Kandi Technolgies Corp Common (OTC BB:KNDIE)

First Quarter Financial Results

• Total revenues grew 9.0% to $43.8 million for the first quarter of 2015 from $40.2 million for the first quarter of 2014
• Non-GAAP adjusted net income2, which excludes stock award expense and change in the fair value of financial derivatives, was $3.4 million, or approximately $0.07 per fully diluted share, a 108.1% increase from $1.6 million in the first quarter of 2014.

Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies, commented: "We achieved solid growth in the first quarter of 2015 throughout our business, including the car-share projects, which continues to be a key growth driver for the Company this year. At the same time, our JV Company has started direct sales to consumers in April 2015, in order to meet the fast growing market demand in China, with great support from the Government, which will contribute to the Company's future growth and profitability."

"We are pleased with the good financial results in the first quarter of 2015, compared to the same quarter last year," added Mr. Wang Cheng, Chief Financial Officer of Kandi Technologies. "We had both revenue growth and margin improvement, which contributed to our net profits. We will continue to implement our cost reduction program throughout the Company and leverage internal production efficiencies, in order to generate stable profitability over the long term."

ITEM 5.02    Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. 

Effective May 1, 2015, Mr. Wang Cheng (Henry Wang) will be our new Chief Financial Officer ("CFO") of Kandi Technologies Group, Inc., a Delaware corporation (the "Company"). The Company's current CFO, Ms. Zhu Xiaoying, will resign from her position as the Company's CFO but will remain to be the CFO of Zhejiang Kandi Vehicles Co., Ltd., a wholly-owned subsidiary of the Company, effective April 30, 2015.

The biographical information of Mr. Wang required by this item is set forth below.

Wang Cheng (Henry Wang), 42 years old, has over 20 years of international financial management experience. Before joining the Company, Mr. Wang served as CFO for Shanghai Always Marketing Service Co., LTD., one of the largest field marketing service agencies in China, leading its procurement and finance departments since May 2014. Prior to that, Mr. Wang worked for Renesola Ltd. (NYSE: SOL), an international leading brand and technology provider of green energy products, initially as Vice President of Finance since January 2010, ascending to CFO in July 2011. Mr. Wang holds both certifications as Certified Public Accountants ("CPA") in China and Certified Internal Auditor ("CIA"). He earned a Master's degree in Law from Renmin University of China and a Master's of Business Administration from the Open University of Hong Kong.

The Company and Mr. Wang entered into an employment contract on March 20, 2015 (the "Employment Contract"), pursuant to which Mr. Wang shall receive an annual salary in the amount of RMB1,200,000 (approximately $193,080) and an annual bonus in the amount of at least RMB300,000 (approximately $48,271) at each year end based on the Company's results of operations and his performance. The bonus can be in the form of equity. The Employment Contract will be effective from May 1, 2015 for three years until April 30, 2018.

KANDI TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

Management Discussion and Analysis

Revenues

For the year ended December 31, 2014, we had net revenues of $170,229,006 compared to net revenues of $94,536,045 for the year ended December 31, 2013 and $64,513,670 for the year ended December 31, 2012, representing an increase of $75,692,961, or 80.1%, from 2013 and an increase of $105,715,336, or 163.9%, from 2012, respectively. Our products include EV parts, EV products, and off-road vehicles, including ATVs, utility vehicles (“UTVs”), go-karts, and others. For the year ended December 31, 2014, 2013 and 2012, 95%, 90% and 86%, respectively, of our revenues were derived from the sales of our products in the People’s Republic of China (the “PRC”).

EV Parts

During the year ended December 31, 2014, our revenues from the sale of EV parts were $116,431,310, representing an increase of $114,707,279 or 6,653.4% from $1,724,031 for the year ended December 31, 2013 and an increase of $112,914,073 or 3,210.3% from $3,517,237 for the year ended December 31, 2012, respectively

Our revenue for the year ended December 31, 2014 primarily consisted of the sales of battery packs, body parts, EV drive motors, EV controllers, air conditioning units and other auto parts to the JV Company for manufacturing of EV products. Of the total EV parts sold for the year ended December 31, 2014, approximately 83%, or the majority of the sales, were related to the sale of battery packs. Due to the Chinese auto industry regulation, we hold the necessary production license to manufacture the battery packs exclusively used in Kandi brand name’s EVs manufactured by the JV Company. Besides the sale of battery packs, approximately 6% of the sales were related to the sales of EV controllers, approximately 5% of the sales were related to the sales of air conditioning units, approximately 4% of the sales were related to the sales of EV drive motors and approximately 2% of the sales were related to the sales of body parts and other auto parts.

