Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | May 23, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 | ||
Entity Registrant Name | ZAP | ||
Entity Central Index Key | 1,024,628 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Common Stock, Shares Outstanding | 650,147,040 | ||
Entity Public Float | $ 5,083,533 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 34 | $ 60 |
Restricted cash | 8,587 | 8,988 |
Notes receivable | 187 | |
Accounts receivable, net | 162 | 743 |
Accounts receivable - related parties | 3,627 | 5,172 |
Inventories, net | 5,887 | 7,743 |
Prepaid taxes | 147 | |
Prepaid expenses and other current assets | 291 | 574 |
Total current assets | 18,775 | 23,427 |
Property, plant and equipment, net | 16,257 | 35,893 |
Land use rights, net | 8,146 | 8,930 |
Other assets: | ||
Distribution fees, net | 6,959 | |
Intangible assets, net | 2,513 | |
Goodwill | 314 | |
Due from related party | 1,136 | 1,614 |
Deposits and other assets | ||
Total other assets | 1,136 | 11,400 |
Total assets | 44,314 | 79,650 |
Current liabilities: | ||
Short term loans | 10,442 | 7,702 |
Accounts payable | 20,970 | 21,486 |
Senior convertible debt | 20,679 | 21,465 |
Accrued liabilities | 3,714 | 4,000 |
Notes payable | 10,727 | 14,366 |
Advances from customers | 6,613 | 7,391 |
Taxes payable | 1,105 | 1,638 |
Due to related parties | 14,397 | 13,978 |
Other payables | 1,729 | 2,256 |
Total current liabilities | 90,376 | 94,282 |
Long term liabilities: | ||
Accrued liabilities and others | 48 | 152 |
Total long term liabilities | 48 | 152 |
Total liabilities | 90,424 | 94,434 |
Commitments and contingencies | ||
Deficiency | ||
Common stock, no par value; 800 million shares authorized; 605,737,077 and 578,465,159 shares issued and outstanding at December 31, 2016 and 2015, respectively | 253,452 | 251,689 |
Accumulated other comprehensive income | 1,823 | 1,359 |
Accumulated deficit | (287,626) | (264,144) |
Total ZAP shareholders' deficiency | (32,351) | (11,096) |
Non-controlling interest | (13,759) | (3,688) |
Total deficiency | (46,110) | (14,784) |
Total liabilities and deficiency | $ 44,314 | $ 79,650 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | ||
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 605,737,077 | 578,465,159 |
Common stock, shares outstanding | 605,737,077 | 578,465,159 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Net sales | $ 10,775 | $ 29,460 |
Cost of goods sold | (11,901) | (30,722) |
Gross loss | (1,126) | (1,262) |
Operating expenses: | ||
Sales and marketing | 1,925 | 3,323 |
General and administrative | 8,215 | 10,775 |
Research and development | 386 | 1,479 |
Impairment loss on assets | 20,367 | 1,082 |
Total operating expenses | 30,893 | 16,659 |
Loss from operations | (32,019) | (17,921) |
Other income (expense): | ||
Interest expense, net | (2,542) | (2,464) |
Other income | 540 | 330 |
Total income (expense) | (2,002) | (2,134) |
Loss before income taxes | (34,021) | (20,055) |
Income tax benefit (expense) | ||
Net loss | (34,021) | (20,055) |
Less: loss attributable to non-controlling interest | 10,539 | 5,911 |
Net loss attributable to ZAP's common shareholders | (23,482) | (14,144) |
Net loss | (34,021) | (20,055) |
Other comprehensive loss | ||
Foreign currency translation adjustments | 932 | (169) |
Total comprehensive loss | (33,089) | (20,224) |
Less: Comprehensive loss attributable to non-controlling interest | 10,071 | 5,784 |
Comprehensive loss attributable to ZAP | $ (23,018) | $ (14,440) |
Net loss per share attributable to common shareholders: | ||
Basic and diluted | $ (0.04) | $ (0.03) |
Weighted average number of common shares outstanding: | ||
Basic and diluted | 589,673 | 502,660 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY DEFICIENCY - USD ($) $ in Thousands | Common Stock [Member] | Accumulated deficit [Member] | Accumulated Other Comprehensive Income [Member] | Shareholders' Deficiency [Member] | Non-controlling Interest [Member] | Total |
Balance at Dec. 31, 2014 | $ 244,368 | $ (250,000) | $ 1,655 | $ (3,977) | $ 2,096 | $ (1,881) |
Balance, shares at Dec. 31, 2014 | 461,396,000 | |||||
Stock based compensation | $ 74 | 74 | 74 | |||
Stock based compensation, shares | ||||||
Issuance of common stock | $ 6,167 | 6,167 | 6,167 | |||
Issuance of common stock, shares | 102,776,000 | |||||
Common stock issued for service | $ 350 | 350 | 350 | |||
Common stock issued for service, shares | 5,833,000 | |||||
Common stock issued to settle interest payable | $ 1,237 | 1,237 | ||||
Common stock issued to settle interest payable, shares | 14,455,000 | |||||
Cancellation of common stock | $ (507) | (507) | (100) | |||
Cancellation of common stock, shares | (5,995,000) | |||||
Foreign currency translation gain | (296) | (296) | 127 | (169) | ||
Net loss | (14,144) | (14,144) | (5,911) | (20,055) | ||
Balance at Dec. 31, 2015 | $ 251,689 | (264,144) | 1,359 | (11,096) | (3,688) | (14,784) |
Balance, shares at Dec. 31, 2015 | 578,465,000 | |||||
Stock based compensation | $ 73 | 73 | 73 | |||
Stock based compensation, shares | ||||||
Issuance of common stock | $ 1,690 | 1,690 | $ 1,690 | |||
Issuance of common stock, shares | 27,272,000 | |||||
Common stock issued for service, shares | 5,833,333 | |||||
Common stock issued to settle interest payable | $ 1,246 | |||||
Common stock issued to settle interest payable, shares | 18,399,316 | |||||
Cancellation of common stock | ||||||
Cancellation of common stock, shares | (1,182,558) | |||||
Foreign currency translation gain | 464 | 464 | 468 | $ 932 | ||
Net loss | (23,482) | (23,482) | (10,539) | (34,021) | ||
Balance at Dec. 31, 2016 | $ 253,452 | $ (287,626) | $ 1,823 | $ (32,351) | $ (13,759) | $ (46,110) |
Balance, shares at Dec. 31, 2016 | 605,737,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (34,021) | $ (20,055) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Stock-based employee compensation | 73 | 74 |
Depreciation and amortization | 6,304 | 6,769 |
Amortization of distribution agreement | 1,440 | 1,440 |
Provision for doubtful accounts | 29 | 2,416 |
Changes in inventory reserve | (40) | (84) |
Impairment loss on assets | 20,367 | 1,082 |
(Gain) loss from disposal of equipment | (23) | |
Changes in assets and liabilities: | ||
Accounts receivable | 1,719 | 756 |
Notes receivable | (196) | 80 |
Inventories | 1,456 | 288 |
Due from related parties | 478 | 21 |
Prepaid expenses and other assets | 391 | 164 |
Accounts payable | 776 | 635 |
Accrued liabilities | 1,485 | 1,583 |
Taxes payable | (446) | 545 |
Advances from customers | (309) | 659 |
Due to related parties | 728 | 1,934 |
Other payables | (474) | (871) |
Net cash used in operating activities | (240) | (2,587) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of property and equipment | (351) | (1,020) |
Proceeds from disposal of equipment | 138 | 23 |
Net cash used in investing activities | (213) | (997) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Change in restricted cash | (194) | 1,164 |
Repayment of convertible bonds | (100) | |
Repurchase of common stock | (407) | |
Proceeds from issuance of common stock | 6,167 | |
Proceeds from notes payable | 24,272 | 14,112 |
Proceeds from short term loans | 11,281 | 2,248 |
Proceeds of convertible bonds | 786 | |
Repayments of notes payable | (27,097) | (14,349) |
Payments on short term loans | (7,836) | (6,157) |
Net cash provided by financing activities | 426 | 3,464 |
Effect of exchange rate changes on cash and cash equivalents | 1 | (58) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (26) | (178) |
CASH AND CASH EQUIVALENTS, beginning of year | 60 | 238 |
CASH AND CASH EQUIVALENTS, end of year | 34 | 60 |
Supplemental disclosure of cash flow information: | ||
Cash paid during year for interest | 1,103 | 810 |
Non-cash transaction: | ||
Issuance of 8,872,602 shares common stock to Cathaya Management Co. Ltd | 444 | |
Issuance of 18,399,316 shares common stock to CEVC to settle interest payable | 1,246 | |
Cancellation of 1,182,558 shares common stock issued to pay convertible bond | 100 | |
Issuance of 14,454,743 shares common stock to pay interest payable | 1,237 | |
Issuance of 5,833,333 shares common stock to pay outstanding management fee | $ 350 |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | 12 Months Ended |
Dec. 31, 2016shares | |
Statement of Cash Flows [Abstract] | |
Shares issued to settle payable | 8,872,602 |
Stock issued to pay interest payable, shares | 18,399,316 |
Shares cancelled | 1,182,558 |
Share issued to pay interest payable | 14,454,743 |
Shares of common stock issued to pay management fee | 5,833,333 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | NOTE 1 - ORGANIZATION ZAP was incorporated in California in September, 1994 (together with its subsidiaries, the “Company” or “ZAP Group”). ZAP Group markets electric, alternative energy, and fuel efficient automobiles and commercial vehicles, motorcycles and scooters, and other forms of personal transportation. The Company’s business strategy is to develop, acquire, and commercialize electric vehicles and electric vehicle power systems which the Company believes have fundamental practical and environmental advantages over available internal combustion modes of transportation and that can be produced commercially on an economically competitive basis. In pursuit of a manufacturing plant and a partner with an existing product line, a distribution and customer support network in China, and experience in vehicle manufacturing, ZAP acquired a majority of the outstanding equity in Zhejiang Jonway Automobile Co., Ltd. (“Jonway Auto”). At the time of the acquisition, the Company believed that its acquisition of 51% equity interest of Jonway Auto would enable it to access the rapidly-growing Chinese market for electric vehicles (“EV”) and to expand its EV business and distribution network around the world. The Company also believed Jonway Auto’s ISO 9001 certified manufacturing facility would provide the competitive production capacity and resources to support production of ZAP Group’s planned line of electric SUV, minivan, and Neighborhood EV (“NEV”). Jonway Auto is a limited liability company incorporated in Sanmen County, Zhejiang Province of the People’s Republic of China (the “PRC”) on April 28, 2004 by Jonway Group Co., Ltd. (“Jonway Group”). Jonway Group is under the control of three individuals, Wang Huaiyi, Alex Wang (the son of Wang Huaiyi) and Wang Xiaoying (the daughter of Wang Huaiyi), and all three individuals are collectively referred to as the “Wang Family” herein with. ZAP has a wholly owned subsidiary, ZAP Hong Kong, a Hong Kong limited company. ZAP Hong Kong was established in 2011 as a wholly foreign owned enterprises (“WOFE”) and has no operation since incorporated. Jonway Auto established three wholly-owned subsidiaries, namely, Taizhou Selling Co., Ltd., focusing on vehicles marketing and distribution, Taizhou Fuxing Vehicle Sale Co., Ltd., focusing on minivan marketing and distribution in China, and Taizhou Vehicle Leasing Co., Ltd., focusing on the vehicle leasing business in Taizhou. As of December 31, 2016, the Company has an outstanding unpaid principal balance of $20,679,069 due to China Electric Vehicle Corporation (“CEVC”) in regards to the Company’s Amended and Restated Promissory Note dated March 22, 2012 (“Note”). Pursuant to the terms of the Note, CEVC has right to convert the unpaid principal balance of the Note into shares of common stock of the Company’s Chinese subsidiary, Jonway Auto (“Conversion”). Upon Conversion, the Company’s indebtedness to CEVC under the Note shall be satisfied in full and CEVC, or its designee, shall hold approximately 39.479% of the equity of Jonway Auto and the Company’s equity position in Jonway Auto shall be reduced from 51% to approximately 11.52%. Accordingly, the Company shall be forced to deconsolidate Jonway Auto. Effective on April 3, 2017, the CEVC and the Board of the Company have mutually agreed to put the conversion temporarily on hold as the Board of the Company approved the initiation of due diligence with respect to the possible merger of the Company with Jonway Group’s motorcycle business with the intention of developing its “light electric vehicle” business (See Note 10). |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2016 | |
Going Concern | |
GOING CONCERN | NOTE - 2 – GOING CONCERN As of December 31, 2016, the Company’s current liabilities exceeded its current assets by approximately $71.6 million and its equity deficiency was $46.1 million. For the year ended December 31, 2016, the Company’s sales dropped 63% and its net loss increased by 70% comparing to year ended December 31, 2015. In addition, the Company has recurring net losses, and Company will be able to continue to consolidate its Chinese subsidiary, Jonway Auto shares of Jonway Auto common stock, which will reduce the Company’s equity position in Jonway Auto to approximately 12% (see Notes 1 and 10). All these factors raise substantial doubt about the Company’s ability to continue as a going concern. Given the Company’s expected capital expenditure for its working capital needs in the foreseeable future, as well as the payments should be made to the creditors, the Company has comprehensively considered available sources of funds as follows: · Financial support and credit guarantee from related parties; and · Other available sources of financing from domestic banks and other financial institutions given its credit history. The Company does not currently have sufficient cash or commitments from financing to sustain its operations for the next twelve months. The Company plans to substantially increase cash flows from operations and revenue derived from its products. If the Company’s revenues do not reach the level anticipated in its plan then the Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. As a result, the Company may be unable to implement its current plans for expansion, repay its debt obligations or respond to competitive pressures, any of which would have a material adverse effect on its business, prospects, financial condition and results of operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand, liquidation value of its current assets, and its operating and capital expenditure commitments. The Company’s principal liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Jonway Auto intends to utilize its existing credit lines (see Note 9) to expand its electric vehicle business as well as other future vehicle models. This includes on-going working capital needs, electric vehicle production equipment requirements, testing, homologation and new EV product molds. Also, the Company’s principal shareholder, Jonway Group, has agreed to provide the necessary support to meet the Company’s financial obligations through December 31, 2017 in the event that the Company requires additional liquidity. The Company will require additional capital to expand its current operations. In particular, the Company requires additional capital to continue development of its electric vehicle business, to continue strengthening its dealer network and after-sale service centers and expanding its market initiatives. The Company also requires financing the investment for the continued roll-out of new products and to add qualified sales and professional staff to execute on its business plan and pursue its efforts in the research and development of advanced technology vehicles, such as the new ZAP Alias, the electric and other fuel efficient vehicles. The Company intends to fund its short and long term liquidity needs related to operations through the incurrence of indebtedness, equity financing or a combination of both. The Company’s ability to fund these needs will depend on its future performance, which will be subject in part to general economic, financial, regulatory and other factors beyond its control, including trends in its industry and technological developments. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Consolidation The accompanying consolidated financial statements include the financial statements of ZAP, and its subsidiaries: Jonway Automobile, Voltage Vehicles, Advanced Technology Vehicles, ZAP and ZAP Hong Kong as of and for the years ended December 31, 2016 and 2015 and are prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). Management considers subsidiaries to be companies that are over 50% controlled. Significant intercompany transactions and balances are eliminated in consolidation; profits from intercompany sales, are also eliminated; non-controlling interests are included in equity. The Company accounts for its 37.5% interest in ZAP Hangzhou and its 50% interest in Shanghai Zapple using the equity method of accounting because it has significant influence but not control. ZAP’s common stock is quoted on the OTC Bulletin Board under the symbol “ZAAP.OB.” Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The more significant estimates relate to revenue recognition, contractual allowances and uncollectible accounts, intangible assets, accrued liabilities, warranty costs, impairment of goodwill and long-lived assets, litigation and contingencies. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for judgments about results and the carrying values of assets and liabilities. Actual results and values may differ significantly from these estimates. Concentration of Risk The Company’s operations are substantially carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations maybe substantially influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which subject the Company to potential credit risk consist of its cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with one high credit quality financial institution. As of December 31, 2016, deposits exceeded the amount of insurance provided by $32,000; however, these deposits typically are redeemable upon demand and, therefore, the Company believes the financial risks associated with these financial instruments are minimal. The Company has not experienced any losses to date on its deposits. The Company performs ongoing credit evaluations of its customers, and generally does not require collateral on its accounts receivable. The Company estimates the need for allowances for potential credit losses based on historical collection activity and the facts and circumstances relevant to specific customers and records a provision for uncollectible accounts when collection is uncertain. The Company currently relies on various outside contract manufacturers in China to supply vehicles parts and products for its customers. Although management believes that other contract manufactures could provide similar services and intends to transition its manufacturing to Jonway’s facilities in Sanmen, China, but, if these Chinese companies are unable to supply electric vehicles and the Company is unable to transition manufacturing to Jonway’s facilities or find alternative sources for these product and services, the Company might not be able to fill existing backorders and/or sell more electric vehicles. Any significant manufacturing interruption could have a material adverse effect on the Company’s business, financial condition and results of operations. Revenue Recognition The Company records revenues for non-Jonway sales when all of the following criteria have been met: - Persuasive evidence of an arrangement exists. The Company generally relies upon sales contracts or agreements, and customer purchase orders to determine the existence of an arrangement. - Sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on the payment terms and whether the sales price is subject to refund or adjustment. - Delivery has occurred. The Company uses shipping terms and related documents, or written evidence of customer acceptance, when applicable, to verify delivery or performance. The Company’s customary shipping terms are FOB shipping point. - Collectability is reasonably assured. The Company assesses collectability based on creditworthiness of customers as determined by our credit checks and their payment histories. The Company records accounts receivable net of allowance for doubtful accounts and estimated customer returns. The Company records revenues for Jonway sales only upon the occurrence of all of the following conditions: - The Company has received a binding purchase order from the customer or distributor authorized by a representative empowered to commit the purchaser (evidence of a sale); - The purchase price has been fixed, based on the terms of the purchase order; - The Company has delivered the product from its factory to a common carrier acceptable to the customer; and - The Company deems the collection of the amount invoiced probable. The Company provides no price protection. Sales are recognized net of sale discounts, rebates and return allowances. Stock-based Compensation The Company accounts for stock-based compensation which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes-Merton option pricing model (the “Black-Scholes model”). The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. The Company estimates forfeitures at the time of grant and revise its estimate in subsequent periods if actual forfeitures differ from those estimates. The Company accounts for stock-based compensation awards and warrants granted to non-employees by determining the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. Revenue-based Taxes The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The primary revenue-based taxes are sales tax and value-added tax (“VAT”). Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires the Company to use the assets and liability method of accounting for income taxes. Under the assets and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between financial statement carrying amounts and the tax bases of existing assets and liabilities and operating loss and tax credit carry forward. Under this accounting standard, the effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. ASC 740-10, Accounting for Uncertainty in Income Taxes defines uncertainty in income taxes and the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Foreign Currency Translation The Company and its wholly owned subsidiaries/investments, maintain their accounting records in United States Dollars (“US$”) whereas Jonway Auto maintains its accounting records in the currency of Renminbi (“RMB”), being the primary currency of the economic environment in which their operations are conducted. Jonway Auto’s principal country of operations is the PRC. The financial position and results of Jonway Auto’s operations are determined using RMB, the local currency, as the functional currency. The results of operations and the statement of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Due to the fact that cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ deficiency as “Accumulated Other Comprehensive Income.” The value of RMB against US$ and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions, any significant revaluation of RMB may materially affect the Company’s financial condition in terms of US$ reporting. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: December 31, 2016 December 31, 2015 $ 1=RMB 6.9448 $ 1=RMB 6.4917 paid in capital and retained earnings, as of year end Amounts included in the statements of operations $ 1=RMB 6.6414 $ 1=RMB 6.2288 and cash flows for the year Loss per Share Basic and diluted net loss per share is computed by dividing consolidated net loss by the weighted-average number of common shares outstanding during the period. The Company’s potentially dilutive shares, which include outstanding common stock options, convertible debt and warrants, have not been included in the computation of diluted net loss per share for all periods presented as the result would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share. Cash and Cash Equivalents The Company invests its excess cash in short-term investments with various banks and financial institutions. Short-term investments are cash equivalents, as they are part of the cash management activities of the Company and are comprised of investments having maturities of three months or less when purchased. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash The Company’s subsidiary Jonway Auto has cash restricted in connection with the issuance of bank acceptance notes to various suppliers of spare parts which were issued through Jonway Auto’s banks. To issue these bank acceptance notes to Jonway Auto’s suppliers, the banks require a deposit of 50% or 100% of the full amount of such notes which are payable within 6 months from issuance. Upon the maturity date, restricted funds will be used to settle the bank acceptance notes. Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to use observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs other than quoted prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3: Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions and methodologies that result in management’s best estimate of fair value. The carrying value of financial instruments included in current assets and liabilities approximate their fair values because of the short-term nature of these instruments. The carrying value of the senior convertible debt (see Note 8), which approximates fair value, is influenced by interest rates and the Company’s stock price, and is determined by prices for the convertible debts observed in market trading, which are Level 2 inputs. Accounts Receivable Accounts and note receivable consist mainly of receivables from our established dealer network. A credit review is performed by the Company before the dealer is approved to purchase vehicles from the Company. The Company performs ongoing credit evaluations of its dealers, and generally does not require collateral on its accounts receivable. The Company estimates the need for allowances for potential credit losses based on historical collection activity and the facts and circumstances relevant to specific customers and records a provision for uncollectible accounts when collection is uncertain. Any uncollectible receivables will be written off against the allowance. The allowance for doubtful accounts was approximately $1.4 million and $1.5 million on December 31, 2016 and 2015, respectively. Inventories ZAP Inventories consist primarily of vehicles, both gas and electric, parts and supplies, and finished goods and are carried at the lesser of lower of cost (first-in, first-out basis for ZAP and moving average basis for Jonway) or market (net realizable value or replacement cost). The Company maintains reserves for estimated excess, obsolete and damaged inventory based on projected future shipments using historical selling rates, and taking into account market conditions, inventory on-hand, purchase commitments, product development plans and life expectancy, and competitive factors. If markets for the Company’s products and corresponding demand were to decline, then additional reserves may be deemed necessary. Any changes to the Company's estimates of its reserves are reflected in cost of goods sold within the statement of operations during the period in which such changes are determined by management. As of December 31, 2016 and 2015, the Company has reserved approximately $1.2 million and $1.3 million of its inventory for obsolescence, respectively. Property and Equipment Property and equipment consists of land, building and improvements, machinery and equipment, office furniture and equipment, vehicles, and leasehold improvements. Property and equipment is stated at cost, net of accumulated depreciation and amortization, and is depreciated or amortized using straight-line method over the asset's estimated useful life. Costs of maintenance and repairs are charged to expense as incurred; significant renewals and betterments are capitalized. Estimated useful lives are as follows: Machinery and equipment 5-10 years Computer equipment and software 3-5 years Office furniture and equipment 5 years Vehicles 5 years Leasehold improvements 10 years or life of lease, whichever is shorter Building and improvements 20-30 years Land Use Rights Under PRC law, all land in the PRC is permanently owned by the government and cannot be sold to an individual or company but companies can purchase the land use rights for the specified period of time, as in the Company’s industry the industrial purpose has a useful life of 50 years. The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use rights are sometimes referred to informally as “ownership”. Land use rights are stated at cost less accumulated amortization. Amortization is provided over the respective useful lives, using the straight-line method. Estimated useful life is 50 years, and is determined in the connection with the term of the land use right. Long-lived Assets Long-lived assets are comprised of property and equipment and finite-lived intangible assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Events that trigger a test for recoverability include material adverse changes in projected revenues and expenses, significant negative industry or economic trends, and a significant adverse change in the manner in which an asset group is used. An estimate of undiscounted future cash flows produced by the asset, or by the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the impairment charge is measured and recognized for the amount by which the carrying value of the asset group exceeds it estimated fair value, which is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flow and fundamental analysis. When an impairment loss is recognized for assets to be held and used, the adjusted carrying amount of those assets is depreciated over their remaining useful life. For the year ended December 31, 2016, the Company recorded an impairment charge of $12.5 million to against all the carrying value of the related production facilities in Jonway Auto (see Note 6). Intangible Assets Intangible assets consist of patents, trademarks, government approvals and customer relationships (including client contracts). For financial statement purposes, identifiable intangible assets with a finite life are being amortized using the straight-line method over the estimated useful lives of seven years for the EPA license and 8.5 years for the customer relationships. Costs incurred by the Company in connection with patent, trademark applications and approvals from governmental agencies such as the Environmental Protection Agency, including legal fees, patent and trademark fees and specific testing costs, are expensed as incurred. Purchased intangible costs are amortized over an estimated economic life of the asset, generally seven years, commencing on the acquisition date. Costs subsequent to the acquisition date are expensed as incurred. In Process Technology and trade name are determined to have an indefinite useful life and not amortized, but instead are tested for impairment at least annually. As of December 31, 2016 and 2015, the Company recognized an impairment loss of $2.1 million and $0.1 million for the trade name, respectively. The impairment charge was recognized for the amount by which the carrying value of intangible assets exceed its estimated fair value, which was estimated based on discounted cash flows (level 3 inputs). For the year ended December 31, 2016, the Company recognized an impairment loss of approximately $2.4 million for the intangibles and goodwill (see Note 7), and an impairment loss of approximately $5.5 million for the distribution agreements (see Note 8). Goodwill Goodwill is determined to have an indefinite useful life and not amortized, but instead is tested for impairment at least annually. The Company assesses annually whether there is an indication that goodwill is impaired, or more frequently if events and circumstances indicate that the asset might be impaired during the year. The Company performs its annual impairment test in the fourth quarter of each year. Calculating the fair value of the reporting units requires significant estimates and assumptions by management. To the extent the carrying amount of a reporting unit exceeds the fair value of the reporting unit, there is an indication that the reporting unit goodwill may be impaired and a second step of the impairment test is performed to determine the amount of the impairment to be recognized, if any. The Company recognized an impairment loss on goodwill of $0.3 million for the year ended December 31, 2016 as the Company concluded that the carrying amount of the goodwill has exceeded its fair value based on appraisals. Product Warranty Costs Jonway provides a 3-year or 60,000 kilometer warranty for its SUV and minivan products. Jonway records the estimated cost of the product warranties at the time of sale using the estimated cost of product warranties based on historical results. The estimated cost of warranties has not been significant to date. Should actual failure rates and material usage differ from our estimates, revisions to the warranty obligation may be required. Jonway 2016 2015 Balance as of January 1 $ 450 $ 481 Provision for warranties 130 421 Charges against warranties (154 ) (329 ) Balance December 31 426 573 Less: long term portion (37 ) (123 ) Current portion $ 389 $ 450 $37,000 was included in “accrued liabilities and others- long term” and $389,000 was included in short-term “accrued liabilities” on the consolidated balance sheets as of December 31, 2016. Comprehensive Loss Comprehensive loss represents the net loss for the period plus the results of certain changes to shareholders’ equity (deficiency) that are not reflected in the consolidated statements of operations. The Company’s comprehensive loss consists of net losses, foreign currency translation adjustments and unrealized net losses on investments. Shipping and Handling Costs The Company includes shipping and handling costs relating to the delivery of products in sales and marketing expense. For the years ended December 31, 2016 and 2015, shipping and handling costs were $54,000 and $442,000, respectively. Reclassification Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. Generally Accepted Accounting Principles when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU No. 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date for ASU 2014-09 by one year. For public entities, the guidance in ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods), which means it will be effective for the Company’s fiscal year beginning October 1, 2018. In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. In April 2016, the FASB issued ASU No. 2016-10, “Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 “Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. In December 2016, the FASB further issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU 2016-20”), which makes minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments are intended to address implementation and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. These amendments have the same effective date as the new revenue standard. The Company is planning to adopt Topic 606 in the first quarter of our fiscal 2019 using the retrospective transition method, and is continuing to evaluate the impact of its pending adoption of Topic 606 will have on the Company’s consolidated financial statements. The Company’s current revenue recognition policies are generally consistent with the new revenue recognition standards set forth in ASU 2014-09. Potential adjustments to input measures are not expected to be pervasive to the majority of the Company’s contracts. While no significant impact is expected upon adoption of the new guidance, the Company will not be able to make that determination until the time of adoption based upon outstanding contracts at that time. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to improve the recognition and measurement of financial instruments. The new guidance makes targeted improvements to existing U.S. GAAP by: (1) requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (2) Requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; (3) Eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and. (4) Requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not expect this update will have a material impact on the Company’s consolidated financial position, results of operations and cash flows. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, to increase the transparency and comparability about leases among entities. The new guidance requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. For public business entities, ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and requires a modified retrospective approach to adoption. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows”. The amendments provide guidance on the following eight specific cash flow issues: (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; (3) Contingent Consideration Payments Made after a Business Combination; (4)Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned; (6) Life Insurance Policies; (7) Distributions Received from Equity Method Investees; (8) Beneficial Interests in Securitization Transactions; and Separately Identifiable Cash Flows and Application of the Predominance Principle. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact of adoption on the consolidated financial statements and related disclosure. In October 2016, the FASB issued ASU No. 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control”. The amendments affect reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. Specifically, the amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The amendments are effective for public business entities for fiscal |
ACCOUNTS RECEIVEABLE
ACCOUNTS RECEIVEABLE | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receiveable | |
ACCOUNTS RECEIVEABLE | NOTE 4 – ACCOUNTS RECEIVEABLE Accounts receivable consisted of the following: December 31, 2016 December 31, 2015 Accounts receivable $ 1,604 $ 2,274 Less – Allowance for doubtful accounts – third parties (1,442 ) (1,531 ) Total account receivable, net $ 162 $ 743 Changes in the Company’s allowance for doubtful accounts as of December 31, 2016 and December 31, 2015 are as follows: December 31, 2016 December 31, 2015 Balance, beginning of year $ 1,531 $ 439 Write-off (100 ) (76 ) Current provision 11 1,168 Balance, end of year $ 1,442 $ 1,531 |
