Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | NF Energy Saving Corp | |
Entity Central Index Key | 1,213,660 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | NFEC | |
Entity Common Stock, Shares Outstanding | 7,073,289 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 20,828 | $ 124,637 |
Accounts receivable, net | 7,366,416 | 6,644,994 |
Retention receivable, current | 572,475 | 629,680 |
Inventories | 5,148,940 | 4,606,564 |
Prepayments and other receivables | 4,516,417 | 3,109,069 |
Total current assets | 17,625,076 | 15,114,944 |
Non-current assets: | ||
Property, plant and equipment, net | 17,291,384 | 17,128,235 |
Land use rights, net | 2,620,260 | 2,555,704 |
Construction in progress | 2,625,765 | 2,520,234 |
TOTAL ASSETS | 40,162,485 | 37,319,117 |
Current liabilities: | ||
Accounts payable, trade | 4,704,682 | 3,404,760 |
Short-term bank borrowings | 6,010,970 | 5,760,618 |
Amount due to a related party | 431,682 | 431,682 |
Other payables and accrued liabilities | 1,897,579 | 1,014,999 |
Total current liabilities | 13,044,913 | 10,612,059 |
TOTAL LIABILITIES | 13,044,913 | 10,612,059 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 7,073,289 and 7,073,289 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 7,073 | 7,073 |
Additional paid-in capital | 12,055,825 | 12,055,825 |
Deferred compensation | (64,500) | (355,200) |
Statutory reserve | 2,227,634 | 2,227,634 |
Accumulated other comprehensive income | 2,034,302 | 858,502 |
Retained earnings | 10,808,693 | 11,913,224 |
Total stockholders’ equity | 27,069,027 | 26,707,058 |
Non-controlling interest | 48,545 | 0 |
TOTAL EQUITY | 27,117,572 | 26,707,058 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 40,162,485 | $ 37,319,117 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 7,073,289 | 7,073,289 |
Common stock, shares outstanding | 7,073,289 | 7,073,289 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUE, NET: | ||||
Product | $ 1,103,952 | $ 1,366,905 | $ 3,678,341 | $ 3,603,738 |
Services | 37,968 | 33,447 | 177,024 | 41,028 |
Total operating revenues, net | 1,141,920 | 1,400,352 | 3,855,365 | 3,644,766 |
COST OF REVENUES: | ||||
Cost of products | 1,082,652 | 1,462,330 | 3,207,838 | 3,593,519 |
Cost of services | 17,319 | 80,686 | 185,966 | 284,418 |
Total cost of revenues | 1,099,971 | 1,543,016 | 3,393,804 | 3,877,937 |
GROSS PROFIT (LOSS) | 41,949 | (142,664) | 461,561 | (233,171) |
OPERATING EXPENSES: | ||||
Sales and marketing | 4,181 | 1,357 | 82,257 | 15,016 |
General and administrative | 378,107 | 154,245 | 1,224,637 | 698,488 |
Total operating expenses | 382,288 | 155,602 | 1,306,894 | 713,504 |
LOSS FROM OPERATIONS | (340,339) | (298,266) | (845,333) | (946,675) |
Other (expense) income: | ||||
Other income | 0 | 2,739 | 0 | 2,788 |
Interest income | 2,689 | 0 | 2,809 | 14,325 |
Interest expense | (89,214) | (85,923) | (267,240) | (271,508) |
Total other expense | (86,525) | (83,184) | (264,431) | (254,395) |
LOSS BEFORE INCOME TAXES | (426,864) | (381,450) | (1,109,764) | (1,201,070) |
Income tax expense | (51) | (182) | (2,723) | (248) |
NET LOSS | (426,915) | (381,632) | (1,112,487) | (1,201,318) |
Less: Net loss attributable to non-controlling interest | (7,956) | 0 | (7,956) | 0 |
NET LOSS ATTRIBUTABLE TO THE COMPANY | (418,959) | (381,632) | (1,104,531) | (1,201,318) |
Other comprehensive income (loss): | ||||
- Foreign currency translation gain (loss) | 489,771 | (115,838) | 1,175,800 | (815,224) |
COMPREHENSIVE INCOME (LOSS) | $ 70,812 | $ (497,470) | $ 71,269 | $ (2,016,542) |
Net loss per share | ||||
- Basic | $ (0.06) | $ (0.06) | $ (0.16) | $ (0.18) |
- Diluted | $ (0.06) | $ (0.06) | $ (0.16) | $ (0.18) |
Weighted average common shares outstanding | ||||
- Basic | 7,073,289 | 6,577,831 | 7,073,289 | 6,577,831 |
- Diluted | 7,073,289 | 6,577,831 | 7,073,289 | 6,577,831 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (1,112,487) | $ (1,201,318) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 613,797 | 577,270 |
Stock based compensation | 290,700 | 38,400 |
Change in operating assets and liabilities: | ||
Accounts and retention receivable | (340,330) | (400,802) |
Inventories | (334,574) | 1,591,606 |
Prepayments and other receivables | (1,205,686) | (77,877) |
Accounts payable | 1,126,355 | (927,553) |
Other payables and accrued liabilities | 829,762 | 244,712 |
Net cash used in operating activities | (132,463) | (155,562) |
Cash flows from investing activities: | ||
Payments on construction in progress | 3,908 | (1,814) |
Net cash used in investing activities | 3,908 | (1,814) |
Cash flows from financing activities: | ||
Decrease in restricted cash | 0 | 1,823,919 |
Repayment on bank demand notes | 0 | (1,816,319) |
Advance from non-controlling interest | 16,385 | 0 |
Proceeds from short-term bank borrowings | 5,877,397 | 6,079,730 |
Repayment on short-term bank borrowings | (5,877,397) | (6,079,730) |
Net cash provided by financing activities | 16,385 | 7,600 |
Effect on exchange rate change on cash and cash equivalents | 8,361 | (11,397) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (103,809) | (161,173) |
BEGINNING OF PERIOD | 124,637 | 434,571 |
END OF PERIOD | 20,828 | 273,398 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for tax | 2,723 | 248 |
Cash paid for interest | 267,240 | 271,508 |
NON-CASH FINANCING AND INVESTING TRANSACTIONS: | ||
Transfer from construction in progress to plant and equipment | $ 0 | $ 6,014,313 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY - 9 months ended Sep. 30, 2017 - USD ($) | Total | Common stock | Additional paid-in capital | Deferred Compensation | Statutory reserve | Accumulated other comprehensive income | Retained earnings | Total NFEC stockholders' equity | Non-controlling Interest |
Balance at Dec. 31, 2016 | $ 26,707,058 | $ 7,073 | $ 12,055,825 | $ (355,200) | $ 2,227,634 | $ 858,502 | $ 11,913,224 | $ 26,707,058 | $ 0 |
