UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): November 12, 2019

 

KANDI TECHNOLOGIES GROUP, INC.
(Exact name of registrant as specified in its charter)

 

Delaware   001-33997   90-0363723
(State of Incorporation)   (Commission File Number)   (IRS Employer Identification)

 

Jinhua City Industrial Zone
Jinhua, Zhejiang Province
People’s Republic of China
Post Code 321016
(Address of principal executive offices)

 

(86-579) 8223-9700
Registrant’s telephone number, including area code

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐Soliciting material pursuant to Rule 1 4a- 12 under the Exchange Act (17 CFR 240.1 4a-12)

 

☐Pre-commencement communications pursuant to Rule 1 4d-2(b) under the Exchange Act (17 CFR 240.1 4d-2(b))

 

☐Pre-commencement communications pursuant to Rule 1 3e-4(c) under the Exchange Act (17 CFR 240.1 3e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock   KNDI   NASDAQ

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

 

 

 

 

 

 


ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On November 12, 2019, Kandi Technologies Group, Inc. (the “Company”) issued a press release announcing certain financial results for the quarter ended September 30, 2019. A copy of the press release is attached hereto as Exhibit 99.1.

 

The information contained in this Item 2.02 is not “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not deemed incorporated by reference by any general statements incorporating by reference this report or future filings into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates the information by reference.

 

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

 

(d) Exhibits.

 

Exhibit No.   Description
99.1   Press release dated November 12, 2019

 

1

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  KANDI TECHNOLOGIES GROUP, INC.
     
Date: November 12, 2019 By: /s/ Hu Xiaoming
  Name: Hu Xiaoming
  Title: Chief Executive Officer

 

 

2

 

Exhibit 99.1

 

Kandi Technologies Reports Third Quarter 2019 Financial Results

 

JINHUA, CHINA-- (November 12, 2019) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), today announced its financial results for the third quarter of 2019.

 

Third Quarter Financial Highlights

 

●Total revenues were $31.7 million for the third quarter of 2019, a decrease of 16.6% from total revenues of $38.0 million for the same period in 2018.

 

●Electric Vehicle (“EV”) parts sales decreased by 19.4%, to $25.8 million for the third quarter of 2019, compared with EV parts sales of $32.1 million for the same period in 2018.

 

●Revenues from sales of off-road vehicles decreased by 1.5%, to $5.8 million for the third quarter of 2019, compared with revenues from sales of off-road vehicles of $5.9 million for the same period in 2018.

 

●Gross profit decreased 15.5% to $5.3 million, compared to $6.2 million for the same period last year. Gross margin increased to 16.7% compared to 16.4% for the same period of 2018.

 

●GAAP net income for the third quarter of 2019 was $12.1 million, or earnings of $0.23 per fully diluted share compared with GAAP net loss of $6.5 million, or loss of $0.13 per fully diluted share for the same period in 2018.

 

●Non-GAAP adjusted net income1, which excludes stock award expenses and the change of the fair value of contingent consideration, was $12.1 million in the third quarter of 2019, compared with non-GAAP net loss of $4.9 million for the same period in 2018. Non-GAAP adjusted income per share1 was approximately $0.23 per fully diluted share for the third quarter of 2019, compared with Non-GAAP adjusted loss per share1 of $0.10 per fully diluted share for the same period in 2018.

 

●Working capital was $80.4 million as of September 30, 2019. Cash, cash equivalents and restricted cash totaled $26.1 million as of September 30, 2019.

 

 

 

 

 

 

 

 

 

 

 

 

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, commented, “Kandi’s financial performance in the first three quarters of 2019 were unsatisfying due to the negative impact stemming from the Affiliate Company’s2 equity adjustment and the corresponding changes to its business operations. However, over the past six months, the Company’s efforts have led to new opportunities for its future development. These efforts include reorganizing and working with other business partners to facilitate the online ride-sharing service alliance project, which offers 300,000 government-accredited vehicles within five years. The Company’s efforts also include improving the operation and production capacity of the Hainan facility, enhancing the Company’s ability to supply the EV-part products, strengthening its relationship with DGL Group Inc. (USA) while simultaneously developing the business of the all-terrain vehicles. We are confident in the Company’s ability to grow and prosper in 2020. In addition, Geely Technologies Group Co., Ltd. has conducted substantial work in connection with the improvement of the Affiliate Company and achieved significant results, details of which will be released by the Affiliate Company in December.”

