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RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2022

NOTE 21 - RELATED PARTY TRANSACTIONS

The table below sets forth the major related parties and their relationships with the Company:

Name of related parties:		Relationship with the Company
Mr. Peter Wang		Chairman, Chief Executive Officer, and principal shareholder of the Company
Mr. Yeung Heung Yeung		A principal shareholder of the Company
Bendon Limited		Controlled by Mr. Justin Davis-Rice, a director of CEGL. As for the resignation of Mr. Justin Davis-Rice in 2022, it was not a related party as of December 31, 2022.
Mr. Zhong Wei		Chief Technology Officer of the Company
Ms. Xu Cheng		Immediate family of Mr. Chris Xiongjian Chen, former Chief Operating Officer of CAG Cayman
CAG Cayman		Mr. Peter Wang is a principal shareholder
Devirra Corporation Limited and its subsidiaries (Collectively referred to the “Devirra Group”)		Entities controlled by CAG Cayman
Cenntro Holding Limited		Ultimately controlled by Mr. Peter Wang
Zhejiang Zhongchai Machinery Co., Ltd (“Zhejiang Zhongchai”)		Ultimately controlled by Mr. Peter Wang
Zhejiang RAP		An entity significantly influenced by Hangzhou Ronda Tech Co., Limited
Jiangsu Rongyuan		An entity significantly influenced by Hangzhou Ronda Tech Co., Limited
Hangzhou Hezhe Energy Technology Co., Ltd (“Hangzhou Hezhe”)		An entity significantly influenced by Hangzhou Ronda Tech Co., Limited
Zhuhai Hengzhong Industrial Investment Fund (Limited Partner) (“Zhuhai Hengzhong”)		Mr. Peter Wang served as General Partner
Shenzhen Yuanzheng Investment Development Co. Ltd (“Shenzhen Yuanzheng“)		Controlled by Mr. Yeung Heung Yeung
Shanghai Hengyu Enterprise Management Consulting Co., Ltd (“Shanghai Hengyu”)		Ultimately controlled by Mr. Peter Wang
Antric GmbH		Invested by the Company

Related party transactions

During the years ended December 31, 2022 and 2021, the Company had the following material related party transactions.

	For the Years Ended December 31,
	2022		2021
Interest income from a related party
Zhejiang RAP	$	13,434	$	23,114
Bendon Limited		113,021		39,296

Purchase of raw materials from related parties
Jiangsu Rongyuan		-		24,799
Hangzhou Hezhe Energy Technology Co., Ltd		1,413,262		1,219,621

Revenue from sales of equipment to a related party
Zhejiang Zhongchai		119,963		-

Payment on the purchase of the raw materials
Hangzhou Hezhe		1,015,036		2,027,483

Repayment of the advance operating fund from a related party
Zhejiang Zhongchai		276,266		-

Consulting service provided by a related party
Shanghai Hengyu		5,053		29,919

Repayment interest-bearing Loan from a related party
Shenzhen Yuanzheng		395,523		-
Mr. Yeung Heung Yeung		1,331,091		-

Interest expense on loans provided by related parties
Mr. Yeung Heung Yeung		2,532		132,000
Mr. Zhong Wei		-		6,039
Others		1,075		40,005

Amounts due from Related Parties – current

The following table presents amounts due from related parties as of December 31, 2022 and 2021.

	As of December 31,
	2022		2021
Hangzhou Hezhe⁽¹⁾		366,936		817,640
Zhejiang Zhongchai ⁽²⁾		-		412,797
Shanghai Hengyu		-		2,197
Jiangsu Rongyuan⁽³⁾		-		166,911
Total		366,936		1,399,545
Less: provision for receivable from a related party ⁽³⁾		-		(166,911	)
Amounts due from related parties, net	$	366,936	$	1,232,634

(1)

The balance mainly represents the prepayment for raw material to the related party.

(2)

The balances mainly represent accounts receivable relating to the sale of industrial equipment of $340,770 and advances to Zhejiang Zhongchai for daily operational purposes of $72,027 as of December 31, 2021.

(3)

The balances mainly represent advances to related parties for daily operational purposes. The business conditions of Jiangsu Rongyuan deteriorated and, as a result, the Company recognized provision for receivables of nil, $227,807 and $206,187 for the years ended December 31, 2021, 2020 and 2019, respectively. For the year ended December 31, 2020, the Company wrote off the balance of provision that it recognized in 2019. The Company reversed the provision of $78,931 for the year ended December 31, 2021 due to the repayment from the related party. The balance was written off during the year ended December 31, 2022.

Amounts due from Related Parties – non-current

	As of December 31,
	2022		2021
Bendon Limited ⁽¹⁾	$	-	$	4,834,973
Total		-		4,834,973
Less: provision for receivable from a related party		-		-
Amounts due from related parties -non-current	$	-	$	4,834,973

(1)

The balance represents a 5-year loan in the aggregate principal amount of $4,439,400 (New Zealand Dollar 7,000,000) to the related party, bearing interest of 2.5% annually and maturing in August 2026. As for the resignation of Mr. Justin Davis-Rice in 2022, the controller of Bendon Limited and the former director of CEGL, Bendon Limited was not a related party as of December 31, 2022.

Amounts due to Related Parties

The following table presents amounts due to related parties as of December 31, 2022 and 2021.

	As of December 31,
	2022		2021
CAG Cayman ⁽¹⁾	$	-	$	13,945,823
Mr. Yeung Heung Yeung ⁽²⁾		-		1,328,559
Shenzhen Yuanzheng ⁽²⁾		-		416,509
Antric GmbH ⁽³⁾		666,396		-
Zhejiang RAP		23,882		40,034
Jiangsu Rongyuan		23,194		25,103
Shanghai Hengyu		2,900		-
Total	$	716,372	$	15,756,028

(1)

CAG Cayman was the parent company of Cenntro before the closing of the Combination. The balance as of December 31, 2021 represented (i) the interest-free operating funds from CAG Cayman of $15,823; and (ii) a reduction of capital from Cenntro by CAG Cayman of $13,930,000 prior to the closing of the Combination. It was fully repaid to CAG Cayman in 2022.

(2)	The balance represented the interest-bearing loan provided by related parties to the Company. The weighted average annual interest rates for the loans was 17.31% as of December 31, 2021. It was fully repaid in 2022.

(3)

The balance represented the capital injection payable to this related party. On December 16, 2022, the Company invested EUR2,500,000 (approximately $2,674,500) in Antric GmbH to acquire 25% of its equity interest. For the year ended December 31, 2022, capital investment of EUR1,868,750 (approximately $1,977,380) was paid to Antric GmbH.