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  • Was Kandi's Latest Investor Presentation An April Fools' Joke? [View article]
    The map with all the little icons on it was simple a capture of the exact location at that point in time of where all the rented cars were in and around that location at that moment in time. It has nothing to do with Charging Locations.

    Since the slide was simply to show how ZZY keeps track using GPS of all its cars, the fact they may have used the same slide is irrelevant.
    Apr 16, 2015. 11:46 AM | 9 Likes Like |Link to Comment
  • Was Kandi's Latest Investor Presentation An April Fools' Joke? [View article]
    porto- You are right, another jokester, who like his predecessor writes articles without doing research. The good part is I only have to copy and past comments from the prior attack to debunk this one.

    Re. The two Geely JV's. If this author did a little homework, he would have realized that the two JV's had major differences such as:


    Didn't we have this same discourse on a prior KNDI article where you raised this question. Am I going to have to correct you each time you feel like spreading this same Disinformation about the JV Management?

    Once again, get your facts straight. Geely DID NOT fund the Dayang Geely JV; at least not with cash as it did when it put up its 50% (about $80 million USD) founders capital in cash for the KNDI-Geely JV. It funded its 50% ownership in Dayang by transferring title to a shuttered Geely Manufacturing facility that was a liability as full payment of its Registered Capital requirement as you can see from the below copy and paste from Geely's recent Annual Report (pg. 013)

    http://bit.ly/1NMufFW

    "On 8 January 2015, the Group agreed with independent
    third parties to set up a 50:50 joint venture – Xin Dayang
    Electric Vehicles Company Limited. The joint venture will be
    engaged in the research and production of automobile parts,
    components and engines, production of electric vehicles
    and the provision of related after-sale services in China.
    The registered capital of the joint venture will be RMB1,000
    million and the Group intended to contribute the entire equity
    interest in Lanzhou Geely Automobile Industrial Company
    Limited (or “Lanzhou Geely”), its
    indirect 99% owned subsidiary, valued at RMB500 million as
    its contribution to the registered capital of the joint venture.
    The contribution of Lanzhou Geely to the joint venture will be
    a deemed disposal of a subsidiary for the Company."

    Aside from the fact that Dayang did Geely a big favor in taking this liability off their hands, what does this tell you about Dayang? Since they turned over all of their assets into the JV for their half, they must have felt their whole company wasn't worth more than a shut down Geely plant.

    On the other hand re the KNDI-Geely JV, Both companies first put up 500 million RMB cash (about $80 million USD) and then each company contributed a 100,000 capacity a year Manufacturing facility.

    From the KNDI-Geely JV agreement filed with the SEC. (pg. 12-13)

    http://1.usa.gov/1NMufG0

    5. Registered Capital

    5.1 Registered Capital

    The registered capital of the JV company is RMB 1 billion.

    5.2 Contribution by Each Party

    5.2.1 Party A shall contribute RMB 500 million which accounts for 50% of the registered capital.

    5.2.2 Party B shall contribute RMB 500 million which accounts for 50% of the registered capital.

    5.3 Form of Contribution and Time of Contribution

    Subject to article 3.2, the Forms of Contribution and Payment of Contribution shall be:

    5.3.1 Party A

    Party A shall contribute in cash to the registered capital of JV company.

    5.3.2 Party B

    Party B shall contribute in cash to the registered capital of JV company.


    While you are correct that Li Shufu, Chairman of Geely was as you stated Chairman of the JV for around 10 months after the agreement was signed, what you failed to mention is that the pre-arranged agreement between the Partners was that after the JV began full operation, Shufu would resign the Chairmanship turning it over to KNDI's Chairman/CEO Xiaoming Hu, but also Shufu's "right hand man" Geely Executive Director and former SVP Sales and Marketing for over 20 years Jin Liang Liu, was put in as President of the JV. Obviously Shifu stepped down as JV Chairman and replaced himself with Hu because he felt Comfortable that the JV was in Good Hands and he concentrate on Geely's problems over the past year.

    http://bloom.bg/1BkiPgZ
    Apr 16, 2015. 11:41 AM | 13 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    Jonathan, I see you decided not to allow my comment on your private blog. I guess my praising of your candor was either premature, or you did not see or read it at that time since it was up on your site for a while.

    But as I promised, if you elected to block your blog readers from an honest "give and take" discussion from all sides, I would put up here what you would not allow on your site.