INVENTORIES, NET
INVENTORIES, NET | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | NOTE 5 – INVENTORIES, NET Inventories, net at December 31, 2016 and 2015 are summarized as follows (in thousands): December 31, 2016 December 31, 2015 Work in Process $ 2,565 $ 2,237 Parts and supplies 3,798 3,616 Finished goods 707 3,186 7,070 9,039 Less - inventory reserve (1,183 ) (1,296 ) Inventories, net $ 5,887 $ 7,743 Changes in the Company’s inventory reserve during the years ended December 31, 2016 and 2015 are as follows (in thousands): December 31, 2016 December 31, 2015 Balance opening year $ 1,296 $ 1,380 Current provision (recovery) for Jonway Auto (3 ) (132 ) Current provision (recovery) for inventory ZAP-net (110 ) 48 Balance end of year $ 1,183 $ 1,296 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET, AND LAND USE RIGHTS | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET, AND LAND USE RIGHTS | NOTE 6 - PROPERTY, PLANT AND EQUIPMENT, NET, AND LAND USE RIGHTS Property, plant and equipment, net at December 31, 2016 and 2015 are summarized as follows (in thousands): December 31, 2016 December 31, 2015 Buildings and improvements $ 18,939 $ 20,260 Machinery and equipment 45,811 47,917 Office furniture and equipment 766 853 Vehicles 575 739 66,091 69,769 Less: Accumulated depreciation and amortization (37,354 ) (33,876 ) Impairment losses recognized in profit and loss (12,480 ) - $ 16,257 $ 35,893 Due to the increased competition in the auto manufacturing industry and the high cost of lithium battery, the net sales of Jonway Auto decreased significantly during the year ended December 31, 2016. The Company’s current sales volume and gross margin for the electronic vehicles could not justify the carrying value of the related long-lived asset or asset group, therefore, Four pieces of land were acquired from the acquisition of Jonway auto in 2011. All land in the People’s Republic of China is government owned and cannot be sold to any individual or company. However, the government grants the user a “land use right” (the Right) to use the land. The Company has the right to use the land for 50 years and amortized the Right on a straight-line basis over the period of 50 years. As of December 31, 2016 and 2015, land use rights consist of the following: December 31, 2016 December 31, 2015 Land use right $ 9,715 $ 10,395 Software 96 102 9,811 10,497 Less: accumulated amortization (1570 ) (1,370 ) Less: accumulated translation adjustments (95 ) (197 ) $ 8,146 $ 8,930 As of December 31, 2016, estimated future amortization expense for land use rights is as follows (in thousands): Amortization Year Expense 2017 $ 182 2018 182 2019 182 2020 182 2021 182 Thereafter 7,236 $ 8,146 Depreciation and amortization expense of property, plant and equipment, as well as land use rights and software was approximately $6.3 and $6.8 million for the years ended December 31, 2016 and 2015, respectively. |
INTANGIBLE ASSETS, NET AND GOOD
INTANGIBLE ASSETS, NET AND GOODWILL | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET & GOODWILL | NOTE 7 - INTANGIBLE ASSETS, NET & GOODWILL Income approach was used to determine the fair value of the intangible assets and goodwill using Level 3 inputs under the fair value hierarchy. The goodwill and other intangible assets at December 31, 2016 and 2015 are summarized as follows: Impairment provision, Amortization and accumulated Net Book translation adjustments (“ATA”) Net Book Useful Life Value for the year ended Value (In Years) December 31, 2015 December 31, 2016 December 31, 2016 Customer Relationships 8.5 $ 316 $ (316 ) $ - Developed Technology 7 619 (619 ) - In Process Technology (a) 178 (178 ) - Trade name (a) 1,400 (1,400 ) - Intangible assets $ 2,513 $ (2,513 ) $ - Goodwill $ 314 $ (314 ) $ - (a) The in-process technology and trade name have been determined to have an indefinite life. As of December 31, 2015, the Company recognized an impairment loss of approximately $0.08 million for the trade name. The impairment loss was based on the fair value, which was based on the estimation of discounted cash flow. During the year ended December 31, 2016, the Company experienced significant decrease of sales and enlarged operating loss due to multiple unexpected factors. In 2016, the government reevaluated the policies on new energy vehicle subsidies and an “anti-subsidy” campaign was continuously practiced in 2016 and the payments of subsidies were reduced and delayed. The delay in subsidy payments by the central government for EV lithium batteries has created uncertainty the Company’s EV sales. Without the fast turnaround on the subsidies for lithium batteries to support the working capital, the sales of Jonway Auto dropped substantially during fiscal 2016. In addition, all EV are now required to be re-evaluated for inclusion in a qualified catalog of models eligible for subsidies. But the updated catalog, which previously covered 2,193 models from 235 manufacturers, has yet to be published. In addition, the Company’s EV sales are largely dependent on the government’s subsidy and incentive. The temporary suspension and reexamination of the government subsidy program on EVs resulted in a significant drop in the Company sales in fiscal 2016. For the purpose of the impairment test, the Company applied fair-value-based impairment test on the intangibles and goodwill, similar to the review for impairment of other long-lived assets, and the resulting fair value determination is significantly impacted by estimates of future margins, capital needs, economic trends and other factors. If the carrying value of the reporting unit exceeds its fair value, an impairment loss would be recognized to the extent the carrying value of goodwill exceeds its implied fair value. As a result, the Company recognized an impairment loss of approximately $2.4 million for the intangibles and goodwill as of December 31, 2016. |
DISTRIBUTION AGREEMENTS
DISTRIBUTION AGREEMENTS | 12 Months Ended |
Dec. 31, 2016 | |
DISTRIBUTION AGREEMENTS [Abstract] | |
DISTRIBUTION AGREEMENTS | NOTE 8 - DISTRIBUTION AGREEMENTS Income approach was used to determine the fair value of the distribution agreements using Level 3 inputs under the fair value hierarchy. Distribution agreements as of December 31, 2016 and 2015 are presented below (in thousands): December 31, 2016 December 31, 2015 Better World Products-related party $ 2,160 $ 2,160 Jonway Products 14,400 14,400 16,560 16,560 Less: amortization and impairment (16,560 ) (9,601 ) $ - $ 6,959 Amortization expenses related to these distribution agreements for the years ended December 31, 2016 and 2015 was $1.4 million. Amortization is based over the term of the agreements. As of December 31, 2016 and 2015, the Company recognized an impairment loss of $5.5 million and $1.0 million for the distribution right, respectively. Due to the deterioration of the sales and enlarged loss from operations in fiscal 2016, which resulted into great uncertainty of future distribution of Jonway products, the Company recognized an impairment loss of $5.5 million for the distribution rights for the year ended December 31, 2016. As of December 31, 2016, the net carrying value of distribution rights with Jonway Auto was nil. Distribution Agreement with Better World, Ltd On January 15, 2010, ZAP entered into a Stock Purchase Agreement with a related party, Better World, Ltd., a British Virgin Islands company, whereby the Company issued 6 million shares of its common stock valued at $2.16 million in exchange for an agreement on terms relating to rights to the distribution of Better World products, such as charging stations for electric vehicles both in the U.S. and internationally. Priscilla Lu, Chairman of the Board of Directors of ZAP, is also a director of Better World, Ltd. Distribution Agreement with Goldenstone Worldwide Limited for Jonway Products On October 10, 2010, ZAP entered into an International Distribution with Goldenstone Worldwide Limited as the distributor of Jonway products such as gasoline SUV’s and gasoline and electric motor scooters, both in the U. S. and internationally. In connection with the distribution agreement the Company also issued 30 million shares of ZAP common stock valued at $14.4 million. The Jonway Group had previously granted exclusive worldwide distribution of Jonway products to Goldenstone Worldwide Limited. ZAP acquired a 51% equity interest in Jonway Auto but this equity interest did not include the worldwide distribution rights for Jonway Products. Therefore it was necessary for ZAP to acquire distribution rights for Jonway Products. |
LINE OF CREDIT, SHORT TERM DEBT
LINE OF CREDIT, SHORT TERM DEBT AND BANK ACCEPTANCE NOTES | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT, SHORT TERM DEBT AND BANK ACCEPTANCE NOTES | NOTE 9 - LINE OF CREDIT, SHORT TERM DEBT AND BANK ACCEPTANCE NOTES Lines of Credit (a) China Everbright Bank In June 2015, the Company was approved for up to an aggregate of $6.9 million of a credit line from China Everbright Bank with 50% restricted cash deposited and credit exposure of $3.5 million. The Company renewed the agreement in June 2016 and the renewed agreement expires in June 2017, which may subject to renewal. In accordance with the renewed agreement, the Company was approved for up to an aggregate of $5.8 million of a credit line from China Everbright Bank with 50% restricted cash deposited and credit exposure of $2.9 million. The credit line is secured by a land use right and a building with a total carrying amount of $1.8 million. As of December 31, 2016, $5.8 million was drawn down as notes payable from China Everbright Bank. The amount of restricted cash deposited with the bank was $2.9 million. As of December 31, 2016, there was no unused line of credit from China Everbright Bank. The credit line expires in June 2017. (b) CITIC Bank Sanmen Branch In March 2016, the Company was approved by CITIC Bank Sanmen Branch for up to an aggregate of $11.3 million of a credit line with 100% restricted cash deposited and credit exposure of $11.3 million through Jonway Auto and Fu Xing. As of December 31, 2016, total outstanding loans under this line of credit agreement were $5.3 million, with annual interest of 5.96%. The loans are due in various dates from March 25, 2017 to April 26, 2017. As of December 31, 2016, $5.0 million was drawn down as notes payable and $5.0 million restricted cash was deposited with the bank, with unused credit line of $5.9 million. The credit line has a term of two years and expires in March 2018. In March 2014, the Company has obtained up to an aggregate of $15.4 million of credit line with the credit exposure of $5.7 million from CITIC Bank Sanmen Branch through Jonway Auto. The line is secured by land and building owned by Jonway Auto and guaranteed by the related party – Jonway Group. In March 2014, Jonway Auto borrowed a one year short-term loan of $1.0 million. The annual interest rate was 7.08% and the loan was due in March 2015. The Company then early settled the loan in December 2014. As of December 31, 2015, Jonway Auto borrowed a half year short-term loan of $3.0 million at annual interest rate of 5.9%. The loan was due on April 28, 2016. The Company has also drawn down $6.4 million in the form of notes payable as of December 31, 2015. For certain notes payables utilizing the credit exposure of $2.6 million, the Company deposited 50% to 100% cash as restricted cash as collateral for these notes payable. These notes were due from March 2016 to April, 2016. As of December 31, 2015, the credit exposure of $5.7 million has been used. The credit line expired in March 2016. (c) ICBC Bank In March 2014, the Company was approved up to an aggregate of $4.7 million of a credit line from ICBC. This credit line was secured by land and buildings owned by Jonway Auto and guaranteed by related parties. As of December 31, 2015, the total outstanding loan under this credit line was $4.6 million with $0.8 million of restricted cash deposited with the bank. The annual interest rates range between 5.0% and 6.9%. The loans were due in various dates from April 2015 to November 2016. During the year ended December 31, 2016, the loans were renewed. As of December 31, 2016, total outstanding loans under this line of credit agreement was $4.3 million with annual interest rate from 4.36% to 5.0%. The loans are due in various dates from June 3, 2017 to October 20, 2017. As of December 31, 2016, total credit exposure of $4.3 million has been used. The credit line expired in March 2017. The Company is in the process of renewing this line of credit, which is expected to be approved by May 2017. Short term loans Short term loans as of December 31, 2016 and 2015 are presented below: December 31, 2016 December 31, 2015 Loan from CITIC bank (a) $ 5,328 $ 3,081 Loan from ICBC (b) 4,320 4,621 Loan from Hangzhou Hengzhong Machinery Ltd. (c) 794 - $ 10,442 $ 7,702 (a) From March 25, 2016 to April 26, 2016, the Company entered multiple loan agreements through Jonway Auto with CITIC Bank Sanmen Brank for a total amount of approximately $5.3 million. The loans have annual interest of 5.96% and are due in various dates from March 25, 2017 to April 26, 2017. The loans are also secured by a land use right and a building with a total carrying amount of $4.4 million. One shareholder and CEO Alex Wang personally guaranteed these loans as well. In October 2015, Jonway Auto borrowed a half year short-term loan of $3.1 million at annual interest rate of 5.9%. The loan was repaid upon maturity in April 2016. (b) On June 8, 2016, the Company entered into a one year short-term loan of $0.3 million at an annual interest rate of 5%. On July 22, 2016, the Company entered into a one year short-term loan of $1.0 million at an annual interest rate of 5%. On October 12, 2016, the Company entered into a one year short-term loan of $1.3 million at an annual interest rate of 5%. On October 13, 2016, the Company entered into a one year short-term loan of $1.0 million at an annual interest rate of 5%. These loans with aggregated amount of $4.3 million are secured by a land use right and a building with a total carrying amount of $2.9 million. One shareholder, Wang Huaiyi, and CEO Alex Wang also personally guaranteed these loans. On June 22, 2016, the Company entered into a one year short-term loan of $0.7 million at an annual interest rate of 4.4%. The loan is secured by a restricted cash deposit of $0.7 million. The Company fully repaid five loans totaling $4.6 million during 2016. (c) On July 28, 2016, the Company entered into an agreement with Hangzhou Zhongheng Machinery Ltd. (“Zhongheng”). Pursuant to the agreement, Zhongheng paid off one loan on behalf of the Company, and the Company would repay the outstanding payable due to Zhongheng within two months after Zhongheng made the payment on behalf of the Company. In exchange for the service, the Company agreed to pay a monthly interest of 1.5% on the payment made by Zhongheng. The 1.5% monthly interest is equivalent to a compound annual interest rate of about 9.34%. The weighted average interest rates were 5.8% and 6.4% for the years ended December 31, 2016 and 2015, respectively. Bank acceptance notes As of December 31, 2016 and 2015, the Company had bank acceptance notes payable in the amount of $10.7 million and $14.4 million, respectively. The notes are guaranteed to be paid by the banks and are usually for a short-term period of six months. The Company is required to maintain cash deposits of 50% or 100% of the notes payable with these bank, in order to ensure future credit availability. As of December 31, 2016 and 2015, the restricted cash for the notes was approximately $8.6 million and $9.0 million, respectively. (In thousands) December 31, 2016 December 31, 2015 a) Bank acceptance notes payable to China Everbright bank $ 5,760 $ 7,086 b) Bank acceptance notes payable to CITIC bank 4,967 6,428 c) Bank acceptance notes payable to Shanghai Pudong Development bank - 852 $ 10,727 $ 14,366 a) Notes payable to China Everbright bank have various maturity dates in June 2017. The notes payable are guaranteed by a land use right and a building with a total carrying value of $2.0 million. The Company is also required to maintain cash deposits at 50% of the notes payable with the bank, in order to ensure future credit availability. b) Notes payable to CITIC bank h c) Notes payable to Shanghai Pudong Development Bank was due and repaid in January and May 2016. The Company was required to maintain cash deposits at 100% of the notes payable with the bank. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Convertible Debt [Abstract] | |
