Kandi Technologies Group, Inc F-4/A, filed Oct 14, 2022

Kandi Technologies Group, Inc. (KNDI)

F-4/A 2022-10-14

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British Virgin Islands		3714		Not Applicable
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(IRS Employer Identification Number)

	1.	To approve the Company’s reincorporation from the State of Delaware to the country of the British Virgin Islands;

	2.	To elect seven directors, each to serve until the 2022 Annual Meeting of Shareholders;

	3.	To ratify the appointment of Paris, Kreit & Chiu CPA LLP as the Company’s independent auditor for the fiscal year ended December 31, 2022;

	4.	To approve an amendment to our Certificate of Incorporation, as amended, to increase the number of authorized shares of common stock from 100,000,000 shares to 1,000,000,000 shares, and to correspondingly increase the number of authorized shares of preferred stock from 10,000,000 to 100,000,000 shares;

	5.	To conduct an advisory vote on the compensation of our named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission; and

	6.	To transact such other business as properly may come before the annual meeting or any adjournments thereof.

	By Order of the Board of Directors

	Hu Xiaoming
	Chief Executive Officer and
	Chairman of the Board of Directors

CONVENTIONS		ii
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		iii
ABOUT THIS PROXY STATEMENT/PROSPECTUS		iii
ADDITIONAL INFORMATION		iii
INFORMATION ABOUT THE ANNUAL MEETING OF SHAREHOLDERS		1
PROPOSAL 1: REINCORPORATION FROM DELAWARE TO THE BRITISH VIRGIN ISLANDS		6
INFORMATION ABOUT THE MERGER		7
SUMMARY		11
RISK FACTORS		23
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA/MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION		36
SUMMARY PRO FORMA FINANCIAL INFORMATION		36
BUSINESS / PROPERTIES LEGAL PROCEEDINGS		36
MERGER		37
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS		43
DESCRIPTION OF SHARE CAPITAL OF KANDI BVI		48
DIFFERENCES IN CORPORATE LAW		50
ENFORCEABILITY OF CIVIL LIABILITIES		57
LEGAL MATTERS		58
EXPERTS		58
PROPOSAL 2: ELECTION OF DIRECTORS		59
PROPOSAL 3: RATIFICATION OF INDEPENDENT AUDITOR		62
PROPOSAL 4: AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED SHARES OF COMMON STOCK		63
PROPOSAL 5: ADVISORY VOTE ON EXECUTIVE COMPENSATION		65
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS		66
CORPORATE GOVERNANCE		67
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		72
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		73
EXECUTIVE COMPENSATION		73
RELATED PARTY TRANSACTIONS		76
AUDIT COMMITTEE REPORT		77
SUBMISSION OF SHAREHOLDER PROPOSALS		78
WHERE YOU CAN FIND ADDITIONAL INFORMATION		78
APPENDIX A		A-1
APPENDIX B		B-1
APPENDIX C		C-1
APPENDIX D		D-1

	1.	You may submit another properly completed proxy bearing a later date.

	2.	You may send a written notice that you are revoking your proxy to Board Secretary, Kandi Technologies Group, Inc., located in Jinhua New Energy Vehicle Town, Jinhua, Zhejiang Province, China, 321016 or to Kewa Luo located at Kandi Technologies Group, Inc., The Hemsley Building, 230 Park Avenue, 3rd/4th Floor West, New York, NY 10169.

	3.	You may attend the Annual Meeting and vote in person. However, simply attending the Annual Meeting will not, by itself, revoke your proxy.

		Not Applicable
		(Translation of Registrant’s Name into English)

	Sincerely,

	Hu Xiaoming
	Chairman of the Board of Directors, President and Chief Executive Officer

Q:	*What is the Merger?*

A:	Under the Merger Agreement, Merger Sub will merge with and into Kandi, with Kandi surviving the Merger as a wholly-owned subsidiary of Kandi BVI. Upon consummation of the Merger, each issued and outstanding share of Kandi’s common stock will be converted into the right to receive one ordinary share in the capital of Kandi BVI, which shares will be issued by Kandi BVI in connection with the Merger. Following the Merger, Kandi BVI, together with its subsidiaries, will own and continue to conduct our business in substantially the same manner as it is currently being conducted by Kandi and its subsidiaries. Kandi BVI will also be managed by the same Board of Directors and executive officers that manage Kandi today.

