JINHUA, CHINA--(Marketwire - Nov 14, 2012) -  Kandi Technologies, Corp. (the 'Company' or 'Kandi') (NASDAQ: KNDI), a leading Chinese manufacturer and developer of pure electric vehicles (EVs) and off-road vehicles, today announced its unaudited financial results for the third quarter ended September 30, 2012.

Q3 2012 Financial Highlights:

• Revenue for the third quarter grew 23.8% year-over-year to $12.77 million from $10.31 million last year. ATV sales grew 66.0% to $1.73 million and EV sales grew 83.8% to $2.78 million as compared to the same period of 2011
• Income from operations jumped by 164.5% in the quarter to $1.49 million as compared to $0.57 million in the same period of 2011
• Gross margins reached to 25.3% in the 2012 third quarter, up from 22.6% in the prior year
• GAAP net income in the third quarter jumped to $0.59 million, or $0.02 per diluted share, a 54.5% increase compared to a GAAP net income of $0.38 million, or $0.01 per diluted share, in the same period last year
• Non-GAAP adjusted net income in the third quarter of 2012, excluding effects from convertible notes' interest expense, amortization of discount on convertible notes, stock awards expense and the change of the fair value of derivatives was $1.51 million, an increase of 111.5% compared with $0.72 million in the same period of 2011
• The Company sold 471 electronic vehicles in Q3, all related to the previously announced 3,000 EV order from Jinhua City
• A working capital surplus of $25.90 million was achieved at quarter-end, improved from a reported working capital surplus of $18.94 million as of September 30, 2011
• Cash, cash equivalents and restricted cash totaled $21.44 million at quarter-end, a 140% increase from $8.93 million at the end of 2011

Mr. Xiaoming Hu, Chairman and Chief Executive Officer of Kandi Technologies, commented, "We are very pleased to report another successful quarter just before the initial launch of our largest EV project in China, Hangzhou's 20,000 EV leasing program. The third quarter demonstrated the balanced growth of both Kandi's legacy businesses, particularly the ATV and Go-cart segment, and the continued strength of our EV business offerings. During the quarter, we achieved robust year-over-year revenue and net income growth. We also have very strong EV sales in Jinhua City and sold 471 EVs in Q3. In coming months, by collaborating closely with State Grid Corporation of China (SGCC), China Aviation Lithium Battery Co., Ltd (CALB), and Hangzhou municipal government, we expect to launch the initial shipment of the first 5000 EVs to CALB for the currently largest pure EV commercialization launch in China -- the 20,000 pure EV leasing program in Hangzhou." 

"There is a growing demand in China for clean energy products and solutions at both the national as well as municipal level. Our company is uniquely positioned to capitalize on this trend with our practical EV products and innovative business model which shall strengthen Kandi's market leadership in China."

Outlook
"The recent Letter of Intent we have entered with the government of Weifang Binhai Economic Development Zone of Shandong Province and Wanning city government of Hainan Province will help us effectively expand into new markets and build order backlog for the years to come. We are confident that our business model will be soon replicated in many other markets throughout China given our successful track record, favorable central government policy, support from regional government and our strong alliance with industry partners," concluded Mr. Hu.

*EXPLANATION OF NON-GAAP RESULTS

In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non-GAAP financial measures that we believe are helpful in understanding and comparing our past financial performance and our future results. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Management believes the non-GAAP financial measures are appropriate for period to period comparisons in our budget, planning and evaluation processes, and to show the reader how our performance compares to other periods. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects: Non-GAAP net income and losses, and related per share amounts as reported for Q1 2012 exclude the effects of all option related expenses, stock award expense, Convertible Note interest expense, effects caused by amortization of discounts, on Convertible Notes, and the change of the fair value of financial derivatives.

KANDI TECHNOLOGIES, CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
		September 30,			December 31,
		2012			2011
		(Unaudited)
CURRENT ASSETS
Cash and cash equivalents		$	1,546,006		$	2,294,352
Restricted cash			19,895,444			6,634,989
Accounts receivable			26,921,141			12,932,776
Inventories (net of reserve for slow moving inventory of $0 and $72,487 as of September 30, 2012 and December 31, 2011 respectively)			14,385,086			6,674,467
Notes receivable			15,980,324			37,879,243
Other receivables			1,056,257			2,438,917
Prepayments and prepaid expenses			92,349			185,037
Due from employees			57,624			79,857
Advances to suppliers			4,105,847			852,638
Total Current Assets			84,040,078			69,972,276
LONG-TERM ASSETS
Plant and equipment, net			18,124,202			20,981,893
Land use rights, net			14,383,669			10,992,769
Intangible assets			723,003			-
Construction in progress			12,214,227			10,007,601
Deferred taxes			35,025			89,998
Investment in associated companies			184,701			229,213
Goodwill			437,525			-
Total Long-Term Assets			46,102,352			42,301,474
TOTAL ASSETS		$	130,142,430		$	112,273,750

