Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 09, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | IT TECH PACKAGING, INC. | |
Trading Symbol | ITP | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 9,915,920 | |
Amendment Flag | false | |
Entity Central Index Key | 0001358190 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-34577 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 20-4158835 | |
Entity Address, Address Line One | Science Park | |
Entity Address, Address Line Two | Juli Rd | |
Entity Address, Address Line Three | Xushui District | |
Entity Address, City or Town | Baoding City | |
Entity Address, Country | CN | |
Entity Address, Postal Zip Code | 072550 | |
City Area Code | (86) | |
Local Phone Number | 312-8698215 | |
Title of 12(b) Security | Common Stock, par value $0.001 | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and bank balances | $ 14,344,077 | $ 11,201,612 |
Restricted cash | ||
Accounts receivable (net of allowance for doubtful accounts of $51,319 and $69,053 as of June 30, 2022 and December 31, 2021, respectively) | 3,820,123 | 4,868,934 |
Inventories | 6,629,657 | 5,844,895 |
Prepayments and other current assets | 22,807,300 | 25,796,640 |
Due from related parties | 844,431 | 7,804,068 |
Total current assets | 48,445,588 | 55,516,149 |
Prepayment on property, plant and equipment | 43,446,210 | |
Finance lease right-of-use assets, net | 2,092,625 | 2,286,459 |
Property, plant, and equipment, net | 161,195,384 | 126,587,428 |
Value-added tax recoverable | 2,226,703 | 2,430,277 |
Deferred tax asset non-current | 11,501,093 | 11,268,679 |
Total Assets | 225,461,393 | 241,535,202 |
Current Liabilities | ||
Short-term bank loans | 5,958,518 | 5,958,561 |
Current portion of long-term loans from credit union | 4,410,406 | 6,838,465 |
Lease liability | 224,219 | 210,161 |
Accounts payable | 17,098 | 10,255 |
Advance from customers | 37,709 | 39,694 |
Due to related parties | 727,433 | 727,433 |
Accrued payroll and employee benefits | 228,624 | 291,206 |
Other payables and accrued liabilities | 5,507,880 | 5,250,539 |
Income taxes payable | 219,307 | 1,108,038 |
Total current liabilities | 17,331,194 | 20,434,352 |
Loans from credit union | 4,917,007 | 2,980,065 |
Deferred gain on sale-leaseback | 100,820 | 155,110 |
Lease liability - non-current | 20,299 | 152,233 |
Derivative liability | 716,901 | 2,063,534 |
Total liabilities (including amounts of the consolidated VIE without recourse to the Company of $16,668,603 and $17,924,475 as of June 30, 2022 and December 31, 2021, respectively) | 23,086,221 | 25,785,294 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Common stock, 500,000,000 shares authorized, $0.001 par value per share, 99,049,900 shares issued and outstanding as of June 30, 2022 and December, 31,2021. | 99,050 | 99,050 |
Additional paid-in capital | 88,927,787 | 88,927,787 |
Statutory earnings reserve | 6,080,574 | 6,080,574 |
Accumulated other comprehensive (loss) income | (102,441) | 10,496,168 |
Retained earnings | 107,370,202 | 110,146,329 |
Total stockholders’ equity | 202,375,172 | 215,749,908 |
Total Liabilities and Stockholders’ Equity | $ 225,461,393 | $ 241,535,202 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts (in Dollars) | $ 51,319 | $ 69,053 |
Consolidated VIE, liabilities (in Dollars) | $ 16,668,603 | $ 17,924,475 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued | 99,049,900 | 99,049,900 |
Common stock, shares outstanding | 99,049,900 | 99,049,900 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 31,788,884 | $ 46,534,915 | $ 47,270,502 | $ 70,744,342 |
Cost of sales | (31,154,847) | (43,505,895) | (46,326,020) | (65,884,317) |
Gross Profit | 634,037 | 3,029,019 | 944,482 | 4,860,024 |
Selling, general and administrative expenses | (1,869,802) | (2,597,611) | (5,170,683) | (5,152,929) |
Gain on acquisition | (1,840) | 32,163 | ||
(Loss) Income from Operations | (1,237,605) | 431,408 | (4,194,038) | (292,905) |
Other Income (Expense): | ||||
Interest income | 4,924 | 11,719 | 8,379 | 16,052 |
Subsidy income | 1,104 | 197,891 | ||
Interest expense | (259,106) | (283,899) | (529,919) | (562,800) |
Gain (Loss) on derivative liability | 960,045 | 4,509,007 | 1,346,633 | 872,040 |
(Loss) Income before Income Taxes | (531,742) | 4,669,339 | (3,368,945) | 230,278 |
Provision for Income Taxes | 243,829 | (5,122,587) | 592,818 | (5,022,382) |
Net Loss | (287,913) | (453,248) | (2,776,127) | (4,792,104) |
Other Comprehensive (Loss) Income | ||||
Foreign currency translation adjustment | (11,524,747) | 3,416,162 | (10,598,609) | 1,947,392 |
Total Comprehensive (Loss) Income | $ (11,812,660) | $ 2,962,914 | $ (13,374,736) | $ (2,844,712) |
Losses Per Share: | ||||
Basic and Diluted Losses per Share (in Dollars per share) | $ (0.003) | $ (0.01) | $ (0.03) | $ (0.1) |
Outstanding – Basic and Diluted (in Shares) | 99,049,900 | 46,638,550 | 99,049,900 | 46,638,550 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Basic and Diluted Losses per Share | $ (0.003) | $ (0.01) | $ (0.03) | $ (0.10) |
Outstanding – Basic and Diluted | 99,049,900 | 46,638,550 | 99,049,900 | 46,638,550 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows from Operating Activities: | ||
Net income | $ (2,776,127) | $ (4,792,104) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 7,592,319 | 8,166,403 |
(Gain) Loss on derivative liability | (1,346,633) | (872,040) |
Gain on acquisition | (33,178) | |
(Recovery from) Allowance for bad debts | (14,731) | 53,074 |
Deferred tax | (821,225) | 3,764,689 |
Accounts receivable | 845,450 | (3,229,340) |
Prepayments and other current assets | 1,963,348 | (8,060,524) |
Inventories | (1,111,160) | (10,412,117) |
Accounts payable | 7,588 | 144,206 |
Related parties | (860,721) | |
Accrued payroll and employee benefits | (49,534) | 86,928 |
Other payables and accrued liabilities | 553,308 | 15,529 |
Income taxes payable | (859,643) | 425,654 |
Net Cash Provided by (Used in) Operating Activities | 3,949,782 | (15,570,363) |
Cash Flows from Investing Activities: | ||
Purchases of property, plant and equipment | (681,640) | (171,541) |
Acquisition of land | (6,642,665) | |
Net Cash Used in Investing Activities | (7,324,305) | (171,541) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of shares and warrants, net | 41,837,553 | |
Repayment of bank loans | (77,301) | |
Payment of capital lease obligation | (102,902) | (88,661) |
Loan repaid by a related party | 6,776,889 | |
Net Cash Provided by Financing Activities | 6,673,987 | 41,671,591 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (156,999) | 201,419 |
Net Increase in Cash and Cash Equivalents | 3,142,465 | 26,131,106 |
Cash, Cash Equivalents and Restricted Cash - Beginning of Period | 11,201,612 | 4,142,437 |
Cash, Cash Equivalents and Restricted Cash - End of Period | 14,344,077 | 30,273,543 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest, net of capitalized interest cost | 165,629 | 312,344 |
Cash paid for income taxes | 1,088,049 | 265,450 |
Cash and bank balances | 14,344,077 | 30,273,543 |
Restricted cash | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ 14,344,077 | $ 30,273,543 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Statutory Earnings Reserve | Accumulated Other Comprehensive Income (loss) | Retained Earnings | Total |
Balance at Dec. 31, 2020 | $ 28,536 | $ 53,989,548 | $ 6,080,574 | $ 5,740,722 | $ 109,240,794 | $ 175,080,174 |
Balance (in Shares) at Dec. 31, 2020 | 28,535,816 | |||||
Issuance of shares to institutional investors | $ 26,182 | 8,002,488 | 8,028,670 | |||
Issuance of shares to institutional investors (in Shares) | 26,181,818 | |||||
Issuance of shares to public investors | $ 29,278 | 15,585,867 | 15,615,145 | |||
Issuance of shares to public investors (in Shares) | 29,277,866 | |||||
Exercise of warrants | $ 15,054 | 11,349,884 | 11,364,938 | |||
Exercise of warrants (in Shares) | 15,054,400 | |||||
Foreign currency translation adjustment | 1,947,392 | 1,947,392 | ||||
Net income | (4,792,104) | (4,792,104) | ||||
Balance at Jun. 30, 2021 | $ 99,050 | 88,927,787 | 6,080,574 | 7,688,114 | 104,448,690 | 207,244,215 |
Balance (in Shares) at Jun. 30, 2021 | 99,049,900 | |||||
Balance at Dec. 31, 2021 | $ 99,050 | 88,927,787 | 6,080,574 | 10,496,168 | 110,146,329 | 215,749,908 |
Balance (in Shares) at Dec. 31, 2021 | 99,049,900 | |||||
Foreign currency translation adjustment | (10,598,609) | (10,598,609) | ||||
Net income | (2,776,127) | (2,776,127) | ||||
Balance at Jun. 30, 2022 | $ 99,050 | $ 88,927,787 | $ 6,080,574 | $ (102,441) | $ 107,370,202 | $ 202,375,172 |
Balance (in Shares) at Jun. 30, 2022 | 99,049,900 |
Organization and Business Backg
Organization and Business Background | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Business Background [Abstract] | |
Organization and Business Background | (1) Organization and Business Background IT Tech Packaging, Inc. (the “Company”) was incorporated in the State of Nevada on December 9, 2005, under the name “Carlateral, Inc.” Through the steps described immediately below, we became the holding company for Hebei Baoding Dongfang Paper Milling Company Limited (“Dongfang Paper”), a producer and distributor of paper products in China, on October 29, 2007. On August 1, 2018, we changed our corporate name to IT Tech Packaging, Inc.. The name change was effected through a parent/subsidiary short-form merger of IT Tech Packaging, Inc., our wholly-owned Nevada subsidiary formed solely for the purpose of the name change, with and into us. We were the surviving entity. In connection with the name change, our common stock began being traded under a new NYSE symbol, “ITP”. On June 9, 2022, the Board of Directors of the Company approved a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-10 (the “Reverse Stock Split”). The Reverse Stock Split become effective on July 7, 2022 (the “Effective Date”), and the shares began trading on the split-adjusted basis on the NYSE American under the Company’s existing trading symbol “ITP” at market open on July 8, 2022. The new CUSIP number following the Reverse Stock Split will be 46527C 209. On October 29, 2007, pursuant to an agreement and plan of merger (the “Merger Agreement”), the Company acquired DongfangZhiye Holding Limited (“Dongfang Holding”), a corporation formed on November 13, 2006 under the laws of the British Virgin Islands, and issued the shareholders of Dongfang Holding an aggregate of 7,450,497 (as adjusted for a four-for-one reverse stock split effected in November 2009) shares of our common stock, which shares were distributed pro-rata to the shareholders of Dongfang Holding in accordance with their respective ownership interests in Dongfang Holding. At the time of the Merger Agreement, Dongfang Holding owned all of the issued and outstanding stock and ownership of Dongfang Paper and such shares of Dongfang Paper were held in trust with Zhenyong Liu, Xiaodong Liu and Shuangxi Zhao, for Mr. Liu, Mr. Liu and Mr. Zhao (the original shareholders of Dongfang Paper) to exercise control over the disposition of Dongfang Holding’s shares in Dongfang Paper on Dongfang Holding’s behalf until Dongfang Holding successfully completed the change in registration of Dongfang Paper’s capital with the relevant PRC Administration of Industry and Commerce as the 100% owner of Dongfang Paper’s shares. As a result of the merger transaction, Dongfang Holding became a wholly owned subsidiary of the Company, and Dongfang Holding’s wholly owned subsidiary, Dongfang Paper, became an indirectly owned subsidiary of the Company. Dongfang Holding, as the 100% owner of Dongfang Paper, was unable to complete the registration of Dongfang Paper’s capital under its name within the proper time limits set forth under PRC law. In connection with the consummation of the restructuring transactions described below, Dongfang Holding directed the trustees to return the shares of Dongfang Paper to their original shareholders, and the original Dongfang Paper shareholders entered into certain agreements with Baoding Shengde Paper Co., Ltd. (“Baoding Shengde”) to transfer the control of Dongfang Paper over to Baoding Shengde. On June 24, 2009, the Company consummated a number of restructuring transactions pursuant to which it acquired all of the issued and outstanding shares of Shengde Holdings Inc., a Nevada corporation. Shengde Holdings Inc. was incorporated in the State of Nevada on February 25, 2009. On June 1, 2009, Shengde Holdings Inc. incorporated Baoding Shengde, a limited liability company organized under the laws of the PRC. Because Baoding Shengde is a wholly-owned subsidiary of Shengde Holdings Inc., it is regarded as a wholly foreign-owned entity under PRC law. To ensure proper compliance of the Company’s control over the ownership and operations of Dongfang Paper with certain PRC regulations, on June 24, 2009, the Company entered into a series of contractual agreements (the “Contractual Agreements”) with Dongfang Paper and Dongfang Paper Equity Owners via the Company’s wholly owned subsidiary Shengde Holdings Inc. (“Shengde Holdings”) a Nevada corporation and Baoding Shengde Paper Co., Ltd. (“Baoding Shengde”), a wholly foreign-owned enterprise in the PRC with an original registered capital of $10,000,000 (subsequently increased to $60,000,000 in June 2010). Baoding Shengde is mainly engaged in production and distribution of digital photo paper and single-use face masks and is 100% owned by Shengde Holdings. Prior to February 10, 2010, the Contractual Agreements included (i) Exclusive Technical Service and Business Consulting Agreement, which generally provides that Baoding Shengde shall provide exclusive technical, business and management consulting services to Dongfang Paper, in exchange for service fees including a fee equivalent to 80% of Dongfang Paper’s total annual net profits; (ii) Loan Agreement, which provides that Baoding Shengde will make a loan in the aggregate principal amount of $10,000,000 to Dongfang Paper Equity Owners in exchange for each such shareholder agreeing to contribute all of its proceeds from the loan to the registered capital of Dongfang Paper; (iii) Call Option Agreement, which generally provides, among other things, that Dongfang Paper Equity Owners irrevocably grant to Baoding Shengde an option to purchase all or part of each owner’s equity interest in Dongfang Paper. The exercise price for the