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Kandi Raised $3.97 Million From Warrant Exercises and Agreed Extension for the Remaining Warrants

Press Release: Kandi Technologies, Corp. – 13 minutes ago

JINHUA, China, Jan. 29, 2013 (GLOBE NEWSWIRE) -- Kandi Technologies Group, Inc. (the 'Company' or 'Kandi') (KNDI), a leading Chinese manufacturer and developer of pure electric vehicles (EVs) and all-terrain vehicles (ATVs), today announced that the Company has raised gross proceeds of $3.97 million from the Warrants issued in a private placement on January 21, 2010. There are certain remaining Warrants To Purchase Common Stock (the "Warrant") issued to the Capital Ventures (the 'Investor') as part of a private placement and the Company agreed to extend the expiration date for such Warrant.

The expiration date of the Warrant was originally set as of January 22, 2013. Pursuant to the extension agreed by the parties, the new expiration date for the Warrant will be March 8, 2013. The exercise price will remain the same at $3.8067. All other terms of the Warrant remains unchanged.


http://finance.yahoo.com/news/kandi-raised-3-97-million-1405...

Denny Schlesinger
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No. of Recommendations: 1
why extend the warrants? further potential stock dilution, though not much
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No. of Recommendations: 2
why extend the warrants? further potential stock dilution, though not much

The story, as told by Arthur Porcari, is that these are warrants issued during January 2010 as part of a funding to raise working capital. The notes and warrants were sold to two "transaction funds" (I believe that is what Art called them), funds that are traders and not investors. According to Art these funds use the warrants security to short the stock in what is essentially a riskless proposition provided the shorts sell the stock above the warrant strike price.

According to Art one of the funds messed up with half of their warrants and asked Kandi for an extension to try to salvage their position. Art got mad as hell about the extension. Others were more pragmatic figuring that a few more weeks of pressure on the stock price was no big deal.

As to why Mr. Hu consented, Art figures that Mr. Hu is not conversant with the fine details of stock market manipulation. My though is that Mr. Hu saw an advantage in staying on the good side of the funds that helped finance Kandi in its hour of need. Only Mr. Hu knows.

I don't think it has any appreciable long term effects.

Denny Schlesinger
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