Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 31, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | Code Chain New Continent Ltd | |
Trading Symbol | CCNC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 46,077,110 | |
Amendment Flag | false | |
Entity Central Index Key | 0001641398 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-37513 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 47-3709051 | |
Entity Address, Address Line One | No 119 South Zhaojuesi Road 2nd Floor | |
Entity Address, Address Line Two | Room 1 Chenghua District | |
Entity Address, Address Line Three | Chengdu | |
Entity Address, City or Town | Sichuan | |
Entity Address, Country | CN | |
Entity Address, Postal Zip Code | 610047 | |
City Area Code | +86 | |
Local Phone Number | 028-84112941 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, par value $0.0001 | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 8,383,906 | $ 998,717 |
Short term investment | 3,295,070 | |
Accounts receivable, net | 1,071,590 | |
Other receivables, net | 104,503 | 555,433 |
Other receivable - related party | 504,456 | 230,134 |
Inventories | 13,473 | 1,047,274 |
Prepayments | 21,916,404 | 4,780,975 |
Total current assets | 30,922,742 | 11,979,193 |
PLANT AND EQUIPMENT, NET | 5,240,523 | 82,833 |
RIGHT-OF-USE ASSETS | 69,038 | |
OTHER ASSETS | ||
Goodwill | 7,753,340 | 11,650,157 |
Intangible assets, net | 3,137,781 | 1,226,521 |
Deferred tax assets | 127,377 | |
Total other assets | 10,891,121 | 13,004,055 |
Total assets | 47,054,386 | 25,135,119 |
CURRENT LIABILITIES | ||
Short term loans - bank | 475,103 | |
Accounts payable | 136,535 | 1,126,091 |
Other payables and accrued liabilities | 12,048 | 21,883 |
Other payables - related parties | 466,407 | 491,136 |
Customer deposits | 10,581,943 | 900,522 |
Lease liabilities - current | 101,292 | |
Taxes payable | 302,061 | 72,639 |
Total current liabilities | 11,498,994 | 3,188,666 |
OTHER LIABILITIES | ||
Lease liabilities - noncurrent | 33,698 | |
Total other liabilities | 33,698 | |
Total liabilities | 11,498,994 | 3,222,364 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 46,077,110 and 29,176,026 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 4,608 | 2,918 |
Additional paid-in capital | 83,034,373 | 20,022,427 |
Subscription receivable | (16,442,110) | |
(Accumulated deficit) retained earnings | (31,241,058) | 951,773 |
Accumulated other comprehensive loss | 199,579 | 935,637 |
Total shareholders’ equity | 35,555,392 | 21,912,755 |
Total liabilities and shareholders’ equity | $ 47,054,386 | $ 25,135,119 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 46,077,110 | 29,176,026 |
Common stock, shares outstanding | 46,077,110 | 29,176,026 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
REVENUES | ||||
Wuge digital door signs | $ 2,665,702 | $ 9,541,992 | ||
Trading and others | $ (45,759) | $ 723 | ||
TOTAL REVENUES | 2,665,702 | (45,759) | 9,541,992 | 723 |
COST OF REVENUES | ||||
Wuge digital door signs | 40,656 | 199,342 | ||
Trading and others | 4,711 | 12,323 | ||
TOTAL COST OF REVENUES | 40,656 | 4,711 | 199,342 | 12,323 |
GROSS PROFIT | 2,625,046 | (50,470) | 9,342,650 | (11,600) |
OPERATING EXPENSES (INCOME) | ||||
Selling, general and administrative | 5,852,606 | 570,999 | 32,748,873 | 752,314 |
Provision for (recovery of) doubtful accounts | (738,449) | |||
TOTAL OPERATING EXPENSES (INCOME) | 5,852,606 | (167,450) | 32,748,873 | 752,314 |
INCOME FROM OPERATIONS | (3,227,560) | 116,980 | (23,406,223) | (763,914) |
OTHER INCOME (EXPENSE) | ||||
Interest income | 15,744 | (2,794) | 35,106 | 5,935 |
Interest expense | 4,375 | |||
Investment income | ||||
Other income (expense), net | 557,107 | 2,373,550 | (1) | |
Total other income (expense), net | 572,851 | 1,581 | 2,408,656 | 5,934 |
LOSS(INCOME) BEFORE INCOME TAXES FROM CONTINUING OPERATIONS | (2,654,709) | 118,561 | (20,997,567) | (757,980) |
PROVISION FOR INCOME TAXES | ||||
LOSS(INCOME) FROM CONTINUING OPERATIONS | (2,654,709) | 118,561 | (20,997,567) | (757,980) |
Discontinued operations: | ||||
Income (loss) from discontinued operations, net of taxes | (459,119) | 23,571 | 424,774 | |
Gain on disposal, net of taxes | 15,661 | (151,318) | (11,218,835) | 6,800,299 |
Net loss | (2,639,048) | (491,876) | (32,192,831) | 6,467,093 |
OTHER COMPREHENSIVE INCOME | ||||
Foreign currency translation adjustment | 3,386 | 1,203,719 | (736,058) | 496,479 |
COMPREHENSIVE LOSS(INCOME) | $ (2,635,662) | $ 711,843 | $ (32,928,889) | $ 6,963,572 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||
Basic and diluted (in Shares) | 37,608,252 | 28,787,800 | 37,608,252 | 28,208,444 |
Earnings per share from continuing operations | ||||
Basic and diluted (in Dollars per share) | $ (0.07) | $ 0 | $ (0.58) | $ (0.03) |
Earnings per share from discontinued operations | ||||
Basic and diluted (in Dollars per share) | 0 | (0.02) | (0.3) | 0.26 |
Earnings per share available to common shareholders | ||||
Basic and diluted (in Dollars per share) | $ (0.07) | $ (0.02) | $ (0.9) | $ 0.23 |
Condensed Statements of Changes
Condensed Statements of Changes in Shareholders’ Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings Statutory Reserves | Retained Earnings Unrestricted | Accumulated Other Comprehensive Income (Loss) | Stock Subscription Receivable | Total |
BALANCE at Dec. 31, 2019 | $ 2,082 | $ 8,350,861 | $ (1,558,683) | $ (832,267) | $ 5,961,993 | |||
BALANCE (in Shares) at Dec. 31, 2019 | 20,821,661 | |||||||
Net income | 6,467,093 | 6,467,093 | ||||||
Issuance of common stock for acquisition | $ 400 | 7,199,600 | 7,200,000 | |||||
Issuance of common stock for acquisition (in Shares) | 4,000,000 | |||||||
Issuance of common stock for cash | $ 537 | 6,203,979 | 6,204,516 | |||||
Issuance of common stock for cash (in Shares) | 5,367,297 | |||||||
The cancellation of the common stock | $ (101) | (1,732,013) | (1,732,114) | |||||
The cancellation of the common stock (in Shares) | (1,012,932) | |||||||
Foreign currency translation | 496,479 | 496,479 | ||||||
BALANCE at Sep. 30, 2020 | $ 2,918 | 20,022,427 | 4,908,410 | (335,788) | 24,597,967 | |||
BALANCE (in Shares) at Sep. 30, 2020 | 29,176,026 | |||||||
BALANCE at Dec. 31, 2020 | $ 2,918 | 20,022,427 | 951,773 | 935,637 | 21,912,755 | |||
BALANCE (in Shares) at Dec. 31, 2020 | 29,176,026 | |||||||
Net income | (32,192,831) | (32,192,831) | ||||||
Issuance of common stock for Bonus | $ 92 | 2,563,526 | 2,563,618 | |||||
Issuance of common stock for Bonus (in Shares) | 925,494 | |||||||
Issuance of common stock for purchase Bitcoin mining machines | $ 159 | 6,159,841 | 6,160,000 | |||||
Issuance of common stock for purchase Bitcoin mining machines (in Shares) | 1,587,800 | |||||||
Issuance of common stock for purchase digital currency mining machines | $ 765 | 16,441,346 | 16,442,111 | |||||
Issuance of common stock for purchase digital currency mining machines (in Shares) | 7,647,493 | |||||||
Issuance of shares for cash | $ 417 | 22,539,579 | 22,539,996 | |||||
Issuance of shares for cash (in Shares) | 4,166,666 | |||||||
Issuance of common stock for employee compensation | $ 300 | 16,923,550 | 16,923,850 | |||||
Issuance of common stock for employee compensation (in Shares) | 3,000,000 | |||||||
The cancellation of the common stock | $ (43) | (1,615,896) | (1,615,939) | |||||
The cancellation of the common stock (in Shares) | (426,369) | |||||||
Issuance of common stock | (16,442,110) | (16,442,110) | ||||||
Foreign currency translation | (736,058) | (736,058) | ||||||
BALANCE at Sep. 30, 2021 | $ 4,608 | $ 83,034,373 | $ (31,241,058) | $ 199,579 | $ (16,442,110) | $ 35,555,392 | ||
BALANCE (in Shares) at Sep. 30, 2021 | 46,077,110 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ (32,192,831) | $ 6,467,093 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation of plant and equipment | 1,237,480 | 14,250 |
Amortization of intangible assets | 151 | 93 |
Issuance of common stock for employee compensation | 16,923,850 | |
Issuance of common stock for bonus | 2,563,618 | |
Disposal of the company | 11,218,835 | (7,911,096) |
Deferred tax provision | 37,444 | |
Bitcoin revenue | (2,366,518) | |
Change in operating assets and liabilities | ||
Notes receivable | 42,902 | |
Accounts receivables | (419,509) | 652,449 |
Other receivables | 439,725 | (40,106) |
Other receivable - related party | (273,570) | 13,329 |
Inventories | (599,768) | (193,695) |
Prepayments | (21,217,981) | (687,356) |
Accounts payable | (420,377) | 668,000 |
Other payables and accrued liabilities | 145,934 | 313,319 |
Customer deposits | 10,094,951 | 1,155,086 |
Lease liabilities | 3,227 | 16,512 |
Taxes payable | 263,930 | 2,829 |
Net cash provided by (used in) operating activities | (14,598,852) | 551,053 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net increase in cash from acquisition of Wuge | 288,788 | |
Net decrease in cash from disposal of discontinued operations | (271,099) | (470,576) |
Purchase of Intangible assets | 463,679 | (1,144,624) |
Purchase of financial products | (3,074,679) | |
Purchase of equipment | (287,821) | (68,188) |
Net cash used in investing activities | (95,241) | (4,469,279) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 22,539,996 | 2,511,657 |
Proceeds from short-term loans - bank | 255,023 | 443,326 |
Repayments of other payable - related parties | ||
Net cash provided by financing activities | 22,795,019 | 2,954,983 |
EFFECT OF EXCHANGE RATE ON CASH | (25,129) | (56,922) |
NET (DECREASE)/INCREASE IN CASH | 8,075,796 | (1,020,165) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 308,110 | 2,483,567 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 8,383,906 | 1,463,402 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for income tax | 19,468 | |
Cash paid for interest | 7,708 | 12,598 |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | ||
Issuance of common stock for Bonus | 2,563,618 | |
Issuance of common stock for purchase Bitcoin mining machines | 6,160,000 | |
Issuance of common stock for purchase digital currency mining machines | 16,442,111 | |
Issuance of common stock for employee compensation | 16,923,850 | |
The cancellation of the common stock | 1,615,939 | 1,732,014 |
Bitcoin revenue | $ 2,366,518 | |
Initial recognition of right-of-use assets and lease liabilities | $ 251,598 |
Nature of Business and Organiza
Nature of Business and Organization | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Nature of business and organization | Note 1 – Nature of business and organization Code Chain New Continent Limited (the “Company” or “CCNC”), formerly known as TMSR Holding Company Limited and JM Global Holding Company, was a blank check company incorporated in Delaware on April 10, 2015. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business transaction, one or more operating businesses or assets. On June 20, 2018, CCNC completed a reincorporation and as a result, the Company changed its state of incorporation from Delaware to Nevada (the “Reincorporation”). The Articles of Incorporation and Bylaws of CCNC Nevada became the governing instruments of the Company, resulting in a 2-for-1 forward stock split of the Company’s common stock (the “Forward Split). The Reincorporation and Forward Split were approved by shareholders holding the majority of the outstanding shares of common stock of CCNC Delaware on June 1, 2018 at the Annual Meeting of Shareholders. On February 6, 2018, China Sunlong Environmental Technology Inc. (“China Sunlong”) consummated the business combination with the Company pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) dated as of August 28, 2017 by and among (i) the Company; (ii) Zhong Hui Holding Limited; (iii) China Sunlong; (iv) each of the shareholders of China Sunlong named on Annex I of the Share Exchange Agreement (the “Sellers”); and (v) Chuanliu Ni, a Chinese citizen who is the Chief Executive Officer and director of China Sunlong, in the capacity as the representative for the Sellers. Pursuant to the Share Exchange Agreement, the Company acquired from the Sellers all of the issued and outstanding equity interests of China Sunlong in exchange for 17,990,856 newly-issued shares of common stock of the Company to the Sellers. 1,799,088 of these newly-issued shares are held in escrow for 18 months from the closing date of the Business Combination as a security for China Sunlong and the Sellers’ indemnification obligations under the Share Exchange Agreement. This transaction is accounted for as a “reverse merger” and recapitalization at the date of the consummation of the transaction since the shareholders of China Sunlong owns the majority of the outstanding shares of the Company immediately following the completion of the transaction and the Company’s operations was the operations of China Sunlong following the transaction. Accordingly, China Sunlong was deemed to be the accounting acquirer in the transaction and the transaction was treated as a recapitalization of China Sunlong. The financial statements of China Sunlong prior to February 6, 2018 are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of the Company. China Sunlong is a holding company incorporated on August 31, 2015, under the laws of the Cayman Islands. China Sunlong has no substantive operations other than holding all of the outstanding share capital of Shengrong Environmental Protection Holding Company Limited (“Shengrong BVI”). Shengrong BVI is a holding company incorporated on June 30, 2015, under the laws of the British Virgin Islands. Shengrong BVI has no substantive operations other than holding all of the outstanding share capital of Hong Kong Shengrong Environmental Technology Limited (“Shengrong HK”). Shengrong HK is also a holding company holding all of the outstanding equity of Shengrong Environmental Protection Technology (Wuhan) Co., Ltd. (“Shengrong WFOE”). The Company focuses on the industrial solid waste recycling and comprehensive utilization. The Company’s main products are high efficiency permanent magnetic separators and comprehensive utilization systems for industrial solid wastes. The Company’s headquarter is located in Hubei Province, in the People’s Republic of China (the “PRC” or “China”). All of the Company’s business activities are carried out by the wholly owned operating Chinese company, Hubei Shengrong Environmental Protection Energy-Saving Science and Technology Ltd. (“Hubei Shengrong”) prior to May 1, 2018. On April 11, 2018, the Company, Shengrong WFOE and Hubei Shengrong, both of which are the Company’s indirectly owned subsidiaries (collectively “Purchasers”), entered into a Share Purchase Agreement with Long Liao, Chunyong Zheng, Wuhan Modern Industrial Technology Research Institute, and Hubei Zhonggong Materials Group Co., Ltd. (collectively “Sellers”) and Wuhan HOST Coating Materials Co., Ltd. (“Wuhan HOST”), a company incorporated in China engaging in the research, development, production and sale of coating materials. Pursuant to the Share Purchase Agreement, as supplemented on August 16, 2018, the Purchasers acquired all of the outstanding equity interests of Wuhan Host. In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million, of which $4.7 million or RMB equivalent shall be paid in cash and $6.0 million shall be paid in shares of common stock, of CCNC (“Share Consideration”). The Parties agree the Share Consideration shall be an aggregate of 1,012,932 shares of common stock of which is based on the closing price of US$4.64 on March 27, 2018. On March 31, 2017, China Sunlong completed its acquisition of 100% of the equity in TJComex International Group Corporation (“TJComex BVI”). At the closing of such acquisition, the selling shareholders of TJComex BVI received 5,935 shares of China Sunlong Common Stock valued at $926.71 per share for 100% of their equity in TJComex BVI. TJComex BVI owns 100% of the issued and outstanding capital stock of TJComex Hong Kong Company Limited (“TJComex HK”), a Hong Kong limited liability company, which owns 100% equity interest of Tianjin Corro Technological Consulting Co., Ltd. (“TJComex WFOE”), a wholly foreign owned enterprise incorporated under the laws of the PRC. Pursuant to certain contractual arrangements, TJComex WFOE controls Tianjin Commodity Exchange Co., Ltd. (“TJComex Tianjin”), a limited liability company incorporated under the law of the PRC. TJComex Tianjin is engaged in general merchandise trading business and related consulting services, and its headquarter is located in the city of Tianjin, PRC. On April 2, 2018, the Company disposed of its subsidiary, TJComex BVI in consideration of (i) its minimum contribution to the Company’s results of operation and (ii) the unsatisfactory synergy between the TJComex BVI business and the rest of the Company’s business. The Company’s decision to dispose of TJComex BVI is to (i) improve the Company’s overall financial condition and results of operations, (ii) reduce the complexity of the Company’s business, (iii) focus the Company’s resources on the solid waste recycling business as well as developing environmental control business opportunities; and (iv) make it possible for the Company to pursue acquisition opportunities for more compatible businesses. TJComex BVI was disposed to Chuanliu Ni, a Chinese citizen who is the director of China Sunlong. As of April 2, 2018, the net assets of TJComex BVI were $16,598 and is being recorded as a loss from disposal of subsidiary in the consolidated financial statements for the period ending December 31, 2018. As TJComex BVI operating revenue was less than 1% of the Company’s revenue and the disposal did not constitute a strategic shift that will have a major effect on the Company’s operations and financial results, the results of operations for TJComex BVI were not reported as discontinued operations under the guidance of Accounting Standards Codification 205. On October 10, 2017, Hubei Shengrong established a wholly owned subsidiary, Fujian Shengrong Environmental Protection Energy-Saving Science and Technology Ltd. (“Fujian Shengrong”), with registered capital of RMB 10,000,000 (approximately USD 1,518,120). Fujian Shengrong has no operations prior to May 30, 2018. On May 30, 2018, Hubei Shengrong and two unrelated entities entered into certain Capital Transfer and Contribution Agreement pursuant to which these two entities shall contribute cash of approximately USD 5.0 million (RMB 32.0 million) into Fujian Shengrong and Hubei Shengrong shall contribute approximately USD 1.3 million (RMB 8.0 million) which is the consideration for certain technology consulting services to be provided by Hubei Shengrong to the two entities. Upon completion of the contribution, the total registered capital of Fujian Shengrong increased to RMB 40.0 million (approximately USD 6.3 million) and Hubai Shengrong owns 20% and the two entities collectively own 80% of the equity interest of Fujian Shengrong. In August 2018, Hubei Shengrong transferred 20% equity interest of Fujian Shengrong to Shengrong WFOE. The Company will account for the investment in Fujian Shengrong using the cost method. Since Shengrong WFOE did not provide any cash contribution to Fujian Shengrong or technology services, the investment balance under the cost method investment on September 30, 2020 is $0. On November 30, 2018, the Company entered into a Share Purchase Agreement with Jirong Huang and Qihuang Wang (collectively “Sellers”) and Jiangsu Rong Hai Electric Power Fuel Co., Ltd. (“Rong Hai”), a company incorporated in China engaging in the sale of fuel materials and harbor cargo handling services. Pursuant to the Share Purchase Agreement, CCNC shall issue an aggregate of 4,630,000 shares of CCNC’s common stock to the Rong Hai Shareholders, in exchange for Rong Hai Shareholders’ agreement to enter into, and their agreement to cause Rong Hai to enter into, certain VIE Agreements (the “Rong Hai VIE Agreements”) with