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Deposit Paid for Acquisition of Long-term Investments | 9 Months Ended
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Sep. 30, 2023
Deposit Paid for Acquisition of Long-term Investments [Abstract] |
Deposit Paid for Acquisition of Long-term Investments | 13. Deposit paid for acquisition of long-term investments Deposit paid for acquisition of long-term investments as of December 31, 2022 and September 30, 2023 consisted of the following:
|  | December 31, |  |  | September 30, |
|  | 2022 |  |  | 2023 |
Investments in non-marketable equity |  | $ | - |  |  | $ | 1,704,350 |
Investments in equity method investees |  |  | - |  |  |  | 1,965,501 |
|  |  | - |  |  |  | 3,669,851 |
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) (the “Target Equity”). Pursuant to the terms of the Equity Transfer Agreement, Nanjing CBAK will pay the Target Equity in three (3) installments as follows: (i) RMB40 million (approximately $5.5 million) due prior to December 31, 2023; (ii) RMB90 million (approximately $12.4 million) due prior to September 30, 2024, and (iii) the remaining Target Equity balance of RMB130 million (approximately $17.8 million) due following SZ BAK’s successful transfer to Nanjing CBAK of the five percent (5%) equity interest in BAK SZ. Upon Nanjing CBAK having paid RMB130 million of the Target Equity, the parties shall work together to complete the registration of equity change with the local governmental authorities. The Company has contributed RMB12.4 million (approximately $1.7 million) as of September 30, 2023. Up to the date of this report, Nanjing CBAK has paid RMB22.4 million (approximately $3.1 million) to SZ BAK. SZ BAK and BAK SZ were the Company’s former subsidiary up to June 30, 2014. Mr, Xiangqian Li, the Company’s former CEO, is the director of SZ BAK and BAK SZ. The Company will measure the investments in BAK SZ as non-marketable equity securities without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis upon the completion. The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3. On September 27, 2023, Zhejiang Hitrans Lithium Technology Co., Ltd. (“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”). Hitrans shall pay the Initial Acquisition price in two (2) installments as follows: (i) 50% of the price due within five business days following the execution of the Equity Transfer Contract and satisfaction of other conditions precedent set forth in the same; and (ii) the remaining 50% of the price due within five business days following Mr. Xu successful transfer to Hitrans of the 26% equity interest in Zhejiang Shengyang. Within fifteen business days after Hitrans has paid 50% of the price, or RMB14.3 million, the parties shall complete the registration of equity change with the local governmental authorities. Zhejiang Shengyang is a material suppliers of Hitrans since June 2020. On November 6, 2023, Hitrans completed the registration of 26% equity interest of Zhejiang Shengyang. And within three months following the Initial Acquisition, Mr. Xu shall transfer an additional 44% equity interest in Zhejiang Shengyang to Hitrans at the same price per share as that of the Initial Acquisition (the “Follow-on Acquisition”). The parties shall enter into another agreement to detail the terms of the Follow-on Acquisition. Neither Mr. Xu, nor Zhejiang Shengyang, is related to the Company. The Company will apply the equity method of accounting to account for the equity investments in Zhejiang Shengyang upon the completion of the Initial Acquisition, over which it has significant influence but does not own a majority equity interest or otherwise control.

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