We started the EV parts business to the JV Company in the first quarter of 2014. During the year ended December 31, 2014, our revenues from the sale of EV parts to the JV Company accounted the majority or approximately 68% of our total net revenue for the year. For the year ended December 31, 2014, the majority of EV parts sold to the JV Companies, or approximately 56% of the sales were to Kandi Changxing, approximately 34% of the sales were to Kandi Shanghai, and approximately 10% of the sales were to Kandi Jinhua. Theses EV parts were used in manufacturing pure EV products by the JV Company’s subsidiaries, all of which were sold to Shanghai Maple Auto Co., Ltd.(“Shanghai Maple”). Shanghai Maple is an unaffiliated company that was granted by the Chinese government vehicle production rights for EV sedans, which is equivalent to a license that qualifies it to sell the EV products to the end customers. Our increased sales of EV parts during the year were largely driven by the manufacturing of EV products by the JV Company to meet the EV demand of EV-Share Program. According to the JV Agreement, we are primarily responsible for supplying the JV Company with EV parts and the JV Company is primarily responsible for producing EV products and finished automobiles through sales channels to its end customers.

During the year ended December 31, 2014, of the total EV parts sales, our revenues from the sale of auto generators to other customers were $57,632, a decrease of $1,666,399, or 96.7% from $1,724,031 for the year ended December 31, 2013 and a decrease of $3,459,605 or 98.4% from $3,517,237 for the year ended December 31, 2012. This decrease in revenue was primarily due to the realignment of Yongkang Scrou’s product offering to shift focus to the manufacturing of automobile motors, air-conditioning systems, controllers, and accelerator pedals for EVs.

EV Products

Our revenues from the sale of EV products for the fiscal year of 2014 were $33,978,619 including $33,421,638 from selling EV products and $556,981 from OEM-EV business line, representing a decrease of $12,640,584 or 27.1% from $46,619,203 for the year ended December 31, 2013 but an increase of $14,943,683 or 78.5% from $19,034,936 for the year ended December 31, 2012, respectively

We continued to sell certain EV products (completed automobiles) during the year of 2014. Our revenues from the sale of EV products for the year ended December 31, 2014 decreased by $13,197,565, or 28.3%, from $46,619,203 for the year ended December 31, 2013 to $33,421,638 for the year ended December 31, 2014, representing a 44.4% of reduction in unit sales but a 29.0% of increase in the average unit price. As compared to our sale of EV products for the year ended December 31, 2012, we increased our sales by $14,386,702, or 75.6%, representing a 33.4% of reduction in unit sales but a 163.6% of increase in the average unit price. The increase of the average unit price was largely due to the inclusion of the cost for battery packs in the unit selling price in 2014. In addition, during the year ended December 31, 2014, our revenues from OEM business were $556,981 or 0.3% of total revenue. We started our OEM business in the second quarter of 2014, and our sales for the year ended December 31, 2014 were primarily derived from assembling EV products for Kandi Jinhua, a wholly-owned subsidiary of the JV Company. Indirectly through our 50% ownership interest in the JV Company, we have a 50% economic interest in Kandi Jinhua.

Our EV products business accounted approximately 20.0% of our total revenue for the year ended December 31, 2014, reduced from 49.3% and 29.5% in the years ended December 31, 2013 and 2012, respectively. Of the total sales of EV products for the year ended December 31, 2014, approximately $25,593,023, or 75.3%, was sold to Shanghai Maple. The sales of EV products were mainly driven by the demand by EV-Share Program. In March 2013, Kandi Vehicles and Shanghai Maple Guorun Automobile Co., Ltd. (“Shanghai Guorun”), a 99%-owned subsidiary of Geely Automobile Holdings Ltd. (“Geely”) formed a joint venture (the “JV Company” ) to develop, manufacture and sell EVs and related auto parts. Under the JV Agreement, our EV product manufacturing business will be gradually transferred to the JV Company. The decreased sales of EV products in 2014 as compared to that in 2013 was a result of this JV Agreement. In the future, under the JV Agreement, we will be mainly responsible for supplying the JV Company with EV parts and the JV Company will be responsible for manufacturing EV products and selling finished goods through channel to its end customers.

