Balances and Transactions with Related Parties

12 Months Ended

Dec. 31, 2023

Balances and Transactions with Related Parties [Abstract]

Balances and Transactions with Related Parties

18. 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
Zhengzhou BAK Battery Co., Ltd	Note a
Shenzhen BAK Battery Co., Ltd (“SZ BAK”)	Former subsidiary and refer to Note b
Shenzhen BAK Power Battery Co., Ltd (“BAK SZ”)	Former subsidiary and refer to Note b
Zhejiang Shengyang Renewable Resources Technology Co., Ltd.	Note c
Fuzhou BAK Battery Co., Ltd	Note d

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

(b) Mr. Xiangqian Li, the Company’s former CEO, is a director of Shenzhen BAK Battery Co., Ltd and Shenzhen BAK Power Battery Co., Ltd. On September 27, 2023, Nanjing CBAK New Energy Technology Co., Ltd. (“Nanjing CBAK”) entered into an Equity Transfer Agreement (the “Equity Transfer Agreement”) with Shenzhen BAK Battery Co., Ltd. (“SZ BAK”), under which SZ BAK shall sell a five percent (5%) equity interest in Shenzhen BAK Power Battery Co., Ltd. (“BAK SZ”) to Nanjing CBAK for a purchase price of RMB260 million (approximately $35.7 million) (note 13).

(c) On September 27, 2023, Hitrans entered into an Equity Transfer Contract (the “Equity Transfer Contract”) with Mr. Shengyang Xu, pursuant to which Hitrans will initially acquire a 26% equity interest in Zhejiang Shengyang Renewable Resources Technology Co., Ltd. (“Zhejiang Shengyang”) from Mr. Xu, an individual who currently holds 97% of Zhejiang Shengyang, for a price of RMB28.6 million (approximately $3.9 million) (the “Initial Acquisition”). Neither Mr. Xu, nor Zhejiang Shengyang is related to the Company.

(d) Zhengzhou BAK Battery Co., Ltd has 51% equity interest in Fuzhou BAK Battery Co., Ltd. Zhengzhou BAK Battery Co., Ltd is a wholly owned subsidiary of BAK SZ.

Related party transactions

The Company entered into the following significant related party transactions:

	For the year ended December 31, 2022		For the year ended December 31, 2023
Purchase of batteries from Zhengzhou BAK Battery Co., Ltd	$	26,819,454	$	10,999,732
Purchase of materials from Zhejiang Shengyang Renewable Resources Technology Co., Ltd.		20,303,783		12,725,193
Sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd		53,236,804		27,872,002
Sales of cathode raw materials to Shenzhen BAK Power Battery Co., Ltd		8,681,496		66,560
Sales of batteries to Fuzhou BAK Battery Co., Ltd		-		105,010

Related party balances

Apart from the above, the Company recorded the following significant related party balances as of December 31, 2022 and 2023:

Receivables from former subsidiary

	December 31, 2022		December 31, 2023
Receivables from Shenzhen BAK Power Battery Co., Ltd	$	5,518,052	$	74,946

Balance as of December 31, 2022 and 2023 represented trade receivable for sales of cathode raw materials to Shenzhen BAK Power Battery Co., Ltd.

Other balances due from/ (to) related parties

	December 31, 2022		December 31, 2023
Trade receivable, net – Zhengzhou BAK Battery Co., Ltd (i)	$	9,156,383	$	12,441,715
Bills receivable – Issued by Zhengzhou BAK Battery Co., Ltd (ii)	$	2,941,683	$	-
Trade payable, net – Zhengzhou BAK Battery Co., Ltd (iii)	$	5,629,343	$	803,685
Trade payable, net – Zhejiang Shengyang Renewable Resources Technology Co., Ltd	$	3,201,814	$	3,489,324
Deposit paid for acquisition of long-term investments – Shenzhen BAK Power Battery Cp., Ltd (note 14)	$	-		7,101,492
Dividend payable to non-controlling interest of Hitrans (note 17)	$	1,290,942	$	1,256,745

(i) Representing trade receivable 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 $7.4 million to the Company.

(ii) Representing bills receivable issued by Zhengzhou BAK Battery Co., Ltd. The Company endorsed the bills receivable as of December 31, 2022 to suppliers for settling trade payable subsequent to December 31, 2022.

(iii) Representing trade payable on purchase of batteries from Zhengzhou BAK Battery Co., Ltd.

Payables to a former subsidiary

Payables to a former subsidiary as of December 31, 2022 and 2023 consisted of the following:

	December 31,			December 31,
	2022			2023
Payables to Shenzhen BAK Power Battery Co., Ltd	$	(358,067	)	$	(411,111	)

Balance as of December 31, 2022 and 2023 consisted of payables for purchase of inventories from Shenzhen BAK Power Battery Co., Ltd.