    Below in quotes is the opposing view comment that Jonathan took off his own blog site linked at the bottom of the SA article:


    "I am confused. In this and the two installments leading up to this article which you also published on Seeking Alpha, you have made a quite bullish case for why KNDI as the first mover in China EV's should be bought as a speculative stock, not sold.

    By your own articles, the market for EV's in China has immense potential. You admit KNDI is a first mover in the market. You don't question that KNDI through its JV with KNDI's largest Passenger Car Maker Geely has sold over 10,000 pure EV's in 2014 making it #1 in the plug-in category in China for 2014, you only seem to question that the buyer, ZZY has a flawed business model that can't continue to buy cars and lease them out at a profit. But at the same time, you give an example of showing revenues of $5600 per year to ZZY for a car that you admit only cost them around $5000. If ZZY can't make money under this model as you say, I would think you would also have to believe that all major Car Rental Company's have even a worse business model. Let me give an example;

    Lets take AVIS, They buy a car for $25,000. The rent it out for a well above industry average of 300 days at an average of $30 a day. Now this AVIS car is a full sized ICE car which requires regular oil changes, tune-ups etc. not required of an EV. At the above calculation, they would generate $9000 a year in gross revenues, or around 38% of the cost of the car in year one.

    If you think buying a car for $5-6000 and renting it out for $5600 a year is a bad business model, you must think that AVIS is brain damaged to even be in the car rental business.

    Now you did copy and paste a comment from KNDI's Annually meeting Q&A that the CEO when asked specifically what the EV life was in the CarShare or Leasing programs gave an answer that the subsidies last 3 years but the life of the car 5 years, but somehow you have twisted this to give the impression that after 3 years the cars would be worthless with no residual value to ZZY. You do realize that the Main Stream Car Rental Companies like AVIS only make money because they do sell their cars after about 1.5 years and capture the residual value as well as the cash flow while in service, don't you?

    As you also know, the Company announced as early as a month ago in their 10k, that the JV, in addition to the Carshare programs in ten major China cities (7 started in Q4), was going to begin selling EV's outside the CarShare directly to consumers. But you also failed to mention this in your article.

    You seem to think that KNDI's PE is extremely overvalued at 45 times, but you don't reference that this was based on $.30 in GAAP net income up from a loss of $.61 the prior year. Even more lacking was your ignoring the fact that in Q4 alone, based on sales of only 3900 EV's by the JV, KNDI earned $.40 a share. But on the other hand, you do claim that KNDI is a legitimate business enterprise. So I assume you are trying to insinuate is that KNDI/JV sales are going to slither away to nothing in the near future. This in spite of the JV's current EV manufacturing capacity of 230,000 units per year (something you also failed to mention) which will increase by an additional 200,000 units likely by this years end, to 430,000 units with the opening of the Wanning, Hainan Province and Rugao, Jiangsu Province facilities. Now maybe in the back of your mind you felt that having all this overcapacity coming on line will be what will sink the company, but you didn't even attempt to make that argument. The only argument you seem to be making is that both KNDI and Geely, are fools to think they have what it takes to compete as a first mover in a potential trillion dollar China market.

    Certainly an opinion you are entitle to, but nothing based on either facts or even logic.

    I could go on, but my guess is that since this is your blog, you will not allow my comments to be added here. But from your comments on your SA article, you claim to be a fair arbiter and invite both pro and con discussion, so perhaps you will allow this comment here, along with a healthy response from you to my points.

    However, so as to not have wasted my time writing this, if you don't put it up here, I will paste it in its entirety on you SA article."
    Apr 16, 2015. 11:24 AM | 7 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    Jonathan, I have to commend you for allowing my comment on your personal blog site to be posted for all your own visitors to see. Apparently, IMO, while maybe uniformed as much as perhaps you could have been, your intention to open this up as a fair Pro & Con discussion is your real motive.

    Here is a link to your blog for all here to see. I look forward to your comments on your site regarding my comments.

    http://bit.ly/1DndWr5
    Apr 16, 2015. 09:29 AM | 2 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    Ezra, Prior to the SEC investigation, you would have gotten no argument out of me re the perceived opinion about the Company's Auditor, but since I know for a fact that 90% of the SEC investigation that was totally dismissed had to do with matters directly or indirectly with subjects having to do with SEC reporting and accounting, my opinion has changed. Just because they are small, doesn't mean they are not good. The culmination of the SEC audit tells me that KNDI current auditors are good.

