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Form 10-K Kandi Technologies Group For: Dec 31

March 15, 2022 8:13 AM EDT

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Exhibit 4.5

 

DESCRIPTION OF SECURITIES

 

REGISTERED PURSUANT TO SECTION 12 OF THE

 

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

 

As of December 31, 2021, Kandi Technologies Group, Inc. (the “Company,” “we,” “us,” and “our” or “Kandi”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which is our common stock, par value $0.001 per share (the “common stock”).

 

We are incorporated in the State of Delaware. The rights of our shareholders are generally covered by Delaware law and our certificate of incorporation and by-laws. The terms of our common stock are therefore subject to Delaware law, including the Delaware General Corporation Law. The following is a summary of the material terms of our common stock. This summary does not purport to be exhaustive and is qualified in its entirety by reference to our certificate of incorporation, bylaws, to the applicable provisions of Delaware law, and to Securities Purchase Agreement, the Second RD Purchase Agreement, the Warrants and the Second RD Warrants, the Placement Agent Warrants and the Second RD Placement Agent Warrants, each is defined below.

 

As of March 10, 2022, there were 77,395,130 shares of our common stock issued and 76,256,345shares of our common stock outstanding, held by approximately 37 shareholders of record.

 

Our common stock is currently traded on the NASDAQ Global Select Market under the symbol “KNDI.”

 

Authorized Shares of Common Stock. We currently have authorized 100,000,000 shares of common stock.

 

Voting. The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders, including the election of directors, and do not have cumulative voting rights. Accordingly, the holders of a majority of the shares of our common stock entitled to vote in any election of directors can elect all of the directors standing for election.

 

Dividends. Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds.

 

Liquidation. In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to shareholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock.

 

Rights and Preferences. The holders of our common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

 

Fully Paid and Nonassessable. All of our issued and outstanding shares of common stock are fully paid and nonassessable.

 

Equiniti Trust Company (f/k/a Corporate Stock Transfer), 3200 Cherry Creek Drive South, Suite 4301, Denver, Colorado 80209, is the registrar and transfer agent of our common stock.

 

 

 

 

Delaware Anti-Takeover Provisions

 

We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a publicly-held Delaware corporation from engaging in a “business combination,” except under certain circumstances, with an “interested shareholder” for a period of three years following the date such person became an “interested shareholder” unless:

 

 

before such person became an interested shareholder, the board of directors of the corporation approved either the business combination or the transaction that resulted in the interested shareholder becoming an interested shareholder;

 

 

upon the consummation of the transaction that resulted in the interested shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares held by directors who also are officers of the corporation and shares held by employee stock plans; or

 

 

at or following the time such person became an interested shareholder, the business combination is approved by the board of directors of the corporation authorized at a meeting of shareholders by the affirmative vote of the holders of two-thirds (2/3) of the outstanding voting stock of the corporation which is not owned by the interested shareholder.

 

For purposes of Section 203, the term “interested shareholder” generally is defined as a person who, together with affiliates and associates, owns, or, within the three years prior to the determination of interested shareholder status, owned, 15% or more of a corporation’s outstanding voting stock. The term “business combination” includes mergers, asset or stock sales and other similar transactions resulting in a financial benefit to an interested shareholder.   Section 203 makes it more difficult for an “interested shareholder” to effect various business combinations with a corporation for a three-year period. The existence of this provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by shareholders. Presently, we have not opted out of this provision.

 

Common Stock underlying the Warrants

 

