Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 10, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | CHINA PHARMA HOLDINGS, INC. | |
Trading Symbol | CPHI | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 47,339,557 | |
Amendment Flag | false | |
Entity Central Index Key | 0001106644 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-34471 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 75-1564807 | |
Entity Address, Address Line One | Second Floor, No. 17, Jinpan Road | |
Entity Address, Address Line Two | Haikou | |
Entity Address, City or Town | Hainan Province | |
Entity Address, Country | CN | |
Entity Address, Postal Zip Code | 570216 | |
City Area Code | 86 | |
Local Phone Number | 898-6681-1730 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 458,831 | $ 957,653 |
Banker’s acceptances | 53,736 | |
Trade accounts receivable, less allowance for doubtful accounts of $18,253,945 and $18,150,493, respectively | 444,271 | 501,892 |
Other receivables, less allowance for doubtful accounts of $29,968 and $22,320, respectively | 50,013 | 27,652 |
Advances to suppliers | 41,518 | 2,238 |
Inventory | 3,073,834 | 3,705,119 |
Prepaid expenses | 72,805 | 73,668 |
Total Current Assets | 4,141,272 | 5,321,958 |
Property, plant and equipment, net | 13,740,444 | 15,564,200 |
Operating lease right of use asset | 146,759 | 49,687 |
Intangible assets, net | 154,820 | 182,146 |
TOTAL ASSETS | 18,183,295 | 21,117,991 |
Current Liabilities: | ||
Trade accounts payable | 599,703 | 1,234,594 |
Accrued expenses | 227,416 | 177,359 |
Other payables | 1,733,128 | 2,748,208 |
Advances from customers | 420,039 | 719,786 |
Borrowings from related parties | 3,057,272 | 2,134,428 |
Operating lease liability | 82,851 | 52,070 |
Construction loan facility | 2,298,886 | |
Current portion of lines of credit | 4,332,809 | 2,038,345 |
Total Current Liabilities | 10,453,218 | 11,403,676 |
Non-current Liabilities: | ||
Lines of credit, net of current portion | 904,228 | |
Operating lease liability, net of current portion | 64,767 | |
Deferred tax liability | 810,462 | 805,556 |
Total Liabilities | 11,328,447 | 13,113,460 |
Commitments and Contingencies (Note 9) | ||
Stockholders’ Equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 95,000,000 shares authorized; 47,339,557 shares and 45,579,557 shares issued and outstanding, respectively | 47,340 | 45,580 |
Additional paid-in capital | 25,645,367 | 24,452,684 |
Retained deficit | (31,257,936) | (28,839,179) |
Accumulated other comprehensive income | 12,420,077 | 12,345,446 |
Total Stockholders’ Equity | 6,854,848 | 8,004,531 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 18,183,295 | $ 21,117,991 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, less allowance for doubtful accounts (in Dollars) | $ 18,253,945 | $ 18,150,493 |
Other receivables, less allowance for doubtful accounts (in Dollars) | $ 29,968 | $ 22,320 |
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 47,339,557 | 45,579,557 |
Common stock, shares outstanding | 47,339,557 | 45,579,557 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 1,978,627 | $ 2,400,667 | $ 6,752,557 | $ 7,935,345 |
Cost of revenue | 2,275,023 | 2,353,471 | 6,705,223 | 6,543,912 |
Gross profit | (296,396) | 47,196 | 47,334 | 1,391,433 |
Operating expenses: | ||||
Selling expenses | 134,292 | 654,090 | 958,105 | 1,707,827 |
General and administrative expenses | 301,970 | 290,586 | 1,040,726 | 1,001,590 |
Research and development expenses | 21,374 | 37,628 | 264,916 | 116,491 |
Bad debt (benefit) expense | 8,372 | 17,386 | (4,593) | 42,314 |
Total operating expenses | 466,008 | 999,690 | 2,259,154 | 2,868,222 |
Loss from operations | (762,404) | (952,494) | (2,211,820) | (1,476,789) |
Other income (expense): | ||||
Interest income | 638 | 3,665 | 1,623 | 5,263 |
Interest expense | (64,903) | (61,067) | (208,560) | (186,214) |
Net other expense | (64,265) | (57,402) | (206,937) | (180,951) |
Loss before income taxes | (826,669) | (1,009,896) | (2,418,757) | (1,657,740) |
Income tax expense | ||||
Net loss | (826,669) | (1,009,896) | (2,418,757) | (1,657,740) |
Other comprehensive income (loss) - foreign currency translation adjustment | (37,499) | 470,445 | 74,631 | 279,209 |
Comprehensive loss | $ (864,168) | $ (539,451) | $ (2,344,126) | $ (1,378,531) |
Loss per share: | ||||
Basic and diluted (in Dollars per share) | $ (0.02) | $ (0.02) | $ (0.05) | $ (0.04) |
Weighted average shares outstanding (in Shares) | 46,000,427 | 43,579,557 | 45,721,389 | 43,579,557 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) | Common Stock | Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive Income | Total |
Balance at Dec. 31, 2019 | $ 43,580 | $ 23,590,204 | $ (25,972,402) | $ 11,576,219 | $ 9,237,601 |
Balance (in Shares) at Dec. 31, 2019 | 43,579,557 | ||||
Net income (loss) | (660,897) | (660,897) | |||
Foreign currency translation adjustment | (197,032) | (197,032) | |||
Balance at Mar. 31, 2020 | $ 43,580 | 23,590,204 | (26,633,299) | 11,379,187 | 8,379,672 |
Balance (in Shares) at Mar. 31, 2020 | 43,579,557 | ||||
Net income (loss) | 13,053 | 13,053 | |||
Foreign currency translation adjustment | 5,796 | 5,796 | |||
Balance at Jun. 30, 2020 | $ 43,580 | 23,590,204 | (26,620,246) | 11,384,983 | 8,398,521 |
Balance (in Shares) at Jun. 30, 2020 | 43,579,557 | ||||
Net income (loss) | (1,009,896) | (1,009,896) | |||
Foreign currency translation adjustment | 470,445 | 470,445 | |||
Balance at Sep. 30, 2020 | $ 43,580 | 23,590,204 | (27,630,142) | 11,855,428 | 7,859,070 |
Balance (in Shares) at Sep. 30, 2020 | 43,579,557 | ||||
Balance at Dec. 31, 2020 | $ 45,580 | 24,452,684 | (28,839,179) | 12,345,446 | 8,004,531 |
Balance (in Shares) at Dec. 31, 2020 | 45,579,557 | ||||
Net income (loss) | (767,327) | (767,327) | |||
Foreign currency translation adjustment | (71,325) | (71,325) | |||
Balance at Mar. 31, 2021 | $ 45,580 | 24,452,684 | (29,606,506) | 12,274,121 | 7,165,879 |
Balance (in Shares) at Mar. 31, 2021 | 45,579,557 | ||||
Net income (loss) | (824,761) | (824,761) | |||
Foreign currency translation adjustment | 183,455 | 183,455 | |||
Balance at Jun. 30, 2021 | $ 45,580 | 24,452,684 | (30,431,267) | 12,457,576 | 6,524,573 |
Balance (in Shares) at Jun. 30, 2021 | 45,579,557 | ||||
Net income (loss) | (826,669) | (826,669) | |||
Foreign currency translation adjustment | (37,499) | (37,499) | |||
Stock option compensation | 15,243 | 15,243 | |||
Issuance of common stock in lieu of compensation | $ 1,760 | 1,177,440 | 1,179,200 | ||
Issuance of common stock in lieu of compensation (in Shares) | 1,760,000 | ||||
Balance at Sep. 30, 2021 | $ 47,340 | $ 25,645,367 | $ (31,257,936) | $ 12,420,077 | $ 6,854,848 |
Balance (in Shares) at Sep. 30, 2021 | 47,339,557 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (2,418,757) | $ (1,657,740) |
Depreciation and amortization | 2,377,104 | 1,978,363 |
Bad debt (benefit) expense | (4,593) | 42,314 |
Stock option compensation | 15,243 | |
Inventory write off | 148,386 | |
Changes in assets and liabilities: | ||
Trade accounts and other receivables | (151,872) | (366,385) |
Advances to suppliers | (39,352) | (103,701) |
Inventory | 756,090 | 561,139 |
Trade accounts payable | (643,797) | (399,363) |
Other payables and accrued expenses | 208,210 | (126,930) |
Change in bankers’ acceptance notes payable | (109,663) | |
Advances from customers | (304,787) | 119,199 |
Prepaid expenses | 6,399 | (314,361) |
Net Cash Used in Operating Activities | (51,726) | (377,128) |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (430,999) | (1,099,878) |
Net Cash Used in Investing Activities | (430,999) | (1,099,878) |
Cash Flows from Financing Activities: | ||
Payments of construction term loan | (2,317,879) | (2,145,389) |