    However, I do agree that KNDI has now grown to a point that for no other reason then perception, an auditor upgrade should be on the near term table. Now that the Company has a well seasoned CFO, a veteran of US trading public companies and speaks English, coming on board May 1, I would not be surprised to see an auditor change taking place over the next twelve months or less.
    Apr 16, 2015. 07:55 AM | 2 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    Jonathan, Give it up. ZZY buying a car at 5000 as you admitted and renting it for $15 a day will make a fortune over three years, even excluding residual value.

    Lets take AVIS, They buy a car for $25,000. The rent it out for a well above industry average of 300 days at an average of $30 a day. Now this AVIS car is a full sized ICE car which requires regular oil changes, tune-ups etc. not required of an EV. At the above calculation, they would generate $9000 a year in gross revenues, or around 38% of the cost of the car in year one.

    If you think buying a car for $5-6000 and renting it out for $5600 a year is a bad business model, you must think that AVIS is brain damaged to even be in the car rental business.
    Apr 16, 2015. 07:43 AM | 4 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    Ezra- You said; "we don't know whether they investigated anything more than the Canadian promoters.

    Now you know much better than this since you are a third year law student. The only portion of the complaint against the "promoters" involving KNDI was a few paragraphs shared above in the article which focus on one suspect accusation, the 350,000 shares. The rest of the couple of hundred paragraphs had to do with other Companies the group was involved with.

    http://1.usa.gov/1CNgtN2

    I know you don't believe the SEC would open a separate investigation with a totally different "header" which was titled " In the Matter of Kandi Technologies Group, Inc" a year after the promoters action began, just to further investigate the promoter relationship with the Company and then spend 14 months investigating and finding nothing.

    As I mentioned in a recent SA article that I authored, the KNDI SEC Investigation was triggered by a mass delivery of bogus suppositions of illegalities to the SEC by a group of Attack Writers and Short Sellers, all found to be just that by the Commission, Bogus.

    While I have yet to figure out why Jonathan would waste the time to even refer to this in his article, even he came to the obvious conclusion that "Taking this ruling into account, I don't believe the company is engaged in any kind of wrongdoings toward investors."
    Apr 16, 2015. 07:33 AM | 4 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    Jonathan, you know what is so farcical about the false accusation pandered over time and again to the tune of more than 15 KNDI attack articles?

    Even if it were true, which it is not, the total number of shares supposidly involved was only 350,000. The stock price at that time in 2009 was around $1.25 a share. So to believe shareholders were being "scammed" into buying KNDI stock supposedly sold by "stupid" promoters at that low price when net income was .25 a share the prior year, seems a bit ludicrous, don't you agree?

    BTW, If you remember I am the one who told you to read the SEC Correspondence filings as evidence that your thoughts were misguided. I assume you only brought that up under the theory of the "Big Lie". That theory holds that most readers will not take the time to read such a reference and rely upon the author since the author dared to mention it.

    But You didn't give a link to where these Correspondence could be found. Let me provide it here since you didn't.

    Just go to this link and scroll down to each link that says; CORRESP

    http://1.usa.gov/1azuVfq
    Apr 16, 2015. 06:56 AM | 3 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    ejwipp- You are correct. In 2012, KNDI sold 600 KD5010 EVs to individuals in Jinhua China, In 2013 KNDI sold 3600 KD5011 EVs to individuals in Hangzhou. The JV started its business in Jan 2014.

    And even prior to this, beginning in 2009, KNDI began selling two Low Speed Electric Vehicles (LSEV) totaling over close to 4000, primarily in the US.

    If the author cared about doing any DD whatsoever on KNDI he would have known this simply by reading past SEC filings.
    Apr 16, 2015. 06:38 AM | 7 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    Jonathan, I already spent two hours personally debunking all the points you are attempting to spread here, but you totally ignored the facts leaving me no choice but to "out" your story as being what it is. A figment of your imagination.

    I would like nothing better than to stop attacking your points, but even your comments are like the "gift that keeps on giving". Perhaps you should quit while you are behind.

    You just said' "Until they don't sell meaningful amounts of vehicles to consumers they have 0% of that pie. 0%. Until you see some real numbers of consumers purchasing Kandi EVs, your point is empty."

    Aside from the fact that this comment is contradictory to itself as you wrote it, if one were to believe the point I think you were trying to make, then those 2900 Renault EV's that your favored BlueCar program were not bought from Renault, just transferred over for nothing?
    Apr 16, 2015. 06:27 AM | 8 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    What factory did KNDI buy from Geely? Read what I posted and gave linked reference to. Geely and KNDI Each Put Up $80 Million in Cash.