Balance (in shares) at Dec. 31, 2016 | 7,073,289 | ||||||||
Contribution from non-controlling interest | 56,204 | $ 0 | 0 | 0 | 0 | 0 | 0 | 0 | 56,204 |
Amortization of deferred compensation | 290,700 | 0 | 0 | 290,700 | 0 | 0 | 0 | 290,700 | 0 |
Foreign currency translation adjustment | 1,176,097 | 0 | 0 | 0 | 0 | 1,175,800 | 0 | 1,175,800 | 297 |
Net loss for the period | (1,112,487) | 0 | 0 | 0 | 0 | 0 | (1,104,531) | (1,104,531) | (7,956) |
Balance at Sep. 30, 2017 | $ 27,117,572 | $ 7,073 | $ 12,055,825 | $ (64,500) | $ 2,227,634 | $ 2,034,302 | $ 10,808,693 | $ 27,069,027 | $ 48,545 |
Balance (in shares) at Sep. 30, 2017 | 7,073,289 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Basis Of Presentation [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of management, the consolidated balance sheet as of December 31, 2016 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2017 or for any future period. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2016. |
ORGANIZATION AND BUSINESS BACKG
ORGANIZATION AND BUSINESS BACKGROUND | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS BACKGROUND | ORGANIZATION AND BUSINESS BACKGROUND NF Energy Saving Corporation (the “Company” or “NFEC”) was incorporated in the State of Delaware in the name of Galli Process, Inc. on October 31, 2000. On February 7, 2002, the Company changed its name to “Global Broadcast Group, Inc.” On November 12, 2004, the Company changed its name to “Diagnostic Corporation of America.” On March 15, 2007, the Company changed its name to “NF Energy Saving Corporation of America.” On August 24, 2009, the Company further changed its name to “NF Energy Saving Corporation.” The Company, through its subsidiaries, mainly engages in the production of heavy industrial components and products such as valves and the provision of technical service and re-engineering projects in the energy saving related industry in the People’s Republic of China (the “PRC”). All the customers are located in the PRC. Name Place of incorporation Principal activities Particulars of issued/ Effective interest Liaoning Nengfa Weiye Energy Technology Co. Ltd (“Nengfa Energy”) The PRC, a limited liability company Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC US$ 5,000,000 100 Liaoning Nengfa Tiefa Import & Export Co. Ltd (“Nengfa Tiefa Import & Export”) The PRC, a limited liability company Development and production of hi-tech and automatic-intelligence valve products RMB 877,192 57 NFEC and its subsidiaries are hereinafter referred to as (the “Company”). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes. In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates. The condensed consolidated financial statements include the financial statements of NFEC and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. l Non-controlling interests Non-controlling interests represent the equity interest in the capital contributions, income and loss of less than wholly-owned and consolidated entities that is not attributable to the Company. Cash and cash equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. Accounts receivable Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 90 90 l Retention receivable Retention receivable is the amount withheld by a customer based upon 5 10 l Inventories Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a weighted average method. Costs include material, labor and manufacturing overhead costs. The Company quarterly reviews historical sales activity to determine excess, slow moving items and potentially obsolete items and also evaluates the impact of any anticipated changes in future demand. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand. As of September 30, 2017, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs. Land use rights All land in the PRC is owned by the PRC government. The government in the PRC, according to the relevant PRC law, may sell the right to use the land for a specified period of time. Thus, the Company’s land purchase in the PRC is considered to be leasehold land and is stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreement on a straight-line basis, which is 50 2059 Amortization expense for the three months ended September 30, 2017 and 2016 was $ 15,463 15,515 Amortization expense for the nine months ended September 30, 2017 and 2016 was $ 45,480 47,046 Period ending September 30: 2018 $ 62,018 2019 62,018 2020 62,018 2021 62,018 2022 62,018 Thereafter 2,310,170 Total: $ 2,620,260 Property, plant and equipment Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Expected useful life Residual value Building 30 years 5% Plant and machinery 10 20 years 5% Furniture, fixture and equipment 5 8 years 5% Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. Depreciation expense for the three months ended September 30, 2017 and 2016 was $ 193,171 125,419 Depreciation expense for the nine months ended September 30, 2017 and 2016 was $ 568,317 530,224 Impairment of long-lived assets In accordance with the provisions of ASC Topic 360, “ Impairment or Disposal of Long-Lived Assets Revenue recognition The Company offers of the following products and service to its customers: (a) Sales of energy saving flow control equipment; and (b) Provision of energy project management and sub-contracting service In accordance with the ASC Topic 605, “Revenue Recognition” (a) Sale of products The Company derives a majority of its revenues from the sale of energy saving flow control equipment. Generally, these products are manufactured and configured to customer requirements. The Company typically produces and builds the energy saving flow control equipment for customers in a period from 1 6 The Company recognizes revenue from the sale of such finished products upon delivery to the customer, whereas the title and risk of loss are fully transferred to the customers. The Company records its