NOTE 9- RELATED PARTIES

Due from (to) related parties

Amounts due from related parties are principally for advances in the normal course of business for parts and supplies used in manufacturing.

Amount due from related parties are as follows:
	06/30/214		12/31/2013
Sanmen Branch of Zhejiang UFO Automobile
Manufacturing Co., Ltd		2,038		4,973
Taizhou Jonway Electric Vehicle Selling Co., Ltd		633		-
JAZ		1,106		961
ZAP Hangzhou		-		127
Total		3,777		6,061

Amount due to related parties are as follows:
	6/30/2014		12/31/2014
Jonway Group		4,314		303
Jonway Motor Cycle		155		113
Taizhou Huadu		692		631
Shanghai Zapple		37		36
ZAP Hangzhou		-		-
Ms. Lu		-		30
Betterworld		149		149
Cathaya Capital		450		1,147
Total		5,797		2,409

Transactions with Jonway Group

Jonway Group is considered a related party as the Wang Family, one of the shareholders of the Company, has controlling interests in Jonway Group. Jonway Group supplies some of the plastic spare parts to Jonway and gave guarantees on Jonway short term bank facilities from China-based banks. For the six months ended June 30, 2014 and 2013, Jonway made purchases from Jonway Group of $390,000 and $671,000. For the three months ended June 30, 2014 and 2013, Jonway made purchases from Jonway Group of $168,000 and $355,000.

Jonway Agreement with Zhejiang UFO

Based on a contract by and among Zhejiang UFO, Jonway Group and Jonway dated as of January 1, 2006, Zhejiang UFO has authorized Jonway to operate its Sanmen Branch to assemble and sell UFO branded SUVs for a period of 10 years starting from January 1, 2006.

According to the contract, Jonway shall pay Zhejiang UFO a variable contractual fee which is calculated based on the number of SUVs that Jonway assembles in the Sanmen Branch every year, at the following rates (historical exchange rate):

The first 3,000 vehicles	$44 per vehicle

Vehicles from 3,001 to 5,000	$30 per vehicle

Vehicles over 5,000	$22 per vehicle

Zhejiang UFO is considered a related party because the Wang Family, who are shareholders of Jonway, has certain non-controlling equity interests in Zhejiang UFO.