| RELATED PARTY TRANSACTIONS AND BALANCES |
11. RELATED PARTY TRANSACTIONS AND
BALANCES
|
a. |
Nature
of relationships with related parties: |
| |
|
Relationship
with the Company |
| Thunder Power (Hong Kong)
Limited (“TP HK”) |
|
Over
which the spouse of Mr. Wellen Sham, the Company’s controlling shareholder, exercises significant influence |
| Thunder Power Electric Vehicle
(Hong Kong) Limited (“TPEV HK”) |
|
Over
which the spouse of Mr. Wellen Sham, the Company’s controlling shareholder, exercises significant influence |
| Mr. Wellen Sham |
|
Controlling
shareholder of the Company |
| Ms. Ling Houng Sham |
|
Spouse
of Mr. Wellen Sham |
| Siang Fang International Co.,
Ltd. (“Siang Fang”) |
|
Mr.
Wellen Sham is the legal representative of Siang Fang |
| Feutune Light Sponsor LLC (“FLFV
Sponsor”) |
|
Shareholder
of the Company |
| EPT |
|
Over
which the Company owns 31.68% equity interest and exercises significant influences |
|
b. |
Related party transactions: |
On April 9, 2026, the Company
issued an aggregate of 31,872,768
shares of its common stock, par value $0.0001
per share, to six eligible shareholders of EPT, in exchange for an aggregate of 26,783,838
ordinary shares of EPT, pursuant to the Agreement. Among the six shareholders of EPT, Mr. Wellen Sham exchanged 8,337,210
shares of EPT for 9,921,280
shares of the Company. Ms. Ling Houng Sham exchanged 1,100,000
shares of EPT for 1,309,000
shares of the Company. Siang Fang exchanged 4,400,000
shares of EPT for 5,236,000
shares of the Company.
For the three months ended
June 30, 2026 and 2025, TP HK charged operating lease expenses of $4,572 and
$4,118,
respectively. For the six months ended June 30, 2026 and 2025, TP HK charged operating lease expenses of $7,298 and
$10,016,
respectively.
For the three months
ended June 30, 2026, the Company borrowed $186,000
from Mr. Wellen Sham to support the Company’s operations. For six months ended June 30, 2026, the Company borrowed $522,000
from Mr. Wellen Sham to support the Company’s operations. On May 29, 2026, the Company and Mr. Wellen Sham executed allonges extending
the maturity dates of certain promissory notes payable to Mr. Sham. As of June 30, 2026, six of these notes, with aggregate principal
amounts of $574,773,
had amended maturity dates ranging from July 25, 2027 through April 28, 2028 and were classified as amounts due to related parties, non-current.
Accordingly, the loans of $574,773
were classified as “amount due to related parties, non-current” as of June 30, 2026.
For the three months ended
June 30, 2025, the Company borrowed $440,020
from Mr. Wellen Sham to support the Company’s operations. The borrowings bear interest at 8%
and are payable through June 2026. During the three months ended June 30, 2025, Mr. Wellen Sham also made payments of $20,152
on behalf of the Company.
For the six months ended
June 30, 2025, the Company borrowed $931,490
from Mr. Wellen Sham to support the Company’s operations. The borrowings bear interest at 8%
and are payable through June 2026. During the six months ended June 30, 2025, the Company also borrowed $100,000
from Ms. Ling Houng Sham to support the Company’s operations. That borrowing bears interest at 8%
and is payable through March 2026.
|
c. |
Balance with related parties: |
|
- |
Amount
due to related parties |
| |
|
Nature |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
| TP HK(1) |
|
Amount due to the related party |
|
$ |
120,787 |
|
|
$ |
113,498 |
|
| Mr. Wellen Sham(2) |
|
Amount due to the related party |
|
|
2,905,162 |
|
|
|
2,823,585 |
|
| Ms. Ling Houng Sham (2) |
|
Amount due to the related party |
|
|
342,652 |
|
|
|
330,751 |
|
| FLFV Sponsor(3) |
|
Amount due to the related party |
|
|
190,000 |
|
|
|
190,000 |
|
| |
|
|
|
$ |
3,558,601 |
|
|
$ |
3,457,834 |
|
|
- |
Amount due to related parties, noncurrent |
| |
|
Nature |
|
June 30,
2026 |
|
|
December 31,
2025 |
|
| Mr.
Wellen Sham(2) |
|
Amount due to the related party |
|
$ |
574,773 |
|
|
$ |
— |
|
| |
|
|
|
$ |
574,773 |
|
|
$ |
— |
|
|
(1) |
The balance due to TP HK represented the payments made by TP HK on behalf of TP Holdings regarding the
office rental fee and employee salary expenses. The balance is interest free and is repayable on demand. |
|
(2)
|
The balance due to Mr. Wellen Sham, including
current and noncurrent, represented the promissory notes of $560,000
for extension of FLFV, promissory notes of $2,537,824
for the daily operation of the Company, other payable of $42,000
for payment of operating expenses on behalf of the Company and interest payable of $340,111.
The promissory notes issued to Mr. Wellen Sham bear interest rates ranging between 8%
and 10%.
On May 29, 2026, the Company and Mr. Wellen Sham executed allonges extending the maturity dates of certain promissory notes payable to
Mr. Sham. As of June 30, 2026, six of these notes, with aggregate principal amounts of $574,773,
had amended maturity dates ranging from July 25, 2027 through April 28, 2028 and were classified as amounts due to related parties, non-current.
On May 29, 2026, the Company granted Mr. and
Ms. Sham a first-priority security interest over substantially all of its assets – including the prepayment of approximately $13.1
million under the Forward Purchase Agreement, and pledged 100%
of the shares of TP NEV.
The balance due to Ms. Ling Houng Sham represented
promissory notes of $300,000
for extension of FLFV and interest payable of $42,652.
The promissory notes issued to Ms. Ling Houng Sham matured through June 2027 with interest rate of 8%. |
| |
|
| (3) |
In May and June 2024, FLFV issued three promissory notes to the FLFV Sponsor in exchange for an aggregated
loan of $190,000
from the FLFV Sponsor, among which $50,000
was payable on closing of the Business Combination, and $140,000
was payable on July 21, 2024. As of the date of these financial statements, the Company has not settled the promissory notes with FLFV
Sponsor. |
|