revenues, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on the majority of the products at the rate of 17 (b) Service revenue Service revenue is primarily derived from energy-saving technical services or project management or sub-contracting services that are not an element of an arrangement for the sale of products. These services are generally billed on a time-cost plus basis, for a period of service time from 2 3 (c) Interest income Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable. l Comprehensive income ASC Topic 220, “Comprehensive Income”, Income taxes Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50 For the three and nine months ended September 30, 2017 and 2016, the Company did not have any interest and penalties associated with tax positions. As of September 30, 2017, the Company did not have any significant unrecognized uncertain tax positions. The Company conducts major businesses in the PRC and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the foreign tax authority. l Product warranty Under the terms of the contracts, the Company offers its customers with a free product warranty on a case-by-case basis, depending upon the type of customers, nature and size of the infrastructure projects. Under such arrangements, a portion of the project contract balance (usually 5% to 10% of contract value) is withheld by a customer from 12 24 Net income per share The Company calculates net income per share in accordance with ASC Topic 260, “Earnings per Share.” l Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company is the United States Dollar ("US$"). The Company's subsidiaries in the PRC maintain their books and records in their local currency, the Renminbi Yuan ("RMB"), which is the functional currency as being the primary currency of the economic environment in which these entities operate. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement September 30, 2017 September 30, 2016 Period-end RMB:US$1 exchange rate 6.65450 6.66938 Average period RMB:US$1 exchange rate 6.80573 6.57924 Related parties Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Segment reporting ASC Topic 280, “ Segment Reporting l Stock based compensation The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Fair value of financial instruments The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments. Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount. The Company also follows the guidance of the ASC Topic 820-10, “ Fair Value Measurements and Disclosures • Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; • Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and • Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations |
ACCOUNTS AND RETENTION RECEIVAB
ACCOUNTS AND RETENTION RECEIVABLES | 9 Months Ended |
Sep. 30, 2017 | |
Accounts And Retention Receivable [Abstract] | |
ACCOUNTS AND RETENTION RECEIVABLES | ACCOUNTS AND RETENTION RECEIVABLES The majority of the Company’s sales are on open credit terms and in accordance with terms specified in the contracts governing the relevant transactions. The Company evaluates the need of an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible. September 30, 2017 December 31, 2016 (Unaudited) (Audited) Accounts receivable, cost $ 8,109,659 $ 7,357,282 Retention receivable, cost 572,475 629,680 8,682,134 7,986,962 Less: allowance for doubtful accounts (743,243) (712,288) Accounts and retention receivable, net $ 7,938,891 $ 7,274,674 As of October 31, 2017, the Company has subsequently recovered from approximately 2 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2017 | |
Inventory, Net [Abstract] | |
INVENTORY | INVENTORY September 30, 2017 December 31, 2016 (Unaudited) (Audited) Raw materials $ 592,998 $ 519,500 Work-in-process 612,238 402,425 Finished goods 3,943,704 3,684,639 $ 5,148,940 $ 4,606,564 For the three and nine months ended September 30, 2017 and 2016, no allowance for obsolete inventories was recorded by the Company. Finished goods are expected to be delivered to the customer in the next twelve months. |
SHORT-TERM BANK BORROWINGS
SHORT-TERM BANK BORROWINGS | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BANK BORROWINGS | NOTE6 SHORT-TERM BANK BORROWINGS September 30, 2017 December 31, 2016 Payable to financial institutions in the PRC: Equivalent to RMB40,000,000 with interest rate at 1.28 times of the Bank of China Benchmark Lending Rate, monthly payable, due March 20, 2017, which is guaranteed by its vendor $ - $ 5,760,618 Equivalent to RMB40,000,000 with interest rate at 1.28 times of the Bank of China Benchmark Lending Rate, monthly payable, due March 19, 2018, which is guaranteed by its vendor 6,010,970 - Total short-term bank borrowings $ 6,010,970 $ 5,760,618 The effective Bank of China Benchmark Lending rate is 6 6 |
AMOUNT DUE TO A RELATED PARTY
AMOUNT DUE TO A RELATED PARTY | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
AMOUNT DUE TO A RELATED PARTY | NOTE7 AMOUNT DUE TO A RELATED PARTY As of September 30, 2017, the amount due to a related party represented temporary advances made by the Company’s major stockholder, Pelaris International Ltd, which is controlled by Ms. Li Hua Wang (the Company’s CFO) and Mr. Gang Li (the Company’s CEO), which was unsecured, interest-free with no fixed repayment term. Imputed interest on this amount is considered insignificant. |
OTHER PAYABLES AND ACCRUED LIAB
OTHER PAYABLES AND ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