Shengrong WFOE, through which Shengrong WFOE shall have the right to control, manage and operate Rong Hai in return for a service fee approximately equal to 100% of Rong Hai’s net income (“Acquisition”). On November 30, 2018, Shengrong WFOE, the Company’s indirectly owned subsidiary, entered into a series of VIE Agreements with Rong Hai and the Rong Hai Shareholders. The VIE Agreements are designed to provide Shengrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. Rong Hai has the necessary license to carry out coal trading business in China. The Acquisition closed on November 30, 2018. Starting on November 30, 2018, the Company’s business activities added coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap, of which business activities are carried out in Nantong, Jiang Su Province, PRC. On December 27, 2018, the Company, entered into an Equity Purchase Agreement with Hopeway International Enterprises Limited., a private limited company duly organized under the laws of British Virgin Islands (the “Hopeway”). Pursuant to the Equity Purchase Agreement, Shengrong WOFE shall sell 100% equity interests in Hubei Shengrong to Hopeway in exchange for Hopeway’s agreement to irrevocably forfeit and cancel 8,523,320 shares of common stock of the Company, constituting all the shares owned by Hopeway. The transaction contemplated by the Equity Purchase Agreement is hereby referred as Disposition. The Company’s decision to dispose of Hubei Shengrong is due to the planning mandates of Wuhan Municipal Government 2018 which manufactures should move away from city’s downtown area. Therefore, due to the policy change, Hubei Shengrong is forced to close the existing facility, relocate and build a new facility, which is expected to take approximately 7-8 years. As a result, Hubei Shengrong will not be able to keep the production running and will generate no income in the foreseeable future. Management believed it is very difficult, if possible at all, to continue manufacturing of solid waste recycling systems. As such, the Company has been actively seeking to dispose Hubei Shengrong while retaining the research and development and sale of solid waste recycling systems business. Upon closing of the Disposition, Hopeway will become the sole shareholder of Hubei Shengrong and as a result, assume all assets and obligations of Hubei Shengrong except the research and development team and intellectual property rights in connection with the solid waste recycling systems business shall be assigned to Shengrong WFOE as part of the Disposition. As Shengrong WFOE has significant continuing involvement in the sale of solid waste recycling systems business and the processed industrial waste materials trading business, this restructuring did not constitute a strategic shift that will have a major effect on the Company’s operations and financial results. Therefore, the results of operations for Hubei Shengrong were not reported as discontinued operations under the guidance of Accounting Standards Codification 205. In April 2019, TMSR Holdings Limited (“TMSR HK”), our indirect wholly owned subsidiary, was incorporated under the laws of Hong Kong. In August 2019, Tongrong Technology (Jiangsu) Co., Ltd. (“Tongrong WFOE”), our indirect wholly owned subsidiary, was incorporated under the laws of PRC. In August 2019, Citi Profit Investment Holding Limited (“Citi Profit”), an exempted company formed under the laws of the British Virgin Islands, became our wholly owned subsidiary. TMSR HK, Tongrong WFOE and Citi Profit are all holding companies that do not have any substantive business operations. On January 3, 2020, the Company entered into a share purchase agreement with Sichuan Wuge Network Games Co., Ltd. (“Wuge”) and all the shareholders of Wuge, including Wei Xu, Bibo Lin, Jiangsu Lingkong Network Joint Stock Co., Ltd., which is controlled by Wei Xu, and Anhui Shuziren Network Technology Co., Ltd., which is also controlled by Wei Xu. Pursuant to the share purchase agreement, on January 24, 2020, the Company issued an aggregate of 4,000,000 shares of TMSR’s common stock to the shareholders of Wuge, in exchange for Wuge’s shareholders’ agreement to enter into, and their agreement to cause Wuge to enter into, certain VIE agreements (the “Wuge VIE Agreements”) with Tongrong WFOE, through which Tongrong WFOE has the right to control, manage and operate Wuge in return for a service fee equal to 100% of Wuge’s net income. On April 30, 2020, Tongrong WFOE entered into a series of assignment agreements with Shengrong WFOE, Rong Hai and shareholders of Rong Hai, pursuant to which Shengrong WFOE assign all its rights and obligations under the Rong Hai VIE Agreements to Tongrong WFOE. The Rong Hai VIE Agreements and the Assignment Agreements grant Tongrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. The assignment does not have any impact on Company’s consolidated financial statements. Effective May 18, 2020, the Company changed its corporate name from “TMSR Holding Company Limited” to “Code Chain New Continent Limited” pursuant to a Certificate of Amendment to the Company’s Articles of Incorporation filed with the Secretary of State of the State of Nevada. In connection with the name change, effective May 18, 2020, the ticker symbol of the Company’s common stock and warrants changed from “TMSR” and “TMSRW” to “CCNC” and “CCNCW”, respectively. On June 30, 2020, the Company entered into a share purchase agreement with Jiazhen Li, former CEO of the Company (the “Buyer”), Long Liao and Chunyong Zheng, who are former shareholders of Wuhan HOST Coating Materials Co., Ltd., an indirect subsidiary of the Company, (collectively the “Payees”). Pursuant to the Agreement, the Company agreed to sell, and the Buyer agreed to purchase all the issued and outstanding ordinary shares of China Sunlong (the “Sunlong Shares”). The Payees have a prior relationship with the Buyer and have agreed to be responsible for the payment of the purchase price on behalf of Buyer. The purchase price for the Sunlong Shares shall be $1,732,114, payable in consideration of cancellation of 1,012,932 shares of the Company owned by the Payees (the “CCNC Shares”). The CCNC Shares are valued at $1.71 per share, based on the closing price of the Company’s common stock on June 30, 2020. The CCNC Shares were cancelled on August 31, 2020. In December 2020, Makesi Iot Technology (Shanghai) Co., Ltd. (“Makesi WFOE”), our indirect wholly owned subsidiary, was incorporated under the laws of PRC. On January 11, 2021, Makesi WFOE entered into a series of assignment agreements (the “Assignment Agreements”) with Tongrong WFOE, Wuge and Wuge Shareholders, pursuant to which Tongrong WFOE assign all its rights and obligations under the VIE Agreements to Makesi WFOE (the “Assignment”). The VIE Agreements and the Assignment Agreements grant Makesi WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Wuge, including absolute rights to control the management, operations, assets, property and revenue of Wuge. The Assignment does not have any impact on Company’s consolidated financial statements. On March 30, 2021, the Company entered into a share purchase agreement with a buyer unaffiliated with the Company (the “Buyer”), and Qihai Wang, former director of the Company (the “Payee”). Pursuant to the agreement, the Company agreed to sell and the Buyer agreed to purchase all the issued and outstanding ordinary shares (the “Tongrong Shares”) of Tongrong WFOE. The Payee agreed to be responsible for the payment of the purchase price on behalf of Buyer. The purchase price for the Tongrong Shares shall be $2,464,411, payable in the form of cancelling 426,369 shares of common stock of the Company owned by the Payee (the “CCNC Shares”). The CCNC Shares are valued at $5.78 per share, based on the average closing price of the Company’s common stock during the 30 trading days immediately prior to the date of the agreement from February 12, 2021 to March 26, 2021. On March 31, 2021, the Company closed the sale of the Tongrong Shares and caused the CCNC Shares to be cancelled. Tongrong WFOE contractually controls Rong Hai. The disposition of Tongrong WFOE included disposition of Rong Hai. The accompanying consolidated financial statements reflect the activities of CCNC and each of the following entities: Name Background Ownership China Sunlong 3 ● A Cayman Islands company 100% owned by the Company Shengrong BVI 3 ● A British Virgin Island company 100% owned by China Sunlong ● Incorporated on June 30, 2015 Citi Profit BVI ● A British Virgin Island company 100% owned by the Company ● Incorporated on April 2019 Shengrong HK 3 ● A Hong Kong company 100% owned by Shengrong BVI ● Incorporated on September 25, 2015 TMSR HK ● A Hong Kong company 100% owned by Citi Profit BVI ● Incorporated on April 2019 Shengrong WFOE 3 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by Shengrong HK ● Incorporated on March 1, 2016 ● Registered capital of USD 12,946 (HKD100,000), fully funded ● Purchase and sales of high efficiency permanent magnetic separator and comprehensive utilization system ● Trading of processed industrial waste materials Tongrong WFOE 4 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TMSR HK ● Incorporated on August 2019 Makesi WFOE ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TMSR HK ● Incorporated on December 2020 Name Background Ownership Hubei Shengrong 2 ● A PRC limited liability company 100% owned by Shengrong WFOE ● Incorporated on January 14, 2009 ● Registered capital of USD 4,417,800 (RMB 30,000,000), fully funded ● Production and sales of high efficiency permanent magnetic separator and comprehensive utilization system. ● Trading of processed industrial waste materials Wuhan HOST 3 ● A PRC limited liability company 100% owned by Shengrong WFOE ● Incorporated on October 27, 2010 ● Registered capital of USD 750,075 (RMB 5,000,000), fully funded ● Research, development, production and sale of coating materials. Shanghai Host Coating Materials Co., Ltd. 3 ● A PRC limited liability company ● Incorporated on December 11, 2014 ● Registered capital of USD 3,184,371 (RMB 20,000,000), to be fully funded by November 2024 ● No operations and no capital contribution has been made as of December 31, 2018 80% owned by Wuhan HOST Wuhan HOST Coating Materials Xiaogan Co., Ltd. 3 ● A PRC limited liability company 90% owned by Wuhan HOST ● Incorporated on December 25, 2018 ● Registered capital of USD 11,595,379 (RMB 80,000,000), to be fully funded by December 2028 ● No operations and no capital contribution has been made as of December 31, 2018 Rong Hai 4 ● A PRC limited liability company VIE of Tongrong WFOE ● Incorporated on May 20, 2009 ● Registered capital of USD 3,171,655 (RMB 20,180,000), fully funded ● Coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap Wuge ● A PRC limited liability company VIE of Makesi WFOE ● Incorporated on July 4, 2019 TJComex BVI 1 ● A British Virgin Island company 100% owned by China Sunlong ● Incorporated on March 8, 2016 TJComex HK 1 ● A Hong Kong company 100% owned by TJComex BVI ● Incorporated on March 19, 2014 TJComex WFOE 1 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TJComex HK ● Incorporated on March 10, 2004 ● Registered capital of USD 200,000 TJComex Tianjin 1 ● A PRC limited liability company 100% owned by TJComex WFOE ● Incorporated on November 19, 2007 ● Registered capital of USD 7,809,165 (RMB 55,000,000) ● General merchandise trading business and related consulting services 1 Disposed on April 2, 2018 2 Disposed on December 27, 2018 3 Disposed on June 30, 2020 4 Disposed on March 31, 2021 Contractual Arrangements Rong Hai was and Wuge is controlled through contractual agreements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of five agreements, consulting services agreement, equity pledge agreement, call option agreement, voting rights proxy agreement, and operating agreement (collectively the “Contractual Arrangements”). Material terms of each of the Rong Hai VIE Agreements are described below. The Company disposed Tongrong WFOE and Rong Hai as of March 31, 2021. Consulting Services Agreement Pursuant to the consulting services agreement between Rong Hai and Shengrong WFOE dated November 30, 2018 and the agreement to assign consulting services agreement among Rong Hai, Shengrong WFOE and Tongrong WFOE dated April 30, 2020, Tongrong WFOE has the exclusive right to provide consulting services to Rong Hai relating to Rong Hai’s business, including but not limited to business consulting services, human resources development, and business development. Tongrong WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. Tongrong WFOE has the right to determine the service fees based on Rong Hai’s actual operation on a quarterly basis. This consulting services agreement took effect upon execution and shall remain in full force and effective until Rong Hai’s valid operation term expires. Tongrong WFOE may, at its discretion, decide to renew or terminate this consulting services agreement. Equity Pledge Agreement. Under the equity pledge agreement among Shengrong WFOE, Rong Hai and the shareholders of Rong Hai dated November 30, 2018, and the agreement to assign equity pledge agreement among Rong Hai, Shengrong WFOE and Tongrong WFOE dated April 30, 2020, the shareholders pledged all of their equity interests in Rong Hai to Tongrong WFOE to guarantee Rong Hai’s performance of relevant obligations and indebtedness under the consulting services agreement. In addition, the shareholders of Rong Hai have completed the registration of the equity pledge under the agreement with the competent local authority. If Rong Hai breaches its obligation under the consulting services agreement, Tongrong WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This equity pledge agreement took effect upon execution and shall remain in full force and effective until Rong Hai and Tongrong WFOE’s satisfaction of all contractual obligations and settlement of all secured indebtedness. Upon Tongrong WFOE’s request, Rong Hai shall extend its operation period to sustain the effectiveness of this equity pledge agreement. Call Option Agreement Under the call option agreement among Shengrong WFOE, Rong Hai and the shareholders of Rong Hai dated November 30, 2018 and the agreement to assign call option agreement among Rong Hai, Shengrong WFOE and Tongrong WFOE dated April 30, 2020, each of the shareholders of Rong Hai irrevocably granted to WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Rong Hai. Also, Tongrong WFOE or its designee has the right to acquire any and all of its assets of Rong Hai. Without Tongrong WFOE’s prior written consent, Rong Hai’s shareholders cannot transfer their equity interests in Rong Hai, and Rong Hai cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This call option agreement shall took effect upon execution. Rong Hai and Tongrong WFOE shall not terminate this call option agreement under any circumstances for any reason unless it is early terminated by Tongrong WFOE or by the requirements under the applicable laws. This call option agreement shall be terminated provided that all equity interest or assets under this option is transferred to Tongrong WFOE or its designee. Voting Rights Proxy Agreement Under the voting rights proxy agreement among Shengrong WFOE and the shareholders of Rong Hai dated November 30, 2018 and the agreement to assign voting rights proxy agreement among Rong Hai, Shengrong WFOE and Tongrong WFOE dated April 30, 2020, each shareholder of Rong Hai irrevocably appointed Shengrong WFOE as its attorney-in-fact to exercise on such shareholder’s behalf any and all rights that such shareholder has in respect of his equity interests in Rong Hai, including but limited to the power to vote on its behalf on all matters of Rong Hai requiring shareholder approval in accordance with the articles of association of Rong Hai. The voting rights proxy agreement took effect upon execution of and shall remain in effect indefinitely for the maximum period of time permitted by law in consideration of Tongrong WFOE. Operating Agreement Pursuant to the operating agreement among Shengrong WFOE, Rong Hai and the shareholders of Rong Hai dated November 30, 2018 and the agreement to assign operating agreement among Rong Hai, Shengrong WFOE and Tongrong WFOE dated April 30, 2020, Rong Hai and the shareholders of Rong Hai agreed not to enter into any transaction that could materially affect Rong Hai’s assets, obligations, rights or operations without prior written consent from Tongrong WFOE, including but not limited to the amendment of the articles of association of Rong Hai. Rong Hai and its shareholders agree to accept and follow our corporate policies provided by Tongrong WFOE in connection with Rong Hai’s daily operations, financial management and the employment and dismissal of Rong Hai’s employees. Rong Hai agreed that it should seek guarantee from Tongrong WFOE first if any guarantee is needed for Rong Hai’s performance of any contract or loan in the course of its business operation. This operating agreement took effect upon execution and shall remain in full force and effective until Rong Hai’s valid operation term expires. Either party of Tongrong WFOE and Rong Hai shall complete approval or registration procedures for the extension of its business term three months prior to the expiration of its business term, for the purpose of the maintenance of the effectiveness of this operating agreement. On April 30, 2020, Tongrong WFOE entered into a series of assignment agreements with Shengrong WFOE, Rong Hai and shareholders of Rong Hai, pursuant to which Shengrong WFOE assign all its rights and obligations under the Rong Hai VIE Agreements to Tongrong WFOE. The Rong Hai VIE Agreements and the Assignment Agreements grant Tongrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. The assignment does not have any impact on Company’s consolidated financial statements. Material terms of each of the Wuge VIE Agreements are described below: Technical Consultation and Services Agreement. Pursuant to the technical consultation and services agreement between Wuge and Tongrong WFOE dated January 3, 2020, Tongrong WFOE has the exclusive right to provide consultation services to Wuge relating to Wuge’s business, including but not limited to business consultation services, human resources development, and business development. Tongrong WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. Tongrong WFOE has the right to determine the service fees based on Wuge’s actual operation on a quarterly basis. This agreement will be effective as long as Wuge exists. Tongrong WFOE may terminate this agreement at any time by giving a 30 days’ prior written notice to Wuge. Equity Pledge Agreement. Under the equity pledge agreement among Tongrong WFOE, Wuge and Wuge Shareholders dated January 3, 2020, Wuge Shareholders pledged all of their equity interests in Wuge to Tongrong WFOE to guarantee Wuge’s performance of relevant obligations and indebtedness under the technical consultation and services agreement. In addition, Wuge Shareholders will complete the registration of the equity pledge under the agreement with the competent local authority. If Wuge breaches its obligation under the technical consultation and services agreement, Tongrong WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the Wuge Shareholders cease to be shareholders of Wuge. Equity Option Agreement. Under the equity option agreement among Tongrong WFOE, Wuge and Wuge Shareholders dated January 3, 2020, each of Wuge Shareholders irrevocably granted to Tongrong WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Wuge. Also, Tongrong WFOE or its designee has the right to acquire any and all of its assets of Wuge. Without Tongrong WFOE’s prior written consent, Wuge’s shareholders cannot transfer their equity interests in Wuge and Wuge cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This pledge will remain effective until all options have been exercised. Voting Rights Proxy and Financial Support Agreement. Under the voting rights proxy and financial support agreement among Tongrong WFOE, Wuge and Wuge Shareholders dated January 3, 2020, each Wuge Shareholder irrevocably appointed Tongrong WFOE as its attorney-in-fact to exercise on such shareholder’s behalf any and all rights that such shareholder has in respect of his equity interests in Wuge, including but not limited to the power to vote on its behalf on all matters of Wuge requiring shareholder approval in accordance with the articles of association of Wuge. The proxy agreement is for a term of 20 years and can be extended by Tongrong WFOE unilaterally by prior written notice to the other parties. On January 11, 2021, Makesi WFOE entered into a series of assignment agreements (the “Assignment Agreements”) with Tongrong WFOE, Wuge and Wuge Shareholders, pursuant to which Tongrong WFOE assign all its rights and obligations under the VIE Agreements to Makesi WFOE (the “Assignm |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of significant accounting policies Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). Principles of consolidation The unaudited condensed financial statements of the Company include the accounts of CCNC and its wholly owned subsidiaries and VIE. All intercompany transactions and balances are eliminated upon consolidation. Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of intangible assets, deferred revenues and plant and equipment, impairment of long-lived assets, collectability of receivables, inventory valuation allowance, present value of lease liabilities and realization of deferred tax assets. Actual results could differ from these estimates. Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive loss amounted to $199,579 and $935,637 as of September 30, 2021 and December 31, 2020, respectively. The balance sheet amounts, with the exception of shareholders’ equity at September 30, 2021 and December 31, 2020 were translated at 6.49 RMB and 6.52 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the nine months ended September 30, 2021 and 2020 were 6.47 RMB and 6.99 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. Investments The Company purchases certain liquid short term investments such as money market funds and or other short term debt securities marketed by financial institutions. These investments are not insured against loss of principal. These investments are accounted for as financial instruments that are marked to fair market value at the end of each reporting period. For investments that are held to maturity debt instruments, which have short maturities, and limited risk profiles, amortized cost may be the best approximation of their fair value and used for such investments. Accounts receivable, net Accounts receivable include trade accounts due from customers. An allowance for doubtful accounts may be established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Inventories Inventories are comprised of raw materials and work in progress and are stated at the lower of cost or net realizable value using the weighted average method in Wuge. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and recognize an impairment charge against the inventory when the carrying value exceeds net realizable value. As of September 30, 2021 and December 31, 2020, no obsolescence and cost in excess of net realizable value were recognized. Prepayments Prepayments are funds deposited or advanced to outside vendors for future inventory or services purchases. As a standard practice in China, many of the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends. Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method after consideration of the estimated useful lives of the assets and estimated residual value. The estimated useful lives and residual value are as follows: Useful Life Estimated Value Building 5 - 20 years 5 % Office equipment and furnishing 5 years 5 % Production equipment 3 - 10 years 5 % Automobile 5 years 5 % Leasehold improvements Shorter of the remaining lease terms or estimated useful lives 0 % The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Intangible assets Intangible assets represent land use rights and patents, and they are stated at cost, less accumulated amortization. Research and development costs associated with internally developed patents are expensed when incurred. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. All land in the PRC is owned by the government; however, the government grants “land use rights.” The Company has obtained the rights to use various parcels of land. The patents have finite useful lives and are amortized using a straight-line method that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The Company amortizes the cost of the land use rights and patents, over their useful life using the straight-line method. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The estimated useful lives are as follows: Useful Life Land use rights 50 years Patents 10 - 20 years Software 5 years Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of income. Impairment losses on goodwill are not reversed. Impairment for long-lived assets Long-lived assets, including plant, equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits, short term loans and taxes payable to approximate their fair values because of their short term nature. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Customer deposits Wuge typically receives customer deposits for services to be rendered from its customers. As Wuge delivers the services, it will recognize these deposits to results of operations in accordance to its revenue recognition policy. Revenue recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s revenue, other than retainage revenues, was recognized based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. However, the impact of the Company’s retainage revenue was not material as of the date of adoption, and as a result, did not result in an adjustment. The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time except for the retainage revenues where the retainage periods are recognized over the retainage period, usually is a period of twelve months. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition except its retainage revenues. An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange. Revenue from equipment and systems, revenue from coating and fuel materials, and revenue from trading and others are recognized at the date of goods delivered and title passed to customers, when a formal arrangement exists, the price is fixed or determinable, the Company has no other significant obligations and collectability is reasonably assured. Such revenues are recognized at a point in time after all performance obligations are satisfied under the new five-step model. In addition, training service revenues are recognized when the services are rendered and the Company has no other obligations, and collectability is reasonably assured. These revenues are recognized at a point in time. Payments received before all of the relevant criteria for revenue recognition are recorded as customer deposits. The Company’s disaggregate revenue streams are summarized as follows: For the Three Months Ended For the Nine Months Ended 2021 2020 2021 2020 Revenues – Wuge digital door signs $ 2,665,702 $ - $ 9,541,992 $ - Trading and others (45,759 ) - 723 Total revenues $ 2,665,702 $ (45,759 ) $ 9,541,992 $ 723 Research and Development (“R&D”) Expenses Research and development expenses include salaries and other compensation-related expenses paid to the Company’s research and product development personnel while they are working on R&D projects, as well as raw materials used for the R&D projects. R&D expenses incurred by the Company are included in the selling, general and administrative expenses. Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes is accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company incurred no such penalties and interest for the nine months ended September 30, 2021 and 2020. As of September 30, 2021, the Company’s PRC tax returns filed for 2018, 2019 and 2020 remain subject to examination by any applicable tax authorities. Earnings per share Basic earnings per share are computed by dividing income available to common shareholders of the Company by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares. 9,079,348 and 10,500,000 of outstanding warrants which is equivalent to convertible of 4,539,674 and 5,250,000 common shares were excluded from the diluted earnings per share calculation due to its antidilutive effect for the nine months ended September 30, 2021 and 2020, respectively. 824,000 of outstanding options were excluded from the diluted earnings per share calculation due to its antidilutive effect for the nine months ended September 30, 2021 and 2020. Recently issued accounting pronouncements In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU would have a material effect on the Company’s unaudited condensed consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Business Combination and Restru
Business Combination and Restructuring | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Business combination and restructuring | Note 3 – Business combination and restructuring TJ Comex BVI On April 2, 2018, the Company disposed of its subsidiary, TJComex BVI, in consideration of (i) its minimum contribution to the Company’s results of operation and (ii) the unsatisfactory synergy between the TJComex BVI business and the rest of the Company’s business. The Company’s decision to dispose TJComex BVI is to (i) improve the Company’s overall financial condition and results of operations, (ii) reduce the complexity of the Company’s business, (iii) focus the Company’s resources on the solid waste recycling business as well as developing environmental control business opportunities; and (iv) make it possible for the Company to pursue acquisition opportunities for more compatible business. TJComex BVI was disposed to Chuanliu Ni, a Chinese citizen who is the Chief Executive Officer and director of China Sunlong, for no consideration. As of April 2, 2018, the net assets of TJComex BVI were $16,598 and will be recorded as a loss from disposal of subsidiary in the consolidated financial statements for the year ended December 31, 2018. As TJComex BVI operating revenue was less than 1% of the Company’s revenue and the disposal did not constitute a strategic shift that will have a major effect on the Company’s operations and financial results, the results of operations for TJComex BVI were not reported as discontinued operations under the guidance of Accounting Standards Codification 205. Wuge On January 3, 2020, the Company entered into a share purchase agreement with Sichuan Wuge Network Games Co., Ltd. (“Wuge”) and all the shareholders of Wuge (“Wuge Shareholders”). Pursuant to the share purchase agreement, the Company agreed to issue an aggregate of 4,000,000 shares of CCNC’s common stock to the Wuge Shareholders, in exchange for Wuge Shareholders’ agreement to enter into, and their agreement to cause Wuge to enter into, certain VIE agreements (“VIE Agreements”) with Tongrong WFOE the Company’s indirectly owned subsidiary, through which Tongrong WFOE shall have the right to control, manage and operate Wuge in return for a service fee equal to 100% of Wuge’s net income (the “Acquisition”). On January 3, 2020, Tongrong WFOE entered into a series of VIE Agreements with Wuge and the Wuge Shareholders. The VIE Agreements are designed to provide Tongrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Wuge, including absolute rights to control the management, operations, assets, property and revenue of Wuge. Wuge has all necessary license to carry out its business in China.Wuge is a technology company in development stage. It was incorporated in China in July 2019. Wuge Manor, the game Wuge is developing, is the world’s first game that combines Internet of Things (IoT) and e-commerce that is based on Code Chain platform. Through the game, players will be able to have access to hundreds of vendors and business owners in over 100 cities in China, participate in activities those businesses set up and collect points, which can be redeemed as equipment in the game or coupons usable when making purchase at that business. In addition, Wuge produced electronic tokens that can be stored in the Code Chain system to purchase virtual property based on real estate. The Acquisition closed on January 24, 2020. The Company’s acquisition of Wuge was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Wuge based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Wuge based on a valuation performed by an independent valuation firm engaged by the Company: Total consideration at fair value $ 7,200,000 Fair Value Cash $ 228,788 Other current assets 20,834 Plant and equipment 6,024 Other noncurrent assets 8,097 Goodwill 7,343,209 Total asset 7,606,952 Total liabilities (406,952 ) Net asset acquired $ 7,200,000 Approximately $7.3 millions of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of the Company and Wuge. None of the goodwill is expected to be deductible for income tax purposes. |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Variable interest entity | Note 4 – Variable interest entity On November 30, 2018, Tongrong WFOE entered into Contractual Arrangements with Rong Hai and its shareholders upon executing of the “Purchase Agreement”. The significant terms of these Contractual Arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classifies Rong Hai as VIE. On January 3, 2020, Tongrong WFOE entered into Contractual Arrangements with Wuge and its shareholders upon executing of the “Purchase Agreement”. The significant terms of these Contractual Arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classifies Wuge as VIE. On January 11, 2021, Makesi WFOE entered into a series of assignment agreements (the “Assignment Agreements”) with Tongrong WFOE, Wuge and Wuge Shareholders, pursuant to which Tongrong WFOE assign all its rights and obligations under the VIE Agreements to Makesi WFOE (the “Assignment”). The VIE Agreements and the Assignment Agreements grant Makesi WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Wuge, including absolute rights to control the management, operations, assets, property and revenue of Wuge. The Assignment does not have any impact on Company’s consolidated financial statements. On March 30, 2021, the Company entered into a share purchase agreement with a buyer unaffiliated with the Company (the “Buyer”), and Qihai Wang, former director of the Company (the “Payee”). Pursuant to the agreement, the Company agreed to sell and the Buyer agreed to purchase all the issued and outstanding ordinary shares (the “Tongrong Shares”) of Tongrong WFOE. The Payee agreed to be responsible for the payment of the purchase price on behalf of Buyer. The purchase price for the Tongrong Shares shall be $2,464,411, payable in the form of cancelling 426,369 shares of common stock of the Company owned by the Payee (the “CCNC Shares”). The CCNC Shares are valued at $5.78 per share, based on the average closing price of the Company’s common stock during the 30 trading days immediately prior to the date of the agreement from February 12, 2021 to March 26, 2021. On March 31, 2021, the Company closed the sale of the Tongrong Shares and caused the CCNC Shares to be cancelled. Tongrong WFOE contractually controls Jaingsu Rong Hai Electric Power Fuel Co., Ltd. (“Rong Hai”), a variable interest entity of the Company. The disposition of Tongrong WFOE included disposition of Rong Hai. A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Makesi WFOE is deemed to have a controlling financial interest and be the primary beneficiary of Wuge because it has both of the following characteristics: (1) The power to direct activities at Wuge that most significantly impact such entity’s economic performance, and (2) The obligation to absorb losses of, and the right to receive benefits from Wuge that could potentially be significant to such entity. Accordingly, the accounts of Rong Hai and Wuge are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, their financial positions and results of operations are included in the Company’s consolidated financial statements beginning on November 30, 2018. The carrying amount of the VIE’s assets and liabilities are as follows: September 30, December 31, 2021 2020 Current assets $ 9,930,745 $ 9,600,157 Property, plants and equipment, Intangible Assets 1,049,564 1,268,272 Other noncurrent assets - 196,415 Goodwill 7,753,340 11,650,157 Total assets 18,733,649 22,715,001 Current liabilities 12,562,464 8,766,619 Non-current liabilities - 33,698 Total liabilities 12,562,464 8,800,317 Net assets $ 6,171,185 $ 13,914,684 September 30, December 31, 2021 2020 Short-term loan $ - $ 475,103 Accounts payable - 1,037,723 Other payables and accrued liabilities 145,235 103,323 Other payables – related party 1,533,225 6,090,841 Tax payables 302,061 57,815 Customer Advances 10,581,943 900,522 Lease liabilities - 101,292 Total current liabilities 12,562,464 8,766,619 Lease liabilities - noncurrent - 33,698 Total liabilities $ 12,562,464 $ 8,800,317 The summarized operating results of the VIE’s are as follows: For the Operating revenues $ 9,541,992 Gross profit 9,384,552 Loss from operations (1,368,074 ) Net loss $ (1,368,074 ) |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Receivable [Abstract] | |
Accounts receivable, net | Note 5 – Accounts receivable, net Accounts receivable consist of the following: September 30, December 31, Accounts receivable $ - $ 1,670,526 Less: Allowance for doubtful accounts - (598,936 ) Total accounts receivable, net $ - $ 1,071,590 Movement of allowance for doubtful accounts is as follows: September 30, December 31, Beginning balance $ - $ - Beginning balance from Wuhan HOST - - Beginning balance from Rong Hai - 24,055 Addition - 542,087 Recovery - - Exchange rate effect - 32,794 Ending balance $ - $ 598,936 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 6 – Inventories Inventories consist of the following: September 30, December 31, Raw materialsc $ - $ - Work in progress - - Finished Goods 13,473 1,047,274 Total inventories $ 13,473 $ 1,047,274 |
Plant and Equipment, Net
Plant and Equipment, Net | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Plant and equipment, net | Note 7 – Plant and equipment, net Plant and equipment consist of the following: September 30, December 31, Office equipment and furniture $ 6,262,187 $ 76,605 Automobile 216,175 272,902 Subtotal 6,478,362 349,507 Less: accumulated depreciation (1,237,839 ) (266,674 ) Total $ 5,240,523 $ 82,833 Depreciation expense for the nine months ended September 30, 2021 and 2020 amounted to $1,237,839 and $14,250, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net | Note 8 – Intangible assets, net Intangible assets consist of the following: September 30, December 31, Development of technology $ 770,962 $ 1,226,072 Bitcoin 2,366,518 Software 601 598 Less: accumulated amortization (301 ) (149 ) Net intangible assets $ 3,137,780 $ 1,226,521 Amortization expense for the nine months ended September 30, 2021 and 2020 amounted to $301 and $112, respectively. As part of a make good provision in prior capital transaction entered into by the Company regarding the acquisition of certain crypto-mining machines, the Company received 54 crypto coin wallets holding Bitcoin with a total aggregate value of approximately $1.81 million. The Company has accounted for these coins as indefinite life intangible assets. The Company recorded the receipt of such coins as other income in its result of operations for the nine months ended September 30, 2020. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 9 – Goodwill The changes in the carrying amount of goodwill by business units are as follows : Rong Hai Wuge Total Balance as of December 31, 2020 $ 3,896,817 $ 7,753,340 $ 11,650,157 Disposal of the company (3,896,817 ) - (3,896,817 ) Balance as of September 30, 2021 $ - $ 7,753,340 $ 7,753,340 |