Off-Road Vehicles

During the year ended December 31, 2014, our revenues from the sale of off-road vehicles including selling go karts, all-terrain vehicles (“ATVs”), and others were $19,819,078, representing a decrease of $26,373,733 or 57.1% from $46,192,811 for the year ended December 31, 2013 and a decrease of $22,142,419 or 52.8% from $41,961,497 for the year ended December 31, 2012, respectively.

Our off road vehicles business line accounted for approximately 11.6% of our total net revenue for the fiscal year 2014, compared to 48.9% for the fiscal year 2013 and 65.0% for the fiscal year 2012, respectively. Of which go-kart business accounted for approximately 7.5% of our total net revenue for the year ended December 31, 2014, reduced from 35.1% and 47.7% for the years ended December 31, 2013 and 2012, respectively, and ATV business accounted for approximately 4.2% of our total net revenue for the year ended December 31, 2014, reduced from 11.0% and 9.9% for the years ended December 31, 2013 and 2012, respectively. The sales of three wheeled motorcycles, utility vehicles (“UTVs”) and refitted cars were insignificant in the fiscal year of 2014 as compared to the sales in the fiscal years 2013 and 2012. The decreased sales of these products were primarily due to the rearrangement of our product portfolio for more efficient use of our resources to capture more sales opportunities in the fast-growing EV market in China.

Net Income (Loss)

We recorded net income of $12,271,338 for the year ended December 31, 2014, compared to net loss of ($21,140,723) for the year ended December 31, 2013 and a net income of $6,049,479 for the year ended December 31, 2012, an increase of $33,412,061, or 158.0%, from the year ended December 31, 2013 and an increase of $6,221,859, or 102.8%, from the year ended December 31, 2012, respectively. The net income was primarily attributable to increased revenue and gross profits, and the gain from the change in the fair value of warrant derivatives.

Excluding (i) the effects of stock award expenses, which were $8,455,422 and $9,658,320 for the years ended December 31, 2014 and 2013, respectively, and (ii) the change of the fair value of financial derivatives, which were a gain of $6,531,308 and a loss of ($16,647,283) for the years ended December 31, 2014 and 2013, respectively, our net income (non-GAAP) was $14,195,452for the year ended December 31, 2014 as compared to net income (non-GAAP) of $5,164,880 for the year ended December 31, 2013, an increase of $9,030,572 or 174.8%. The increase in such net income was primarily attributable to the increase of revenue and gross profits during the year of 2014.

Kandi Technologies Announces Conclusion of SEC Investigation

Jinhua, China--(February 17, 2015) - Kandi Technologies Group, Inc. ("Kandi" or the "Company") announced today that it received a letter dated February 9, 2015 from the staff of the Enforcement Division of the U. S. Securities and Exchange Commission (the "SEC") advising that the Division has concluded its investigation of Kandi and, based on information received to date, does not intend to recommend to the Commission that any enforcement action be brought against Kandi. This formally concludes the SEC's investigation that commenced in 2013. As previously disclosed, Kandi received notice of a formal investigation and a subpoena dated November 21, 2013 in connection with the SEC's investigation.

Hu Xiaoming, Kandi's Chairman of the Board and Chief Executive Officer commented: "We are extremely pleased that the SEC has concluded its investigation, particularly since its existence was the subject of much misleading and harmful press by those holding short positions in the Company's securities. We respect the SEC and its mandate to protect investors, and cooperated in its investigation. As I have stated before, Kandi's management's primary interests have always been twofold – shareholder protection and building a solid foundation for the continued long term growth of the Company. We will continue to pursue those goals with transparency and in compliance with all applicable laws and regulations.”