OTHER PAYABLES AND ACCRUED LIABILITIES | NOTE8 OTHER PAYABLES AND ACCRUED LIABILITIES September 30, 2017 December 31, 2016 (Unaudited) (Audited) Customer deposits $ 608,927 $ 487,175 Advance from employees 675,086 - Value added tax payable 12,563 89,471 Accrued operating expenses 555,239 387,981 Other payable 45,764 50,372 $ 1,897,579 $ 1,014,999 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE9 INCOME TAXES NFEC is incorporated in the State of Delaware and is subject to the tax laws of United States of America. As of September 30, 2017, the operations in the United States of America incurred $ 3,638,325 2037 1,237,031 The Company’s subsidiaries operating in the PRC are subject to the Corporate Income Tax Law of the People’s Republic of China at a unified income tax rate of 25 Nine months ended September 30, 2017 2016 Loss before income taxes from PRC operation $ (709,663) $ (1,119,393) Statutory income tax rate 25 % 25 % Income tax expense at statutory rate (177,416) (279,848) Effect from non-deductible items 180,139 280,096 Income tax expense $ 2,723 $ 248 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE10 STOCKHOLDERS’ EQUITY As of September 30, 2017, the Company had a total of 7,073,289 |
CONCENTRATIONS OF RISK
CONCENTRATIONS OF RISK | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF RISK | NOTE11 CONCENTRATIONS OF RISK The Company is exposed to the following concentrations of risk: (a) Major customers 10 Three months ended September 30, 2017 September 30, 2017 Percentage Accounts Customers Sales of sales and retention receivable Customer A $ 828,573 73 % Total: $ 7,889,415 Nine months ended September 30, 2017 September 30, 2017 Percentage Accounts Customers Sales of sales and retention receivable Customer A $ 2,460,866 64 % $ 7,889,415 Customer B 448,519 12 % 461,557 Total: $ 2,909,385 76 % Total: $ 8,350,972 Three months ended September 30, 2016 September 30, 2016 Percentage Accounts Sales of sales and retention receivable Customer A $ 1,338,045 96 % $ 7,218,593 Nine months ended September 30, 2016 September 30, 2016 Percentage Accounts Sales of sales and retention receivable Customer A $ 3,441,483 94 % $ 7,218,593 All major customers are located in the PRC. (b) Major vendors 10 Three months ended September 30, 2017 September 30, 2017 Vendors Purchases Percentage Accounts Vendor D $ 74,550 37 % $ - Vendor E 84,261 42 % 147,035 Total: $ 158,811 79 % Total: $ 147,035 Nine months ended September 30, 2017 September 30, 2017 Vendors Purchases Percentage Accounts Vendor D 453,965 45 % - Vendor E 179,586 18 % 147,035 Total: $ 633,551 63 % Total: $ 147,035 Three months ended September 30, 2016 September 30, 2016 Percentage Accounts Purchases of purchases payable Vendor C $ 88,350 33 % $ 129,011 Vendor D 155,972 59 % 705 244,322 92 % 129,716 Nine months ended September 30, 2016 September 30, 2016 Vendors Purchases Percentage Accounts Vendor A $ 117,460 20 % $ 158,947 Vendor B 85,510 15 % - Vendor C 562,590 23 % 129,011 Vendor D 155,972 27 % 705 Total: $ 921,532 85 % Total: $ 288,663 All vendors are located in the PRC. (c) Credit risk Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. (d) Interest rate risk As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates. The Company’s interest-rate risk arises from borrowing under notes and bank borrowings. The Company manages interest rate risk by varying the issuance and maturity dates variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As of September 30, 2017, borrowings under related party notes were at fixed rates and short-term bank borrowings were at variable rates. (e) Exchange rate risk The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in RMB and a significant portion of the assets and liabilities are denominated in RMB. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and RMB. If RMB depreciates against US$, the value of RMB revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk. (f) Economic and political risks The Company's operations are conducted in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company's operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE12 SUBSEQUENT EVENTS The Company evaluated subsequent events through the date the financial statements were issued and filed with this Form 10-Q. There were no subsequent events that required recognition or disclosure. |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Use of estimates | In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates. |
Basis of consolidation | The condensed consolidated financial statements include the financial statements of NFEC and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. |
Non-controlling interest | l Non-controlling interests Non-controlling interests represent the equity interest in the capital contributions, income and loss of less than wholly-owned and consolidated entities that is not attributable to the Company. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. |
Accounts receivable | Accounts receivable Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 90 90 |
Retention receivable | l Retention receivable Retention receivable is the amount withheld by a customer based upon 5 10 |
Inventories | l Inventories Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a weighted average method. Costs include material, labor and manufacturing overhead costs. The Company quarterly reviews historical sales activity to determine excess, slow moving items and potentially obsolete items and also evaluates the impact of any anticipated changes in future demand. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand. As of September 30, 2017, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs. |
Land use rights | Land use rights All land in the PRC is owned by the PRC government. The government in the PRC, according to the relevant PRC law, may sell the right to use the land for a specified period of time. Thus, the Company’s land purchase in the PRC is considered to be leasehold land and is stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreement on a straight-line basis, which is 50 2059 Amortization expense for the three months ended September 30, 2017 and 2016 was $ 15,463 15,515 Amortization expense for the nine months ended September 30, 2017 and 2016 was $ 45,480 47,046 Period ending September 30: 2018 $ 62,018 2019 62,018 2020 62,018 2021 62,018 2022 62,018 Thereafter 2,310,170 Total: $ 2,620,260 |
