893 |
|
|
|
70,681,013 |
|
Goodwill |
|
|
28,552,215 |
|
|
|
322,591 |
|
Intangible assets |
|
|
4,328,127 |
|
|
|
331,116 |
|
Advances to
suppliers |
|
|
- |
|
|
|
21,592,918 |
|
Other long term
assets |
|
|
5,865,386 |
|
|
|
7,590,734 |
|
Amount due from JV
Company, net |
|
|
- |
|
|
|
15,907,183 |
|
TOTAL Long-Term
Assets |
|
|
261,479,476 |
|
|
|
200,019,957 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
428,829,264 |
|
|
$ |
438,332,844 |
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payables |
|
$ |
112,309,683 |
|
|
$ |
111,595,540 |
|
Other payables and
accrued expenses |
|
|
4,251,487 |
|
|
|
6,556,209 |
|
Short-term loans |
|
|
30,539,236 |
|
|
|
33,042,864 |
|
Customer deposits |
|
|
94,408 |
|
|
|
205,544 |
|
Notes payable |
|
|
12,787,619 |
|
|
|
28,075,945 |
|
Income tax payable |
|
|
3,471,366 |
|
|
|
2,902,699 |
|
Due to employees |
|
|
28,473 |
|
|
|
35,041 |
|
Deferred income |
|
|
1,340,605 |
|
|
|
2,191,143 |
|
Total Current
Liabilities |
|
|
164,822,877 |
|
|
|
184,604,985 |
|
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES |
|
|
|
|
|
|
|
|
Long term bank
loans |
|
|
28,794,136 |
|
|
|
30,737,547 |
|
Deferred taxes
liabilities |
|
|
1,711,343 |
|
|
|
- |
|
Contingent
liability |
|
|
7,256,000 |
|
|
|
- |
|
Other long-term
liability |
|
|
622,034 |
|
|
|
- |
|
Total Long-Term
Liabilities |
|
|
38,383,513 |
|
|
|
30,737,547 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
|
203,206,390 |
|
|
|
215,342,532 |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDER’S
EQUITY |
|
|
|
|
|
|
|
|
Common stock, $0.001
par value; 100,000,000 shares authorized; 55,992,002 and
48,036,538 shares issued and 51,484,444 and 48,036,538 outstanding
at December 31, 2018 and December 31,2017, respectively |
|
|
51,484 |
|
|
|
48,037 |
|
Additional paid-in
capital |
|
|
254,989,657 |
|
|
|
233,055,348 |
|
Retained earnings (the
restricted portion is $4,422,033 and $4,422,033 at December 31,
2018 and December 31, 2017, respectively) |
|
|
(9,497,009 |
) |
|
|
(3,802,310 |
) |
Accumulated other
comprehensive loss |
|
|
(19,921,258 |
) |
|
|
(6,310,763 |
) |
TOTAL
STOCKHOLDERS’ EQUITY |
|
|
225,622,874 |
|
|
|
222,990,312 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
428,829,264 |
|
|
$ |
438,332,844 |
|
|
|
|
|
|
|
|
|
|
|
|
KANDI TECHNOLOGIES GROUP, INC. AND
SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS) |
|
FOR THE YEARS ENDED DECEMBER 31, 2018, 2017
AND 2016 |
|
|
|
|
|
Year Ended |
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
REVENUES FROM UNRELATED
PARTY, NET |
|
$ |
63,707,518 |
|
|
$ |
9,853,410 |
|
|
$ |
47,870,589 |
|
REVENUES FROM JV
COMPANY AND RELATED PARTY, NET |
|
|
48,731,310 |
|
|
|
92,952,211 |
|
|
|
81,621,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES,
NET |
|
|
112,438,828 |
|
|
|
102,805,621 |
|
|
|
129,492,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF GOODS SOLD |
|
|
(92,191,383 |
) |
|
|
(88,461,432 |
) |
|
|
(111,770,197 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT |
|
|
20,247,445 |
|
|
|
14,344,189 |
|
|
|
17,721,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development |
|
|
(10,084,378 |
) |
|
|
(27,628,085 |
) |
|
|
(26,504,650 |
) |
Selling and
marketing |
|
|
(3,189,022 |
) |
|
|
(1,465,007 |
) |
|
|
(1,567,707 |
) |
General and
administrative |