Third Quarter 2014 Financial Results:

• Revenue for the third quarter grew 157.78% to $44.21 million from $17.15 million in the third quarter last year.
• Non-GAAP adjusted net income was $5.37 million, or approximately $0.12 per fully diluted shares, a 716.5% increase from net loss of $0.87 million, or -$0.02 for the same period of 2013.

"Our third quarter was another exciting quarter with strong top-line growth, improved financial condition and new strategic developments," commented Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi. "In particular, our EV manufacturing joint venture with Geely Auto, or the 'JV Company' achieved great quarterly net profit and net margin, despite the fact that the quarter was back-end loaded because the new EV purchase tax exemption did not become effective until September 1."

Mr. Hu continued: "During the quarter, we also made numerous business initiatives, including the initial delivery of Kandi brand EVs to Shanghai public pure EV sharing program, the unveiling of our new 4-seat pure EV model KD17 'Cyclone', and the successful completion of our $71 million registered direct offering. Given the increasing opportunities and demand for electric cars in China, as well as Kandi's solid foundation and financial strength, we believe we are in a great position to continue executing our current business strategy."

"Looking forward to the fourth quarter, we are confident that our business model is beginning to gain traction in both top-line and bottom-line growth," concluded Mr. Hu. "The Car-Share Program has been highly recognized and well received by the customers, we believe our EV business model will be expanded to more EV pilot cities in China. We are also thrilled with our recent partnership with Ant Financial Services Group to launch Alipay, including Alipay Wallet services and technology platform, to Kandi's EV end users. We hope to raise the market awareness of the Kandi brand through the 300 million registered Alipay users."

Kandi Technologies Group, Inc.

4,127,908 Shares of Common Stock
743,024 Warrants to purchase up to 743,024 Shares of Common Stock and 743,024 Shares of Common Stock
underlying the Warrants

Option to purchase up to 1,744,186 Shares of Common Stock, 1,744,186 Shares of Common Stock underlying
the Option, the accompanying Warrants to purchase 313,954 Shares of Common Stock and 313,954 Shares of
Common Stock underlying the Warrants

Item 1.01 Entry into a Material Definitive Agreement

On August 29, 2014, Kandi Technologies Group, Inc., a Delaware corporation (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers (the “Buyers”) pursuant to which the Company will sell to the Buyers, in a registered direct offering, an aggregate of 4,127,908 units, (the “Units”) each consisting of one share (the “Shares”) of our common stock, par value $0.001 per share (“Common Stock”) and 0.18 warrants to purchase a share of our Common Stock (the “Warrants”), at a purchase price of $17.20 per share, for aggregate gross proceeds to the Company of $71,000,000.00, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. At the initial closing, the Company shall issue Units consisting of an aggregate of 4,127,908 shares of our Common Stock and Warrants initially exercisable into an aggregate of up to 743,024 shares of our Common Stock.

In addition, each Buyer that purchases at least $30 million in the initial offering of Shares and Warrants (each, a “Major Buyer”) will have an option to purchase its pro rata share of up to a $30 million additional Units, at one or more additional closings, at the purchase price of $17.20 per share for a period commencing after the initial closing date and ending on November 17, 2014.

Assuming the Major Buyers fully exercise their rights to purchase additional Units at such additional closing or additional closings, as applicable, the Company shall have issued, in the aggregate, Units consisting of an aggregate of 1,744,186 shares of our Common Stock and Warrants initially exercisable into an aggregate of up to 313,954 shares of our Common Stock,

The Warrants have a term of 17 months and are exercisable by the holders at any time after the date of issuance, or the applicable closing date, at an exercise price of $21.50 per share. The exercise price and the number of shares issuable upon exercise of the Warrants are subject to an adjustment upon the occurrence of certain events, including, but not limited to, stock splits or dividends, business combinations, sale of assets, similar recapitalization transactions, or other similar transactions. The exercise price of the Warrants is subject to adjustment in the event that the Company issues or is deemed to issue shares of our Common Stock for less than the applicable exercise price of the Warrants. The exercisability of the Warrants may be limited if, upon exercise, the holder or any of its affiliates would beneficially own more than 4.99% of our Common Stock.