Property, plant and equipment | Property, plant and equipment Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Expected useful life Residual value Building 30 years 5% Plant and machinery 10 20 years 5% Furniture, fixture and equipment 5 8 years 5% Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. Depreciation expense for the three months ended September 30, 2017 and 2016 was $ 193,171 125,419 Depreciation expense for the nine months ended September 30, 2017 and 2016 was $ 568,317 530,224 |
Impairment of long-lived assets | Impairment of long-lived assets In accordance with the provisions of ASC Topic 360, “ Impairment or Disposal of Long-Lived Assets |
Revenue recognition | Revenue recognition The Company offers of the following products and service to its customers: (a) Sales of energy saving flow control equipment; and (b) Provision of energy project management and sub-contracting service In accordance with the ASC Topic 605, “Revenue Recognition” (a) Sale of products The Company derives a majority of its revenues from the sale of energy saving flow control equipment. Generally, these products are manufactured and configured to customer requirements. The Company typically produces and builds the energy saving flow control equipment for customers in a period from 1 6 The Company recognizes revenue from the sale of such finished products upon delivery to the customer, whereas the title and risk of loss are fully transferred to the customers. The Company records its revenues, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on the majority of the products at the rate of 17 (b) Service revenue Service revenue is primarily derived from energy-saving technical services or project management or sub-contracting services that are not an element of an arrangement for the sale of products. These services are generally billed on a time-cost plus basis, for a period of service time from 2 3 (c) Interest income Interest income is recognized on a time apportionment basis, taking into account the principal amounts outstanding and the interest rates applicable. |
Comprehensive income | l Comprehensive income ASC Topic 220, “Comprehensive Income”, |
Income taxes | Income taxes Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50 For the three and nine months ended September 30, 2017 and 2016, the Company did not have any interest and penalties associated with tax positions. As of September 30, 2017, the Company did not have any significant unrecognized uncertain tax positions. The Company conducts major businesses in the PRC and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the foreign tax authority. |
Product warranty | l Product warranty Under the terms of the contracts, the Company offers its customers with a free product warranty on a case-by-case basis, depending upon the type of customers, nature and size of the infrastructure projects. Under such arrangements, a portion of the project contract balance (usually 5% to 10% of contract value) is withheld by a customer from 12 24 |
Net income per share | Net income per share The Company calculates net income per share in accordance with ASC Topic 260, “Earnings per Share.” |
Foreign currencies translation | l Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company is the United States Dollar ("US$"). The Company's subsidiaries in the PRC maintain their books and records in their local currency, the Renminbi Yuan ("RMB"), which is the functional currency as being the primary currency of the economic environment in which these entities operate. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement September 30, 2017 September 30, 2016 Period-end RMB:US$1 exchange rate 6.65450 6.66938 Average period RMB:US$1 exchange rate 6.80573 6.57924 |
Related parties | Related parties Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence. |
Segment reporting | Segment reporting ASC Topic 280, “ Segment Reporting |
Stock based compensation | l Stock based compensation The Company accounts for employee and non-employee stock awards under ASC 718, whereby equity instruments issued to employees for services are recorded based on the fair value of the instrument issued and those issued to non-employees are recorded based on the fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. |
Fair value of financial instruments | Fair value of financial instruments The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments. Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount. The Company also follows the guidance of the ASC Topic 820-10, “ Fair Value Measurements and Disclosures • Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; • Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and • Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Recent accounting pronouncements | Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations |
ORGANIZATION AND BUSINESS BAC20
ORGANIZATION AND BUSINESS BACKGROUND (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Subsidiaries | Description of subsidiaries Name Place of incorporation Principal activities Particulars of issued/ Effective interest Liaoning Nengfa Weiye Energy Technology Co. Ltd (“Nengfa Energy”) The PRC, a limited liability company Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC US$ 5,000,000 100 Liaoning Nengfa Tiefa Import & Export Co. Ltd (“Nengfa Tiefa Import & Export”) The PRC, a limited liability company Development and production of hi-tech and automatic-intelligence valve products RMB 877,192 57 |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Estimated Amortization Expense on Land Use Right | The estimated amortization expense on the land use right in the next five years and thereafter is as follows: Period ending September 30: 2018 $ 62,018 2019 62,018 2020 62,018 2021 62,018 2022 62,018 Thereafter 2,310,170 Total: $ 2,620,260 |