CONVERTIBLE DEBT | NOTE 10 - CONVERTIBLE DEBT Convertible debt consists of the following: December 31, 2016 December 31, 2015 Senior convertible debt – CEVC (a) $ 20,679 $ 20,679 Convertible debt – Mr. Luo Hua Liang (b) - 786 $ 20,679 $ 21,465 (a) Senior convertible debt - CEVC On January 12, 2011, the Company entered into a Senior Secured Convertible Note and Warrant Purchase Agreement (the “Agreement”) with CEVC, a British Virgin Island company whose sole shareholder is Cathaya Capital, L.P., and a Cayman Islands exempted limited partnership (“Cathaya”). Priscilla Lu was the former chairwoman of the board of directors of ZAP, a managing partner of Cathaya and a director of CEVC. Pursuant to the Agreement, (i) CEVC purchased from the Company a Senior Secured Convertible Note (the “Note”) in the principal amount of $19 million, as amended; (ii) the Company issued to CEVC a warrant (the “Warrant”) exercisable for two years for the purchase up to 20 million shares of the Company’s Common Stock at $0.50 per share, as amended; (iii) the Company, certain investors and CEVC entered into an Amended and Restated Voting Agreement that amended and restated that certain Voting Agreement, dated as of August 6, 2009 that was previously granted to Cathaya Capital L.P.; (iv) the Company, certain investors and CEVC entered into an Amended and Restated Registration Rights Agreement that amended and restated that certain Registration Rights Agreement, dated as of August 6, 2009, that was previously granted to Cathaya Capital L.P which grants certain registration rights relating to the Note and the Warrant; and (v) the Company and CEVC entered into a Security Agreement that secures the Note with all of the Company’s assets other than those assets specifically excluded from the lien created by the Security Agreement. The note is convertible upon the option of CEVC at any time, into (a) shares of Jonway capital stock owned by ZAP at a conversion rate of 0.003743% of shares of Jonway capital stock owned by ZAP for each $1,000 principal amount of the Note being converted; or (b) shares of ZAP common stock at a conversion rate of 4,435 shares of common stock for each $1,000 principal amount of the Note being converted. As of December 31, 2016, the Company has an outstanding unpaid principal balance of $20,679,069 due to CEVC in regards to the Company’s Amended and Restated Promissory Note dated March 22, 2012 (“Amended Note”). Pursuant to the terms of the Amended Note, CEVC has right to convert the unpaid principal balance of the Amended Note into shares of common stock of the Company’s Chinese subsidiary -Jonway Auto (“Conversion”). Upon Conversion, the Company’s indebtedness to CEVC under the Note shall be satisfied in full and CEVC, or its designee, shall hold approximately 39.479% of the equity of Jonway Auto and the Company’s equity position in Jonway Auto shall be reduced from 51% to approximately 11.52%. Accordingly, the Company shall be forced to deconsolidate Jonway Auto. On December 23, 2016, the Company received the Conversion Notice from CEVC. Effective on April 3, 2017, the CEVC and the Board of the Company have mutually agreed to put the conversion temporarily on hold as the Board of the Company approved the initiation of due diligence with respect to the possible merger of the Company with Jonway Group’s motorcycle business with the intention of developing its “light electric vehicle” business. It is expected that the assessment of the merger and the related due diligence would be completed in the second quarter of 2017 and with a decision on the overall structure of the merger to be made by the end of the second quarter of 2017. CEVC may elect to accept the shares of the Jonway Auto or accept the shares of the Company in satisfaction of the Note based on the outcome of the due diligence and the assessment result of the merger. During this period, the Note will remain the same interest as indicated in the Agreement. Interest expense related to CEVC convertible note for the years ended December 31, 2016 was $1,658,858 and $1,242,929, respectively. Accrued interest related to CEVC convertible note was $1,246,410 and $833,961 as of December 31, 2016 and December 31, 2015, respectively. (b) Convertible debt – Mr. Luo Hua Liang This obligation was fully repaid in 2016. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 - INCOME TAXES The Company is subject to United States of America (“United States” or “US”) and People’s Republic of China (“China” or “PRC”) income tax on any profit generated. The Company did not record any provision for income tax for the both years ended December 31, 2016 and 2015 due to recurring losses. United States The Company is incorporated in the United States of America and is subject to United States federal taxation. The Company has no taxable income for the year so did not incur income taxes. The applicable income tax rate for the Company for both years ended December 31, 2016 and 2015 was 34%. The tax effect of temporary differences that give rise to significant portions of the deferred tax assets as of December 31, 2016 and 2015 is presented below: December 31, 2016 2015 Net operating loss carryovers - US $ 57,582 $ 54,132 Temporary differences, including Stock based compensation 6,582 6,557 Fixed assets, due to differences in depreciation 288 288 Non-qualified options and warrants 6,728 6,728 Reserves on investments 2,069 2,069 Intangible assets, due to impairment 5,024 2,342 R&D credit 138 138 Amortization of debt discount 1,865 1,865 Total gross deferred tax assets - US $ 80,275 $ 74,119 Valuation allowance - US (80,275 ) (74,119 ) Net deferred tax assets $ - $ - The net changes in the valuation allowances for the years ended December 31, 2016 and 2015 were an increase of $6.1 million and $3.1 million, respectively. Because there is uncertainty regarding the Company’s ability to realize its deferred tax assets, a 100% valuation allowance has been established. As of December 31, 2016, the Company had net operating loss carry forwards of approximately $172 million for US federal income tax purposes, which expires in the years 2017 through 2032. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor were any interest expense recognized for the years ended December 31, 2016 and 2015. The federal tax returns of 2012, 2013, 2014 and 2015 remain subject to examination. And the state tax returns from 2010 to 2015 remain subject to examination. PRC Effective January 1, 2008, the PRC Enterprise Income Tax Law, EIT Law, and Implementing Rules impose unified enterprise income tax rate of 25% on all domestic-invested enterprises and foreign investment enterprises in PRC, unless they qualify under certain limited exceptions. As such, the Company’s subsidiary in PRC is subject to an enterprise income tax rate of 25%. No provision for income taxes has been made as the Company has no taxable income for the periods. The tax effect of temporary differences that gave rise to significant portions of the deferred tax assets at December 31, 2016 and 2015 is presented below (in thousand): December 31, 2016 2015 Deferred tax assets - PRC: Timing differences in depreciation and bad debt allowance $ 320 $ 1,311 Property and equipment impairments 3,120 - Inventories, due to impairment 97 651 Accrued liabilities 225 416 Net operating loss carry forward 15,429 10,053 Total deferred tax assets, gross – PRC 19,192 12,431 Valuation allowance - PRC (19,192 ) (12,431 ) Deferred tax assets, net of valuation allowance $ - $ - The net change in the valuation allowances for the years ended December 31, 2016 and 2015 was an increase of $6.8 million and $2.7 million, respectively. As of December 31, 2016, the Company had net operating loss carry forwards of approximately of $61.7 million in PRC tax Jurisdiction, which expires in the years 2017 through 2021. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 12– STOCK-BASED COMPENSATION Services performed and other transactions settled in the Company’s common stock are recorded at the estimated fair value of the stock issued if that value is more readily determinable, than the fair value of the consideration received. The Company has stock compensation plans for employees and directors. The Company recognizes the stock-based compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. All of the Company’s stock-based compensation is accounted for as an equity instrument. Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value December 31, 2014 11,848 $ 0.38 3.0 - Options forfeited and expired (421 ) - - - December 31, 2015 11,427 0.40 2.0 - Options forfeited and expired - - - - December 31, 2016 11,427 0.40 1.0 - Aggregate intrinsic value is the sum of the amounts by which the quoted market price of our stock exceeded the exercise price of the options at December 31, 2016 and 2015 for those options for which the quoted market price was in excess of the exercise price (“in-the-money- options”). There were no options in the money at December 31, 2016 and 2015. As of December 31, 2016, all the stock options have been vested. The Company recorded no income tax benefits for stock-based compensation expense arrangements for the years ended December 31, 2016 and 2015, as the Company has cumulative operating losses. For the year ended December 31, 2016 and 2015, $73,000 and $74,000 of stock based compensation expense have been charged to general and administrative expense, respectively. |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | NOTE 13 – LOSS PER SHARE Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution of securities by including other potential common stock, including convertible preferred stock, stock options and warrants, in the weighted average number of common shares outstanding for the period, if dilutive. The numerators and denominators used in the computations of basic and dilutive earnings (loss) per share are presented in the following table: December 31, 2016 2015 Net loss attributable to ZAP’s common shareholders $ (23,482 ) $ (14,144 ) Weighted average shares used in basic and diluted computation 589,673 502,660 Earnings (loss) per share – Basic and diluted Net loss before noncontrolling interest (0.05 ) (0.04 ) Added: Net loss attributable to noncontrolling interest 0.01 0.01 Net loss attributable to ZAP’s common shareholders (0.04 ) (0.03 ) Anti-dilutive shares as of December 31: Warrants outstanding 38,000 38,000 Options outstanding 11,427 11,427 For the years ended December 31, 2016 and 2015, there were 11.4 million options, and 38.0 million warrants not included in the diluted loss per share as they would be anti-dilutive. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 14 – SEGMENT REPORTING Operating Segments The Company has identified three reportable segments consisting of Jonway Auto, ZAP (Consumer Product) and ZAP Hong Kong. The Jonway Auto segment represents sales of the gas fueled Jonway A380 three and five-door sports utility vehicles, EV minivan and EV SUVs and spare parts principally through distributors in China. The ZAP Consumer Product segment represents rechargeable portable energy products, our Zapino scooter, and our ZAPPY3 personal transporters. These segments are strategic business units that offer different services. They are managed separately because each business requires different resources and strategies. The Company’s chief operating decision making group, which is comprised of the CEO and the senior executives of each of ZAP’s strategic segments, regularly evaluate the financial information about these segments in deciding how to allocate resources and in assessing performance. The performance of each segment is measured based on its profit or loss from operations before income taxes. Segment results are summarized as follows: Jonway Auto ZAP ZAP Hong Kong Totals For the year ended December 31, 2016 Net sales $ 10,736 $ 39 $ - $ 10,775 Gross profit (loss) $ (1,151 ) $ 25 $ - $ (1,126 ) Depreciation and amortization $ 5,179 $ 2,565 $ - $ 7,744 Interest expense, net $ 881 $ 1,661 $ - $ 2,542 Impairment loss on assets $ 12,480 $ 7,887 $ - $ 20,367 Net loss $ (21,506 ) $ (12,515 ) $ - $ (34,021 ) Expenditure on property and equipment $ 351 $ - $ - $ 351 Total assets $ 40,136 $ 4,178 $ - $ 44,314 For the year ended December 31, 2015 Net sales $ 29,179 $ 281 $ - $ 29,460 Gross profit (loss) $ (1,333 ) $ 71 $ - $ (1,262 ) Depreciation and amortization $ 5,600 $ 2,609 $ - $ 8,209 Interest expense, net $ 767 $ 1,697 $ - $ 2,464 Impairment loss on assets $ 82 $ 1,000 $ - $ 1,082 Net loss $ (12,063 ) $ (7,992 ) $ - $ (20,055 ) Expenditure on property and equipment $ 1,020 $ - $ - $ 1,020 Total assets $ 64,949 $ 14,692 $ 9 $ 79,650 Customer information Approximately 99.6% or $10.7 million of our 2016 revenues are from sales in China. Jonway Auto distributes its products to an established network of over 70 factory level dealers in China with three customers contributing to 36%, 25% 15% of our consolidated revenue, respectively. Approximately 99.1% or $29.2 million of our 2015 revenues are from sales in China. Jonway Auto distributes its products to an established network of over 70 factory level dealers in China with one customer contributing to 22% of our consolidated revenue. Supplier information For the years ended 2016 and 2015, approximately 99.9% or $11.8 million and 99.3% or $30.5 million of the consolidated cost of goods sold were purchased in China. For the year ended December 31, 2016, two venders accounted for 14% and 11% of the total purchase. For the year ended December 31, 2015, one vender accounted for 9% of the total purchase, respectively. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE -15 SHAREHOLDERS’ EQUITY Common stock 2016 ISSUANCES In August 2016, the amount of $443,630 due to Cathaya Management Co Ltd, a related party, has been converted into 8,872,602 shares of common stock at price of $0.05. In addition, China Electric Vehicle Corporation (CEVC), a related party, has elected to convert the interest of $1,246,410 due on the $20.7 million convertible note to 18,399,316 shares of ZAP’s common stock at the average share price of related interest period (see Note 8). The Company issued an aggregate of 44,409,963 shares of the Company’s common stock to settle certain existing debts of $1,429,736 in accordance with the Board approval, which including the amount of $1,246,410 due to CEVC, a related party, to be converted into 38,299,077 shares of common stock at price of $0.033, and the amount of $34,113 due to a debt holder to be converted into 1,137,098 shares of common stock at price of $0.03 and the amount of $149,214 due to Better World, a related party, to be converted into 4,973,788 shares of common stock at price of 0.03. These shares were issued in March 2017. 2015 ISSUANCES On February 11, 2015, the cancellation of 1,182,558 shares of common stock was processed to pay back the proceeds from convertible notes, and a partial repayment representing a principal reduction of $100,000 and $8,433 of interest was paid on the Company’s outstanding convertible bond held by Yung. For the year ended December 31, 2015, the Company repurchased 4,811,633 shares of common stock at cost of $406,872 from Yung and cancelled those shares. The balance of the outstanding note issued to Korea Yung was $133,116 after the payment and cancellation of these shares. Yung is allowed to engage in open market sales of the shares through December 31, 2015. In the event the gross proceeds realized from the sale of the shares by Yung is greater than the principal and interest due on the bond as of the maturity date, Yung will be entitled to retain all proceeds. If the proceeds from the sale of shares are less than the principal and interest due on the bond as of the maturity date, ZAP will pay the shortfall to Yung in cash within five business days of written notice from Yung. In September 2015, the Company issued 89,194,715 shares to Mr. Wang Alex, the Chief Executive Officer of the Company for his investment of $5,351,683 in the Company (approximately $4.5 million investment was loan by the Company to its subsidiary Jonway Auto). In September 2015, the amount of $814,863 investment from Cathaya Management Co Ltd and $350,000 due to Cathaya Management Co Ltd have been converted into 13,581,051 and 5,833,333 shares of common stock at price of $0.06, respectively. In September 2015, China Electric Vehicle Corporation (CEVC) has elected to convert the interest of $1,237,345 due on the $20.7 million convertible note to 14,454,743 shares of common stock at the average price of $0.086. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 16 – RELATED PARTY TRANSACTIONS Due from (to) related parties Amount due from related parties are principally for advances in the normal course of business for parts and suppliers used in manufacturing. Amount due from related parties are as follows (in thousands): December 31, 2016 December 31, 2015 Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd $ 874 $ 998 Jonway Motor Cycle 262 - Jonway Economy and Trade Co., Ltd - 616 Total $ 1,136 $ 1,614 The sales made to related parties are as follows: December 31, 2016 December 31, 2015 Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd $ 38 $ 296 Taizhou Jonway Electric Vehicle Selling Co - 3,945 Jonway Group - 5 Jonway Motor Cycle 4 231 Total $ 42 $ 4,477 Accounts receivable – related parties are as follows: December 31, 2016 December 31, 2015 Jonway EV Selling Ltd $ 3,072 $ 4,659 Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd 250 212 Jonway Motor Cycle 305 301 $ 3,627 $ 5,172 Due to related parties included in accounts payable as follows: December 31, 2016 December 31, 2015 Jonway Group $ 2,512 $ - Taizhou Huadu 966 - $ 3,478 $ - Amount due to related parties are follows (in thousands): December 31, 2016 December 31, 2015 Jonway Group $ 13,384 $ 12,606 Jonway Motor Cycle 63 64 Taizhou Huadu - 846 Shanghai Zapple 33 35 Mr. Wang 7 74 Betterworld 149 149 Taizhou Jonway Electric Vehicle Selling Co 80 - Zhejiang Jonway Painting Co. Ltd. - 11 Cathaya Operations Management Ltd. 257 193 Zhejiang Aochuang Alternative Energy Vehicle Co., Ltd. 424 - Total $ 14,397 $ 13,978 Transactions with Jonway Group Jonway Group is considered as a related party as the Wang Family, one of the principal shareholders of the Company, has controlling interests in Jonway Group. Jonway Group supplies some of plastics spare parts to Jonway Auto and gave guarantees on Jonway short term bank facilities from China-based banks. Jonway made such purchase from Jonway Group for a total of $294,000 and $5.3 million for the years ended December 31, 2016 and 2015, respectively. In addition, Jonway sold Jonway Group in the amount of $Nil and $5,000 for the years ended December 31, 2016 and 2015, respectively. Jonway Agreement with Zhejiang UFO Based on a contract by and among the Zhejiang UFO, Jonway Group and Jonway dated as of January 1, 2006, Zhejiang UFO has authorized Jonway to operate its Sanmen Branch to assemble and sell UFO branded SUVs for a period of 10 years starting from January 1, 2006 and extended another year to expire until the end of 2017. According to the contract, Jonway shall pay Zhejiang UFO a variable contractual fee which is calculated based on the number of SUVs that Jonway assembles in the Sanmen Branch every year, at the following rates (historical exchange rate): The first 3,000 vehicles $44 per vehicle Vehicles from 3,001 to 5,000 $30 per vehicle Vehicles over 5,000 $22 per vehicle Zhejiang UFO is considered a related party because the Wang Family, who are shareholders of Jonway, has certain non-controlling equity interests in Zhejiang UFO. For the years ended December 31, 2016 and 2015, $24,000 and $223,000 were recorded as assembling fees, respectively. Also during 2016 and 2015, Jonway sold SUVs and parts in the amount of $38,000 and $295,000 to Zhejiang UFO. Other Related Party Transactions During 2016, Jonway purchased parts in amount of $2,000 and $894,000 from Jonway Motor Cycle and Taizhou Huadu, respectively. During 2015, Jonway purchased parts in amount of $2,000 and $894,000 from Jonway Motor Cycle and Taizhou Huadu, respectively. In August 2016, the amount of $443,630 due to Cathaya Management Co Ltd, a related party, has been converted into 8,872,602 shares of common stock at price of $0.05. In addition, China Electric Vehicle Corporation (CEVC), a related party, has elected to convert the interest of $1,246,410 due on the $20.7 million convertible note to 18,399,316 shares of ZAP’s common stock at the average share price of related interest period (see Note 8). The Company also issued 200,000 shares of common stock to the CFO in August 2016. In September 2015, the Company issued 89,194,715 shares to Mr. Wang Alex, the Chief Executive Officer of the Company for his investment of $5,351,683 in the Company (approximately $4.5 million investment was loan by the Company to its subsidiary Jonway Auto). In September 2015, the amount of $814,863 investment from Cathaya Management Co Ltd and $350,000 due to Cathaya Management Co Ltd have been converted into 13,581,051 and 5,833,333 shares of common stock at price of $0.06, respectively. In September 2015, China Electric Vehicle Corporation (CEVC) has elected to convert the interest of $1,237,345 due on the $20.7 million convertible note to 14,454,743 shares of common stock at the average price of $0.086. |
LITIGATION
LITIGATION | 12 Months Ended |
Dec. 31, 2016 | |
Loss Contingency, Information about Litigation Matters [Abstract] | |