options shall be RMB1 which Baoding Shengde should pay to each of Dongfang Paper Equity Owner for all their equity interests in Dongfang Paper; (iv) Share Pledge Agreement, which provides that Dongfang Paper Equity Owners will pledge all of their equity interests in Dongfang Paper to Baoding Shengde as security for their obligations under the other agreements described in this section. Specifically, Baoding Shengde is entitled to dispose of the pledged equity interests in the event that Dongfang Paper Equity Owners breach their obligations under the Loan Agreement or Dongfang Paper fails to pay the service fees to Baoding Shengde pursuant to the Exclusive Technical Service and Business Consulting Agreement; and (v) Proxy Agreement, which provides that Dongfang Paper Equity Owners shall irrevocably entrust a designee of Baoding Shengde with such shareholder’s voting rights and the right to represent such shareholder to exercise such owner’s rights at any equity owners’ meeting of Dongfang Paper or with respect to any equity owner action to be taken in accordance with the laws and Dongfang Paper’s Articles of Association. The terms of the agreement are binding on the parties for as long as Dongfang Paper Equity Owners continue to hold any equity interest in Dongfang Paper. AnDongfang Paper Equity Owner will cease to be a party to the agreement once it transfers its equity interests with the prior approval of Baoding Shengde. As the Company had controlled Dongfang Paper since July 16, 2007 through Dongfang Holding and the trust until June 24, 2009 and continued to control Dongfang Paper through Baoding Shengde and the Contractual Agreements, the execution of the Contractual Agreements is considered as a business combination under common control. On February 10, 2010, Baoding Shengde and the Dongfang Paper Equity Owners entered into a Termination of Loan Agreement to terminate the above-mentioned $10,000,000 Loan Agreement. Because of the Company’s decision to fund future business expansions through Baoding Shengde instead of Dongfang Paper, the $10,000,000 loan contemplated was never made prior to the point of termination. The parties believe the termination of the Loan Agreement does not in itself compromise the effective control of the Company over Dongfang Paper and its businesses in the PRC. An agreement was also entered into among Baoding Shengde, Dongfang Paper and the Dongfang Paper Equity Owners on December 31, 2010, reiterating that Baoding Shengde is entitled to 100% of the distributable profit of Dongfang Paper, pursuant to the above- mentioned Contractual Agreements. In addition, Dongfang Paper and the Dongfang Paper Equity Owners shall not declare any of Dongfang Paper’s unappropriated earnings as dividend, including the unappropriated earnings of Dongfang Paper from its establishment to 2010 and thereafter. On June 25, 2019, Dongfang Paper entered into an acquisition agreement with the shareholder of Hebei Tengsheng Paper Co., Ltd. (“Hebei Tengsheng”), a limited liability company organized under the laws of the PRC, pursuant to which Dongfang Paper will acquire Hebei Tengsheng. Full payment of the consideration in the amount of RMB320 million (approximately $45 million) was made on February 23, 2022. The Company has no direct equity interest in Dongfang Paper. However, through the Contractual Agreements described above, the Company is found to be the primary beneficiary (the “Primary Beneficiary”) of Dongfang Paper and is deemed to have the effective control over Dongfang Paper’s activities that most significantly affect its economic performance, resulting in Dongfang Paper and its subsidiary, being treated as a controlled variable interest entity of the Company in accordance with Topic 810 - Consolidation of the Accounting Standards Codification (the “ASC”) issued by the Financial Accounting Standard Board (the “FASB”). The revenue generated from Dongfang Paper and Hebei Tengsheng for the three months ended June 30, 2022 and 2021 was accounted for 99.73% and 99.77% of the Company’s total revenue, respectively. The revenue generated from Dongfang Paper and Hebei Tengsheng for the six months ended June 30, 2022 and 2021 was accounted for 99.70% and 99.66% of the Company’s total revenue, respectively. Dongfang Paper and Hebei Tengsheng also accounted for 87.11% and 84.13% of the total assets of the Company as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022 and December 31, 2021, details of the Company’s subsidiaries and variable interest entities are as follows: Name Date of Incorporation or Establishment Place of Incorporation or Establishment Percentage of Ownership Principal Activity Subsidiary: Dongfang Holding November 13, 2006 BVI 100 % Inactive investment holding Shengde Holdings February 25, 2009 State of Nevada 100 % Investment holding Baoding Shengde June 1, 2009 PRC 100 % Paper production and distribution Variable interest entity (“VIE”): Dongfang Paper March 10, 1996 PRC Control * Paper production and distribution * Dongfang Paper is treated as a 100% controlled variable interest entity of the Company. However, uncertainties in the PRC legal system could cause the Company’s current ownership structure to be found to be in violation of any existing and/or future PRC laws or regulations and could limit the Company’s ability, through its subsidiary, to enforce its rights under these contractual arrangements. Furthermore, shareholders of the VIE may have interests that are different than those of the Company, which could potentially increase the risk that they would seek to act contrary to the terms of the aforementioned agreements. In addition, if the current structure or any of the contractual arrangements were found to be in violation of any existing or future PRC law, the Company may be subject to penalties, which may include, but not be limited to, the cancellation or revocation of the Company’s business and operating licenses, being required to restructure the Company’s operations or being required to discontinue the Company’s operating activities. The imposition of any of these or other penalties may result in a material and adverse effect on the Company’s ability to conduct its operations. In such case, the Company may not be able to operate or control the VIE, which may result in deconsolidation of the VIE. The Company believes the possibility that it will no longer be able to control and consolidate its VIE will occur as a result of the aforementioned risks and uncertainties is remote. The Company has aggregated the financial information of Dongfang Paper in the table below. The aggregate carrying value of Dongfang Paper’s assets and liabilities (after elimination of intercompany transactions and balances) in the Company’s condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 are as follows: The Company and its consolidated subsidiaries are not required to provide financial support to the VIE, and no creditor (or beneficial interest holders) of the VIE have recourse to the assets of Company unless the Company separately agrees to be subject to such claims. There are no terms in any agreements or arrangements, implicit or explicit, which require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE does require financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIE. June 30, December 31, ASSETS Current Assets Cash and bank balances $ 3,693,419 $ 1,921,407 Restricted cash - - Accounts receivable 3,820,123 4,867,759 Inventories 6,609,820 5,823,762 Prepayments and other current assets 17,304,373 19,942,878 Due from related parties 844,431 888,893 Total current assets 32,272,166 33,444,699 Prepayment on property, plant and equipment 41,877,755 Finance lease right-of-use assets, net 2,092,625 2,286,459 Property, plant, and equipment, net 152,023,115 116,054,387 Deferred tax asset non-current 10,005,097 9,547,741 Total Assets $ 196,393,003 $ 203,211,041 LIABILITIES Current Liabilities Short-term bank loans $ 5,958,519 $ 5,958,561 Current portion of long-term loans from credit union 4,410,406 2,289,945 Lease liability 224,219 210,161 Accounts payable 17,098 10,255 Advance from customers 37,709 39,694 Accrued payroll and employee benefits 220,367 279,513 Other payables and accrued liabilities 4,863,858 4,740,900 Income taxes payable 219,307 1,108,038 Total current liabilities 15,951,483 14,637,067 Loans from credit union 596,001 2,980,065 Deferred gain on sale-leaseback 100,820 155,110 Lease liability - non-current 20,299 152,233 Total liabilities $ 16,668,603 $ 17,924,475 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Business Background [Abstract] | |
Basis of Presentation and Significant Accounting Policies | (2) Basis of Presentation and Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. Accordingly, certain information and notes required by the United States of America generally accepted accounting principles (“GAAP”) for annual financial statements are not included herein. These interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2021 of the Company, and its subsidiaries and variable interest entity (which we sometimes refer to collectively as “the Company”, “we”, “us” or “our”). Principles of Consolidation Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of June 30, 2022 and the results of operations for the three months ended June 30, 2022 are not necessarily indicative of the results to be expected for any future period. Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates. Valuation of long-lived asset The Company reviews the carrying value of long-lived assets to be held and used when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose. Fair Value Measurements The Company has adopted ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts that the Company could realize in a current market exchange. As of June 30, 2022 and December 31, 2021, the carrying value of the Company’s short term financial instruments, such as cash and cash equivalents, accounts receivable, accounts and notes payable, short-term bank loans, balance due to a related party and obligation under capital lease, approximate at their fair values because of the short maturity of these instruments; while loans from credit union and loans from a related party approximate at their fair value as the interest rates thereon are close to the market rates of interest published by the People’s Bank of China. Management determined that liabilities created by beneficial conversion features associated with the issuance of certain warrants (see “ Derivative liabilities” Non-Recurring Fair Value Measurements The Company reviews long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow. Share-Based Compensation The Company uses the fair value recognition provision of ASC Topic 718, Compensation-Stock Compensation The Company also applies the provisions of ASC Topic 505-50, Equity Based Payments to Non-Employees |
Restricted Cash
Restricted Cash | 6 Months Ended |
Jun. 30, 2022 | |
Restricted Cash [Abstract] | |
Restricted Cash | (3) Restricted Cash Restricted cash was nil |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | (4) Inventories Raw materials inventory includes mainly recycled paper board and recycled white scrap paper. Finished goods include mainly products of corrugating medium paper, offset printing paper and tissue paper products. Inventories consisted of the following as of June 30, 2022 and December 31, 2021: June 30, December 31, 2022 2021 Raw Materials Recycled paper board $ 5,289,833 $ 2,097,062 Recycled white scrap paper 11,217 11,808 Gas 148,119 32,753 Base paper and other raw materials 249,447 206,531 5,698,616 2,348,154 Semi-finished Goods 107,309 96,087 Finished Goods 823,732 3,400,654 Total inventory, gross 6,629,657 5,844,895 Inventory reserve - - Total inventory, net $ 6,629,657 $ 5,844,895 |
Prepayments and Other Current A
Prepayments and Other Current Assets | 6 Months Ended |
Jun. 30, 2022 | |
Prepaid Expenses And Other Current Assets Disclosure [Abstract] | |
Prepayments and other current assets | (5) Prepayments and other current assets Prepayments and other current assets consisted of the following as of June 30, 2022 and December 31, 2021: June 30, December 31, 2022 2021 Prepaid land lease $ 178,800 $ 188,215 Prepayment for purchase of materials 7,450,713 9,190,527 Prepayment for purchase of equipment 1,053,908 980,786 Value-added tax recoverable 13,910,314 14,740,296 Others 213,565 696,816 $ 22,807,300 $ 25,796,640 |
Property, plant and equipment,
Property, plant and equipment, net | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment, net | (6) Property, plant and equipment, net As of June 30, 2022 and December 31, 2021, property, plant and equipment consisted of the following: June 30, December 31, 2022 2021 Property, Plant, and Equipment: Land use rights $ 59,862,539 $ 12,790,062 Building and improvements 70,877,768 74,609,698 Machinery and equipment 161,815,491 170,149,367 Vehicles 754,802 725,838 Construction in progress 312,191 - Totals 293,622,791 258,274,965 Less: accumulated depreciation and amortization (132,427,407 ) (131,687,537 ) Property, Plant and Equipment, net $ 161,195,384 $ 126,587,428 As of June 30, 2022 and December 31, 2021, land use rights represented twenty three parcels of state-owned lands located in Xushui District and Wei County of Hebei Province in China, with lease terms of 50 years expiring in 2061 and 2068, respectively. As of June 30, 2022 and December 31, 2021, certain property, plant and equipment of Dongfang Paper with net values of $682,421 and $1,130,333, respectively, have been pledged pursuant to a long-term loan from credit union of Dongfang Paper. Land use right of Dongfang Paper with net values of $5,631,283 and $6,002,195, respectively, as of June 30, 2022 and December 31, 2021 was pledged for the bank loan from Industrial & Commercial Bank of China (“ICBC”). Land use right of Hebei Tengsheng with net value of $5,364,917 and $5,690,261, respectively, as of June 30, 2022 and December 31, 2021 was pledged for a long-term loan from credit union of Baoding Shengde. In addition, land use right of Hebei Tengsheng with net value of $4,151,619 and $4,407,889, respectively, as of June 30, 2022 and December 31, 2021 was pledged for another long-term loan from credit union of Baoding Shengde. See “ Short-term bank loans Depreciation and amortization of property, plant and equipment was $3,819,083 and $4,073,916 for the three months ended June 30, 2022 and 2021, respectively. Depreciation and amortization of property, plant and equipment was $7,592,319 and $8,166,403 for the six months ended June 30, 2022 and 2021, respectively. |