Pursuant to the terms of the Purchase Agreement, the Company and the Buyers have agreed that: (i) subject to certain exceptions, the Company will not, within the sixty (60) trading days following the initial closing of this financing transactions enter into any agreement to issue or announce the issuance or proposed issuance of any securities; (ii) for a period of 12 months, the Company will not enter into an agreement to effect a “Variable Rate Transaction,” as that term is defined in the Purchase Agreement; and (iii) if the Company issues securities within the 12 months following the initial closing, the Buyers shall have the right to purchase up to 30% of the securities on the same terms, conditions and price provided for in the proposed issuance of securities.

FT Global Capital, Inc. (“FT Global Capital”) acted as the exclusive placement agent in connection with this offering pursuant to the terms of a placement agent agreement, dated August 11, 2014, between the Company and FT Global Capital (the “Placement Agent Agreement”). Pursuant to the Placement Agent Agreement, the Company agreed to pay FT Global Capital a cash fee equal to five percent (5%) of the aggregate proceeds received by the Company from the sale of its securities to investors introduced to the Company by FT Global Capital. FT Global Capital is also entitled to additional tail compensation for any financings consummated within the 12-month period following the termination of the Placement Agent Agreement to the extent that such financing is provided to the Company by investors that FT Global Capita had introduced to the Company. In addition to the cash fees, the Company agreed to issue to the Placement Agent warrants to purchase an aggregate of up to 5% of the aggregate number of shares of our Common Stock sold in the offering (the “Placement Agent Warrants”). The Placement Agent Warrants shall generally be on the same terms and conditions as the Warrants, provided that (i) the Placement Agent Warrants have an exercise price of 120% of the purchase price, and (ii) the Placement Agent Warrants shall not be exercisable for a period of six months from the initial closing date and shall be exercisable for 17 months thereafter.

The Shares, the Warrants, the Placement Agent Warrants and our Common Stock issuable upon exercise of the Warrants and the Placement Agent Warrants are being offered by the Company pursuant to an effective shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission on June 20, 2014 and was declared effective on August 6, 2014 (File No. 333-196938).

Kandi Technologies Group, Inc.

1,429,393 SHARES OF COMMON STOCK OFFERED BY SELLING STOCKHOLDERS

This prospectus relates to the resale, from time to time, by the selling stockholders identified in this prospectus under the caption “Selling Stockholders,” of up to 1,429,393 shares of our common stock, par value $0.001 per share, issuable upon the exercise of outstanding common stock purchase warrants. We are not selling any shares of our common stock under this prospectus and will not receive any proceeds from the sale of shares by the selling stockholders. However, we will receive the proceeds from any cash exercise of the warrants which, if all exercised for cash, would result in gross proceeds to us of approximately $21,440,895. The selling stockholders will bear all commissions and discounts, if any, attributable to the sale of the shares. We will bear all costs, expenses and fees in connection with the registration of the shares.

The selling stockholder may sell the shares of our common stock offered by this prospectus from time to time on terms to be determined at the time of sale through ordinary brokerage transactions or through any other means described in this prospectus under “Plan of Distribution.” The prices at which the selling stockholder may sell the shares will be determined by the prevailing market price for the shares or in negotiated transactions.

Our common stock is quoted on the NASDAQ Global Select Market under the symbol “KNDI.” On August 7, 2014, the last reported sale price of our common stock on the NASDAQ Global Select Market was $19.20 per share.

The 1,429,393 shares of common stock covered by this prospectus are issuable upon the exercise of outstanding warrants that we issued in a private placement transaction completed on January 15, 2014. Additional information about the private placement is provided in the section entitled “Description of Private Placement” of this Prospectus.

Second Quarter 2014 Financial Results

• Revenue for the second quarter grew 171.1% to $32.96 million from $12.16 million in the second quarter last year.
• GAAP net income for the second quarter was $11.16 million, or $0.27 per fully diluted share, an increase of 1168.4% from a net loss of $1.04 million, or ($0.03) per fully diluted share, in the second quarter of 2013;
   
• *Non-GAAP adjusted net income in the second quarter, which excludes the stock award expense and the change in the fair value of financial derivatives, was $3.22 million, or approximately $.08 per fully diluted shares, a 4,269.6% increase from net income of $73,785 for the same period of 2013;

