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Balances and Transactions with Related Parties
 3 Months Ended
Mar. 31, 2024
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 periods 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.

 

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

 

(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
three months ended
March 31,		 
   2023   2024 
         
Purchase of batteries from Zhengzhou BAK Battery Co., Ltd    $3,161,173   $2,572,553 
Purchase of materials from Zhejiang Shengyang Renewable Resources Technology Co., Ltd   2,702,824    1,546,870 
Sales of batteries to Fuzhou BAK Battery Co., Ltd   
-
    76,279 
Sales of cathode raw materials to Zhengzhou BAK Battery Co., Ltd     9,323,839    4,985,896 
Sales of cathode raw materials to Zhengzhou BAK Electronics Co., Ltd.   
-
    97,002 

 

Related party balances:

 

Apart from the above, the Company recorded the following significant related party balances as of December 31, 2023 and March 31, 2024:

 

Receivables from a former subsidiary, net 

 

   December 31,
2023		   March 31,
2024		 
         
Receivables from Shenzhen BAK Power Battery Co., Ltd  $74,946   $36,273 
Less: Allowance for credit losses   
-
    (326)
   $74,946   $35,947 

 

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

 

Balance as at January 1, 2024  $
-
 
Current period provision, net   328 
Foreign exchange adjustment   (2)
Balance as at March 31, 2024  $326 

 

Balance as of December 31, 2023 and March 31, 2024 consisted of receivable for sales of cathode materials to Shenzhen BAK Power Battery Co., Ltd.

 

Other balances due from/ (to) related parties

 

   December 31,
2023		   March 31,
2024		 
         
Trade receivable, net – Zhengzhou BAK Battery Co., Ltd. (i)  $12,441,715   $7,570,334 
           
Trade receivable, net – Zhengzhou BAK Electronics Co., Ltd. (ii)  $226,143   $87,762 
           
Bills receivable – Issued by Zhengzhou BAK Electronics Co., Ltd (ii)  $47,767   $78,998 
           
Trade payable, net – Zhengzhou BAK Battery Co., Ltd (iii)  $803,685   $1,588,488 
           
Trade payable, net – Zhejiang Shengyang Renewable Resources Technology Co., Ltd (iv)  $3,489,324   $3,651,854 
           
Deposit paid for acquisition of long-term investments – Shenzhen BAK Power Battery Co., Ltd (note 14)  $7,101,492   $11,883,163 
           
Dividend payable to non-controlling interest of Hitrans (note 17)  $1,256,745   $1,216,179 

 

(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 $2.8 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, 2023 to suppliers for settling trade payables subsequent to December 31, 2023. Bills receivable as of March 31, 2024 were pledged to bank as security for issuance of bills payable (note 15).

 

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

  

(iv) Representing trade payables on purchase of cathode raw materials from Zhejiang Shengyang Renewable Resources Technology Co., Ltd.

 

Payables to a former subsidiary

 

Payables to a former subsidiary as of December 31, 2023 and March 31, 2024 consisted of the following:

 

   December 31,
2023		   March 31,
2024		 
Payables to Shenzhen BAK Power Battery Co., Ltd   $(411,111)  $(416,491)

 

Balance as of December 31, 2023 and March 31, 2024 consisted of payables for purchase of inventories from Shenzhen BAK Power Battery Co., Ltd.