Financing with Sale-Leaseback
Financing with Sale-Leaseback | 6 Months Ended |
Jun. 30, 2022 | |
Financing with Sale-Leaseback [Abstract] | |
Financing with Sale-Leaseback | (7) Financing with Sale-Leaseback The Company entered into a sale-leaseback arrangement (the “Lease Financing Agreement”) with TAC Leasing Co., Ltd.(“TLCL”) on August 6, 2020, for a total financing proceeds in the amount of RMB 16 million (approximately US$2.5 million). Under the sale-leaseback arrangement, Hebei Tengsheng sold the Leased Equipment to TLCL for 16 million (approximately US$2.5 million). Concurrent with the sale of equipment, Hebei Tengsheng leases back the equipment sold to TLCL for a lease term of three years. At the end of the lease term, Hebei Tengsheng may pay a nominal purchase price of RMB 100 (approximately $16) to TLCL and buy back the Leased Equipment. The Leased Equipment in amount of $2,349,452 was recorded as right of use assets and the net present value of the minimum lease payments was recorded as lease liability and calculated with TLCL’s implicit interest rate of 15.6% per annum and stated at $567,099 at the inception of the lease on August 17, 2020. Hebei Tengsheng made payments due according to the schedule. The balance of Leased Equipment net of amortization was $2,092,625 and $2,286,459 as of June 30, 2022 and December 31, 2021, respectively. The lease liability was $244,518 and $362,394, and its current portion in the amount of $224,219 and $210,161 as of June 30, 2022 and December 31, 2021, respectively. Amortization of the Leased Equipment was $39,972 and $41,457 for the three months ended June 30, 2022 and 2021. Amortization of the Leased Equipment was $81,978 and $82,454 for the six months ended June 30, 2022 and 2021. Total interest expenses for the sale-leaseback arrangement was $10,862 and $18,932 for the three months ended June 30, 2022 and 2021.Total interest expenses for the sale-leaseback arrangement was $24,369 and $39,350 for the six months ended June 30, 2022 and 2021. As a result of the sale and leaseback, a deferred gain in the amount of $430,695 was recorded. The deferred gain is amortized over the lease term and as an offset to amortization of the Leased Equipment. The future minimum lease payments of the capital lease as of June 30, 2022 were as follows: June 30, Amount 2023 246,744 2024 20,562 Less: unearned discount (22,788 ) 244,518 Less: Current portion lease liability (224,219 ) $ 20,299 |
Loans Payable
Loans Payable | 6 Months Ended |
Jun. 30, 2022 | |
Loans Payable [Abstract] | |
Loans Payable | (8) Loans Payable Short-term bank loans On November 25, 2021, the Company entered into a working capital loan agreement with the ICBC, with a balance of $5,660,518 and $5,958,561 as of June 30, 2022 and December 31, 2021, respectively. The working capital loan was secured by the land use right of Dongfang Paper as collateral for the benefit of the bank and guaranteed by Mr. Liu. The loan bears a fixed interest rate of 4.785% per annum. The loan will be due and repaid at various installments by November 17, 2022. As of June 30, 2022, there were guaranteed short-term borrowings of $5,660,518 and unsecured bank loans of $ nil nil The average short-term borrowing rates for the three months ended June 30, 2022 and 2021 were approximately 4.79%. The average short-term borrowing rates for the six months ended June 30, 2022 and 2021 were approximately 4.79%. Long-term loans from credit union As of June 30, 2022 and December 31, 2021, loans payable to Rural Credit Union of Xushui District, amounted to $9,327,413 and $9,818,530, respectively. June 30, December 31, 2022 2021 Rural Credit Union of Xushui District Loan 1 $ 1,281,402 $ 1,348,871 Rural Credit Union of Xushui District Loan 2 3,725,005 3,921,139 Rural Credit Union of Xushui District Loan 3 2,384,003 2,509,528 Rural Credit Union of Xushui District Loan 4 1,937,003 2,038,992 Total 9,327,413 9,818,530 Less: Current portion of long-term loans from credit union (4,410,406 ) (6,838,465 ) Long-term loans from credit union $ 4,917,007 $ 2,980,065 As of Jun 30, 2022, the Company’s long-term debt repayments for the next coming years were as follows: Amount Fiscal year Remainder of 2022 $ 4,410,406 2023 4,917,007 Total 9,327,413 On April 16, 2014, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 5 years, which was originally due in various installments from June 21, 2014 to November 18, 2018. The loan is guaranteed by an independent third party. Interest payment is due quarterly and bears the rate of 0.64% per month. On November 6, 2018, the loan was renewed for additional 5 years and will be due and payable in various installments from December 21, 2018 to November 5, 2023. As of June 30, 2022 and December 31, 2021, total outstanding loan balance was $1,281,402 and$1,348,871, respectively, Out of the total outstanding loan balance, current portion amounted were $685,401 and $329,376 as of June 30, 2022 and December 31, 2021, respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $596,001 and $1,019,495 are presented as non-current liabilities in the consolidated balance sheet as of June 30, 2022 and December 31, 2021, respectively. On July 15, 2013, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 5 years, which was originally due and payable in various installments from December 21, 2013 to July 26, 2018. On June 21, 2018, the loan was extended for additional 5 years and will be due and payable in various installments from December 21, 2018 to June 20, 2023. The loan is secured by certain of the Company’s manufacturing equipment with net book value of $682,421 and $1,130,333 as of June 30, 2022 and December 31, 2021, respectively. Interest payment is due quarterly and bears a fixed rate of 0.64% per month. As of June 30, 2022 and December 31, 2021, the total outstanding loan balance was $3,725,005 and $3,921,139, respectively. Out of the total outstanding loan balance, current portion amounted were $3,725,005 and $1,960,569 as of June 30, 2022 and December 31, 2021 respectively, which are presented as current liabilities in the consolidated balance sheet and the remaining balance of $ nil On April 17, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which was due and payable in various installments from August 21, 2019 to April 16, 2021. The loan was renewed on March 22, 2021 and December 24, 2021 and extended for additional 3 years in total, which will be due on April 16, 2024 according to the new schedule. The loan is secured by Hebei Tengsheng with its land use right as collateral for the benefit of the credit union. Interest payment is due quarterly and bears a fixed rate of 0.6% per month. As of June 30, 2022 and December 31, 2021, the total outstanding loan balance was $2,384,003 and $2,509,528, respectively. Out of the total outstanding loan balance, current portion amounted were $ nil nil On December 12, 2019, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from June 21, 2020 to December 11, 2021. The loan was renewed on March 22, 2021 and December 24, 2021 and extended for additional 3 years in total, which will be due on December 11, 2024 according to the new schedule. The loan is secured by Hebei Tengsheng with its land use right as collateral for the benefit of the credit union. Interest payment is due monthly and bears a fixed rate of 7.56% per annum. As of June 30, 2022 and December 31, 2021, the total outstanding loan balance was $1,937,003 and $2,038,992, respectively. Out of the total outstanding loan balance, current portion amounted were $ nil nil Total interest expenses for the short-term bank loans and long-term loans for the three months ended June 30, 2022 and 2021 were $248,244 and $264,967, respectively. Total interest expenses for the short-term bank loans and long-term loans for the six months ended June 30, 2022 and 2021 were $505,550 and $523,450, respectively. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (9) Related Party Transactions Mr. Zhenyong Liu, the Company’s CEO has loaned money to Dongfang Paper for working capital purposes over a period of time. On January 1, 2013, Dongfang Paper and Mr. Zhenyong Liu renewed the three-year term loan previously entered on January 1, 2010, and extended the maturity date further to December 31, 2015. On December 31, 2015, the Company paid off the loan of $2,249,279, together with interest of $391,374 for the period from 2013 to 2015. Approximately $381,938 and $402,047 of interest were outstanding to Mr. Zhenyong Liu, which were recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet as of June 30, 2022 and December 31, 2021, respectively. On December 10, 2014, Mr. Zhenyong Liu provided a loan to the Company, amounted to $8,742,278 to Dongfang Paper for working capital purpose with an interest rate of 4.35% per annum, which was based on the primary lending rate of People’s Bank of China. The unsecured loan was provided on December 10, 2014, and would be originally due on December 10, 2017. During the year of 2016, the Company repaid $6,012,416 to Mr. Zhenyong Liu, together with interest of $288,596. In February 2018, the company paid off the remaining balance, together with interest of $20,400. As of June 30, 2022 and December 31, 2021, approximately $44,700 and $47,054 of interest, respectively were outstanding to Mr. Zhenyong Liu, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet. On March 1, 2015, the Company entered an agreement with Mr. Zhenyong Liu which allows Dongfang Paper to borrow from the CEO an amount up to $17,201,342 (RMB120,000,000) for working capital purposes. The advances or funding under the agreement are due three years from the date each amount is funded. The loan is unsecured and carries an annual interest rate set on the basis of the primary lending rate of the People’s Bank of China at the time of the borrowing. On July 13, 2015, an unsecured amount of $4,324,636 was drawn from the facility. On October 14, 2016 an unsecured amount of $2,883,091 was drawn from the facility. In February 2018, the company repaid $1,507,432 to Mr. Zhenyong Liu. The loan would be originally due on July 12, 2018. Mr. Zhenyong Liu agreed to extend the loan for additional 3 years and the remaining balance was due on July 12, 2021. On November 23, 2018, the Company repaid $3,768,579 to Mr. Zhenyong Liu, together with interest of $158,651. In December 2019, the Company paid off the remaining balance, together with interest of 94,636. As of June 30, 2022 and December 31, 2021, the outstanding interest was $204,782 and $215,565, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet. As of June 30, 2022 and December 31, 2021, total amount of loans due to Mr. Zhenyong Liu were $ nil nil On December 8, 2021, the Company entered an agreement with Mr. Zhenyong Liu, which allows Mr. Zhenyong Liu to borrow from the Company an amount of $6,915,176(RMB44,089,085). The loan is unsecured and carries a fixed interest rate of 3% per annum. The loan was repaid by Mr. Zhenyong Liu in February 2022. As of June 30, 2022 and December 31, 2021, amount due to shareholder was $727,433, which represents funds from shareholders to pay for various expenses incurred in the U.S. The amount is due on demand with interest free. |
Other Payables and Accrued Liab
Other Payables and Accrued Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Payables And Accruals [Abstract] | |
Other payables and accrued liabilities | (10) Other payables and accrued liabilities Other payables and accrued liabilities consist of the following: June 30, December 31, 2022 2021 Accrued electricity $ 84,676 $ 135,360 Accrued rental 133,284 61,879 Value-added tax payable 128,497 - Accrued interest to a related party 631,420 664,666 Payable for purchase of equipment 3,193,945 3,379,368 Accrued commission to salesmen 14,657 15,274 Accrued bank loan interest 1,296,451 992,989 Others 24,950 1,003 Totals $ 5,507,880 $ 5,250,539 |
Derivative Liabilities
Derivative Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | (11) Derivative Liabilities The Company analyzed the warrant for derivative accounting consideration under ASC 815, “Derivatives and Hedging, and hedging,” and determined that the instrument should be classified as a liability since the warrant becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item. The Company determined its derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2022. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each warrant is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used in the June 30, 2022: Three months ended June 30, Expected term 1.68 - 2.75 Expected average volatility 85% - 114% Expected dividend yield - Risk-free interest rate 0.19% - 2.99% The following table summarizes the changes in the derivative liabilities during the three months ended June 30, 2022: Fair Value Measurements Using Significant Observable Inputs (Level 3) Balance at December 31, 2021 $ 2,063,534 Addition of new derivatives recognized as warrant - Addition of new derivatives recognized as loss on derivatives - Exercise of warrants - Change in fair value of derivative liability (1,346,633 ) Balance at June 30, 2022 $ 716,901 |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2022 | |
Common Stock [Abstract] | |
Common Stock | (12) Common Stock Issuance of common stock to investors On January 20, 2021, the Company offered and sold to certain institutional investors an aggregate of 26,181,818 shares of common stock and 26,181,818 warrants to purchase up to 26,181,818 shares of common stock in a best-efforts public offering for gross proceeds of approximately $14.4 million. The purchase price for each share of common stock and the corresponding warrant was $0.55. The exercise price of the warrant was $0.55 per share. On March 1, 2021, the Company offered and sold to the public investors an aggregate of 29,277,866 shares of common stock and 14,638,933 warrants to purchase up to 14,638,933 shares of common stock in a firm commitment underwritten public offering for gross proceeds of approximately $21.9 million. The purchase price for each share of common stock and accompanying warrant was $0.75. The exercise price of the warrant was $0.75 per share, |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2022 | |