 

Revenues and Gross Profit

 

　  3Q19   3Q18   Y-o-Y% 
Revenues (US$million)  $31.7   $38.0    -16.6%
Gross Profit (US$million)  $5.3   $6.2    -15.5%
Gross Margin   16.7%   16.4%   - 

 

Revenues for the third quarter of 2019 decreased by 16.6% compared to the same period of last year. The decrease in revenues was mainly due to the decrease in EV parts sales during this quarter. The decrease in EV parts sales was primarily due to the Affiliate Company’s temporary declining sales, which was caused by its product adjustments. The increase in the gross margin was mainly due to the increased selling price of the charging and exchanging equipment and the increased proportion of the high-margin battery processing business this year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2Refers to Kandi Electric Vehicles Group Co., Ltd., formerly known as the “JV Company”.

 

2

 

 

Operating Income (Loss)

 

　  3Q19   3Q18   Y-o-Y% 
Operating Expenses (US$million)  $5.0   $8.7    -42.7%
Operating Income (Loss) (US$million)  $0.3   $(2.4)   -113.1%
Operating Margin   1.0%   -6.4%   - 

 

Total operating expenses in the third quarter of 2019 were $5.0 million, compared with $8.7 million in the same quarter of 2018. The decrease in total operating expenses was due to the decreased R&D expenses, which were $0.6 million in this quarter compared with $5.7 million in the same quarter last year.

 

The following table summarizes our non-GAAP net income for the three months ended September 30, 2019 and 2018:

 

　  3Q19   3Q18   Y-o-Y% 
Net Income (Loss) (US$million)  $12.1   $(6.5)   -285.4%
Earnings (Loss) per Weighted Average Common Share  $0.23   $(0.13)   - 
Earnings (Loss) per Weighted Average Diluted Share  $0.23   $(0.13)   - 
Stock Award Expenses (US$million)  $0.02   $0.03    -27.6%
Change in the Fair Value of Contingent Consideration (US$million)  $(0.06)  $1.6    -103.7%
Non-GAAP Net Income (Loss) (US$million)  $12.1   $(5.0)   -344.2%

 

Net income was $12.1 million in the third quarter of 2019, compared with net loss of $6.5 million in the same quarter of 2018. The increase of net income for this quarter was primarily attributable to the gain from equity sale in the Affiliate Company and the decreased research and development expense.

 

Non-GAAP net income was $12.1 million in the third quarter of 2019, compared to Non-GAAP net loss of $5.0 million in the same quarter of 2018. The increase of net income (non-GAAP) was primarily attributable to the gain from equity sale in the Affiliate Company and the decreased research and development expense.

 

3

 

 

Third Quarter 2019 Conference Call Details

 

The Company has scheduled a conference call and live webcast to discuss its third quarter 2019 financial results at 8:00 A.M. Eastern Time (9:00 P.M. Beijing Time) on November 12, 2019. Mr. Hu Xiaoming, Chief Executive Officer of the Company, and Mr. Zhu Xiaoying, interim Chief Financial Officer of the Company, will deliver prepared remarks to be followed by a question and answer session.

 

Dial-in details for the conference call are as follows:

 

●Toll-free dial-in number: +1-866-548-4713

 

●International dial-in number: + 1-323-794-2093

 

●Webcast and replay: http://public.viavid.com/index.php?id=136981

 

A live audio webcast of the call can also be accessed by visiting Kandi’s Investor Relations page on the Company’s website at http://www.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”) and its subsidiaries, SC Autosports, LLC, a wholly-owned subsidiary of Kandi in the United States and Kandi Electric Vehicles Group Co., Ltd. (the “Affiliate Company”). Kandi Vehicles has established itself as one of China’s leading manufacturers of pure electric vehicle (“EV”) parts and off-road vehicles.

 

In 2013, Kandi Vehicles and Geely Group, China’s leading automaker, jointly invested in the establishment of the Affiliate Company in order to develop, manufacture and sell pure EV products. As of September 30, 2019, Geely Technologies Group Co., Ltd. (including its affiliate) and Kandi Vehicles respectively hold 78% and 22% of the equity interest in the Affiliate Company. The Affiliate 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.

 

4

 

 

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.