Related Party Balances and Tran
Related Party Balances and Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related party balances and transactions | Note 10 – Related party balances and transactions Related party balances a. Other receivable – related party: Name of related party Relationship September 30, December 31, Chengdu Yuan Code Chain Technology Co. Ltd A company controlled by former shareholder of the Company $ 504,456 $ 230,134 The Company advanced funds to the related party for technical services. b. Other payables – related parties: Name of related party Relationship September 30, December 31, Chuanliu Ni Chief Executive Officer and director of a former subsidiary $ 325,907 $ 325,907 Zhong Hui Holding Limited Shareholder of the Company 140,500 140,500 Qihai Wang Shareholder of the Company - 24,729 Total $ 466,407 $ 491,136 The above payables represent interest free loans and advances. These loans and advances are unsecured and due on demand. |
Taxes
Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Taxes | Note 11 – Taxes Income tax United States CCNC was organized in the state of Delaware in April 2015 and re-incorporated in the state of Nevada in June 2018. CCNC’s U.S. net operating loss for the nine months ended September 30, 2021 amounted to approximately $26.5 million. As of September 30, 2021, CCNC’s net operating loss carry forward for United States income taxes was approximately $5.6 million. The net operating loss carry forwards are available to reduce future years’ taxable income through year 2038. Management believes that the realization of the benefits from these losses appears uncertain due to the Company’s operating history and continued losses in the United States. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management reviews this valuation allowance periodically and makes changes accordingly. On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. The 2017 Tax Act imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. The Company determined that there are no impact of GILTI for the nine months ended September 30, 2021 and 2020, which the Company believes that it will be imposed a minimum tax rate of 10.5% and to the extent foreign tax credits are available to reduce its US corporate tax, which may result in no additional US federal income tax being due. Cayman Islands China Sunlong is incorporated in the Cayman Islands and are not subject to tax on income or capital gains under current Cayman Islands law. In addition, upon payments of dividends by China Sunlong to its shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Citi Profit BVI is incorporated in the British Virgin Islands and are not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong TMSR HK is incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, TMSR HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. PRC Makesi WFOE and Wuge are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments. Deferred tax assets Bad debt allowances must be approved by the Chinese tax authority prior to being deducted as an expense item on the tax return. Significant components of deferred tax assets were as follows: September 30, December 31, Net operating losses carried forward – U.S. $ 5,463,533 $ 303,560 Net operating losses carried forward – PRC - - Bad debt allowance - 127,377 Valuation allowance (5,463,533 ) (303,560 ) Deferred tax assets, net $ - $ 127,377 Value added tax Enterprises or individuals who sell commodities, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with PRC laws. The value added tax (“VAT”) standard rates are 6% to 17% of the gross sales price and changed to 6% to 16% of gross sales starting in May 2018. The VAT standard rates changed to 6% to 13% of the gross sales prices starting in April 2019. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on sales of the finished products and services. Taxes payable consisted of the following: September 30, December 31, VAT taxes payable $ 302,061 $ 1,589 Income taxes payable - 70,914 Other taxes payable - 136 Total $ 302,061 $ 72,639 |
Concentration of Risk
Concentration of Risk | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentration of risk | Note 12 – Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. As of September 30, 2021 and December 31, 2020, $7,220,994 and $998,717 and were deposited with various financial institutions located in the PRC, respectively. As of September 30, 2021 and December 31, 2020, $1,162,912 and $0 were deposited with one financial institution located in the U.S., respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Equity | Note 13 – Equity Restricted net assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by Makesi WFOE only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Makesi WFOE. Makesi WFOE and Wuge are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Makesi WFOE may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. Wuge may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange. As a result of the foregoing restrictions, Makesi WFOE and Wuge are restricted in their ability to transfer their net assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Makesi WFOE and Wuge from transferring funds to China Sunlong in the form of dividends, loans and advances. As of September 30, 2021 and December 31, 2020, amounts restricted are the net assets of Makesi WFOE and Wuge which amounted to $(1,013,341) and $(216,935), respectively. Stock split On June 1, 2018, the Company’s shareholder approved a 2 for 1 stock split of the Company’s common stock at the Annual Meeting of Shareholders. The stock split was effected on June 20, 2018, pursuant to the completion of the reincorporation from Delaware to Nevada. All shares and per share amounts used herein and in the accompanying consolidated financial statements have been retroactively restated to reflect the stock split. Common stock On June 23, 2018, the Company issued an aggregate of 26,693 shares of the Company’s common stock, par value $0.0001 per share, to certain non-U.S. purchasers at a purchase price of $5.00 per share for an aggregate offering price of $133,335 pursuant to certain securities purchase agreement dated April 20, 2018 and June 22, 2018. The issuances were pursuant to the exemption from registration under Regulation S promulgated under the Securities Act of 1933, as amended. On February 12, 2019, the Company’s warrant holders converted 294,971 of the Company’s warrants into 52,077 shares of the Company’s common stock using cashless exercises method. On February 20, 2019, the Company’s warrant holders converted 415,355 of the Company’s warrants into 54,826 shares of the Company’s common stock using cashless exercises method. On March 11, 2019, the Board granted an aggregate of 131,330 shares of restricted common stock, with a fair value of $261,347, determined using the closing price of $1.99 on March 11, 2019, to repay the debt the Company owed to two unrelated third parties. As the carrying value of the debt equaled to the fair value of the 131,330 common shares at $1.99 per share, no gain or loss were recognized upon this debt settlement. On March 15, 2019, the Board granted an aggregate of 142,530 shares of restricted common stock, with a fair value of $290,761, determined using the closing price of $2.04 on March 15, 2019, to repay the debt the Company owed to one unrelated third party. As the carrying value of the debt equaled to the fair value of the 142,530 common shares at $2.04 per share, no gain or loss were recognized upon this debt settlement. On April 4, 2019, the Company entered into certain securities purchase agreement with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, as amended pursuant to which the Company agreed to sell 1,492,000 shares of its common stock, par value $0.0001 per share, at a per share purchase price of $2.00. The net proceeds to the Company from this offering were approximately $2.9 million. On November 20, 2019, the company wrote off 947,037 common shares. On December 23, 2019, the Company entered into certain securities purchase agreement (the “SPA”) with certain “non-U.S. Persons” (the “Purchasers”) as defined in Regulation S of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to which the Company agreed to sell 3,692,859 shares of its common stock (“Common Stock”), par value $0.0001 per share, at a per share purchase price of $1.00. The net proceeds to the Company from this offering will be approximately $3.66 million. On January 3, 2020, the Company entered into a Share Purchase Agreement with Wuge and all the shareholders of Wuge (“Wuge Shareholders”). Wuge Shareholders are Wei Xu, Bibo Lin, Jiangsu Lingkong Network Joint Stock Co., Ltd., which is controlled by Wei Xu, and Anhui Shuziren Network Technology Co., Ltd., which is controlled by Wei Xu. Pursuant to the SPA, TMSR shall issue an aggregate of 4,000,000 shares of TMSR’s common stock to the Wuge Shareholders, in exchange for Wuge Shareholders’ agreement to enter into, and their agreement to cause Wuge to enter into, certain VIE agreements (“VIE Agreements”) with Tongrong Technology (Jiangsu) Co., Ltd. (“WFOE”), the Company’s indirectly owned subsidiary, through which WFOE shall have the right to control, manage and operate Wuge in return for a service fee equal to 100% of Wuge’s net income (“Acquisition”). On January 24, 2020, the Company completed the Acquisition and issued the Shares to the Wuge Shareholders. On June 30, 2020, the Company entered into a share purchase agreement (the “Agreement”) with Jiazhen Li, former CEO of the Company (the “Buyer”), Long Liao and Chunyong Zheng, who are former shareholders of Wuhan HOST Coating Materials Co., Ltd., an indirect subsidiary of the Company, (collectively the “Payees”). Pursuant to the Agreement, the Company agreed to sell and the Buyer agreed to purchase all the issued and outstanding ordinary shares of China Sunlong Environmental Technology Inc., a Cayman Islands company and a subsidiary of the Company (the “Sunlong Shares”). The Payees have a prior relationship with the Buyer and have agreed to be responsible for the payment of the purchase price on behalf of Buyer. The purchase price for the Sunlong Shares shall be $1,732,114, payable in consideration of cancellation of 1,012,932 shares of the Company owned by the Payees (the “CCNC Shares”). The CCNC Shares are valued at $1.71 per share, based on the closing price of the Company’s common stock on June 30, 2020. On August 11, 2020, pursuant to certain securities purchase agreements dated May 1, 2020, the Company issued 1,674,428 shares of its common, at a per share purchase price of $1.50, to the eleven investors. The gross proceeds to the Company from this private placement were approximately $2.51 million. On February 22, 2021, pursuant to a securities purchase agreement (the “Purchase Agreement”) with two institutional investors, the Company , closed (a) a registered direct offering (the “Registered Direct Offering”) for the sale of (i) 4,166,666 shares of common stock, par value $0.0001 of the Company (the “Shares”) and (ii) registered investor warrants, with a term of five years, exercisable immediately upon issuance, to purchase an aggregate of up to 1,639,362 shares of common stock (the “Registered Investor Warrant Shares”) at an exercise price of $6.72 per share, subject to adjustments thereunder, including a reduction in the exercise price, in the event of a subsequent offering at a price less than the then current exercise price, to the same price as the price in such offering (a “Price Protection Adjustment”) (the “Registered Investor Warrants”), and (b) a concurrent private placement (the “Private Placement” and collectively with the Registered Direct Offering, the “Offering”) for the sale of unregistered investor warrants, with a term of five and one-half years, first exercisable on the date that is the earlier of (i) six months after the date of issuance or (ii) the date on which the Company obtains stockholder approval approving the sale of all of the securities offered and sold under the Purchase Agreement (the “Stockholder Approval”) to purchase an aggregate of up to 2,527,304 shares of common stock (the “Unregistered Investor Warrant Shares”) at an exercise price of $6.72 per share, subject to adjustments thereunder, including (x) a Price Protection Adjustment and (y) in the event the exercise price is more than $6.10, a reduction of the exercise price to $6.10, upon obtaining the Stockholder Approval (the “Unregistered Investor Warrants”). The Shares, the Registered Investor Warrants, the Unregistered Investor Warrants, the Registered Investor Warrant Shares and the Unregistered Investor Warrant Shares are collectively referred to as the “Securities.” The Company received gross proceeds from the sale of the Securities of $24,999,996, before deducting placement agent fees and other Offering expenses. The Company intends to use the net proceeds from this Offering for working capital and general business purposes. On February 23, 2021, the Company entered into an asset purchase agreement with Sichuan RiZhanYun Jisuan Co., Ltd. (the “Seller”), which was amended and restated on April 16, 2021, and further amended on May 28, 2021. Pursuant to the asset purchase agreement, the Company purchased a total of 10,000 Bitcoin mining machines (the “Assets”) for a total purchase price of RMB 40,000,000 or US$6,160,000 based on the exchange rate as of April 8, 2021 (the “Purchase Price”), payable in the form of 1,587,800 shares of common stock of the Company, valued at US$3.88 per share, which is the closing bid price of the common stock of the Company on the Nasdaq Stock Market on April 8, 2021. The Seller shall cause revenue and any other source of income from the operation of the Assets to be paid to the Company, payable in cryptocurrency to be deposited into a cryptocurrency wallet held by the Company on a daily basis. The Company shall issue to the Seller or its designees RMB 5,000,000 or US$770,000 worth of common stock of the Company (the “Bonus Shares”) if the Assets generate an average net profit per day/10,000 machines (the “Daily Profit”) on behalf of the Company during the one-year period from March 19, 2021 to March 19, 2022 (the “Valuation Period”) equals to RMB 200,000 or US$30,800 and if the Assets generate an average net profit per month/10,000 machines (the “Monthly Profit”) on behalf of the Company during the Valuation Period equals to RMB 6,000,000 or US$924,000. If the Daily Profit is more than RMB 200,000 or US$30,800 and the Monthly Profit is more than RMB 6,000,000 or US$924,000, the Company shall issue to the Seller or its designees additional shares of common stock in proportion to the amount that is in excess. If the Daily Profit is less than RMB 200,000 or US$30,800 or the Monthly Profit is less than RMB 6,000,000 or US$924,000, the Company shall not issue to the Seller or its designees any Bonus Shares and such month is deemed a “Re-evaluated Month”. At the end of the Valuation Period, the Monthly Profit of such Re-evaluated Month(s) shall be aggregated (the “Aggregate Profit”), and the Company shall issue RMB5,000,000 or US$770,000 worth of common stock of the Company for every RMB6,000,000 or US$924,000 in Aggregate Profit on a pro rata basis. Such Daily Profit and Monthly Profit shall be determined on a monthly basis on the first day of the next month. Such Bonus Shares and additional shares, when applicable, shall be issued on the fifteenth day of the next month. For any month that has 28 days or 31 days, the Monthly Profit is calculated based on the actual number of days in the month. Notwithstanding the foregoing, no share pursuant to this Agreement shall be issued earlier than May 24, 2021 in any event. The total number of shares of common stock, including the Bonus Shares, issuable to the Seller or its designees pursuant to the Agreement shall in no event be more than 19.99% of the total shares issued and outstanding of Company as of the February 23, 2021, the date of the asset purchase agreement. On June 1, 2021, the Company issued to a designee of the Seller 2,513,294 shares of common stock, consisted of (i) the Purchase Price in the form of 1,587,800 shares of common stock and (ii) 925,494 Bonus Shares, valued at US$2.51 per share, which is the closing bid price of the common stock of the Company on the Nasdaq Stock Market on May 12, 2021, for meeting and exceeding the Daily Profit and Monthly Profit benchmark. On July 28, 2021, the Company entered into an asset purchase agreement with certain seller(the “Seller”) pursuant to which the Company agreed to purchase from the Seller digital currency mining machines for a total purchase price of RMB 106,388,672.43, or US$ 16,442,109.95 (based on the exchange rate between RMB and USD of 1: 6.4705 as of July 8, 2021), payable in the form of 7,647,493 shares of common stock of the Company(“CCNC Shares”). The CCNC Shares are valued at $2.15 per share. The Company plans to use the assets to further develop its digital currency mining operation. Warrants and options On July 29, 2015, the Company sold 10,000,000 units at a purchase price of $5.00 per unit (“Public Units”) in its initial public offering. Each Public Unit consists of one share of the Company’s common stock, $0.0001 par value, and one warrant. Each warrant will entitle the holder to purchase one-half of one share of common stock at an exercise price of $2.88 per half share ($5.75 per whole share). Warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. The warrants will become exercisable on 30 days after the consummation of its initial Business Combination with China Sunlong on February 6, 2018. The warrants will expire February 5, 2023. The warrants will be redeemable by the Company at a price of $0.01 per warrant upon 30 days prior written notice after the warrants become exercisable, only in the event that the last sale price of the common stock equals or exceeds $12.