Warrant Disclosure [Abstract] | |
Warrants | (13) Warrants On April 29, 2020, the Company and certain institutional investors entered into a securities purchase agreement, as amended on May 4, 2020 (the “2020 Purchase Agreement”), pursuant to which the Company agreed to sell to such investors an aggregate of 4,400,000 shares of common stock and warrants to purchase up to 4,400,000 shares of common stock in a concurrent private placement (the “May 2020 Warrants”). The exercise price of the May 2020 Warrant is $0.7425 per share. These warrants become exercisable on July 23, 2020 and have a term of exercise equal to five years and six months from the date of issuance till July 23, 2025. 880,000 May 2020 Warrants were exercised in February 2021 at the exercise price of $0.7425 per share and 3,520,000 May 2020 Warrants were outstanding as of June 30, 2022. The Company classified warrant as liabilities and accounted for the issuance of the May 2020 Warrants as a derivative. On January 20, 2021, the Company offered and sold to certain institutional investors an aggregate of 26,181,818 shares of common stock and 26,181,818 warrants to purchase up to 26,181,818 shares of common stock (the “January 2021 Warrants”). The January 2021 Warrants became exercisable on January 20, 2021 at an exercise price of $0.55 and will expire on January 20, 2026. 14,106,900 January 2021 Warrants were exercised in January and February of 2021 at the exercise price of $0.55 per share. 12,074,918 January 2021 Warrants were outstanding as of June 30, 2022. On March 1, 2021, the Company offered and sold to the public investors an aggregate of 29,277,866 shares of common stock and 14,638,933 warrants to purchase up to 14,638,933 shares of common stock (the “March 2021 Warrants”). The March 2021 Warrants became exercisable on March 1, 2021 at an exercise price of $0.75 and will expire on March 1, 2026. 67,500 March 2021 Warrants were exercised in January and March 2021 at the exercise price of $0.75 per share and 14,571,433 March 2021 Warrants were outstanding as of June 30, 2022. The Company classified warrants as liabilities and accounted for the issuance of the warrants as a derivative. A summary of stock warrant activities is as below: Six months Ended Number Weight average exercise price Outstanding and exercisable at beginning of the period 30,166,351 $ 0.6691 Issued during the period - Exercised during the period - Cancelled or expired during the period - Outstanding and exercisable at end of the period 30,166,351 $ 0.6691 The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2022. Warrants Outstanding Warrants Exercisable Weighted Average Remaining Number of Contractual life Weighted Average Number of Weighted Average Shares (in years) Exercise Price Shares Exercise Price 30,166,351 3.59 $ 0.6691 30,166,351 $ 0.6691 Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at June 30, 2022 for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). The intrinsic value of the warrants as of June 30, 2022 and December 31, 2021 are nil. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | (14) Earnings Per Share For the three months ended June 30, 2022 and 2021, basic and diluted net income per share are calculated as follows: Three Months Ended 2022 2021 Basic loss per share Net loss for the period - numerator $ (287,913 ) $ (453,248 ) Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Net loss per share $ (0.003 ) $ (0.01 ) Diluted income per share Net income for the period- numerator $ (287,913 ) $ (453,248 ) Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Effect of dilution - - Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Diluted loss per share $ (0.003 ) $ (0.01 ) For the six months ended June 30, 2022 and 2021, basic and diluted net income per share are calculated as follows: Six Months Ended 2022 2021 Basic loss per share Net loss for the period - numerator $ (2,776,127 ) $ (4,792,104 ) Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Net loss per share $ (0.03 ) $ (0.10 ) Diluted loss per share Net loss for the period - numerator $ (2,776,127 ) $ (4,792,104 ) Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Effect of dilution - - Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Diluted loss per share $ (0.03 ) $ (0.10 ) For the three and six months ended June 30, 2022 and 2021 there were no securities with dilutive effect issued and outstanding. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (15) Income Taxes United States The Company and Shengde Holdings are incorporated in the State of Nevada and are subject to the U.S. federal tax and state statutory tax rates up to 34%and 0%, respectively. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “2017 TCJA”), which significantly changed U.S. tax law. The 2017 TCJA lowered the Company’s U.S. statutory federal income tax rate from the highest rate of 35% to 21% effective January 1, 2018, while also imposing a deemed repatriation tax on deferred foreign income which requires companies to pay a one-time transition tax on previously unremitted earnings of non-U.S. subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. The SEC staff issued Staff Accounting Bulletin (SAB) 118, which provides guidance on accounting for enactment effects of the 2017 TCJA. SAB 118 provides a measurement period of up to one year from the 2017 TCJA’s enactment date for companies to complete their accounting under ASC 740. In accordance with SAB 118, to the extent that a company’s accounting for certain income tax effects of the 2017 TCJA is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the 2017 TCJA. Transition tax: The transition tax is a tax on previously untaxed accumulated and current earnings and profits (E&P) of certain of the Company’s non-U.S. subsidiaries. To determine the amount of the transition tax, the Company must determine, in addition to other factors, the amount of post-1986 E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. The Company was able to make a reasonable estimate of the transition tax and recorded a provisional obligation and additional income tax expense of approximately $80,000 in the fourth quarter of 2017. However, the Company is continuing to gather additional information and will consider additional technical guidance to more precisely compute and account for the amount of the transition tax. This amount may change when the Company finalizes the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalizes the amounts held in cash or other specified assets. The 2017 TCJA’s transition tax is payable over eight years beginning in 2018. PRC Dongfang Paper and Baoding Shengde are PRC operating companies and are subject to PRC Enterprise Income Tax. Pursuant to the PRC New Enterprise Income Tax Law, Enterprise Income Tax is generally imposed at a statutory rate of 25%. The provisions for income taxes for three months ended June 30, 2022 and 2021 were as follows: Three Months Ended June 30, 2022 2021 Provision for Income Taxes Current Tax Provision U.S. $ - $ 14,717 Current Tax Provision PRC 228,407 754,087 Deferred Tax Provision PRC (472,236 ) 4,353,783 Total Provision for (Deferred tax benefit)/ Income Taxes $ (243,829 ) $ 5,122,587 The provisions for income taxes for six months ended June 30, 2022 and 2021 were as follows: Six Months Ended June 30, 2022 2021 Provision for Income Taxes Current Tax Provision U.S. $ - $ 14,717 Current Tax Provision PRC 228,407 1,242,976 Deferred Tax Provision PRC (821,225 ) 3,764,689 Total Provision for (Deferred tax benefit)/ Income Taxes $ (592,818 ) $ 5,022,382 In addition to the reversible future PRC income tax benefits stemming from the timing differences of items such as recognition of asset disposal gain or loss and asset depreciation, the Company was incorporated in the United States and incurred net operating losses of approximately $776,533 and $882,743 for U.S. income tax purposes for the years ended December 31, 2021 and 2020, respectively. The net operating loss carried forward may be available to reduce future years’ taxable income. These carry forwards would expire, if not utilized, during the period of 2030 through 2035. As of June 30, 2022,management believed that the realization of all the U.S. income tax benefits from these losses, which generally would generate a deferred tax asset if it can be expected to be utilized in the future, appears not more than likely due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, As of June 30, 2022, the Company provided a 100% valuation allowance on the U.S. deferred tax asset benefit to reduce the total deferred tax asset to the amount realizable for the PRC income tax purposes. Management reviews this valuation allowance periodically and will make adjustments as warranted. A summary of the otherwise deductible (or taxable) deferred tax items is as follows: June 30, December 31, 2022 2021 Deferred tax assets (liabilities) Depreciation and amortization of property, plant and equipment $ 15,100,193 $ 14,754,456 Impairment of property, plant and equipment 785,428 783,433 Miscellaneous 382,146 342,170 Net operating loss carryover of PRC company 233,326 388,620 Total deferred tax assets 16,501,093 16,268,679 Less: Valuation allowance (5,000,000 ) (5,000,000 ) Total deferred tax assets, net $ 11,501,093 11,268,679 Three Months Ended June 30, 2022 2021 PRC Statutory rate 25.0 % 25.0 % Effect of different tax jurisdiction Effect of reconciling items in the PRC for tax purposes 20.9 % (22.2 )% Change in valuation allowance 106.9 % Effective income tax rate 45.9 % 109.7 % Six Months Ended June 30, 2022 2021 PRC Statutory rate 25.0 % 25.0 % Effect of different tax jurisdiction Effect of reconciling items in the PRC for tax purposes (7.4 )% (12.6 )% (Over) Under-provision in previous year Change in valuation allowance 2168.6 % Effective income tax rate 17.6 % 2181.0 % During the three months ended June 30, 2022 and 2021, the effective income tax rate was estimated by the Company to be 45.9% and 109.7%, respectively. During the six months ended June30, 2022 and 2021, the effective income tax rate was estimated by the Company to be 17.6% and 2181.0%, respectively. As of June 30, 2022, except for the one-time transition tax under the 2017 TCJA which imposes a U.S. tax liability on all unrepatriated foreign E&Ps, the Company does not believe that its future dividend policy and the available U.S. tax deductions and net operating losses will cause the Company to recognize any other substantial current U.S. federal or state corporate income tax liability in the near future. Nor does it believe that the amount of the repatriation of the VIE’s earnings and profits for purposes of paying dividends will change the Company’s position that its PRC subsidiary Baoding Shengde and the VIE, Dongfang Paper are considered or are expected to be indefinitely reinvested offshore to support our future capacity expansion. If these earnings are repatriated to the U.S. resulting in U.S. taxable income in the future, or if it is determined that such earnings are to be remitted in the foreseeable future, additional tax provisions would be required. The Company has adopted ASC Topic 740-10-05, Income Taxes. To date, the adoption of this interpretation has not impacted the Company’s financial position, results of operations, or cash flows. The Company performed self-assessment and the Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed, which in the PRC is usually 5 years. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of June 30, 2022 and December 31, 2021, management considered that the Company had no uncertain tax positions affecting its consolidated financial position and results of operations or cash flows, and will continue to evaluate for any uncertain position in future. There are no estimated interest costs and penalties provided in the Company’s consolidated financial statements for the three and six months ended June 30, 2022 and 2021, respectively. The Company’s tax positions related to open tax years are subject to examination by the relevant tax authorities and the major one is the China Tax Authority. |
Stock Incentive Plans
Stock Incentive Plans | 6 Months Ended |
Jun. 30, 2022 | |
Stock Incentive Plans [Abstract] | |