"Our strong performance in the second quarter reflects sustained strong market demand for electric vehicles in China, especially our positive momentum in the Hangzhou Public EV Sharing System (the 'Car-Share' Project) and Group Long-Term Leasing Program ('Group Leasing'). The Car-Share Project has become one of most preferred business models for EV development in China. Such model is expected to be expanded into other major Chinese cities." Commented by Mr. Hu Xiaoming, Chairman and Chief Executive Officer of Kandi Technologies, "We are also pleased to see that the Chinese government has recently unveiled a series of aggressive new policies and incentives, such as EV sales tax break for consumers, government subsidy for manufactures and consumers, favorable electricity rate for EV users and incentive for building EV charging/parking infrastructure, to stimulate the electric car sales. All of those favorable policies are Chinese government's determination to reach 500,000 New Energy Vehicles (NEV) productions by 2015 and 2 million NEV productions by 2020, while only 20,000 NEV were produced and sold in China in the first half in 2014, according to the information from the Ministry of Industrial and Information Technology ('MIIT')."

"Being one of earlier movers in the Chinese EV industry, Kandi has just begun to enjoy the benefits from the favorable market trend as well as our company's strategy shift to focus on Chinese EV segment in recent two years. With the robust EV sales growth ahead of us, our management team will continue to work diligently to capture market share, refine our innovative business model, assist our partners in building out EV charging/parking infrastructure, improve corporate disclosure and investors communication, and deliver strong financial performance for our long-term shareholders," Mr. Hu concluded.

KANDI TECHNOLOGIES GROUP, INC.

CALCULATION OF REGISTRATION FEE

Item 1.01 Entry into a Material Definitive Agreement.

As disclosed in Kandi Technologies Group, Inc.'s (the “Company”) Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2014, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers identified on the signature pages thereto (the “Buyers”) pursuant to which the Company will sell to the Buyers, in a registered direct offering, an aggregate of 606,000 shares (the “Shares”) of common stock, par value $0.001 per share (“Common Stock”), at a negotiated purchase price of $18.24 per share, for aggregate gross proceeds to the Company of approximately $11,053,440, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. As part of the transaction, the Buyers will also receive 90,900 warrants for the purchase of up to 90,900 shares of our Common Stock at an exercise price of $22.80 per share (the “Warrants”). The Warrants have a term of eighteen months and are exercisable by the holders at any time after the date of issuance.

The Shares, the Warrants and the Common Stock issuable upon exercise of the Warrants are being offered by the Company pursuant to an effective shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission on April 19, 2013 and was declared effective on May 23, 2013 (File No. 333-188039). A prospectus supplement was filed with the Securities and Exchange Commission on March 19, 2014.

Kandi Technologies Group, Inc.

Pursuant to this prospectus supplement and the accompanying prospectus, we are offering to investors 606,000 shares of our common stock (the “Shares”) together with 90,900 warrants to purchase an aggregate of 90,900 shares of Common Stock at an exercise price of $22.80 per share (the “Warrants”). The Warrants have a term of eighteen months and are exercisable by the holders at any time after the date of issuance. In connection with this offering, we also issued, as additional compensation, to FT Global Capital, Inc., our exclusive placement agent, Placement Agent warrants to purchase up to 36,360 shares of Common Stock, equivalent to 6% of the Shares, at an exercise price of 125% of the purchase price of the Shares (the “Placement Agent Warrants”).

The Shares and Warrants will be sold together as a unit consisting of one Share and a Warrant (to purchase 0.15 shares of our Common Stock for each Share included in the unit). The negotiated purchase price per unit will be $18.24. The Shares and the Warrants will be issued separately but can only be purchased together in this offering. The shares of common stock issuable from time to time pursuant to the exercise of the Warrants are also being offered pursuant to this prospectus supplement and the accompanying prospectus.

Our common stock trades on the NASDAQ Global Select Market under the symbol “KNDI.” The last reported sale price of our common stock on the NASDAQ Global Select Market on March 17, 2014 was $21.41 per share. There is no established public trading market for the Warrants and we do not expect a market to develop. In addition, we do not intend to apply for listing of the Warrants on any national securities exchange. As of March 17, 2014, the aggregate market value of our outstanding common stock held by non-affiliates was approximately $572,221,238 based on 40,105,321 shares of outstanding common stock, of which 13,378,500 shares were held by affiliates as of such date, and a price of $21.41 per share, which was the last reported sale price of our common stock as quoted on the NASDAQ Global Select Market on March 17, 2014.

