Balances and Transactions With Related Parties

12 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

Balances and Transactions With Related Parties

17. Balances and Transactions with Related Parties

The principal related parties with which the Company had transactions during the years presented are as follows:

Name of Entity or Individual	Relationship with the Company
New Era Group Zhejiang New Energy Materials Co., Ltd.	Shareholder of company’s subsidiary
Shenzhen Baijun Technology Co., Ltd	Shareholder of company’s subsidiary
Zhengzhou BAK Battery Co., Ltd	Note a
Zhengzhou BAK New Energy Technology Co., Ltd	Note b
Shenzhen BAK Battery Co., Ltd	Former subsidiary and refer to Note c
Shenzhen BAK Power Battery Co., Ltd	Former subsidiary and refer to Note c
Zhejiang New Era Zhongneng Recycling Technology Co., Ltd.	Note d
Hangzhou Juzhong Daxin Asset Management Co., Ltd	Note e
Mr. Junnan Ye (Note 13)	Former shareholder of Zhejiang Hitrans Lithium Battery Technology Co., Ltd

(a) Mr. Xiangqian Li, the Company’s former CEO, is a director of Zhengzhou BAK Battery Co., Ltd.

(b) Mr. Xiangqian Li is a director of Zhengzhou BAK New Energy Vehicle Co., Ltd, which has 29% equity interests in Zhengzhou BAK New Energy Technology Co., Ltd.

(c) Mr. Xiangqian Li is a director of Shenzhen BAK Battery Co., Ltd and Shenzhen BAK Power Battery Co., Ltd .

(d) New Era Group Zhejiang New Energy Materials Co., Ltd. (note 12) is a shareholder of Zhejiang New Era Zhongneng Recycling Technology Co., Ltd., holding 27.08% equity interests.

(e) Hangzhou Juzhong Daxin Asset Management Co., Ltd. was the trustee of 85% of registered equity interests of Hitrans (note 12)

Related party transactions

The Company entered into the following significant related party transactions:

	For the year ended December 31, 2021			For the year ended December 31, 2022
Purchase of batteries from Zhengzhou BAK Battery Co., Ltd	$	5,522,832		$	26,819,454
Sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd		8,339,088			53,236,804
Sales return of batteries to Zhengzhou BAK New Energy Technology Co., Ltd		(91,974	)		-
Sales of cathode raw materials to Shenzhen BAK Power Battery Co., Ltd		10,032			8,681,496
Interest expense charge by Mr. Junnan Ye		135,606			-

Related party balances

Apart from the above, the Company recorded the following significant related party balances as of December 31, 2021 and December 31, 2022:

Receivables from former subsidiary

	December 31, 2021		December 31, 2022
Receivables from Shenzhen BAK Power Battery Co., Ltd	$	2,263,955	$	5,518,052

Balance as of December 31, 2021 and 2022 represented trade receivable for sales of cathode raw materials to Shenzhen BAK Power Battery Co., Ltd. Up to the date of this report, Shenzhen BAK Power Battery Co., Ltd repaid $4.5 million  to the Company.

Amount due from non-controlling interest

	December 31, 2021		December 31, 2022
Shenzhen Baijun Technology Co., Ltd
Current	$	125,883	$	-
Non-current		62,941		-
	$	188,824	$	-

In August 2018, Guangdong Hitrans and Shenzhen Baijun entered into a services contract for the provision of consultancy service to assist Guangdong Hitrans to obtain the license for recycling solid wastes with a contract sum of RMB3,000,000 ($465,362). During August and September 2018, RMB1,500,000 ($232,681) was paid to Shenzhen Baijun as deposit. In 2020, Guangdong Hitrans and Shenzhen Baijun entered into supplemental agreement to cancel the services contract and Shenzhen Baijun agreed to refund the deposit paid by four installments from 2021 throughout 2023.

Hitrans assessed the recoverability of the amount due from Shenzhen Baijun and considered the recoverability is low and written off the whole amount due from Shenzhen Baijun as of December 31, 2022.

Amount due from related party

	December 31, 2021		December 31, 2022
Hangzhou Juzhong Daxin Asset Management Co., Ltd (Note 12)		472,061		-

The above balances are due on demand, interest-free and unsecured. The Company assessed the recoverability of the amount due from Juzhong Daxin and considered the recoverability is low and written off the whole amount due from Juzhong Daxin as of December 31, 2022.

Other balances due from/ (to) related parties

	December 31, 2021			December 31, 2022
Trade receivable, net – Zhengzhou BAK Battery Co., Ltd (i)	$	14,583,061		$	9,156,383
Trade receivable, net – Zhengzhou BAK New Energy Technology Co., Ltd (ii)	$	459,714		$	-
Bills receivable – Issued by Zhengzhou BAK Battery Co., Ltd (iii)	$	1,861,280		$	2,941,683
Trade payable, net – Zhengzhou BAK Battery Co., Ltd	$	(572,768	)	$	(5,629,343	)
Dividend payable to non-controlling interest of Hitrans (note 16)	$	1,444,737		$	1,290,942

(i)	Representing trade receivables from sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd. Up to the date of this report, Zhengzhou BAK Battery Co., Ltd. repaid $5.1 million to the Company.
(ii)	Representing trade payables on purchase of batteries from Zhengzhou BAK Battery Co., Ltd.
(iii)	Representing bills receivable issued by Zhengzhou BAK Battery Co., Ltd. The Company endorsed the bills receivable to suppliers for settling trade payables subsequent to December 31, 2022.

Payables to a former subsidiary

Payables to a former subsidiary as of December 31, 2021 and 2022 consisted of the following:

	December 31,			December 31,
	2021			2022
Payables to Shenzhen BAK Power Battery Co., Ltd	$	(326,507	)	$	(358,067	)

Balance as of December 31, 2021 and December 31, 2022 consisted of payables for purchase of inventories from Shenzhen BAK Power Battery Co., Ltd.