Stock Incentive Plans | (16) Stock Incentive Plans 2021 Incentive Stock Plan On November 12, 2021, the Company’s Annual General Meeting adopted and approved the 2021 Omnibus Equity Incentive Plan of IT Tech Packaging, Inc. (the”2021 Plan”).Under the 2021 ISP, the Company has reserved a total of 1,500,000 shares of common stock for issuance as or under awards to be made to the directors, officers, employees and/or consultants of the Company and its subsidiaries. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (17) Commitments and Contingencies Operating Lease The Company leases 32.95 acres of land from a local government in Xushui District, Baoding City, Hebei, China through a real estate lease with a 30-year term, which expires on December 31, 2031. The lease requires an annual rental payment of approximately $18,445 (RMB120,000). This operating lease is renewable at the end of the 30-year term. On August 7, 2013, the Company’s Audit Committee and the Board of Directors approved the sale of the land use right of the Headquarters Compound (the “LUR”), the office building and essentially all industrial-use buildings in the Headquarters Compound (the “Industrial Buildings”), and three employee dormitory buildings located within the Headquarters Compound (the “Dormitories”) to Hebei Fangsheng for cash prices of approximately $2.77 million, $1.15 million, and $4.31 million respectively. Sales of the LUR and the Industrial Buildings were completed in year 2013. In connection with the sale of the Industrial Buildings, Hebei Fangsheng agreed to lease the Industrial Buildings back to the Company for its original use with an annual rental payment of approximately $153,709 (RMB1,000,000). The lease agreement is renewable in August 2022. Future minimum lease payments of all operating leases are as follows: June 30, Amount 2023 30,297 2024 17,880 2025 17,880 2026 17,880 2027 17,880 Thereafter 80,460 Total operating lease payments $ 182,277 Capital commitment As of June 30, 2022, the Company has entered into several contracts for the purchase of paper machine of a new tissue paper production line PM10 and the improvement of Industrial Buildings. Total outstanding commitments under these contracts were $4,492,610 and $4,700,927 as of June 30, 2022 and December 31, 2021, respectively. The Company expected to pay off all the balances within 1-3 years. Guarantees and Indemnities The Company agreed with Baoding Huanrun Trading Co., a major supplier of raw materials, to guarantee certain obligations of this third party, and as of June 30, 2022 and December 31, 2021, the Company guaranteed its long-term loan from financial institutions amounting to $4,619,006 (RMB31,000,000) and $4,862,211 (RMB31,000,000), respectively, that matured at various times in 2018-2023. If Huanrun Trading Co., were to become insolvent, the Company could be materially adversely affected. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | (18) Segment Reporting Since March 10, 2010, Baoding Shengde started its operations and thereafter the Company manages its operations through two business operating segments: Dongfang Paper, which produces offset printing paper and corrugating medium paper, and Baoding Shengde, which produces digital photo paper. They are managed separately because each business requires different technology and marketing strategies. The Company evaluates performance of its operating segments based on net income. Administrative functions such as finance, treasury, and information systems are centralized. However, where applicable, portions of the administrative function expenses are allocated between the operating segments based on gross revenue generated. The operating segments do share facilities in Xushui County, Baoding City, Hebei Province, China. All sales were sold to customers located in the PRC. Summarized financial information for the three reportable segments is as follows: Three Months Ended June 30, 2022 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Revenues $ 31,289,918 $ 411,388 $ 87,578 $ - $ - $ 31,788,884 Gross profit 1,430,181 (814,347 ) 18,203 - - 634,037 Depreciation and amortization 1,210,646 2,188,973 419,464 - - 3,819,083 Interest income 1,787 226 2,911 - - 4,924 Interest expense 167,431 10,862 80,813 - - 259,106 Income tax expense(benefit) 134,982 (379,460 ) 649 - - (243,829 ) Net income (loss) 650,767 (2,003,653 ) (52,758 ) 1,119,571 (1,840 ) (287,913 ) Three Months Ended June 30, 2021 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Revenues $ 43,997,853 $ 2,727,000 $ 2,794,759 $ - $ (2,984,697 ) $ 46,534,915 Gross profit 3,233,548 (232,251 ) 27,722 - - 3,029,019 Depreciation and amortization 927,090 2,283,861 862,965 - - 4,073,916 Interest income 8,614 600 2,505 - - 11,719 Interest expense 181,175 18,932 83,792 - - 283,899 Income tax expense(benefit) 617,975 4,494,672 (4,777 ) 14,717 - 5,122,587 Net income (loss) 1,847,997 (6,482,307 ) (85,776 ) 4,266,838 - (453,248 ) Six Months Ended June 30, 2022 Dongfang Hebei Baoding Not Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Revenues $ 46,316,551 809,776 144,175 - - 47,270,502 Gross profit 2,287,725 (1,378,124 ) 34,881 - - 944,482 Depreciation and amortization 2,481,138 4,250,910 860,271 - - 7,592,319 Interest income 3,743 396 4,240 - - 8,379 Interest expense 340,620 24,369 164,930 - - 529,919 Income tax expense(benefit) 54,583 (790,651 ) 143,250 - - (592,818 ) Net income (loss) (53,906 ) (3,609,095 ) (284,648 ) 1,139,359 32,163 (2,776,127 ) Six Months Ended June 30, 2021 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Revenues $ 66,825,406 3,978,416 2,925,217 70,744,342 Gross profit (loss) 5,496,229 (688,458 ) 52,253 4,860,024 Depreciation and amortization 2,760,191 4,540,928 865,284 8,166,403 Interest income 10,980 806 4,266 16,052 Interest expense 357,561 39,350 165,889 562,800 Income tax expense(benefit) 1,034,830 3,979,043 (6,208 ) 5,022,382 Net income (loss) 2,935,206 (7,960,911 ) (153,821 ) (4,792,104 ) As of June 30, 2022 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise- wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Total assets $ 62,656,905 133,736,099 23,323,044 5,745,345 - 225,461,393 As of December 31, 2021 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Total assets $ 109,369,166 93,841,874 29,181,392 9,142,770 - 241,535,202 |
Concentration and Major Custome
Concentration and Major Customers and Suppliers | 6 Months Ended |
Jun. 30, 2022 | |
Concentration And Major Customers And Suppliers [Abstract] | |
Concentration and Major Customers and Suppliers | (19) Concentration and Major Customers and Suppliers For the three months ended June 30, 2022, the Company had no single customer contributed over 10% of total sales. For the three months ended June 30, 2021, the Company had no single customer contributed over 10% of total sales. For the six months ended June 30, 2022, the Company had no single customer contributed over 10% of total sales. For the six months ended June 30, 2021, the Company had no single customer contributed over 10% of total sales. For the three months ended June 30, 2022, the Company had three major suppliers accounted for 77%, 16% and 5% of total purchases. For the three months ended June 30, 2021, the Company had three major suppliers accounted for 79%, 10% and 3% of total purchases. For the six months ended June 30, 2022, the Company had three major suppliers accounted for 77%, 15% and 5% of total purchases. For the six months ended June 30, 2021, the Company had three major suppliers accounted for 80%, 10% and 2% of total purchases. |
Concentration of Credit Risk
Concentration of Credit Risk | 6 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | (20) Concentration of Credit Risk Financial instruments for which the Company is potentially subject to concentration of credit risk consist principally of cash. The Company places its cash in reputable financial institutions in the PRC and the United States. Although it is generally understood that the PRC central government stands behind all of the banks in China in the event of bank failure, there is no deposit insurance system in China that is similar to the protection provided by the Federal Deposit Insurance Corporation (“FDIC”) of the United States as of as of June 30, 2022 and December 31, 2021. On May 1, 2015, the new “Deposit Insurance Regulations” was effective in the PRC that the maximum protection would be up to RMB500,000 ($74,500) per depositor per insured financial intuition, including both principal and interest. For the cash placed in financial institutions in the United States, the Company’s U.S. bank accounts are all fully covered by the FDIC insurance as of June 30, 2022 and December 31, 2021, while for the cash placed in financial institutions in the PRC, the balances exceeding the maximum coverage of RMB500,000 amounted to RMB55,139,496 ($8,215,796) as of June 30, 2022. |
Risks and Uncertainties
Risks and Uncertainties | 6 Months Ended |
Jun. 30, 2022 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | (21) Risks and Uncertainties The Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, foreign currency exchange rates, and operating in the PRC under its various laws and restrictions. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2022 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | (22) Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.ASU 2016-13 replaced the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. In October 2019, the FASB issued ASU No. 2019-10, “Financial Instruments-Credit Losses (Topic326): Effective Dates”, to finalize the effective date delays for private companies, not-for-profits, and smaller reporting companies applying the CECL standards. The ASU is effective for reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2016-13 on our condensed consolidated financial statements. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | (23) Subsequent Event On June 9, 2022, the Board of Directors of the Company approved the Reverse Stock Split, pursuant to Section 78.207 of the Nevada Revised Statutes (“NRS”). The Reverse Stock Split was effected by the Company filing of a Certificate of Change Pursuant to NRS 78.209 with the Secretary of State of the State of Nevada on July 7, 2022. As a result of the Reverse Stock Split, the number of shares of the Company’s authorized Common Stock was reduced from 500,000,000 shares to 50,000,000 shares and the issued and outstanding number of shares of the Company’s common stock reduced from 99,049,900 to 9,915,920. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Business Background [Abstract] | |
Principles of Consolidation | Principles of Consolidation Our unaudited condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of June 30, 2022 and the results of operations for the three months ended June 30, 2022 are not necessarily indicative of the results to be expected for any future period. Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We believe that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates. |
Valuation of long-lived asset | Valuation of long-lived asset The Company reviews the carrying value of long-lived assets to be held and used when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose. |
Fair Value Measurements | Fair Value Measurements The Company has adopted ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts that the Company could realize in a current market exchange. As of June 30, 2022 and December 31, 2021, the carrying value of the Company’s short term financial instruments, such as cash and cash equivalents, accounts receivable, accounts and notes payable, short-term bank loans, balance due to a related party and obligation under capital lease, approximate at their fair values because of the short maturity of these instruments; while loans from credit union and loans from a related party approximate at their fair value as the interest rates thereon are close to the market rates of interest published by the People’s Bank of China. Management determined that liabilities created by beneficial conversion features associated with the issuance of certain warrants (see “ Derivative liabilities” |
Non-Recurring Fair Value Measurements | Non-Recurring Fair Value Measurements The Company reviews long-lived assets for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow. |
Share-Based Compensation | Share-Based Compensation The Company uses the fair value recognition provision of ASC Topic 718, Compensation-Stock Compensation The Company also applies the provisions of ASC Topic 505-50, Equity Based Payments to Non-Employees |
Organization and Business Bac_2
Organization and Business Background (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Business Background [Abstract] | |
Schedule of subsidiaries and variable interest entities | Name Date of Incorporation or Establishment Place of Incorporation or Establishment Percentage of Ownership Principal Activity Subsidiary: Dongfang Holding November 13, 2006 BVI 100 % Inactive investment holding Shengde Holdings February 25, 2009 State of Nevada 100 % Investment holding Baoding Shengde June 1, 2009 PRC 100 % Paper production and distribution Variable interest entity (“VIE”): Dongfang Paper March 10, 1996 PRC Control * Paper production and distribution * Dongfang Paper is treated as a 100% controlled variable interest entity of the Company. |
Schedule of aggregate carrying value of Dongfang Paper’s assets and liabilities | June 30, December 31, ASSETS Current Assets Cash and bank balances $ 3,693,419 $ 1,921,407 Restricted cash - - Accounts receivable 3,820,123 4,867,759 Inventories 6,609,820 5,823,762 Prepayments and other current assets 17,304,373 19,942,878 Due from related parties 844,431 888,893 Total current assets 32,272,166 33,444,699 Prepayment on property, plant and equipment 41,877,755 Finance lease right-of-use assets, net 2,092,625 2,286,459 Property, plant, and equipment, net 152,023,115 116,054,387 Deferred tax asset non-current 10,005,097 9,547,741 Total Assets $ 196,393,003 $ 203,211,041 LIABILITIES Current Liabilities Short-term bank loans $ 5,958,519 $ 5,958,561 Current portion of long-term loans from credit union 4,410,406 2,289,945 Lease liability 224,219 210,161 Accounts payable 17,098 10,255 Advance from customers 37,709 39,694 Accrued payroll and employee benefits 220,367 279,513 Other payables and accrued liabilities 4,863,858 4,740,900 Income taxes payable 219,307 1,108,038 Total current liabilities 15,951,483 14,637,067 Loans from credit union 596,001 2,980,065 Deferred gain on sale-leaseback 100,820 155,110 Lease liability - non-current 20,299 152,233 Total liabilities $ 16,668,603 $ 17,924,475 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | June 30, December 31, 2022 2021 Raw Materials Recycled paper board $ 5,289,833 $ 2,097,062 Recycled white scrap paper 11,217 11,808 Gas 148,119 32,753 Base paper and other raw materials 249,447 206,531 5,698,616 2,348,154 Semi-finished Goods 107,309 96,087 Finished Goods 823,732 3,400,654 Total inventory, gross 6,629,657 5,844,895 Inventory reserve - - Total inventory, net $ 6,629,657 $ 5,844,895 |
Prepayments and Other Current_2
Prepayments and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Prepaid Expenses And Other Current Assets Disclosure [Abstract] | |
Schedule of prepayments and other current assets | June 30, December 31, 2022 2021 Prepaid land lease $ 178,800 $ 188,215 Prepayment for purchase of materials 7,450,713 9,190,527 Prepayment for purchase of equipment 1,053,908 980,786 Value-added tax recoverable 13,910,314 14,740,296 Others 213,565 696,816 $ 22,807,300 $ 25,796,640 |
Property, plant and equipment_2
Property, plant and equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment, net | June 30, December 31, 2022 2021 Property, Plant, and Equipment: Land use rights $ 59,862,539 $ 12,790,062 Building and improvements 70,877,768 74,609,698 Machinery and equipment 161,815,491 170,149,367 Vehicles 754,802 725,838 Construction in progress 312,191 - Totals 293,622,791 258,274,965 Less: accumulated depreciation and amortization (132,427,407 ) (131,687,537 ) Property, Plant and Equipment, net $ 161,195,384 $ 126,587,428 |
Financing with Sale-Leaseback (
Financing with Sale-Leaseback (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of future minimum lease payments of the capital lease | June 30, Amount 2023 246,744 2024 20,562 Less: unearned discount (22,788 ) 244,518 Less: Current portion lease liability (224,219 ) $ 20,299 |
Loans Payable (Tables)