 

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 -

 

5

 

 

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET

   

   September 30,
2019		   December 31,
2018		 
   (UNAUDITED)     
Current assets        
Cash and cash equivalents  $14,338,637   $15,662,201 
Restricted cash   11,713,004    6,690,870 
Accounts receivable (net of allowance for doubtful accounts of $130,420 and $120,010 as of September 30, 2019 and December 31, 2018, respectively)   54,859,801    34,274,728 
Inventories   35,447,383    21,997,868 
Notes receivable   41,549,888    72,712 
Notes receivable from the Affiliate Company and related party   -    3,861,032 
Other receivables   12,859,304    1,264,323 
Prepayments and prepaid expense   9,497,459    11,136,408 
Due from employees   5,499    1,001 
Advances to suppliers   4,474,104    4,705,183 
Amount due from the Affiliate Company, net   25,335,894    67,683,462 
Right - of - use asset   42,974    - 
TOTAL CURRENT ASSETS   210,123,947    167,349,788 
           
LONG-TERM ASSETS          
Property, plant and equipment, net   74,491,204    82,045,923 
Land use rights, net   11,084,717    11,749,728 
Construction in progress   17,781    - 
Deferred taxes assets   -    8,204 
Investment in the Affiliate Company   53,837,011    128,929,893 
Goodwill   27,762,120    28,552,215 
Intangible assets   3,723,988    4,328,127 
Other long term assets   4,803,349    5,865,386 
TOTAL Long-Term Assets   175,720,170    261,479,476 
           
TOTAL ASSETS  $385,844,117   $428,829,264 
           
CURRENT LIABILITIES          
Accounts payable  $79,632,036   $112,309,683 
Other payables and accrued expenses   4,843,001    4,251,487 
Short-term loans   30,969,731    30,539,236 
Customer deposits   33,535    94,408 
Notes payable   11,463,004    12,787,619 
Income tax payable   1,519,699    3,471,366 
Due to employees   7,105    28,473 
Deferred income   1,237,556    1,340,605 
Lease liability   44,121    - 
Total Current Liabilities   129,749,788    164,822,877 
           
LONG-TERM LIABILITIES          
Long term bank loans   27,606,502    28,794,136 
Deferred taxes liability   1,758,643    1,711,343 
Contingent consideration liability   6,562,000    7,256,000 
Other long-term liability   -    622,034 
Total Long-Term Liabilities   35,927,145    38,383,513 
           
TOTAL LIABILITIES   165,676,933    203,206,390 
           
STOCKHOLDER’S EQUITY          
Common stock, $0.001 par value; 100,000,000 shares authorized;  56,263,102 and 55,992,002 shares issued and 52,839,441 and 51,484,444 outstanding at September 30, 2019 and December 31, 2018, respectively   52,839    51,484 
Less: Treasury stock (487,155 shares with average price of $5.09 and 0 shares at September 30, 2019 and December 31, 2018, respectively )   (2,477,965)   - 
Additional paid-in capital   259,691,370    254,989,657 
Accumulated deficit (the restricted portion is $4,422,033 and $4,422,033 at September 30, 2019 and December 31, 2018, respectively)   (9,135,198)   (9,497,009)
Accumulated other comprehensive loss   (27,963,862)   (19,921,258)
TOTAL STOCKHOLDERS’ EQUITY   220,167,184    225,622,874 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $385,844,117   $428,829,264 

 

6

 

  

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

  

   Three Months Ended   Nine Months Ended 
   September 30,
2019		   September 30,
2018		   September 30,
2019		   September 30,
2018		 
                 
REVENUES FROM UNRELATED PARTY, NET  $26,968,385   $14,860,034   $63,360,044   $32,211,352 
REVENUES FROM THE AFFILIATE COMPANY AND RELATED PARTY, NET   4,720,159    23,135,326    10,543,190    30,479,521 
                     
REVENUES, NET   31,688,544    37,995,360    73,903,234    62,690,873 
                     
COST OF GOODS SOLD   (26,412,129)   (31,753,311)   (61,288,228)   (53,044,861)
                     
GROSS PROFIT   5,276,415    6,242,049    12,615,006    9,646,012 
                     
OPERATING EXPENSES:                    
Research and development   (596,187)   (5,691,649)   (1,766,210)   (7,091,836)
Selling and marketing   (930,810)   (898,896)   (2,448,291)   (1,875,294)
General and administrative   (3,432,920)   (2,070,947)   (11,096,246)   (5,534,039)
Total Operating Expenses   (4,959,917)   (8,661,492)   (15,310,747)   (14,501,169)
                     
INCOME (LOSS) FROM OPERATIONS   316,498    (2,419,443)   (2,695,741)   (4,855,157)
                     