Expected Useful Lives | Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: Expected useful life Residual value Building 30 years 5% Plant and machinery 10 20 years 5% Furniture, fixture and equipment 5 8 years 5% |
Exchange Rates | Translation of amounts from RMB into US$1 has been made at the following exchange rates for the respective period: September 30, 2017 September 30, 2016 Period-end RMB:US$1 exchange rate 6.65450 6.66938 Average period RMB:US$1 exchange rate 6.80573 6.57924 |
ACCOUNTS AND RETENTION RECEIV22
ACCOUNTS AND RETENTION RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounts And Retention Receivable [Abstract] | |
ACCOUNTS AND RETENTION RECEIVABLES | If actual collections experience changes, revisions to the allowance may be required. September 30, 2017 December 31, 2016 (Unaudited) (Audited) Accounts receivable, cost $ 8,109,659 $ 7,357,282 Retention receivable, cost 572,475 629,680 8,682,134 7,986,962 Less: allowance for doubtful accounts (743,243) (712,288) Accounts and retention receivable, net $ 7,938,891 $ 7,274,674 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory, Net [Abstract] | |
INVENTORY | September 30, 2017 December 31, 2016 (Unaudited) (Audited) Raw materials $ 592,998 $ 519,500 Work-in-process 612,238 402,425 Finished goods 3,943,704 3,684,639 $ 5,148,940 $ 4,606,564 |
SHORT-TERM BANK BORROWINGS (Tab
SHORT-TERM BANK BORROWINGS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Short-Term Bank Borrowings | Short-term bank borrowings consist of the following: September 30, 2017 December 31, 2016 Payable to financial institutions in the PRC: Equivalent to RMB40,000,000 with interest rate at 1.28 times of the Bank of China Benchmark Lending Rate, monthly payable, due March 20, 2017, which is guaranteed by its vendor $ - $ 5,760,618 Equivalent to RMB40,000,000 with interest rate at 1.28 times of the Bank of China Benchmark Lending Rate, monthly payable, due March 19, 2018, which is guaranteed by its vendor 6,010,970 - Total short-term bank borrowings $ 6,010,970 $ 5,760,618 |
OTHER PAYABLES AND ACCRUED LI25
OTHER PAYABLES AND ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Other Payables and Accrued Liabilities | Other payables and accrued liabilities consisted of the following: September 30, 2017 December 31, 2016 (Unaudited) (Audited) Customer deposits $ 608,927 $ 487,175 Advance from employees 675,086 - Value added tax payable 12,563 89,471 Accrued operating expenses 555,239 387,981 Other payable 45,764 50,372 $ 1,897,579 $ 1,014,999 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Income Tax Rate to Effective Income Tax Rate | The reconciliation of income tax rate to the effective income tax rate for the nine months ended September 30, 2017 and 2016 is as follows: Nine months ended September 30, 2017 2016 Loss before income taxes from PRC operation $ (709,663) $ (1,119,393) Statutory income tax rate 25 % 25 % Income tax expense at statutory rate (177,416) (279,848) Effect from non-deductible items 180,139 280,096 Income tax expense $ 2,723 $ 248 |
CONCENTRATIONS OF RISK (Tables)
CONCENTRATIONS OF RISK (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Customers Account for Ten Percent or More of Revenues and its Outstanding Accounts Receivable | For the three and nine months ended September 30, 2017 and 2016, the customers who accounted for 10 Three months ended September 30, 2017 September 30, 2017 Percentage Accounts Customers Sales of sales and retention receivable Customer A $ 828,573 73 % Total: $ 7,889,415 Nine months ended September 30, 2017 September 30, 2017 Percentage Accounts Customers Sales of sales and retention receivable Customer A $ 2,460,866 64 % $ 7,889,415 Customer B 448,519 12 % 461,557 Total: $ 2,909,385 76 % Total: $ 8,350,972 Three months ended September 30, 2016 September 30, 2016 Percentage Accounts Sales of sales and retention receivable Customer A $ 1,338,045 96 % $ 7,218,593 Nine months ended September 30, 2016 September 30, 2016 Percentage Accounts Sales of sales and retention receivable Customer A $ 3,441,483 94 % $ 7,218,593 |
Concentrations Risk of Company's Purchases and Outstanding Accounts Payable Balances | For the three and nine months ended September 30, 2017 and 2016, the vendors who accounted for 10 Three months ended September 30, 2017 September 30, 2017 Vendors Purchases Percentage Accounts Vendor D $ 74,550 37 % $ - Vendor E 84,261 42 % 147,035 Total: $ 158,811 79 % Total: $ 147,035 Nine months ended September 30, 2017 September 30, 2017 Vendors Purchases Percentage Accounts Vendor D 453,965 45 % - Vendor E 179,586 18 % 147,035 Total: $ 633,551 63 % Total: $ 147,035 Three months ended September 30, 2016 September 30, 2016 Percentage Accounts Purchases of purchases payable Vendor C $ 88,350 33 % $ 129,011 Vendor D 155,972 59 % 705 244,322 92 % 129,716 Nine months ended September 30, 2016 September 30, 2016 Vendors Purchases Percentage Accounts Vendor A $ 117,460 20 % $ 158,947 Vendor B 85,510 15 % - Vendor C 562,590 23 % 129,011 Vendor D 155,972 27 % 705 Total: $ 921,532 85 % Total: $ 288,663 |
Organization and Business Bac28
Organization and Business Background (Detail) - 9 months ended Sep. 30, 2017 | USD ($) | CNY (¥) |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 100.00% | 100.00% |
Liaoning Nengfa Weiye Energy Technology Co Ltd [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Subsidiary of Limited Liability Company or Limited Partnership, Business Purpose | Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC | Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC |
Stock Issued During Periods Value Issued For Cash | $ | $ 5,000,000 | |
Entity Incorporation, State Country Name | The PRC, a limited liability company | The PRC, a limited liability company |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 100.00% | 100.00% |