Loans Payable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Loans Payable [Abstract] | |
Schedule of loans payable to rural credit union of xushui district | June 30, December 31, 2022 2021 Rural Credit Union of Xushui District Loan 1 $ 1,281,402 $ 1,348,871 Rural Credit Union of Xushui District Loan 2 3,725,005 3,921,139 Rural Credit Union of Xushui District Loan 3 2,384,003 2,509,528 Rural Credit Union of Xushui District Loan 4 1,937,003 2,038,992 Total 9,327,413 9,818,530 Less: Current portion of long-term loans from credit union (4,410,406 ) (6,838,465 ) Long-term loans from credit union $ 4,917,007 $ 2,980,065 |
Schedule of long-term debt repayment | Amount Fiscal year Remainder of 2022 $ 4,410,406 2023 4,917,007 Total 9,327,413 |
Other Payables and Accrued Li_2
Other Payables and Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Payables And Accruals [Abstract] | |
Schedule of other payables and accrued liabilities | June 30, December 31, 2022 2021 Accrued electricity $ 84,676 $ 135,360 Accrued rental 133,284 61,879 Value-added tax payable 128,497 - Accrued interest to a related party 631,420 664,666 Payable for purchase of equipment 3,193,945 3,379,368 Accrued commission to salesmen 14,657 15,274 Accrued bank loan interest 1,296,451 992,989 Others 24,950 1,003 Totals $ 5,507,880 $ 5,250,539 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value warrant estimated valuation weighted-average assumptions | Three months ended June 30, Expected term 1.68 - 2.75 Expected average volatility 85% - 114% Expected dividend yield - Risk-free interest rate 0.19% - 2.99% |
Schedule of changes in the derivative liabilities | Balance at December 31, 2021 $ 2,063,534 Addition of new derivatives recognized as warrant - Addition of new derivatives recognized as loss on derivatives - Exercise of warrants - Change in fair value of derivative liability (1,346,633 ) Balance at June 30, 2022 $ 716,901 |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Warrant Disclosure [Abstract] | |
Schedule of stock warrant activities | Six months Ended Number Weight average exercise price Outstanding and exercisable at beginning of the period 30,166,351 $ 0.6691 Issued during the period - Exercised during the period - Cancelled or expired during the period - Outstanding and exercisable at end of the period 30,166,351 $ 0.6691 |
Schedule of outstanding and exercisable warrants | Warrants Outstanding Warrants Exercisable Weighted Average Remaining Number of Contractual life Weighted Average Number of Weighted Average Shares (in years) Exercise Price Shares Exercise Price 30,166,351 3.59 $ 0.6691 30,166,351 $ 0.6691 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net income per share | Three Months Ended 2022 2021 Basic loss per share Net loss for the period - numerator $ (287,913 ) $ (453,248 ) Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Net loss per share $ (0.003 ) $ (0.01 ) Diluted income per share Net income for the period- numerator $ (287,913 ) $ (453,248 ) Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Effect of dilution - - Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Diluted loss per share $ (0.003 ) $ (0.01 ) Six Months Ended 2022 2021 Basic loss per share Net loss for the period - numerator $ (2,776,127 ) $ (4,792,104 ) Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Net loss per share $ (0.03 ) $ (0.10 ) Diluted loss per share Net loss for the period - numerator $ (2,776,127 ) $ (4,792,104 ) Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Effect of dilution - - Weighted average common stock outstanding - denominator 99,049,900 46,638,550 Diluted loss per share $ (0.03 ) $ (0.10 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of provisions for income taxes | Three Months Ended June 30, 2022 2021 Provision for Income Taxes Current Tax Provision U.S. $ - $ 14,717 Current Tax Provision PRC 228,407 754,087 Deferred Tax Provision PRC (472,236 ) 4,353,783 Total Provision for (Deferred tax benefit)/ Income Taxes $ (243,829 ) $ 5,122,587 Six Months Ended June 30, 2022 2021 Provision for Income Taxes Current Tax Provision U.S. $ - $ 14,717 Current Tax Provision PRC 228,407 1,242,976 Deferred Tax Provision PRC (821,225 ) 3,764,689 Total Provision for (Deferred tax benefit)/ Income Taxes $ (592,818 ) $ 5,022,382 |
Schedule of deferred tax | June 30, December 31, 2022 2021 Deferred tax assets (liabilities) Depreciation and amortization of property, plant and equipment $ 15,100,193 $ 14,754,456 Impairment of property, plant and equipment 785,428 783,433 Miscellaneous 382,146 342,170 Net operating loss carryover of PRC company 233,326 388,620 Total deferred tax assets 16,501,093 16,268,679 Less: Valuation allowance (5,000,000 ) (5,000,000 ) Total deferred tax assets, net $ 11,501,093 11,268,679 |
Schedule of reconciles the statutory rates effective tax rates | Three Months Ended June 30, 2022 2021 PRC Statutory rate 25.0 % 25.0 % Effect of different tax jurisdiction Effect of reconciling items in the PRC for tax purposes 20.9 % (22.2 )% Change in valuation allowance 106.9 % Effective income tax rate 45.9 % 109.7 % Six Months Ended June 30, 2022 2021 PRC Statutory rate 25.0 % 25.0 % Effect of different tax jurisdiction Effect of reconciling items in the PRC for tax purposes (7.4 )% (12.6 )% (Over) Under-provision in previous year Change in valuation allowance 2168.6 % Effective income tax rate 17.6 % 2181.0 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | June 30, Amount 2023 30,297 2024 17,880 2025 17,880 2026 17,880 2027 17,880 Thereafter 80,460 Total operating lease payments $ 182,277 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of financial informations for reportable segments | Three Months Ended June 30, 2022 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Revenues $ 31,289,918 $ 411,388 $ 87,578 $ - $ - $ 31,788,884 Gross profit 1,430,181 (814,347 ) 18,203 - - 634,037 Depreciation and amortization 1,210,646 2,188,973 419,464 - - 3,819,083 Interest income 1,787 226 2,911 - - 4,924 Interest expense 167,431 10,862 80,813 - - 259,106 Income tax expense(benefit) 134,982 (379,460 ) 649 - - (243,829 ) Net income (loss) 650,767 (2,003,653 ) (52,758 ) 1,119,571 (1,840 ) (287,913 ) Three Months Ended June 30, 2021 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Revenues $ 43,997,853 $ 2,727,000 $ 2,794,759 $ - $ (2,984,697 ) $ 46,534,915 Gross profit 3,233,548 (232,251 ) 27,722 - - 3,029,019 Depreciation and amortization 927,090 2,283,861 862,965 - - 4,073,916 Interest income 8,614 600 2,505 - - 11,719 Interest expense 181,175 18,932 83,792 - - 283,899 Income tax expense(benefit) 617,975 4,494,672 (4,777 ) 14,717 - 5,122,587 Net income (loss) 1,847,997 (6,482,307 ) (85,776 ) 4,266,838 - (453,248 ) Six Months Ended June 30, 2022 Dongfang Hebei Baoding Not Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Revenues $ 46,316,551 809,776 144,175 - - 47,270,502 Gross profit 2,287,725 (1,378,124 ) 34,881 - - 944,482 Depreciation and amortization 2,481,138 4,250,910 860,271 - - 7,592,319 Interest income 3,743 396 4,240 - - 8,379 Interest expense 340,620 24,369 164,930 - - 529,919 Income tax expense(benefit) 54,583 (790,651 ) 143,250 - - (592,818 ) Net income (loss) (53,906 ) (3,609,095 ) (284,648 ) 1,139,359 32,163 (2,776,127 ) Six Months Ended June 30, 2021 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Revenues $ 66,825,406 3,978,416 2,925,217 70,744,342 Gross profit (loss) 5,496,229 (688,458 ) 52,253 4,860,024 Depreciation and amortization 2,760,191 4,540,928 865,284 8,166,403 Interest income 10,980 806 4,266 16,052 Interest expense 357,561 39,350 165,889 562,800 Income tax expense(benefit) 1,034,830 3,979,043 (6,208 ) 5,022,382 Net income (loss) 2,935,206 (7,960,911 ) (153,821 ) (4,792,104 ) As of June 30, 2022 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise- wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Total assets $ 62,656,905 133,736,099 23,323,044 5,745,345 - 225,461,393 As of December 31, 2021 Dongfang Hebei Baoding Not Attributable Elimination of Enterprise-wide, Paper Tengsheng Shengde to Segments Inter-segment consolidated Total assets $ 109,369,166 93,841,874 29,181,392 9,142,770 - 241,535,202 |
Organization and Business Bac_3
Organization and Business Background (Details) $ / shares in Units, ¥ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
Feb. 10, 2010 USD ($) | Jun. 25, 2019 USD ($) | Jun. 25, 2019 CNY (¥) | Jun. 24, 2009 USD ($) | Oct. 29, 2007 shares | Jun. 30, 2022 $ / shares | Jun. 30, 2021 | Jun. 30, 2022 $ / shares | Jun. 30, 2021 | Jun. 09, 2022 $ / shares | Dec. 31, 2021 $ / shares | Dec. 31, 2010 | Jun. 30, 2010 USD ($) | |
Organization and Business Background (Details) [Line Items] | |||||||||||||
Common stock, par value (in Dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Percentage of ownership | 100% | ||||||||||||
Registered capital (in Dollars) | $ 60,000,000 | ||||||||||||
Agreement options description | (iii) Call Option Agreement, which generally provides, among other things, that Dongfang Paper Equity Owners irrevocably grant to Baoding Shengde an option to purchase all or part of each owner’s equity interest in Dongfang Paper. The exercise price for the options shall be RMB1 which Baoding Shengde should pay to each of Dongfang Paper Equity Owner for all their equity interests in Dongfang Paper; | ||||||||||||
Percentage of distributable profit of Dongfang Paper | 100% | ||||||||||||
Percentage of revenue | 99.70% | 99.66% | |||||||||||
Variable interest percentage | 100% | ||||||||||||
Dongfang Holding [Member] | |||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||
Shares of common stock issued to shareholders under merger agreement (in Shares) | shares | 7,450,497 | ||||||||||||
Dongfang Paper [Member] | |||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||
Percentage of ownership | 100% | ||||||||||||
Percentage of annual net profits | 80% | ||||||||||||
Principal amount (in Dollars) | $ 10,000,000 | ||||||||||||
Loan amount (in Dollars) | 10,000,000 | ||||||||||||
Percentage of total assets | 87.11% | 87.11% | 84.13% | ||||||||||
Dongfang Paper [Member] | Revenue [Member] | |||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||
Percentage of revenue | 99.73% | 99.77% | |||||||||||
Baoding Shengde [Member] | |||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||
Percentage of ownership | 100% | ||||||||||||
Registered capital (in Dollars) | $ 10,000,000 | ||||||||||||
Loan agreement to terminate (in Dollars) | $ 10,000,000 | ||||||||||||
Hebei Tengsheng [Member] | |||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||
Business combination, consideration transferred | $ 45,000,000 | ¥ 320 |
Organization and Business Bac_4
Organization and Business Background (Details) - Schedule of subsidiaries and variable interest entities | 6 Months Ended |
Jun. 30, 2022 | |
Dongfang Holding [Member] | |
Variable Interest Entity [Line Items] | |
Date of Incorporation or Establishment | November 13, 2006 |
Place of Incorporation or Establishment | BVI |
Percentage of Ownership | 100% |
Principal Activity | Inactive investment holding |
Shengde Holdings [Member] | |
Variable Interest Entity [Line Items] | |
Date of Incorporation or Establishment | February 25, 2009 |
Place of Incorporation or Establishment | State of Nevada |
Percentage of Ownership | 100% |
Principal Activity | Investment holding |
Baoding Shengde [Member] | |
Variable Interest Entity [Line Items] | |
Date of Incorporation or Establishment | June 1, 2009 |
Place of Incorporation or Establishment | PRC |
Percentage of Ownership | 100% |
Principal Activity | Paper production and distribution |
Dongfang Paper [Member] | |
Variable Interest Entity [Line Items] | |
Date of Incorporation or Establishment | March 10, 1996 |
Place of Incorporation or Establishment | PRC |
Percentage of Ownership | Control |
Principal Activity | Paper production and distribution |
Organization and Business Bac_5
Organization and Business Background (Details) - Schedule of aggregate carrying value of Dongfang Paper’s assets and liabilities - VIE [Member] - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and bank balances | $ 3,693,419 | $ 1,921,407 |
Restricted cash | ||
Accounts receivable | 3,820,123 | 4,867,759 |
Inventories | 6,609,820 | 5,823,762 |
Prepayments and other current assets | 17,304,373 | 19,942,878 |
Due from related parties | 844,431 | 888,893 |
Total current assets | 32,272,166 | 33,444,699 |
Prepayment on property, plant and equipment | 41,877,755 | |
Finance lease right-of-use assets, net | 2,092,625 | 2,286,459 |
Property, plant, and equipment, net | 152,023,115 | 116,054,387 |
Deferred tax asset non-current | 10,005,097 | 9,547,741 |
Total Assets | 196,393,003 | 203,211,041 |
Current Liabilities | ||
Short-term bank loans | 5,958,519 | 5,958,561 |
Current portion of long-term loans from credit union | 4,410,406 | 2,289,945 |
Lease liability | 224,219 | 210,161 |
Accounts payable | 17,098 | 10,255 |
Advance from customers | 37,709 | 39,694 |
Accrued payroll and employee benefits | 220,367 | 279,513 |
Other payables and accrued liabilities | 4,863,858 | 4,740,900 |
Income taxes payable | 219,307 | 1,108,038 |
Total current liabilities | 15,951,483 | 14,637,067 |
Loans from credit union | 596,001 | 2,980,065 |
Deferred gain on sale-leaseback | 100,820 | 155,110 |
Lease liability - non-current | 20,299 | 152,233 |
Total liabilities | $ 16,668,603 | $ 17,924,475 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Restricted Cash [Abstract] | ||
Restricted cash |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventories - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Raw Materials | ||
Raw materials | $ 5,698,616 | $ 2,348,154 |
Semi-finished Goods | 107,309 | 96,087 |
Finished Goods | 823,732 | 3,400,654 |
Total inventory, gross | 6,629,657 | 5,844,895 |
Inventory reserve | ||
Total inventory, net | 6,629,657 | 5,844,895 |
Recycled paper board [Member] | ||
Raw Materials | ||
Raw materials | 5,289,833 | 2,097,062 |
Recycled white scrap paper [Member] | ||
Raw Materials | ||
Raw materials | 11,217 | 11,808 |
Gas [Member] | ||
Raw Materials | ||
Raw materials | 148,119 | 32,753 |
Base paper and other raw materials [Member] | ||
Raw Materials | ||
Raw materials | $ 249,447 | $ 206,531 |
Prepayments and Other Current_3
Prepayments and Other Current Assets (Details) - Schedule of prepayments and other current assets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Schedule of prepayments and other current assets [Abstract] | ||