OTHER INCOME (EXPENSE):                    
Interest income   209,736    52,745    559,954    1,452,522 
Interest expense   (435,524)   (483,376)   (1,304,062)   (1,505,409)
Change in fair value of contingent consideration   57,000    (1,552,686)   694,000    1,814,326 
Government grants   502,146    607,008    725,189    717,821 
Gain from equity dilution in the Affiliate Company   (49,285)   -    4,291,974    - 
Gain from equity sale in the Affiliate Company   20,574,217    -    20,574,217    - 
Share of loss after tax of the Affiliate Company   (8,433,767)   (3,247,343)   (22,883,126)   (79,592)
Other income , net   57,833    15,735    357,626    666,294 
Total other income (expense), net   12,482,356    (4,607,917)   3,015,772    3,065,962 
                     
INCOME (LOSS) BEFORE INCOME TAXES   12,798,854    (7,027,360)   320,031    (1,789,195)
                     
INCOME TAX (EXPENSE) BENEFIT   (709,413)   505,961    41,780    370,316 
                     
NET INCOME (LOSS)   12,089,441    (6,521,399)   361,811    (1,418,879)
                     
OTHER COMPREHENSIVE INCOME (LOSS)                    
Foreign currency translation   (8,531,043)   (8,108,270)   (8,042,604)   (13,230,652)
                     
COMPREHENSIVE INCOME (LOSS)  $3,558,398   $(14,629,669)  $(7,680,793)  $(14,649,531)
                     
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC AND DILUTED   52,613,642    51,474,048    52,332,260    51,089,047 
                     
NET INCOME (LOSS) PER SHARE, BASIC AND DILUTED  $0.23   $(0.13)  $0.01   $(0.03)

 

7

 

 

KANDI TECHNOLOGIES GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

 

    Number of Outstanding Shares     Common Stock     Treasury Stock     Additional Paid-in Capital     Accumulated Deficit     Accumulated Other Comprehensive Income     Total  
Balance, December 31, 2018     51,484,444       51,484       -       254,989,657       (9,497,009 )     (19,921,258 )     225,622,874  
Stock issuance and award     1,096,397       1,097       -　       3,387,379       -　       -　       3,388,476  
Net income (loss)     -       -       -       -       (4,409,472 )     -       (4,409,472 )
Foreign currency translation     -　       -　       -　       -　       -　       5,404,028       5,404,028  
                                                         
Balance, March 31, 2019     52,580,841       52,581       -       258,377,036       (13,906,481 )     (14,517,230 )     230,005,906  
Stock issuance and award     238,600       238       -　       1,259,569       -　       -　       1,259,807  
Net income (loss)     -       -       -       -       (7,318,158 )     -       (7,318,158 )
Foreign currency translation     -　       -　       -　       -　       -　       (4,915,589 )     (4,915,589 )
                                                         
Balance, June 30, 2019     52,819,441       52,819       -       259,636,605       (21,224,639 )     (19,432,819 )     219,031,966  
Stock issuance and award     20,000       20       -　       69,380       -　       -　       69,400  
Stock buyback     -       -       (2,477,965 )     -       -       -       (2,477,965 )
Commission in stock buyback     -　       -　       -　       (14,615 )     -　       -　       (14,615 )
Net income (loss)     -       -       -       -       12,089,441       -       12,089,441  
Foreign currency translation     -　       -　       -　       -　       -　       (8,531,043 )     (8,531,043 )
                                                         
Balance, September 30, 2019     52,839,441       52,839       (2,477,965 )     259,691,370       (9,135,198 )     (27,963,862 )     220,167,184  

 

    Number of Outstanding Shares     Common Stock     Treasury Stock     Additional Paid-in Capital     Accumulated Deficit     Accumulated Other Comprehensive Income     Total  
Balance, December 31, 2017     48,036,538       48,037       -       233,055,348       (3,802,310 )     (6,310,763 )     222,990,312  
Stock issuance and award     2,972,337       2,972       -　       19,099,556       -　       -　       19,102,528  
Net income (loss)     -       -       -       -       3,727,995       -       3,727,995  
Foreign currency translation     -　       -　       -　       -　       -　       7,465,240       7,465,240  
                                                         
Balance, March 31, 2018     51,008,875       51,009       -       252,154,904       (74,315 )     1,154,477       253,286,075  
Stock issuance and award     288,600       289       -　       2,038,476       -　       -　       2,038,765  
Net income (loss)     -       -       -       -       1,374,525       -       1,374,525  
Foreign currency translation     -　       -　       -　       -　       -　       (12,587,622 )     (12,587,622 )
                                                         