    You said; "So you should really stop spreading false information."

    Correct me if I am wrong, but isn't that what the SEC Commissioner told you when YOU wrote an article headlined, "Kandi Crushed: Mary Jo White's "Broken Windows" Policy Makes An SEC Enforcement Action Inevitable" back in January?
    Apr 16, 2015. 06:05 AM | 9 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    RD- Did you read what you wrote? Do you realize how silly your 4 bullets sound?
    Apr 15, 2015. 10:29 PM | 6 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    t0nutz- I assume you are asking about the latest Shareholder Proxy and the vote on the omnibus Employee Stock Incentive Plan. I was asked the same question on the KNDI Private Yahoo Forum earlier in the week. Let me plagiarize myself by copying my comment here.

    I have no problem whatsoever with the new omnibus employee stock incentive plan. However, I would rather have like to seen it be filed after the market close Friday so level heads could evaluate it.

    Back in Nov. 2008 when KNDI's first plan was put in place, there was around 19.6 million shares issued and outstanding, Average daily volume was around 10,000 shares and the market was going to hell in a hand basket. Shareholders were asked to vote, and subsequently approved 4 million shares. Or about the same ratio to outstanding as we have today.

    Hu's salary that year was $19,600 about the same as the CFO. In February 09, with the stock trading around $.75 a share, stock options were issued at .80 to top officers and Directors which were to vest 1/3 each year over three years. Hu received 800,000 the CFO received 500,000 and his son who was EVP also received 500,000, each of the Directors received 20,000.

    Over the next two years, His son resigned so he only vested 1/3 of the 500k the rest lapsed worthless. Also during the vesting period, a couple of the Directors were replaced prior to their full vesting, so the balance of their issuance also lapsed worthless. (once shares are issued or reserved for options, they cannot be re-issued)

    While there was no requirement for Hu or the CFO to exercise until 2019, sometime around 2012 when Hu and the CFO realized that keeping these warrants outstanding was creating GAAP problems with evaluation for earnings, they both early exercised their earned warrants.

    Some might be concerned that these shares or warrants might be given to short sellers. Stock registered under S8 can only be issued to bone fide Officers, Directors and Consultants. And even under the Consultants, they cannot be issued to "Market Related" consultants like IR Firms or for stock promoters.

    It never ceases to amaze me how much perception comes into play with situations like this. In 2012, TSLA's board gave Elon Musk a ten year, $31/sh stock option for 5.3 million shares (5% of the outstanding at that time) Now there were some vesting requirements to include the stock hitting certain market cap milestones (which I had always been under the impression was illegal to award based on stock price). When that option was issued, the stock was bogged down in the mid $20/sh area. After the announcement, the stock took off like a skinned cat on the upside. The consensus was, and should also be in the KNDI case, that top Managers in developing companies should be given incentives based on equity, rather than on cash.

    As of year end, KNDI was still being run with a lean sub 500 employees and executives. If the Company is about to go into a hyper-growth phase, particularly if it gets it's own Auto Manufacturer license, the employee count will have to make quantum jumps and top level managers will have to be brought on to run to ride herd over them. KNDI is in a very enviable position to compete for top people in China BECAUSE it can offer US based equity. Just since Jan 1, we have found several China Job Site listing totaling a couple of hundred positions with at least a third middle-level management and higher.

    Having US traded stock is a big advantage over companies that are public in China only. As in the case of Alibaba when it came public in the US, the shares that were given to several thousand Alibaba managers were and are continuing to be sold in the US, thereby creating "off-shore" cash to these employees. Cash they can use to invest in other US stock, real estate, etc. They can repatriate any or all of that cash to China if they like, but once it is brought back to China, under current rules, it is stuck there.

    Bottom line. To date, very little of the 2008 plan shares issued in the first round have ever been sold, none by top management, even though they have great profits. The last employee stock purchase plan was not abused, no reason to expect this one to be any different. Share incentive is what public companies are all about, be glad KNDI is a company that is growing and can take particular advantage of its easily discernible hyper-growth potential to get top people with stock as an incentive.
    Apr 15, 2015. 10:19 PM | 5 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    Jonathan. You said: "I believe mentioning the SEC complaint was important given that it clearly says that there WAS an oral agreement to promote the stock. It made me think of the way Kandi management approached this entire thing, and I used to build my argument.

    Do you claim the SEC document was false? If so do you also think that the recent investigation conclusion was false? It's the same SEC."