Payments of line of credit | (2,441,499) | |
Borrowings and interest from related party | 1,172,244 | 162,090 |
Repayments to related party | (251,876) | (77,530) |
Proceeds from lines of credit | 3,816,774 | 2,695,087 |
Net Cash (Used In) Provided By Financing Activities | (22,236) | 634,258 |
Effect of Exchange Rate Changes on Cash | 6,139 | 4,472 |
Net Increase in Cash, Cash Equivalents and Restricted Cash | (498,822) | (838,276) |
Cash and Cash Equivalents at Beginning of Period | 957,653 | 1,184,887 |
Cash, Cash Equivalents and Restricted Cash at End of Period | 458,831 | 346,611 |
Supplemental Cash Flow Information: | ||
Cash paid for income taxes | ||
Cash paid for interest | 173,157 | 176,055 |
Supplemental Noncash Investing and Financing Activities: | ||
Accounts receivable collected with banker’s acceptances | 195,032 | 394,393 |
Inventory purchased with banker’s acceptances | 249,212 | $ 402,582 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 168,087 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations – Onny acquired 100% of the ownership in Helpson on May 25, 2005, by entering into an Equity Transfer Agreement with Helpson’s three former shareholders. The transaction was approved by the Commercial Bureau of Hainan Province on June 12, 2005 and Helpson received the Certificate of Approval for Establishment of Enterprises with Foreign Investment in the PRC on the same day. Helpson received its business license evidencing its Wholly Foreign Owned Enterprise (“WFOE”) status on June 21, 2005. Helpson is principally engaged in the development, manufacture and marketing of pharmaceutical products for human use in connection with a variety of high-incidence and high-mortality diseases and medical conditions prevalent in the PRC. All of its operations are conducted in the PRC, where its manufacturing facilities are located. Helpson manufactures pharmaceutical products in the form of dry powder injectables, liquid injectables, tablets, capsules, and cephalosporin oral solutions. The majority of its pharmaceutical products are sold on a prescription basis and all have been approved for at least one or more therapeutic indications by the National Medical Products Administration (the “NMPA”, formerly China Food and Drug Administration, or CFDA) based upon demonstrated safety and efficacy. Liquidity and Going Concern As of September 30, 2021, the Company had cash and cash equivalents of $0.5 million and an accumulated deficit of $31.3 million. The Company’s Chairperson, Chief Executive Officer and Interim Chief Financial Officer has advanced an aggregate of $1,702,705 at September 30, 2021 to provide working capital and enable the Company to make the required payments related to its construction loan facility. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to the production of its existing products, debt service costs and costs of selling and administrative costs. These conditions raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued. To alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, management plans to enhance the sales model of advance payment, and further strengthen its collection of accounts receivable. Further, the Company is currently exploring strategic alternatives to accelerate the launch of nutrition products. In addition, management believes that the Company’s existing fixed assets can serve as collateral to support additional bank loans. While the current plans will allow the Company to fund its operations in the next twelve months, there can be no assurance that the Company will be able to achieve its future strategic alternatives raising substantial doubt about its ability to continue as a going concern. Pursuant to the requirements of Accounting Standards Codification (ASC) 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Under ASC 205-40, the strategic alternatives being pursued by the Company cannot be considered probable at this time because none of the Company’s current plans have been finalized at the time of the issuance of these financial statements and the implementation of any such plan is not probable of being effectively implemented as none of the plans are entirely within the Company’s control. Accordingly, substantial doubt is deemed to exist about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. Consolidation and Basis of Presentation Helpson’s functional currency is the Chinese Renminbi. Helpson’s revenue and expenses are translated into United States dollars at the average exchange rate for the period. Assets and liabilities are translated at the exchange rate as of the end of the reporting period. Gains or losses from translating Helpson’s financial statements are included in accumulated other comprehensive income, which is a component of stockholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency of the entity that is party to the transaction are included in the results of operations. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated on consolidation. However, the results of operations included in such financial statements may not necessary be indicative of annual results. Such financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2021 (“2020 Annual Report”). Accounting Estimates The Company uses the same accounting policies in preparing its quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Loss Per Share The potentially dilutive common shares related to the option to purchase 65,000 shares of common stock are excluded from the computation of diluted net loss per share for all periods presented because the effect is anti-dilutive due to net losses of the Company. Reclassification Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326) In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 2 – INVENTORY Inventory consisted of the following: September 30, December 31, 2021 2020 Raw materials $ 1,836,288 $ 2,081,745 Work in process 442,022 662,999 Finished goods 795,524 960,375 Total Inventory $ 3,073,834 $ 3,705,119 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 3 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: September 30, December 31, 2021 2020 Permit of land use $ 434,310 $ 431,681 Building 10,085,357 10,024,303 Plant, machinery and equipment 29,607,584 29,018,708 Motor vehicle 331,668 329,660 Office equipment 273,616 259,175 Total 40,732,535 40,063,527 Less: accumulated depreciation (26,992,091 ) (24,499,327 ) Property, plant and equipment, net $ 13,740,444 $ 15,564,200 Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows: Asset Life - years Permit of land use 40 - 70 Building 20 - 49 Plant, machinery and equipment 5 - 10 Motor vehicle 5 - 10 Office equipment 3-5 Depreciation relating to office equipment was included in general and administrative expenses, while all other depreciation was included in cost of revenue. Depreciation expense was $966,956 and $664,400 for the three months ended September 30, 2021 and 2020, respectively and $2,348,606 and $1,951,986 for the nine months ended September 30, 2021 and 2020, respectively. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4 - INTANGIBLE ASSETS Intangible assets represent the cost of medical formulas approved for production by the NMPA. The Company did not obtain NMPA production approval for any new medical formulas during the nine months ended September 30, 2021 and 2020 and no costs were reclassified from advances to intangible assets during the nine months ended September 30, 2021 and 2020, respectively. Approved medical formulas are amortized from the date NMPA approval is obtained over their individually identifiable estimated useful life, which range from ten to thirteen years. It is at least reasonably possible that a change in the estimated useful lives of the medical formulas could occur in the near term due to changes in the demand for the drugs and medicines produced from these medical formulas. Amortization expense relating to intangible assets was $9,501 and $8,893 for the three months ended September 30, 2021 and 2020, respectively and $28,498 and $26,377 for the nine months ended September 30, 2021 and 2020, respectively which was included in the general and administrative expenses. Medical formulas typically do not have a residual value at the end of their amortization period. The Company evaluates each approved medical formula for impairment at the date of NMPA approval, when indications of impairment are present and also at the date of each financial statement. The Company’s evaluation is based on an estimated undiscounted net cash flow model, which considers currently available market data for the related drug and the Company’s estimated market share. If the carrying value of the medical formula exceeds the estimated future net cash flows, an impairment loss is recognized for the excess of the carrying value over the fair value of the medical formula, which is determined by the estimated discounted future net cash flows. No impairment loss was recognized during the nine months ended September 30, 2021 and 2020. Intangible assets consisted solely of NMPA approved medical formulas as follows: September 30, December 31, 2021 2020 Gross carrying amount $ 5,205,330 $ 5,173,818 Accumulated amortization (5,050,510 ) (4,991,672 ) Net carrying amount $ 154,820 $ 182,146 |
Other Payables
Other Payables | 9 Months Ended |
Sep. 30, 2021 | |
Other Payables [Abstract] | |
OTHER PAYABLES | NOTE 5 – OTHER PAYABLES Other Payables consisted of the following: September 30, December 31, 2021 2020 Compensation payable to officer 645,328 $ 1,815,990 Compensation and interest to related party $ 404,646 $ 382,486 Business taxes and other 683,154 549,732 Total Other Payables $ 1,733,128 $ 2,748,208 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS A member of the Company’s board of directors (“Board”) had previously advanced to the Company an aggregate amount of $1,354,567 as of September 30, 2021 and December 31, 2020 which is recorded as “Other payables – related parties” on the accompanying condensed consolidated balance sheets. The advances bear interest at a rate of 1.0% per year. Total interest expense for each of the three months ended September 30, 2021 and 2020 was $3,386 and $3,386, respectively and $10,159 and $10,159 for the nine months ended September 30, 2021, respectively. Compensation and interest payable to the board member is included in Other payables in the accompanying condensed consolidated balance sheet totaling $404,646 and $382,486 as of September 30, 2021 and December 31, 2020, respectively. The Company received advances totaling $1,147,192 and repaid $251,334 of the advances during the nine months ended September 30, 2021 from its Chairperson, Chief Executive Officer and Interim Chief Financial Officer. Total amounts owed were $1,702,705 and $779,861 and are recorded as Other payables – related parties on the accompanying condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively. On July 8, 2019 the Company entered into a loan agreement in exchange for cash of RMB 4,770,000 ($738,379) with its Chairperson, Chief Executive Officer and Interim Chief Financial Officer. The loan bears interest at a rate of 4.35% and is payable within one year of the loan agreement. The due date of the loan agreement was extended to July 10, 2021 and further extended to July 9, 2022 on identical terms. Total interest expense related to the loan for the three months ended September 30, 2021 and 2020 was $7,526 and $7,282, respectively and $22,576 and $21,846 for the nine months ended September 30, 2021 and 2020, respectively. Compensation payable to the Chairperson, Chief Executive Officer and Interim Chief Financial Officer is included in Other payables in the accompanying condensed consolidated balance sheet totaling $645,328 and $1,815,990 as of September 30, 2021 and December 31, 2020, respectively. As discussed more fully in Note 12, an aggregate of $1,179,200 of compensation was converted into a total of 1,760,000 shares of common stock at the market price of $0.67 per share from the Company’s 2010 Long-Term Incentive Plan, as amended. |
Banker's Acceptance Notes Payab
Banker's Acceptance Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Banker's Acceptance Notes Payable [Abstract] | |
BANKER'S ACCEPTANCE NOTES PAYABLE | NOTE 7 – BANKER’S ACCEPTANCE NOTES PAYABLE In April 2016, the Company entered into a Banker’s Acceptance Note Agreement with a bank. Pursuant to the terms of the agreement, the Company can issue banker’s acceptance notes to any third party as payment of amounts owing to that third party. The Company is required to deposit with the bank an amount equal to the amounts represented by the banker’s acceptance notes issued to the third parties. The maximum amount that the Company can issue under this agreement is limited to the lesser of RMB30,000,000 (approximately $4.5 million) or the amount of cash available to deposit against the banker’s acceptance notes. In addition, the agreement calls for the payment of fees equal to 0.05% of the note amount to the bank. As of September 30, 2021 and December 31, 2020, the Company had no outstanding banker’s acceptance notes payable. |
Construction Loan Facility and
Construction Loan Facility and Lines of Credit | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
CONSTRUCTION LOAN FACILITY AND LINES OF CREDIT | NOTE 8 – CONSTRUCTION LOAN FACILITY AND LINES OF CREDIT The Company obtained a construction loan facility, dated June 21, 2013, in the aggregate amount of RMB 80,000,000 (approximately $13 million). The loan facility is for an eight-year term, which commenced on July 11, 2013, the initial draw-down date. The proceeds of the loan were used for and are collateralized by the construction of the Company’s new production facility and the included production line equipment and machinery. The loan bears interest based upon 110% of the PRC government’s eight-year term rate effective on the actual draw-down date, subject to annual adjustments based on 110% of the floating rate for the same type of loan on the anniversary from the draw-down date and its subsequent anniversary dates. The interest rate has remained at 5.39% on each of the July 10 anniversary dates since inception. The loan required interest only payments for the first two years. Beginning July 11, 2015, the principal was due in at least two (2) annual installments with the first annual payment being due within six month period after July 10, 2015 and the second annual payment being due July 10, 2016 and each following year over the next five years through July 11, 2021 on the identical terms as described above for 2015. The Company has made all required payments due under the loan. During the nine months ended September 30, 2021, the Company made the remaining principal payments due under the loan in the amount of $2,317,879 (RMB 15,000,000). On September 18, 2021 the Company entered into a new line of credit with the same bank as discussed below. Lines of Credit In April 2020, the Company obtained a line of credit from Postal Savings Bank of China for an aggregate amount of RMB 10,000,000 (approximately $1.4 million), of which RMB 5,000,000 (approximately $0.7 million) was advanced in April 2020, and RMB 3,000,000 (approximately $0.4 million) was advanced in July 2020. The loan bears interest at a rate of 4.25% per annum. Advances on the line of credit are due two years from the date of the advance. A third party company has guaranteed the loan as being a second priority creditor in the collateral in certain land use rights and buildings next to the creditor of the construction loan facility as discussed above. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit. The Company has an additional RMB 2,000,000 (approximately $0.3 million) available under the line, subject to a risk review and approval by the third party guarantee company. Total interest expense under this facility for the three months ended September 30, 2021 and 2020 was $10,907 and $10,420, respectively. Total interest expense under this facility for the Nine months ended September 30, 2021 and 2020 was $34,424 and $15,410, respectively. The Company repaid RMB 1,100,000 (approximately $0.17 million) during the nine months ended September 30, 2021 as per the repayment schedule. On June 30, 2020 the Company obtained a line of credit with Bank of Communications for an aggregate amount of RMB 8,500,000 (approximately $1.2 million), all of which has been advanced. The loan bears interest at the rate of 4.05% per annum. The line of credit is due in one year on the anniversary date of the line of credit. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. On June 21, 2021 the Company paid the balance in full. On June 25, 2021 the Company entered into a new loan bearing an interest rate of 4.17%. The line of credit is due in one year on the anniversary date of the line of credit. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. Total interest expense for the three months ended September 30, 2021 and 2020 was $13,390 and $11,372, respectively. Total interest expense for the nine months ended September 30, 2021 and 2020 was $40,281 and $11,372, respectively. The Company obtained a line of credit of RMB 3,200,000 (approximately $0.5 million) from China CITIC Bank in September 2020 and obtained an advance of RMB 2,343,340 (approximately $0.3 million), and the remaining of RMB 856,660 (approximately $0.1 million) in October 2020 under this line. The loan bears interest at the rate of 4.50% per annum. In September, 2021 the Company repaid the line of credit in full, Also in September, 2021 the Company entered into a new line a credit in the amount of RMB 3,200,000 ((approximately $0.8 million) on the same terms. The line of credit is due on September 2, 2022. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. Total interest for the three months ended September, 2021 and 2020 was $5,440 and $377, respectively. Total interest for the nine months ended September, 2021 and 2020 was $16,689 and $377, respectively. On July 12, 2021, the Company obtained a short-term loan of RMB 3 million (approximately US$460,000) from Haikou HaiHongXin microfinance Co., Ltd., with a monthly interest rate of 1.5%. The company paid off the loan in September 2021. The total interest paid on this loan is RMB103550 (approximately USD 16,000) for the three and nine months ended September 30, 2021. This loan is guaranteed by Haikou Financing Guarantee Company. On September 18, 2021 the Company obtained a line of credit for RMB 10,000,000 (approximately $1.54 million) with Bank of China. The loan bears interest at the rate of 3.85% per annum. The line of credit is due September 18, 2022. The loan is collateralized by the Company’s new production facility and the included production line equipment and machinery. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit. Total interest for the three months ended September, 2021 and 2020 was $5,697 and $0, respectively. Total interest for the nine months ended September, 2021 and 2020 was $5,697 and $0, respectively. Principal payments required for the remaining terms of the loan facility and lines of credit as of September 30, 2021 are as follows: Year Lines of Credit Construction Loan Facility Total 2022 $ 4,332,809 $ - $ 4,332,809 $ 4,332,809 $ - $ 4,332,809 Fair Value of Construction Loan Facility |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
LEASES | NOTE 9 - LEASES The Company has leases for certain office and production facilities in the PRC which are classified as operating leases. The leases contain payment terms for fixed amounts. Options to extend are recognized as part of the lease liabilities and recognized as right to use assets when management estimates to renew the lease. There are no residual value guarantees, no variable lease payments, and no restrictions or covenants imposed by leases. The discount rate used in measuring the lease liabilities and right of use assets was determined by reviewing the Company’s incremental borrowing rate at the initial measurement date. For the three months ended September 30, 2021 and 2020, operating lease cost was $22,195 and $23,127, respectively and cash paid for amounts included in the measurement of lease liabilities for operating cash flows from operating leases was $23,327 and $24,581, respectively. For the nine months ended September 30, 2021 and 2020, operating lease cost was $70,955 and $69,382, respectively and cash paid for amounts included in the measurement of lease liabilities for operating cash flows from operating leases was $75,154 and $73,745, respectively. As of September 30, 2021 and December 31, 2020, the Company reported operating lease right of use assets of $146,759 and $70,733, respectively and operating use liabilities of $147,618 and $73,690, respectively. As of September 30, 2021, its operating leases had a weighted average remaining lease term of 1.73 years and a weighted average discount rate of 4.75%. Minimum lease payments for the Company’s operating lease liabilities were as follows for the twelve month periods ended September 30: 2022 $ 88,075 2023 66,056 Total undiscounted cash flows 154,131 Less: Imputed interest (6,513 ) 147,618 Less: Operating lease liabilities, current portion (82,851 ) Operating lease liabilities, net of current portion $ 64,767 The Company has leases with terms less than one year for certain provincial sales offices that are not material. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 - INCOME TAXES Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect of a change in tax laws or rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Liabilities are established for uncertain tax positions expected to be taken in income tax returns when such positions are judged to meet the “more-likely-than-not” threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax positions are included as a component of other expenses. Through December 31, 2020, the Company has not identified any uncertain tax positions that it has taken. U.S. income tax returns for the years ended December 31, 2017 through December 31, 2020 and the Chinese income tax return for the year ended December 31, 2020 are open for possible examination. Under the current tax law in the PRC, the Company is and will be subject to the enterprise income tax rate of 25%. There was no provision for income taxes for the three and nine months ended September 30, 2021 and 2020, respectively due to continued net losses of the Company. As of September 30, 2021, the Company had net operating loss carryforwards for PRC tax purposes of approximately $40.4 million which are available to offset any future taxable income through 2026. Approximately $20.1 million of these carryforwards will expire in December 2021. The Company also has net operating losses for United States federal income tax purposes of approximately $7.0 million of which $5.1 million is available to offset future taxable income, if any, through 2039, and $1.9 million are available for carryforward indefinitely subject to a limitation of 80% of taxable income for each tax year. U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those differences become deductible or tax loss carry forwards are utilized. Management considers projected future taxable income and tax planning strategies in making this assessment. Based upon an assessment of the level of historical taxable income and projections for future taxable income over the periods on which the deferred tax assets are deductible or can be utilized, management believes it is not likely for the Company to realize all benefits of the deferred tax assets as of September 30, 2021 and December 31, 2020. Therefore, the Company provided for a valuation allowance against its deferred tax assets of $28,412,653 and $27,666,557 as of September 30, 2021 and December 31, 2020, respectively. The Company also incurred various other taxes, comprised primarily of business taxes, value-added taxes, urban construction taxes, education surcharges and others. Any unpaid amounts are reflected on the balance sheets as accrued taxes payable. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 11 – FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, a hierarchy has been established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; and Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. The Company uses fair value to measure the value of the banker’s acceptance notes it holds at September 30, 2021 and December 31, 2020. The banker’s acceptance notes are recorded at cost which approximates fair value. The Company held the following assets and liabilities recorded at fair value: Fair Value Measurements at Description September 30, 2021 Level 1 Level 2 Level 3 Banker’s acceptance notes $ - $ - $ - $ - Total $ - $ - $ - $ - Fair Value Measurements at Description December 31, 2020 Level 1 Level 2 Level 3 Banker’s acceptance notes $ 53,736 $ - $ 53,736 $ - Total $ 53,736 $ - $ 53,736 $ - |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 12 - STOCKHOLDERS’ EQUITY The Company is authorized to issue 95,000,000 shares of common stock, $0.001 par value, and 5,000,000 shares of preferred stock, $0.001 par value. The preferred stock may be issued in series with such designations, preferences, stated values, rights, qualifications or limitations as determined solely by the Company’s Board. According to relevant PRC laws, companies registered in the PRC, including the Company’s PRC subsidiary, Helpson, are required to allocate at least 10% of their after tax income, as determined under the accounting standards and regulations in the PRC, to statutory surplus reserve accounts until the reserve account balances reach 50% of the company’s registered capital prior to their remittance of funds out of the PRC. Allocations to these reserves and funds can only be used for specific purposes and are not transferrable to the parent company in the form of loans, advances or cash dividends. The amount designated for general and statutory capital reserves is $8,145,000 at September 30, 2021 and December 31, 2020. 2010 Incentive Plan On November 12, 2010, the Company’s Board adopted the Company’s 2010 Incentive Plan (the “Plan”), which was then approved by stockholders on December 22, 2010. On October 17, 2019, the Board of Directors approved the First Amendment to the 2010 Incentive Plan (the “Amendment”), pursuant to which the term of the 2010 Incentive Plan was extended to December 31, 2029. The Amendment was adopted by the shareholders on December 19, 2019. The Plan gave the Company the ability to grant stock options, restricted stock, stock appreciation rights and performance units to its employees, directors and consultants, or those who will become employees, directors and consultants of the Company and/or its subsidiaries. The Plan currently allows for equity awards of up to 4,000,000 shares of common stock. Through September 30, 2021, there were 3,935,000 shares of stock and stock options granted and outstanding under the Plan. A total of 65,000 options were outstanding as of September 30, 2021 under the Plan. As such, there are no additional shares available for issuance under the Plan. On September 9, 2021 the Company issued an aggregate of 1,760,000 fully vested shares of common stock at the price of $0.67, representing the closing market price on that date to its Chairperson, Chief Executive Officer and Interim Chief Financial Officer under the Plan, as amended, to partially offset certain unpaid cash compensation totaling $1,179,200. Also on September 9, 2021 the Company issued an option to purchase 65,000 shares of common stock at an exercise price at $1.47 per share, under the Plan. The Option vests immediately and expires on September 9, 2024. As of September 30, 2021, there was no remaining unrecognized compensation expense related to stock options or restricted stock grants. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 13 – REVENUE The following table summarizes the Company’s revenues disaggregated by revenue source and geography based on the Company’s PRC based business locations: For the Three Months For the Nine Months 2021 2020 2021 2020 Domestic Pharmaceuticals $ 1,978,627 $ 2,400,667 $ 6,752,557 $ 6,234,237 Export Medical Test Kits - - - 1,701,108 $ 1,978,627 $ 2,400,667 $ 6,752,557 $ 7,935,345 There were no sales of medical test kits within the PRC. |
Risks & Uncertainties
Risks & Uncertainties | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
RISKS & UNCERTAINTIES | NOTE 14 – RISKS & UNCERTAINTIES Current vulnerability due to certain concentrations For the nine months ended September 30, 2021, no customer accounted for more than 10% of sales and three customers accounted for 52.2%, 11.2% and 10.2% of accounts receivable. Three suppliers accounted for 27.3%, 16.1%and 13.0% of raw material purchases, and three different products accounted for 29.2%, 19.1% and 14.7% of revenue. For the nine months ended September 30, 2020, one customer accounted for 21.6% of sales and two customers respectively accounted for 50.2% and 10.8% of accounts receivable. Two suppliers respectively accounted for 19.5% and 14.8% of raw material purchases, and three different products respectively accounted for 29.5%, 19.1% and 16.9% of revenue. Nature of Operations Impact from the New Coronavirus Global Pandemic (“COVID-19”) Economic environment - In addition, all of the Company’s revenue is denominated in the PRC’s currency of Renminbi (RMB), which must be converted into other currencies before remittance out of the PRC. Both the conversion of RMB into foreign currencies and the remittance of foreign currencies abroad require approval of the PRC government. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations – Onny acquired 100% of the ownership in Helpson on May 25, 2005, by entering into an Equity Transfer Agreement with Helpson’s three former shareholders. The transaction was approved by the Commercial Bureau of Hainan Province on June 12, 2005 and Helpson received the Certificate of Approval for Establishment of Enterprises with Foreign Investment in the PRC on the same day. Helpson received its business license evidencing its Wholly Foreign Owned Enterprise (“WFOE”) status on June 21, 2005. Helpson is principally engaged in the development, manufacture and marketing of pharmaceutical products for human use in connection with a variety of high-incidence and high-mortality diseases and medical conditions prevalent in the PRC. All of its operations are conducted in the PRC, where its manufacturing facilities are located. Helpson manufactures pharmaceutical products in the form of dry powder injectables, liquid injectables, tablets, capsules, and cephalosporin oral solutions. The majority of its pharmaceutical products are sold on a prescription basis and all have been approved for at least one or more therapeutic indications by the National Medical Products Administration (the “NMPA”, formerly China Food and Drug Administration, or CFDA) based upon demonstrated safety and efficacy. |