|
|
(8,612,393 |
) |
|
|
(11,333,336 |
) |
|
|
(20,665,709 |
) |
Total Operating
Expenses |
|
|
(21,885,793 |
) |
|
|
(40,426,428 |
) |
|
|
(48,738,066 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS |
|
|
(1,638,348 |
) |
|
|
(26,082,239 |
) |
|
|
(31,016,250 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
1,324,812 |
|
|
|
2,269,844 |
|
|
|
2,961,153 |
|
Interest expense |
|
|
(1,871,851 |
) |
|
|
(2,280,286 |
) |
|
|
(1,831,667 |
) |
Change in fair value of
financial instruments |
|
|
- |
|
|
|
- |
|
|
|
3,823,590 |
|
Change in fair value of
contingent consideration |
|
|
3,405,864 |
|
|
|
- |
|
|
|
- |
|
Government grants |
|
|
17,787,445 |
|
|
|
5,913,554 |
|
|
|
25,913,540 |
|
Share of loss after tax
of JV |
|
|
(17,888,706 |
) |
|
|
(11,555,302 |
) |
|
|
(7,307,510 |
) |
Other income, net |
|
|
956,839 |
|
|
|
123,925 |
|
|
|
1,627,933 |
|
Total other
income (expense), net |
|
|
3,714,403 |
|
|
|
(5,528,265 |
) |
|
|
25,187,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS)
BEFORE INCOME TAXES |
|
|
2,076,055 |
|
|
|
(31,610,504 |
) |
|
|
(5,829,211 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX (EXPENSE)
BENEFIT |
|
|
(7,770,754 |
) |
|
|
3,263,030 |
|
|
|
(681,546 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS |
|
|
(5,694,699 |
) |
|
|
(28,347,474 |
) |
|
|
(6,510,757 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
(LOSS) INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation |
|
|
(13,610,495 |
) |
|
|
13,846,110 |
|
|
|
(15,415,223 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
LOSS |
|
$ |
(19,305,194 |
) |
|
$ |
(14,501,364 |
) |
|
$ |
(21,925,980 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES
OUTSTANDING BASIC |
|
|
51,188,647 |
|
|
|
47,943,830 |
|
|
|
47,447,665 |
|
WEIGHTED AVERAGE SHARES
OUTSTANDING DILUTED |
|
|
51,188,647 |
|
|
|
47,943,830 |
|
|
|
47,447,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE,
BASIC |
|
$ |
(0.11 |
) |
|
$ |
(0.59 |
) |
|
$ |
(0.14 |
) |
NET LOSS PER SHARE,
DILUTED |
|
$ |
(0.11 |
) |
|
$ |
(0.59 |
) |
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KANDI TECHNOLOGIES GROUP, INC. AND
SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH
FLOW |
|
FOR THE YEARS ENDED DECEMBER 31, 2018, 2017
AND 2016 |
|
|
|
|
|
Year Ended |
|
|
|
December 31, 2018 |
|
|
December 31, 2017 |
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(5,694,699 |
) |
|
$ |
(28,347,474 |
) |
|
$ |
(6,510,757 |
) |
Adjustments to
reconcile net income to net cash provided by operating
activities |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
4,326,296 |
|
|
|
4,777,992 |
|
|
|
4,863,277 |
|
Assets impairments |
|
|
263,185 |
|
|
|
170,506 |
|
|
|
(40,142 |
) |
Allowance for doubtful
accounts |
|
|
(213,809 |
) |
|
|
128,972 |
|
|
|
- |
|
Deferred taxes |
|
|
4,815,774 |
|
|
|
(5,448,015 |
) |
|
|
3,651,362 |
|
Change in fair value of
financial instruments |
|
|
- |
|
|
|
- |
|
|
|
(3,823,590 |
) |
Share of loss after tax
of JV Company |
|
|
17,888,706 |
|
|
|
11,555,302 |
|
|
|
7,307,510 |
|
Reserve for fixed
assets |
|
|
(52,744 |
) |
|
|
451,503 |
|
|
|
- |
|
Change in fair value of
contingent consideration |
|
|
(3,405,864 |
) |
|
|
- |
|
|
|
- |
|
Stock compensation
cost |
|
|
285,609 |
|
|
|
5,191,307 |
|
|
|
14,913,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in