Q:	*Why does Kandi want to engage in the Merger?*

A:	The Merger is part of a reorganization of Kandi’s corporate structure approved by our Board of Directors that we expect will, among other things, result in a reduction in operational, administrative, legal and accounting costs over the long term and provide us with flexibility to pursue corporate development including mergers and acquisitions, spin-off and separate listing. Please see the section entitled “Reorganization Merger—Background and Reasons for the Merger.” However, there can be no assurance that following the Merger we will be able to realize these expected benefits for the reasons discussed in the section entitled “Risk Factors—Risks Relating to the Merger and Reorganization—The expected benefits of the Merger and reorganization may not be realized.” We also have incurred and will continue to incur transaction costs.

Q:	*Will the Merger affect current or future operations?*

A:	The Merger is not expected to have a material impact on how we conduct day-to-day operations. While the new corporate structure would not change our future operational plans to grow our business, including our focus on our Chinese business, it may improve our ability to expand internationally. The location of future operations will depend on the needs of the business, which will be determined without regard to Kandi BVI’s jurisdiction of incorporation. Please see the section entitled “Reorganization Merger—Background and Reasons for the Merger.”

Q:	*Is the Merger taxable to me?*

A:	The Merger should be characterized for U.S. federal income tax purposes as either a “reorganization” within the meaning of Section 368(a) of the Code, or as a transaction qualifying under Section 351 of the Code. In either case, U.S. holders will not recognize gain or loss for U.S. federal income tax purposes upon receipt of Kandi BVI ordinary shares in exchange for Kandi common stock. The aggregate tax basis in the ordinary shares of Kandi BVI received in the Merger will equal each such U.S. holder’s aggregate tax basis in the Kandi common stock surrendered. A U.S. holder’s holding period for the ordinary shares of Kandi BVI that are received in the Merger will include such U.S. holder’s holding period for the common stock of Kandi surrendered, provided the surrendered Kandi common stock is held as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). Please see the section entitled “Material U.S. Federal Income Tax Considerations.”
	THE TAX TREATMENT OF THE MERGER UNDER STATE OR LOCAL LAW WILL DEPEND ON THE RELEVANT JURISDICTION. WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES OF THE MERGER TO YOU.

Q:	*Has the U.S. Internal Revenue Service rendered a ruling on any aspects of the Merger?*

A:	No ruling has been requested from the U.S. Internal Revenue Service, or the IRS, in connection with the Merger.

Q:	*When do you expect to complete the Merger?*

A:	If the adoption of the Merger Agreement is approved by our shareholders, we anticipate that the Merger will become effective on or about _________, 2022, although the Merger may be abandoned by our Board of Directors prior to its completion. Please see the section entitled “Risk Factors—Risks Relating to the Merger and Reorganization—Our Board of Directors may choose to defer or abandon the Merger.”

Q:	*What types of information and reports will Kandi BVI make available to shareholders following the Merger?*

A:	The term foreign private issuer under the rules and regulations of the SEC means any foreign issuer other than a foreign government except an issuer meeting the following conditions as of the last business day of its most recently completed second fiscal quarter: (i) More than 50 percent of the outstanding voting securities of such issuer are directly or indirectly owned of record by residents of the United States; and (ii) Any of the following: (a) The majority of the executive officers or directors are United States citizens or residents; (b) More than 50 percent of the assets of the issuer are located in the United States; or (c) The business of the issuer is administered principally in the United States. While we believe Kandi BVI qualifies as a “foreign private issuer” as of the date of this proxy statement/prospectus, Kandi BVI will remain subject to the mandates of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and, as long as the Kandi BVI’s ordinary shares are listed on the NASDAQ Stock Market, or NASDAQ, the governance and disclosure rules of that stock exchange. However, as a foreign private issuer, Kandi BVI will be exempt from certain rules under the Exchange Act that would otherwise apply if Kandi BVI were a company incorporated in the United States or did not meet the other conditions to qualify as a foreign private issuer. For example:

	Kandi BVI may include in its SEC filings financial statements prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, or with the International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, without reconciliation to U.S. GAAP.