Liquidity and Going Concern | Liquidity and Going Concern As of September 30, 2021, the Company had cash and cash equivalents of $0.5 million and an accumulated deficit of $31.3 million. The Company’s Chairperson, Chief Executive Officer and Interim Chief Financial Officer has advanced an aggregate of $1,702,705 at September 30, 2021 to provide working capital and enable the Company to make the required payments related to its construction loan facility. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to the production of its existing products, debt service costs and costs of selling and administrative costs. These conditions raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued. To alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, management plans to enhance the sales model of advance payment, and further strengthen its collection of accounts receivable. Further, the Company is currently exploring strategic alternatives to accelerate the launch of nutrition products. In addition, management believes that the Company’s existing fixed assets can serve as collateral to support additional bank loans. While the current plans will allow the Company to fund its operations in the next twelve months, there can be no assurance that the Company will be able to achieve its future strategic alternatives raising substantial doubt about its ability to continue as a going concern. Pursuant to the requirements of Accounting Standards Codification (ASC) 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Under ASC 205-40, the strategic alternatives being pursued by the Company cannot be considered probable at this time because none of the Company’s current plans have been finalized at the time of the issuance of these financial statements and the implementation of any such plan is not probable of being effectively implemented as none of the plans are entirely within the Company’s control. Accordingly, substantial doubt is deemed to exist about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation Helpson’s functional currency is the Chinese Renminbi. Helpson’s revenue and expenses are translated into United States dollars at the average exchange rate for the period. Assets and liabilities are translated at the exchange rate as of the end of the reporting period. Gains or losses from translating Helpson’s financial statements are included in accumulated other comprehensive income, which is a component of stockholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency of the entity that is party to the transaction are included in the results of operations. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated on consolidation. However, the results of operations included in such financial statements may not necessary be indicative of annual results. Such financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2021 (“2020 Annual Report”). |
Accounting Estimates | Accounting Estimates The Company uses the same accounting policies in preparing its quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. |
Loss Per Share | Loss Per Share The potentially dilutive common shares related to the option to purchase 65,000 shares of common stock are excluded from the computation of diluted net loss per share for all periods presented because the effect is anti-dilutive due to net losses of the Company. |
Reclassification | Reclassification |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326) In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption. |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | September 30, December 31, 2021 2020 Raw materials $ 1,836,288 $ 2,081,745 Work in process 442,022 662,999 Finished goods 795,524 960,375 Total Inventory $ 3,073,834 $ 3,705,119 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | September 30, December 31, 2021 2020 Permit of land use $ 434,310 $ 431,681 Building 10,085,357 10,024,303 Plant, machinery and equipment 29,607,584 29,018,708 Motor vehicle 331,668 329,660 Office equipment 273,616 259,175 Total 40,732,535 40,063,527 Less: accumulated depreciation (26,992,091 ) (24,499,327 ) Property, plant and equipment, net $ 13,740,444 $ 15,564,200 |
Schedule of estimated useful lives of the assets | Asset Life - years Permit of land use 40 - 70 Building 20 - 49 Plant, machinery and equipment 5 - 10 Motor vehicle 5 - 10 Office equipment 3-5 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | September 30, December 31, 2021 2020 Gross carrying amount $ 5,205,330 $ 5,173,818 Accumulated amortization (5,050,510 ) (4,991,672 ) Net carrying amount $ 154,820 $ 182,146 |
Other Payables (Tables)
Other Payables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Payables [Abstract] | |
Schedule of other payables | September 30, December 31, 2021 2020 Compensation payable to officer 645,328 $ 1,815,990 Compensation and interest to related party $ 404,646 $ 382,486 Business taxes and other 683,154 549,732 Total Other Payables $ 1,733,128 $ 2,748,208 |
Construction Loan Facility an_2
Construction Loan Facility and Lines of Credit (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of principal payments | Year Lines of Credit Construction Loan Facility Total 2022 $ 4,332,809 $ - $ 4,332,809 $ 4,332,809 $ - $ 4,332,809 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Text Block [Abstract] | |
Schedule of operating lease liabilities | 2022 $ 88,075 2023 66,056 Total undiscounted cash flows 154,131 Less: Imputed interest (6,513 ) 147,618 Less: Operating lease liabilities, current portion (82,851 ) Operating lease liabilities, net of current portion $ 64,767 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities recorded at fair value | Fair Value Measurements at Description September 30, 2021 Level 1 Level 2 Level 3 Banker’s acceptance notes $ - $ - $ - $ - Total $ - $ - $ - $ - Fair Value Measurements at Description December 31, 2020 Level 1 Level 2 Level 3 Banker’s acceptance notes $ 53,736 $ - $ 53,736 $ - Total $ 53,736 $ - $ 53,736 $ - |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Ssdule of revenues | For the Three Months For the Nine Months 2021 2020 2021 2020 Domestic Pharmaceuticals $ 1,978,627 $ 2,400,667 $ 6,752,557 $ 6,234,237 Export Medical Test Kits - - - 1,701,108 $ 1,978,627 $ 2,400,667 $ 6,752,557 $ 7,935,345 |
Organization and Significant _2
Organization and Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2021 | May 25, 2005 |
Organization and Significant Accounting Policies (Details) [Line Items] | ||
Cash and cash equivalents | $ 500,000 | |
Accumulated deficit | $ 31,300,000 | |
Purchase of common stock | 65,000 | |
Management [Member] | ||
Organization and Significant Accounting Policies (Details) [Line Items] | ||
Working capital | $ 1,702,705 | |
Subsidiaries [Member] | ||
Organization and Significant Accounting Policies (Details) [Line Items] | ||
Equity method investment, ownership percentage | 100.00% | |
Subsidiaries One [Member] | ||
Organization and Significant Accounting Policies (Details) [Line Items] | ||
Equity method investment, ownership percentage | 100.00% | |
Subsidiaries Three [Member] | ||
Organization and Significant Accounting Policies (Details) [Line Items] | ||
Equity method investment, ownership percentage | 100.00% |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of inventory - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of inventory [Abstract] | ||
Raw materials | $ 1,836,288 | $ 2,081,745 |
Work in process | 442,022 | 662,999 |
Finished goods | 795,524 | 960,375 |
Total Inventory | $ 3,073,834 | $ 3,705,119 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expanse | $ 966,956 | $ 664,400 | $ 2,348,606 | $ 1,951,986 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Details) - Schedule of property, plant and equipment - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of property, plant and equipment [Abstract] | ||