LITIGATION | NOTE –17 - LITIGATION ZAP is in arrears with the settlement payment to Hogan & Lovells. The current negotiated balance due is $779,500. Hogan & Lovells agreed to reduce the total amount owed by $453,827, as long as the Company does not default on its payment agreement. If Hogan & Lovells does seek a judgment, the total balance due immediately would be $1,233,327, recorded by the Company in its books and records. Currently ZAP is in default of the payment agreement and the Company is seeking additional funding, and is working with prospective investors or lenders so ZAP can resume the installment payments to Hogan & Lovells. As of December 31, 2016 and 2015, the Company accrued approximately $1.2 million for this litigation. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTIGENCIES | NOTE –18 - COMMITMENTS AND CONTIGENCIES Guarantees Jonway Auto guaranteed certain financial obligations of outside third parties including suppliers and customers to support our business and economic growth. Guarantees will terminate on payment and/or cancellation of the obligation once it is repaid. A payment by us would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee. Maximum potential payments under guarantees total $101 million at December 31, 2016. The guarantee expires at variance dates from December 2017 to December 2019. The Company performances risk under these guarantees is reviewed regularly, and has resulted in no changes to our initial valuations. Jonway Auto pledged a land use right and a building to Shanghai Pu Dong Development Bank to secure a bank loan of $1.0 million offered to a related company, Taizhou Jonway Jing Mao Trading Ltd., which is a subsidiary of Jonway Group. The period of guarantee was five years from 2014 to 2019. The net value of the land use right and the building pledged as at December 31, 2016 was $0.4 million. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19 – SUBSEQUENT EVENTS From January 1, 2017 to May 31, 2017, the Company repaid approximately $5.3 million bank loans and $10.7 million notes payable that become due. The Company also borrowed approximately $10 million bank loans, including $5.3 million short-term loans and $3.5 million long-term loans, as well as approximately $4.0 million notes payable from various banks in China. The loans and notes payable are guaranteed by the Company’s shareholders and related parties. |
SIGNIFICANT ACCOUNTING POLICI27
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements include the financial statements of ZAP, and its subsidiaries: Jonway Automobile, Voltage Vehicles, Advanced Technology Vehicles, ZAP and ZAP Hong Kong as of and for the years ended December 31, 2016 and 2015 and are prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). Management considers subsidiaries to be companies that are over 50% controlled. Significant intercompany transactions and balances are eliminated in consolidation; profits from intercompany sales, are also eliminated; non-controlling interests are included in equity. The Company accounts for its 37.5% interest in ZAP Hangzhou and its 50% interest in Shanghai Zapple using the equity method of accounting because it has significant influence but not control. ZAP’s common stock is quoted on the OTC Bulletin Board under the symbol “ZAAP.OB.” |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. The more significant estimates relate to revenue recognition, contractual allowances and uncollectible accounts, intangible assets, accrued liabilities, warranty costs, impairment of goodwill and long-lived assets, litigation and contingencies. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for judgments about results and the carrying values of assets and liabilities. Actual results and values may differ significantly from these estimates. |
Concentration of Risk | Concentration of Risk The Company’s operations are substantially carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations maybe substantially influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which subject the Company to potential credit risk consist of its cash and cash equivalents and accounts receivable. The Company places its cash and cash equivalents with one high credit quality financial institution. As of December 31, 2016, deposits exceeded the amount of insurance provided by $32,000; however, these deposits typically are redeemable upon demand and, therefore, the Company believes the financial risks associated with these financial instruments are minimal. The Company has not experienced any losses to date on its deposits. The Company performs ongoing credit evaluations of its customers, and generally does not require collateral on its accounts receivable. The Company estimates the need for allowances for potential credit losses based on historical collection activity and the facts and circumstances relevant to specific customers and records a provision for uncollectible accounts when collection is uncertain. The Company currently relies on various outside contract manufacturers in China to supply vehicles parts and products for its customers. Although management believes that other contract manufactures could provide similar services and intends to transition its manufacturing to Jonway’s facilities in Sanmen, China, but, if these Chinese companies are unable to supply electric vehicles and the Company is unable to transition manufacturing to Jonway’s facilities or find alternative sources for these product and services, the Company might not be able to fill existing backorders and/or sell more electric vehicles. Any significant manufacturing interruption could have a material adverse effect on the Company’s business, financial condition and results of operations. |
Revenue Recognition | Revenue Recognition The Company records revenues for non-Jonway sales when all of the following criteria have been met: - Persuasive evidence of an arrangement exists. The Company generally relies upon sales contracts or agreements, and customer purchase orders to determine the existence of an arrangement. - Sales price is fixed or determinable. The Company assesses whether the sales price is fixed or determinable based on the payment terms and whether the sales price is subject to refund or adjustment. - Delivery has occurred. The Company uses shipping terms and related documents, or written evidence of customer acceptance, when applicable, to verify delivery or performance. The Company’s customary shipping terms are FOB shipping point. - Collectability is reasonably assured. The Company assesses collectability based on creditworthiness of customers as determined by our credit checks and their payment histories. The Company records accounts receivable net of allowance for doubtful accounts and estimated customer returns. The Company records revenues for Jonway sales only upon the occurrence of all of the following conditions: - The Company has received a binding purchase order from the customer or distributor authorized by a representative empowered to commit the purchaser (evidence of a sale); - The purchase price has been fixed, based on the terms of the purchase order; - The Company has delivered the product from its factory to a common carrier acceptable to the customer; and - The Company deems the collection of the amount invoiced probable. The Company provides no price protection. Sales are recognized net of sale discounts, rebates and return allowances. |
Stock-based compensation | Stock-based Compensation The Company accounts for stock-based compensation which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. The Company estimates the fair value of stock-based awards on the date of grant using the Black-Scholes-Merton option pricing model (the “Black-Scholes model”). The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method. The Company estimates forfeitures at the time of grant and revise its estimate in subsequent periods if actual forfeitures differ from those estimates. The Company accounts for stock-based compensation awards and warrants granted to non-employees by determining the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. |
Revenue-based Taxes | Revenue-based Taxes The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The primary revenue-based taxes are sales tax and value-added tax (“VAT”). |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires the Company to use the assets and liability method of accounting for income taxes. Under the assets and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between financial statement carrying amounts and the tax bases of existing assets and liabilities and operating loss and tax credit carry forward. Under this accounting standard, the effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. ASC 740-10, Accounting for Uncertainty in Income Taxes defines uncertainty in income taxes and the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. |
Foreign Currency Translation | Foreign Currency Translation The Company and its wholly owned subsidiaries/investments, maintain their accounting records in United States Dollars (“US$”) whereas Jonway Auto maintains its accounting records in the currency of Renminbi (“RMB”), being the primary currency of the economic environment in which their operations are conducted. Jonway Auto’s principal country of operations is the PRC. The financial position and results of Jonway Auto’s operations are determined using RMB, the local currency, as the functional currency. The results of operations and the statement of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Due to the fact that cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ deficiency as “Accumulated Other Comprehensive Income.” The value of RMB against US$ and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions, any significant revaluation of RMB may materially affect the Company’s financial condition in terms of US$ reporting. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: December 31, 2016 December 31, 2015 $ 1=RMB 6.9448 $ 1=RMB 6.4917 paid in capital and retained earnings, as of year end Amounts included in the statements of operations $ 1=RMB 6.6414 $ 1=RMB 6.2288 and cash flows for the year |
Loss per Share | Loss per Share Basic and diluted net loss per share is computed by dividing consolidated net loss by the weighted-average number of common shares outstanding during the period. The Company’s potentially dilutive shares, which include outstanding common stock options, convertible debt and warrants, have not been included in the computation of diluted net loss per share for all periods presented as the result would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share. |
Cash and cash equivalents | Cash and Cash Equivalents The Company invests its excess cash in short-term investments with various banks and financial institutions. Short-term investments are cash equivalents, as they are part of the cash management activities of the Company and are comprised of investments having maturities of three months or less when purchased. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Restricted Cash | Restricted Cash The Company’s subsidiary Jonway Auto has cash restricted in connection with the issuance of bank acceptance notes to various suppliers of spare parts which were issued through Jonway Auto’s banks. To issue these bank acceptance notes to Jonway Auto’s suppliers, the banks require a deposit of 50% or 100% of the full amount of such notes which are payable within 6 months from issuance. Upon the maturity date, restricted funds will be used to settle the bank acceptance notes. |
Fair value of financial instruments | Fair Value of Financial Instruments Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to use observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs other than quoted prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3: Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions and methodologies that result in management’s best estimate of fair value. The carrying value of financial instruments included in current assets and liabilities approximate their fair values because of the short-term nature of these instruments. The carrying value of the senior convertible debt (see Note 8), which approximates fair value, is influenced by interest rates and the Company’s stock price, and is determined by prices for the convertible debts observed in market trading, which are Level 2 inputs. |
Accounts Receivable | Accounts Receivable Accounts and note receivable consist mainly of receivables from our established dealer network. A credit review is performed by the Company before the dealer is approved to purchase vehicles from the Company. The Company performs ongoing credit evaluations of its dealers, and generally does not require collateral on its accounts receivable. The Company estimates the need for allowances for potential credit losses based on historical collection activity and the facts and circumstances relevant to specific customers and records a provision for uncollectible accounts when collection is uncertain. Any uncollectible receivables will be written off against the allowance. The allowance for doubtful accounts was approximately $1.4 million and $1.5 million on December 31, 2016 and 2015, respectively. |
Inventories | Inventories ZAP Inventories consist primarily of vehicles, both gas and electric, parts and supplies, and finished goods and are carried at the lesser of lower of cost (first-in, first-out basis for ZAP and moving average basis for Jonway) or market (net realizable value or replacement cost). The Company maintains reserves for estimated excess, obsolete and damaged inventory based on projected future shipments using historical selling rates, and taking into account market conditions, inventory on-hand, purchase commitments, product development plans and life expectancy, and competitive factors. If markets for the Company’s products and corresponding demand were to decline, then additional reserves may be deemed necessary. Any changes to the Company's estimates of its reserves are reflected in cost of goods sold within the statement of operations during the period in which such changes are determined by management. As of December 31, 2016 and 2015, the Company has reserved approximately $1.2 million and $1.3 million of its inventory for obsolescence, respectively. |
Property and equipment | Property and Equipment Property and equipment consists of land, building and improvements, machinery and equipment, office furniture and equipment, vehicles, and leasehold improvements. Property and equipment is stated at cost, net of accumulated depreciation and amortization, and is depreciated or amortized using straight-line method over the asset's estimated useful life. Costs of maintenance and repairs are charged to expense as incurred; significant renewals and betterments are capitalized. Estimated useful lives are as follows: Machinery and equipment 5-10 years Computer equipment and software 3-5 years Office furniture and equipment 5 years Vehicles 5 years Leasehold improvements 10 years or life of lease, whichever is shorter Building and improvements 20-30 years |
Land use Rights | Land Use Rights Under PRC law, all land in the PRC is permanently owned by the government and cannot be sold to an individual or company but companies can purchase the land use rights for the specified period of time, as in the Company’s industry the industrial purpose has a useful life of 50 years. The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use rights are sometimes referred to informally as “ownership”. Land use rights are stated at cost less accumulated amortization. Amortization is provided over the respective useful lives, using the straight-line method. Estimated useful life is 50 years, and is determined in the connection with the term of the land use right. |
Long-lived Assets | Long-lived Assets Long-lived assets are comprised of property and equipment and finite-lived intangible assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Events that trigger a test for recoverability include material adverse changes in projected revenues and expenses, significant negative industry or economic trends, and a significant adverse change in the manner in which an asset group is used. An estimate of undiscounted future cash flows produced by the asset, or by the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the impairment charge is measured and recognized for the amount by which the carrying value of the asset group exceeds it estimated fair value, which is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flow and fundamental analysis. When an impairment loss is recognized for assets to be held and used, the adjusted carrying amount of those assets is depreciated over their remaining useful life. For the year ended December 31, 2016, the Company recorded an impairment charge of $12.5 million to against all the carrying value of the related production facilities in Jonway Auto (see Note 6). |
Intangible Assets | Intangible Assets Intangible assets consist of patents, trademarks, government approvals and customer relationships (including client contracts). For financial statement purposes, identifiable intangible assets with a finite life are being amortized using the straight-line method over the estimated useful lives of seven years for the EPA license and 8.5 years for the customer relationships. Costs incurred by the Company in connection with patent, trademark applications and approvals from governmental agencies such as the Environmental Protection Agency, including legal fees, patent and trademark fees and specific testing costs, are expensed as incurred. Purchased intangible costs are amortized over an estimated economic life of the asset, generally seven years, commencing on the acquisition date. Costs subsequent to the acquisition date are expensed as incurred. In Process Technology and trade name are determined to have an indefinite useful life and not amortized, but instead are tested for impairment at least annually. As of December 31, 2016 and 2015, the Company recognized an impairment loss of $2.1 million and $0.1 million for the trade name, respectively. The impairment charge was recognized for the amount by which the carrying value of intangible assets exceed its estimated fair value, which was estimated based on discounted cash flows (level 3 inputs). For the year ended December 31, 2016, the Company recognized an impairment loss of approximately $2.4 million for the intangibles and goodwill (see Note 7), and an impairment loss of approximately $5.5 million for the distribution agreements (see Note 8). |
Goodwill | Goodwill Goodwill is determined to have an indefinite useful life and not amortized, but instead is tested for impairment at least annually. The Company assesses annually whether there is an indication that goodwill is impaired, or more frequently if events and circumstances indicate that the asset might be impaired during the year. The Company performs its annual impairment test in the fourth quarter of each year. Calculating the fair value of the reporting units requires significant estimates and assumptions by management. To the extent the carrying amount of a reporting unit exceeds the fair value of the reporting unit, there is an indication that the reporting unit goodwill may be impaired and a second step of the impairment test is performed to determine the amount of the impairment to be recognized, if any. The Company recognized an impairment loss on goodwill of $0.3 million for the year ended December 31, 2016 as the Company concluded that the carrying amount of the goodwill has exceeded its fair value based on appraisals. |
