Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | Wetouch Technology Inc. |
Entity Central Index Key | 0001826660 |
Document Type | S-1 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash | $ 19,268,280 | $ 14,279,797 |
Accounts receivable, net of US$72,672 and US$70,874 allowance of doubtful accounts as of September 30, 2020 and December 31, 2019, respectively | 17,788,923 | 16,049,453 |
Inventories | 269,161 | 203,778 |
Due from related parties | 73,633 | 71,884 |
Prepaid expenses and other current assets | 389,845 | 283,269 |
TOTAL CURRENT ASSETS | 37,762,178 | 30,888,181 |
Property, plant and equipment, net | 9,370,419 | 9,867,584 |
Intangible assets, net | 969,365 | 989,052 |
TOTAL ASSETS | 48,129,626 | 41,744,817 |
CURRENT LIABILITIES | ||
Short-term bank loans | 430,923 | |
Accounts payable | 1,011,632 | 795,480 |
Due to related parties | 4,766,080 | 5,000,803 |
Income tax payable | 107,921 | 642,967 |
Accrued expenses and other current liabilities | 833,219 | 2,340,858 |
Deferred grants | 235,655 | 229,826 |
TOTAL CURRENT LIABILITIES | 6,954,507 | 9,440,857 |
Deferred grants-non current | 475,237 | 635,851 |
TOTAL LIABILITIES | 7,429,744 | 10,076,708 |
COMMITMENTS AND CONTINGENCIES (Note 9) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $1.0 par value, 50,000 authorized, 10,000 and 10,000 issued and outstanding as of September 30, 2020 and December 31, 2019, respectively* | 10,000 | 1,288 |
Additional paid in capital | 32,034 | 40,746 |
Statutory reserve | 2,003,569 | 2,003,569 |
Retained earnings | 39,336,959 | 31,357,494 |
Accumulated other comprehensive loss | (682,680) | (1,734,988) |
TOTAL STOCKHOLDERS' EQUITY | 40,699,882 | 31,668,109 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 48,129,626 | $ 41,744,817 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Wetouch Holding Group Limited) (Parenthetical) - Wetouch Holding Group Limited [Member] - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Allowance of doubtful accounts | $ 72,672 | $ 70,874 |
Common stock, par value | $ 1 | $ 1 |
Common stock, shares authorized | 50,000 | 50,000 |
Common stock, shares issued | 10,000 | 10,000 |
Common stock, shares outstanding | 10,000 | 10,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Wetouch Holding Group Limited) (Unaudited) - Wetouch Holding Group Limited [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
REVENUES | $ 11,904,120 | $ 12,583,836 | $ 20,669,272 | $ 30,584,091 |
COST OF REVENUES | (5,716,594) | (6,124,237) | (10,180,477) | (15,321,469) |
GROSS PROFIT | 6,187,526 | 6,459,599 | 10,488,795 | 15,262,622 |
OPERATING EXPENSES | ||||
Selling expenses | (29,028) | (47,697) | (73,960) | (190,796) |
General and administrative expenses | (952,824) | (1,129,679) | (1,512,761) | (2,108,985) |
Research and development expenses | (21,532) | (33,872) | (54,831) | (104,517) |
OPERATING EXPENSES | (1,003,384) | (1,211,248) | (1,641,552) | (2,404,298) |
INCOME FROM OPERATIONS | 5,184,142 | 5,248,351 | 8,847,243 | 12,858,324 |
Interest income | 21,483 | 18,563 | 61,092 | 57,197 |
Interest expense | (33) | (3,301) | (5,926) | (9,898) |
Government grant | 57,922 | 58,897 | 185,905 | 192,910 |
Late penalty on debt | (874,279) | |||
TOTAL OTHER INCOME (EXPENSES), NET | 79,372 | 74,159 | 241,071 | (634,070) |
INCOME BEFORE INCOME TAX EXPENSE | 5,263,514 | 5,322,510 | 9,088,314 | 12,224,254 |
INCOME TAX EXPENSE | (537,019) | (916,922) | (1,108,849) | (2,090,404) |
NET INCOME | 4,726,495 | 4,405,588 | 7,979,465 | 10,133,850 |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Foreign currency translation adjustment | 1,530,474 | (2,094,785) | 1,052,308 | (1,609,536) |
COMPREHENSIVE INCOME | $ 6,256,969 | $ 2,310,803 | $ 9,031,773 | $ 8,524,314 |
EARNINGS PER COMMON SHARE | ||||
Basic and diluted | $ 472.6 | $ 440.6 | $ 797.9 | $ 1,013.40 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | 10,000 | 10,000 | 10,000 | 10,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Wetouch Holding Group Limited) (Unaudited) - Wetouch Holding Group Limited [Member] - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Statutory Reserve [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (loss) [Member] | Total Stockholders' Equity [Member] |
Balance at Dec. 31, 2018 | $ 1,288 | $ 40,746 | $ 288,045 | $ 19,356,405 | $ (890,796) | $ 18,795,688 |
Balance, shares at Dec. 31, 2018 | 10,000 | |||||
Net income | 10,133,850 | 10,133,850 | ||||
Foreign currency translation adjustment | (1,609,536) | (1,609,536) | ||||
Appropriation to statutory reserve | 1,715,524 | (1,715,524) | ||||
Balance at Sep. 30, 2019 | $ 1,288 | 40,746 | 2,003,569 | 27,774,731 | (2,500,332) | 27,320,002 |
Balance, shares at Sep. 30, 2019 | 10,000 | |||||
Balance at Dec. 31, 2018 | $ 1,288 | 40,746 | 288,045 | 19,356,405 | (890,796) | 18,795,688 |
Balance, shares at Dec. 31, 2018 | 10,000 | |||||
Balance at Dec. 31, 2019 | $ 1,288 | 40,746 | 2,003,569 | 31,357,494 | (1,734,988) | 31,668,109 |
Balance, shares at Dec. 31, 2019 | 10,000 | |||||
Balance at Jun. 30, 2019 | $ 1,288 | 40,746 | 288,045 | 25,084,667 | (405,547) | 25,009,199 |
Balance, shares at Jun. 30, 2019 | 10,000 | |||||
Net income | 4,405,588 | 4,405,588 | ||||
Foreign currency translation adjustment | (2,094,785) | (2,094,785) | ||||
Appropriation to statutory reserve | 1,715,524 | (1,715,524) | ||||
Balance at Sep. 30, 2019 | $ 1,288 | 40,746 | 2,003,569 | 27,774,731 | (2,500,332) | 27,320,002 |
Balance, shares at Sep. 30, 2019 | 10,000 | |||||
Balance at Dec. 31, 2019 | $ 1,288 | 40,746 | 2,003,569 | 31,357,494 | (1,734,988) | 31,668,109 |
Balance, shares at Dec. 31, 2019 | 10,000 | |||||
Net income | 7,979,465 | 7,979,465 | ||||
Reorganization by share exchange | 8,712 | (8,712) | ||||
Foreign currency translation adjustment | 1,052,308 | 1,052,308 | ||||
Balance at Sep. 30, 2020 | $ 10,000 | 32,034 | 2,003,569 | 39,336,959 | (682,680) | 40,699,882 |
Balance, shares at Sep. 30, 2020 | 10,000 | |||||
Balance at Jun. 30, 2020 | $ 1,288 | 40,746 | 2,003,569 | 34,610,464 | (2,213,154) | 34,442,913 |
Balance, shares at Jun. 30, 2020 | 10,000 | |||||
Net income | 4,726,495 | 4,726,495 | ||||
Reorganization by share exchange | $ 8,712 | (8,712) | ||||
Foreign currency translation adjustment | 1,530,474 | 1,530,474 | ||||
Balance at Sep. 30, 2020 | $ 10,000 | $ 32,034 | $ 2,003,569 | $ 39,336,959 | $ (682,680) | $ 40,699,882 |
Balance, shares at Sep. 30, 2020 | 10,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Wetouch Holding Group Limited) (Unaudited) - Wetouch Holding Group Limited [Member] - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash flows from operating activities | |||||
Net income | $ 4,726,495 | $ 4,405,588 | $ 7,979,465 | $ 10,133,850 | |
Adjustments to reconcile net income to cash provided by operating activities | |||||
Depreciation and amortization | 769,179 | 783,567 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (1,293,696) | (4,947,989) | |||
Amounts due from related parties | 280 | 88,365 | |||
Inventories | (58,465) | 5,751 | |||
Prepaid expenses and other current assets | (96,350) | (8,578) | |||
Accounts payable | 190,281 | (643,636) | |||
Amounts due to related parties | (351,048) | 321,606 | |||
Tax payable | (535,330) | 309,058 | |||
Accrued expenses and other current liabilities | (1,530,154) | 64,203 | |||
Deferred grants | (171,603) | (188,605) | |||
Net cash provided by operating activities | 4,902,561 | 5,917,592 | |||
Cash flows from investing activities | |||||
Net cash used in investing activities | |||||
Cash flows from financing activities | |||||
Repayment of bank borrowings | (429,011) | ||||
Repayment of interest-free advances to related parties | (13,618,684) | ||||
Net cash used in financing activities | (429,011) | (13,618,684) | |||
Effect of changes of foreign exchange rates on cash | 514,933 | (907,231) | |||
Net increase in cash | 4,988,483 | (8,608,323) | |||
Cash, beginning | 14,279,797 | 18,292,780 | $ 18,292,780 | ||
Cash, end | $ 19,268,280 | $ 9,684,457 | 19,268,280 | 9,684,457 | $ 14,279,797 |
Supplemental disclosure of cash flow information | |||||
Cash paid for interest expense | 42,901 | ||||
Cash paid for income tax | $ 1,644,175 | $ 1,773,914 |
Consolidated Balance Sheets (Ho
Consolidated Balance Sheets (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash | $ 14,279,797 | $ 18,292,780 |
Accounts receivable, net | 16,049,453 | 13,904,413 |
Inventories | 203,778 | 216,967 |
Due from a related party | 71,884 | 107,603 |
Prepaid expenses and other current assets | 283,269 | 365,590 |
TOTAL CURRENT ASSETS | 30,888,181 | 32,887,353 |
Property, plant and equipment, net | 9,867,584 | 10,970,323 |
Intangible assets, net | 989,052 | 1,060,416 |
TOTAL ASSETS | 41,744,817 | 44,918,092 |
CURRENT LIABILITIES | ||
Short-term bank loans | 430,923 | 436,332 |
Accounts payable | 795,480 | 2,851,682 |
Due to related parties | 5,000,803 | 18,496,401 |
Income tax payable | 642,967 | 598,954 |
Accrued expenses and other current liabilities | 2,340,858 | 2,629,784 |
Deferred grants | 229,826 | 232,710 |
TOTAL CURRENT LIABILITIES | 9,440,857 | 25,245,862 |
Deferred grants-non current | 635,851 | 876,542 |
TOTAL LIABILITIES | 10,076,708 | 26,122,404 |
COMMITMENTS AND CONTINGENCIES (Note 12) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.1288 par value, 10,000 shares authorized, 10,000 issued and outstanding as of December 31, 2019 and 2018, respectively | 1,288 | 1,288 |
Additional paid in capital | 40,746 | 40,746 |
Statutory reserve | 2,003,569 | 288,045 |
Retained earnings | 31,357,494 | 19,356,405 |
Accumulated other comprehensive loss | (1,734,988) | (890,796) |
TOTAL STOCKHOLDERS' EQUITY | 31,668,109 | 18,795,688 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 41,744,817 | $ 44,918,092 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Hong Kong Wetouch Electronics Technology Limited) (Parenthetical) - Hong Kong Wetouch Electronics Technology Limited [Member] - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, par value | $ 0.1288 | $ 0.1288 |
Common stock, shares authorized | 10,000 | 10,000 |
Common stock, shares issued | 10,000 | 10,000 |
Common stock, shares outstanding | 10,000 | 10,000 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUES | $ 40,004,103 | $ 36,745,376 |