Liaoning Nengfa Tiefa Import Export Co.Ltd [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Subsidiary of Limited Liability Company or Limited Partnership, Business Purpose | Development and production of hi-tech and automatic-intelligence valve products | Development and production of hi-tech and automatic-intelligence valve products |
Stock Issued During Periods Value Issued For Cash | ¥ | ¥ 877,192 | |
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 57.00% | 57.00% |
Summary of significant accoun29
Summary of significant accounting policies - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Value added tax rate levied on majority of products | 17.00% | |||
Minimum likelihood of tax benefits being realized upon settlement | 50.00% | 50.00% | ||
Depreciation expense | $ 193,171 | $ 125,419 | $ 568,317 | $ 530,224 |
Accounts Receivable | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Customers billing period | 90 days | |||
Use Rights | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Finite lived intangible assets, useful Life | 50 years | |||
Finite lived intangible assets amortization period | 2,059 | |||
Land Use Rights [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Amortization expense | $ 15,463 | $ 15,515 | $ 45,480 | $ 47,046 |
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Retention receivable percentage | 5.00% | 5.00% | ||
Portion of project contract balance withheld period | 12 months | |||
Product Control Equipment Period | 1 month | |||
Billing Period | 2 months | |||
Minimum | Accounts Receivable | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Customers billing period | 30 days | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Retention receivable percentage | 10.00% | 10.00% | ||
Portion of project contract balance withheld period | 24 months | |||
Product Control Equipment Period | 6 months | |||
Billing Period | 3 months | |||
Maximum | Accounts Receivable | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Customers billing period | 90 days |
Estimated Amortization Expense
Estimated Amortization Expense on Land Use Right (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Land Use Right [Line Items] | ||
2,018 | $ 62,018 | |
2,019 | 62,018 | |
2,020 | 62,018 | |
2,021 | 62,018 | |
2,022 | 62,018 | |
Thereafter | 2,310,170 | |
Total: | $ 2,620,260 | $ 2,555,704 |
Property, Plant and Equipment E
Property, Plant and Equipment Expected Useful Lives and Estimated Residual Values (Detail) | 9 Months Ended |
Sep. 30, 2017 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 30 years |
Property plant and equipment, residual value | 5.00% |
Plant and machinery | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, residual value | 5.00% |
Plant and machinery | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 10 years |
Plant and machinery | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 20 years |
Furniture, fixture and equipment | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, residual value | 5.00% |
Furniture, fixture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 5 years |
Furniture, fixture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 8 years |
Exchange Rates (Detail)
Exchange Rates (Detail) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Period-end RMB:US$1 exchange rate | 6.65450 | 6.66938 |
Average period RMB:US$1 exchange rate | 6.80573 | 6.57924 |
Accounts and Retention Receiv33
Accounts and Retention Receivables - Additional Information (Detail) | Sep. 30, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Percentage Of Accounts Receivable Recovered | 2.00% |
Accounts and Retention Receiv34
Accounts and Retention Receivables (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, cost | $ 8,109,659 | $ 7,357,282 |
Retention receivable, cost | 572,475 | 629,680 |
Accounts And Retention Receivable Gross | 8,682,134 | 7,986,962 |
Less: allowance for doubtful accounts | (743,243) | (712,288) |
Accounts and retention receivable, net | $ 7,938,891 | $ 7,274,674 |
Inventory (Detail)
Inventory (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 592,998 | $ 519,500 |
Work-in-process | 612,238 | 402,425 |
Finished goods | 3,943,704 | 3,684,639 |
Total inventory | $ 5,148,940 | $ 4,606,564 |
Short-Term Bank Borrowings - Ad
Short-Term Bank Borrowings - Additional Information (Detail) | Sep. 30, 2017 | Sep. 30, 2016 |
China Benchmark Lending Rate [Member] | ||
Short-term Debt [Line Items] | ||
Effective interest rate, per annum | 6.00% | 6.00% |
Short-Term Bank Borrowings (Det
Short-Term Bank Borrowings (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | ||
Total short-term bank borrowings | $ 6,010,970 | $ 5,760,618 |
Short Term Loan One | ||
Short-term Debt [Line Items] | ||
Total short-term bank borrowings | 0 | 5,760,618 |
Short Term Loan Two | ||
Short-term Debt [Line Items] | ||
Total short-term bank borrowings | $ 6,010,970 | $ 0 |
Short-Term Bank Borrowings (Par
Short-Term Bank Borrowings (Parenthetical) (Detail) | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2017CNY (¥) | Dec. 31, 2016USD ($) | |
Short-term Debt [Line Items] | |||
Short-term bank borrowings | $ 6,010,970 | $ 5,760,618 | |
Short Term Loan One | |||
Short-term Debt [Line Items] | |||
Short-term bank borrowings | 0 | 5,760,618 | |
Short Term Loan Two | |||
Short-term Debt [Line Items] | |||
Short-term bank borrowings | $ 6,010,970 | $ 0 | |
Guarantee Type, Other | Short Term Loan One | |||
Short-term Debt [Line Items] | |||
Short-term bank borrowings | ¥ | ¥ 40,000,000 | ||
Percentage of face value as handling fee | 1.28% | 1.28% | |
Debt Instrument, Maturity Date | Mar. 20, 2017 | ||
Guarantee Type, Other | Short Term Loan Two | |||
Short-term Debt [Line Items] | |||
Short-term bank borrowings | ¥ | ¥ 40,000,000 | ||
Percentage of face value as handling fee | 1.28% | 1.28% | |
Debt Instrument, Maturity Date | Mar. 19, 2018 |
Other Payables and Accrued Li39
Other Payables and Accrued Liabilities (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts Payable and Accrued Liabilities [Line Items] | ||
