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Balances and Transactions With Related Parties
 3 Months Ended
Mar. 31, 2023
Related Party Transactions [Abstract]  
Balances and Transactions With Related Parties

16. 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 　 Former subsidiary and refer to Note b
Shenzhen BAK Power Battery Co., Ltd 　 Former subsidiary and refer to Note b

  

  (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 Shenzhen BAK Battery Co., Ltd and Shenzhen BAK Power Battery Co., Ltd

 

Related party transactions:

 

The Company entered into the following significant related party transactions:

 

   For the
three months ended
March 31,		 
   2022   2023 
   　   　 
Purchase of batteries from Zhengzhou BAK Battery Co., Ltd 　  $5,164,433   $3,161,173 
Sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd 　 　   25,823,532    9,323,839 
Sales of cathode raw materials to Shenzhen BAK Power Battery Co., Ltd   112,468    
-
 

 

Related party balances:

 

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

 

Receivables from a former subsidiary, net 

 

   December 31,
2022		   March 31,
2023		 
   　   　 
Receivables from Shenzhen BAK Power Battery Co., Ltd  $5,518,052   $1,834,983 
Less: Allowance for credit losses   
-
    (16,714)
   $5,518,052    1,818,269 

 

An analysis of the allowance for credit losses are as follows:

 

Balance as at December 31, 2022  $
-
 
Adoption of ASC Topic 326   
-
 
Balance as at January 1, 2023   
-
 
Current period provision, net   16,779 
Foreign exchange adjustment   (65)
Balance as at March 31, 2023  $16,714 

 

Balance as of December 31, 2022 and March 31, 2023 consisted of receivable for sales of cathode materials to Shenzhen BAK Power Battery Co., Ltd. Up to the date of this report, Shenzhen BAK Power Battery Co., Ltd repaid $1.8 million to the Company.

 

Other balances due from/ (to) related parties

 

   December 31,
2022		   March 31,
2023		 
   　   　 
Trade receivable, net – Zhengzhou BAK Battery Co., Ltd. (i)  $9,156,383   $14,251,802 
           
Bills receivable – Issued by Zhengzhou BAK Battery Co., Ltd (ii)  $2,941,683   $2,246,742 
           
Trade payable, net – Zhengzhou BAK Battery Co., Ltd (iii)  $5,629,343   $3,307,343 
           
Dividend payable to non-controlling interest of Hitrans (note 14)  $1,290,942   $1,298,497 

 

  (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 $5.2 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 payables subsequent to December 31, 2022. Bills receivable as of March 31, 2023 were pledged to bank as security for issuance of bills payable (note 12).

 

(iii)Representing trade payables 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 March 31, 2023 consisted of the following:

 

   December 31,
2022		   March 31,
2023		 
Payables to Shenzhen BAK Power Battery Co., Ltd 　  $(358,067)  $(355,913)

 

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