JINHUA, CHINA--(Marketwire - Feb 21, 2012) - Kandi Technologies, Corp. (the 'Company' or 'Kandi') (NASDAQ: KNDI), a leading Chinese manufacturer and developer of pure electric vehicles (EVs) and all-terrain vehicles (ATVs), today announced that the company has entered into a Share Exchange Agreement (the "Agreement") to acquire Yongkang Scrou Electric. Co., Ltd. ("Scrou"), a leading Chinese manufacturer of motors and related products for Electric Vehicles (EVs), by acquiring all of the outstanding capital stock of KO NGA Investment Co., Ltd. ("KO NGA"), a British Virgin Islands Corporation and the sole owner and shareholder of Scrou. Scrou is the only operating entity of KO NGA. No closing date has presently been scheduled.
Located in Qiaoxia Industrial Zone of Yongkang City, Zhejiang Province, Yongkang Scrou Electric Co., Ltd., specializes in the manufacture of a variety of automobile generators and motors for pure EVs, as well as auto starters, auto asynchronous motors, auto air-conditioners and other auto related products. Scrou holds several international recognized verification certificates, including ISO9001-2000 and ISO / TS16949. Its driving motors and auto air-conditioning systems are essential components for pure electric vehicles and the auto industry.
Before entering into the Agreement, Kandi conducted usual due diligence on Scrou, including its land use rights, fixed assets and inventories, etc., and reviewed an evaluation report by an independent third party valuation firm which reports the net asset market value of Scrou is RMB 50,052,387.66 (approximately $7,952,524) as of November 30th, 2011. Scrou had no debts other than account payables and receivables incurred in the ordinary course of business.
According to the Agreement, Kandi will exchange a total of 2,354,211 shares of the Company's common stock, representing an aggregate exchange purchase price of RMB 50,052,387.66 (approximately $7,952,524) for the 253 shares of KO NGA, representing 100% of the issued and outstanding shares of KO NGA. The exchange purchase price was based upon the evaluation report. Upon consummation of the share exchange transaction, Scrou will become a wholly-owned subsidiary of Kandi.
Based upon Scrou's three-year business plan, Scrou expects to produce 70,000 units of driving generators for pure EVs, 70,000 units of auto air-conditioners for pure EVs and 390,000 units of auto generators for the years 2012 to 2014. The estimated total revenue and net profit for the three years in aggregation is expected to reach RMB 437,400,000 (approximately $69,428,571) and RMB 57,159,000 (approximately $ 9,072,857), respectively. All these estimated amounts are non U.S. GAAP numbers. The Company is unable to provide the comparable U.S.GAAP numbers at this time, but does not expect the variation from these numbers to be significant.
Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies, commented, "We are pleased to reach an agreement to acquire Scrou. This addition will increase our competitiveness in the pure electric vehicle industry and extend our industrial chain in EV business. Upon the completion of this transaction, Scrou will make a critical contribution to our overall electric vehicles offering, and further improve our EV products quality and cost efficiency. We expect the acquisition will further establish Kandi as the leading pure electric vehicle manufacturer in China.
About Kandi Technologies, Corp.
Kandi Technologies, Corp. (NASDAQ: KNDI) is a manufacturer and exporter of a variety of vehicles in China, making it a world leader in the production of popular off-road vehicles (ORVs). It also ranks among the leading manufacturers in China of all-terrain vehicles (ATVs), specialized utility vehicles (UTVs), and a recently introduced second-generation high mileage, two-seat three-wheeled motorcycle. Another major company focus has been on the manufacture and sale of the COCO electric vehicle (EV), a highly economical, beautifully designed, all-electric super mini-car for neighborhood driving and commuting. The convertible and hardtop models of the COCO EV are available in the United States and other countries, while the Chinese government has approved the sale of Kandi EVs in China since 2010. The Company's products can be viewed at http://www.kandivehicle.com and its corporate website is http://www.chinakandi.com.
Safe Harbor Statement
This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.