Q:	*Do I have to take any action to exchange my Kandi common stock and receive Kandi BVI ordinary shares?*

A:	The Kandi common stock registered in your name or which you beneficially own through your broker will be converted into the right to receive an equal number of Kandi BVI ordinary shares and such shares will be registered in your name (or your broker’s name, as applicable) in Kandi BVI’s register of members upon completion of the Merger, without any further action on your part. Upon completion of the Merger, only registered shareholders reflected in Kandi BVI’s register of members will have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon Kandi BVI ordinary shares registered in their respective names. Any attempted transfer of Kandi stock prior to the Merger that is not properly documented and reflected in the stock records maintained by Kandi’s transfer agent as of immediately prior to the time that the Merger become effective, or the Effective Time, will not be reflected in Kandi BVI’s register of members upon completion of the Merger. Registered holders of Kandi BVI’s ordinary shares seeking to transfer Kandi BVI ordinary shares following the Merger will be required to provide customary transfer documents required by Kandi BVI’s transfer agent to complete the transfer.

	If you hold Kandi common stock in uncertificated book-entry form (for example, if you hold your shares through a broker), at the Effective Time the Kandi common stock registered in your name or which you beneficially own through your broker will be converted into the right to receive an equal number of Kandi BVI ordinary shares and such shares will be registered in your name (or your broker’s name, as applicable) in book-entry form without any action on your part.

	If you hold Kandi common stock in certificated form, you may exchange your Kandi stock certificates for new Kandi BVI share certificates promptly following the Merger. We will request that all Kandi stock certificates be returned to Kandi BVI’s transfer agent following the Merger. Soon after the closing of the Merger, you will be sent a letter of transmittal from our transfer agent. It is expected that, prior to the Effective Time, Equiniti Trust Company will be appointed as our transfer agent for the Merger. The letter of transmittal will contain instructions explaining the procedure for surrendering your Kandi stock certificates for new Kandi BVI share certificates.

	Kandi’s current transfer agent is Equiniti Trust Company, which will continue to serve as the transfer agent for Kandi BVI ordinary shares after the Effective Time.

Q:	*Can I trade my Kandi common stock before the Merger is completed?*

A:	Yes. Kandi common stock will continue trading on NASDAQ through the last trading day prior to the date of completion of the Merger, which date of completion is expected to be on or about________, 2022 (ET).

Q:	*After the Merger, where can I trade my Kandi BVI ordinary shares?*

A:	We expect that as of the Effective Time, the Kandi BVI ordinary shares will be authorized for listing on NASDAQ, and we expect such shares will be traded on the exchange under the symbol “KNDI.”, which is the same symbol under which shares of Kandi common stock are currently listed.

Q:	*How will my rights as a shareholder of Kandi BVI change after the Merger relative to my rights as a shareholder of Kandi prior to the Merger?*

A:	Because of differences between Delaware law and British Virgin Islands law and differences between the governing documents of Kandi and Kandi BVI, we are unable to adopt governing documents for Kandi BVI that are identical to the governing documents for Kandi, but we have attempted to preserve in the memorandum and articles of association of Kandi BVI the same allocation of material rights and powers between the shareholders and our Board of Directors that exists under Kandi’s bylaws and certificate of incorporation.

