Kandi Technologies (KNDI) Acknowledges Accounting Error, But It Doesn’t Affect Revenues

Kandi Technologies (KNDI) sent a letter to shareholders yesterday indicating that in fact the company did have accounting errors, but that they have no impact on revenues for 2009 and 2010.  The error affects unit volumes and come as a result of a recategorization of certain models and a translation of China accounting standards to US GAAP.  The company has filed a copy of the letter with the SEC and will amend its annual report.

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"We have taken time and great care to determine the source of this error and provide corrected unit figures to our investors," said Xiaoming Hu, CEO and Chairman of the Board of Kandi Technologies.  "However, we wanted to be sure that the information we provided was absolutely accurate.  We take our responsibility in this regard very seriously, and hope our prompt attention to this matter shows the high regard we have for the accuracy and transparency of our financial information." 

Shares of KNDI rose with volume yesterday after the announcement, but remain in a long downtrend off the November 2010 highs.  The $2 level is an important short term level of support it has been holding at in recent days.  Perhaps the accounting uncertainty will be the catalyst for a recovery.

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