operating assets and liabilities, net of effects of
acquisition: |
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)
Decrease In: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(57,503,289 |
) |
|
|
(5,821,522 |
) |
|
|
(40,962,889 |
) |
Deferred taxes
assets |
|
|
375 |
|
|
|
- |
|
|
|
- |
|
Notes receivable |
|
|
483,778 |
|
|
|
- |
|
|
|
1,383,605.00 |
|
Notes receivable from
JV Company and related party |
|
|
6,231,669 |
|
|
|
8,068,968 |
|
|
|
- |
|
Inventories |
|
|
(5,243,388 |
) |
|
|
(3,311,357 |
) |
|
|
4,952,792 |
|
Other receivables and
other assets |
|
|
(31,373,831 |
) |
|
|
(1,243,552 |
) |
|
|
(43,650,395 |
) |
Due from employee |
|
|
1,045 |
|
|
|
10,127 |
|
|
|
41,529 |
|
Advances to supplier
and prepayments and prepaid expenses |
|
|
(5,386,448 |
) |
|
|
23,107,334 |
|
|
|
(9,209,955 |
) |
Advances to
suppliers-long term |
|
|
- |
|
|
|
(5,941,692 |
) |
|
|
- |
|
Amount due from JV
Company |
|
|
(95,442,739 |
) |
|
|
(53,622,842 |
) |
|
|
(111,996,250 |
) |
Amount due from JV
Company-Longterm |
|
|
15,907,183 |
|
|
|
(15,907,183 |
) |
|
|
- |
|
Due from related
party |
|
|
159,405 |
|
|
|
10,622,123 |
|
|
|
28,715,113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease) In: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
137,390,139 |
|
|
|
66,784,385 |
|
|
|
112,150,789 |
|
Other payables and
accrued liabilities |
|
|
60,736,669 |
|
|
|
1,914,293 |
|
|
|
(3,790,859 |
) |
Notes payable |
|
|
(30,542,040 |
) |
|
|
(13,297,993 |
) |
|
|
(8,480,858 |
) |
Customer deposits |
|
|
(104,047 |
) |
|
|
155,100 |
|
|
|
(48,312 |
) |
Income tax payable |
|
|
822,422 |
|
|
|
1,221,012 |
|
|
|
1,008,274 |
|
Deferred income |
|
|
(761,736 |
) |
|
|
(4,431,765 |
) |
|
|
- |
|
Net cash
provided by (used in) operating activities |
|
$ |
13,587,621 |
|
|
$ |
(3,214,471 |
) |
|
|
(49,526,543 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property,
plant and equipment, net |
|
|
(582,872 |
) |
|
|
(760,253 |
) |
|
|
(275,801 |
) |
Purchases of land use
rights and other intangible assets |
|
|
(103,871 |
) |
|
|
(416,361 |
) |
|
|
(3,388 |
) |
Acquisition of Jinhua
An Kao (net of cash received) |
|
|
(3,555,766 |
) |
|
|
- |
|
|
|
- |
|
Acquisition of SC
Autosports |
|
|
486,954 |
|
|
|
- |
|
|
|
- |
|
Purchases of
construction in progress |
|
|
(418,755 |
) |
|
|
(702,719 |
) |
|
|
(6,001,664 |
) |
Reimbursement of
capitalize interests for construction in progress |
|
|
1,790,652 |
|
|
|
- |
|
|
|
- |
|
Repayment of notes
receivable |
|
|
- |
|
|
|
- |
|
|
|
10,335,807 |
|
Long Term
Investment |
|
|
1,436,217 |
|
|
|
- |
|
|
|
- |
|
Short term
investment |
|
|
- |
|
|
|
4,587,971 |
|
|
|
(3,088,327 |
) |
Net cash (used
in) provided by investing activities |
|
$ |
(947,441 |
) |
|
$ |
2,708,638 |
|
|
|
966,627 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
short-term bank loans |
|
|
32,503,855 |
|
|
|
32,263,794 |
|
|
|
65,912,237 |
|
Repayments of
short-term bank loans |
|
|
(33,259,759 |
) |
|
|
(35,667,772 |
) |
|
|
(35,815,325 |
) |
Repayments of long-term
bank loans |
|
|
(302,361 |
) |
|
|
- |
|
|
|
- |
|
Proceeds from notes
payable |
|
|
54,348,577 |
|
|
|
22,270,028 |
|
|
|
12,038,765 |
|
Repayment of notes
payable |
|
|
(58,588,036 |
) |
|
|
(28,680,591 |
) |
|
|
- |
|
Warrant exercise |
|
|
- |
|
|