	Nevertheless, Kandi BVI’s proposed memorandum and articles of association differ from Kandi’s bylaws and certificate of incorporation, both in form and substance, and your rights as a shareholder of Kandi BVI will change relative to your rights as a shareholder of Kandi as a result of the Merger and you may not be afforded as many rights as a shareholder of Kandi BVI under applicable laws and the Kandi BVI memorandum and articles of association as you were as a shareholder of Kandi under applicable laws and the Kandi certificate of incorporation and bylaws. Please see the sections entitled “Risk Factors—Risks Relating to the Merger and Reorganization—Your rights as a shareholder of Kandi will change as a result of the Merger and you may not be afforded as many rights as a shareholder of Kandi BVI under applicable laws and the Kandi BVI memorandum and articles of association as you were as a shareholder of Kandi under applicable laws and the Kandi certificate of incorporation and bylaws,” “Description of Share Capital of Kandi BVI” and “Differences in Corporate Law.”

	Notwithstanding the foregoing, the changes above may not change your rights as a shareholder significantly in practice because Kandi has a concentrated ownership structure with at least two shareholders each holding more than five percent of Kandi’s common stock. For further details on the security ownership of certain beneficial owners of Kandi, please see the section entitled “Security Ownership of Certain Beneficial Owners and Management.”

	Additionally, as a foreign private issuer, Kandi BVI will be permitted to follow corporate governance practices in accordance with British Virgin Islands laws in lieu of certain NASDAQ corporate governance standards. Please see the sections entitled “Reorganization Merger—Background and Reasons for the Merger.”

	1.	the Merger Agreement has been adopted by the requisite vote of shareholders of Kandi;

	2.	none of the parties to the Merger Agreement is subject to any decree, order or injunction that prohibits the consummation of the Merger;

	3.	the registration statement of which this proxy statement/prospectus is a part has been declared effective by the SEC and no stop order is in effect;

	4.	the Kandi BVI ordinary shares to be issued pursuant to the Merger have been authorized for listing on NASDAQ, subject to official notice of issuance and satisfaction of other standard conditions;

	5.	all material consents and authorizations of, filings or registrations with, and notices to, any governmental or regulatory authority required of Kandi, Kandi BVI or their subsidiaries to consummate the Merger have been obtained or made; and

	6.	the representations and warranties of the parties to the Merger Agreement set forth in the Merger Agreement are true and correct in all material respects, and the covenants of the parties set forth in the Merger Agreement (other than those to be performed after the Effective Time) have been performed in all material respects.

	For the year ended December 31, 2021
	Parent including non-VIE subsidiaries		VIE			Elimination			Consolidated
Revenues	$	87,210,780	$	14,414,362		$	(10,138,758	)	$	91,486,384
Gross profit	$	15,892,507	$	355,355		$	-		$	16,247,862
Income (loss) from operations	$	2,576,730	$	(1,240,525	)	$	-		$	1,336,205
Income (loss) before income taxes	$	46,250,219	$	3,115,420		$	(20,155,351	)	$	29,210,288
Net income	$	40,739,432	$	2,279,717		$	(20,155,351	)	$	22,863,798

	For the year ended December 31, 2020
	Parent including non-VIE subsidiaries			VIE			Elimination			Consolidated
Revenues	$	68,235,630		$	27,613,722		$	(18,928,839	)	$	76,920,513
Gross profit	$	12,973,809		$	514,124		$	-		$	13,487,933
Income (loss) from operations	$	2,061,373		$	(1,306,977	)	$	-		$	754,396
loss before income taxes	$	(14,410,035	)	$	(1,031,298	)	$	-		$	(15,441,333	)
Net loss	$	(9,648,826	)	$	(745,338	)	$	-		$	(10,394,164	)

	As of December 31, 2021
	Parent including non-VIE subsidiaries		VIE		Elimination			Consolidated
Cash and cash equivalents	$	128,862,704	$	360,739	$	-		$	129,223,443
Total current assets	$	352,068,155	$	21,002,017	$	(30,462,036	)	$	342,608,136
Total non-current assets	$	181,562,128	$	32,700,203	$	(36,710,195	)	$	177,552,136
Total current liabilities	$	58,240,678	$	36,384,048	$	(30,462,036	)	$	64,162,690
Total non-current liabilities	$	11,971,688	$	825,567	$	-		$	12,797,255
Total stockholders’ equity	$	463,417,917	$	16,492,605	$	(36,710,195	)	$	443,200,327

