RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 10 – RELATED PARTY TRANSACTIONS

Due from (to) related parties

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

Amounts due from related parties are as follows (in thousands):

	June 30, 2016		December 31, 2015
Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd	$	994	$	998
Zhejiang Jonway Motorcycle		96		-
Taizhou Jonway		120		-
Shanghai Zapple		124
Jonway Economy and Trade Co., Ltd.		-		616
	$	1,334	$	1,614

In addition, accounts receivable included in accounts receivable due from related parties as follows (in thousands):

	June 30, 2016		December 31, 2015
Jonway EV selling Ltd.	$	4,249	$	4,659
Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd		155		212
Jonway Motorcycle		294		301
	$	4,698	$	5,172

Amounts due to related parties are follows (in thousands):

	June 30, 2016		December 31, 2015
Jonway Group	$	14,721	$	12,606
Jonway Motor Cycle		64		64
Taizhou Huadu		1,310		846
Shanghai Zapple		-		35
Mr. Alex Wang		7		74
Mr. Huaiyi Wang		14		-
Betterworld		149		149
Zhejiang Jonway Painting Co., Ltd.		-		11
Cathaya Operations Management Ltd.		442		193
	$	16,707	$	13,978

Transactions with Jonway Group

Jonway Group is considered as a related party as the Wang Family, one of the principal shareholders of the Company, has controlling interests in Jonway Group. Jonway Group supplies some of plastics spare parts to Jonway Auto and gave guarantees on Jonway Auto short term bank facilities from China-based banks. Jonway Auto made such purchase from Jonway Group for a total of $627,000 and $1,299,000 for the six months ended June 30, 2016 and 2015, respectively. Jonway Auto made such purchase from Jonway Group for a total of $138,000 and $544,000 for the three months ended June 30, 2016 and 2015, respectively.

Jonway Auto Agreement with Zhejiang UFO

Based on a contract by and among the Zhejiang UFO, Jonway Group and Jonway Auto dated as of January 1, 2006, Zhejiang UFO has authorized Jonway Auto 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 Auto shall pay Zhejiang UFO a variable contractual fee which is calculated based on the number of SUVs that Jonway Auto 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 Auto, has certain non-controlling equity interests in Zhejiang UFO.  For the six months ended June 30, 2016 and 2015, $0.1 million and $Nil were recorded as assembling fees, respectively.  For the three months ended June 30, 2016 and 2015, $0.1 million and $Nil were recorded as assembling fees, respectively.

  Other Related Party Transactions

For the six months ended June 30, 2016, Jonway Auto purchased parts in amount of $301,000 and $98,000 from Taizhou Huadu and Jonway Group, respectively. For the six months ended June 30, 2015, Jonway Auto purchased $Nil and $1,299,000 spare parts from Taizhou Huadu and Jonway Group, respectively.