United States securities and exchange commission logo
October 26, 2021
Xiaoming Hu
President and Chief Executive Officer
Kandi Technologies Group, Inc.
Jinhua New Energy Vehicle Town
Jinhua, Zhejiang Province
People's Republic of China
Post Code 321016
Re: Kandi Technologies
Group, Inc.
Form 10-K for the
Year Ended December 31, 2020
Form 10-Q for the
Quarter Ended June 30, 2021
File No. 001-33997
Dear Mr. Hu:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Year Ended December 31, 2020
General
1. To the extent the
comments contained in our letter dated October 26, 2021 relating to the
Form F-4 filed by Kandi
Technologies, Inc. (File No. 333-259881), including comments
1-11, apply to the
disclosure contained in the Form 10-K, which you incorporate by
reference to the Form
F-4, please make appropriate and corresponding revisions.
Item 1
Business, page 1
2. We note your website
currently offers potential customers the ability to reserve a
neighborhood or
off-road electric vehicle. Please revise your disclosure to describe
Xiaoming Hu
FirstName LastNameXiaoming
Kandi Technologies Group, Inc.Hu
Comapany
October 26,NameKandi
2021 Technologies Group, Inc.
October
Page 2 26, 2021 Page 2
FirstName LastName
the reservation, order, and sale process. Indicate what obstacles must
be overcome to start
vehicle deliveries, and estimate when these will start. Disclose
whether and how the final
models will differ from the prototypes shown on your website.
3. Please revise your disclosure to more fully describe your principal
products and services,
their markets, and distribution methods. See Item 101(h)(4)(i)-(iii)
of Regulation S-K.
Please also address the following:
Clarify the development and production status of your electric
vehicle models (K23,
K27, and K32);
Identify whether you have made sales and deliveries of the K23,
K27, and K32 in
each of your key markets;
Describe the "nationwide sales channels" of SC Autosports, LLC,
and, if
different, your authorized dealer network; and
Describe your Ride-Share Program and clarify how this relates
to the online ride-
sharing service program/project.
4. We note that you identify one of your material suppliers as "Supplier
D." Please disclose
the names of your principal suppliers. See Item 101(h)(4)(v) of
Regulation S-K.
5. Please outline your commitments and other material terms related to
the project of
"300,000 government-accredited ride-sharing vehicles within 5 years."
Please update the
status of your plans of gradual delivery of 1,000 EVs to the city of
Haikou in Hainan
province and 2,500 EVs to the city of Shaoxing in Zhejiang province.
Please also
describe more fully how your changing-battery-model functions and
highlight the
potential risks, if material.
6. We note your relocation from the Jinhua Industrial Park and contract
to build up
production facilities in Haikou City to an annual production of
100,000 EV products.
Please clarify whether you own these production facilities, describe
the "EV products"
manufactured there, and disclose your current production capacity.
Intellectual Property and Licenses, page 5
7. Please disclose the duration of your patents and other items specified
in Item
101(h)(4)(vii).
Item 1A
Risk Factors, page 7
8. We note your disclosure that identifies Fengsheng Automotive
Technologies (or the
Affiliate Company) as your third most important customer and describes
the sale of your
interest in the Affiliate Company in March 2021. We further note risk
factor disclosure
that your operating results would be materially negatively affected if
your relationship
with the Affiliate Company and/or your partner in the Affiliate
Company changes
negatively. Please revise this disclosure to reflect that Fengsheng
Automotive is no longer
Xiaoming Hu
FirstName LastNameXiaoming
Kandi Technologies Group, Inc.Hu
Comapany
October 26,NameKandi
2021 Technologies Group, Inc.
October
Page 3 26, 2021 Page 3
FirstName LastName
your affiliate, if true, and describe the material effects of the
change in your relationship.
9. Please consider additional risk factor disclosure related to electric
vehicle delivery delays,
speed and usage restrictions, availability of charging options, sales
in states where you do
not have an authorized dealer, and customer ability to obtain warranty
and other after-
sale service.
Item 3
Legal Proceedings, page 19
10. Please update your description of legal proceedings. For example,
please indicate the
outcome of your motion to dismiss filed in March 2021 (Note 26, page
F-34).
Note 6 - Summary of Significant Accounting Policies
(f) Accounts Receivable and Due from Affiliate Company and Related Parties,
page F-14
11. We note your disclosure that credit terms with your customers are
typically 180 to 360
days after delivery. We also note that as of December 31, 2020 and
December 31, 2019,
the allowance for doubtful accounts was less that 1% of your gross
accounts receivable
balance. Please address the following:
Tell us how you determined the appropriate allowance amount at
December 31, 2020,
including your consideration of ASC 310-10-35-7 through 35-11
when establishing
your allowance of doubtful accounts.
Provide us with and revise to disclose an aging of your accounts
receivable as of
December 31, 2020 and June 30, 2021, detailing the total amounts
outstanding at the
balance sheet dates by categories of time, such as over 30 days,
over 90 days, over six
months, over one year, over two years, etc. For each category,
show the amount that
has been subsequently collected.
Describe to us and revise to disclose the nature and terms of the
payment
commitment letters you signed with your customers, including
whether they are
legally enforceable.
Revise your disclosures to present, for each period presented, a
roll-forward of
your allowance for doubtful accounts, returns, and deductions
including a related
discussion of any other significant items included in the
roll-forward.
This comment also applies to your Form 10-Q for the period ended June
30, 2021.
(s) Goodwill, page F-18
12. We note your disclosure that you evaluate your reporting units on an
annual basis and, if
necessary, reassign goodwill using a relative fair value allocation
approach and performed
goodwill impairment testing at the reporting unit level and determined
that no impairment
was necessary. Please tell us and expand your disclosures to identify
the number of
reporting units where goodwill is allocated and tested for impairment.
Additionally, please
indicate whether the fair value substantially exceeds book value for
all reporting units
Xiaoming Hu
Kandi Technologies Group, Inc.
October 26, 2021
Page 4
given the significant decline in your revenues for the year ended
December 31, 2020.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Melissa Gilmore at (202) 551-3777 or Martin James at
(202) 551-
3671 if you have questions regarding comments on the financial statements and
related
matters. Please contact Jennifer Angelini at (202) 551-3047 or Jay Ingram at
(202) 551-
3397 with any other questions.
FirstName LastNameXiaoming Hu Sincerely,
Comapany NameKandi Technologies Group, Inc.
Division of
Corporation Finance
October 26, 2021 Page 4 Office of
Manufacturing
FirstName LastName