COST OF REVENUES | (20,265,509) | (20,404,903) |
GROSS PROFIT | 19,738,594 | 16,340,473 |
OPERATING EXPENSES | ||
Selling expenses | (270,752) | (214,187) |
General and administrative expenses | (2,330,322) | (1,579,684) |
Research and development expenses | (136,433) | (169,171) |
Total operating expenses | (2,737,507) | (1,963,042) |
INCOME FROM OPERATIONS | 17,001,087 | 14,377,431 |
OTHER INCOME (EXPENSES) | ||
Interest income | 76,201 | 50,108 |
Interest expense | (16,884) | (741,936) |
Government grant | 249,330 | 252,264 |
Late penalty on debt | (868,546) | |
TOTAL OTHER (EXPENSES), NET | (559,812) | (439,564) |
INCOME BEFORE INCOME TAX EXPENSE | 16,441,275 | 13,937,867 |
INCOME TAX EXPENSE | (2,724,662) | (2,136,180) |
NET INCOME | 13,716,613 | 11,801,687 |
OTHER COMPREHENSIVE INCOME (LOSS) | ||
Foreign currency translation adjustment | (844,192) | (1,633,382) |
COMPREHENSIVE INCOME | $ 12,872,421 | $ 10,168,305 |
EARNINGS PER COMMON SHARE | ||
Basic and diluted | $ 1,371.7 | $ 1,180.2 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||
Basic and diluted | 10,000 | 10,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Statutory Reserve [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (loss) [Member] | Total Stockholders' Equity [Member] |
Balance at Dec. 31, 2017 | $ 1,288 | $ 40,746 | $ 288,045 | $ 7,554,718 | $ 742,586 | $ 8,267,383 |
Balance, shares at Dec. 31, 2017 | 10,000 | |||||
Net income | 11,801,687 | 11,801,687 | ||||
Foreign currency translation adjustment | (1,633,382) | (1,633,382) | ||||
Balance at Dec. 31, 2018 | $ 1,288 | 40,746 | 288,045 | 19,356,405 | (890,796) | 18,795,688 |
Balance, shares at Dec. 31, 2018 | 10,000 | |||||
Balance at Dec. 31, 2018 | $ 1,288 | 40,746 | 288,045 | 19,356,405 | (890,796) | 18,795,688 |
Balance, shares at Dec. 31, 2018 | 10,000 | |||||
Net income | 13,716,613 | 13,716,613 | ||||
Foreign currency translation adjustment | (844,192) | (844,192) | ||||
Appropriation to statutory reserve | 1,715,524 | (1,715,524) | ||||
Balance at Dec. 31, 2019 | $ 1,288 | $ 40,746 | $ 2,003,569 | $ 31,357,494 | $ (1,734,988) | $ 31,668,109 |
Balance, shares at Dec. 31, 2019 | 10,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net income | $ 13,716,613 | $ 11,801,687 |
Adjustments to reconcile net income to cash provided by operating activities | ||
Bad debts expenses | 21,583 | |
Depreciation and amortization | 1,037,941 | 1,046,608 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,334,513) | (1,410,957) |
Amounts due from related parties | 34,603 | (212,438) |
Inventories | 10,581 | (118,641) |
Prepaid expenses and other current assets | 78,393 | (35,043) |
Accounts payable | (2,036,549) | (1,728,040) |
Amounts due to related parties | 94,714 | 362,609 |
Income tax payable | 51,838 | 503,802 |
Accrued expenses and other current liabilities | (258,357) | (1,067,435) |
Deferred grants | (231,611) | (242,093) |
Net cash provided by operating activities | 10,163,653 | 8,921,642 |
Cash flows from investing activities | ||
Purchase of property and equipment | (5,006) | (5,679) |
Net cash used in investing activities | (5,006) | (5,679) |
Cash flows from financing activities | ||
Proceeds from bank borrowings | 302,616 | |
Repayment of bank borrowings | (7,999,418) | |
Proceedings(Repayment) of interest-free advances from related parties | (13,529,422) | 226,962 |
Net cash used in financing activities | (13,529,422) | (7,469,840) |
Effect of changes of foreign exchange rates on cash | (642,208) | (1,120,494) |
Net increase (decrease) in cash | (4,012,983) | 325,629 |
Cash, beginning | 18,292,780 | 17,967,151 |
Cash, end | 14,279,797 | 18,292,780 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest expense | 688,750 | |
Cash paid for income tax | $ 4,176,694 | $ 1,569,117 |
Business Description and Reorga
Business Description and Reorganization (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Business Description and Reorganization | NOTE 1 — BUSINESS DESCRIPTION AND REORGANIZATION Business Wetouch Holding Group Limited (“BVI Wetouch”) was incorporated under the laws of British Virgin Islands on August 14, 2020. It became the holding company of Hong Kong Wetouch Electronics Technology Limited (“HK Wetouch”) on September 11, 2020. HK Wetouch, formerly known as Hong Kong Vtouch Electronics Technology Limited, is a holding company that is incorporated under the laws of Hong Kong Special Administrative Region (“SAR”). HK Wetouch has initiated no business activity and is currently not engaging in any active business operations. Sichuan Wetouch Technology Co. Ltd. (“Sichuan Wetouch”) was formed on May 6, 2011 in the People’s Republic of China (“PRC”) and became Wholly Foreign-Owned Enterprise in PRC on February 23, 2017. On July 19, 2016, Sichuan Wetouch was 100% held by HK Wetouch. BVI Wetouch (hereinafter as the “Company”), through its wholly owned subsidiary Sichuan Wetouch, is primarily engaged in the business of research development, manufacture, distribution of touchscreen displays to customers both in PRC and overseas. The touchscreen products, which are manufactured by the Company, are primarily for use in the computer components. Reorganization A reorganization of our legal structure (“Reorganization”) was completed on September 11, 2020. The reorganization involved the incorporation of BVI Wetouch and entering into certain contractual arrangements between the shareholders of HK Wetouch and BVI Wetouch. BVI Wetouch acquired all the outstanding shares of HK Wetouch from the shareholders of HK Wetouch in consideration of the payment of HK$10,000 pursuant to instruments of transfer in accordance with Hong Kong law. As a result of the acquisition, HK Wetouch became a wholly-owned subsidiary of BVI Wetouch. The shareholders of HK Wetouch became the shareholders of BVI Wetouch in said transaction, and therefore the shareholders who controlled HK Wetouch became the controlling shareholders of BVI Wetouch. On October 9, 2020, Wetouch Technology Inc. (“Wetouch”), a Nevada company entered into a share exchange agreement with BVI Wetouch and all the shareholders of BVI Wetouch (each, a “BVI Shareholder” and collectively the “BVI Shareholders”), to acquire all the issued and outstanding capital stock of BVI Wetouch in exchange for the issuance to the BVI Shareholders an aggregate of 28,000,000 shares of our common stock (the “Reverse Merger”). In the Reverse Merger, each ordinary share of BVI Wetouch was exchanged for 560 shares of common stock of Wetouch. Immediately after the closing of the Reverse Merger on October 9, 2020, we had a total of 31,396,394 issued and outstanding shares of common stock. As a result of the Reverse Merger, BVI Wetouch is now our wholly-owned subsidiary of Wetouch. |
Basis of Presentation (Wetouch
Basis of Presentation (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Basis of Presentation | NOTE 2 — BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the United States Securities and Exchange Commission (“SEC”). The condensed consolidated balance sheet as of December 31, 2019 was derived from the audited consolidated financial statements of HK Wetouch and its subsidiary Sichuan Wetouch. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated balance sheet of the Company as of December 31, 2019, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended. In the opinion of the management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of September 30, 2020, the results of operations and cash flows for the nine-month periods ended September 30, 2020 and 2019, have been made. However, the results of operations included in such financial statements may not necessary be indicative of annual results. Use of Estimates The preparation of condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, management evaluates the Company’s estimates, including those related to the bad debt allowance, fair values of financial instruments, intangible assets and property and equipment, income taxes, and contingent liabilities, among others. The Company bases its estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant Accounting Policies For a detailed discussion about BVI Wetouch’s significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies,” in HK Wetouch’ consolidated financial statements included in Company’s 2019 audited consolidated financial statements. During the nine-month periods ended September 30, 2020, there were no significant changes made to BVI Wetouch’s significant accounting policies. |
Accounts Receivable (Wetouch Ho
Accounts Receivable (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Accounts Receivable | NOTE 3 — ACCOUNTS RECEIVABLE Accounts receivable consists of the following: September 30, 2020 December 31 2019 Accounts receivable $ 17,861,595 $ 16,120,327 Allowance for doubtful accounts (72,672 ) (70,874 ) Accounts receivable, net $ 17,788,923 $ 16,049,453 There was no accrual of additional provision or write-off of accounts receivable for the three-month and nine-month periods ended September 30, 2020 and 2019. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Property, Plant and Equipment, Net | NOTE 4 — PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consists of the following: September 30, 2020 December 31 2019 Buildings $ 9,928,163 $ 9,682,590 Machinery, equipment and furniture 5,603,249 5,464,652 Subtotal 15,531,412 15,147,242 Less: accumulated depreciation (6,160,993 ) (5,279,658 ) Property, plant and equipment, net $ 9,370,419 $ 9,867,584 Depreciation expense was $244,592 and $246,829 for the three-month period ended September 30, 2020 and 2019, and $725,708 and $739,273 for the nine-month period ended September 30, 2020 and 2019, respectively. |
Related Party Transactions (Wet