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which notice of redemption is given. The sponsor of the Company purchased, simultaneously with the closing of the Public Offering on July 29, 2015, 500,000 units at $5.00 per unit in a private placement for an aggregate price of $2,500,000. Each unit purchased is substantially identical to the units sold in the Public Offering. The Company sold to the underwriter (and/or its designees), for $100, as additional compensation, an option to purchase up to a total of 800,000 units exercisable at $5.00 per unit (or an aggregate exercise price of $4,000,000) upon the closing of the Public Offering. Since the option is not exercisable until the earliest on the closing the initial Business Combination, the option will effectively represent the right to purchase up to 800,000 shares of common stock and 800,000 warrants to purchase 400,000 shares at $5.75 per full share for an aggregate maximum amount of $6,300,000. The units issuable upon exercise of this option are identical to those issued in the Public Offering. In July 2016, the board of directors of the Company appointed two new directors. In August 2016, the sponsor of the Company granted an option to each of the two new directors to acquire 12,000 shares of common stock at a price of $4.90 per share vested immediately and exercisable commencing six months after closing of the initial Business Combination and expiring five years from the closing of the initial Business Combination. The aforementioned warrants and options are deemed to be effective on February 6, 2018, the date of the consummation of its initial business combination with China Sunlong, as the Company was deemed to be the accounting acquiree in the transaction and the transaction was treated as a recapitalization of China Sunlong. The summary of warrant activity is as follows: Exercisable Weighted Average Warrants Number of Exercise Contractual Outstanding Shares Price Life December 31, 2020 9,079,348 4,539,674 $ 5.75 2.13 Granted/Acquired - - $ - - Forfeited - - $ - - Exercised - - - - September 30, 2021 9,079,348 4,539,674 $ 5.75 1.37 The summary of option activity is as follows: Weighted Average Average Remaining Options Exercise Contractual Outstanding Price Life December 31, 2020 824,000 $ 5.00 2.13 Granted/Acquired - $ - - Forfeited - $ - - Exercised - $ - - September 30, 2021 824,000 $ 5.00 1.37 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 14 – Commitments and contingencies Contingencies From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment reporting | Note 15 – Segment reporting The Company follows ASC 280, Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance. The Company’s chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being income from operations. The Company’s has disposed of Tongrong WFOE and Rong Hai. The Company’s remain business segment and operations is Wuge. The Company’s consolidated results of operations and consolidated financial position from continuing operations are almost all attributable to Wuge; accordingly, management believes that the consolidated balance sheets and statement of operations provide the relevant information to assess Wuge’s performance. The following represents assets by division as of: Total assets as of September 30, December 31, Rong Hai and Tongrong WFOE $ - $ 15,006,063 Wuge 18,425,264 2,304,566 CCNC, Citi Profit BVI and TMSR HK 28,629,122 7,824,490 Total Assets $ 47,054,386 $ 25,135,119 Total revenues of September 30, September 30, Rong Hai and Tongrong WFOE $ - $ - Wuge 9,541,992 723 CCNC, Citi Profit BVI and TMSR HK - - Total revenues $ 9,541,992 $ 723 |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 16 – Discontinued Operations The following depicts the financial position for the discounted operations of Wuhan Host, Shengrong WOFE, Tongrong WOFE and Rong Hai as of September 30, 2021 and December 31, 2020, and the result of operations for the discounted operations of Wuhan Host, Shengrong WOFE, Tongrong WOFE and Rong Hai for the nine months ended September 30, 2021 and 2020. The results of operations for Shengrong HK and China Sunlong have been included in the results of discontinued operations up to June 30, 2020, which is the date when they were disposed and removed from balance sheet. Results of Operations For the For the REVENUES Fuel materials $ 4,890,734 $ 8,956,705 TOTAL REVENUES 4,890,734 8,956,705 COST OF REVENUES Fuel materials 4,690,388 8,546,438 TOTAL COST OF REVENUES 4,690,388 8,546,438 GROSS PROFIT 200,346 410,267 OPERATING EXPENSES (INCOME) Selling, general and administrative 160,254 96,245 Provision for (recovery of) doubtful accounts - (149,775 ) TOTAL OPERATING EXPENSES 160,254 (53,530 ) INCOME FROM OPERATIONS 40,092 463,797 OTHER INCOME (EXPENSE) Interest income 75 1,632 Interest expense (7,708 ) (12,598 ) Investment income - 14,102 Other income (expense), net 8 - Total other income (expense), net (7,625 ) 3,136 INCOME BEFORE INCOME TAXES 32,467 466,933 PROVISION FOR INCOME TAXES 8,896 42,159 NET INCOME $ 23,571 $ 424,774 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 17 – Subsequent events On October 1, 2021, Mr. Weidong (David) Feng tendered his resignation as Co-Chief Executive Officer of the Company, effective October 6, 2021. Mr. Feng’s resignation was not a result of any disagreement with the Company’s operations, policies or procedures. On October 1, 2021, Mr. Zijing (Ryan) Xu tendered his resignation as Chief Strategy Officer of the Company, effective October 6, 2021. Mr. Xu’s resignation was not a result of any disagreement with the Company’s operations, policies or procedures. On October 7, 2021, approved by the Board of Directors and the , |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). |
Principles of consolidation | Principles of consolidation The unaudited condensed financial statements of the Company include the accounts of CCNC and its wholly owned subsidiaries and VIE. All intercompany transactions and balances are eliminated upon consolidation. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of intangible assets, deferred revenues and plant and equipment, impairment of long-lived assets, collectability of receivables, inventory valuation allowance, present value of lease liabilities and realization of deferred tax assets. Actual results could differ from these estimates. |
Foreign currency translation and transaction | Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive loss amounted to $199,579 and $935,637 as of September 30, 2021 and December 31, 2020, respectively. The balance sheet amounts, with the exception of shareholders’ equity at September 30, 2021 and December 31, 2020 were translated at 6.49 RMB and 6.52 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the nine months ended September 30, 2021 and 2020 were 6.47 RMB and 6.99 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. |
Investments | Investments The Company purchases certain liquid short term investments such as money market funds and or other short term debt securities marketed by financial institutions. These investments are not insured against loss of principal. These investments are accounted for as financial instruments that are marked to fair market value at the end of each reporting period. For investments that are held to maturity debt instruments, which have short maturities, and limited risk profiles, amortized cost may be the best approximation of their fair value and used for such investments. |
Accounts receivable, net | Accounts receivable, net Accounts receivable include trade accounts due from customers. An allowance for doubtful accounts may be established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. |
Inventories | Inventories Inventories are comprised of raw materials and work in progress and are stated at the lower of cost or net realizable value using the weighted average method in Wuge. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and recognize an impairment charge against the inventory when the carrying value exceeds net realizable value. As of September 30, 2021 and December 31, 2020, no obsolescence and cost in excess of net realizable value were recognized. |
Prepayments | Prepayments Prepayments are funds deposited or advanced to outside vendors for future inventory or services purchases. As a standard practice in China, many of the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends. |
Plant and equipment | Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method after consideration of the estimated useful lives of the assets and estimated residual value. The estimated useful lives and residual value are as follows: Useful Life Estimated Value Building 5 - 20 years 5 % Office equipment and furnishing 5 years 5 % Production equipment 3 - 10 years 5 % Automobile 5 years 5 % Leasehold improvements Shorter of the remaining lease terms or estimated useful lives 0 % The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. |
Intangible assets | Intangible assets Intangible assets represent land use rights and patents, and they are stated at cost, less accumulated amortization. Research and development costs associated with internally developed patents are expensed when incurred. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. All land in the PRC is owned by the government; however, the government grants “land use rights.” The Company has obtained the rights to use various parcels of land. The patents have finite useful lives and are amortized using a straight-line method that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The Company amortizes the cost of the land use rights and patents, over their useful life using the straight-line method. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The estimated useful lives are as follows: Useful Life Land use rights 50 years Patents 10 - 20 years Software 5 years |
Goodwill | Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of income. Impairment losses on goodwill are not reversed. |
Impairment for long-lived assets | Impairment for long-lived assets Long-lived assets, including plant, equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. |
Fair value measurement | Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits, short term loans and taxes payable to approximate their fair values because of their short term nature. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. |
Customer deposits | Customer deposits Wuge typically receives customer deposits for services to be rendered from its customers. As Wuge delivers the services, it will recognize these deposits to results of operations in accordance to its revenue recognition policy. |
Revenue recognition | Revenue recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s revenue, other than retainage revenues, was recognized based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. However, the impact of the Company’s retainage revenue was not material as of the date of adoption, and as a result, did not result in an adjustment. The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time except for the retainage revenues where the retainage periods are recognized over the retainage period, usually is a period of twelve months. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition except its retainage revenues. An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange. Revenue from equipment and systems, revenue from coating and fuel materials, and revenue from trading and others are recognized at the date of goods delivered and title passed to customers, when a formal arrangement exists, the price is fixed or determinable, the Company has no other significant obligations and collectability is reasonably assured. Such revenues are recognized at a point in time after all performance obligations are satisfied under the new five-step model. In addition, training service revenues are recognized when the services are rendered and the Company has no other obligations, and collectability is reasonably assured. These revenues are recognized at a point in time. Payments received before all of the relevant criteria for revenue recognition are recorded as customer deposits. The Company’s disaggregate revenue streams are summarized as follows: For the Three Months Ended For the Nine Months Ended 2021 2020 2021 2020 Revenues – Wuge digital door signs $ 2,665,702 $ - $ 9,541,992 $ - Trading and others (45,759 ) - 723 Total revenues $ 2,665,702 $ (45,759 ) $ 9,541,992 $ 723 |
Research and Development (“R&D”) Expenses | Research and Development (“R&D”) Expenses Research and development expenses include salaries and other compensation-related expenses paid to the Company’s research and product development personnel while they are working on R&D projects, as well as raw materials used for the R&D projects. R&D expenses incurred by the Company are included in the selling, general and administrative expenses. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes is accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company incurred no such penalties and interest for the nine months ended September 30, 2021 and 2020. As of September 30, 2021, the Company’s PRC tax returns filed for 2018, 2019 and 2020 remain subject to examination by any applicable tax authorities. |
Earnings per share | Earnings per share Basic earnings per share are computed by dividing income available to common shareholders of the Company by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares. 9,079,348 and 10,500,000 of outstanding warrants which is equivalent to convertible of 4,539,674 and 5,250,000 common shares were excluded from the diluted earnings per share calculation due to its antidilutive effect for the nine months ended September 30, 2021 and 2020, respectively. 824,000 of outstanding options were excluded from the diluted earnings per share calculation due to its antidilutive effect for the nine months ended September 30, 2021 and 2020. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU would have a material effect on the Company’s unaudited condensed consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Nature of Business and Organi_2
Nature of Business and Organization (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of activities of CCNC and each of the following entities | Name Background Ownership China Sunlong 3 ● A Cayman Islands company 100% owned by the Company Shengrong BVI 3 ● A British Virgin Island company 100% owned by China Sunlong ● Incorporated on June 30, 2015 Citi Profit BVI ● A British Virgin Island company 100% owned by the Company ● Incorporated on April 2019 Shengrong HK 3 ● A Hong Kong company 100% owned by Shengrong BVI ● Incorporated on September 25, 2015 TMSR HK ● A Hong Kong company 100% owned by Citi Profit BVI ● Incorporated on April 2019 Shengrong WFOE 3 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by Shengrong HK ● Incorporated on March 1, 2016 ● Registered capital of USD 12,946 (HKD100,000), fully funded ● Purchase and sales of high efficiency permanent magnetic separator and comprehensive utilization system ● Trading of processed industrial waste materials Tongrong WFOE 4 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TMSR HK ● Incorporated on August 2019 Makesi WFOE ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TMSR HK ● Incorporated on December 2020 Name Background Ownership Hubei Shengrong 2 ● A PRC limited liability company 100% owned by Shengrong WFOE ● Incorporated on January 14, 2009 ● Registered capital of USD 4,417,800 (RMB 30,000,000), fully funded ● Production and sales of high efficiency permanent magnetic separator and comprehensive utilization system. ● Trading of processed industrial waste materials Wuhan HOST 3 ● A PRC limited liability company 100% owned by Shengrong WFOE ● Incorporated on October 27, 2010 ● Registered capital of USD 750,075 (RMB 5,000,000), fully funded ● Research, development, production and sale of coating materials. Shanghai Host Coating Materials Co., Ltd. 3 ● A PRC limited liability company ● Incorporated on December 11, 2014 ● Registered capital of USD 3,184,371 (RMB 20,000,000), to be fully funded by November 2024 ● No operations and no capital contribution has been made as of December 31, 2018 80% owned by Wuhan HOST Wuhan HOST Coating Materials Xiaogan Co., Ltd. 3 ● A PRC limited liability company 90% owned by Wuhan HOST ● Incorporated on December 25, 2018 ● Registered capital of USD 11,595,379 (RMB 80,000,000), to be fully funded by December 2028 ● No operations and no capital contribution has been made as of December 31, 2018 Rong Hai 4 ● A PRC limited liability company VIE of Tongrong WFOE ● Incorporated on May 20, 2009 ● Registered capital of USD 3,171,655 (RMB 20,180,000), fully funded ● Coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap Wuge ● A PRC limited liability company VIE of Makesi WFOE ● Incorporated on July 4, 2019 TJComex BVI 1 ● A British Virgin Island company 100% owned by China Sunlong ● Incorporated on March 8, 2016 TJComex HK 1 ● A Hong Kong company 100% owned by TJComex BVI ● Incorporated on March 19, 2014 TJComex WFOE 1 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TJComex HK ● Incorporated on March 10, 2004 ● Registered capital of USD 200,000 TJComex Tianjin 1 ● A PRC limited liability company 100% owned by TJComex WFOE ● Incorporated on November 19, 2007 ● Registered capital of USD 7,809,165 (RMB 55,000,000) ● General merchandise trading business and related consulting services |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of plant and equipment | Useful Life Estimated Value Building 5 - 20 years 5 % Office equipment and furnishing 5 years 5 % Production equipment 3 - 10 years 5 % Automobile 5 years 5 % Leasehold improvements Shorter of the remaining lease terms or estimated useful lives 0 % |
Schedule of estimated useful lives of intangible assets | Useful Life Land use rights 50 years Patents 10 - 20 years Software 5 years |
Schedule of disaggregate revenue | For the Three Months Ended For the Nine Months Ended 2021 2020 2021 2020 Revenues – Wuge digital door signs $ 2,665,702 $ - $ 9,541,992 $ - Trading and others (45,759 ) - 723 Total revenues $ 2,665,702 $ (45,759 ) $ 9,541,992 $ 723 |
Business Combination and Rest_2
Business Combination and Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of net purchase price allocation | Total consideration at fair value $ 7,200,000 |
Schedule of the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date | Fair Value Cash $ 228,788 Other current assets 20,834 Plant and equipment 6,024 Other noncurrent assets 8,097 Goodwill 7,343,209 Total asset 7,606,952 Total liabilities (406,952 ) Net asset acquired $ 7,200,000 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of carrying amount of the VIE’s assets and liabilities | September 30, December 31, 2021 2020 Current assets $ 9,930,745 $ 9,600,157 Property, plants and equipment, Intangible Assets 1,049,564 1,268,272 Other noncurrent assets - 196,415 Goodwill 7,753,340 11,650,157 Total assets 18,733,649 22,715,001 Current liabilities 12,562,464 8,766,619 Non-current liabilities - 33,698 Total liabilities 12,562,464 8,800,317 Net assets $ 6,171,185 $ 13,914,684 September 30, December 31, 2021 2020 Short-term loan $ - $ 475,103 Accounts payable - 1,037,723 Other payables and accrued liabilities 145,235 103,323 Other payables – related party 1,533,225 6,090,841 Tax payables 302,061 57,815 Customer Advances 10,581,943 900,522 Lease liabilities - 101,292 Total current liabilities 12,562,464 8,766,619 Lease liabilities - noncurrent - 33,698 Total liabilities $ 12,562,464 $ 8,800,317 |
Schedule of summarized operating results of the VIE’s | For the Operating revenues $ 9,541,992 Gross profit 9,384,552 Loss from operations (1,368,074 ) Net loss $ (1,368,074 ) |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounts Receivable [Abstract] | |
Schedule of accounts receivable | September 30, December 31, Accounts receivable $ - $ 1,670,526 Less: Allowance for doubtful accounts - (598,936 ) Total accounts receivable, net $ - $ 1,071,590 |
Schedule of movement of allowance for doubtful accounts | September 30, December 31, Beginning balance $ - $ - Beginning balance from Wuhan HOST - - Beginning balance from Rong Hai - 24,055 Addition - 542,087 Recovery - - Exchange rate effect - 32,794 Ending balance $ - $ 598,936 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | September 30, December 31, Raw materialsc $ - $ - Work in progress - - Finished Goods 13,473 1,047,274 Total inventories $ 13,473 $ 1,047,274 |
Plant and Equipment, Net (Table
Plant and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of plant and equipment | September 30, December 31, Office equipment and furniture $ 6,262,187 $ 76,605 Automobile 216,175 272,902 Subtotal 6,478,362 349,507 Less: accumulated depreciation (1,237,839 ) (266,674 ) Total $ 5,240,523 $ 82,833 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | September 30, December 31, Development of technology $ 770,962 $ 1,226,072 Bitcoin 2,366,518 Software 601 598 Less: accumulated amortization (301 ) (149 ) Net intangible assets $ 3,137,780 $ 1,226,521 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill by business units | Rong Hai Wuge Total Balance as of December 31, 2020 $ 3,896,817 $ 7,753,340 $ 11,650,157 Disposal of the company (3,896,817 ) - (3,896,817 ) Balance as of September 30, 2021 $ - $ 7,753,340 $ 7,753,340 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of other receivable – related party | Name of related party Relationship September 30, December 31, Chengdu Yuan Code Chain Technology Co. Ltd A company controlled by former shareholder of the Company $ 504,456 $ 230,134 |