KANDI TECHNOLOGIES, CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
			September 30,			December 31,
			2012			2011
			(Unaudited)
CURRENT LIABILITIES
Accounts payable			$	10,968,071		$	5,061,069
Other payables and accrued expenses				1,182,349			3,137,983
Short-term bank loans				34,970,003			36,372,492
Customer deposits				131,557			1,025,357
Notes payable, net of discount of $0 and $71 as of September 30, 2012 and December 31, 2011 respectively				9,630,565			5,847,552
Income tax payable				181,766			153,730
Due to employees				160,547			9,455
Due to related party				841,251			841,251
Deferred taxes				70,522			56,362
Financial derivate - liability				-			213
	Total Current Liabilities			58,136,631			52,505,464
LONG-TERM LIABILITIES
Financial derivatives - liability				2,621,557			3,919,411
	Total Long-Term Liabilities			2,621,557			3,919,411
TOTAL LIABILITIES				60,758,188			56,424,875
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value; 100,000,000 shares authorized; 29,941,134and 27,445,600 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively				29,941			27,446
Additional paid-in capital				38,614,210			31,533,378
Retained earnings (the restricted portion is $1,940,832 at September 30, 2012 and December 31, 2011)				23,093,029			19,210,330
Accumulated other comprehensive income				7,647,062			5,077,721
TOTAL STOCKHOLDERS' EQUITY				69,384,242			55,848,875
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	130,142,430		$	112,273,750

KANDI TECHNOLOGIES, CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
		Three Months Ended						Nine Months Ended
		30-Sep-12			30-Sep-11			30-Sep-12			30-Sep-11
REVENUES, NET		$	12,765,694		$	10,310,558		$	38,182,211		$	28,789,766
COST OF GOODS SOLD			-9,541,687			-7,984,828			-29,829,097			-22,060,888
GROSS PROFIT			3,224,007			2,325,730			8,353,114			6,728,878
Research and development			-630,083			-608,463			-2,006,269			-1,695,003
Selling and marketing			-158,714			-85,239			-331,750			-234,854
General and administrative			-940,930			-1,067,021			-2,520,600			-2,568,417
INCOME FROM CONTINUING OPERATIONS			1,494,280			565,007			3,494,495			2,230,604
Interest income (expense), net			-76,866			117,353			-133,806			95,549
Change in fair value of financial instruments			-882,731			-271,780			1,078,795			7,480,992
Government grants			20,634			9,235			45,942			289,962
Investment (loss) income			-18,259			-12,905			-45,670			-20,181
Other income, net			239,203			95,067			285,805			262,299
INCOME (LOSS) BEFORE INCOME TAXES			776,261			501,977			4,725,561			10,339,225
INCOME TAX EXPENSE			-181,743			-117,119			-842,863			-394,624
NET INCOME			594,518			384,858			3,882,698			9,944,601
OTHER COMPREHENSIVE INCOME
Foreign currency translation			-260,114			377,991			2,569,341			1,524,411
COMPREHENSIVE INCOME (LOSS)		$	334,404		$	762,849		$	6,452,039			11,469,012
WEIGHTED AVERAGE SHARES OUTSTANDING BASIC			29,909,130			27,445,600			29,068,208			27,436,434
WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED			31,464,257			28,617,870			30,413,267			28,740,204
NET INCOME PER SHARE, BASIC		$	0.02		$	0.01		$	0.13			0.36
NET INCOME PER SHARE, DILUTED		$	0.02		$	0.01		$	0.13			0.35

KANDI TECHNOLOGIES, CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
			Nine Months Ended September 30
			2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)			$	3,882,698		$	9,944,601
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization				3,694,917			3,501,765
Deferred taxes				72,004			236,939
Option and warrant expense				19,053			195,474
Change of derivative instrument's fair value				-1,297,854			-7,480,992
Loss in investment in associated company				45,670			29,786
Changes in operating assets and liabilities:
(Increase) Decrease In:
Accounts receivable				-13,939,987			8,118,796
Inventories				-7,686,157			-2,554,537
Other receivables and prepaid expenses				1,395,899			-880,750
Due from employees				173,844			10,376
Prepayments and prepaid expenses				-3,158,733			-3,290,026
	Marketable equity securities (trading)			-			305,564
Increase (Decrease) In:
Accounts payable				5,888,514			-1,431,210
Other payables and accrued liabilities				-1,957,184			-156,970
Customer deposits				-899,693			-24,783
Income tax payable				27,318			-14,090
Net cash (used in) provided by operating activities			$	-13,739,691		$	6,509,943
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Acquired in Acquisition				112,551			-
	Purchases of plant and equipment			-472,696			-240,954
	Purchase of construction in progress			-2,160,338			-6,019,101
	Issuance of notes receivable			-1,010,596			-2,751,302
	Repayments of notes receivable			23,115,794			7,810,463
Net cash provided by (used in) investing activities			$	19,584,715		$	-1,200,894
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash			$	-13,241,885		$	-8,255,977
Proceeds from short-term bank loans				31,023,311			25,607,093
Repayments of short-term bank loans				-32,603,714			-22,748,197
Proceeds from notes payable				18,316,871			33,309,509
Repayments of notes payable				-14,558,408			-39,023,610
Option exercise & other financing				116,903			65,544
Common Stock Issued, net of Cost of Capital				3,741,790			-
Warrant exercise				219,059
Net cash provided by financing activities				-6,986,073			-11,045,638
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				-1,141,049			-5,736,589
	Effect of exchange rate changes on cash			392,703			-136,100
	Cash and cash equivalents at beginning of period			2,294,352			7,754,166
CASH AND CASH EQUIVALENTS AT END OF PERIOD			$	1,546,006		$	1,881,477
SUPPLEMENTARY CASH FLOW INFORMATION
	Income taxes paid		$	688,668		$	408,714
	Interest paid		$	2,062,306		$	1,776,835
Issuance of Common Stock for Acquisition			$	8,616,416			-

About Kandi Technologies, Corp.

Kandi Technologies, Corp. (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. More information can be viewed at its corporate website is http://www.kandivehicle.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.