Related Party Transactions (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Related Party Transactions | NOTE 5 — RELATED PARTY TRANSACTIONS Amounts due from related parties are as follows: Amounts due from related parties Relationship September 30, 2020 December 31, 2019 Note Mr. Shengyong Li General Manager of Sichuan Wetouch - 72 Employee advance Vision Touch Technology AG 100% owned by Mr. Yong Yang, Sales Director of Sichuan Wetouch 73,633 71,812 Operating expense paid on behalf of the related party/Company Total $ 73,633 $ 71,884 Amounts due to related parties are as follows: Relationship September 30, 2020 December 31, 2019 Note Chengdu Wetouch Technology Co., Ltd (“Chengdu Wetouch”) 94% owned by Mr. Guangde Cai & 2% by Mr. Shengyong Li $ 129,370 $ 121,306 Operating expense paid on behalf of the Company Meishan Vtouch Electronics Technology Co., Ltd. 95% owned by Mr. Guangde Cai and 5% by Chengdu Wetouch 74,453 397,947 Operating expense paid on behalf of the Company Australia Vtouch Technolody Co., Ltd. (i) 35.36% owned by Mr. Guangde Cai 4,341,331 4,233,949 Interest- free loan Mr. Guangde Cai Chairman and CEO of HK Wetouch 220,926 215,031 Payable to employee Mr. Yong Yang Sales Director of Sichuan Wetouch - 32,570 Payable to employee Total $ 4,766,080 $ 5,000,803 (i) As of September 30, 2020, RMB29.5 million (equivalent to US$4.3 million) was interest free advance provided by nine shareholders of Australia Vtouch Technology Co., Ltd, a related party, for the working capital purposes. On November 24, 2020, the Company made a full repayment of RMB29.5 million (equivalent to US$4.3 million) to the nine shareholders of Australia Vtouch Technology Co., Ltd. For other related party guarantees, please refer to Note 9. |
Income Taxes (Wetouch Holding G
Income Taxes (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Income Taxes | NOTE 6 — INCOME TAXES Pursuant to an approval from the local tax authority in October 2017, Sichuan Wetouch became a qualified enterprise located in the western region of the PRC, which entitled it to a preferential income tax rate of 15% from October 11, 2017 to October 11, 2020. On October 21, 2020, Sichuan Wetouch was granted on a case-by-case basis by Sichuan Provincial government as preferential tax treatment High and New Technology Enterprises (“HNTEs”), entitled to a reduced income tax rate of 15% beginning October 21, 2020 till October 20, 2023. The effective income tax rates for the nine-month periods ended September 30, 2020 and 2019 were 12.1% and 17.2%, respectively. The effective income tax rate for the nine-month period ended September 30, 2020 differs from the PRC statutory income tax rate of 25% primarily due to Sichuan Wetouch’s preferential income tax rate. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Accrued Expenses and Other Current Liabilities | NOTE 7 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: September 30, 2020 December 31, 2019 Advance from customers $ 8,385 $ 11,719 Accrued payroll and employee benefits 169,602 248,745 Accrued interest expenses - 37,140 Other tax payables (i) 614,740 324,670 Penalty related to a loan default (ii) - 1,701,986 Others (iii) 40,492 16,598 Accrued expenses and other current liabilities $ 833,219 $ 2,340,858 (i) Other tax payables are mainly value added tax payable. (ii) Penalty payable of RMB6.0 million (equivalent to US$0.9 million) and RMB5.8 million (equivalent to US$0.8 million) was accrued for a loan default by Sichuan Wetouch obtained from Chengdu Bank in 2013 and guaranteed by a third party Chengdu SME Credit Guarantee Co., Ltd. (“Chengdu SME”) as of December 31, 2019. (see Note 10). On September 16, 2020, Sichuan Wetouch made a full repayment of RMB11.8 million (equivalent to US$1.7 million) of the above loan default penalties to Chengdu SME. (iii) Others mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses. |
Deferred Grants (Wetouch Holdin
Deferred Grants (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Deferred Grants | NOTE 8 — DEFERRED GRANTS On January 14, 2013 and January 27, 2014, Sichuan Wetouch received RMB11.2 million (equivalent to US$1.8 million) and RMB4.8 million (equivalent to US$0.8 million) government subsidies, respectively, from Sichuan Provincial Government in supporting the initial set-up and construction of production facility. The Company completed the construction of the plant in June 2013 and there were no other unfulfilled conditions and/or other contingencies attaching to government assistance which has been recognized as income. Since the funding is related to the construction of long-term assets, the amounts were recognized as government grant, which is included in deferred grants on the consolidated balance sheets, and to be recognized as other income in the consolidated statements of comprehensive income (loss) over the periods and in the proportions in which depreciation expense on the long-term assets is recognized. As of September 30, 2020, the remaining deferred grants as below: Years ended December 31 Three month ended December 31, 2020 $ 59,788 2021 239,149 2022 239,149 2023 172,806 Total deferred grants 710,892 less: current portion (235,655 ) Deferred grants- non-current $ 475,237 |
Risks and Uncertainties (Wetouc
Risks and Uncertainties (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Risks and Uncertainties | NOTE 9 — RISKS AND UNCERTAINTIES Credit Risk The Company has its cash in bank deposits primarily at state owned banks located in the PRC. Historically, deposits in PRC banks have been secured due to the state policy of protecting depositors’ interests. The PRC promulgated a Bankruptcy Law in August 2006, effective June 1, 2007, which contains provisions for the implementation of measures for the bankruptcy of PRC banks. The bank deposits with financial institutions in the PRC are insured by the government authority for up to RMB500,000. Interest Rate Risk Currency Risk - Concentrations - The Company sells its products primarily through direct customers in the PRC and to some extent, the overseas customers in European countries and East Asia such as South Korea and Taiwan. For the three-month periods ended September 30, 2020 and 2019, five customers accounted for 18.5%, 16.3%, 15.0%, 12.5% and 12.5%, and five customers accounted for 17.9%, 15.6%, 15.4%, 12.6% and 11.2%, respectively, of the Company’s revenue. For the nine-month periods ended September 30, 2020 and 2019, five customers accounted for 18.0%, 17.3%, 14.5%, 13.5% and 11.4%, and five customers accounted for 17.4%, 16.7%, 16.0%, 11.5% and 11.0%, respectively, of the Company’s revenue. And the Company’s top ten customers aggregately accounted for 81.8% and 98.5 % of the total revenue for the three-month periods ended September 30, 2020 and 2019, and 97.0% and 64.7% for the nine-month periods ended September 30, 2020 and 2019. As of September 30, 2020, five customers accounted for 17.6%, 15.0%, 14.6%, 14.0% and 11.6% of the total accounts receivable balance, respectively. The Company purchases its raw materials through various suppliers. Raw material purchases from these suppliers which individually exceeded 10% of the Company’s total raw material purchases, accounted for approximately 28.1% (two suppliers) and 13.3% (one supplier) for the three-month periods ended September 30, 2020 and 2019, respectively, and 36.7% (three suppliers) and 34.0% (three suppliers) of the Company’s total raw materials purchases for the nine-month periods ended September 30, 2020 and 2019, respectively. |
Commitments and Contingencies (
Commitments and Contingencies (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Commitments and Contingencies | NOTE 10 — COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. For the nine-month periods ended September 30, 2020, the Company had several legal claims or litigation that, individually or in aggregate, could have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows. i) Legal case with Chengdu SME Credit Guarantee Co., Ltd. on a loan default penalty of RMB11.8 million (equivalent to $1.7 million) On July 5, 2013, Sichuan Wetouch obtained a one-year loan of RMB60.0 million (equivalent to $9.8 million) from Bank of Chengdu, at an annual interest rate of 8.61%. Chengdu SME Credit Guarantee Co., Ltd (“Chengdu SME”), a third party, provided a 70% guarantee and Bank of Chengdu retained 30% of the risk, while Chengdu Wetouch and Mr. Guangde Cai (related parties, see Note 5) provided joint and several liability guarantee for 100% of the loan. On July 31, 2014, Sichuan Wetouch repaid RMB5.0 million (equivalent to $0.8 million). The remaining loan of RMB55.0 million (equivalent to $8.9 million) was twice extended to be due on August 22, 2018. Upon the loan becoming due, but unpaid by the Company, Chengdu SME paid the outstanding balance of RMB55 million (equivalent to $8.0 million) to Bank of Chengdu. The Company subsequently repaid RMB55 million (equivalent to $8.0 million) to Chengdu SME; however, Chengdu SME filed two separate lawsuits against the Company to recover loan default penalties from the Company. The loan default penalties were (a) RMB5.8 million (equivalent to $0.8 million) related to the 30% of the remaining loan balance repaid by Chengdu SME and (b) RMB6.0 million (equivalent to $0.9 million) related to the 70% of the remaining loan balance repaid by Chengdu SME. During the year ended December 31, 2017, the Company recorded loan default penalties, and related liabilities, of $1.7 million. Chengdu SME applied to the Chengdu High-tech Court for enforcement for the above mentioned loan default penalties of RMB5.8 million (equivalent to $0.8 million) and RMB6.0 million (equivalent to $0.9 million) on December 30, 2018. On March 12, 2020, the Enforcement Settlement Agreement issued by the Chengdu High-tech Court confirmed that Sichuan Wetouch still owed RMB5.8 million (equivalent to $0.8 million) and RMB6.0 million (equivalent to $0.9 million) of loan default penalties. On September 16, 2020, Sichuan Wetouch made a full repayment of RMB11.8 million (equivalent to US$1.7 million) of the above loan default penalties to Chengdu SME. ii) Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. on an asset recovery of RMB12.0 million (equivalent to $1.7 million) On March 19, 2014, Chengdu Wetouch, a related party, obtained a two and half-year loan of RMB15.0 million (equivalent to $2.2 million) from Chengdu Bank Co., Ltd. Gaoxin Branch (“Chengdu Bank Gaoxin Branch”) , with Chengdu Hi-tech Investment Group Co., Ltd. (“CDHT Investment”) acting as guarantor to pay off the loan principal and related interests, while Sichuan Wetouch and Hong Kong Wetouch as guarantors, were jointly and severally liable for such debts. Upon the loan due in January 2017, Chengdu Wetouch defaulted the loan, thus, CDHT Investment filed a lawsuit against Chengdu Wetouch, Sichuan Wetouch, and Hong Kong Wetouch demanding a full repayment of such debts. To support the local economic development as well as Chengdu Wetouch, two government-backed companies, Sichuan Renshou Shigao Tianfu Investment Co., Ltd. (“Shigaotianfu Investment”) and Renshou Tengyi Landscaping Co., Ltd. (“Renshou Tenyi”) provided their bank deposits of RMB 12.0 million (equivalent to US$1.7 million) as pledge, while Mr. Guangde Cai and Sichuan Wetouch also provided counter-guarantee. Upon the expiration of the guarantee, Chengdu Wetouch still defaulted repayment of above pledge. As a result, CDHT Investment levied this collateral of RMB12.0 million On November 21, 2019. Subsequently, Shigaotianfu Investment and Renshou Tengyi filed with Chengdu Intermediate People’s Court a lawsuit demanding an asset recovery of RMB12.0 million (equivalent to $1.7 million) pursuant to the counter guarantee agreement. On December 2, 2019, pursuant to the reconciling agreement issued by Chengdu Intermediate People’s Court, the parties agreed to cancel the demand to seize property of Sichuan Wetouch rather than the property of Chengdu Wetouch, and to waive freezing Guangde Cai’s 60% shareholding equity in Xinjiang Wetouch. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch, Hong Kong Wetouch and Guangde Cai are fully discharged and released from any and all obligations under the outstanding debts, and from all liabilities under guarantee. Chengdu Wetouch was solely responsible for repaying the outstanding RMB12.0 million by December 31, 2020. Guarantees i) Guarantee to Chengdu Wetouch for a loan of RMB17.0 million (equivalent to $2.6 million) In July 2014, Chengdu Wetouch, a related party, obtained a loan of RMB17.0 million (equivalent to $2.6 million) from Bank of Chengdu, with third party Chengdu SME as a joint guarantor, while Sichuan Wetouch, Mr. Guangde Cai and his 60% controlled Xinjiang Wetouch and his 95% controlled Meishan Wetouch, as well as two unrelated individuals acting as counter guarantors for this loan. On July 2, 2018, as Chengdu Wetouch defaulted the loan, Chengdu SME filed a lawsuit demanding the full repayment. As of December 31, 2019 and 2018, there was a lawsuit in progress on this loan repayment. Above mentioned counter guarantors were obliged for the joint responsibilities. On May 13, 2020, with Xinjiang Wetouch partially repaying RMB5.9 million and Chengdu Wetouch still obligated to repay the balance prior to December 31, 2020, Xinjiang Wetouch, Meishan Wetouch and the other two unrelated individuals were under joint and several liabilities for the balance. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch and Mr. Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts. ii) Guarantee to Chengdu Wetouch for a loan of RMB9.0 million (equivalent to $1.3 million) On April 21, 2014, Sichuan Wetouch, Mr. Guangde Cai provided counter guarantee to Chengdu Wetouch obtaining a loan of RMB9.0 million (equivalent to $1.3 million) from Deyang Bank Co., Ltd., Chengdu Branch, with third party Tianhong Asset Management Co., Ltd.(“Tianhong Asset”) as a guarantor. Upon the loan due, Chengdu Wetouch failed to pay the debts on schedule. On May 3, 2017, Tianhong Asset brought a lawsuit to the local court. As of December 31, 2019 and 2018, this lawsuit was in progress on the loan repayment. Sichuan Wetouch and Mr. Guangde Cai were under joint and several guarantee liability for the agreed principal and interest and corresponding fees. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch and Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch obliged to repay the balance in a lump sum by December 31, 2020. iii) Guarantee to Chengdu Wetouch for a loan of RMB15.0 million (equivalent to $2.2 million) On May 26, 2015, Sichuan Wetouch, Mr. Guangde Cai provided guarantee to Chengdu Wetouch obtaining a loan of RMB15.0 million (equivalent to $2.2 million) from Deyang Bank Co., Ltd., Chengdu Branch, with third party Tianhong Asset Management Co., Ltd.(“Tianhong Asset”) as a guarantor. Upon the loan due, Chengdu Wetouch failed to pay the debts on schedule. On May 3, 2017, Tianhong Asset brought a lawsuit to the local court. As of December 31, 2019 and 2018, this lawsuit was in progress on the loan repayment. Sichuan Wetouch and Mr. Guangde Cai were under joint and several guarantee liability for the agreed principal and interest and corresponding fees. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch and Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch obliged to repay the balance by the end of December 31, 2020. iv) Guarantee to Chengdu Wetouch for a loan of RMB14.9 million (equivalent to $2.3 million) On July 4, 2014, Sichuan Wetouch, Mr. Guangde Cai and another unrelated individual provided joint guarantee to Chengdu Wetouch obtaining a loan of RMB14.9 million (equivalent to $2.3 million) from Sichuan Tianfu Bank Co., Ltd. Chengdu Wenjiang Branch (formerly known as Nanchong Commercial Bank Wenjiang Branch). Upon the loan due, Sichuan Wetouch, Mr. Cai and another unrelated individual were jointly liable for the agreed principal and interests. Upon the loan due, Chengdu Wetouch failed to pay the debts on schedule. On December 16, 2015, the bank thus brought a lawsuit to the local court. As of December 31, 2019 and 2018, there was a lawsuit in progress on the loan repayment. Sichuan Wetouch, Mr. Guangde Cai and another unrelated individual for the joint guarantee responsibility. On October 9, 2020, pursuant to a settlement and release agreement, Wetouch and Mr. Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch and another unrelated individual being obliged to repay the balance by December 31, 2020. v) Guarantee to Chengdu Wetouch for a loan of RMB17.3 million (equivalent to $2.7 million) On May 23, 2014, Sichuan Wetouch and Mr. Guangde Cai provided guarantee to Chengdu Wetouch obtaining a loan of RMB17.3 million (equivalent to $2.7 million) from Agricultural Bank of China Co., Ltd. Chengdu Wenjiang Branch (“Agricultural Bank Wenjiang Branch”), with two unrelated two parties also providing guarantee. Upon the loan due, the four guarantors were jointly obliged to repay the loan and its interests. On February 3, 2017, Agricultural Bank Wenjiang Branch filed a lawsuit demanding the full repayments of the above mentioned loan and its interests. As of December 31, 2019 and 2018, there was a lawsuit in progress on the loan repayment. Sichuan Wetouch and Mr. Guangde Cai and two other unrelated parties were obliged to take joint guarantee responsibility. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch, and Mr. Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch being obliged to repay the outstanding debts by December 31, 2020. vi) Guarantee to Chengdu Wetouch for a loan of RMB15.0 million (equivalent to $2.2 million) On March 19, 2014, Sichuan Wetouch, Mr. Guangde Cai and HK Wetouch provided counter guarantee to Chengdu Wetouch obtaining a loan of RMB15.0 million (equivalent to $2.2 million) from Chengdu Bank Co., Ltd. Gaoxin Branch (“Chengdu Bank Gaoxin Branch”), with a third party Chengdu Hi-tech Investment Group Co., Ltd. (“CDHT Investment”) as a guarantor. Sichuan Wetouch and Mr. Guangde Cai and Chengdu Wetouch were jointly and severally liable for such debts. Upon the loan defaulted, CDHT paid off the above loan principal and interests to the bank on behalf of Chengdu Wetouch on January 10, 2017. On August 16, 2018, CDHT Investment brought a lawsuit to Chengdu Railway Transport Court. (See above Legal Case #2- Note 10) As of December 31, 2019 and 2018, there was a lawsuit in progress on the loan repayment. Sichuan Wetouch, Mr. Guangde Cai and Hong Kong Wetouch were obliged to take joint guarantee responsibility for the above loan and its interests. On October 9, 2020, pursuant to a settlement and release, Sichuan Wetouch, Mr. Guangde Cai and HK Wetouch are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch being obliged to repay the outstanding debts by December 31, 2020. vii) Guarantee to Meishan Wetouch for a loan of RMB26.0 million (equivalent to $3.5 million) On October 21, 2014, Sichuan Wetouch, Chengdu Wetouch, Mr.Guangde Cai and his 60% owned Xinjiang Wetouch, together with one unrelated guarantee company Sichuan Yitong Financing Guarantee Co., Ltd. (“Yitong Guarantee”) provided joint guarantee to Meishan Wetouch obtaining a two-year loan of RMB26.0 million (equivalent to $3.5 million) from Meishan Rural Commercial Bank Co., Ltd. (“Meishan Rural Commercial Bank”) and later extended to October 20, 2017. Upon the loan due, the guarantors were jointly obliged for the responsibility of repaying the loan and its interests. On June 1, 2018, Meishan Rural Commercial Bank filed a lawsuit demanding the full repayments of the due loan and its interests. On September 11, 2019, Meishan Wetouch made a partial repayment of RMB10.5 million (equivalent to US$1.5 million). As of December 31, 2019 and 2018, there was a lawsuit in progress on the loan remaining balance repayment. Sichuan Wetouch, Chengdu Wetouch and Mr. Guangde Cai, and Xinjiang Wetouch as well as Yitong Guarantee were under guarantee responsibility. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch and Mr. Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Meishan Wetouch being obliged to repay the outstanding debts by December 31, 2020, and Chengdu Wetouch and Xinjiang Wetouch sharing the joint responsibilities. Capital expenditure commitment The Company does not have any capital commitments as of September 30, 2020. |
Revenues (Wetouch Holding Group
Revenues (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Revenues | NOTE 11 — REVENUES The Company’s geographical revenue information is set forth below: Three-Month Period Ended September 30, Nine-Month Period Ended September 30, 2020 2019 2020 2019 US$ US$ US$ US$ Sales in PRC $ 8,386,376 $ 8,723,761 $ 13,940,497 $ 20,371,987 Sales in Overseas —Republic of China (ROC, or Taiwan) 1,967,824 1,941,992 3,652,757 4,974,950 -South Korea 1,508,698 1,894,824 2,993,888 5,135,774 -Others 41,222 23,259 82,130 101,380 Sub-total 3,517,744 3,860,075 6,728,775 10,212,104 Total Revenue $ 11,904,120 $ 12,583,836 $ 20,669,272 $ 30,584,091 |