Product warranty costs | Product Warranty Costs Jonway provides a 3-year or 60,000 kilometer warranty for its SUV and minivan products. Jonway records the estimated cost of the product warranties at the time of sale using the estimated cost of product warranties based on historical results. The estimated cost of warranties has not been significant to date. Should actual failure rates and material usage differ from our estimates, revisions to the warranty obligation may be required. Jonway 2016 2015 Balance as of January 1 $ 450 $ 481 Provision for warranties 130 421 Charges against warranties (154 ) (329 ) Balance December 31 426 573 Less: long term portion (37 ) (123 ) Current portion $ 389 $ 450 $37,000 was included in “accrued liabilities and others- long term” and $389,000 was included in short-term “accrued liabilities” on the consolidated balance sheets as of December 31, 2016. |
Comprehensive loss | Comprehensive Loss Comprehensive loss represents the net loss for the period plus the results of certain changes to shareholders’ equity (deficiency) that are not reflected in the consolidated statements of operations. The Company’s comprehensive loss consists of net losses, foreign currency translation adjustments and unrealized net losses on investments. |
Shipping and Handling Costs | Shipping and Handling Costs The Company includes shipping and handling costs relating to the delivery of products in sales and marketing expense. For the years ended December 31, 2016 and 2015, shipping and handling costs were $54,000 and $442,000, respectively. |
Reclassification | Reclassification Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. Generally Accepted Accounting Principles when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU No. 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”), which defers the effective date for ASU 2014-09 by one year. For public entities, the guidance in ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within those periods), which means it will be effective for the Company’s fiscal year beginning October 1, 2018. In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue versus Net)” (“ASU 2016-08”), which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard. In April 2016, the FASB issued ASU No. 2016-10, “Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which reduces the complexity when applying the guidance for identifying performance obligations and improves the operability and understandability of the license implementation guidance. In May 2016, the FASB issued ASU No. 2016-12 “Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. In December 2016, the FASB further issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU 2016-20”), which makes minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments are intended to address implementation and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. These amendments have the same effective date as the new revenue standard. The Company is planning to adopt Topic 606 in the first quarter of our fiscal 2019 using the retrospective transition method, and is continuing to evaluate the impact of its pending adoption of Topic 606 will have on the Company’s consolidated financial statements. The Company’s current revenue recognition policies are generally consistent with the new revenue recognition standards set forth in ASU 2014-09. Potential adjustments to input measures are not expected to be pervasive to the majority of the Company’s contracts. While no significant impact is expected upon adoption of the new guidance, the Company will not be able to make that determination until the time of adoption based upon outstanding contracts at that time. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to improve the recognition and measurement of financial instruments. The new guidance makes targeted improvements to existing U.S. GAAP by: (1) requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (2) Requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; (3) Eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and. (4) Requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not expect this update will have a material impact on the Company’s consolidated financial position, results of operations and cash flows. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, to increase the transparency and comparability about leases among entities. The new guidance requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. For public business entities, ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and requires a modified retrospective approach to adoption. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows”. The amendments provide guidance on the following eight specific cash flow issues: (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; (3) Contingent Consideration Payments Made after a Business Combination; (4)Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned; (6) Life Insurance Policies; (7) Distributions Received from Equity Method Investees; (8) Beneficial Interests in Securitization Transactions; and Separately Identifiable Cash Flows and Application of the Predominance Principle. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact of adoption on the consolidated financial statements and related disclosure. In October 2016, the FASB issued ASU No. 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control”. The amendments affect reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. Specifically, the amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The amendments are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash", which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of- period and end-of-period total amounts shown on the statement of cash flows. The amendments in this ASU apply to all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows under Topic 230. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied using a retrospective transition method to each period presented. The adoption of this guidance will increase cash and cash equivalents by the amount of restricted cash on the Company's consolidated statement of cash flows. In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business". The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Basically these amendments provide a screen to determine when a set is not a business. If the screen is not met, the amendments in this ASU first, require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and second, remove the evaluation of whether a market participant could replace missing elements. These amendments take effect for public businesses for fiscal years beginning after December 15, 2017 and interim periods within those periods. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”. The amendment amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI28
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Foreign Currency Exchange Balance | The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: December 31, 2016 December 31, 2015 $ 1=RMB 6.9448 $ 1=RMB 6.4917 paid in capital and retained earnings, as of year end Amounts included in the statements of operations $ 1=RMB 6.6414 $ 1=RMB 6.2288 and cash flows for the year |
Schedule of Estimated Useful Lives of Property and Equipment | Costs of maintenance and repairs are charged to expense as incurred; significant renewals and betterments are capitalized. Estimated useful lives are as follows: Machinery and equipment 5-10 years Computer equipment and software 3-5 years Office furniture and equipment 5 years Vehicles 5 years Leasehold improvements 10 years or life of lease, whichever is shorter Building and improvements 20-30 years |
Summary of Changes in the Product Warranty Accrual | Should actual failure rates and material usage differ from our estimates, revisions to the warranty obligation may be required. Jonway 2016 2015 Balance as of January 1 $ 450 $ 481 Provision for warranties 130 421 Charges against warranties (154 ) (329 ) Balance December 31 426 573 Less: long term portion (37 ) (123 ) Current portion $ 389 $ 450 |
ACCOUNTS RECEIVEABLE (Tables)
ACCOUNTS RECEIVEABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receiveable Tables | |
Schedule of accounts receivable | Accounts receivable consisted of the following: December 31, 2016 December 31, 2015 Accounts receivable $ 1,604 $ 2,274 Less – Allowance for doubtful accounts – third parties (1,442 ) (1,531 ) Total account receivable, net $ 162 $ 743 |
Schedule of changes in allowance for doubtful accounts | Changes in the Company’s allowance for doubtful accounts as of December 31, 2016 and December 31, 2015 are as follows: December 31, 2016 December 31, 2015 Balance, beginning of year $ 1,531 $ 439 Write-off (100 ) (76 ) Current provision 11 1,168 Balance, end of year $ 1,442 $ 1,531 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories, net at December 31, 2016 and 2015 are summarized as follows (in thousands): December 31, 2016 December 31, 2015 Work in Process $ 2,565 $ 2,237 Parts and supplies 3,798 3,616 Finished goods 707 3,186 7,070 9,039 Less - inventory reserve (1,183 ) (1,296 ) Inventories, net $ 5,887 $ 7,743 |
Schedule of Inventory Reserve | Changes in the Company’s inventory reserve during the years ended December 31, 2016 and 2015 are as follows (in thousands): December 31, 2016 December 31, 2015 Balance opening year $ 1,296 $ 1,380 Current provision (recovery) for Jonway Auto (3 ) (132 ) Current provision (recovery) for inventory ZAP-net (110 ) 48 Balance end of year $ 1,183 $ 1,296 |
PROPERTY, PLANT AND EQUIPMENT31
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, net at December 31, 2016 and 2015 are summarized as follows (in thousands): December 31, 2016 December 31, 2015 Buildings and improvements $ 18,939 $ 20,260 Machinery and equipment 45,811 47,917 Office furniture and equipment 766 853 Vehicles 575 739 66,091 69,769 Less: Accumulated depreciation and amortization (37,354 ) (33,876 ) Impairment losses recognized in profit and loss (12,480 ) - $ 16,257 $ 35,893 |
Schedule of Intangible Assets | The Company has the right to use the land for 50 years and amortized the Right on a straight-line basis over the period of 50 years. As of December 31, 2016 and 2015, land use rights consist of the following: December 31, 2016 December 31, 2015 Land use right $ 9,715 $ 10,395 Software 96 102 9,811 10,497 Less: accumulated amortization (1570 ) (1,370 ) Less: accumulated translation adjustments (95 ) (197 ) $ 8,146 $ 8,930 |
Schedule of Future Amortization Expense | As of December 31, 2016, estimated future amortization expense for land use rights is as follows (in thousands): Amortization Year Expense 2017 $ 182 2018 182 2019 182 2020 182 2021 182 Thereafter 7,236 $ 8,146 |
INTANGIBLE ASSETS, NET AND GO32
INTANGIBLE ASSETS, NET AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Other Intangible Assets | The goodwill and other intangible assets at December 31, 2016 and 2015 are summarized as follows: Impairment provision, Amortization and accumulated Net Book translation adjustments (“ATA”) Net Book Useful Life Value for the year ended Value (In Years) December 31, 2015 December 31, 2016 December 31, 2016 Customer Relationships 8.5 $ 316 $ (316 ) $ - Developed Technology 7 619 (619 ) - In Process Technology (a) 178 (178 ) - Trade name (a) 1,400 (1,400 ) - Intangible assets $ 2,513 $ (2,513 ) $ - Goodwill $ 314 $ (314 ) $ - (a) The in-process technology and trade name have been determined to have an indefinite life. |
DISTRIBUTION AGREEMENTS (Tables
DISTRIBUTION AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
DISTRIBUTION AGREEMENTS [Abstract] | |
Schedule of Distribution Agreements | Distribution agreements as of December 31, 2016 and 2015 are presented below (in thousands): December 31, 2016 December 31, 2015 Better World Products-related party $ 2,160 $ 2,160 Jonway Products 14,400 14,400 16,560 16,560 Less: amortization and impairment (16,560 ) (9,601 ) $ - $ 6,959 |
LINE OF CREDIT, SHORT TERM DE34
LINE OF CREDIT, SHORT TERM DEBT AND BANK ACCEPTANCE NOTES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term Debt | Short term loans as of December 31, 2016 and 2015 are presented below: December 31, 2016 December 31, 2015 Loan from CITIC bank (a) $ 5,328 $ 3,081 Loan from ICBC (b) 4,320 4,621 Loan from Hangzhou Hengzhong Machinery Ltd. (c) 794 - $ 10,442 $ 7,702 (a) From March 25, 2016 to April 26, 2016, the Company entered multiple loan agreements through Jonway Auto with CITIC Bank Sanmen Brank for a total amount of approximately $5.3 million. The loans have annual interest of 5.96% and are due in various dates from March 25, 2017 to April 26, 2017. The loans are also secured by a land use right and a building with a total carrying amount of $4.4 million. One shareholder and CEO Alex Wang personally guaranteed these loans as well. In October 2015, Jonway Auto borrowed a half year short-term loan of $3.1 million at annual interest rate of 5.9%. The loan was repaid upon maturity in April 2016. (b) On June 8, 2016, the Company entered into a one year short-term loan of $0.3 million at an annual interest rate of 5%. On July 22, 2016, the Company entered into a one year short-term loan of $1.0 million at an annual interest rate of 5%. On October 12, 2016, the Company entered into a one year short-term loan of $1.3 million at an annual interest rate of 5%. On October 13, 2016, the Company entered into a one year short-term loan of $1.0 million at an annual interest rate of 5%. These loans with aggregated amount of $4.3 million are secured by a land use right and a building with a total carrying amount of $2.9 million. One shareholder, Wang Huaiyi, and CEO Alex Wang also personally guaranteed these loans. On June 22, 2016, the Company entered into a one year short-term loan of $0.7 million at an annual interest rate of 4.4%. The loan is secured by a restricted cash deposit of $0.7 million. The Company fully repaid five loans totaling $4.6 million during 2016. (c) On July 28, 2016, the Company entered into an agreement with Hangzhou Zhongheng Machinery Ltd. (“Zhongheng”). Pursuant to the agreement, Zhongheng paid off one loan on behalf of the Company, and the Company would repay the outstanding payable due to Zhongheng within two months after Zhongheng made the payment on behalf of the Company. In exchange for the service, the Company agreed to pay a monthly interest of 1.5% on the payment made by Zhongheng. The 1.5% monthly interest is equivalent to a compound annual interest rate of about 9.34%. |
Schedule of Bank Acceptance Notes | Bank acceptance notes are presented below: (In thousands) December 31, 2016 December 31, 2015 a) Bank acceptance notes payable to China Everbright bank $ 5,760 $ 7,086 b) Bank acceptance notes payable to CITIC bank 4,967 6,428 c) Bank acceptance notes payable to Shanghai Pudong Development bank - 852 $ 10,727 $ 14,366 a) Notes payable to China Everbright bank have various maturity dates in June 2017. The notes payable are guaranteed by a land use right and a building with a total carrying value of $2.0 million. The Company is also required to maintain cash deposits at 50% of the notes payable with the bank, in order to ensure future credit availability. b) Notes payable to CITIC bank h c) Notes payable to Shanghai Pudong Development Bank was due and repaid in January and May 2016. The Company was required to maintain cash deposits at 100% of the notes payable with the bank. |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Convertible Debt [Abstract] | |
Schedule of convertible debt | Convertible debt consists of the following: December 31, 2016 December 31, 2015 Senior convertible debt – CEVC (a) $ 20,679 $ 20,679 Convertible debt – Mr. Luo Hua Liang (b) - 786 $ 20,679 $ 21,465 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Domestic Tax Authority [Member] | |
Income Tax Contingency [Line Items] | |
Schedule of Deferred Tax Assets | The tax effect of temporary differences that give rise to significant portions of the deferred tax assets as of December 31, 2016 and 2015 is presented below: December 31, 2016 2015 Net operating loss carryovers - US $ 57,582 $ 54,132 Temporary differences, including Stock based compensation 6,582 6,557 Fixed assets, due to differences in depreciation 288 288 Non-qualified options and warrants 6,728 6,728 Reserves on investments 2,069 2,069 Intangible assets, due to impairment 5,024 2,342 R&D credit 138 138 Amortization of debt discount 1,865 1,865 Total gross deferred tax assets - US $ 80,275 $ 74,119 Valuation allowance - US (80,275 ) (74,119 ) Net deferred tax assets $ - $ - |
Foreign Tax Authority [Member] | |
Income Tax Contingency [Line Items] | |
Schedule of Deferred Tax Assets | The tax effect of temporary differences that gave rise to significant portions of the deferred tax assets at December 31, 2016 and 2015 is presented below (in thousand): December 31, 2016 2015 Deferred tax assets - PRC: Timing differences in depreciation and bad debt allowance $ 320 $ 1,311 Property and equipment impairments 3,120 - Inventories, due to impairment 97 651 Accrued liabilities 225 416 Net operating loss carry forward 15,429 10,053 Total deferred tax assets, gross – PRC 19,192 12,431 Valuation allowance - PRC (19,192 ) (12,431 ) Deferred tax assets, net of valuation allowance $ - $ - |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Option Activity | All of the Company’s stock-based compensation is accounted for as an equity instrument. Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value December 31, 2014 11,848 $ 0.38 3.0 - Options forfeited and expired (421 ) - - - December 31, 2015 11,427 0.40 2.0 - Options forfeited and expired - - - - December 31, 2016 11,427 0.40 1.0 - |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Loss per Share | The numerators and denominators used in the computations of basic and dilutive earnings (loss) per share are presented in the following table: December 31, 2016 2015 Net loss attributable to ZAP’s common shareholders $ (23,482 ) $ (14,144 ) Weighted average shares used in basic and diluted computation 589,673 502,660 Earnings (loss) per share – Basic and diluted Net loss before noncontrolling interest (0.05 ) (0.04 ) Added: Net loss attributable to noncontrolling interest 0.01 0.01 Net loss attributable to ZAP’s common shareholders (0.04 ) (0.03 ) Anti-dilutive shares as of December 31: Warrants outstanding 38,000 38,000 Options outstanding 11,427 11,427 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Results | Segment results are summarized as follows: Jonway Auto ZAP ZAP Hong Kong Totals For the year ended December 31, 2016 Net sales $ 10,736 $ 39 $ - $ 10,775 Gross profit (loss) $ (1,151 ) $ 25 $ - $ (1,126 ) Depreciation and amortization $ 5,179 $ 2,565 $ - $ 7,744 Interest expense, net $ 881 $ 1,661 $ - $ 2,542 Impairment loss on assets $ 12,480 $ 7,887 $ - $ 20,367 Net loss $ (21,506 ) $ (12,515 ) $ - $ (34,021 ) Expenditure on property and equipment $ 351 $ - $ - $ 351 Total assets $ 40,136 $ 4,178 $ - $ 44,314 For the year ended December 31, 2015 Net sales $ 29,179 $ 281 $ - $ 29,460 Gross profit (loss) $ (1,333 ) $ 71 $ - $ (1,262 ) Depreciation and amortization $ 5,600 $ 2,609 $ - $ 8,209 Interest expense, net $ 767 $ 1,697 $ - $ 2,464 Impairment loss on assets $ 82 $ 1,000 $ - $ 1,082 Net loss $ (12,063 ) $ (7,992 ) $ - $ (20,055 ) Expenditure on property and equipment $ 1,020 $ - $ - $ 1,020 Total assets $ 64,949 $ 14,692 $ 9 $ 79,650 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Amount Due To/From Related Parties | Due from (to) related parties Amount due from related parties are principally for advances in the normal course of business for parts and suppliers used in manufacturing. Amount due from related parties are as follows (in thousands): December 31, 2016 December 31, 2015 Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd $ 874 $ 998 Jonway Motor Cycle 262 - Jonway Economy and Trade Co., Ltd - 616 Total $ 1,136 $ 1,614 Accounts receivable – related parties are as follows: December 31, 2016 December 31, 2015 Jonway EV Selling Ltd $ 3,072 $ 4,659 Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd 250 212 Jonway Motor Cycle 305 301 $ 3,627 $ 5,172 Amount due to related parties are follows (in thousands): December 31, 2016 December 31, 2015 Jonway Group $ 13,384 $ 12,606 Jonway Motor Cycle 63 64 Taizhou Huadu - 846 Shanghai Zapple 33 35 Mr. Wang 7 74 Betterworld 149 149 Taizhou Jonway Electric Vehicle Selling Co 80 - Zhejiang Jonway Painting Co. Ltd. - 11 Cathaya Operations Management Ltd. 257 193 Zhejiang Aochuang Alternative Energy Vehicle Co., Ltd. 424 - Total $ 14,397 $ 13,978 |