|
- |
|
|
|
434,666 |
|
Net cash (used
in) provided by financing activities |
|
$ |
(5,297,724 |
) |
|
$ |
(9,814,541 |
) |
|
|
42,570,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH |
|
|
7,342,456 |
|
|
|
(10,320,374 |
) |
|
|
(5,989,573 |
) |
Effect of exchange rate
changes on cash |
|
|
(1,099,881 |
) |
|
|
1,237,572 |
|
|
|
(1,727,697 |
) |
CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR |
|
|
16,110,496 |
|
|
|
25,193,298 |
|
|
|
32,910,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH
EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD |
|
|
22,353,071 |
|
|
|
16,110,496 |
|
|
|
25,193,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTARY
CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid |
|
|
2,056,670 |
|
|
|
1,448,523 |
|
|
|
2,598,846 |
|
Interest paid |
|
|
1,708,766 |
|
|
|
1,625,240 |
|
|
|
1,671,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
NON-CASH DISCLOSURES: |
|
|
|
|
|
|
|
|
|
|
|
|
Construction in
progress transferred to Property, Plant and equipment |
|
|
74,118,229 |
|
|
|
- |
|
|
|
- |
|
Long term and short
term Advances to suppliers transferred to Construction in
progress |
|
|
31,301,325 |
|
|
|
18,848,586 |
|
|
|
- |
|
Purchase of
construction in progress by accounts payable |
|
|
- |
|
|
|
3,756,605 |
|
|
|
4,191,246 |
|
Advances to
suppliers-long term adjusted for other payable |
|
|
- |
|
|
|
1,065,100 |
|
|
|
- |
|
Settlement of due from
JV Company and related parties with notes receivable from related
parties |
|
|
86,461,386 |
|
|
|
53,565,297 |
|
|
|
43,707,157 |
|
Settlement of accounts
receivables with notes receivable from unrelated parties |
|
|
60,543,404 |
|
|
|
5,868,902 |
|
|
|
15,052,339 |
|
Settlement of other
receivables with notes receivable from related parties |
|
|
34,015,662 |
|
|
|
- |
|
|
|
- |
|
Assignment of notes
receivable from unrelated parties to supplier to settle accounts
payable |
|
|
31,347,383 |
|
|
|
5,868,902 |
|
|
|
14,509,390 |
|
Assignment of notes
receivable from JV Company and related parties to supplier to
settle accounts payable |
|
|
77,107,835 |
|
|
|
44,812,574 |
|
|
|
44,846,561 |
|
Assignment of notes
receivable from unrelated parties to supplier to settle other
payable |
|
|
28,636,652 |
|
|
|
- |
|
|
|
- |
|
Assignment of notes
receivable from JV Company and related parties to supplier to
settle other payable |
|
|
34,242,433 |
|
|
|
- |
|
|
|
- |
|
Settlement of accounts
payable with notes payables |
|
|
31,039,932 |
|
|
|
31,533,939 |
|
|
|
8,146,783 |
|
Acquisition of Jinhua
An Kao by stock |
|
|
20,718,859 |
|
|
|
- |
|
|
|
- |
|
Acquisition of SC
Autosports by stock |
|
|
756,664 |
|
|
|
- |
|
|
|
- |
|
Replacement of notes
payables with accounts payable |
|
|
10,582,651 |
|
|
|
- |
|
|
|
- |
|
Amount due from JV
Company converted to investment in JV Company |
|
|
82,393,493 |
|
|
|
- |
|
|
|
- |
|
Reversal of
construction in progress and accounts payable |
|
|
8,029,198 |
|
|
|
- |
|
|
|
- |
|
Construction in
progress transferred back to prepayments |
|
|
- |
|
|
|
- |
|
|
|
35,035,762 |
|
Reclassification of
overpaid accounts payable to advances to suppliers |
|
|
16,826 |
|
|
|
- |
|
|
|
- |
|
Deferred tax changed to
other comprehensive income |
|
|
- |
|
|
|
78,967 |
|
|
|
- |
|
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