Description of Business (Hong K
Description of Business (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Description of Business | NOTE 1 — DESCRIPTION OF BUSINSS Hong Kong Wetouch Electronics Technology Limited (“HK Wetouch”), formerly known as Hong Kong Vtouch Electronics Technology Limited, is a holding company that is incorporated under the laws of Hong Kong Special Administrative Region (“SAR”). It’s wholly owned subsidiary, Sichuan Wetouch Technology Co., Ltd (“Sichuan Wetouch”), (collectively with HK Wetouch referred to hereinafter as the “Company”), is primarily engaged in the business of research and development, manufacture, and distribution of touchscreen displays to customers both in domestic China and overseas. The touchscreen products, which are manufactured by the Company, are primarily for use in computer components. The Company’s operations are primarily conducted through Sichuan Wetouch in the People’s Republic of China (“PRC”). HK Wetouch has initiated no business activity and is currently not engaging in any active business operations. Sichuan Wetouch was formed on May 6, 2011 in the PRC and became Wholly Foreign-Owned Enterprise in PRC on February 23, 2017. On July 19, 2016, Sichuan Wetouch was 100% held by HK Wetouch. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Summary of Significant Accounting Policies | Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying consolidated financial statements include the financial statements of the HK Wetouch and its wholly owned subsidiary Sichuan Wetouch. All significant intercompany transactions and balances have been eliminated upon consolidation. (b) Uses of estimates In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for estimated uncollectible receivables, inventory valuations, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, revenue recognition and realization of deferred tax assets. Actual results could differ from those estimates. (c) Foreign Currency Translation The functional currency for HK Wetouch is Hong Kong dollar. The functional currency of Sichuan Wetouch is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements have been translated into US$. Assets and liabilities accounts are translated using the exchange rate at each reporting period end date. Equity accounts are translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: December 31, 2019 December 31, 2018 Year-end spot rate US$1=RMB 6.9618 US$1=RMB 6.8755 Average rate US$1=RMB 6.9081 US$1=RMB 6.6090 (d) Cash and cash equivalents Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. (e) Accounts receivables, net Accounts receivables are presented net of allowance for doubtful accounts. The Company determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trend. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections. Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the collection is not probable. Allowance for uncollectable balances amounted to $70,874 and $71,764 as of December 31, 2019 and 2018, respectively. There were nil and US$21,583 bad debts provided for the years ended December 31, 2019 and 2018, respectively. (f) Inventory Inventory consists of raw materials, work-in-process and finished goods and is stated at the lower of cost or net realizable value. Cost is determined using a weighted average. For work-in-process and manufactured inventories, cost consists of raw materials, direct labor and an allocated portion of the Company’s production overhead. The Company writes down excess and obsolete inventory to its estimated net realizable value based upon assumptions about future demand and market conditions. For finished goods and work-in-process, if the estimated net realizable value for an inventory item, which is the estimated selling price in the ordinary course of business, less reasonably predicable costs to completion and disposal, is lower than its cost, the specific inventory item is written down to its estimated net realizable value. Net realizable value for raw materials is based on replacement cost. Provisions for inventory write-downs are included in the cost of revenues in the consolidated statements of operations. Inventories are carried at this lower cost basis until sold or scrapped. No inventory reserve was recorded for the years ended December 31, 2019 and 2018, respectively. (g) Fair value of financial instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● 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, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 — inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses and other current assets, accounts payable, short-term bank loans, accrued expenses and other current liabilities, taxes payable and due to related parties, approximate the fair value of the respective assets and liabilities as of December 31, 2019 and 2018 based upon the short-term nature of the assets and liabilities. (h) Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: Useful life Buildings 20 years Machinery and equipment 10 years Office and electric equipment 3 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. (i) Intangible assets, net The Company’s intangible assets primarily includes land use rights and patent right. A land use right in the PRC represents an exclusive right to occupy, use and develop a piece of land during the contractual term of the land use right. The cost of a land use right is usually paid in one lump sum at the date the right is granted. The prepayment usually covers the entire period of the land use right. The lump sum advance payment is capitalized and recorded as land use right and then charged to expense on a straight-line basis over the period of the right, which is normally 50 years. Patents are recognized at cost of acquisition. They have a finite life and are carried at cost less any accumulated amortization and any impairment losses. Useful life Land use right 50 years Patents 10 years (j) Impairment of long-lived Assets Long-lived assets, such as property, plant and equipment, land use rights, are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as considered necessary. Assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long-lived assets was recognized for any of the years presented. (k) Revenue recognition The Company adopted Accounting Standards Codification (“ASC”) 606 using the modified retrospective approach. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Therefore, no adjustments to opening retained earnings were necessary. ASC 606, Revenue from Contracts with customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. ASC 606 requires the use of a 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. The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that would result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams. In accordance to ASC 606, the Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company accounts for the revenue generated from sales of its products primarily to its customers in PRC and overseas, as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods, which the Company has control of the goods and has the ability to direct the use of goods to obtain substantially all the benefits. All of the Company’s contracts have one single performance obligation as the promise is to transfer the individual goods to customers, and there is no separately identifiable other promises in the contracts. The Company’s revenue streams are recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. The Company’s products are sold with no right of return and the Company does not provide other credits or sales incentive to customers. The Company’s sales are net of value added tax (“VAT”) and business tax and surcharges collected on behalf of tax authorities in respect of product sales. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contract assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing when an order is placed and when shipment or delivery occurs. As of December 31, 2019 and 2018, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. The Company generally warrants that its products will substantially conform to the agreed-upon specifications for three years from the date of shipment. The Company’s liability is limited to either a credit equal to the purchase price or replacement of the defective part. Returns, after sales services and technical support under warranty have historically been immaterial. As such, the Company does not record a specific warranty reserve or consider activities related to such warranty, if any, to be a separate performance obligation. Disaggregation of Revenues The Company disaggregates its revenue from contracts by geography, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the years ended December 31, 2019 and 2018 are disclosed in Note 13 to the financial statements. (l) Selling, General and Administrative Expenses Selling expenses represents primarily costs of payroll, benefits, commissions for sales representatives and advertising expenses. General and administrative expenses represents primarily payroll and benefits costs for administrative employees, rent and operating costs of office premises, depreciation and amortization of office facilities, professional fees and other administrative expenses. (m) Research and Development Expense Research and development costs are expensed as incurred. (n) Government grant The Company follows other authoritative accounting guidance since there is no clear guidance with regard to government grants. Government grants are recognized at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognized as income over the periods necessary to match the grant to the costs it is compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis. (o) Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination. 