Schedule of other payables – related parties | Name of related party Relationship September 30, December 31, Chuanliu Ni Chief Executive Officer and director of a former subsidiary $ 325,907 $ 325,907 Zhong Hui Holding Limited Shareholder of the Company 140,500 140,500 Qihai Wang Shareholder of the Company - 24,729 Total $ 466,407 $ 491,136 |
Taxes (Tables)
Taxes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of deferred tax assets | September 30, December 31, Net operating losses carried forward – U.S. $ 5,463,533 $ 303,560 Net operating losses carried forward – PRC - - Bad debt allowance - 127,377 Valuation allowance (5,463,533 ) (303,560 ) Deferred tax assets, net $ - $ 127,377 |
Schedule of taxes payable | September 30, December 31, VAT taxes payable $ 302,061 $ 1,589 Income taxes payable - 70,914 Other taxes payable - 136 Total $ 302,061 $ 72,639 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | Exercisable Weighted Average Warrants Number of Exercise Contractual Outstanding Shares Price Life December 31, 2020 9,079,348 4,539,674 $ 5.75 2.13 Granted/Acquired - - $ - - Forfeited - - $ - - Exercised - - - - September 30, 2021 9,079,348 4,539,674 $ 5.75 1.37 |
Schedule of option activity | Weighted Average Average Remaining Options Exercise Contractual Outstanding Price Life December 31, 2020 824,000 $ 5.00 2.13 Granted/Acquired - $ - - Forfeited - $ - - Exercised - $ - - September 30, 2021 824,000 $ 5.00 1.37 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of assets by division | Total assets as of September 30, December 31, Rong Hai and Tongrong WFOE $ - $ 15,006,063 Wuge 18,425,264 2,304,566 CCNC, Citi Profit BVI and TMSR HK 28,629,122 7,824,490 Total Assets $ 47,054,386 $ 25,135,119 Total revenues of September 30, September 30, Rong Hai and Tongrong WFOE $ - $ - Wuge 9,541,992 723 CCNC, Citi Profit BVI and TMSR HK - - Total revenues $ 9,541,992 $ 723 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of financial position and result of operations for the discounted operations | Results of Operations For the For the REVENUES Fuel materials $ 4,890,734 $ 8,956,705 TOTAL REVENUES 4,890,734 8,956,705 COST OF REVENUES Fuel materials 4,690,388 8,546,438 TOTAL COST OF REVENUES 4,690,388 8,546,438 GROSS PROFIT 200,346 410,267 OPERATING EXPENSES (INCOME) Selling, general and administrative 160,254 96,245 Provision for (recovery of) doubtful accounts - (149,775 ) TOTAL OPERATING EXPENSES 160,254 (53,530 ) INCOME FROM OPERATIONS 40,092 463,797 OTHER INCOME (EXPENSE) Interest income 75 1,632 Interest expense (7,708 ) (12,598 ) Investment income - 14,102 Other income (expense), net 8 - Total other income (expense), net (7,625 ) 3,136 INCOME BEFORE INCOME TAXES 32,467 466,933 PROVISION FOR INCOME TAXES 8,896 42,159 NET INCOME $ 23,571 $ 424,774 |
Nature of Business and Organi_3
Nature of Business and Organization (Details) | Apr. 11, 2018 | Feb. 06, 2018shares | Mar. 30, 2021 | Jun. 30, 2020 | Nov. 30, 2018shares | May 30, 2018 | Mar. 31, 2017 | Sep. 30, 2021 | Dec. 27, 2018shares | Apr. 02, 2018USD ($) | Oct. 10, 2017USD ($) | Oct. 10, 2017CNY (¥) |
Nature of Business and Organization (Details) [Line Items] | ||||||||||||
Share exchange agreement, description | (v) Chuanliu Ni, a Chinese citizen who is the Chief Executive Officer and director of China Sunlong, in the capacity as the representative for the Sellers. Pursuant to the Share Exchange Agreement, the Company acquired from the Sellers all of the issued and outstanding equity interests of China Sunlong in exchange for 17,990,856 newly-issued shares of common stock of the Company to the Sellers. 1,799,088 of these newly-issued shares are held in escrow for 18 months from the closing date of the Business Combination as a security for China Sunlong and the Sellers’ indemnification obligations under the Share Exchange Agreement. | |||||||||||
Exchange for newly-issued shares of common stock | 17,990,856 | 1 | ||||||||||
TJComex BVI [Member] | ||||||||||||
Nature of Business and Organization (Details) [Line Items] | ||||||||||||
China sunlong completed its acquisition, description | China Sunlong completed its acquisition of 100% of the equity in TJComex International Group Corporation (“TJComex BVI”). At the closing of such acquisition, the selling shareholders of TJComex BVI received 5,935 shares of China Sunlong Common Stock valued at $926.71 per share for 100% of their equity in TJComex BVI. TJComex BVI owns 100% of the issued and outstanding capital stock of TJComex Hong Kong Company Limited (“TJComex HK”), a Hong Kong limited liability company, which owns 100% equity interest of Tianjin Corro Technological Consulting Co., Ltd. (“TJComex WFOE”), a wholly foreign owned enterprise incorporated under the laws of the PRC. Pursuant to certain contractual arrangements, TJComex WFOE controls Tianjin Commodity Exchange Co., Ltd. (“TJComex Tianjin”), a limited liability company incorporated under the law of the PRC. TJComex Tianjin is engaged in general merchandise trading business and related consulting services, and its headquarter is located in the city of Tianjin, PRC.On April 2, 2018, the Company disposed of its subsidiary, TJComex BVI in consideration of (i) its minimum contribution to the Company’s results of operation and (ii) the unsatisfactory synergy between the TJComex BVI business and the rest of the Company’s business. The Company’s decision to dispose of TJComex BVI is to (i) improve the Company’s overall financial condition and results of operations, (ii) reduce the complexity of the Company’s business, (iii) focus the Company’s resources on the solid waste recycling business as well as developing environmental control business opportunities; and (iv) make it possible for the Company to pursue acquisition opportunities for more compatible businesses. TJComex BVI was disposed to Chuanliu Ni, a Chinese citizen who is the director of China Sunlong. As of April 2, 2018, the net assets of TJComex BVI were $16,598 and is being recorded as a loss from disposal of subsidiary in the consolidated financial statements for the period ending December 31, 2018. As TJComex BVI operating revenue was less than 1% of the Company’s revenue and the disposal did not constitute a strategic shift that will have a major effect on the Company’s operations and financial results, the results of operations for TJComex BVI were not reported as discontinued operations under the guidance of Accounting Standards Codification 205. On October 10, 2017, Hubei Shengrong established a wholly owned subsidiary, Fujian Shengrong Environmental Protection Energy-Saving Science and Technology Ltd. (“Fujian Shengrong”), with registered capital of RMB 10,000,000 (approximately USD 1,518,120). Fujian Shengrong has no operations prior to May 30, 2018. On May 30, 2018, Hubei Shengrong and two unrelated entities entered into certain Capital Transfer and Contribution Agreement pursuant to which these two entities shall contribute cash of approximately USD 5.0 million (RMB 32.0 million) into Fujian Shengrong and Hubei Shengrong shall contribute approximately USD 1.3 million (RMB 8.0 million) which is the consideration for certain technology consulting services to be provided by Hubei Shengrong to the two entities. Upon completion of the contribution, the total registered capital of Fujian Shengrong increased to RMB 40.0 million (approximately USD 6.3 million) and Hubai Shengrong owns 20% and the two entities collectively own 80% of the equity interest of Fujian Shengrong. In August 2018, Hubei Shengrong transferred 20% equity interest of Fujian Shengrong to Shengrong WFOE. The Company will account for the investment in Fujian Shengrong using the cost method. Since Shengrong WFOE did not provide any cash contribution to Fujian Shengrong or technology services, the investment balance under the cost method investment on September 30, 2020 is $0. On November 30, 2018, the Company entered into a Share Purchase Agreement with Jirong Huang and Qihuang Wang (collectively “Sellers”) and Jiangsu Rong Hai Electric Power Fuel Co., Ltd. (“Rong Hai”), a company incorporated in China engaging in the sale of fuel materials and harbor cargo handling services. Pursuant to the Share Purchase Agreement, CCNC shall issue an aggregate of 4,630,000 shares of CCNC’s common stock to the Rong Hai Shareholders, in exchange for Rong Hai Shareholders’ agreement to enter into, and their agreement to cause Rong Hai to enter into, certain VIE Agreements (the “Rong Hai VIE Agreements”) with Shengrong WFOE, through which Shengrong WFOE shall have the right to control, manage and operate Rong Hai in return for a service fee approximately equal to 100% of Rong Hai’s net income (“Acquisition”). On November 30, 2018, Shengrong WFOE, the Company’s indirectly owned subsidiary, entered into a series of VIE Agreements with Rong Hai and the Rong Hai Shareholders. The VIE Agreements are designed to provide Shengrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. Rong Hai has the necessary license to carry out coal trading business in China. The Acquisition closed on November 30, 2018. Starting on November 30, 2018, the Company’s business activities added coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap, of which business activities are carried out in Nantong, Jiang Su Province, PRC. On December 27, 2018, the Company, entered into an Equity Purchase Agreement with Hopeway International Enterprises Limited., a private limited company duly organized under the laws of British Virgin Islands (the “Hopeway”). Pursuant to the Equity Purchase Agreement, Shengrong WOFE shall sell 100% equity interests in Hubei Shengrong to Hopeway in exchange for Hopeway’s agreement to irrevocably forfeit and cancel 8,523,320 shares of common stock of the Company, constituting all the shares owned by Hopeway. The transaction contemplated by the Equity Purchase Agreement is hereby referred as Disposition. The Company’s decision to dispose of Hubei Shengrong is due to the planning mandates of Wuhan Municipal Government 2018 which manufactures should move away from city’s downtown area. Therefore, due to the policy change, Hubei Shengrong is forced to close the existing facility, relocate and build a new facility, which is expected to take approximately 7-8 years. As a result, Hubei Shengrong will not be able to keep the production running and will generate no income in the foreseeable future. Management believed it is very difficult, if possible at all, to continue manufacturing of solid waste recycling systems. As such, the Company has been actively seeking to dispose Hubei Shengrong while retaining the research and development and sale of solid waste recycling systems business. Upon closing of the Disposition, Hopeway will become the sole shareholder of Hubei Shengrong and as a result, assume all assets and obligations of Hubei Shengrong except the research and development team and intellectual property rights in connection with the solid waste recycling systems business shall be assigned to Shengrong WFOE as part of the Disposition. As Shengrong WFOE has significant continuing involvement in the sale of solid waste recycling systems business and the processed industrial waste materials trading business, this restructuring did not constitute a strategic shift that will have a major effect on the Company’s operations and financial results. Therefore, the results of operations for Hubei Shengrong were not reported as discontinued operations under the guidance of Accounting Standards Codification 205. In April 2019, TMSR Holdings Limited (“TMSR HK”), our indirect wholly owned subsidiary, was incorporated under the laws of Hong Kong. In August 2019, Tongrong Technology (Jiangsu) Co., Ltd. (“Tongrong WFOE”), our indirect wholly owned subsidiary, was incorporated under the laws of PRC. In August 2019, Citi Profit Investment Holding Limited (“Citi Profit”), an exempted company formed under the laws of the British Virgin Islands, became our wholly owned subsidiary. TMSR HK, Tongrong WFOE and Citi Profit are all holding companies that do not have any substantive business operations. On January 3, 2020, the Company entered into a share purchase agreement with Sichuan Wuge Network Games Co., Ltd. (“Wuge”) and all the shareholders of Wuge, including Wei Xu, Bibo Lin, Jiangsu Lingkong Network Joint Stock Co., Ltd., which is controlled by Wei Xu, and Anhui Shuziren Network Technology Co., Ltd., which is also controlled by Wei Xu. Pursuant to the share purchase agreement, on January 24, 2020, the Company issued an aggregate of 4,000,000 shares of TMSR’s common stock to the shareholders of Wuge, in exchange for Wuge’s shareholders’ agreement to enter into, and their agreement to cause Wuge to enter into, certain VIE agreements (the “Wuge VIE Agreements”) with Tongrong WFOE, through which Tongrong WFOE has the right to control, manage and operate Wuge in return for a service fee equal to 100% of Wuge’s net income. On April 30, 2020, Tongrong WFOE entered into a series of assignment agreements with Shengrong WFOE, Rong Hai and shareholders of Rong Hai, pursuant to which Shengrong WFOE assign all its rights and obligations under the Rong Hai VIE Agreements to Tongrong WFOE. The Rong Hai VIE Agreements and the Assignment Agreements grant Tongrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. The assignment does not have any impact on Company’s consolidated financial statements. Effective May 18, 2020, the Company changed its corporate name from “TMSR Holding Company Limited” to “Code Chain New Continent Limited” pursuant to a Certificate of Amendment to the Company’s Articles of Incorporation filed with the Secretary of State of the State of Nevada. In connection with the name change, effective May 18, 2020, the ticker symbol of the Company’s common stock and warrants changed from “TMSR” and “TMSRW” to “CCNC” and “CCNCW”, respectively. On June 30, 2020, the Company entered into a share purchase agreement with Jiazhen Li, former CEO of the Company (the “Buyer”), Long Liao and Chunyong Zheng, who are former shareholders of Wuhan HOST Coating Materials Co., Ltd., an indirect subsidiary of the Company, (collectively the “Payees”). Pursuant to the Agreement, the Company agreed to sell, and the Buyer agreed to purchase all the issued and outstanding ordinary shares of China Sunlong (the “Sunlong Shares”). The Payees have a prior relationship with the Buyer and have agreed to be responsible for the payment of the purchase price on behalf of Buyer. The purchase price for the Sunlong Shares shall be $1,732,114, payable in consideration of cancellation of 1,012,932 shares of the Company owned by the Payees (the “CCNC Shares”). The CCNC Shares are valued at $1.71 per share, based on the closing price of the Company’s common stock on June 30, 2020. The CCNC Shares were cancelled on August 31, 2020. In December 2020, Makesi Iot Technology (Shanghai) Co., Ltd. (“Makesi WFOE”), our indirect wholly owned subsidiary, was incorporated under the laws of PRC. On January 11, 2021, Makesi WFOE entered into a series of assignment agreements (the “Assignment Agreements”) with Tongrong WFOE, Wuge and Wuge Shareholders, pursuant to which Tongrong WFOE assign all its rights and obligations under the VIE Agreements to Makesi WFOE (the “Assignment”). The VIE Agreements and the Assignment Agreements grant Makesi WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Wuge, including absolute rights to control the management, operations, assets, property and revenue of Wuge. The Assignment does not have any impact on Company’s consolidated financial statements. On March 30, 2021, the Company entered into a share purchase agreement with a buyer unaffiliated with the Company (the “Buyer”), and Qihai Wang, former director of the Company (the “Payee”). Pursuant to the agreement, the Company agreed to sell and the Buyer agreed to purchase all the issued and outstanding ordinary shares (the “Tongrong Shares”) of Tongrong WFOE. The Payee agreed to be responsible for the payment of the purchase price on behalf of Buyer. The purchase price for the Tongrong Shares shall be $2,464,411, payable in the form of cancelling 426,369 shares of common stock of the Company owned by the Payee (the “CCNC Shares”). The CCNC Shares are valued at $5.78 per share, based on the average closing price of the Company’s common stock during the 30 trading days immediately prior to the date of the agreement from February 12, 2021 to March 26, 2021. On March 31, 2021, the Company closed the sale of the Tongrong Shares and caused the CCNC Shares to be cancelled. Tongrong WFOE contractually controls Rong Hai. The disposition of Tongrong WFOE included disposition of Rong Hai. The accompanying consolidated financial statements reflect the activities of CCNC and each of the following entities: Name Background Ownership China Sunlong3 ● A Cayman Islands company 100% owned by the Company Shengrong BVI3 ● A British Virgin Island company 100% owned by China Sunlong ● Incorporated on June 30, 2015 Citi Profit BVI ● A British Virgin Island company 100% owned by the Company ● Incorporated on April 2019 Shengrong HK3 ● A Hong Kong company 100% owned by Shengrong BVI ● Incorporated on September 25, 2015 TMSR HK ● A Hong Kong company 100% owned by Citi Profit BVI ● Incorporated on April 2019 Shengrong WFOE3 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by Shengrong HK ● Incorporated on March 1, 2016 ● Registered capital of USD 12,946 (HKD100,000), fully funded ● Purchase and sales of high efficiency permanent magnetic separator and comprehensive utilization system ● Trading of processed industrial waste materials Tongrong WFOE4 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TMSR HK ● Incorporated on August 2019 Makesi WFOE ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TMSR HK ● Incorporated on December 2020 Name Background OwnershipHubei Shengrong2 ●A PRC limited liability company 100% owned by Shengrong WFOE ●Incorporated on January 14, 2009 ●Registered capital of USD 4,417,800 (RMB 30,000,000), fully funded ●Production and sales of high efficiency permanent magnetic separator and comprehensive utilization system. ●Trading of processed industrial waste materials Wuhan HOST3 ●A PRC limited liability company 100% owned by Shengrong WFOE ●Incorporated on October 27, 2010 ●Registered capital of USD 750,075 (RMB 5,000,000), fully funded ●Research, development, production and sale of coating materials. Shanghai Host Coating Materials Co., Ltd.3 ●A PRC limited liability company ●Incorporated on December 11, 2014 ●Registered capital of USD 3,184,371 (RMB 20,000,000), to be fully funded by November 2024 ●No operations and no capital contribution has been made as of December 31, 2018 80% owned by Wuhan HOST Wuhan HOST Coating Materials Xiaogan Co., Ltd.3 ●A PRC limited liability company 90% owned by Wuhan HOST ●Incorporated on December 25, 2018 ●Registered capital of USD 11,595,379 (RMB 80,000,000), to be fully funded by December 2028 ●No operations and no capital contribution has been made as of December 31, 2018 Rong Hai4 ●A PRC limited liability company VIE of Tongrong WFOE ●Incorporated on May 20, 2009 ●Registered capital of USD 3,171,655 (RMB 20,180,000), fully funded ●Coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap Wuge ●A PRC limited liability company VIE of Makesi WFOE ●Incorporated on July 4, 2019 TJComex BVI1 ●A British Virgin Island company 100% owned by China Sunlong ●Incorporated on March 8, 2016 TJComex HK1 ●A Hong Kong company 100% owned by TJComex BVI ●Incorporated on March 19, 2014 TJComex WFOE1 ●A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TJComex HK ●Incorporated on March 10, 2004 ●Registered capital of USD 200,000 TJComex Tianjin1 ●A PRC limited liability company 100% owned by TJComex WFOE ●Incorporated on November 19, 2007 ●Registered capital of USD 7,809,165 (RMB 55,000,000) ●General merchandise trading business and related consulting services | |||||||||||