Schedule of Sales made by related parites | The sales made to related parties are as follows: December 31, 2016 December 31, 2015 Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd $ 38 $ 296 Taizhou Jonway Electric Vehicle Selling Co - 3,945 Jonway Group - 5 Jonway Motor Cycle 4 231 Total $ 42 $ 4,477 |
Schedule of Due to related parties included in accounts payable | Due to related parties included in accounts payable as follows: December 31, 2016 December 31, 2015 Jonway Group $ 2,512 $ - Taizhou Huadu 966 - $ 3,478 $ - |
Schedule of Contract Rates | According to the contract, Jonway shall pay Zhejiang UFO a variable contractual fee which is calculated based on the number of SUVs that Jonway assembles in the Sanmen Branch every year, at the following rates (historical exchange rate): The first 3,000 vehicles $44 per vehicle Vehicles from 3,001 to 5,000 $30 per vehicle Vehicles over 5,000 $22 per vehicle |
ORGANIZATION (Details)
ORGANIZATION (Details) | Dec. 31, 2016USD ($) |
ORGANIZATION AND BASIS OF PRESENTATION [Abstract] | |
Acquisition percentage in Jonway | 51.00% |
Reduced ownership percentage | 12.00% |
Jonway Auto [Member] | |
ORGANIZATION AND BASIS OF PRESENTATION [Abstract] | |
Reduced ownership percentage | 11.52% |
China Electric Vehicle Corporation [Member] | |
ORGANIZATION AND BASIS OF PRESENTATION [Abstract] | |
Outstanding Amount unpaid principal balance | $ 20,679,069 |
GOING CONCERN (Details)
GOING CONCERN (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Current liabilities exceeded current assets | $ 71,600 |
Equity Deficiency | $ 46,100 |
Percentage of sales dropped | 63.00% |
Percentage of net loss increased by prior year | 70.00% |
Percentage of reduce in equity poistion | 12.00% |
CEVC convertible note [Member] | |
Outstanding principal balance | $ 20,700 |
SIGNIFICANT ACCOUNTING POLICI43
SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)¥ / $ | Dec. 31, 2015USD ($)¥ / $ | |
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Excess deposits amount over insurance provided | $ 32,000 | |
Currency exchange rate | ¥ / $ | 6.9448 | 6.4917 |
Average currency exchange rate | ¥ / $ | 6.6414 | 6.2288 |
Allowance for doubtful accounts | $ 1,442,000 | $ 1,531,000 |
Inventory reserves for obsolescence | 1,200,000 | 1,300,000 |
Accumulated impairment loss on goodwill | 300,000 | |
Imapirment charge on Long-lived Assets | 12,500,000 | |
Impairment loss on Intangible assets | 2,400,000 | |
Impairment loss on Intangible assets | 2,100,000 | 100,000 |
Impairment loss on Distribution rights | 5,500,000 | |
Shipping and Handling Costs | $ 54,000 | $ 442,000 |
Customer Relationships [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Estimated useful life | 8 years 6 months | |
Developed Technology Rights [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Estimated useful life | 7 years | |
Use Rights [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Estimated useful life | 50 years | |
Intellectual Property [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Estimated useful life | 7 years | |
Bankers Acceptance [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Term | 6 months | |
Bankers Acceptance [Member] | Minimum [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Required cash deposit | 50.00% | |
Bankers Acceptance [Member] | Maximum [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Required cash deposit | 100.00% | |
ZAP Hangzhou [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Ownership percentage | 37.50% | |
Shanghai Zapple [Member] | ||
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||
Ownership percentage | 50.00% |
SIGNIFICANT ACCOUNTING POLICI44
SIGNIFICANT ACCOUNTING POLICIES (Summary of Property, Equipment and Land Use Rights) (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Computer equipment and software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer equipment and software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Office Furniture And Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Building and Building Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Building and Building Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 30 years |
Use Rights [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 50 years |
SIGNIFICANT ACCOUNTING POLICI45
SIGNIFICANT ACCOUNTING POLICIES (Summary of Product Warranty Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Beginning balance | $ 573 | $ 481 |
Provision for warranties | 130 | 421 |
Charges against warranties | (154) | (329) |
Ending balance | 426 | 573 |
Less: long term portion | (37) | (123) |
Current portion | $ 389 | $ 450 |
ACCOUNTS RECEIVABLE (Schedule O
ACCOUNTS RECEIVABLE (Schedule Of Accounts Receivable) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Receivable, Net [Abstract] | ||
Accounts receivable | $ 1,604 | $ 2,274 |
Less - Allowance for doubtful accounts - third parties | (1,442) | (1,531) |
Total account receivable, net | $ 162 | $ 743 |
ACCOUNTS RECEIVABLE (Schedule47
ACCOUNTS RECEIVABLE (Schedule Of Changes In Allowance For Doubtful Accounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts Receivable, Net [Abstract] | ||
Balance, beginning of period | $ 1,531 | $ 439 |
Write-off | (100) | (76) |
Current provision | 29 | 2,416 |
Balance, end of period | $ 1,442 | $ 1,531 |
INVENTORIES, NET (Schedule of I
INVENTORIES, NET (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | |||
Work in Process | $ 2,565 | $ 2,237 | |
Parts and supplies | 3,798 | 3,616 | |
Finished goods | 707 | 3,186 | |
Inventories | 7,070 | 9,039 | |
Less - inventory reserve | (1,183) | (1,296) | $ (1,380) |
Inventories, net | $ 5,887 | $ 7,743 |
INVENTORIES, NET (Schedule of49
INVENTORIES, NET (Schedule of Inventory Reserve) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | ||
Beginning balance | $ 1,296 | $ 1,380 |
Current provision (recovery) for Jonway Auto | (3) | (132) |
Current provision (recovery) for inventory ZAP-net | (110) | 48 |
Ending balance | $ 1,183 | $ 1,296 |
PROPERTY, PLANT AND EQUIPMENT50
PROPERTY, PLANT AND EQUIPMENT, NET (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation and amortization | $ 6,304,000 | $ 6,769,000 |
Imapirment charge on Long-lived Assets | $ 12,500,000 | |
Use Rights [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 50 years |
PROPERTY, PLANT AND EQUIPMENT51
PROPERTY, PLANT AND EQUIPMENT, NET (Schedule Of Property, Plant And Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 66,091 | $ 69,769 |
Less: accumulated depreciation and amortization | (37,354) | (33,876) |
Less: Impairment losses recognized in profit and loss | (12,480) | |
Property, plant and equipment, net | 16,257 | 35,893 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 18,939 | 20,260 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 45,811 | 47,917 |
Office Furniture And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 766 | 853 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 575 | $ 739 |
PROPERTY, PLANT AND EQUIPMENT52
PROPERTY, PLANT AND EQUIPMENT, NET (Schedule of Capitalized Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Land use right | $ 9,715 | $ 10,395 |
Software | 96 | 102 |
Intangible assets | 9,811 | 10,497 |
Less: accumulated amortization | (1,570) | (1,370) |
Less: accumulated translation Adjustments | (95) | (197) |
Intangible assets, net | $ 8,146 | $ 8,930 |
PROPERTY, PLANT AND EQUIPMENT53
PROPERTY, PLANT AND EQUIPMENT, NET (Schedule of Future Amortization Expense) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Estimated future amortization expense: | ||
Intangible assets, net | $ 8,146 | $ 8,930 |
Land Use Rights and Software [Member] | ||
Estimated future amortization expense: | ||
2,017 | 182 | |
2,018 | 182 | |
2,019 | 182 | |
2,020 | 182 | |
2,021 | 182 | |
Thereafter | 7,236 | |
Intangible assets, net | $ 8,146 |
INTANGIBLE ASSETS, NET AND GO54
INTANGIBLE ASSETS, NET AND GOODWILL (Summary of Intangible Assets) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Intangible Assets [Line Items] | ||||
Beginning balance | $ 2,513 | |||
Amortization and accumulated translation adjustments ("ATA") | (2,513) | |||
Ending balance | $ 2,513 | |||
Impairment loss on Intangible assets | $ 2,400 | |||
Customer Relationships [Member] | ||||
Intangible Assets [Line Items] | ||||
Useful life | 8 years 6 months | |||
Beginning balance | $ 316 | |||
Amortization and accumulated translation adjustments ("ATA") | (316) | |||
Ending balance | 316 | |||
Developed Technology Rights [Member] | ||||
Intangible Assets [Line Items] | ||||
Useful life | 7 years | |||
Beginning balance | $ 619 | |||
Amortization and accumulated translation adjustments ("ATA") | (619) | |||
Ending balance | 619 | |||
In Process Technology [Member] | ||||
Intangible Assets [Line Items] | ||||
Beginning balance | [1] | 178 | ||
Amortization and accumulated translation adjustments ("ATA") | [1] | (178) | ||
Ending balance | [1] | 178 | ||
Trade name [Member] | ||||
Intangible Assets [Line Items] | ||||
Beginning balance | 1,400 | |||
Amortization and accumulated translation adjustments ("ATA") | (1,400) | [1] | (200) | |
Ending balance | [1] | 1,400 | ||
Impairment loss on Intangible assets | $ 80 | |||
[1] | The in process technology and trade name have been determined to have an indefinite life. |
INTANGIBLE ASSETS, NET AND GO55
INTANGIBLE ASSETS, NET AND GOODWILL (Summary of Intangible Assets) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, beginning balance | $ 314 |
Amortization and accumulated translation adjustments ("ATA") | (314) |
Goodwill, ending balance |
DISTRIBUTION AGREEMENTS (Schedu
DISTRIBUTION AGREEMENTS (Schedule of Distribution Agreements) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Distribution Agreements [Line Items] | ||
Distribution agreements | $ 16,560 | $ 16,560 |
Less amortization | (16,560) | (9,601) |
Distribution agreements, net | 6,959 | |
Better World [Member] | ||
Distribution Agreements [Line Items] | ||
Distribution agreements | 2,160 | 2,160 |
Goldenstone Worldwide [Member] | ||
Distribution Agreements [Line Items] | ||
Distribution agreements | $ 14,400 | $ 14,400 |
DISTRIBUTION AGREEMENTS (Narrat
DISTRIBUTION AGREEMENTS (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2010 | |
Distribution Agreements [Line Items] | |||
Depreciation and amortization | $ 7,744,000 | $ 8,209,000 | |
Impairment loss on Distribution rights | $ 5,500,000 | ||
Acquisition percentage in Jonway | 51.00% | ||
Value of common stock issued in relation to distribution agreement for CNG products | $ 1,690,000 | 6,167,000 | |
Better World [Member] | |||
Distribution Agreements [Line Items] | |||
Purchase of fixed assets and intangibles, shares | 6,000,000 | ||
Purchase of fixed assets and intangibles | $ 21,600,000 | ||
Goldenstone Worldwide [Member] | |||
Distribution Agreements [Line Items] | |||
Purchase of fixed assets and intangibles, shares | 30,000,000 | ||
Purchase of fixed assets and intangibles | $ 14,400,000 | ||
Jonway Group [Member] | |||
Distribution Agreements [Line Items] | |||
Impairment loss on Distribution rights | 5,500,000 | ||
Distribution Agreements [Member] | |||
Distribution Agreements [Line Items] | |||
Depreciation and amortization | 1,400,000 | 1,400,000 | |
Impairment loss on Distribution rights | $ 5,500,000 | $ 1,000,000 |
LINE OF CREDIT, SHORT TERM DE58
LINE OF CREDIT, SHORT TERM DEBT AND BANK ACCEPTANCE NOTES (Lines of Credit) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Jun. 30, 2015 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Line of Credit Facility [Line Items] | |||||
Repayment of short-term loans | $ 7,836 | $ 6,157 | |||
China Everbright Bank [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 6,900 | 5,800 | |||
Credit exposure | $ 3,500 | 2,900 | |||
Collateral amount | 1,800 | ||||
Note payable | 5,800 | ||||
Restricted cash deposit | $ 2,900 | ||||
Required cash deposit | 50.00% | 50.00% | |||
Expiration | Jun. 30, 2017 | ||||
Citic Bank [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 11,300 | $ 15,400 | 3,000 | ||
Credit exposure | 11,300 | 5,700 | 5,700 | ||
Amount outstanding | $ 5,300 | $ 1,000 | $ 2,600 | ||
Interest rate | 5.96% | 7.08% | 5.90% | ||
Note payable | $ 5,000 | $ 6,400 | |||
Restricted cash deposit | 5,000 | ||||
Unused Credit line | $ 5,900 | ||||
Expiration | Mar. 31, 2018 | Mar. 31, 2016 | |||
Beginning maturity date | Mar. 25, 2017 | Mar. 1, 2016 | |||
Ending maturity date | Apr. 26, 2017 | Apr. 30, 2016 | |||
Debt instrument maturity period | 2 years | 1 year | |||
Citic Bank [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Required cash deposit | 50.00% | ||||
Citic Bank [Member] | Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Required cash deposit | 100.00% | ||||
Industrial And Commercial Bank Of China [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 4,700 | ||||
Credit exposure | $ 4,300 | ||||
Amount outstanding | $ 4,300 | $ 4,600 | |||
Note payable | $ 800 | ||||
Expiration | Mar. 31, 2017 | ||||
Beginning maturity date | Jun. 3, 2017 | Apr. 1, 2015 | |||
Ending maturity date | Oct. 20, 2017 | Nov. 30, 2016 | |||
Industrial And Commercial Bank Of China [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 4.36% | 5.00% | |||
Industrial And Commercial Bank Of China [Member] | Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 5.00% | 6.90% |
LINE OF CREDIT, SHORT TERM DE59
LINE OF CREDIT, SHORT TERM DEBT AND BANK ACCEPTANCE NOTES (Schedule of Short-Term Debt) (Details) - USD ($) $ in Thousands | Oct. 13, 2016 | Oct. 12, 2016 | Jun. 08, 2016 | Jul. 28, 2016 | Jul. 22, 2016 | Jun. 22, 2016 | Mar. 25, 2016 | Oct. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2015 | |
Short-term Debt [Line Items] | ||||||||||||
Short term debt | $ 10,442 | $ 7,702 | ||||||||||
Repayment of short term loans | 7,836 | 6,157 | ||||||||||
Citic Bank [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Short term debt | [1] | 5,328 | 3,081 | |||||||||
Face amount | $ 5,300 | $ 3,100 | ||||||||||
Term | 1 year | 6 months | ||||||||||
Interest rate | 5.96% | 5.90% | ||||||||||
Collateral amount | $ 4,400 | |||||||||||
Debt Instrument, Maturity Date | Apr. 30, 2016 | |||||||||||
Beginning maturity date | Mar. 25, 2017 | |||||||||||
Ending maturity date | Apr. 26, 2017 | |||||||||||
Industrial And Commercial Bank Of China [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Short term debt | [2] | 4,320 | 4,621 | |||||||||
Face amount | $ 1,000 | $ 1,300 | $ 300 | $ 1,000 | $ 700 | 4,600 | ||||||
Term | 1 year | 1 year | 1 year | 1 year | 1 year | |||||||
Interest rate | 5.00% | 5.00% | 5.00% | 5.00% | 4.40% | |||||||
Collateral amount | 4,300 | |||||||||||
Restricted cash deposit | $ 700 | 2,900 | ||||||||||
Hangzhou Hengzhong Machinery Ltd. [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Short term debt | [3] | $ 794 | ||||||||||
Term | 1 month | |||||||||||
Interest rate | 1.50% | |||||||||||
Weighted average interest rate | 5.80% | 6.40% | ||||||||||
Hangzhou Hengzhong Machinery Ltd. [Member] | Maximum [Member] | ||||||||||||
Short-term Debt [Line Items] | ||||||||||||
Interest rate | 9.34% | |||||||||||
[1] | From March 25, 2016 to April 26, 2016, the Company entered multiple loan agreements through Jonway Auto with CITIC Bank Sanmen Brank for a total amount of approximately $5.3 million. The loans have annual interest of 5.96% and are due in various dates from March 25, 2017 to April 26, 2017. The loans are also secured by a land use right and a building with a total carrying amount of $4.4 million. One shareholder and CEO Alex Wang personally guaranteed these loans as well. In October 2015, Jonway Auto borrowed a half year short-term loan of $3.1 million at annual interest rate of 5.9%. The loan was repaid upon maturity in April 2016. | |||||||||||
[2] | On June 8, 2016, the Company entered into a one year short-term loan of $0.3 million at an annual interest rate of 5%. On July 22, 2016, the Company entered into a one year short-term loan of $1.0 million at an annual interest rate of 5%. On October 12, 2016, the Company entered into a one year short-term loan of $1.3 million at an annual interest rate of 5%. On October 13, 2016, the Company entered into a one year short-term loan of $1.0 million at an annual interest rate of 5%. These loans with aggregated amount of $4.3 million are secured by a land use right and a building with a total carrying amount of $2.9 million. One shareholder, Wang Huaiyi, and CEO Alex Wang also personally guaranteed these loans. On June 22, 2016, the Company entered into a one year short-term loan of $0.7 million at an annual interest rate of 4.4%. The loan is secured by a restricted cash deposit of $0.7 million. The Company fully repaid five loans totaling $4.6 million during 2016. | |||||||||||
[3] | On July 28, 2016, the Company entered into an agreement with Hangzhou Zhongheng Machinery Ltd. ("Zhongheng"). Pursuant to the agreement, Zhongheng paid off one loan on behalf of the Company, and the Company would repay the outstanding payable due to Zhongheng within two months after Zhongheng made the payment on behalf of the Company. In exchange for the service, the Company agreed to pay a monthly interest of 1.5% on the payment made by Zhongheng. The 1.5% monthly interest is equivalent to a compound annual interest rate of about 9.34%. |
LINE OF CREDIT, SHORT TERM DE60
LINE OF CREDIT, SHORT TERM DEBT AND BANK ACCEPTANCE NOTES (Schedule of Bank Acceptance Notes) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 25, 2016 | Oct. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2015 | |
Citic Bank [Member] | |||||
Short-term Debt [Line Items] | |||||
Beginning maturity date | Mar. 25, 2017 | ||||