On November 12, 2020, Kandi entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers (the “Buyers”) pursuant to which the Company sold to the Buyers, in a registered direct offering, an aggregate of 9,404,392 units (the “Units”), each consisting of one share (the “Shares”) of our common stock, and 0.4 warrant to purchase a share of our common stock (the “Warrants”), at a purchase price of $6.38 per share, for aggregate gross proceeds to the Company of $60,000,021, before deducting fees to the placement agent and other estimated offering expenses payable, approximately $3.1 million, by the Company. At the closing, the Company issued Units consisting of an aggregate of 9,404,392 shares of our common stock and Warrants initially exercisable into an aggregate of up to 3,761,757 shares of our common stock. The Warrants have a term of 30 months and are exercisable by the holders at any time after six months of the date of issuance at an exercise price of $8.18 per share. 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 Company issued to FT Global Capital, Inc. (the “Placement Agent”) warrants to purchase an aggregate of up to six percent (6%) of the aggregate number of shares of our common stock sold in the offering, or 564,264 shares of the common stock (the “Placement Agent Warrants”). The Placement Agent Warrants shall generally be on the same terms and conditions as the Warrants, exercisable at a price of $8.18 per share, provided that Placement Agent Warrants will not provide for certain anti-dilution protections included in the Warrants.

 

On November 24, 2020, Kandi entered into a Securities Purchase Agreement (the “Second RD Purchase Agreement”), with certain purchasers (the “Second RD Buyers”) pursuant to which the Company sold to the Second RD Buyers, in a registered direct offering, an aggregate of 8,849,560 units (the “Second RD Units”), each consisting of one share (the “Second RD Shares”) of our common stock, and a warrant to purchase 0.4 share of our common stock (the “Second RD Warrants”), at a purchase price of $11.30 per share, for aggregate gross proceeds to the Company of $100,000,028, before deducting fees to the placement agent and other estimated offering expenses payable, approximately $5.0 million, by the Company. At the closing, the Company issued Second RD Units consisting of an aggregate of 8,849,560 shares of our common stock and Second RD Warrants initially exercisable into an aggregate of up to 3,539,825 shares of our common stock. The Warrants have a term of 30 months and are exercisable by the holders at any time after the date of issuance at an exercise price of $14.50 per share. The exercise price of the Second RD Warrants is subject to adjustment in the event that the Company issues or is deemed to issue shares of our common stock for less $10.08, or the average closing price of the five trading days prior to the date of the Second RD Purchase Agreement (the “Minimum Price”).

 

The Company issued to the Placement Agent warrants to purchase an aggregate of up to three percent (3%) of the aggregate number of shares of our common stock sold in the offering, or 265,487 shares of the common stock (the “Second RD Placement Agent Warrants”). The Second RD Placement Agent Warrants shall generally be on the same terms and conditions as the Second RD Warrants, exercisable at a price of $14.50 per share, provided that the Second RD Placement Agent Warrants will not provide for certain anti-dilution protections included in the Second RD Warrants.

 

 

 

 

Exhibit 10.23

 

Share Transfer Agreement

 

Of

 

Jinhua Kandi New Energy Vehicles Co., Ltd

 

Transferor (Party A): Hu Xiaoming

Transferee (Party B): Zhejiang Kandi Technologies Group Co., Ltd.

 

Approval by the resolutions of shareholders’ meeting of Jinhua Kandi New Energy Vehicles Co., Ltd, Party A and Party B reached the following agreement on the share transfer of Jinhua New Energy Vehicles Co., Ltd:

 

1. Amount of the transferred share and its price: Party A is willing to sell 50% of the equity interest of Kandi New Energy Vehicles Co., Ltd. (the subscribed capital contribution is RMB 18 million) to Party B at a price of RMB 18 million, and Party B is willing to transfer the above equity interest at such price.

 

2. After the share transfer, the corresponding rights and obligations of Party A, as a shareholder, in Kandi New Energy Vehicles Co., Ltd shall be assumed by Party B.

 

3. Party A guarantees that he has the full right to dispose of the transferred equity interest, and there is no reason for the share to be pledged or frozen. Party A must cooperate with Party B and Kandi New Energy Vehicles Co., Ltd. to go through the transfer and modification procedures of the equity interest of this target with the registration authority in accordance with applicable law.

 

4. Liability for breach of contract and settlement of disputes: If any party to the agreement violates this agreement, and causes losses to the other party, the breaching party shall be liable and compensate for the economic losses caused to the other party.

 

5. In case of any dispute arising from this agreement, both parties shall resolve it through negotiation. If the negotiation fails, they shall file a lawsuit in the people’s court according to relevant law.

 

6. This agreement is made in triplicate, with each party holding one copy. It shall take effect after being signed (sealed) by both parties.

