Related Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

a.Transaction with Dr. Wu and his affiliates

As of December 31, 2023 and 2022, the Company has receivables of $0.2 million, respectively, due from Dr. Wu, the former Chairman of the Company, and his affiliates and recorded in “Current assets of discontinued operations” in the consolidated balance sheets.

As of December 31, 2023 and 2022, the Company has payables of $0.7 million, respectively, due to Dr. Wu, the former Chairman of the Company, and his affiliates and recorded in “Current liabilities of discontinued operations” in the consolidated balance sheets.

b.Amounts due from and due to Glory

As of December 31, 2023 and 2022, the Company has payables of $0.2 million, respectively, due to Glory as a result of the transactions incurred in 2020 and is recorded in “Current liabilities of discontinued operations”in the consolidated balance sheets.

c.Receivable due from Tree Technology minority shareholders

As of December 31, 2022, the Company has receivables of $0.3 million due from Tree Technology minority shareholders for the registered capital contribution of the entity.in “Current assets of discontinued operations” in the consolidated balance sheets.

In the year ended December 31, 2023, the Company entered $10.5 million senior convertible note with Tree Technology and fully converted this note into Tree Technology equity, then the Company used $0.3 million to settle the previous receivable due from Tree Technology minority shareholders..

d. Transactions with Energica management and their affiliates

Energica management stock options

The Company loaned $1.8 million to Energica senior management to exercise their stock options. In the second quarter of 2022, the Company purchased 0.8 million shares from options exercised for an additional $1.3 million. The total of the disbursements, $3.1 million, is considered part of the purchase price of Energica.

Materials and services from CRP Meccanica S.r.l., CRP Service S.r.l., CRP Technology S.r.l. and CRP USA LLC

During the year ended December 31, 2023 and December 31, 2022, Energica has purchased $0.1 million and $0.6 million of material and services from four entities owned by one of its senior management team. The balance as of December 31, 2023 and December 31, 2022, with these four entities is $1.4 million and $1.3 million and recorded in “Amounts due to related parties” in the condensed consolidated Balance Sheets.

Lease agreement with EMCH S.r.l.

Energica entered a lease agreement with EMCH S.r.l., an entity owned by one of its senior management team. The lease period

is from February 1, 2023 through January 31, 2029. This lease agreement is reflected in the consolidated balance sheets and statement of operations as follows (in thousands):

	December 31, 2023
Operating lease right of use assets	287
Current portion of operating lease liabilities	49
Operating lease liabilities - long term	238
Selling, general and administrative expenses	61

e. Promissory note with Tillou

On December 13, 2022, the Company entered into a promissory note with Tilllou in the amount of $2.0 million. Tillou is an entity controlled by Vince McMahon, the father of our Executive Chairman, the principal and interest payable on demand any time after January 15, 2023. The note has the flat interest rate 20% per annum. The Company granted to the Noteholder a security interest in the secured collateral. The subordinate agreement among the Company, Tillou and YA PN II agreed to subordinate YA PN II’s security interest in the Inobat Note to Tillou’s security interest up to an aggregate of $2.4 million, subject to the other provisions. The Company repaid the principal and the accrued interest of less than $0.1 million on January 13, 2023.

On March 19, 2023, the Company entered into a promissory note with Tilllou in the amount of $2.0 million. The principal and interest is payable on demand any time after April 20, 2023. The note bears interest at a rate of 20% per annum. If any amount payable under the Note is not paid when due, such overdue amount shall bear interest at the Interest Rate plus 2%. The Company granted to the Noteholder a security interest in a purchase obligation of YA II PN, Ltd as collateral. The Company

recorded the note $2.3 million, including principal and interest, in “promissory note due to related party-short term” in the consolidated balance sheets as of December 31, 2023.

f. Promissory notes with Therese Lee Carabillo

On April 6, 2023, the Company entered into a secured negotiable promissory note with Therese Lee Carabillo, a private individual who provides loan facilities to small cap companies, in the amount of $1.0 million. The maturity date is June 6 2023. The applicable interest rate is 20% . If any amount payable under the Note is not paid when due, such overdue amount shall bear interest at the applicable interest rate plus 2%. The Company repaid $0.2 million during the year ended December 31, 2023. Our Executive Chairman provided the personal guarantee of the note. The Company recorded the note $1.1 million in “Promissory note due to third parties” in the consolidated balance sheets as of December 31, 2023.

g. Promissory notes with the CEO of one subsidiary

On August 31, 2023, one of the Company's subsidiaries entered into a promissory note with its CEO in the amount of $50,000. the note bears interest at a rate of 7% per annum, compounded monthly. there is no maturity date on this note the Company recorded the note in “promissory note due to related party-short term” in the consolidated balance sheets as of December 31, 2023.

h. Promissory note with FNL

On June 7, 2022, the Company entered into a secured negotiable promissory note of $1.0 million with FNL. The note bears an interest rate of 6% and expires on March 7, 2023, or with a change of control of FNL, or in the event of default. The Company transferred the note to a third party at the price of $0.4 million and recorded $0.6 million impairment of this note during the year ended December 31, 2022.

i.CEO private placement

On October 20, 2022, Alf Poor, our CEO purchased 0.4 million shares of the Company in the amount of 0.1 million

j. Purchase of receivables from Orangegrid

On December 28, 2022, Timios purchased $0.4 million of receivables from Orangegrid in the consideration of $0.4 million. The receivables represent the Employee Retention Tax Credit to be applied against the payroll taxes paid in Q4 2020 through Q3 2021 by Orangegrid. The transfer of receivables is without recourse for nonpayment. Orangegrid is responsible for collection of the receivables and will send to Timios upon receipt, net of 15% fee. As an incentive, Orangegrid agreed to issue $0.1 million worth of its convertible securities to Timios. In the event that Orangegrid returned the full consideration for the receivables on or before January 6, 2023, the receivables would revert back to Orangegrid, and the agreement would be voided. Orangegrid returned the full purchase price of the receivables on or before January 6, 2023. The receivables reverted back to Orangegrid, and the agreement was voided to include no issuance of convertible securities to Timios.

k. Shandong notes receivable

On Nov 9, 2022, Shandong provided a note receivable to its minority interest in amount of RMB 2.2 million ($0.3 million). The note matures on November 18, 2023. The interest rate is the RMB Benchmark loan interest rate for financial institution for one-to-three year loan published by the the People's Bank of China. Shandong was disposed on November 29, 2022.

l. Disposal of Shangdong

On November 29, 2022, the Company sold its 80% ownership on Shandong to the entity’s minority shareholder and its related party in amount of RMB 2.7 million($0.5 million), 70% to the entity’s minority shareholder in amount of RMB 2.4 million ($0.4 million) and 10% to a third party in amount of RMB 0.3 million ($0.1 million). The Company recognized a disposal loss of $0.1 million as a result of the deconsolidation and such loss was recorded in “Loss on disposal of subsidiaries, net” in the condensed consolidated statements of operations for the twelve months ended December 31, 2022. The Company is not involved in the operations of Shangdong after the disposal and is no longer considered a related party.

m. Disposal of Seven Stars Energy Pte. Ltd.

On February 9, 2022, the Company transferred its 51.0% interest in Seven Stars Energy Pte. Ltd. to Fan Yurong, a current shareholder of SSE, for a nominal amount. The Company recognized a disposal loss of $0.2 million as a result of the deconsolidation of SSE and such loss was recorded in “Loss on disposal of subsidiaries, net” in the condensed consolidated statements of operations for the twelve months ended December 31, 2022. The Company is not involved in the operations of SSE after the disposal and is no longer considered a related party.