Ending maturity date | Apr. 26, 2017 | ||||
Collateral amount | $ 4,400 | ||||
Face amount | $ 5,300 | $ 3,100 | |||
Maturity date | Apr. 30, 2016 | ||||
Notes Payable to Banks [Member] | |||||
Short-term Debt [Line Items] | |||||
Bank acceptance notes payable | $ 10,727 | $ 14,366 | |||
Restricted cash deposit | 8,600 | 9,000 | |||
Notes Payable to Banks [Member] | China Everbright Bank [Member] | |||||
Short-term Debt [Line Items] | |||||
Bank acceptance notes payable | 5,760 | 7,086 | |||
Collateral amount | $ 2,000 | ||||
Required cash deposit | 50.00% | ||||
Maturity date | Jun. 30, 2017 | ||||
Notes Payable to Banks [Member] | Citic Bank [Member] | |||||
Short-term Debt [Line Items] | |||||
Bank acceptance notes payable | $ 4,967 | 6,428 | |||
Beginning maturity date | Mar. 31, 2017 | ||||
Ending maturity date | Apr. 30, 2017 | ||||
Required cash deposit | 100.00% | ||||
Notes Payable to Banks [Member] | Shanghai Pu Dong Development Bank [Member] | |||||
Short-term Debt [Line Items] | |||||
Bank acceptance notes payable | $ 852 | ||||
Beginning maturity date | Jan. 31, 2016 | ||||
Ending maturity date | May 31, 2016 | ||||
Required cash deposit | 100.00% | ||||
Notes Payable to Banks [Member] | Minimum [Member] | |||||
Short-term Debt [Line Items] | |||||
Required cash deposit | 50.00% | ||||
Notes Payable to Banks [Member] | Maximum [Member] | |||||
Short-term Debt [Line Items] | |||||
Required cash deposit | 100.00% |
CONVERTIBLE DEBT (Schedule of C
CONVERTIBLE DEBT (Schedule of Convertible Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Convertible Debt [Abstract] | ||
Senior convertible debt - CEVC | $ 20,679 | $ 20,679 |
Convertible debt - Mr. Luo Hua Liang | 786 | |
Convertible debt | $ 20,679 | $ 21,465 |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) | Jan. 12, 2011USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | |||
Reduced ownership percentage | 12.00% | ||
CEVC convertible note [Member] | |||
Debt Instrument [Line Items] | |||
Amount outstanding | $ 20,679,069 | ||
Ownership percentage | 39.479% | ||
Interest expense | $ 1,658,858 | ||
Accrued interest | 1,246,410 | $ 833,961 | |
CEVC convertible note [Member] | |||
Debt Instrument [Line Items] | |||
Interest expense | $ 1,242,929 | ||
Jonway Auto [Member] | |||
Debt Instrument [Line Items] | |||
Reduced ownership percentage | 11.52% | ||
Convertible Debt [Member] | |||
Debt Instrument [Line Items] | |||
Face amount | $ 19,000,000 | ||
Shares called by warrant | shares | 20,000,000 | ||
Term | 2 years | ||
Exercise price | $ / shares | $ 0.50 | ||
Conversion ratio | 0.003743 | ||
Number of shares | shares | 4,435 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||
Provision for income tax | ||
Accrued interest and penalties related to uncertain tax positions | 0 | 0 |
Recognized interest and penalties related to uncertain tax positions | $ 0 | $ 0 |
U.S. statutory rate | 34.00% | 34.00% |
Domestic Tax Authority [Member] | ||
Income Tax [Line Items] | ||
Net change in the valuation allowance | $ 6,100 | $ 3,100 |
Net operating loss carry forwards | $ 172,000 | |
Expiration date of operating loss carry forward | Dec. 31, 2032 | |
Foreign Tax Authority [Member] | ||
Income Tax [Line Items] | ||
Net change in the valuation allowance | $ 6,800 | $ 2,700 |
Net operating loss carry forwards | $ 61,700 | |
Expiration date of operating loss carry forward | Dec. 31, 2021 | |
State and Local Jurisdiction [Member] | ||
Income Tax [Line Items] | ||
Open tax years | 2,010 |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Domestic Tax Authority [Member] | ||
Income Tax [Line Items] | ||
Net operating loss carryovers | $ 57,582 | $ 54,132 |
Temporary differences, including Stock based compensation | 582 | 6,557 |
Fixed assets, due to differences in depreciation | 288 | 288 |
Non-qualified options and warrants | 6,728 | 6,728 |
Reserves on investments | 2,069 | 2,069 |
Intangible assets, due to impairment | 5,024 | 2,342 |
R&D credit | 138 | 138 |
Amortization of debt discount | 1,865 | 1,865 |
Total gross deferred tax assets | 80,275 | 74,119 |
Valuation allowance | (80,275) | (74,119) |
Net deferred tax assets | ||
Foreign Tax Authority [Member] | ||
Income Tax [Line Items] | ||
Timing differences in depreciation and bad debt allowance | 320 | 1,311 |
Property and equipment impairments | 3,120 | |
Inventories, due to impairment | 97 | 651 |
Accrued liabilities | 225 | 416 |
Net operating loss carryovers | 15,429 | 10,053 |
Total gross deferred tax assets | 19,192 | 12,431 |
Valuation allowance | (19,192) | (12,431) |
Net deferred tax assets |
STOCK-BASED COMPENSATION (Narra
STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Tax benefit recognized for stock- based compensation expense | $ 0 | $ 0 |
Employees And Directors [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Amount charged to general and administrative expense | $ 73,000 | $ 74,000 |
STOCK-BASED COMPENSATION (Sched
STOCK-BASED COMPENSATION (Schedule of Option Activity) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | |||
Options outstanding | 11,427 | 11,848 | |
Options forfeited and expired | (421) | ||
Options outstanding | 11,427 | 11,427 | 11,848 |
Weighted Average Exercise Price | |||
Options outstanding | $ 0.40 | $ 0.38 | |
Options forfeited and expired | |||
Options outstanding | $ 0.40 | $ 0.40 | $ 0.38 |
Aggregate Intrinsic Value | |||
Options outstanding | |||
Options forfeited and expired | |||
Options outstanding | |||
Options outstanding | 1 year | 2 years | 3 years |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net loss attributable to ZAP's common shareholders | $ (23,482) | $ (14,144) |
Weighted average shares used in basic and diluted computation | 589,673 | 502,660 |
Earnings (loss) per share – Basic and diluted | ||
Net loss before noncontrolling interest | $ (0.05) | $ (0.04) |
Added: Net loss attributable to noncontrolling interest | 0.01 | 0.01 |
Net loss attributable to ZAP's common shareholders | $ (0.04) | $ (0.03) |
Warrant [Member] | ||
Earnings (loss) per share – Basic and diluted | ||
Antidilutive securities | 38,000 | 38,000 |
Equity Option [Member] | ||
Earnings (loss) per share – Basic and diluted | ||
Antidilutive securities | 11,427 | 11,427 |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Concentration Risk [Line Items] | ||
Revenues | $ 10,775 | $ 29,460 |
Number of reportable segments | 3 | |
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 99.60% | 99.10% |
Revenues | $ 10,700 | $ 29,200 |
Geographic Concentration Risk [Member] | Cost of Goods, Total [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 99.90% | 99.30% |
Revenues | $ 11,800 | $ 30,500 |
Customer Concentration Risk One [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 36.00% | |
Customer Concentration Risk Two [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 25.00% | |
Customer Concentration Risk Three [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 15.00% | |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 22.00% | |
Supplier Concentration Risk One [Member] | Cost of Goods, Total [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 14.00% | |
Supplier Concentration Risk Two [Member] | Cost of Goods, Total [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 11.00% | |
Supplier Concentration Risk [Member] | Cost of Goods, Total [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 9.00% |
SEGMENT REPORTING (Schedule of
SEGMENT REPORTING (Schedule of Segment Results) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 10,775 | $ 29,460 |
Gross profit (loss) | (1,126) | (1,262) |
Depreciation and amortization | 7,744 | 8,209 |
Interest expense, net | 2,542 | 2,464 |
Impairment loss on assets | 20,367 | 1,082 |
Net loss | (34,021) | (20,055) |
Expenditure on property and equipment | 351 | 1,020 |
Total assets | 44,314 | 79,650 |
Jonway Auto [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 10,736 | 29,179 |
Gross profit (loss) | (1,151) | (1,333) |
Depreciation and amortization | 5,179 | 5,600 |
Interest expense, net | 881 | 767 |
Impairment loss on assets | 12,480 | 82 |
Net loss | (21,506) | (12,063) |
Expenditure on property and equipment | 351 | 1,020 |
Total assets | 40,136 | 64,949 |
Zap Company [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 39 | 281 |
Gross profit (loss) | 25 | 71 |
Depreciation and amortization | 2,565 | 2,609 |
Interest expense, net | 1,661 | 1,697 |
Impairment loss on assets | 7,887 | 1,000 |
Net loss | (12,515) | (7,992) |
Expenditure on property and equipment | ||
Total assets | 4,178 | 14,692 |
ZAP Hong Kong [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | ||
Gross profit (loss) | ||
Depreciation and amortization | ||
Interest expense, net | ||
Impairment loss on assets | ||
Net loss | ||
Expenditure on property and equipment | ||
Total assets | $ 9 |
SHAREHOLDERS' EQUITY (Narrative
SHAREHOLDERS' EQUITY (Narrative) (Details) - USD ($) | Feb. 11, 2015 | Aug. 31, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Stock issued to settle the cash advance, shares | 44,409,963 | ||||
Stock issued to settle the cash advance | $ 1,429,736 | ||||
Stock issued to pay interest | 1,246,000 | ||||
Convertible notes payable | 786,000 | ||||
Stock issued for addressing a lawsuit | 350,000 | ||||
Shares cancelled | 1,182,558 | ||||
Interest paid | $ 1,103,000 | 810,000 | |||
Value of shares cancelled | $ 100,000 | ||||
Due to related parties converted into shares of common stock | 14,454,743 | ||||
Chief Executive Officer [Member] | |||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Stock issued for due to related parties | $ 5,351,683 | ||||
Stock issued for due to related parties, shares | 89,194,715 | ||||
Due to related parties converted into shares of common stock | 200,000 | ||||
Cathaya Management Ltd [Member] | |||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Share price (in dollars per share) | $ 0.05 | $ 0.06 | |||
Amount due to related parties | $ 443,630 | $ 350,000 | |||
Due to related parties converted into shares of common stock | 8,872,602 | 5,833,333 | |||
China Electric Vehicle Corporation [Member] | |||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Stock issued to pay interest | $ 1,246,410 | $ 1,237,345 | |||
Convertible notes payable | $ 20,700,000 | $ 20,700,000 | |||
Share price (in dollars per share) | $ 0.086 | $ 0.033 | |||
Amount due to related parties | $ 1,246,410 | ||||
Due to related parties converted into shares of common stock | 18,399,316 | 14,454,743 | 38,299,077 | ||
Debt Holder [Member] | |||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Share price (in dollars per share) | $ 0.03 | ||||
Amount due to related parties | $ 34,113 | ||||
Due to related parties converted into shares of common stock | 1,137,098 | ||||
Better World [Member] | |||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Share price (in dollars per share) | $ 0.03 | ||||
Amount due to related parties | $ 149,214 | ||||
Due to related parties converted into shares of common stock | 4,973,788 | ||||
Korea Yung [Member] | |||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Shares cancelled | 4,811,633 | ||||
Value of shares cancelled | $ 406,872 | ||||
Korea Yung [Member] | Convertible Debt [Member] | |||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Shares cancelled | 1,182,558 | ||||
Interest paid | $ 8,433 | ||||
Repayment of principal amount | $ 100,000 | ||||
Outstanding shares issued | 133,116 | ||||
Cathaya Operations [Member] | |||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Amount due to related parties | $ 814,863 | ||||
Due to related parties converted into shares of common stock | 13,581,051 | ||||
Subsidiaries [Member] | Chief Executive Officer [Member] | |||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | |||||
Stock issued for due to related parties | $ 4,500,000 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||||
Stock issued to settle the cash advance, shares | 44,409,963 | |||
Stock issued to settle the cash advance | $ 1,429,736 | |||
Stock issued to pay interest | 1,246,000 | |||
Convertible notes payable | 786,000 | |||
Stock issued to pay interest payable, shares | 18,399,316 | |||
Chief Executive Officer [Member] | ||||
Related Party Transaction [Line Items] | ||||
Stock issued for due to related parties | $ 5,351,683 | |||
Stock issued for due to related parties, shares | 89,194,715 | |||
Due to related parties converted into shares of common stock | 200,000 | |||
Jonway Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 294,000 | 5,300,000 | ||
Revenue | 5,000 | |||
Sanmen Branch Of Zhejiang Ufo Automobile [Member] | ||||
Related Party Transaction [Line Items] | ||||
Expenses | 24,000 | 223,000 | ||
SUVs and parts [Member] | Sanmen Branch Of Zhejiang Ufo Automobile [Member] | ||||
Related Party Transaction [Line Items] | ||||
Revenue | 38,000 | 295,000 | ||
Spare Parts [Member] | Jonway Motor Cycle [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | 2,000 | 2,000 | ||
Spare Parts [Member] | Taizhou Huadu [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases | $ 894,000 | $ 894,000 | ||
Cathaya Management Ltd [Member] | ||||
Related Party Transaction [Line Items] | ||||
Share price (in dollars per share) | $ 0.05 | $ 0.06 | ||
Amount due to related parties | $ 443,630 | $ 350,000 | ||
Due to related parties converted into shares of common stock | 8,872,602 | 5,833,333 | ||
China Electric Vehicle Corporation [Member] | ||||
Related Party Transaction [Line Items] | ||||
Stock issued to pay interest | $ 1,246,410 | $ 1,237,345 | ||
Convertible notes payable | $ 20,700,000 | $ 20,700,000 | ||
Share price (in dollars per share) | $ 0.086 | $ 0.033 | ||
Amount due to related parties | $ 1,246,410 | |||
Due to related parties converted into shares of common stock | 18,399,316 | 14,454,743 | 38,299,077 | |
Subsidiaries [Member] | Chief Executive Officer [Member] | ||||
Related Party Transaction [Line Items] | ||||
Stock issued for due to related parties | $ 4,500,000 | |||
Cathaya Operations [Member] | ||||
Related Party Transaction [Line Items] | ||||
Amount due to related parties | $ 814,863 | |||
Due to related parties converted into shares of common stock | 13,581,051 |
RELATED PARTY TRANSACTIONS (Sch
RELATED PARTY TRANSACTIONS (Schedule of Related Party Balances) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||
Amount due from related party | $ 1,136 | $ 1,614 |
Accounts receivable due from related parties | 3,627 | 5,172 |
Amount due to related party | 14,397 | 13,978 |
Sanmen Branch Of Zhejiang Ufo Automobile [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due from related party | 874 | 998 |
Accounts receivable due from related parties | 250 | 212 |
Jonway Economy and Trade Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due from related party | 616 | |
Jonway EV Selling Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts receivable due from related parties | 3,072 | 4,659 |
Jonway Motor Cycle [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due from related party | 262 | |
Accounts receivable due from related parties | 305 | 301 |
Amount due to related party | 63 | 64 |
Jonway Group [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due to related party | 13,384 | 12,606 |
Taizhou Huadu [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due to related party | 846 | |
Shanghai Zapple [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due to related party | 33 | 35 |
Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due to related party | 7 | 74 |
Better World [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due to related party | 149 | 149 |
Taizhou Jonway Electric Vehicle Selling Co [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due to related party | 80 | |
Zhejiang Jonway Painting Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due to related party | 11 | |
Cathaya Operations [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due to related party | 257 | 193 |
Zhejiang Aochuang Alternative Energy Vehicle Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Amount due to related party | $ 424 |
RELATED PARTY TRANSACTIONS (S73
RELATED PARTY TRANSACTIONS (Schedule of Sales made of related parties) (Details) (USD $) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Sales made to related parties | $ 42 | $ 4,477 |
Sanmen Branch Of Zhejiang Ufo Automobile [Member] | ||
Sales made to related parties | 38 | 296 |
Taizhou Jonway Electric Vehicle Selling Co [Member] | ||
Sales made to related parties | 3,945 | |
Jonway Group [Member] | ||
Sales made to related parties | 5 | |
Jonway Motor Cycle [Member] | ||
Sales made to related parties | $ 4 | $ 231 |
RELATED PARTY TRANSACTIONS (S74
RELATED PARTY TRANSACTIONS (Schedule of Accounts payable related parties) (Details) (USD $) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts payble to related parties | $ 3,478 | |
Jonway Group [Member] | ||
Accounts payble to related parties | 2,512 | |
Taizhou Huadu [Member] | ||
Accounts payble to related parties | $ 966 |
RELATED PARTY TRANSACTIONS (S75
RELATED PARTY TRANSACTIONS (Schedule of Contract Fees) (Details) - Sanmen Branch Of Zhejiang Ufo Automobile [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
First 3,000 Vehicles [Member] | |
Related Party Transaction [Line Items] | |
Contractual fee per vehicle | $ 44 |
First 3,000 Vehicles [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Number of vehicles assembled | 3,000 |
Vehicles 3,001 to 5,000 [Member] | |
Related Party Transaction [Line Items] | |
Contractual fee per vehicle | $ 30 |
Vehicles 3,001 to 5,000 [Member] | Maximum [Member] | |
Related Party Transaction [Line Items] | |
Number of vehicles assembled | 5,000 |
Vehicles 3,001 to 5,000 [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Number of vehicles assembled | 3,001 |
Over 5,000 Vehicles [Member] | |
Related Party Transaction [Line Items] | |
Contractual fee per vehicle | $ 22 |
Over 5,000 Vehicles [Member] | Minimum [Member] | |
Related Party Transaction [Line Items] | |
Number of vehicles assembled | 5,000 |
LITIGATION (Details)
LITIGATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Loss Contingency, Information about Litigation Matters [Abstract] | ||
Settlement payment | $ 779,500 | |
Reduction in settlement payment | 453,827 | |
Damages would be sought | 1,233,327 | |
Accrued litigation amount | $ 1,200,000 | $ 1,200,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Shanghai Pu Dong Development Bank [Member] | Taizhou Jonway Jing Mao Trading Ltd [Member] | |
Guarantor Obligations [Line Items] | |
Face amount | $ 1 |
Period of guarantee | 5 years |
Collateral amount | $ 0.4 |
Subsidiaries [Member] | |
Guarantor Obligations [Line Items] | |
Potential payments under guarantee | $ 101 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 5 Months Ended | 12 Months Ended | |
May 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Notes payable due | $ 24,272,000 | $ 14,112,000 | |
Short term Loan | 11,281,000 | 2,248,000 | |
Notes payable | $ 27,097,000 | $ 14,349,000 | |
Subsequent Event [Member] | |||
Repaid bank loans | $ 5,300,000 | ||
Notes payable due | 5,000,000 | ||
Borrowed bank loans | 13,100,000 | ||
Short term Loan | 9,600,000 | ||
Long term loan | 3,500,000 | ||
Notes payable | $ 4,000,000 |