	As of December 31, 2020
	Parent including non-VIE subsidiaries		VIE		Elimination			Consolidated
Cash and cash equivalents	$	142,062,013	$	16,177	$	-		$	142,078,190
Total current assets	$	285,542,114	$	51,257,889	$	(29,684,427	)	$	307,115,576
Total non-current assets	$	191,180,142	$	10,128,747	$	(13,174,625	)	$	188,134,264
Total current liabilities	$	85,980,986	$	27,500,866	$	(29,684,427	)	$	83,797,425
Total non-current liabilities	$	7,544,838	$	140,913	$	-		$	7,685,751
Total stockholders’ equity	$	383,196,432	$	33,744,857	$	(13,174,625	)	$	403,766,664

	For the year ended December 31, 2021
	Parent including non-VIE subsidiaries			VIE			Elimination			Consolidated
Net cash (used in) provided by operating activities	$	(9,412,899	)	$	9,654,589		$	-		$	241,690
Net cash provided by (used in) investing activities	$	30,230,627		$	(22,811,949	)	$	14,791,226		$	22,209,904
Net cash provided by (used in) financing activities	$	2,042,523		$	13,496,632		$	(14,791,226	)	$	747,929

For the year ended December 31, 2020
No.	Transfer from	Transfer to	Approximate value ($)		Note
1	Other non-VIE subsidiaries in PRC*	VIE		3,079,765	Products purchased from VIE by the other non-VIE subsidiaries in PRC
2	Other non-VIE subsidiaries in PRC*	VIE		19,630,712	Cash (as working capital) borrowed by the VIE from other non-VIE subsidiaries in PRC
3	VIE	Other non-VIE subsidiaries in PRC*		35,725,229	Products purchased from the other non-VIE subsidiaries in PRC by the VIE
4	VIE	Other non-VIE subsidiaries in PRC*		26,526,218	Cash (as working capital) repaid by the VIE to the other non-VIE subsidiaries in PRC

For the year ended December 31, 2021
#	Purchaser	Seller	Approximate value ($)
1	VIE	Other non-VIE subsidiaries in PRC*		10,022,236
2	Other non-VIE subsidiaries in PRC*	VIE		116,522

As of December 31, 2021
#	Description	Approximate value ($)
1	Receivables of other non-VIE subsidiaries in PRC* due from VIE		28,582,029
2	Receivables of VIE due from other non-VIE subsidiaries in PRC*		1,880,007

Company	License/Permission	Issuing Authority	Validity
Zhejiang Kandi Technologies Group, Co. Ltd.	Business License	Market Supervision and Administration Bureau of Jinhua City	Until March 12, 2052
Zhejiang Kandi Technologies Group, Co. Ltd.	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
Jinhua Kandi New Energy Vehicle Co., Ltd.	Business License	Market Supervision and Administration Bureau of Jinhua City	Until May 26, 2030
Jinhua Kandi New Energy Vehicle Co., Ltd.	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
Zhejiang Kandi Smart Battery Swap Technology Co., Ltd	Business License	Market Supervision and Administration Bureau of Jinhua City	Long-term
Zhejiang Kandi Smart Battery Swap Technology Co., Ltd	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
Yongkang Scrou Electric Co, Ltd.	Business License	Market Supervision and Administration Bureau of Yongkang City	Until November 17, 2031