Customer deposits | $ 608,927 | $ 487,175 |
Advance from employees | 675,086 | 0 |
Value added tax payable | 12,563 | 89,471 |
Accrued operating expenses | 555,239 | 387,981 |
Other payable | 45,764 | 50,372 |
Other payables and accrued liabilities | $ 1,897,579 | $ 1,014,999 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes [Line Items] | ||
Unified income tax rate | 25.00% | 25.00% |
United States of America | ||
Income Taxes [Line Items] | ||
Expiration date | 2,037 | |
Operating Loss Carryforwards | $ 3,638,325 | |
Operating Loss Carryforwards, Valuation Allowance | $ 1,237,031 |
Reconciliation of Income Tax Ra
Reconciliation of Income Tax Rate to Effective Income Tax Rate (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of Effective Income Tax Rate [Line Items] | ||||
Loss before income taxes from PRC operation | $ (709,663) | $ (1,119,393) | ||
Statutory income tax rate | 25.00% | 25.00% | ||
Income tax expense at statutory rate | $ (177,416) | $ (279,848) | ||
Effect from non-deductible items | 180,139 | 280,096 | ||
Income tax expense | $ 51 | $ 182 | $ 2,723 | $ 248 |
Stockholders_ Equity - Addition
Stockholders’ Equity - Additional Information (Detail) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Capitalization, Equity [Line Items] | ||
Common stock, shares issued | 7,073,289 | 7,073,289 |
Common stock, shares outstanding | 7,073,289 | 7,073,289 |
Concentrations of Risk - Additi
Concentrations of Risk - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Concentration Risk [Line Items] | ||||
Percentage of purchases | 10.00% | 10.00% | 10.00% | 10.00% |
Customers Account for Ten Perce
Customers Account for Ten Percent or More of Revenues and its Outstanding Accounts Receivable Balances (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||||
Revenue | $ 1,103,952 | $ 1,366,905 | $ 3,678,341 | $ 3,603,738 | |
Percentage of sales | 10.00% | 10.00% | 10.00% | 10.00% | |
Accounts and retention receivable | $ 7,938,891 | $ 7,938,891 | $ 7,274,674 | ||
Customer A and B | |||||
Concentration Risk [Line Items] | |||||
Accounts and retention receivable | 8,350,972 | 8,350,972 | |||
Customer A and B | Sales | |||||
Concentration Risk [Line Items] | |||||
Revenue | $ 2,909,385 | ||||
Percentage of sales | 76.00% | ||||
Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts and retention receivable | 7,889,415 | $ 7,218,593 | $ 7,889,415 | $ 7,218,593 | |
Customer One [Member] | Sales | |||||
Concentration Risk [Line Items] | |||||
Revenue | $ 828,573 | $ 1,338,045 | $ 2,460,866 | $ 3,441,483 | |
Percentage of sales | 73.00% | 96.00% | 64.00% | 94.00% | |
Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts and retention receivable | $ 461,557 | $ 461,557 | |||
Customer Two [Member] | Sales | |||||
Concentration Risk [Line Items] | |||||
Revenue | $ 448,519 | ||||
Percentage of sales | 12.00% |
Concentrations Risk of Company'
Concentrations Risk of Company's Purchases and Outstanding Accounts Payable Balances (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Concentration Risk [Line Items] | ||||
Purchases | $ 1,082,652 | $ 1,462,330 | $ 3,207,838 | $ 3,593,519 |
Percentage of purchases | 10.00% | 10.00% | 10.00% | 10.00% |
Vendor C and D | ||||
Concentration Risk [Line Items] | ||||
Accounts payable | $ 129,716 | $ 129,716 | ||
Major Supplier Concentration Risk | Vendor A | Accounts Payable | ||||
Concentration Risk [Line Items] | ||||
Accounts payable | 158,947 | 158,947 | ||
Major Supplier Concentration Risk | Vendor A | Purchases | ||||
Concentration Risk [Line Items] | ||||
Purchases | $ 117,460 | |||
Percentage of purchases | 20.00% | |||
Major Supplier Concentration Risk | Vendors B | Accounts Payable | ||||
Concentration Risk [Line Items] | ||||
Accounts payable | 0 | $ 0 | ||
Major Supplier Concentration Risk | Vendors B | Purchases | ||||
Concentration Risk [Line Items] | ||||
Purchases | $ 85,510 | |||
Percentage of purchases | 15.00% | |||
Major Supplier Concentration Risk | Vendors C | Accounts Payable | ||||
Concentration Risk [Line Items] | ||||
Accounts payable | 129,011 | $ 129,011 | ||
Major Supplier Concentration Risk | Vendors C | Purchases | ||||
Concentration Risk [Line Items] | ||||
Purchases | $ 88,350 | $ 562,590 | ||
Percentage of purchases | 33.00% | 23.00% | ||
Major Supplier Concentration Risk | Vendors D | Accounts Payable | ||||
Concentration Risk [Line Items] | ||||
Accounts payable | $ 0 | $ 705 | $ 0 | $ 705 |
Major Supplier Concentration Risk | Vendors D | Purchases | ||||
Concentration Risk [Line Items] | ||||
Purchases | $ 74,550 | $ 155,972 | $ 453,965 | $ 155,972 |
Percentage of purchases | 37.00% | 59.00% | 45.00% | 27.00% |
Major Supplier Concentration Risk | Vendor E | Accounts Payable | ||||
Concentration Risk [Line Items] | ||||
Accounts payable | $ 147,035 | $ 147,035 | ||
Major Supplier Concentration Risk | Vendor E | Purchases | ||||
Concentration Risk [Line Items] | ||||
Purchases | $ 84,261 | $ 179,586 | ||
Percentage of purchases | 42.00% | 18.00% | ||
Major Supplier Concentration Risk | Vendor D and E | Accounts Payable | ||||
Concentration Risk [Line Items] | ||||
Accounts payable | $ 147,035 | $ 147,035 | ||
Major Supplier Concentration Risk | Vendor D and E | Purchases | ||||
Concentration Risk [Line Items] | ||||
Purchases | $ 158,811 | $ 633,551 | ||
Percentage of purchases | 79.00% | 63.00% | ||
Major Supplier Concentration Risk | Vendor C and D | Purchases | ||||
Concentration Risk [Line Items] | ||||
Purchases | $ 244,322 | |||
Percentage of purchases | 92.00% | |||
Major Supplier Concentration Risk | Vendor A,B,C and D | Accounts Payable | ||||
Concentration Risk [Line Items] | ||||
Accounts payable | $ 288,663 | $ 288,663 | ||
Major Supplier Concentration Risk | Vendor A,B,C and D | Purchases | ||||
Concentration Risk [Line Items] | ||||
Purchases | $ 921,532 | |||
Percentage of purchases | 85.00% |