Kandi Technologies Group announced that Zhejiang Geely Auto Limited - Shanghai Subsidiary, a business partner of Kandi Electric Vehicles Group, received a total of RMB 305M, or approximately $44.3M, in tax credits. The refund of the Value Added Tax remaining tax credit is made by the State Administration of Taxation through a new policy intended to promote sustainable economic development. A select number of advanced equipment manufacturers were given tax refunds on the VAT remaining tax credit at the end of 2018's tax season. The amount refunded to Zhejiang Geely corresponds to the production and sale of Kandi products by the JV Company in the years of 2015, 2016, and 2017. As a result, the JV Company expects to receive such a payment from Zhejiang Geely.
Kandi Technologies Group announced that Zhejiang JiHeKang Electric Vehicle Sales, a 100% owned subsidiary of Kandi Electric Vehicles Group, signed a Framework Sales Agreement with Sportsman Country on June 10th, 2018 for bringing its pure electric vehicles to the United States. According to the terms, the JV Company will ship pure electric vehicle prototypes to the United States before August 10, 2018. The shipment will include Model EX3 and Model K22, which are designed for the American market in order to precede opportunity analysis and market assessment. Sportsman is responsible for all necessary application procedures for the sale of the JV Company's pure electric vehicles that are required in the United States. Detailed purchase and procurement plans will be determined based on the progress of preparation work.
Kandi Technologies announced that Kandi entered into a Membership Interests Transfer Agreement with the two members of Sportsman Country, LLC under which Kandi will acquire 100% of the ownership of Sportsman Country. The Transfer Agreement was signed on May 31, 2018. Sportsman Country is a Dallas based sales company primarily engaged in the wholesale of off-road vehicle products, with a small percentage of business in off-road vehicle parts wholesale and retail. Currently, Sportsman Country has a seasoned management team and a distribution force averaging over ten years of sales experience. With countrywide sales channels in the US, its off-road vehicle products are particularly popular to American consumers. According to the terms of the Transfer Agreement, the Transferors promised that Sportsman Country will achieve pre-tax profit totaling over $10.0 million from 2017 to 2020. The pre-tax profit in 2017 was $1.02 million and Sportsman Country is targeting a pre-tax profit of more than $2.0 million, $3.0 million, $4.0 million for 2018, 2019 and 2020, respectively. Kandi will transfer $10.0 million worth of corresponding restricted shares to acquire 100% membership interests in Sportsman Country. Kandi is required to issue $1.0 million worth of corresponding restricted shares within 30 days from the signing date of the Transfer Agreement, the remaining $9.0 million worth of corresponding restricted shares will be released from escrow based on its pre-tax profit performance, i.e., $2.0 million worth of corresponding restricted shares will be released from escrow if pre-tax profit of $2.0 million is achieved for the full year of 2018, $3.0 million worth of corresponding restricted shares will be released from escrow if pre-tax profit of $3.0 million is achieved for the full year of 2019, $4.0 million worth of corresponding restricted shares will be released from escrow if pre-tax profit of $4.0 million is achieved for the full year of 2020.