NOTE 16 – RELATED PARTY TRANSACTIONS

Due from (to) related parties

Amount due from related parties are principally for advances in the normal course of business for parts and suppliers used in manufacturing. Amount due from related parties are as follows (in thousands):

	December 31, 2016		December 31, 2015
Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd	$	874	$	998
Jonway Motor Cycle		262		-
Jonway Economy and Trade Co., Ltd		-		616
Total	$	1,136	$	1,614

	December 31, 2016		December 31, 2015
Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd	$	38	$	296
Taizhou Jonway Electric Vehicle Selling Co		-		3,945
Jonway Group		-		5
Jonway Motor Cycle		4		231
Total	$	42	$	4,477

	December 31, 2016		December 31, 2015
Jonway EV Selling Ltd	$	3,072	$	4,659
Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd		250		212
Jonway Motor Cycle		305		301
	$	3,627	$	5,172

	December 31, 2016		December 31, 2015
Jonway Group	$	13,384	$	12,606
Jonway Motor Cycle		63		64
Taizhou Huadu		-		846
Shanghai Zapple		33		35
Mr. Wang		7		74
Betterworld		149		149
Taizhou Jonway Electric Vehicle Selling Co		80		-
Zhejiang Jonway Painting Co. Ltd.		-		11
Cathaya Operations Management Ltd.		257		193
Zhejiang Aochuang Alternative Energy Vehicle Co., Ltd.		424		-
Total	$	14,397	$	13,978

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 short term bank facilities from China-based banks. Jonway made such purchase from Jonway Group for a total of $294,000 and $5.3 million for the years ended December 31, 2016 and 2015, respectively. In addition, Jonway sold Jonway Group in the amount of $Nil and $5,000 for the years ended December 31, 2016 and 2015, respectively.

Based on a contract by and among the 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 and extended another year to expire until the end of 2017.

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. For the years ended December 31, 2016 and 2015, $24,000 and $223,000 were recorded as assembling fees, respectively. Also during 2016 and 2015, Jonway sold SUVs and parts in the amount of $38,000 and $295,000 to Zhejiang UFO.

During 2016, Jonway purchased parts in amount of $2,000 and $894,000 from Jonway Motor Cycle and Taizhou Huadu, respectively. During 2015, Jonway purchased parts in amount of $2,000 and $894,000 from Jonway Motor Cycle and Taizhou Huadu, respectively.

In August 2016, the amount of $443,630 due to Cathaya Management Co Ltd, a related party, has been converted into 8,872,602 shares of common stock at price of $0.05. In addition, China Electric Vehicle Corporation (CEVC), a related party, has elected to convert the interest of $1,246,410 due on the $20.7 million convertible note to 18,399,316 shares of ZAP’s common stock at the average share price of related interest period (see Note 8). The Company also issued 200,000 shares of common stock to the CFO in August 2016.

In September 2015, the Company issued 89,194,715 shares to Mr. Wang Alex, the Chief Executive Officer of the Company for his investment of $5,351,683 in the Company (approximately $4.5 million investment was loan by the Company to its subsidiary Jonway Auto).

In September 2015, the amount of $814,863 investment from Cathaya Management Co Ltd and $350,000 due to Cathaya Management Co Ltd have been converted into 13,581,051 and 5,833,333 shares of common stock at price of $0.06, respectively.

In September 2015, China Electric Vehicle Corporation (CEVC) has elected to convert the interest of $1,237,345 due on the $20.7 million convertible note to 14,454,743 shares of common stock at the average price of $0.086.