Net assets | $ | $ 16,598 | |||||||||||
Fujian Shengrong [Member] | ||||||||||||
Nature of Business and Organization (Details) [Line Items] | ||||||||||||
Registered capital | $ 1,518,120 | ¥ 10,000,000 | ||||||||||
Hubei Shengrong [Member] | ||||||||||||
Nature of Business and Organization (Details) [Line Items] | ||||||||||||
Hubei shengrong, description | Hubei Shengrong and two unrelated entities entered into certain Capital Transfer and Contribution Agreement pursuant to which these two entities shall contribute cash of approximately USD 5.0 million (RMB 32.0 million) into Fujian Shengrong and Hubei Shengrong shall contribute approximately USD 1.3 million (RMB 8.0 million) which is the consideration for certain technology consulting services to be provided by Hubei Shengrong to the two entities. Upon completion of the contribution, the total registered capital of Fujian Shengrong increased to RMB 40.0 million (approximately USD 6.3 million) and Hubai Shengrong owns 20% and the two entities collectively own 80% of the equity interest of Fujian Shengrong. In August 2018, Hubei Shengrong transferred 20% equity interest of Fujian Shengrong to Shengrong WFOE. The Company will account for the investment in Fujian Shengrong using the cost method. Since Shengrong WFOE did not provide any cash contribution to Fujian Shengrong or technology services, the investment balance under the cost method investment on September 30, 2020 is $0. | |||||||||||
Equity Purchase Agreement [Member] | ||||||||||||
Nature of Business and Organization (Details) [Line Items] | ||||||||||||
Share purchase agreement, description | Pursuant to the Share Purchase Agreement, as supplemented on August 16, 2018, the Purchasers acquired all of the outstanding equity interests of Wuhan Host. In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million, of which $4.7 million or RMB equivalent shall be paid in cash and $6.0 million shall be paid in shares of common stock, of CCNC (“Share Consideration”). The Parties agree the Share Consideration shall be an aggregate of 1,012,932 shares of common stock of which is based on the closing price of US$4.64 on March 27, 2018. | |||||||||||
Forfeit and cancellation of shares | 8,523,320 | |||||||||||
Purchase Agreement [Member] | ||||||||||||
Nature of Business and Organization (Details) [Line Items] | ||||||||||||
Exchange for newly-issued shares of common stock | 4,630,000 | |||||||||||
Equity pledge agreement, description | The purchase price for the Tongrong Shares shall be $2,464,411, payable in the form of cancelling 426,369 shares of common stock of the Company owned by the Payee (the “CCNC Shares”). The CCNC Shares are valued at $5.78 per share, based on the average closing price of the Company’s common stock during the 30 trading days immediately prior to the date of the agreement from February 12, 2021 to March 26, 2021. | The purchase price for the Sunlong Shares shall be $1,732,114, payable in consideration of cancellation of 1,012,932 shares of the Company owned by the Payees (the “CCNC Shares”). The CCNC Shares are valued at $1.71 per share, based on the closing price of the Company’s common stock on June 30, 2020. | Under the equity pledge agreement among Tongrong WFOE, Wuge and Wuge Shareholders dated January 3, 2020, Wuge Shareholders pledged all of their equity interests in Wuge to Tongrong WFOE to guarantee Wuge’s performance of relevant obligations and indebtedness under the technical consultation and services agreement. In addition, Wuge Shareholders will complete the registration of the equity pledge under the agreement with the competent local authority. If Wuge breaches its obligation under the technical consultation and services agreement, Tongrong WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the Wuge Shareholders cease to be shareholders of Wuge. | |||||||||
Operating Agreement [Member] | ||||||||||||
Nature of Business and Organization (Details) [Line Items] | ||||||||||||
Agreement term | 20 years |
Nature of Business and Organi_4
Nature of Business and Organization (Details) - Schedule of activities of CCNC and each of the following entities | 9 Months Ended | |
Sep. 30, 2021 | ||
China Sunlong [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A Cayman Islands company | [1] |
Ownership | 100% owned by the Company | [1] |
Shengrong BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A British Virgin Island company | [1] |
Ownership | 100% owned by China Sunlong | [1] |
Shengrong BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on June 30, 2015 | [1] |
Citi Profit BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A British Virgin Island company | |
Ownership | 100% owned by the Company | |
Citi Profit BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on April 2019 | |
Shengrong HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A Hong Kong company | [1] |
Ownership | 100% owned by Shengrong BVI | [1] |
Shengrong HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on September 25, 2015 | [1] |
TMSR HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A Hong Kong company | |
Ownership | 100% owned by Citi Profit BVI | |
TMSR HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on April 2019 | |
Shengrong WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) | [1] |
Ownership | 100% owned by Shengrong HK | [1] |
Shengrong WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on March 1, 2016 | [1] |
Shengrong WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Registered capital of USD 12,946 (HKD100,000), fully funded | [1] |
Shengrong WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Purchase and sales of high efficiency permanent magnetic separator and comprehensive utilization system | [1] |
Shengrong WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Trading of processed industrial waste materials | [1] |
Tongrong WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) | [2] |
Ownership | 100% owned by TMSR HK | [2] |
Tongrong WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on August 2019 | [2] |
Makesi WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) | |
Ownership | 100% owned by TMSR HK | |
Makesi WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on December 2020 | |
Hubei Shengrong [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company | [3] |
Ownership | 100% owned by Shengrong WFOE | [3] |
Hubei Shengrong [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on January 14, 2009 | [3] |
Hubei Shengrong [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Registered capital of USD 4,417,800 (RMB 30,000,000), fully funded | [3] |
Hubei Shengrong [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Production and sales of high efficiency permanent magnetic separator and comprehensive utilization system. | [3] |
Hubei Shengrong [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Trading of processed industrial waste materials | [3] |
Wuhan HOST [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company | [1] |
Ownership | 100% owned by Shengrong WFOE | [1] |
Wuhan HOST [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on October 27, 2010 | [1] |
Wuhan HOST [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Registered capital of USD 750,075 (RMB 5,000,000), fully funded | [1] |
Wuhan HOST [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Research, development, production and sale of coating materials. | [1] |
Shanghai Host Coating Materials Co., Ltd. [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company | [1] |
Shanghai Host Coating Materials Co., Ltd. [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on December 11, 2014 | [1] |
Shanghai Host Coating Materials Co., Ltd. [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Registered capital of USD 3,184,371 (RMB 20,000,000), to be fully funded by November 2024 | [1] |
Shanghai Host Coating Materials Co., Ltd. [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | No operations and no capital contribution has been made as of December 31, 2018 | [1] |
Ownership | 80% owned by Wuhan HOST | |
Wuhan HOST Coating Materials Xiaogan Co., Ltd. [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company | [1] |
Ownership | 90% owned by Wuhan HOST | [1] |
Wuhan HOST Coating Materials Xiaogan Co., Ltd. [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on December 25, 2018 | [1] |
Wuhan HOST Coating Materials Xiaogan Co., Ltd. [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Registered capital of USD 11,595,379 (RMB 80,000,000), to be fully funded by December 2028 | [1] |
Wuhan HOST Coating Materials Xiaogan Co., Ltd. [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | No operations and no capital contribution has been made as of December 31, 2018 | [1] |
Rong Hai [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company | [2] |
Ownership | VIE of Tongrong WFOE | [2] |
Rong Hai [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on May 20, 2009 | [2] |
Rong Hai [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Registered capital of USD 3,171,655 (RMB 20,180,000), fully funded | [2] |
Rong Hai [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap | [2] |
Wuge [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company | |
Ownership | VIE of Makesi WFOE | |
Wuge [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on July 4, 2019 | |
TJComex BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A British Virgin Island company | [4] |
Ownership | 100% owned by China Sunlong | [4] |
TJComex BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on March 8, 2016 | [4] |
TJComex HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A Hong Kong company | [4] |
Ownership | 100% owned by TJComex BVI | [4] |
TJComex HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on March 19, 2014 | [4] |
TJComex WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) | [4] |
Ownership | 100% owned by TJComex HK | [4] |
TJComex WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on March 10, 2004 | [4] |
TJComex WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Registered capital of USD 200,000 | [4] |
TJComex Tianjin [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company | [4] |
Ownership | 100% owned by TJComex WFOE | [4] |
TJComex Tianjin [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Incorporated on November 19, 2007 | [4] |
TJComex Tianjin [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | Registered capital of USD 7,809,165 (RMB 55,000,000) | [4] |
TJComex Tianjin [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | General merchandise trading business and related consulting services | [4] |
[1] | Disposed on June 30, 2020 | |
[2] | Disposed on March 31, 2021 | |
[3] | Disposed on December 27, 2018 | |
[4] | Disposed on April 2, 2018 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Accumulated other comprehensive income (loss) (in Dollars) | $ 199,579 | $ 935,637 | |
Foreign currency translation, description | The balance sheet amounts, with the exception of shareholders’ equity at September 30, 2021 and December 31, 2020 were translated at 6.49 RMB and 6.52 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the nine months ended September 30, 2021 and 2020 were 6.47 RMB and 6.99 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. | ||
Income tax benefit, percentage | 50.00% | ||
Outstanding warrants | 9,079,348 | 10,500,000 | |
Common shares excluded from diluted earnings per share | 4,539,674 | 5,250,000 | |
Outstanding options | 824,000 | 9 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment | 9 Months Ended |
Sep. 30, 2021 | |
Building [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment [Line Items] | |
Plant and equipment, Estimated Residual Value | 5.00% |
Office equipment and furnishing [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment [Line Items] | |
Plant and equipment, Useful Life | 5 years |
Plant and equipment, Estimated Residual Value | 5.00% |
Production equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment [Line Items] | |
Plant and equipment, Estimated Residual Value | 5.00% |
Automobile [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment [Line Items] | |
Plant and equipment, Useful Life | 5 years |
Plant and equipment, Estimated Residual Value | 5.00% |
Leasehold improvements [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment [Line Items] | |
Plant and equipment, Estimated Residual Value | 0.00% |
Property and equipment, Useful Life, description | Shorter of the remaining lease terms or estimated useful lives |
Minimum [Member] | Building [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment [Line Items] | |
Plant and equipment, Useful Life | 5 years |
Minimum [Member] | Production equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment [Line Items] | |
Plant and equipment, Useful Life | 3 years |
Maximum [Member] | Building [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment [Line Items] | |
Plant and equipment, Useful Life | 20 years |
Maximum [Member] | Production equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of plant and equipment [Line Items] | |
Plant and equipment, Useful Life | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of intangible assets | 9 Months Ended |
Sep. 30, 2021 | |
Land use rights [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of intangible assets [Line Items] | |
Estimated useful lives for intangible assets | 50 years |
Patents [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of intangible assets [Line Items] | |
Estimated useful lives for intangible assets | 10 years |
Patents [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of intangible assets [Line Items] | |
Estimated useful lives for intangible assets | 20 years |
Software [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of intangible assets [Line Items] | |
Estimated useful lives for intangible assets | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of disaggregate revenue - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of disaggregate revenue [Abstract] | ||||
Revenues – Wuge digital door signs | $ 2,665,702 | $ 9,541,992 | ||
Trading and others | (45,759) | 723 | ||
Total revenues | $ 2,665,702 | $ (45,759) | $ 9,541,992 | $ 723 |
Business Combination and Rest_3
Business Combination and Restructuring (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Jan. 03, 2020 | Apr. 02, 2018 | |
TJComex BVI [Member] | |||
Business Combination and Restructuring (Details) [Line Items] | |||
Net assets | $ 16,598 | ||
Operating revenue percentage | 1.00% | ||
Wuge [Member] | |||
Business Combination and Restructuring (Details) [Line Items] | |||
Goodwill acquisition | $ 7,300,000 | ||
Purchase Agreement [Member] | |||
Business Combination and Restructuring (Details) [Line Items] | |||
Aggregate shares issued | 4,000,000 | ||
Percentage of service fee | 100.00% |
Business Combination and Rest_4
Business Combination and Restructuring (Details) - Schedule of net purchase price allocation | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Schedule of net purchase price allocation [Abstract] | |
Total consideration at fair value | $ 7,200,000 |
Business Combination and Rest_5
Business Combination and Restructuring (Details) - Schedule of the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date - Wuge [Member] | Sep. 30, 2021USD ($) |
Business Combination and Restructuring (Details) - Schedule of the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date [Line Items] | |
Cash | $ 228,788 |
Other current assets | 20,834 |
Plant and equipment | 6,024 |
Other noncurrent assets | 8,097 |
Goodwill | 7,343,209 |
Total asset | 7,606,952 |
Total liabilities | (406,952) |
Net asset acquired | $ 7,200,000 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) | 1 Months Ended |
Mar. 30, 2021USD ($)$ / sharesshares | |
Accounting Policies [Abstract] | |
Purchase price | $ | $ 2,464,411 |
Cancelling shares of common stock | shares | 426,369 |
Per share value | $ / shares | $ 5.78 |
Variable Interest Entity (Det_2
Variable Interest Entity (Details) - Schedule of carrying amount of the VIE’s assets and liabilities - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Variable Interest Entity [Line Items] | ||
Total assets | $ 18,733,649 | $ 22,715,001 |
Total liabilities | 12,562,464 | 8,800,317 |
Other payables – related party | 466,407 | 491,136 |
Tax payables | 302,061 | 72,639 |
Total current liabilities | 12,562,464 | 8,766,619 |
Variable Interest Entities [Member] | ||
Variable Interest Entity [Line Items] | ||
Current assets | 9,930,745 | 9,600,157 |
Property, plants and equipment, Intangible Assets | 1,049,564 | 1,268,272 |
Other noncurrent assets | 196,415 | |
Goodwill | 7,753,340 | 11,650,157 |
Current liabilities | 12,562,464 | 8,766,619 |
Non-current liabilities | 33,698 | |
Net assets | 6,171,185 | 13,914,684 |
Short-term loan | 475,103 | |
Accounts payable | 1,037,723 | |
Other payables and accrued liabilities | 145,235 | 103,323 |
Other payables – related party | 1,533,225 | 6,090,841 |
Tax payables | 302,061 | 57,815 |
Customer Advances | 10,581,943 | 900,522 |
Lease liabilities | 101,292 | |
Lease liabilities - noncurrent | $ 33,698 |
Variable Interest Entity (Det_3
Variable Interest Entity (Details) - Schedule of summarized operating results of the VIE’s - Variable Interest Entities [Member] | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Variable Interest Entity (Details) - Schedule of summarized operating results of the VIE’s [Line Items] | |
Operating revenues | $ 9,541,992 |
Gross profit | 9,384,552 |
Loss from operations | (1,368,074) |
Net loss | $ (1,368,074) |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - Schedule of accounts receivable - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of accounts receivable [Abstract] | ||
Accounts receivable | $ 1,670,526 | |
Less: Allowance for doubtful accounts | (598,936) | |
Total accounts receivable, net | $ 1,071,590 |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details) - Schedule of movement of allowance for doubtful accounts - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of movement of allowance for doubtful accounts [Abstract] | ||
Beginning balance | ||
Beginning balance from Wuhan HOST | ||
Beginning balance from Rong Hai | 24,055 | |
Addition | 542,087 | |
Recovery | ||
Exchange rate effect | 32,794 | |
Ending balance | $ 598,936 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventories - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of inventories [Abstract] | ||
Raw materialsc | ||
Work in progress | ||
Finished Goods | 13,473 | 1,047,274 |
Total inventories | $ 13,473 | $ 1,047,274 |
Plant and Equipment, Net (Detai
Plant and Equipment, Net (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1,237,839 | $ 14,250 |
Plant and Equipment, Net (Det_2
Plant and Equipment, Net (Details) - Schedule of plant and equipment - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 6,478,362 | $ 349,507 |
Less: accumulated depreciation | (1,237,839) | (266,674) |
Total | 5,240,523 | 82,833 |
Office equipment and furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 6,262,187 | 76,605 |
Automobile [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 216,175 | $ 272,902 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 301 | $ 112 | |
Aggregate value | $ 1,810,000 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of intangible assets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Less: accumulated amortization | $ (301) | $ (149) |
Net intangible assets | 3,137,780 | 1,226,521 |
Development of technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 770,962 | 1,226,072 |
