Why Kandi Technologies (KNDI) Is Lower on Wednesday

NEW YORK (TheStreet) -- Kandi Technologies (KNDI) is slipping on Wednesday after announcing it has entered into a securities purchase agreement with two institutional investors.

Before the bell, shares had taken off 5.2% to $20.06.

The electrical vehicle (EV) developer said it intends to raise around $11 with the direct placement of 606k shares of common stock at a price of $18.24 per share.

The China-based business also said it would issue warrants to the investors for 90.9k worth of common stock at $22.80 a share. The warrants have a term of 18 months from their issue date.

Kandi Technologies said the net proceeds would be used for general working capital purposes. The offering is expected to occur around March 24, pursuant to customary closing conditions.

Earlier in the week, the company reported fourth-quarter revenue of $50.6 million, a 92.2% year-over-year increase, and adjusted net income of $4.6 million.

In its 10-K filing with the SEC, Kandi also noted it has been part of an SEC investigation since November and that, if prolonged, it would have a significant financial impact.

"A protracted investigation could impose substantial costs and distractions, regardless of its outcome. There can be no assurance that any final resolution of this investigation will not have a material and adverse effect on the company's financial condition and results of operations," the company said in the filing.

Reasons for the SEC's investigation were not disclosed.

Must read: Warren Buffett's 10 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

If you liked this article you might like

Has Tesla Just Given Us New Insight Into Elon Musk's Master Plan?

Kandi Technologies (KNDI) Stock Pops on Higher Q2 Sales Outlook

Will the Latest Tesla Motors Headline-Grabber Destroy Its Stock?

Today's Weak On High Volume Stock: Kandi Technologies Group (KNDI)

Kandi Technologies Group (KNDI) Stock: Weak On High Volume Today