Permit of land use | $ 434,310 | $ 431,681 |
Building | 10,085,357 | 10,024,303 |
Plant, machinery and equipment | 29,607,584 | 29,018,708 |
Motor vehicle | 331,668 | 329,660 |
Office equipment | 273,616 | 259,175 |
Total | 40,732,535 | 40,063,527 |
Less: accumulated depreciation | (26,992,091) | (24,499,327) |
Property, plant and equipment, net | $ 13,740,444 | $ 15,564,200 |
Property, Plant and Equipment_4
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets | 9 Months Ended |
Sep. 30, 2021 | |
Minimum [Member] | Permit Of Land Use [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 40 years |
Minimum [Member] | Building [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 20 years |
Minimum [Member] | Plant, Machinery and Equipment [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 5 years |
Minimum [Member] | Motor Vehicle [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 5 years |
Minimum [Member] | Office Equipment [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 3 years |
Maximum [Member] | Permit Of Land Use [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 70 years |
Maximum [Member] | Building [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 49 years |
Maximum [Member] | Plant, Machinery and Equipment [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 10 years |
Maximum [Member] | Motor Vehicle [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 10 years |
Maximum [Member] | Office Equipment [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 5 years |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible assets useful life, description | Approved medical formulas are amortized from the date NMPA approval is obtained over their individually identifiable estimated useful life, which range from ten to thirteen years. | |||
Amortization expense relating to intangible assets | $ 9,501 | $ 8,893 | $ 28,498 | $ 26,377 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of intangible assets [Abstract] | ||
Gross carrying amount | $ 5,205,330 | $ 5,173,818 |
Accumulated amortization | (5,050,510) | (4,991,672) |
Net carrying amount | $ 154,820 | $ 182,146 |
Other Payables (Details) - Sche
Other Payables (Details) - Schedule of other payables - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of other payables [Abstract] | ||
Compensation payable to officer | $ 645,328 | $ 1,815,990 |
Compensation and interest to related party | 404,646 | 382,486 |
Business taxes and other | 683,154 | 549,732 |
Total Other Payables | $ 1,733,128 | $ 2,748,208 |
Related Party Transactions (Det
Related Party Transactions (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Jul. 08, 2019USD ($) | Jul. 08, 2019CNY (¥) | |
Related Party Transactions (Details) [Line Items] | |||||||
Advance received | $ 1,354,567 | $ 1,354,567 | $ 1,354,567 | ||||
Interest rate | 1.00% | 1.00% | |||||
Interest expense | $ 3,386 | $ 3,386 | $ 10,159 | $ 10,159 | |||
Other payables | 404,646 | 404,646 | 382,486 | ||||
Borrowings from related parties | 1,702,705 | 1,702,705 | 779,861 | ||||
Other payables | 645,328 | 645,328 | $ 1,815,990 | ||||
Aggregate Note payable | 1,179,200 | 1,179,200 | |||||
Compensation converted | 1,760,000 | ||||||
Chief Executive Officer [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Advance received | 1,147,192 | 1,147,192 | |||||
Chief Financial Officer [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Repaid advance | $ 251,334 | $ 251,334 | |||||
Market price per share (in Dollars per share) | $ / shares | $ 0.67 | $ 0.67 | |||||
Management [Member] | |||||||
Related Party Transactions (Details) [Line Items] | |||||||
Interest rate | 4.35% | 4.35% | |||||
Interest expense | $ 7,526 | $ 7,282 | $ 22,576 | $ 21,846 | |||
Loan agreement to borrow cash | $ (738,379) | ¥ 4,770,000 |
Banker's Acceptance Notes Pay_2
Banker's Acceptance Notes Payable (Details) - 1 months ended Apr. 30, 2016 $ in Millions | USD ($) | CNY (¥) |
Banker's Acceptance Notes Payable (Details) [Line Items] | ||
Maximum amount of agreement | $ | $ 4.5 | |
Agreement payments fees, description | In addition, the agreement calls for the payment of fees equal to 0.05% of the note amount to the bank. | |
RMB [Member] | ||
Banker's Acceptance Notes Payable (Details) [Line Items] | ||
Maximum amount of agreement | ¥ | ¥ 30,000,000 |
Construction Loan Facility an_3
Construction Loan Facility and Lines of Credit (Details) | Sep. 18, 2021 | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Apr. 30, 2021 | Sep. 30, 2021CNY (¥) | Jul. 12, 2021USD ($) | Jul. 12, 2021CNY (¥) | Jun. 25, 2021 | Jun. 30, 2020CNY (¥) | Jun. 21, 2013USD ($) | Jun. 21, 2013CNY (¥) |
Construction Loan Facility and Lines of Credit (Details) [Line Items] | ||||||||||||||
Line of credit amount | $ 1,200,000 | ¥ 8,500,000 | $ 13,000,000 | ¥ 80,000,000 | ||||||||||
Description of loan interest rates | The loan bears interest based upon 110% of the PRC government’s eight-year term rate effective on the actual draw-down date, subject to annual adjustments based on 110% of the floating rate for the same type of loan on the anniversary from the draw-down date and its subsequent anniversary dates. The interest rate has remained at 5.39% on each of the July 10 anniversary dates since inception. The loan required interest only payments for the first two years. Beginning July 11, 2015, the principal was due in at least two (2) annual installments with the first annual payment being due within six month period after July 10, 2015 and the second annual payment being due July 10, 2016 and each following year over the next five years through July 11, 2021 on the identical terms as described above for 2015. | |||||||||||||
Principal Payments | $ 2,317,879 | $ 2,317,879 | ¥ 15,000,000 | |||||||||||
Lines of credit description | the Company obtained a line of credit from Postal Savings Bank of China for an aggregate amount of RMB 10,000,000 (approximately $1.4 million), of which RMB 5,000,000 (approximately $0.7 million) was advanced in April 2020, and RMB 3,000,000 (approximately $0.4 million) was advanced in July 2020. The loan bears interest at a rate of 4.25% per annum. Advances on the line of credit are due two years from the date of the advance. A third party company has guaranteed the loan as being a second priority creditor in the collateral in certain land use rights and buildings next to the creditor of the construction loan facility as discussed above. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit. The Company has an additional RMB 2,000,000 (approximately $0.3 million) available under the line, subject to a risk review and approval by the third party guarantee company. Total interest expense under this facility for the three months ended September 30, 2021 and 2020 was $10,907 and $10,420, respectively. Total interest expense under this facility for the Nine months ended September 30, 2021 and 2020 was $34,424 and $15,410, respectively. The Company repaid RMB 1,100,000 (approximately $0.17 million) during the nine months ended September 30, 2021 as per the repayment schedule. | |||||||||||||
Interest rates description | The loan bears interest at the rate of 4.05% per annum. | |||||||||||||
Interest rate | 1.00% | 1.00% | 1.00% | |||||||||||
Total interest expense | $ 64,903 | $ 61,067 | $ 208,560 | $ 186,214 | ||||||||||
Short-term loan | $ 460,000 | ¥ 3,000,000 | ||||||||||||
Interest amount | 16,000 | 16,000 | ¥ 103,550 | |||||||||||
Bank of China [Member] | ||||||||||||||
Construction Loan Facility and Lines of Credit (Details) [Line Items] | ||||||||||||||
