SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2014

SHAREHOLDERS' EQUITY [Abstract]

SHAREHOLDERS' EQUITY

NOTE 15-SHAREHOLDERS' EQUITY

Common stock

2013 ISSUANCES

ZAP issued 69,677 shares of common stock valued at $12,000 in exchange for engineering services. These shares were issued pursuant to Section 4(2) of the Securities Act of 1933, as amended, on the basis of each recipient's pre-existing relationship with Zap and the fact that no public offering was involved.

Total warrants outstanding at December 31, 2013 are summarized as follows (in thousands):

	Number of		Exercise		Expiration
	Warrants		Price		Dates
$0.50 Warrants-Restricted		18,000		0.50	6-1-14
$0.50 Warrants-Restricted		20,000		0.50	2-12-15
		38,000

55,000 of Series D-2 warrants and 100,000 of $0.70 unrestricted warrants expired in fiscal year 2013

Total warrants outstanding at December 31, 2014 are summarized as follows (in thousands):

	Number of		Exercise		Expiration
	Warrants		Price		Dates
$0.50 Warrants-Restricted		18,000		0.50		8-6-15
$0.50 Warrants-Restricted		20,000		0.50		8-12-15
		38,000

2014 ISSUANCES

Cathaya Operations Management Limited and China Electric Vehicle Corp have elected to convert the amounts recorded as due to related parties to common stock.  The amount of $967,543 due to Cathaya Operations Management Limited have been converted into 17,819,783 shares of common stock at 30% below market price based on the average trading prices of the previous 120 days after notification. The 17,819,783 shares of common stock have been issued in April 2014. In December, 2014, the company issued 4,513,163 shares to settle the cash advance of $410,800 from Cathaya Operations Management Limited.

China Electric Vehicle Corporation (CEVC) has elected to convert the interest of $639,068 due on the $20.7 million convertible note to 6,439,552 shares of common stock at the average of the closing prices for each trading day during such fiscal quarter ended on (and including) the last trading day of such fiscal quarter. The 6,439,552 shares of common stock have been issued in April 2014. In December 2014, the company issued 8,727,099 shares to settle the interest of $1,237,345 due on the convertible note.

In March 2014, Jonway Group agreed to pay all of the outstanding mold expenses of the Minivan that is currently still outstanding, and in return ZAP will share half of the asset value and share the IPR (50%) of the Minivan with Jonway Auto. The Minivan was purchased by ZAP from a prior agreement between ZAP and Jonway Group which was signed on January 18, 2012.  In return for ZAP receiving worldwide exclusivity for the sales, distribution, and product IPR rights for all current and future models of the compressed natural gas (“CNG”) versions of Jonway Auto's Products, including, but not limited to, SUV, minivan, and all other models, the Company's Board of Directors authorized on March 28, 2014 to issue 61,000,000 shares of common stock to the companies owned by the Co-CEO and shareholder Alex Wang, including 20,000,000 shares to Major Management Limited, 20,000,000 shares to Max Reliance Management Limited and 21,000,000 shares to New Dragon Management Limited. The 61,000,000 shares of common stock have been issued in April 2014.

In May 2014, ZAP issued 62,500 shares of common stock to Jeffery and Karen Bank, who paid $5,000 in cash on behalf of ZAP to address a lawsuit from Jackson Long.

On February 26, 2014, a binding letter of commitment in equity investment in ZAP was signed between the Company and four individual investors. The four individual investors are the representatives of the employees of Jonway Auto and Jonway Group in China and they will hold the issued stocks on behalf of these employees. The shares were issued at discounted share price based on averaged price over the last 60 days from the date of signing the agreement. As of December 31, 2014, $1.9 million was received by ZAP. The number of stock issued on August 14, 2014 was 31,666,668 shares.

On December 31, 2014, the company issued 10,915,748 shares and 2,666,666 shares at $0.06 per share to Alex Wang, the CO-CEO of the company and an individual for the cash advance of $654,945 and 160,000 respectively. The cash advance provided working capital to finance the operations of the company.