SEGMENT REPORTING

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 9 – SEGMENT REPORTING

Operating Segments

In accordance with ASC 280, the Company has identified three reportable segments consisting of Jonway Auto, ZAP (Consumer Product) and ZAP Hong Kong. The Jonway Auto segment represents sales of the gas fueled Jonway Auto A380 three and five-door sports utility vehicles, EV minivan and EV SUVs and spare parts principally through distributors in China. The ZAP Consumer Product segment represents rechargeable portable energy products, the Company’s Zapino scooter, and the Company’s ZAPPY3 personal transporters. These segments are strategic business units that offer different services. They are managed separately because each business requires different resources and strategies. The Company’s chief operating decision making group, which is comprised of the CEOs and the senior executives of each of ZAP’s strategic segments, regularly evaluate the financial information about these segments in deciding how to allocate resources and in assessing performance.

The performance of each segment is measured based on its profit or loss from operations before income taxes. Segment results are summarized as follows (in thousands):

	Jonway Auto			ZAP			ZAP Hong Kong		Total
For the three months ended June 30, 2016
Net sales	$	2,966		$	5		$	-	$	2,971
Gross profit (loss)	$	(725	)	$	1		$	-	$	(724	)
Depreciation and amortization	$	1,955		$	-		$	-	$	1,955
Net loss	$	(2,183	)	$	(1,194	)	$	-	$	(3,377	)
Total assets	$	62,105		$	13,350		$	-	$	75,455
For the three months ended June 30, 2015
Net sales	$	5,331		$	25		$	-	$	5,356
Gross profit (loss)	$	(278	)	$	7		$	-	$	(271	)
Depreciation and amortization	$	1,455		$	651		$	-	$	2,106
Net loss	$	(4,023	)	$	(1,454	)	$	-	$	(5,477	)
Total assets	$	67,925		$	18,273		$	9	$	86,207
For the six months ended June 30, 2016
Net sales	$	6,344		$	9		$	-	$	6,353
Gross profit (loss)	$	(660	)	$	2		$	-	$	(658	)
Depreciation and amortization	$	3,226		$	651		$	-	$	3,877
Net loss	$	(4,413	)	$	(2,353	)	$	-	$	(6,766	)
Total assets	$	62,105		$	13,350		$	-	$	75,455
For the six months ended June 30, 2015
Net sales	$	13,517		$	201		$	-	$	13,718
Gross profit (loss)	$	(865	)	$	82		$	-	$	(783	)
Depreciation and amortization	$	2,890		$	1,308		$	-	$	4,198
Net loss	$	(7,294	)	$	(2,859	)	$	-	$	(10,153	)
Total assets	$	67,925		$	18,273		$	9	$	86,207

Customer information

Approximately 99.8% or $3.0 million of the Company’s revenues for the three months ended June 30, 2016 are from sales in China.  Jonway Auto distributes its products to an established network of over 70 factory level dealers in China with one customer contributing over 10% of the Company’s consolidated revenue during the three months ended June 30, 2016. Approximately 99.6% or $5.3 million of the Company’s revenues for the three months ended June 30, 2015 are from sales in China. Jonway Auto distributes its products to an established network of over 63 factory level dealers in China with no customer contributing to more than 10% of the Company’s consolidated revenue during the three months ended June 30, 2015.

Approximately 99.9% or $6.3 million of the Company’s revenue for the six months ended June 30, 2016 are from sales in China. Jonway Auto distributes its products to an established network of over 70 factory level dealers in China with one customer contributing over 10% of the Company’s consolidated revenue during the six months ended June 30, 2016. Approximately 98.5% or $13.5 million of the Company’s revenue for the six months ended June 30, 2015 are from sales in China. Jonway Auto distributed its product to an established network of over 65 factory level dealers in China with one customer contributing 10% of the Company’s consolidated revenue during the six months ended June 30, 2015.

Supplier information

For the three months ended June 30, 2016 and 2015, approximately 100% or $3.7 million and 100% or $5.6 million of the consolidated cost of goods sold were purchased in China. For the three months ended June 30, 2016, no vendors contributed to over 10% of the Company’s purchase.  For the three months ended June 30, 2015, one vender accounted for 11% of the total purchase. For the six months ended June 30, 2016 and 2015, approximately 100% or $7.0 million and 100% or $14.5 million of the consolidated cost of goods sold were purchased in China. For the six months ended June 30, 2016, one vendor accounted for 14% of the total purchase. For the six months ended June 30, 2015, no vendor contributed to over 10% of the Company’s purchase.