Prepaid land lease | $ 178,800 | $ 188,215 |
Prepayment for purchase of materials | 7,450,713 | 9,190,527 |
Prepayment for purchase of equipment | 1,053,908 | 980,786 |
Value-added tax recoverable | 13,910,314 | 14,740,296 |
Others | 213,565 | 696,816 |
Total | $ 22,807,300 | $ 25,796,640 |
Property, plant and equipment_3
Property, plant and equipment, net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Property, plant and equipment, net (Details) [Line Items] | |||||
Term of lease, description | As of June 30, 2022 and December 31, 2021, land use rights represented twenty three parcels of state-owned lands located in Xushui District and Wei County of Hebei Province in China, with lease terms of 50 years expiring in 2061 and 2068, respectively. | ||||
Land use right net values pledged for sale-leaseback financing | $ 5,631,283 | $ 5,631,283 | $ 6,002,195 | ||
Net value | 4,151,619 | 4,151,619 | 4,407,889 | ||
Depreciation and amortization | 3,819,083 | $ 4,073,916 | 7,592,319 | $ 8,166,403 | |
Dongfang Paper [Member] | |||||
Property, plant and equipment, net (Details) [Line Items] | |||||
Property, plant and equipment net value | $ 682,421 | $ 682,421 | $ 1,130,333 | ||
Hebei Tengsheng [Member] | |||||
Property, plant and equipment, net (Details) [Line Items] | |||||
Land use right net value | $5,364,917 | $5,690,261 |
Property, plant and equipment_4
Property, plant and equipment, net (Details) - Schedule of property, plant and equipment, net - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Total | $ 293,622,791 | $ 258,274,965 |
Less: accumulated depreciation and amortization | (132,427,407) | (131,687,537) |
Property, Plant and Equipment, net | 161,195,384 | 126,587,428 |
Land use rights [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Total | 59,862,539 | 12,790,062 |
Building and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Total | 70,877,768 | 74,609,698 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Total | 161,815,491 | 170,149,367 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Total | 754,802 | 725,838 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Total | $ 312,191 |
Financing with Sale-Leaseback_2
Financing with Sale-Leaseback (Details) | 3 Months Ended | 6 Months Ended | ||||||
Aug. 06, 2020 USD ($) | Aug. 06, 2020 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Aug. 17, 2020 USD ($) | |
Financing with Sale-Leaseback (Details) [Line Items] | ||||||||
Sale of lease equipment | $ 2,500,000 | |||||||
Right of use assets | $ 2,349,452 | |||||||
Interest rate | 15.60% | 15.60% | ||||||
Inception of the lease | $ 567,099 | |||||||
Lease liability | $ 244,518 | $ 244,518 | $ 362,394 | |||||
Current portion amount | 224,219 | 224,219 | 210,161 | |||||
Amortization of leased equipment | 39,972 | $ 41,457 | 81,978 | $ 82,454 | ||||
Sale-leaseback arrangement | 10,862 | $ 18,932 | 24,369 | $ 39,350 | ||||
Deferred gain amount | 430,695 | |||||||
TLCL [Member] | ||||||||
Financing with Sale-Leaseback (Details) [Line Items] | ||||||||
Sale of lease equipment | $ 16,000,000 | |||||||
Lease term | 3 years | 3 years | ||||||
TLCL [Member] | Lease Financing Agreement [Member] | ||||||||
Financing with Sale-Leaseback (Details) [Line Items] | ||||||||
Financing proceeds amount | $ 2,500,000 | ¥ 16,000,000 | ||||||
Hebei Tengsheng [Member] | ||||||||
Financing with Sale-Leaseback (Details) [Line Items] | ||||||||
Purchase price | $ 16 | ¥ 100 | ||||||
Leased equipment net | $ 2,092,625 | $ 2,092,625 | $ 2,286,459 |
Financing with Sale-Leaseback_3
Financing with Sale-Leaseback (Details) - Schedule of future minimum lease payments of the capital lease | Jun. 30, 2022 USD ($) |
Schedule of future minimum lease payments of the capital lease [Abstract] | |
2023 | $ 246,744 |
2024 | 20,562 |
Less: unearned discount | (22,788) |
Total future minimum lease payments | 244,518 |
Less: Current portion lease liability | (224,219) |
Present value of operating lease liability | $ 20,299 |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Dec. 12, 2019 | Apr. 17, 2019 | Nov. 06, 2018 | Jul. 15, 2013 | Apr. 16, 2014 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Loans Payable (Details) [Line Items] | ||||||||||
Short-term borrowings | $ 5,660,518 | $ 5,660,518 | $ 5,958,561 | |||||||
Unsecured bank loans | ||||||||||
Average short-term borrowing rates | 4.79% | 4.79% | 4.79% | 4.79% | ||||||
Loan extension period | 5 years | |||||||||
Fixed rate | 0.60% | 7.56% | 7.56% | |||||||
Total outstanding loan | $ 2,384,003 | $ 2,384,003 | ||||||||
Loan agreement, description | the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which is due and payable in various installments from June 21, 2020 to December 11, 2021. The loan was renewed on March 22, 2021 and December 24, 2021 and extended for additional 3 years in total, which will be due on December 11, 2024 according to the new schedule. | the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 2 years, which was due and payable in various installments from August 21, 2019 to April 16, 2021. The loan was renewed on March 22, 2021 and December 24, 2021 and extended for additional 3 years in total, which will be due on April 16, 2024 according to the new schedule. | ||||||||
Total outstanding loan | 4,410,406 | 4,410,406 | 6,838,465 | |||||||
Current portion amount | 2,038,992 | |||||||||
Total outstanding loan | 2,509,528 | |||||||||
Total outstanding loan | 1,937,003 | 1,937,003 | 2,038,992 | |||||||
Total interest expenses | 248,244 | $ 264,967 | ||||||||
Working capital loan amount | 505,550 | 505,550 | ||||||||
Working capital loan agreement | 5,958,518 | $ 523,450 | 5,958,518 | $ 523,450 | 5,958,561 | |||||
ICBC [Member] | ||||||||||
Loans Payable (Details) [Line Items] | ||||||||||
Working capital loan agreement | $ 5,660,518 | $ 5,660,518 | 5,958,561 | |||||||
Loans fixed interest rate | 4.785% | 4.785% | ||||||||
Rural Credit Union of Xushui District [Member] | ||||||||||
Loans Payable (Details) [Line Items] | ||||||||||
Loans payable | $ 9,327,413 | $ 9,327,413 | 9,818,530 | |||||||
Fixed rate | 0.64% | 0.64% | ||||||||
Repayments due, description | On November 6, 2018, the loan was renewed for additional 5 years and will be due and payable in various installments from December 21, 2018 to November 5, 2023. | |||||||||
Total outstanding loan | $ 685,401 | $ 685,401 | 329,376 | |||||||
Non-current liabilities | 596,001 | 596,001 | 1,019,495 | |||||||
Loan agreement, description | On July 15, 2013, the Company entered into a loan agreement with the Rural Credit Union of Xushui District for a term of 5 years, which was originally due and payable in various installments from December 21, 2013 to July 26, 2018. On June 21, 2018, the loan was extended for additional 5 years and will be due and payable in various installments from December 21, 2018 to June 20, 2023. | |||||||||
Total outstanding loan | 682,421 | 682,421 | 1,130,333 | |||||||
Total outstanding loan balance | 2,384,003 | 2,384,003 | 2,509,528 | |||||||
Rural Credit Union of Xushui District [Member] | Long-term Loan [Member] | ||||||||||
Loans Payable (Details) [Line Items] | ||||||||||
Total outstanding loan | $ 1,281,402 | $ 1,281,402 | 1,348,871 | |||||||
Rural Credit Union of Xushui District Member1 [Member] | ||||||||||
Loans Payable (Details) [Line Items] | ||||||||||
Fixed rate | 0.64% | 0.64% | ||||||||
Total outstanding loan | ||||||||||
Total outstanding loan | $ 3,725,005 | $ 3,725,005 | 3,921,139 | |||||||
Current portion amount | 3,725,005 | 1,960,569 | ||||||||
Loans Payable [Member] | ||||||||||
Loans Payable (Details) [Line Items] | ||||||||||
Non-current liabilities | $ 1,960,570 | |||||||||
Rural Credit Union of Xushui District Member1 [Member] | ||||||||||
Loans Payable (Details) [Line Items] | ||||||||||
Total outstanding loan | $ 1,937,003 | $ 1,937,003 |
Loans Payable (Details) - Sched
Loans Payable (Details) - Schedule of loans payable to rural credit union of xushui district - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Loans Payable (Details) - Schedule of loans payable to rural credit union of xushui district [Line Items] | ||
Total | $ 9,327,413 | $ 9,818,530 |
Less: Current portion of long-term loans from credit union | (4,410,406) | (6,838,465) |
Long-term loans from credit union | 4,917,007 | 2,980,065 |
Rural Credit Union of Xushui District Loan 1 [Member] | ||
Loans Payable (Details) - Schedule of loans payable to rural credit union of xushui district [Line Items] | ||
Total | 1,281,402 | 1,348,871 |
Rural Credit Union of Xushui District Loan 2 [Member] | ||
Loans Payable (Details) - Schedule of loans payable to rural credit union of xushui district [Line Items] | ||
Total | 3,725,005 | 3,921,139 |
Rural Credit Union of Xushui District Loan 3 [Member] | ||
Loans Payable (Details) - Schedule of loans payable to rural credit union of xushui district [Line Items] | ||
Total | 2,384,003 | 2,509,528 |
Rural Credit Union of Xushui District Loan 4 [Member] | ||
Loans Payable (Details) - Schedule of loans payable to rural credit union of xushui district [Line Items] | ||
Total | $ 1,937,003 | $ 2,038,992 |
Loans Payable (Details) - Sch_2
Loans Payable (Details) - Schedule of long-term debt repayment | Jun. 30, 2022 USD ($) |
Fiscal year | |
Remainder of 2022 | $ 4,410,406 |
2023 | 4,917,007 |
Total | $ 9,327,413 |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||||
Jul. 12, 2021 | Mar. 01, 2015 USD ($) | Dec. 10, 2014 USD ($) | Jan. 01, 2013 | Dec. 31, 2019 USD ($) | Nov. 23, 2018 USD ($) | Feb. 28, 2018 USD ($) | Dec. 31, 2015 USD ($) | Dec. 31, 2016 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 08, 2021 USD ($) | Dec. 08, 2021 CNY (¥) | Oct. 14, 2016 USD ($) | Jul. 13, 2015 USD ($) | Mar. 01, 2015 CNY (¥) | |
Related Party Transactions (Details) [Line Items] | ||||||||||||||||
Interest amount | $ 94,636 | $ 20,400 | $ 2,249,279 | |||||||||||||
Amount due to shareholder | $ 391,374 | |||||||||||||||
Advances or funding agreement | 3 years | |||||||||||||||
Unsecured amount | ||||||||||||||||
Loan due description | Mr. Zhenyong Liu agreed to extend the loan for additional 3 years and the remaining balance was due on July 12, 2021. | |||||||||||||||
Fixed interest rate | 3% | 3% | ||||||||||||||
Chief Executive Officer [Member] | ||||||||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||||||||
Amount due to shareholder | 727,433 | 727,433 | ||||||||||||||
Working capital | $ 17,201,342 | ¥ 120,000,000 | ||||||||||||||
Outstanding interest | 204,782 | 215,565 | ||||||||||||||
Unsecured amount | $ 2,883,091 | $ 4,324,636 | ||||||||||||||
Mr. Zhenyong Liu [Member] | ||||||||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||||||||
Repaid amount | $ 6,012,416 | |||||||||||||||
Interest paid | $ 288,596 | |||||||||||||||
Outstanding interest | 44,700 | 47,054 | ||||||||||||||
Due to loan amount | ||||||||||||||||
Borrow amount | $ 6,915,176 | ¥ 44,089,085 | ||||||||||||||
Mr. Zhenyong Liu [Member] | Dongfang Paper [Member] | ||||||||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||||||||
Interest amount | $ 158,651 | |||||||||||||||
Other payables and accrued liabilities | 381,938 | 402,047 | ||||||||||||||
Working capital | $ 8,742,278 | |||||||||||||||
Interest rate on loans | 4.35% | |||||||||||||||
Repayment of related party loans | $ 3,768,579 | $ 1,507,432 | ||||||||||||||
Mr. Zhenyong Liu [Member] | Chief Executive Officer [Member] | ||||||||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||||||||
Accrued interest | $ 631,420 | $ 664,666 | ||||||||||||||
Mr. Zhenyong Liu [Member] | Dongfang Paper [Member] | ||||||||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||||||||
Loan payable term, description | On January 1, 2013, Dongfang Paper and Mr. Zhenyong Liu renewed the three-year term loan previously entered on January 1, 2010, and extended the maturity date further to December 31, 2015. |
Other Payables and Accrued Li_3
Other Payables and Accrued Liabilities (Details) - Schedule of other payables and accrued liabilities - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Schedule of other payables and accrued liabilities [Abstract] | ||
Accrued electricity | $ 84,676 | $ 135,360 |
Accrued rental | 133,284 | 61,879 |
Value-added tax payable | 128,497 | |
Accrued interest to a related party | 631,420 | 664,666 |
Payable for purchase of equipment | 3,193,945 | 3,379,368 |
Accrued commission to salesmen | 14,657 | 15,274 |
Accrued bank loan interest | 1,296,451 | 992,989 |
Others | 24,950 | 1,003 |
Totals | $ 5,507,880 | $ 5,250,539 |
Derivative Liabilities (Details
Derivative Liabilities (Details) - Schedule of fair value warrant estimated valuation weighted-average assumptions | 3 Months Ended |
Jun. 30, 2022 | |
Product Warranty Liability [Line Items] | |
Expected dividend yield | |
Minimum [Member] | |
Product Warranty Liability [Line Items] | |
Expected term | 1 year 8 months 4 days |
Expected average volatility | 85% |
Risk-free interest rate | 0.19% |
Maximum [Member] | |
Product Warranty Liability [Line Items] | |
Expected term | 2 years 9 months |
Expected average volatility | 114% |
Risk-free interest rate | 2.99% |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details) - Schedule of changes in the derivative liabilities - Fair Value, Inputs, Level 3 [Member] | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Derivative Liabilities (Details) - Schedule of changes in the derivative liabilities [Line Items] | |
Balance at December 31, 2021 | $ 2,063,534 |
Addition of new derivatives recognized as warrant | |
Addition of new derivatives recognized as loss on derivatives | |
Exercise of warrants | |
Change in fair value of derivative liability | (1,346,633) |
Balance at June 30, 2022 | $ 716,901 |
Common Stock (Details)
Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 01, 2021 | Jan. 20, 2021 |
Common Stock [Abstract] | ||
Common stock, description | the Company offered and sold to certain institutional investors an aggregate of 26,181,818 shares of common stock and 26,181,818 warrants to purchase up to 26,181,818 shares of common stock in a best-efforts public offering for gross proceeds of approximately $14.4 million. | |
Warrant price per share | $ 0.75 | $ 0.55 |
Exercise price per warrant | $ 0.75 | $ 0.55 |
Aggregate shares of common stock (in Shares) | 29,277,866 | |