Kandi Electric Vehicles (Hainan) Co., Ltd.	Business License	Market Supervision and Administration Bureau of Hainan Province	Long-term
Kandi Electric Vehicles (Hainan) Co., Ltd.	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
China Battery Exchange (Zhejiang) Technology Co., Ltd.	Business License	Market Supervision and Administration Bureau of Xihu District, Hangzhou City	Until September 13, 2050
China Battery Exchange (Hainan) Technology Co., Ltd.	Business License	Market Supervision and Administration Bureau of Hainan Province	Long-term
China Battery Exchange (Shaoxing) Technology Co., Ltd.	Business License	Market Supervision and Administration Bureau of Yuecheng District, Shaoxing City	Long-term
Jiangxi Province Huiyi New Energy Co., Ltd.	Business License	Market Supervision and Administration Bureau of Xinyu City High tech Zone	Long-term
Jiangxi Province Huiyi New Energy Co., Ltd.	Record Registration Form for Foreign Trade Business Operators	Eligible local foreign trade authorities appointed by the Ministry of Commerce	Long-term
Jiangxi Province Huiyi New Energy Co., Ltd.	Environmental impact assessment	Environmental Protection Bureau of Xinyu City	Long-term
Jiangxi Province Huiyi New Energy Co., Ltd.	Pollutant Discharge Permit	Xinyu High Tech Ecological Environment Bureau	Until July 18, 2027

	●	any derivative action or proceeding brought on behalf of Kandi BVI, including actions arising under the U.S. federal securities laws;

	●	any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Kandi BVI to the Kandi BVI or its Members;

	●	independence of committees

	●	regularly scheduled executive sessions with only independent directors

	●	adopt and disclose a code of ethics for directors, officers and employees.

Provision	Kandi	Kandi BVI

Authorized Capital/Shares	100,000,000 shares of common stock authorized, par value $0.001 per share	1,000,000,000 shares of common stock authorized, par value $0.001 per share (Immediately prior to the Merger)

Par Value	Stated in U.S. dollars

	Changes in capital generally require shareholder approval	Changes in the number of shares the company may issue, pursuant to the Charter Documents, may be made by resolution of shareholders or resolution of directors

Preferred Shares	Directors may fix the designations, powers, preferences, rights, qualifications, limitations and restrictions by resolution	Preferred shares must be authorized in the Charter Documents and the rights attaching to such shares set out in the memorandum of Association

Registered Shares	Shares of capital stock of Kandi to be registered shares	Same as Kandi

Purpose of Corporation	To engage in any lawful act not prohibited by law	To carry on or undertake any business activity irrespective of corporate benefit and not prohibited by law

Amended and Restated Certificate of Incorporation/memorandum and articles of association	Requires shareholder vote and, except in limited circumstances, by the board of directors	Requires vote of the shareholders or, as permitted by the Act and the Charter Documents, by resolution of the board of directors only where such amendment is required to provide for the rights conferred by preferred shares on their holders pursuant to the Charter Documents

Registered Office	c/o Corporation Service Company 251 Little Falls Drive Wilmington, DE 19808	Vistra Corporate Services Centre located at Wikhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands

Transfer Agent	Equiniti Trust Company	Same as Kandi

Voting Rights	Common stock: one share, one vote on all matters before the holders of the common stock	Ordinary shares: one share, one vote on all matters before the holders of the ordinary shares

	Other classes of equity may have voting rights as assigned to them by the board of directors or as approved by shareholders

	Directors elected by plurality, all other matters either by majority of issued and outstanding or majority of those present and entitled to vote as specified by law	Directors elected by plurality as provided in Charter Documents; all other matters by a majority of those shares present and entitled to vote

Redemption of Equity	Shares may be repurchased or otherwise acquired, provided the capital of the company will not be impaired by the Merger	Shares may be repurchased or otherwise acquired, provided the company will remain solvent after the Merger

	Company may hold or sell treasury shares	Same as Kandi

Shareholder consent	Permitted as required for a vote at a meeting	Same as Kandi

Notice Requirements for Shareholder Nominations and Other Proposals	In general, to bring a matter before an annual meeting or to nominate a candidate for director, a shareholder must give notice of the proposed matter or nomination not less than 90 days and not more than 120 days prior to public disclosure of the date of annual meeting	The Charter Documents do not contain an express right for shareholders to bring a matter before an annual meeting or nominate a director candidate

	In the event that less than 70 days’ notice or prior public disclosure of the date of the meeting is given or made to shareholder, to be timely, the notice must be received by the company no later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or public disclosure was made, whichever first occurs