Line of credit description | On September 18, 2021 the Company obtained a line of credit for RMB 10,000,000 (approximately $1.54 million) with Bank of China. The loan bears interest at the rate of 3.85% per annum. The line of credit is due September 18, 2022. The loan is collateralized by the Company’s new production facility and the included production line equipment and machinery. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit. Total interest for the three months ended September, 2021 and 2020 was $5,697 and $0, respectively. Total interest for the nine months ended September, 2021 and 2020 was $5,697 and $0, respectively. | |||||||||||||
Haikou HaiHongXin microfinance Co., Ltd., [Member] | ||||||||||||||
Construction Loan Facility and Lines of Credit (Details) [Line Items] | ||||||||||||||
Interest rate | 1.50% | 1.50% | ||||||||||||
Bank of Communications [Member] | ||||||||||||||
Construction Loan Facility and Lines of Credit (Details) [Line Items] | ||||||||||||||
Interest rate | 4.17% | |||||||||||||
Total interest expense | $ 13,390 | $ 11,372 | $ 40,281 | $ 11,372 | ||||||||||
China CITIC Bank [Member] | ||||||||||||||
Construction Loan Facility and Lines of Credit (Details) [Line Items] | ||||||||||||||
Line of credit, description | The Company obtained a line of credit of RMB 3,200,000 (approximately $0.5 million) from China CITIC Bank in September 2020 and obtained an advance of RMB 2,343,340 (approximately $0.3 million), and the remaining of RMB 856,660 (approximately $0.1 million) in October 2020 under this line. The loan bears interest at the rate of 4.50% per annum. In September, 2021 the Company repaid the line of credit in full, Also in September, 2021 the Company entered into a new line a credit in the amount of RMB 3,200,000 ((approximately $0.8 million) on the same terms. The line of credit is due on September 2, 2022. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. Total interest for the three months ended September, 2021 and 2020 was $5,440 and $377, respectively. Total interest for the nine months ended September, 2021 and 2020 was $16,689 and $377, respectively. |
Construction Loan Facility an_4
Construction Loan Facility and Lines of Credit (Details) - Schedule of principal payments | Sep. 30, 2021USD ($) |
Debt Instrument [Line Items] | |
2022 | $ 4,332,809 |
Total | 4,332,809 |
Lines of Credit [Member] | |
Debt Instrument [Line Items] | |
2022 | 4,332,809 |
Total | 4,332,809 |
Construction Loan Facility [Member] | |
Debt Instrument [Line Items] | |
2022 | |
Total |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Leases (Textual) | |||||
Operating lease cost | $ 22,195 | $ 23,127 | $ 70,955 | $ 69,382 | |
Cash flows from operating leases | 23,327 | $ 24,581 | 75,154 | $ 73,745 | |
Operating lease right of use assets | 146,759 | 146,759 | $ 70,733 | ||
Operating leases liabilities | $ 147,618 | $ 147,618 | $ 73,690 | ||
Weighted average remaining lease term | 1 year 8 months 23 days | ||||
Weighted average discount rate | 4.75% |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating lease liabilities | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Schedule of operating lease liabilities [Abstract] | |
2022 | $ 88,075 |
2023 | 66,056 |
Total undiscounted cash flows | 154,131 |
Less: Imputed interest | (6,513) |
Total | 147,618 |
Less: Operating lease liabilities, current portion | (82,851) |
Operating lease liabilities, net of current portion | $ 64,767 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Enterprise income tax rate | 25.00% | |
Net operating loss carryforwards for PRC tax | $ 40,400,000 | |
Net operating loss expiration, description | Approximately $20.1 million of these carryforwards will expire in December 2021. The Company also has net operating losses for United States federal income tax purposes of approximately $7.0 million of which $5.1 million is available to offset future taxable income, if any, through 2039, and $1.9 million are available for carryforward indefinitely subject to a limitation of 80% of taxable income for each tax year. | |
Description of federal corporate income tax rate | The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. | |
Valuation allowance for deferred tax assets | $ 28,412,653 | $ 27,666,557 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value [Line Items] | ||
Banker’s acceptance notes | $ 53,736 | |
Total | 53,736 | |
Level 1 [Member] | ||
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value [Line Items] | ||
Banker’s acceptance notes | ||
Total | ||
Level 2 [Member] | ||
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value [Line Items] | ||
Banker’s acceptance notes | 53,736 | |
Total | 53,736 | |
Level 3 [Member] | ||
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value [Line Items] | ||
Banker’s acceptance notes | ||
Total |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Sep. 09, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Stockholders' Equity (Details) [Line Items] | |||
Common stock, shares authorized | 95,000,000 | 95,000,000 | |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
After tax net income, percentage | 10.00% | ||
Reserve account balances, percentage | 50.00% | ||
General and statutory capital reserves amount (in Dollars) | $ 8,145,000 | $ 8,145,000 | |
Total option outstanding | 65,000 | ||
Purchase of common stock | 65,000 | ||
Exercise price (in Dollars per share) | $ 1.47 | ||
Fair value of options granted (in Dollars) | $ 15,243 | ||
Market price (in Dollars per share) | $ 0.67 | ||
Volatility rate | 118.40% | ||
Risk free interest rate | 0.75% | ||
Expected life | 1 year 6 months | ||
Common Stock [Member] | |||
Stockholders' Equity (Details) [Line Items] | |||
Aggregate of common stock | 1,760,000 | ||
Price per share (in Dollars per share) | $ 0.67 | ||
Total unpaid cash compensation (in Dollars) | $ 1,179,200 | ||
2010 Incentive Plan [Member] | |||
Stockholders' Equity (Details) [Line Items] | |||
Common stock issued | 4,000,000 | ||
Stock granted and outstanding | 3,935,000 |
Revenue (Details) - Schedule of
Revenue (Details) - Schedule of revenues - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||||
Revenue | $ 1,978,627 | $ 2,400,667 | $ 6,752,557 | $ 7,935,345 |
Domestic Pharmaceuticals [Member] | ||||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||||
Revenue | 1,978,627 | 2,400,667 | 6,752,557 | 6,234,237 |
Export Medical Test Kits [Member] | ||||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||||
Revenue | $ 1,701,108 |
Risks & Uncertainties (Details)
Risks & Uncertainties (Details) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Sales Revenue, Net [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 10.00% | 21.60% |
Number of customers | 3 | 1 |
Accounts Receivable [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Number of customers | 2 | |
Raw Material Purchases [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Number of suppliers | 3 | 2 |
Raw Material Purchases [Member] | Suppliers One [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 27.30% | 19.50% |
Raw Material Purchases [Member] | Suppliers Two [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 16.10% | 14.80% |
Raw Material Purchases [Member] | Suppliers Three [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 13.00% | |
Revenue One [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 29.20% | 29.50% |
Revenue Two [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 19.10% | 19.10% |
Revenue Three [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 14.70% | 16.90% |
Customer One [Member] | Accounts Receivable [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 52.20% | 50.20% |
Customer Two [Member] | Accounts Receivable [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 11.20% | 10.80% |
Customer Three [Member] | Accounts Receivable [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 10.20% |