Kandi Technologies To Buy Scrou For About $8M In Stock

Kandi Technologies, Corp.

today announced that the company has entered into a Share Exchange Agreement (the "Agreement") to acquire Yongkang Scrou Electric. Co., Ltd. ("Scrou"), a leading Chinese manufacturer of motors and related products for Electric Vehicles (EVs), by acquiring all of the outstanding capital stock of KO NGA Investment Co., Ltd. ("KO NGA"), a British Virgin Islands Corporation and the sole owner and shareholder of Scrou. Scrou is the only operating entity of KO NGA. No closing date has presently been scheduled. Located in Qiaoxia Industrial Zone of Yongkang City, Zhejiang Province, Yongkang Scrou Electric Co., Ltd., specializes in the manufacture of a variety of automobile generators and motors for pure EVs, as well as auto starters, auto asynchronous motors, auto air-conditioners and other auto related products. Scrou holds several international recognized verification certificates, including ISO9001-2000 and ISO / TS16949. Its driving motors and auto air-conditioning systems are essential components for pure electric vehicles and the auto industry. Before entering into the Agreement, Kandi conducted usual due diligence on Scrou, including its land use rights, fixed assets and inventories, etc., and reviewed an evaluation report by an independent third party valuation firm which reports the net asset market value of Scrou is RMB 50,052,387.66 (approximately $7,952,524) as of November 30th, 2011. Scrou had no debts other than account payables and receivables incurred in the ordinary course of business.