Deferred Government Grants |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Government Grants [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Government Grants |
grants as of December 31, 2025 and March 31, 2026 consist of the following:
Government grants that are received in advance are deferred and recognized in the consolidated statements of operations over the period necessary to match them with the costs that they are intended to compensate. Government grants in relation to the achievement of stages of research and development projects are recognized in the consolidated statements of operations when amounts have been received and all attached conditions have been met. Non-refundable grants received without any further obligations or conditions attached are recognized immediately in the consolidated statements of operations.
On October 17, 2014, the Company received a subsidy of RMB46,150,000 pursuant to an agreement with the Management Committee dated July 2, 2013 for costs of land use rights and to be used to construct the new manufacturing site in Dalian. Part of the facilities had been completed and was operated in July 2015 and the Company has initiated amortization on a straight-line basis over the estimated useful lives of the depreciable facilities constructed thereon.
On June 23, 2020, BAK Asia, the Company wholly-owned Hong Kong subsidiary, entered into a framework investment agreement with Jiangsu Gaochun Economic Development Zone Development Group Company (“Gaochun EDZ”), pursuant to which the Company intended to develop certain lithium battery projects that aim to have a production capacity of 8Gwh. Gaochun EDZ agreed to provide various support to facilitates the development and operation of the projects. Since 2020, the Company accumulatively received RMB61.0 million (approximately $8.7 million) subsidy from Gaochun EDZ and government to facilitate the construction works and equipment in Nanjing. The Company recognized RMB10 million ($1.6 million) as other income after moving the Company facilities to Nanjing in 2020. For the remaining subsidy, the Company has initiated amortization on a straight-line basis over the estimated useful lives of the depreciable facilities constructed thereon.
On December 12, 2024, Hitrans received RMB11.42 million ($1.6 million) from Development and Reform Bureau of Shangyu District, Shaoxing for the purpose to facilitate the development of new production line. Hitrans received additional RMB20.3 million ($2.8 million) on March 26, 2025 from Development and Reform Bureau of Shangyu District, Shaoxing for the same nature. The Company will recognize the subsidies as income or offsets them against the related expenditures when there are no present or future obligations for the subsidized projects. Government grants were recognized in the consolidated statements of operations as follows:
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