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. No significant penalties or interest relating to income taxes have been incurred during the years ended December 31, 2019 and 2018. The Company does not believe there was any uncertain tax provision at December 31, 2019 and 2018. The Company’s operating subsidiary in China is subject to the income tax laws of the PRC. No significant income was generated outside the PRC for the fiscal years ended December 31, 2019 and 2018. As of December 31, 2019, all of the Company’s tax returns of its PRC Subsidiary remain open for statutory examination by PRC tax authorities. (p) Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable or recoverable net of VAT payments in the accompanying consolidated financial statements. For export sales, VAT is not imposed on gross sales price, but the VAT related to purchasing raw materials is refunded after the export is completed. (q) Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of December 31, 2019 and 2018, there were no dilutive shares. (r) Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of income and comprehensive income. (s) Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale (AFS) debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The pronouncement will be effective for public business entities that are SEC filers in fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application of the guidance will be permitted for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company does not anticipate the guidance will have a material impact on its financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption. |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Property, Plant and Equipment, Net | NOTE 3 — PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consists of the following: December 31, 2019 December 31, 2018 Buildings $ 9,682,590 $ 9,804,124 Machinery, equipment and furniture 5,464,652 5,528,214 Subtotal 15,147,242 15,332,338 Less: accumulated depreciation (5,279,658 ) (4,362,015 ) Property, plant and equipment, net $ 9,867,584 $ 10,970,323 Depreciation expense was $979,270 and $1,025,012 for the years ended December 31, 2019 and 2018, respectively. |
Intangible Assets, Net (Hong Ko
Intangible Assets, Net (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Intangible Assets, Net | NOTE 4 — INTANGIBLE ASSETS, NET Intangible assets, net mainly consist of the following: December 31, 2019 December 31, 2018 Patents $ 391,697 $ 396,614 Land use rights 952,455 964,410 Subtotal 1,344,152 1,361,024 Less: accumulated amortization for patents (234,456 ) (197,738 ) Accumulated amortization for land use right (120,644 ) (102,870 ) Subtotal (355,100 ) (300,608 ) Intangible assets, net $ 989,052 $ 1,060,416 Amortization expense was $58,671 and $61,326 for the years ended December 31, 2019 and 2018, respectively. Estimated future amortization expense for intangible assets is as follows: December 31, Total amortization expense 2020 $ 58,671 2021 58,671 2022 58,671 2023 57,038 2024 27,432 Thereafter 728,569 Total expense $ 989,052 |
Borrowings (Hong Kong Wetouch E
Borrowings (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Borrowings | NOTE 5 — BORROWINGS The Company has short-term bank loans as described below: (1) On September 2, 2016, Sichuan Wetouch obtained a six-month loan of RMB1.0 million (equivalent to US$143,641 and US$145,444 as of December 31, 2019 and 2018, respectively) from Sichuan Renshou Shigao Tianfu Investment Co., Ltd. (“Renshou Shigao”), a local government investment vehicle at an annual interest rate of 8.2% per annum, which can be waived and converted to government grant upon the Company’s successful going public. This loan was guaranteed by the personal shareholding of Mr. Cai, the Chairman and CEO of Sichuan Wetouch, and director of HK Wetouch. Subsequently, this loan was extended to December 31, 2018, and then to December 31, 2020. (2) On April 2, 2017, Sichuan Wetouch obtained a six-month loan of RMB2.0 million (equivalent to US$287,282 and US$290,888 as of December 31, 2019 and 2018, respectively) from Renshou Shigao at an annual interest rate of 8.2% per annum, which can be waived and converted to government grant upon the Company’s successful going public. This loan was guaranteed by the personal shareholding of Mr. Cai, the Chairman and CEO of the Sichuan Wetouch, and director of HK Wetouch. Subsequently, this loan was extended to December 31, 2018, and then to December 31, 2020. On June 15, 2020, Sichuan Wetouch made a full repayment of above mentioned RMB3.0 million (equivalent to US$430,923). For the above-mentioned loans, the Company recorded a total interest expense of $12,707 and $24,433 for the years ended December 31, 2019 and 2018, respectively. |
Related Party Transactions (Hon
Related Party Transactions (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Related Party Transactions | NOTE 6 — RELATED PARTY TRANSACTIONS Amounts due from related parties are as follows: Amounts due from December 31, related parties Relationship 2019 2018 Note Meishan Wetouch Electronics Technology Co., Ltd. 95% owned by Mr. Guangde Cai and 5% by Chengdu Wetouch Technology Co., Ltd (“Chengdu Wetouch”) $ - $ 107,603 Operating expense paid on behalf of the related party Mr. Shengyong Li General Manager of Sichuan Wetouch 72 - Employee advance Vision Touch Technology AG 100% owned by Mr. Yong Yang, Sales Director of Sichuan Wetouch 71,812 - Operating expense paid on behalf of the related party Total amounts due from related parties $ 71,884 $ 107,603 Amounts due to related parties are as follows: Amounts due to December 31, related parties Relationship 2019 2018 Note Chengdu Wetouch Technology Co., Ltd (“Chengdu Wetouch”) 94% owned by Mr. Guangde Cai & 2% by Mr. Shengyong Li $ 121,306 $ 117,607 Operating expense paid on behalf of the Company Meishan Wetouch Electronics Technology Co., Ltd. (“Meishan Wetouch”) 95% owned by Mr. Guangde Cai and 5% by Chengdu Wetouch 397,947 - Operating expense paid on behalf of the Company Australia Vtouch Technolody Co., Ltd.(i) 35.36% owned by Mr. Guangde Cai 4,233,949 4,287,092 Interest- free loan Sichuan Vtouch Trading Co., Ltd. 100% owned by Mr. Guangde Cai - 18,991 Operating expense paid on behalf of the Company Mr. Guangde Cai (ii) Chairman and CEO of the Company 215,031 13,423,113 Payable to employee/Interest free advance Mr. Guanying Cai (ii) Daughter of Mr. Guangde Cai - 622,628 Interest- free advance Mr. Shengyong Li (ii) General Manager of Sichuan Wetouch - 2,695 Interest- free advance Mr. Yong Yang Sales Director of Sichuan Wetouch 32,570 24,275 Employee advance/payable to employee Total amounts due to related parties $ 5,000,803 $ 18,496,401 (i) RMB29.5million (equivalent to US$4.2 million) was interest free advance provided by nine shareholders of Australia Vtouch Techonolody Co., Ltd, a related party, for the working capital purposes. (ii) On July 19, 2016, pursuant to a share transfer agreement, HK Wetouch acquired 100% of Sichuan Wetouch with advances from Mr. Guangde Cai, Ms. Guanying Cai and Mr. Shengyong Li. Thus RMB93.5 million (equivalent to US$14.0 million) was recorded as payable to related parties as non-interest bearing advances from our shareholders and senior management mentioned above. On September 30, 2019, the Company made full repayment of above US$14.0 million to Mr. Guangde Cai, Ms. Guanying Cai and Mr. Shengyong Li. For other related party guarantees, please refer to Note 12. |
Income Taxes (Hong Kong Wetouch
Income Taxes (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Income Taxes | NOTE 7 — INCOME TAXES Hong Kong HK Wetouch is incorporated in Hong Kong and is subject to profit taxes in Hong Kong at a progressive rate of 16.5%. HK Wetouch did not generate any assessable profits derived from Hong Kong sources for the fiscal years ended December 31, 2019 and 2018, and accordingly no provision for Hong Kong profits tax has been made in these periods. PRC Sichuan Wetouch files income tax returns in the PRC. Effective from January 1, 2008, the PRC statutory income tax rate is 25% according to the Corporate Income Tax (“CIT”) Law which was passed by the National People’s Congress on March 16, 2007. Under PRC CIT Law, domestic enterprises and Foreign Investment Enterprises (“FIEs”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on a case-by-case basis by local government as preferential tax treatment to High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for their HNTE status every three years. Sichuan Wetouch was approved as a HNTE and is entitled to a reduced income tax rate of 15% beginning October 11, 2014 and renewed with a new term from October 11, 2017 to October 11, 2020. CIT is typically governed by the local tax authority in PRC. Each local tax authority at times may grant tax holidays to local enterprises as a way to encourage entrepreneurship and stimulate local economy. The CIT Law and its implementation rules impose a withholding income tax at 10%, unless reduced by a tax treaty or arrangement, on the amount of dividends distributed by a PRC-resident enterprise to its immediate holding company outside the PRC that are related to earnings accumulated beginning on January 1, 2008. Dividends relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding income tax. The components of the income tax provision (benefit) are as follows: For the Years Ended December 31, 2019 2018 Current tax provision Hong Kong $ - $ - China 2,724,662 2,136,180 2,724,662 2,136,180 Deferred tax provision (benefit) Hong Kong - - China - - - - Income tax provision $ 2,724,662 $ 2,136,180 The following table reconciles the China statutory rates to the Company’s effective tax rate for the years ended December 31, 2019 and 2018: For the Years Ended December 31, 2019 2018 PRC statutory income tax rate 25.0 % 25.0 % Effect of income tax holiday (10.0 )% (10.0 )% Non-deductible expenses in PRC 1.6 % 0.3 % Effective tax rate 16.6 % 15.3 % Deferred tax assets The Company’s has no deferred tax assets are as of December 31, 2019 and 2018, respectively. The Company follows ASC 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. As of December 31, 2019 and 2018, Sichuan Wetouch remains open for statutory examination by PRC tax authorities. |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Accrued Expenses and Other Current Liabilities | NOTE 8 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: December 31, 2019 December 31, 2018 Advance from customers $ 11,719 $ 94,956 Accrued payroll and employee benefits 248,745 187,919 Accrued interest expenses 37,140 24,433 Other tax payables (i) 324,670 755,742 Penalty related to a loan default (ii) 1,701,986 850,686 Others (iii) 16,598 716,048 Accrued expenses and other current liabilities $ 2,340,858 $ 2,629,784 (i) Other tax payables are mainly value added tax payable. (ii) Penalty payable of RMB6.0 million (equivalent to US$0.9 million) and RMB5.8 million (equivalent to US$0.8 million) was accrued for a loan default by Sichuan Wetouch obtained from Chengdu Bank in 2013 and guaranteed by a third party Chengdu SME Credit Guarantee Co., Ltd. (“Chengdu SME”) as of December 31, 2019. On September 16, 2020, Sichuan Wetouch made a full repayment of RMB11.8 million (equivalent to US$1.7 million) of the loan default penalty to Chengdu SME (see Note 12). (iii) Others mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses. |