Meetings of Shareholders - Presence	In person or by proxy or other appropriate electronic means	In person or by proxy or by telephone or other electronic means and all shareholders can hear one another

Meeting of Shareholder - Notice	Not less than 10 days or more than 60 days	Not less than seven days; no maximum limit

Meeting of Shareholders - Call of Meeting	Regular and annual meetings shall be called by the directors. Special meetings may be called only by majority of board of directors, chief executive officer or by a majority of the issued and outstanding capital stock entitled to vote	Meetings may be called by the directors or by shareholders holding 30% of the outstanding votes. The articles require an annual meeting of the members for the election of directors to be called by the directors

		Meetings on short notice may be called upon waiver or presence of all the members holding shares entitled to vote or 90% of the total number of shares entitled to vote agree to short notice

Meeting of Shareholders - Place	Within or outside Delaware	Within or outside the BVI as the directors consider necessary or desirable

Meeting of Shareholders - Quorum	Majority of the capital stock issued and outstanding and entitled to vote at meeting. Meeting may be adjourned for up to 30 days without additional notice to shareholders.	Not less than 50% of the votes of the shares entitled to vote. Adjournment to the next business day at the same time and the same place if quorum is not present.

Meeting of Shareholders - Record Date	As fixed by the directors, no more than 60 days and no less than 10 days before the meeting. If not fixed, the day before notice of meeting is given	As fixed by the directors, may be the date on which notice of the meeting is given to the shareholders or such later date as specified in the notice, being a date not earlier than the date of the notice.

Directors - Election	By the shareholders as entitled by their terms, including the holders of common stock	By the shareholders, including the holders of ordinary shares, or by the directors who have the power to appoint additional directors and the filling of any vacancy in that connection.

Directors - Removal	By the shareholders for cause	By resolution of shareholders, passed by a majority vote or by resolution of directors passed by majority vote, in either case with or without cause.

Directors - Vacancy	May be filled by majority of remaining directors (unless they are the result of the action of shareholders) and newly created vacancies may be filled by majority of remaining directors	Same as Kandi

Directors - Number	Unless established by the amended and restated certificate of incorporation, as determined by board of directors, but not less than one	There is no minimum or maximum number of directors

Directors - Quorum and Vote Requirements	A majority of the entire board. The affirmative vote of a majority of directors present at a meeting at which there is a quorum constitutes action by the board of directors	Not less than one-third of the total number of directors (with a minimum of 2) present in person or by alternate, except if there is only one director, then a quorum will be one director, and a sole director passes resolution by written consent. A resolution is passed at a meeting by the affirmative vote of a majority of the directors or consented to in writing by all directors

Directors - Powers	All powers to govern the corporation not reserved to the shareholders	Same as Kandi

Directors - Committees	Directors may establish one or more committees with the authority that the board determines	Directors may establish one or more committees with the authority that the board determines, subject to certain restrictions under the Act

Directors - Consent Action	Directors may take action by written consent of all directors, in addition to action by meeting	Same as Kandi

Director - Alternates	Not permitted	Directors may, by written instrument, appoint an alternate who need not be a director, who may attend meetings in the absence of the director and vote in the place of the directors

Directors - Appoint Officers	Directors appoint the officers of the corporation, subject to the by-laws, with such powers as they determine	Same as Kandi, subject to the Charter Documents and certain restrictions under the Act

Director - Limitation of Liability	Directors liability is limited, except for (i) breach of loyalty, (ii) act not in good faith or which involves international misconduct or a knowing violation of law, (iii) willful violation of law in respect of payment of dividend or converting shares, or (iv) actions in which director receives improper benefit	Duty to act honestly and in good faith with a view to the best interests of the company and exercise care, diligence and skill that a reasonable director would exercise in the same circumstances, taking the factual circumstances into account. No provisions in the memorandum, articles or agreement may relieve a director from the duty to act in accordance with the memorandum or articles or from personal liability arising from the management of the business or affairs of the company. Further, a director who vacates office remains liable in respect of acts or omissions that occurred while he was a director.