Item 1.01 Entry into a Material Definitive Agreement

On March 19, 2014, Kandi Technologies Group, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers identified on the signature pages thereto (the “Buyers”) pursuant to which the Company will sell to the Buyers, in a registered direct offering, an aggregate of 606,000 shares (the “Shares”) of common stock, par value $0.001 per share (“Common Stock”), at a negotiated purchase price of $18.24 per share, for aggregate gross proceeds to the Company of approximately $11,053,440, before deducting fees to the placement agent and other estimated offering expenses payable by the Company.

As part of the transaction, the Buyers will also receive 90,900 warrants for the purchase of up to 90,900 shares of our Common Stock at an exercise price of $22.80 per share (the “Warrants”). The Warrants have a term of eighteen months and are exercisable by the holders at any time after the date of issuance.

The exercise price and the number of shares issuable upon exercise of the Warrants are subject to an adjustment upon the occurrence of certain events, including, but not limited to, stock splits or dividends, business combinations, sale of assets, similar recapitalization transactions, or other similar transactions. The exercise price of the Warrants are subject to adjustment in the event that the Company issues or is deemed to issue shares of Common Stock for less than the applicable exercise price of the Warrants.

The exercisability of the Warrants may be limited if, upon exercise, the holder or any of its affiliates would beneficially own more than 4.99% of the Common Stock. Further, the exercisability of the Warrants are subject to compliance with principal market (NASDAQ) regulations.

Management Discussion and Analysis

Results of Operations

Revenues

For the year ended December 31, 2013, our revenues increased by 46.5%, from $64,513,670 in 2012 to $94,536,045 in 2013.

In 2013, our ATVs experienced an increase in revenue of $4,005,105 or 62.6%, a 26.5% increase in unit sales, and a 28.5% increase in the average unit price compared to fiscal year 2012. The increase in revenue was primarily attributable to the market condition for ATV products, which continued to recover and the increase in the average unit price is because a higher percentage of high-end and middle-end products were sold in 2013.

In 2013, our go-karts experienced an increase in revenue of $2,393,462, or 7.8%, a 5.7% increase in unit sales, and a 1.9% increase in the average unit price compared to fiscal year 2012. The increase in revenue was mainly attributable to the relative stable growth in go-karts sales. The Company manufactures both high-end, more expensive go-kart products and less expensive go-kart products to meet customers' various needs.

In 2013, our utility vehicles (“UTVs”) experienced an increase in revenue of $836,207 or 262.1%, a 373.1% increase in unit sales, and a 23.5% decrease in the average unit price compared to fiscal year 2012. The increase in revenue was mainly attributable to the increase of UTV orders. The decrease in the average unit price was due to the fact that cheaper model UTVs took a higher percentage of sales in year 2013

Net Income (Loss)

For the fiscal year ended December 31, 2013, the Company generated a net loss of ($21,140,723), a significant change from a net income of $6,049,479 in year 2012. The decrease was caused by (i) changes in the fair value of financial derivatives, (ii) increases in general and administrative expenses, and (iii) interest expenses.

Excluding the effects of (i) option-related expenses, which were $0 and $19,053 for 2013 and 2012, respectively, (ii) the stock award expense, which was $9,658,320 and $85,558 for 2013 and 2012, respectively, (iii) the Convertible Note's interest expense, which was $0 and $2 for 2013 and 2012, respectively, (iv) the effect caused by amortization of discount on Convertible Notes, which was $0 and $43 for 2013 and 2012, respectively, and (v) the change of the fair value of financial derivatives, which was a ($16,647,283) expense and a $1,986,063 income for 2013 and 2012, respectively, the Company's net income for the year ended December 31, 2013, was $5,164,880. This net income figure represents an increase of 23.9% as compared with net income of $4,168,072 for the same period of 2012, excluding the same effects. This increase is primarily due to our increased sales and gross profit.