Balance, June 30, 2018     51,297,475       51,298       -       254,193,380       1,300,210       (11,433,145 )     244,111,743  
Stock issuance and award     184,469       184       -　       787,529       -　       -　       787,713  
Net income (loss)     -       -       -       -       (6,521,399 )     -       (6,521,399 )
Foreign currency translation     -　       -　       -　       -　       -　       (8,108,271 )     (8,108,271 )
                                                         
Balance, September 30, 2018     51,481,944       51,482       -       254,980,909       (5,221,189 )     (19,541,416 )     230,269,786  

 

8

 

 

KANDI TECHNOLOGIES GROUP, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 

    Nine Months Ended 
   September 30,
2019		   September 30,
2018		 
         
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss)  $361,811   $(1,418,879)
Adjustments to reconcile net income to net cash provided by operating activities          
Depreciation and amortization   6,443,422    2,271,599 
Impairments   44,544    24,854 
Allowance for doubtful accounts   15,366    (7,093)
Deferred taxes   50,693    - 
Share of loss after tax of the Affiliate Company   22,883,126    79,592 
Gain from equity dilution in the Affiliate Company   (4,291,974)   - 
Gain from equity sale in the Affiliate Company   (20,574,217)   - 
Change in fair value of contingent consideration   (694,000)   (1,814,326)
Stock compensation cost   1,337,333    253,934 
           
Changes in operating assets and liabilities:          
(Increase) Decrease In:          
Accounts receivable   (36,822,184)   (52,845,923)
Deferred taxes assets   -    (52,126)
Notes receivable   174,881    491,272.00 
Notes receivable from the Affiliate Company and related party   437,203    3,196,340 
Inventories   (14,813,147)   1,555,993 
Other receivables and other assets   (17,275,954)   1,497,230 
Due from employee   (25,861)   945 
Advances to supplier and prepayments and prepaid expenses   1,357,001    (4,590,404)
Amount due from the Affiliate Company   30,549,072    (81,549,214)
Amount due from Affiliate Company-Long term   -    15,907,183 
Due from related party   -    161,874 
           
Increase (Decrease) In:          
Accounts payable   11,383,411    101,684,965 
Other payables and accrued liabilities   7,791,028    29,845,307 
Notes payable   (11,836,950)   (12,434,813)
Customer deposits   (59,734)   20,350 
Income tax payable   (1,803,574)   (2,353,826)
Deferred income   (56,448)   (761,643)
Net cash used in operating activities  $(25,425,152)  $(836,809)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property, plant and equipment, net   (955,670)   (304,745)
Purchases of land use rights and other intangible assets   -    (105,480)
Acquisition of Jinhua An Kao (net of cash received)   -    (3,610,846)
Acquisition of SC Autosports   -    486,954 
Purchases of construction in progress   (18,491)   (425,241)
Reimbursement of capitalize interests for construction in progress   -    1,818,390 
Cash received from equity sale in the Affiliate Company   32,061,558    - 
Long Term Investment   -    1,458,464 
Net cash provided by (used in) investing activities  $31,087,397   $(682,504)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from short-term bank loans   27,864,409    25,515,452 
Repayments of short-term bank loans   (26,261,331)   (26,283,065)
Repayments of long-term bank loans   (145,734)   (153,523)
Proceeds from notes payable   -    40,313,800 
Repayment of notes payable   -    (43,024,633)
Cash used for stock buyback   (2,492,579)   - 
Net cash used in financing activities  $(1,035,235)  $(3,631,969)
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH   4,627,010    (5,151,282)
Effect of exchange rate changes on cash   (928,440)   (512,545)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR   22,353,071    16,110,496 
           
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD   26,051,641    10,446,669 
-CASH AND CASH EQUIVALENTS AT END OF PERIOD   14,338,637    1,342,085 
-RESTRICTED CASH AT END OF PERIOD   11,713,004    9,104,584 
           
SUPPLEMENTARY CASH FLOW INFORMATION          
Income taxes paid   1,711,101    1,981,072 
Interest paid   1,304,062    1,274,399 
           
SUPPLEMENTAL NON-CASH DISCLOSURES:          
Acquisition of Jinhua An Kao by stock   -    20,718,859 
Acquisition of SC Autosports by stock   -    756,664 
Amount due from the Affiliate Company converted to investment in the Affiliate Company   -    83,669,804 
Notes receivable from unrelated parties for equity transfer payment   43,137,369    - 

 

 

9