Director - Indemnification Insurance	Company may purchase insurance in relation to any person who is or was a director or officer of the company	Same as Kandi

Amendments to Organizational Documents	Amendments must be approved by the board of directors and by a majority of the outstanding stock entitled to vote on the amendment, and if applicable, by a majority of the outstanding stock of each class or series entitled to vote on the amendment as a class or series. By-laws may be amended by the shareholders entitled to vote at any meeting or, if so provided by the amended and restated certificate of incorporation, by the board of directors	Amendments to the Charter Documents, with certain restrictions, may be made by resolution of the shareholders or by the resolution of the board of directors

Sale of Assets	The sale of all or substantially all the assets of the company requires shareholder approval	The sale of more than 50% of the assets of the company requires shareholder approval, other than in the regular course of business

Dissenters’ Rights	Provision is made under Delaware corporate law to dissent and obtain fair value of shares in connection with certain corporate actions that require shareholder approval or consent	Provision is made under the Act to dissent and obtain fair value of shares in connection with certain corporate actions that require shareholder approval or consent

Name	Age	Position	Served From
Hu Xiaoming	65	Chairman of the Board, President and Chief Executive Officer	June 2007
Chen Liming ^{(1), (2), (3)}	85	Director (Independent)	May 2012
Lin Yi ^{(2), (3)}	69	Director (Independent)	May, 2017
Jerry Lewin ⁽¹⁾	67	Director (Independent)	November 2010
Henry Yu ^(1),(2),(3)	68	Director (Independent)	July 2011
Dong Xueqin	40	Director	December 2021
Wang Lin	34	Director	December 2019

	●	The Company makes annual cash compensation decisions based on assessment of our performance against measurable financial goals, as well as each executive’s individual performance.

	●	The Company emphasizes long-term incentive compensation awards that collectively reward executive officers based on our performance, external and internal peer equity compensation practices, and the executive officer’s job responsibilities.

	●	The Company designs pay practices to retain a highly talented and experienced senior executive team.

	●	The Company encourages stock ownership by our senior executive officers.

	2021		2020
Audit Fees	$	350,000	$	460,000
Audit Related Fees	$	-	$	93,800
Tax Fees	$	-	$	-
All other fees	$	-	$	715
TOTAL FEES	$	350,000	$	554,515

	Compensation Committee of the Board of Directors
	Respectfully submitted,

	/s/ Chen Liming (Chairman)

	/s/ Henry Yu

	/s/ Lin Yi

	[ ], 2022

Title of Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
Named Executive Officers and Directors
Common Stock	Hu Xiaoming		14,326,481	(1)		18.8	%
Common Stock	Jehn Ming Lim		1,500			*
Common Stock	Henry Yu		120,500			*
Common Stock	Jerry Lewin		105,000			*
Common Stock	Chen Liming		-			-
Common Stock	Lin Yi		-			-
Common Stock	Dong Xunqin		-			-
Common Stock	Sun chenming		5,000			-
Common Stock	Wang Lin		7,000			*
All officers and directors			14,565,481			19.1	%
Other 5% Stockholders:
Common Stock	Excelvantage Group Limited		12,821,404	(2)		16.8	%
Common Stock®	Invesco WilderHill Clean Energy ETF		5,953,498	(3)		7.8	%

Name and			Salary		Bonus		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		Nonqualified Deferred Compensation Earnings		All Other Compensation		Total
Principal Position	Year		($)		($)		($)(4)		($)(5)		($)		($)		($)		($)
Hu Xiaoming (1)		2021	$	55,815		-	$	288,000		-		-		-		-	$	343,815
CEO, President and		2020	$	52,173		-	$	168,000		-		-		-		-	$	220,173
Chairman of the Board

Lim Jehn Ming (2)		2021	$	120,000		-	$	18,540		-		-		-		-	$	138,540
CFO		2020	$	75,000		7,605	$	9,270		-		-		-		-	$	91,875