 

Signature (seal) of the transfer (Party A):

 

Signature (seal) of the transferee (Party B):

 

March 7, 2022 

 

Exhibit 21.1

SUBSIDIAIRES OF KANDI TECHNOLOGIES GROUP, INC.

 

Name   Place of Incorporation
     
Continental Development Limited   Hong Kong, Special Administrative Region of the People's Republic of China
Zhejiang Kandi Technologies Group Co., Ltd.   The People's Republic of China
China Battery Exchange (Zhejiang) Technology Co., Ltd.   The People's Republic of China
Jinhua Kandi New Energy Vehicles Co., Ltd.   The People's Republic of China
Kandi Electric Vehicles (Hainan) Co., Ltd.   The People's Republic of China
Hainan Kandi Holding New Energy Technology Co., Ltd.   The People's Republic of China
Zhejiang Kandi Smart Battery Swap Technology Co., Ltd.   The People's Republic of China
Yongkang Scrou Electric Co, Ltd.   The People's Republic of China
Jiangxi Province Huiyi New Energy Co., Ltd.   The People's Republic of China
SC Autosports, LLC (d/b/a: Kandi America)   Texas, USA
Kandi America Investment, LLC.   Texas, USA

 

Exhibit 23.1

 

Independent Registered Public Accounting Firm’s Consent

 

We consent to the incorporation by reference in the Registration Statement of Kandi Technologies Group, Inc. on Form S-3 (FILE NO. 333-249585), Form S-3 (FILE NO. 333-230495) and S-8 (FILE NO. 333-204459) of our report dated March 30, 2021, with respect to our audits of the consolidated financial statements of Kandi Technologies Group, Inc. as of December 31, 2020 and for the year then ended and our report dated March 30, 2021 with respect to our audit of internal control over financial reporting of Kandi Technologies Group, Inc. as of December 31, 2020 which reports are included in this Annual Report on Form 10-K of Kandi Technologies Group, Inc. for the year ended December 31, 2021.

 

/s/ Marcum Bernstein & Pinchuk llp

New York, New York

March 15, 2022

 

Exhibit 23.2

 

Consent of Independent Registered Public Accounting Firm

 

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-249585), Form S-3 (No. 333-230495) and Form S-8 (No. 333-204459) of Kandi Technologies Group, Inc. of our report dated March 15, 2022, relating to the consolidated financial statements, and the effectiveness of Kandi Technologies Group, Inc.’s internal control over financial reporting, which appears in this Form 10-K.

 

/s/ Paris, Kreit & Chiu CPA LLP

 

Paris, Kreit & Chiu CPA LLP

New York, New York

March 15, 2022

 

 

Exhibit 31.1

 

Certification Pursuant to 
Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended

 

I, Hu Xiaoming, certify that:

 

1.I have reviewed this annual report on Form 10-K of Kandi Technologies Group, Inc.

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: March 15, 2022

 

/s/ Hu Xiaoming 
Hu Xiaoming  
President and Chief Executive Officer  
(Principal Executive Officer)  

 

 

Exhibit 31.2

 

Certification Pursuant to 
Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Amended

 

I, Jehn Ming Lim, certify that:

 

1.I have reviewed this annual report on Form 10-K of Kandi Technologies Group, Inc.

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: March 15, 2022

 

/s/ Jehn Ming Lim  
Jehn Ming Lim  
Chief Financial Officer  
(Principal Financial Officer and Principal Accounting Officer)  

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 
18 U.S.C. SECTION 1350, 
AS ADOPTED PURSUANT TO 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report on Form 10-K for the year ended December 31, 2021 (the “Report”) of Kandi Technologies Group, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof, we, Hu Xiaoming, President and Chief Executive Officer, and Jehn Ming Lim, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Hu Xiaoming  
Hu Xiaoming  
President and Chief Executive Officer  
(Principal Executive Officer)  
   
/s/ Jehn Ming Lim  
Jehn Ming Lim  
Chief Financial Officer  
(Principal Financial Officer and Principal Accounting Officer)  
   
March 15, 2022  

 

 



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