Bitcoin [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 2,366,518 | |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 601 | $ 598 |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of goodwill by business units | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Goodwill [Line Items] | |
Balance as of December 31, 2020 | $ 11,650,157 |
Disposal of the company | (3,896,817) |
Balance as of September 30, 2021 | 7,753,340 |
Rong Hai [Member] | |
Goodwill [Line Items] | |
Balance as of December 31, 2020 | 3,896,817 |
Disposal of the company | (3,896,817) |
Balance as of September 30, 2021 | |
Wuge [Member] | |
Goodwill [Line Items] | |
Balance as of December 31, 2020 | 7,753,340 |
Disposal of the company | |
Balance as of September 30, 2021 | $ 7,753,340 |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) - Schedule of other receivable – related party - Chengdu Yuan Code Chain Technology Co. LTD [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Balances and Transactions (Details) - Schedule of other receivable – related party [Line Items] | ||
Name of related party | Chengdu Yuan Code Chain Technology Co. Ltd | |
Relationship | A company controlled by former shareholder of the Company | |
Other receivable – related party | $ 504,456 | $ 230,134 |
Related Party Balances and Tr_4
Related Party Balances and Transactions (Details) - Schedule of other payables – related parties - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Balances and Transactions (Details) - Schedule of other payables – related parties [Line Items] | ||
Name of related party | Total | |
Other payables - related parties | $ 466,407 | $ 491,136 |
Chuanliu Ni [Member] | ||
Related Party Balances and Transactions (Details) - Schedule of other payables – related parties [Line Items] | ||
Name of related party | Chuanliu Ni | |
Relationship | Chief Executive Officer and director of a former subsidiary | |
Other payables - related parties | $ 325,907 | 325,907 |
Zhong Hui Holding Limited [Member] | ||
Related Party Balances and Transactions (Details) - Schedule of other payables – related parties [Line Items] | ||
Name of related party | Zhong Hui Holding Limited | |
Relationship | Shareholder of the Company | |
Other payables - related parties | $ 140,500 | 140,500 |
Qihai Wang [Member] | ||
Related Party Balances and Transactions (Details) - Schedule of other payables – related parties [Line Items] | ||
Name of related party | Qihai Wang | |
Relationship | Shareholder of the Company | |
Other payables - related parties | $ 24,729 |
Taxes (Details)
Taxes (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | May 31, 2018 | Dec. 22, 2017 | Sep. 30, 2021 | |
Minimum [Member] | ||||
Taxes (Details) [Line Items] | ||||
Value added tax | 6.00% | 6.00% | ||
Gross sales price, percentage | 6.00% | |||
Maximum [Member] | ||||
Taxes (Details) [Line Items] | ||||
Value added tax | 13.00% | 17.00% | ||
Gross sales price, percentage | 16.00% | |||
PRC [Member] | ||||
Taxes (Details) [Line Items] | ||||
Foreign tax rate, percentage | 25.00% | |||
United States [Member] | ||||
Taxes (Details) [Line Items] | ||||
Net operating loss (in Dollars) | $ 26.5 | |||
Net operating loss carry forward (in Dollars) | $ 5.6 | |||
Deferred tax asset valuation allowance, description | Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. | |||
Corporate tax rate, description | On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. The 2017 Tax Act imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. The Company determined that there are no impact of GILTI for the nine months ended September 30, 2021 and 2020, which the Company believes that it will be imposed a minimum tax rate of 10.5% and to the extent foreign tax credits are available to reduce its US corporate tax, which may result in no additional US federal income tax being due. | |||
Hong Kong [Member] | ||||
Taxes (Details) [Line Items] | ||||
Foreign tax rate, percentage | 16.50% |
Taxes (Details) - Schedule of d
Taxes (Details) - Schedule of deferred tax assets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of deferred tax assets [Abstract] | ||
Net operating losses carried forward – U.S. | $ 5,463,533 | $ 303,560 |
Net operating losses carried forward – PRC | ||
Bad debt allowance | 127,377 | |
Valuation allowance | (5,463,533) | (303,560) |
Deferred tax assets, net | $ 127,377 |
Taxes (Details) - Schedule of t
Taxes (Details) - Schedule of taxes payable - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of taxes payable [Abstract] | ||
VAT taxes payable | $ 302,061 | $ 1,589 |
Income taxes payable | 70,914 | |
Other taxes payable | 136 | |
Total | $ 302,061 | $ 72,639 |
Concentration of Risk (Details)
Concentration of Risk (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
US [Member] | ||
Concentration of Risk (Details) [Line Items] | ||
Deposit for concentration risk | $ 1,162,912 | $ 0 |
PRC [Member] | ||
Concentration of Risk (Details) [Line Items] | ||
Deposit for concentration risk | $ 7,220,994 | $ 998,717 |
Equity (Details)
Equity (Details) - USD ($) | Jun. 01, 2021 | Aug. 11, 2020 | Apr. 04, 2019 | Mar. 15, 2019 | Mar. 11, 2019 | Feb. 12, 2019 | Jun. 01, 2018 | Jul. 28, 2021 | Feb. 23, 2021 | Feb. 22, 2021 | Jun. 30, 2020 | Dec. 23, 2019 | Feb. 20, 2019 | Jun. 23, 2018 | Aug. 31, 2016 | Jul. 29, 2015 | Sep. 30, 2021 | Dec. 31, 2020 | Jan. 03, 2020 | Nov. 20, 2019 |
Equity (Details) [Line Items] | ||||||||||||||||||||
Statutory reserve, description | Makesi WFOE and Wuge are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. | |||||||||||||||||||
Shareholder stock split, description | On June 1, 2018, the Company’s shareholder approved a 2 for 1 stock split of the Company’s common stock at the Annual Meeting of Shareholders. | |||||||||||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||||||||||||
Purchase price amount (in Dollars) | $ 7,200,000 | |||||||||||||||||||
Purchase agreement, description | the Company entered into an asset purchase agreement with certain seller(the “Seller”) pursuant to which the Company agreed to purchase from the Seller digital currency mining machines for a total purchase price of RMB 106,388,672.43, or US$ 16,442,109.95 (based on the exchange rate between RMB and USD of 1: 6.4705 as of July 8, 2021), payable in the form of 7,647,493 shares of common stock of the Company(“CCNC Shares”). The CCNC Shares are valued at $2.15 per share. The Company plans to use the assets to further develop its digital currency mining operation. | the Company entered into an asset purchase agreement with Sichuan RiZhanYun Jisuan Co., Ltd. (the “Seller”), which was amended and restated on April 16, 2021, and further amended on May 28, 2021. Pursuant to the asset purchase agreement, the Company purchased a total of 10,000 Bitcoin mining machines (the “Assets”) for a total purchase price of RMB 40,000,000 or US$6,160,000 based on the exchange rate as of April 8, 2021 (the “Purchase Price”), payable in the form of 1,587,800 shares of common stock of the Company, valued at US$3.88 per share, which is the closing bid price of the common stock of the Company on the Nasdaq Stock Market on April 8, 2021. | ||||||||||||||||||
Original agreement description | The Company shall issue to the Seller or its designees RMB 5,000,000 or US$770,000 worth of common stock of the Company (the “Bonus Shares”) if the Assets generate an average net profit per day/10,000 machines (the “Daily Profit”) on behalf of the Company during the one-year period from March 19, 2021 to March 19, 2022 (the “Valuation Period”) equals to RMB 200,000 or US$30,800 and if the Assets generate an average net profit per month/10,000 machines (the “Monthly Profit”) on behalf of the Company during the Valuation Period equals to RMB 6,000,000 or US$924,000. If the Daily Profit is more than RMB 200,000 or US$30,800 and the Monthly Profit is more than RMB 6,000,000 or US$924,000, the Company shall issue to the Seller or its designees additional shares of common stock in proportion to the amount that is in excess. If the Daily Profit is less than RMB 200,000 or US$30,800 or the Monthly Profit is less than RMB 6,000,000 or US$924,000, the Company shall not issue to the Seller or its designees any Bonus Shares and such month is deemed a “Re-evaluated Month”. At the end of the Valuation Period, the Monthly Profit of such Re-evaluated Month(s) shall be aggregated (the “Aggregate Profit”), and the Company shall issue RMB5,000,000 or US$770,000 worth of common stock of the Company for every RMB6,000,000 or US$924,000 in Aggregate Profit on a pro rata basis. Such Daily Profit and Monthly Profit shall be determined on a monthly basis on the first day of the next month. Such Bonus Shares and additional shares, when applicable, shall be issued on the fifteenth day of the next month. For any month that has 28 days or 31 days, the Monthly Profit is calculated based on the actual number of days in the month. Notwithstanding the foregoing, no share pursuant to this Agreement shall be issued earlier than May 24, 2021 in any event. The total number of shares of common stock, including the Bonus Shares, issuable to the Seller or its designees pursuant to the Agreement shall in no event be more than 19.99% of the total shares issued and outstanding of Company as of the February 23, 2021, the date of the asset purchase agreement. | |||||||||||||||||||
Issued aggregate shares | 46,077,110 | 29,176,026 | ||||||||||||||||||
Bonus shares | 925,494 | |||||||||||||||||||
Bonus shares value per share (in Dollars per share) | $ 2.51 | |||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||||||||||||
Number of shares | 1,492,000 | 3,692,859 | ||||||||||||||||||
Purchase price per share (in Dollars per share) | $ 1.5 | $ 2 | $ 1 | |||||||||||||||||
Net proceeds from offering shares (in Dollars) | $ 2,900,000 | $ 3,660,000 | ||||||||||||||||||
Aggregate shares issued | 1,674,428 | |||||||||||||||||||
Gross proceeds from private placement (in Dollars) | $ 2,510,000 | |||||||||||||||||||
Securities purchase agreement, description | the sale of (i) 4,166,666 shares of common stock, par value $0.0001 of the Company (the “Shares”) and (ii) registered investor warrants, with a term of five years, exercisable immediately upon issuance, to purchase an aggregate of up to 1,639,362 shares of common stock (the “Registered Investor Warrant Shares”) at an exercise price of $6.72 per share, subject to adjustments thereunder, including a reduction in the exercise price, in the event of a subsequent offering at a price less than the then current exercise price, to the same price as the price in such offering (a “Price Protection Adjustment”) (the “Registered Investor Warrants”), and (b) a concurrent private placement (the “Private Placement” and collectively with the Registered Direct Offering, the “Offering”) for the sale of unregistered investor warrants, with a term of five and one-half years, first exercisable on the date that is the earlier of (i) six months after the date of issuance or (ii) the date on which the Company obtains stockholder approval approving the sale of all of the securities offered and sold under the Purchase Agreement (the “Stockholder Approval”) to purchase an aggregate of up to 2,527,304 shares of common stock (the “Unregistered Investor Warrant Shares”) at an exercise price of $6.72 per share, subject to adjustments thereunder, including (x) a Price Protection Adjustment and (y) in the event the exercise price is more than $6.10, a reduction of the exercise price to $6.10, upon obtaining the Stockholder Approval (the “Unregistered Investor Warrants”). The Shares, the Registered Investor Warrants, the Unregistered Investor Warrants, the Registered Investor Warrant Shares and the Unregistered Investor Warrant Shares are collectively referred to as the “Securities.” The Company received gross proceeds from the sale of the Securities of $24,999,996, before deducting placement agent fees and other Offering expenses. | |||||||||||||||||||
Purchase Agreement [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Purchase price per share (in Dollars per share) | $ 1.71 | |||||||||||||||||||
Aggregate shares issued | 4,000,000 | |||||||||||||||||||
Percentage of service fee | 100.00% | |||||||||||||||||||
Sponsor [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Number of shares | 500,000 | |||||||||||||||||||
Purchase price per share (in Dollars per share) | $ 5 | |||||||||||||||||||
Gross proceeds from private placement (in Dollars) | $ 2,500,000 | |||||||||||||||||||
Underwriter [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Securities purchase agreement, description | The Company sold to the underwriter (and/or its designees), for $100, as additional compensation, an option to purchase up to a total of 800,000 units exercisable at $5.00 per unit (or an aggregate exercise price of $4,000,000) upon the closing of the Public Offering. Since the option is not exercisable until the earliest on the closing the initial Business Combination, the option will effectively represent the right to purchase up to 800,000 shares of common stock and 800,000 warrants to purchase 400,000 shares at $5.75 per full share for an aggregate maximum amount of $6,300,000. | |||||||||||||||||||
Restricted Stock [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Aggregate shares of restricted common stock | 142,530 | 131,330 | ||||||||||||||||||
Fair value (in Dollars) | $ 290,761 | $ 261,347 | ||||||||||||||||||
Closing price of stock (in Dollars per share) | $ 2.04 | $ 1.99 | ||||||||||||||||||
Director [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Common stock price per share (in Dollars per share) | $ 4.9 | |||||||||||||||||||
Director [Member] | Series of Individually Immaterial Business Acquisitions [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Acquire shares of common stock | 12,000 | |||||||||||||||||||
Warrants Options [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Number of shares | 10,000,000 | |||||||||||||||||||
Purchase price per share (in Dollars per share) | $ 5 | |||||||||||||||||||
Common stock rights, description | Each Public Unit consists of one share of the Company’s common stock, $0.0001 par value, and one warrant. Each warrant will entitle the holder to purchase one-half of one share of common stock at an exercise price of $2.88 per half share ($5.75 per whole share). Warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. The warrants will become exercisable on 30 days after the consummation of its initial Business Combination with China Sunlong on February 6, 2018. The warrants will expire February 5, 2023. The warrants will be redeemable by the Company at a price of $0.01 per warrant upon 30 days prior written notice after the warrants become exercisable, only in the event that the last sale price of the common stock equals or exceeds $12.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which notice of redemption is given | |||||||||||||||||||
Makesi WFOE [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Restricted net assets (in Dollars) | $ (1,013,341) | |||||||||||||||||||
Wuge [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Restricted net assets (in Dollars) | $ (216,935) | |||||||||||||||||||
Sunlongt [Member] | Purchase Agreement [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Purchase price amount (in Dollars) | $ 1,732,114 | |||||||||||||||||||
Consideration of cancellation shares | 1,012,932 | |||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||
Equity (Details) [Line Items] | ||||||||||||||||||||
Issued aggregate shares | 26,693 | |||||||||||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | |||||||||||||||||||
Purchase price per share (in Dollars per share) | $ 5 | |||||||||||||||||||
Aggregate offering price (in Dollars) | $ 133,335 | |||||||||||||||||||
Conversion of warrants | 294,971 | 415,355 | ||||||||||||||||||
Shares of common stock | 1,587,800 | 52,077 | 54,826 | |||||||||||||||||
Fair value of common shares | 142,530 | 131,330 | ||||||||||||||||||
Common shares per share (in Dollars per share) | $ 2.04 | $ 1.99 | ||||||||||||||||||
Wrote off common shares | 947,037 | |||||||||||||||||||
Issued aggregate shares | 2,513,294 |
Equity (Details) - Schedule of
Equity (Details) - Schedule of warrant activity | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Schedule of warrant activity [Abstract] | |
Warrants Outstanding, Beginning balance | 9,079,348 |
Exercisable Into Number of Shares, Beginning balance | 4,539,674 |
Weighted Average Exercise Price, Beginning balance (in Dollars per share) | $ / shares | $ 5.75 |
Average Remaining Contractual Life, Beginning balance | 2 years 1 month 17 days |
Warrants Outstanding, Ending balance | 9,079,348 |
Exercisable Into Number of Shares, Ending balance | 4,539,674 |
Weighted Average Exercise Price, Ending balance (in Dollars per share) | $ / shares | $ 5.75 |
Average Remaining Contractual Life, Ending balance | 1 year 4 months 13 days |
Warrants Outstanding, Granted/Acquired | |
Exercisable Into Number of Shares, Granted/Acquired | |
Weighted Average Exercise Price, Granted/Acquired (in Dollars per share) | $ / shares | |
Warrants Outstanding, Forfeited | |
Exercisable Into Number of Shares, Forfeited | |
Weighted Average Exercise Price, Forfeited (in Dollars per share) | $ / shares | |
Warrants Outstanding, Exercised | |
Exercisable Into Number of Shares, Exercised | |
Weighted Average Exercise Price, Exercised (in Dollars per share) | $ / shares |
Equity (Details) - Schedule o_2
Equity (Details) - Schedule of option activity | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Schedule of option activity [Abstract] | |
Options Outstanding, Beginning balance | shares | 824,000 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 5 |
Average Remaining Contractual Life, Beginning balance | 2 years 1 month 17 days |
Options Outstanding, Ending balance | shares | 824,000 |
Weighted Average Exercise Price, Ending balance | $ / shares | $ 5 |
Average Remaining Contractual Life, Ending balance | 1 year 4 months 13 days |
Options Outstanding, Granted/Acquired | shares | |
Weighted Average Exercise Price, Granted/Acquired | $ / shares | |
Options Outstanding, Forfeited | shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Options Outstanding, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of assets by division - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Total Assets | $ 47,054,386 | $ 25,135,119 | |
Total revenues | 9,541,992 | $ 723 | |
Rong Hai and Tongrong WFOE [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 15,006,063 | ||
Total revenues | |||
Wuge [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 18,425,264 | 2,304,566 | |
Total revenues | 9,541,992 | 723 | |
CCNC, Citi Profit BVI and TMSR HK [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 28,629,122 | $ 7,824,490 | |
Total revenues |
Discontinued Operations (Detail
Discontinued Operations (Details) - Schedule of financial position and result of operations for the discounted operations - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
REVENUES | ||
Fuel materials | $ 4,890,734 | $ 8,956,705 |
TOTAL REVENUES | 4,890,734 | 8,956,705 |
COST OF REVENUES | ||
Fuel materials | 4,690,388 | 8,546,438 |
TOTAL COST OF REVENUES | 4,690,388 | 8,546,438 |
GROSS PROFIT | 200,346 | 410,267 |
OPERATING EXPENSES (INCOME) | ||
Selling, general and administrative | 160,254 | 96,245 |
Provision for (recovery of) doubtful accounts | (149,775) | |
TOTAL OPERATING EXPENSES | 160,254 | (53,530) |
INCOME FROM OPERATIONS | 40,092 | 463,797 |
OTHER INCOME (EXPENSE) | ||
Interest income | 75 | 1,632 |
Interest expense | (7,708) | (12,598) |
Investment income | 14,102 | |
Other income (expense), net | 8 | |
Total other income (expense), net | (7,625) | 3,136 |
INCOME BEFORE INCOME TAXES | 32,467 | 466,933 |
PROVISION FOR INCOME TAXES | 8,896 | 42,159 |
NET INCOME | $ 23,571 | $ 424,774 |