Warrants to purchase shares (in Shares) | 14,638,933 | |
Shares of common stock (in Shares) | 14,638,933 | |
Public offering for gross proceeds (in Dollars) | $ 21.9 |
Warrants (Details)
Warrants (Details) - shares | 1 Months Ended | 6 Months Ended | ||
Mar. 01, 2021 | Jan. 20, 2021 | Apr. 29, 2020 | Jun. 30, 2022 | |
Warrants (Details) [Line Items] | ||||
Warrants to purchase shares of common stock | 14,638,933 | 26,181,818 | ||
Warrant term, description | The March 2021 Warrants became exercisable on March 1, 2021 at an exercise price of $0.75 and will expire on March 1, 2026. 67,500 March 2021 Warrants were exercised in January and March 2021 at the exercise price of $0.75 per share and 14,571,433 March 2021 Warrants were outstanding as of June 30, 2022. | Warrants became exercisable on January 20, 2021 at an exercise price of $0.55 and will expire on January 20, 2026. 14,106,900 January 2021 Warrants were exercised in January and February of 2021 at the exercise price of $0.55 per share. 12,074,918 January 2021 Warrants were outstanding as of June 30, 2022 | These warrants become exercisable on July 23, 2020 and have a term of exercise equal to five years and six months from the date of issuance till July 23, 2025. 880,000 May 2020 Warrants were exercised in February 2021 at the exercise price of $0.7425 per share and 3,520,000 May 2020 Warrants were outstanding as of June 30, 2022. | |
May 2020 Warrants [Member] | ||||
Warrants (Details) [Line Items] | ||||
Issuance of common stock and warrants | 29,277,866 | 26,181,818 | 4,400,000 | |
Warrants to purchase shares of common stock | 14,638,933 | 26,181,818 | 4,400,000 |
Warrants (Details) - Schedule o
Warrants (Details) - Schedule of stock warrant activities | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Schedule of stock warrant activities [Abstract] | |
Number of Outstanding and exercisable at beginning of the period | shares | 30,166,351 |
Weight average exercise price of Outstanding and exercisable at beginning of the period | $ / shares | $ 0.6691 |
Number of Issued during the period | shares | |
Weight average exercise price of Issued during the period | $ / shares | |
Number of Exercised during the period | shares | |
Weight average exercise price of Exercised during the period | $ / shares | |
Number of Cancelled or expired during the period | shares | |
Weight average exercise price of Cancelled or expired during the period | $ / shares | |
Number of Outstanding and exercisable at end of the period | shares | 30,166,351 |
Weight average exercise price of Outstanding and exercisable at end of the period | $ / shares | $ 0.6691 |
Warrants (Details) - Schedule_2
Warrants (Details) - Schedule of outstanding and exercisable warrants - Warrant [Member] | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Warrants (Details) - Schedule of outstanding and exercisable warrants [Line Items] | |
Warrants Outstanding, Number of Shares | shares | 30,166,351 |
Warrants Outstanding, Weighted Average Remaining Contractual life (in years) | 3 years 7 months 2 days |
Warrants Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.6691 |
Warrants Exercisable, Number of Shares | shares | 30,166,351 |
Warrants Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.6691 |
Earnings Per Share (Details) -
Earnings Per Share (Details) - Schedule of basic and diluted net income per share - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Basic loss per share | ||||
Net loss for the period - numerator | $ (287,913) | $ (453,248) | $ (2,776,127) | $ (4,792,104) |
Weighted average common stock outstanding - denominator | 99,049,900 | 46,638,550 | 99,049,900 | 46,638,550 |
Net loss per share | $ (0.003) | $ (0.01) | $ (0.03) | $ (0.1) |
Diluted income per share | ||||
Net income (loss) for the period- numerator | $ (287,913) | $ (453,248) | $ (2,776,127) | $ (4,792,104) |
Weighted average common stock outstanding - denominator | 99,049,900 | 46,638,550 | 99,049,900 | 46,638,550 |
Effect of dilution | ||||
Weighted average common stock outstanding - denominator | 99,049,900 | 46,638,550 | 99,049,900 | 46,638,550 |
Diluted loss per share | $ (0.003) | $ (0.01) | $ (0.03) | $ (0.1) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jan. 01, 2018 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2017 | Dec. 31, 2021 | Dec. 31, 2019 | |
Income Taxes (Details) [Line Items] | ||||||||
State statutory tax rates percentage | 25% | |||||||
Net operating losses (in Dollars) | $ 776,533 | $ 882,743 | ||||||
Description of carry forwards expire | These carry forwards would expire, if not utilized, during the period of 2030 through 2035. | |||||||
Percentage of valuation allowance | 100% | |||||||
Effective income tax rate | 45.90% | 109.70% | 17.60% | 2,181% | ||||
Statute of limitations period | 5 years | |||||||
Maximum [Member] | ||||||||
Income Taxes (Details) [Line Items] | ||||||||
U.S. statutory federal income tax rate from the highest rate, percentage | 35% | |||||||
Minimum [Member] | ||||||||
Income Taxes (Details) [Line Items] | ||||||||
U.S. statutory federal income tax rate from the highest rate, percentage | 21% | |||||||
United States [Member] | ||||||||
Income Taxes (Details) [Line Items] | ||||||||
U.S. federal tax percentage | 34% | |||||||
State statutory tax rates percentage | 0% | |||||||
Additional income tax expense (in Dollars) | $ 80,000 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of provisions for income taxes - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Provision for Income Taxes | ||||
Current Tax Provision U.S. | $ 14,717 | $ 14,717 | ||
Current Tax Provision PRC | 228,407 | 754,087 | 228,407 | 1,242,976 |
Deferred Tax Provision PRC | (472,236) | 4,353,783 | (821,225) | 3,764,689 |
Total Provision for (Deferred tax benefit)/ Income Taxes | $ (243,829) | $ 5,122,587 | $ (592,818) | $ 5,022,382 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of deferred tax - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Deferred tax assets (liabilities) | ||
Depreciation and amortization of property, plant and equipment | $ 15,100,193 | $ 14,754,456 |
Impairment of property, plant and equipment | 785,428 | 783,433 |
Miscellaneous | 382,146 | 342,170 |
Net operating loss carryover of PRC company | 233,326 | 388,620 |
Total deferred tax assets | 16,501,093 | 16,268,679 |
Less: Valuation allowance | (5,000,000) | (5,000,000) |
Total deferred tax assets, net | $ 11,501,093 | $ 11,268,679 |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of reconciles the statutory rates effective tax rates | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Schedule of reconciles the statutory rates effective tax rates [Abstract] | ||||
PRC Statutory rate | 25% | 25% | 25% | 25% |
Effect of different tax jurisdiction | ||||
Effect of reconciling items in the PRC for tax purposes | 20.90% | (22.20%) | (7.40%) | (12.60%) |
(Over) Under-provision in previous year | ||||
Change in valuation allowance | 106.90% | 2,168.60% | ||
Effective income tax rate | 45.90% | 109.70% | 17.60% | 2,181% |
Stock Incentive Plans (Details)
Stock Incentive Plans (Details) | Nov. 12, 2021 shares |
2021 Incentive Stock Plan [Member] | |
Stock Incentive Plans (Details) [Line Items] | |
Number of shares | 1,500,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | 6 Months Ended | 12 Months Ended | ||||
Aug. 07, 2013 | Jun. 30, 2022 USD ($) ft² | Jun. 30, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Jun. 30, 2022 CNY (¥) ft² | |
Commitments and Contingencies (Details) [Line Items] | ||||||
Area of land (in Square Feet) | ft² | 32.95 | 32.95 | ||||
Lease term | 30 years | 30 years | ||||
Annual rental payment | $ 18,445 | ¥ 120,000 | ||||
Operating lease renewable term | 30 years | 30 years | ||||
Outstanding commitments | $ | $ 4,492,610 | $ 4,700,927 | ||||
Long-term loan from financial institutions | $ 4,619,006 | ¥ 31,000,000 | $ 4,862,211 | ¥ 31,000,000 | ||
Cash prices, description | the Company’s Audit Committee and the Board of Directors approved the sale of the land use right of the Headquarters Compound (the “LUR”), the office building and essentially all industrial-use buildings in the Headquarters Compound (the “Industrial Buildings”), and three employee dormitory buildings located within the Headquarters Compound (the “Dormitories”) to Hebei Fangsheng for cash prices of approximately $2.77 million, $1.15 million, and $4.31 million respectively. | |||||
Minimum [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Expected term | 1 year | 1 year | ||||
Maximum [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Expected term | 3 years | 3 years | ||||
Hebei Fangsheng [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Annual rental payment | $ 153,709 | ¥ 1,000,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of future minimum lease payments | Jun. 30, 2022 USD ($) |
Schedule of future minimum lease payments [Abstract] | |
2023 | $ 30,297 |
2024 | 17,880 |
2025 | 17,880 |
2026 | 17,880 |
2027 | 17,880 |
Thereafter | 80,460 |
Total operating lease payments | $ 182,277 |
Segment Reporting (Details)
Segment Reporting (Details) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Number of business operating segments | 2 |
Number of reportable segment | 3 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of financial informations for reportable segments - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Dongfang Paper [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 31,289,918 | $ 43,997,853 | $ 46,316,551 | $ 66,825,406 | |
Gross profit (loss) | 1,430,181 | 3,233,548 | 2,287,725 | 5,496,229 | |
Depreciation and amortization | 1,210,646 | 927,090 | 2,481,138 | 2,760,191 | |
Interest income | 1,787 | 8,614 | 3,743 | 10,980 | |
Interest expense | 167,431 | 181,175 | 340,620 | 357,561 | |
Income tax expense(benefit) | 134,982 | 617,975 | 54,583 | 1,034,830 | |
Net income (loss) | 650,767 | 1,847,997 | (53,906) | 2,935,206 | |
Total assets | 62,656,905 | 62,656,905 | $ 109,369,166 | ||
Hebei Tengsheng [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 411,388 | 2,727,000 | 809,776 | 3,978,416 | |
Gross profit (loss) | (814,347) | (232,251) | (1,378,124) | (688,458) | |
Depreciation and amortization | 2,188,973 | 2,283,861 | 4,250,910 | 4,540,928 | |
Interest income | 226 | 600 | 396 | 806 | |
Interest expense | 10,862 | 18,932 | 24,369 | 39,350 | |
Income tax expense(benefit) | (379,460) | 4,494,672 | (790,651) | 3,979,043 | |
Net income (loss) | (2,003,653) | (6,482,307) | (3,609,095) | (7,960,911) | |
Total assets | 133,736,099 | 133,736,099 | 93,841,874 | ||
Baoding Shengde [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 87,578 | 2,794,759 | 144,175 | 2,925,217 | |
Gross profit (loss) | 18,203 | 27,722 | 34,881 | 52,253 | |
Depreciation and amortization | 419,464 | 862,965 | 860,271 | 865,284 | |
Interest income | 2,911 | 2,505 | 4,240 | 4,266 | |
Interest expense | 80,813 | 83,792 | 164,930 | 165,889 | |
Income tax expense(benefit) | 649 | (4,777) | 143,250 | (6,208) | |
Net income (loss) | (52,758) | (85,776) | (284,648) | (153,821) | |
Total assets | 23,323,044 | 23,323,044 | 29,181,392 | ||
Not Attributable to Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | |||||
Gross profit (loss) | |||||
Depreciation and amortization | |||||
Interest income | |||||
Interest expense | |||||
Income tax expense(benefit) | 14,717 | ||||
Net income (loss) | 1,119,571 | 4,266,838 | 1,139,359 | ||
Total assets | 5,745,345 | 5,745,345 | 9,142,770 | ||
Elimination of Inter-segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | (2,984,697) | ||||
Gross profit (loss) | |||||
Depreciation and amortization | |||||
Interest income | |||||
Interest expense | |||||
Income tax expense(benefit) | |||||
Net income (loss) | (1,840) | 32,163 | |||
Total assets | |||||
Enterprise-wide, consolidated [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 31,788,884 | 46,534,915 | 47,270,502 | 70,744,342 | |
Gross profit (loss) | 634,037 | 3,029,019 | 944,482 | 4,860,024 | |
Depreciation and amortization | 3,819,083 | 4,073,916 | 7,592,319 | 8,166,403 | |
Interest income | 4,924 | 11,719 | 8,379 | 16,052 | |
Interest expense | 259,106 | 283,899 | 529,919 | 562,800 | |
Income tax expense(benefit) | (243,829) | 5,122,587 | (592,818) | 5,022,382 | |
Net income (loss) | (287,913) | $ (453,248) | (2,776,127) | $ (4,792,104) | |
Total assets | $ 225,461,393 | $ 225,461,393 | $ 241,535,202 |
Concentration and Major Custo_2
Concentration and Major Customers and Suppliers (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Total Sales [Member] | ||||
Concentration and Major Customers and Suppliers (Details) [Line Items] | ||||
Concentration risk percentage | 10% | 10% | 10% | 10% |
Total Purchases [Member] | ||||
Concentration and Major Customers and Suppliers (Details) [Line Items] | ||||
Number of major supplier | 3 | 3 | 3 | 3 |
Supplier One [Member] | Total Purchases [Member] | ||||
Concentration and Major Customers and Suppliers (Details) [Line Items] | ||||
Concentration risk percentage | 77% | 79% | 77% | 80% |
Supplier Two [Member] | Total Purchases [Member] | ||||
Concentration and Major Customers and Suppliers (Details) [Line Items] | ||||
Concentration risk percentage | 16% | 10% | 15% | 10% |
Supplier Three [Member] | Total Purchases [Member] | ||||
Concentration and Major Customers and Suppliers (Details) [Line Items] | ||||
Concentration risk percentage | 5% | 3% | 5% | 2% |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) | 1 Months Ended | |||
May 01, 2015 USD ($) | May 01, 2015 CNY (¥) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 CNY (¥) | |
Concentration of Credit Risk (Details) [Line Items] | ||||
Per depositor per insured financial intuition | $ 74,500 | ¥ 500,000 | ||
Maximum coverage | $ | $ 8,215,796 | |||
Minimum [Member] | ||||
Concentration of Credit Risk (Details) [Line Items] | ||||
Maximum coverage | ¥ 500,000 | |||
Maximum [Member] | ||||
Concentration of Credit Risk (Details) [Line Items] | ||||
Maximum coverage | ¥ 55,139,496 |
Subsequent Event (Details)
Subsequent Event (Details) - Common Stock [Member] | Jun. 30, 2022 shares |
Maximum [Member] | |
Subsequent Event (Details) [Line Items] | |
Common stock authorized | 500,000,000 |
Common shares issued and outstanding | 99,049,900 |
Minimum [Member] | |
Subsequent Event (Details) [Line Items] | |
Common stock authorized | 50,000,000 |
Common shares issued and outstanding | 9,915,920 |