    There was NEVER an oral or written agreement with anyone to promote the stock. Chairman Hu made that very clear on several occasions in public to include the Nov. Shareholders meeting in San Francisco. I personally have spoken with each of the two individuals named along with Mr. Hu after the claim was made of such an "oral" deal; and both, along with Hu denied any such thing was even discussed, let alone executed. And more definitively, one of the two had already settled with the SEC so he would have had no reason to lie. Just like Hu, while under investigation would not want to get the ire of the SEC up by publicly denying it ever happened. While some things might be difficult for the Commission to find proof of, don't you think there would have had to be some sort of paper trail, at least at the transfer agent, if the Company gave any stock to these individuals? Once again, this is another issue that you asked me about a few weeks ago and I gave you this same answer.

    Rest assured. If any of this would have happened, there would have been some sanction against the Company and or CEO Hu.

    Having personally been involved with the SEC in past years, I can assure you they are no different than any opposing party in a legal action. They will claim anything and everything before the beginning of an investigation if for no other reason than to elicit a response in hopes something will stick.
    Apr 15, 2015. 10:07 PM | 9 Likes Like |Link to Comment
  • 5 Reasons Why Kandi's Risk Is Much Higher Than You Think [View article]
    RD- Didn't we have this same discourse on a prior KNDI article. Am I going to have to correct you each time you feel like spreading this same Disinformation about the JV Management?

    Once again, get your facts straight. Geely DID NOT fund the Dayang Geely JV; at least not with cash as it did when it put up its 50% (about $80 million USD) founders capital in cash for the KNDI-Geely JV. It funded its 50% ownership in Dayang by transferring title to a shuttered Geely Manufacturing facility that was a liability as full payment of its Registered Capital requirement as you can see from the below copy and paste from Geely's recent Annual Report (pg. 013)

    http://bit.ly/1NMufFW

    "On 8 January 2015, the Group agreed with independent
    third parties to set up a 50:50 joint venture – Xin Dayang
    Electric Vehicles Company Limited. The joint venture will be
    engaged in the research and production of automobile parts,
    components and engines, production of electric vehicles
    and the provision of related after-sale services in China.
    The registered capital of the joint venture will be RMB1,000
    million and the Group intended to contribute the entire equity
    interest in Lanzhou Geely Automobile Industrial Company
    Limited (or “Lanzhou Geely”), its
    indirect 99% owned subsidiary, valued at RMB500 million as
    its contribution to the registered capital of the joint venture.
    The contribution of Lanzhou Geely to the joint venture will be
    a deemed disposal of a subsidiary for the Company."

    Aside from the fact that Dayang did Geely a big favor in taking this liability off their hands, what does this tell you about Dayang? Since they turned over all of their assets into the JV for their half, they must have felt their whole company wasn't worth more than a shut down Geely plant.

    On the other hand re the KNDI-Geely JV, Both companies first put up 500 million RMB cash (about $80 million USD) and then each company contributed a 100,000 capacity a year Manufacturing facility.

    From the KNDI-Geely JV agreement filed with the SEC. (pg. 12-13)

    http://1.usa.gov/1NMufG0

    5. Registered Capital

    5.1 Registered Capital

    The registered capital of the JV company is RMB 1 billion.

    5.2 Contribution by Each Party

    5.2.1 Party A shall contribute RMB 500 million which accounts for 50% of the registered capital.

    5.2.2 Party B shall contribute RMB 500 million which accounts for 50% of the registered capital.

    5.3 Form of Contribution and Time of Contribution

    Subject to article 3.2, the Forms of Contribution and Payment of Contribution shall be:

    5.3.1 Party A

    Party A shall contribute in cash to the registered capital of JV company.

    5.3.2 Party B

    Party B shall contribute in cash to the registered capital of JV company.


    While you are correct that Li Shufu, Chairman of Geely was as you stated Chairman of the JV for around 10 months after the agreement was signed, what you failed to mention is that the pre-arranged agreement between the Partners was that after the JV began full operation, Shufu would resign the Chairmanship turning it over to KNDI's Chairman/CEO Xiaoming Hu, but also Shufu's "right hand man" Geely Executive Director and former SVP Sales and Marketing for over 20 years Jin Liang Liu, was put in as President of the JV. Obviously Shifu stepped down as JV Chairman and replaced himself with Hu because he felt Comfortable that the JV was in Good Hands and he concentrate on Geely's problems over the past year.

    http://bloom.bg/1BkiPgZ
    Apr 15, 2015. 09:41 PM | 10 Likes Like |Link to Comment
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