Deferred Grants (Hong Kong Weto
Deferred Grants (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Deferred Grants | NOTE 9 — DEFERRED GRANTS On January 14, 2013 and January 27, 2014, Sichuan Wetouch received RMB11.2 million (equivalent to US$1.8 million) and RMB4.8 million (equivalent to US$0.8 million) government subsidies, respectively, from Sichuan Provincial Government in supporting the initial set-up and construction of production facility. The Company completed the construction of the plant in June 2013 and there were no other unfulfilled conditions and/or other contingencies attaching to government assistance which has been recognized as income. Since the funding is related to the construction of long-term assets, the amounts were recognized as government grant, which is included in deferred grants on the consolidated balance sheets, and to be recognized as other income in the consolidated statements of comprehensive income (loss) over the periods and in the proportions in which depreciation expense on the long-term assets is recognized. As of December 31, 2019, the remaining deferred grants are as below: US$ Years ended December 31 2020 $ 229,826 2021 229,826 2023 229,826 2024 176,199 Total deferred grants 865,677 less: current portion (229,826 ) Deferred grants- non-current 623,851 |
Shareholders' Equity (Hong Kong
Shareholders' Equity (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Shareholders' Equity | NOTE 10 — SHAREHOLDERS’ EQUITY Ordinary Shares The Company’s authorized number of ordinary shares was 10,000 shares with par value of HK$1.00 (equivalent to US$0.1288) and 10,000 shares were issued. Statutory reserve and restricted net assets Under PRC rules and regulations, Sichuan Wetouch is required to appropriate 10% of their net income to a statutory surplus reserve until the reserve balance reaches 50% of their registered capital. The appropriation to this statutory surplus reserve must be made before distribution of dividends can be made. The statutory reserve is non-distributable, other than during liquidation, and can be used to fund previous years losses, if any, and may be converted into share capital by issuing new shares to existing shareholders in proportion to their shareholders or by increasing the par value of the shares currently outstanding, provided that the remaining balance of the statutory reserve after such issue is not less than 25% of the registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the board of directors. The statutory reserve may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends. For the years ended December 31, 2019 and 2018, Sichuan Wetouch made appropriations to the reserve fund of RMB12,216,247 (equivalent to US$1,715,524) and nil, respectively. |
Risks and Uncertainties (Hong K
Risks and Uncertainties (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Risks and Uncertainties | NOTE 11 — RISKS AND UNCERTAINTIES Credit Risk The Company has its cash in bank deposits primarily at state owned banks located in the PRC. Historically, deposits in PRC banks have been secured due to the state policy of protecting depositors’ interests. The PRC promulgated a Bankruptcy Law in August 2006, effective June 1, 2007, which contains provisions for the implementation of measures for the bankruptcy of PRC banks. The bank deposits with financial institutions in the PRC are insured by the government authority for up to RMB500,000. Interest Rate Risk Currency Risk - Concentrations - And the Company’s top ten customers aggregately accounted for 98.6% and 99.0 % of the total revenue for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, four customers accounted for 18.6%, 17.4%, 15.8% and 14.0% of the total accounts receivable balance, respectively. As of December 31, 2018, four customers accounted for 17.3%, 14.7%, 14.0% and 13.7% of the total accounts receivable balance, respectively. The Company purchases its raw materials through various suppliers. Raw material purchases from these suppliers which individually exceeded 10% of the Company’s total raw material purchases, accounted for approximately 33.7% (three suppliers) and 14.8% (one supplier) of the Company’s total raw material purchases for the years ended December 31, 2019 and 2018, respectively. |
Commitments and Contingencies_2
Commitments and Contingencies (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Commitments and Contingencies | NOTE 12 — COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. For the years ended December 31, 2019 and 2018, the Company had several legal claims or litigation that, individually or in aggregate, could have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows. i) Legal case with Chengdu SME Credit Guarantee Co., Ltd. on a loan default penalty of RMB11.8 million (equivalent to $1.7 million) On July 5, 2013, Sichuan Wetouch obtained a one-year loan of RMB60.0 million (equivalent to $9.8million) from Bank of Chengdu, at an annual interest rate of 8.61%. Chengdu SME Credit Guarantee Co., Ltd (“Chengdu SME”), a third party, provided a 70% guarantee and Bank of Chengdu retained 30% of the risk, while Chengdu Wetouch and Mr. Guangde Cai (related parties, see Note 6) provided joint and several liability guarantee for 100% of the loan. On July 31, 2014, Sichuan Wetouch repaid RMB5.0 million (equivalent to $0.8 million). The remaining loan of RMB55.0 million (equivalent to $8.9 million) was twice extended to be due on August 22, 2018. Upon the loan becoming due, but unpaid by the Company, Chengdu SME paid the outstanding balance of RMB55 million (equivalent to $8.0 million) to Bank of Chengdu. The Company subsequently repaid RMB55 million (equivalent to $8.0 million) to Chengdu SME; however, Chengdu SME filed two separate lawsuits against the Company to recover loan default penalties from the Company. The loan default penalties were (a) RMB5.8 million (equivalent to $0.8 million) related to the 30% of the remaining loan balance repaid by Chengdu SME and (b) RMB6.0 million (equivalent to $0.9 million) related to the 70% of the remaining loan balance repaid by Chengdu SME. During the year ended December 31, 2017, the Company recorded loan default penalties, and related liabilities, of $1.7 million. Chengdu SME applied to the Chengdu High-tech Court for enforcement for the above mentioned loan default penalties of RMB5.8 million (equivalent to $0.8 million) and RMB6.0 million (equivalent to $0.9 million) on December 30, 2018. On March 12, 2020, the Enforcement Settlement Agreement issued by the Chengdu High-tech Court confirmed that Sichuan Wetouch still owed RMB5.8 million (equivalent to $0.8 million) and RMB6.0 million (equivalent to $0.9 million) of loan default penalties. On September 16, 2020, Sichuan Wetouch made a full repayment of RMB11.8 million (equivalent to US$1.7 million) of the above loan default penalties to Chengdu SME. ii) Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. on an asset recovery of RMB12.0 million (equivalent to $1.7 million) On March 19, 2014, Chengdu Wetouch, a related party, obtained a two and half-year loan of RMB15.0 million (equivalent to $2.2 million) from Chengdu Bank Co., Ltd. Gaoxin Branch (“Chengdu Bank Gaoxin Branch”) , with Chengdu Hi-tech Investment Group Co., Ltd. (“CDHT Investment”) acting as guarantor to pay off the loan principal and related interests, while Sichuan Wetouch and Hong Kong Wetouch as guarantors, were jointly and severally liable for such debts. Upon the loan due in January 2017, Chengdu Wetouch defaulted the loan, thus, CDHT Investment filed a lawsuit against Chengdu Wetouch , Sichuan Wetouch, and Hong Kong Wetouch demanding a full repayment of such debts. To support the local economic development as well as Chengdu Wetouch, two government-backed companies, Sichuan Renshou Shigao Tianfu Investment Co., Ltd. (“Shigaotianfu Investment”) and Renshou Tengyi Landscaping Co., Ltd. (“Renshou Tenyi”) provided their bank deposits of RMB 12.0 million (equivalent to US$1.7 million) as pledge, while Mr. Guangde Cai and Sichuan Wetouch also provided counter-guarantee. Upon the expiration of the guarantee, Chengdu Wetouch still defaulted repayment of above pledge. As a result, CDHT Investment levied this collateral of RMB12.0 million on November 21, 2019. Subsequently, Shigaotianfu Investment and Renshou Tengyi filed with Chengdu Intermediate People’s Court a lawsuit demanding an asset recovery of RMB12.0 million (equivalent to $1.7 million) pursuant to the counter guarantee agreement. On December 2, 2019, pursuant to the reconciling agreement issued by Chengdu Intermediate People’s Court, the parties agreed to cancel the demand to seize property of Sichuan Wetouch rather than the property of Chengdu Wetouch, and to waive freezing Guangde Cai’s 60% shareholding equity in Xinjiang Wetouch. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch, Hong Kong Wetouch and Guangde Cai are fully discharged and released from any and all obligations under the outstanding debts, and from all liabilities under guarantee. Chengdu Wetouch was solely responsible for repaying the outstanding RMB12.0 million by end of December 31, 2020. Guarantees i) Guarantee to Chengdu Wetouch for a loan of RMB17.0 million (equivalent to $2.6 million) In July 2014, Chengdu Wetouch, a related party, obtained a loan of RMB17.0 million (equivalent to $2.6 million) from Bank of Chengdu, with third party Chengdu SME as a joint guarantor, while Sichuan Wetouch, Mr. Guangde Cai and his 60% controlled Xinjiang Wetouch and his 95% controlled Meishan Wetouch, as well as two unrelated individuals acting as counter guarantors for this loan. On July 2, 2018, as Chengdu Wetouch defaulted the loan, Chengdu SME filed a lawsuit demanding the full repayment. As of December 31, 2019 and 2018, there was a lawsuit in progress on this loan repayment. Above mentioned counter guarantors were obliged for the joint responsibilities. On May 13, 2020, with Xinjiang Wetouch partially repaying RMB5.9 million and Chengdu Wetouch still obligated to repay the balance prior to December 31, 2020, Xinjiang Wetouch, Meishan Wetouch and the other two unrelated individuals were under joint and several liabilities for the balance. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch and Mr. Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts. ii) Guarantee to Chengdu Wetouch for a loan of RMB9.0 million (equivalent to $1.3 million) On April 21, 2014, Sichuan Wetouch, Mr. Guangde Cai provided counter guarantee to Chengdu Wetouch obtaining a loan of RMB9.0 million (equivalent to $1.3 million) ) from Deyang Bank Co., Ltd., Chengdu Branch, with third party Tianhong Asset Management Co., Ltd.(“Tianhong Asset”) as a guarantor. Upon the loan due, Chengdu Wetouch failed to pay the debts on schedule. On May 3, 2017, Tianhong Asset brought a lawsuit to the local court. As of December 31, 2019 and 2018, this lawsuit was in progress on the loan repayment. Sichuan Wetouch and Mr. Guangde Cai were under joint and several guarantee liability for the agreed principal and interest and corresponding fees. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch and Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch obliged to repay the balance in a lump sum by the end of December 31, 2020. iii) Guarantee to Chengdu Wetouch for a loan of RMB15.0 million (equivalent to $2.2 million) On May 26, 2015, Sichuan Wetouch, Mr. Guangde Cai provided guarantee to Chengdu Wetouch obtaining a loan of RMB15.0 million (equivalent to $2.2 million) from Deyang Bank Co., Ltd., Chengdu Branch, with third party Tianhong Asset Management Co., Ltd.(“Tianhong Asset”) as a guarantor. Upon the loan due, Chengdu Wetouch failed to pay the debts on schedule. On May 3, 2017, Tianhong Asset brought a lawsuit to the local court. As of December 31, 2019 and 2018, this lawsuit was in progress on the loan repayment. Sichuan Wetouch and Mr. Guangde Cai were under joint and several guarantee liability for the agreed principal and interest and corresponding fees. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch and Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch obliged to repay the balance by the end of December 31, 2020. iv) Guarantee to Chengdu Wetouch for a loan of RMB14.9 million (equivalent to $2.3 million) On July 4, 2014, Sichuan Wetouch, Mr. Guangde Cai and another unrelated individual provided joint guarantee to Chengdu Wetouch obtaining a loan of RMB14.9 million (equivalent to $2.3 million) from Sichuan Tianfu Bank Co., Ltd. Chengdu Wenjiang Branch (formerly known as Nanchong Commercial Bank Wenjiang Branch). Upon the loan due, Sichuan Wetouch, Mr. Cai and another unrelated individual were jointly liable for the agreed principal and interests. Upon the loan due, Chengdu Wetouch failed to pay the debts on schedule. On December 16, 2015, the bank thus brought a lawsuit to the local court. As of December 31, 2019 and 2018, there was a lawsuit in progress on the loan repayment. Sichuan Wetouch, Mr. Guangde Cai and another unrelated individual for the joint guarantee responsibility. On October 9, 2020, pursuant to a settlement and release agreement, Wetouch and Mr. Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch and another unrelated individual being obliged to repay the balance by the end of December 31, 2020. v) Guarantee to Chengdu Wetouch for a loan of RMB17.3 million (equivalent to $2.7 million) On May 23, 2014, Sichuan Wetouch and Mr. Guangde Cai provided guarantee to Chengdu Wetouch obtaining a loan of RMB17.3 million (equivalent to $2.7 million) from Agricultural Bank of China Co., Ltd. Chengdu Wenjiang Branch (“Agricultural Bank Wenjiang Branch”), with two unrelated two parties also providing guarantee. Upon the loan due, the four guarantors were jointly obliged to repay the loan and its interests. On February 3, 2017, Agricultural Bank Wenjiang Branch filed a lawsuit demanding the full repayments of the above mentioned loan and its interests. As of December 31, 2019 and 2018, there was a lawsuit in progress on the loan repayment. Sichuan Wetouch and Mr. Guangde Cai and two other unrelated parties were obliged to take joint guarantee responsibility. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch, and Mr. Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch being obliged to repay the outstanding debts by the end of December 31, 2020. vi) Guarantee to Chengdu Wetouch for a loan of RMB15.0 million (equivalent to $2.2 million) On March 19, 2014, Sichuan Wetouch, Mr. Guangde Cai and HK Wetouch provided counter guarantee to Chengdu Wetouch obtaining a loan of RMB15.0 million (equivalent to $2.2 million) from Chengdu Bank Co., Ltd. Gaoxin Branch (“Chengdu Bank Gaoxin Branch”), with a third party Chengdu Hi-tech Investment Group Co., Ltd. (“CDHT Investment”) as a guarantor. Sichuan Wetouch and Mr. Guangde Cai and Chengdu Wetouch were jointly and severally liable for such debts. Upon the loan defaulted, CDHT paid off the above loan principal and interests to the bank on behalf of Chengdu Wetouch on January 10, 2017. On August 16, 2018, CDHT Investment brought a lawsuit to Chengdu Railway Transport Court. (See above Legal Case #2- Note 12) As of December 31, 2019 and 2018, there was a lawsuit in progress on the loan repayment. Sichuan Wetouch, Mr. Guangde Cai and Hong Kong Wetouch were obliged to take joint guarantee responsibility for the above loan and its interests. On October 9, 2020, pursuant to a settlement and release, Sichuan Wetouch, Mr. Guangde Cai and HK Wetouch are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Chengdu Wetouch being obliged to repay the outstanding debts by the end of December 31, 2020. vii) Guarantee to Meishan Wetouch for a loan of RMB26.0 million (equivalent to $3.5 million) On October 21, 2014, Sichuan Wetouch, Chengdu Wetouch, Mr.Guangde Cai and his 60% owned Xinjiang Wetouch, together with one unrelated guarantee company Sichuan Yitong Financing Guarantee Co., Ltd. (“Yitong Guarantee”) provided joint guarantee to Meishan Wetouch obtaining a two-year loan of RMB26.0 million (equivalent to $3.5 million) from Meishan Rural Commercial Bank Co., Ltd. (“Meishan Rural Commercial Bank”) and later extended to October 20, 2017. Upon the loan due, the guarantors were jointly obliged for the responsibility of repaying the loan and its interests. On June 1, 2018, Meishan Rural Commercial Bank filed a lawsuit demanding the full repayments of the due loan and its interests. On September 11, 2019, Meishan Wetouch made a partial repayment of RMB10.5 million (equivalent to US$1.5 million). As of December 31, 2019 and 2018, there was a lawsuit in progress on the loan remaining balance repayment. Sichuan Wetouch, Chengdu Wetouch and Mr. Guangde Cai, and Xinjing Wetouch as well as Yitong Guarantee were under guarantee responsibility. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch and Mr. Guangde Cai are unconditionally and fully released and discharged from all and only obligations under the outstanding debts, with Meishan Wetouch being obliged to repay the outstanding debts by the end of December 31, 2020, and Chengdu Wetouch and Xinjiang Wetouch sharing the joint responsibilities. Capital expenditure commitment The Company does not have any capital commitments as of December 31, 2019 and 2018. |
Revenues (Hong Kong Wetouch Ele
Revenues (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Revenues | NOTE 13 — REVENUES The Company’s geographical revenue information is set forth below: For the Years Ended December 31, 2019 2018 Sales in PRC $ 26,496,302 $ 27,663,759 Sales in Overseas —Republic of China (ROC, or Taiwan) 6,725,155 5,790,988 -South Korea 6,697,864 3,138,336 -Others 84,782 152,293 Sub-total 13,507,801 9,081,617 Total revenues $ 40,004,103 $ 36,745,376 |
Subsequent Events (Hong Kong We
Subsequent Events (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Subsequent Events | NOTE 14 — SUBSEQUENT EVENTS i) In December 2019, a novel strain of COVID-19 was reported in Wuhan, China. On March 11, 2020, the World Health Organization categorized it as a pandemic. To reduce the spread of the COVID-19, the Chinese government has employed measures including city lockdowns, quarantines, travel restrictions, suspension of business activities and school closures. Due to difficulties resulting from the COVID-19 outbreak, including, but not limited to, the temporary closure of the Company’s factory and operations beginning in early February, limited support from the Company’s employees, delayed access to raw material supplies and inability to deliver products to customers on a timely basis, the Company’s business was negatively impacted and is expected to generate lower revenue and net income during the period from February to June 2020. The Company resumed operations on March 2, 2020 and, as such, the extent of the impact of COVID-19 on the Company’s results of operations and financial condition will depend on future developments, including the duration and spread of the outbreak and the impact on the Company’s customers, which are still uncertain and cannot be reasonably estimated at this point in time. ii) On June 11, 2020, Sichuan Wetouch entered into a repayment agreement with Renshou Shigao for the RMB3.0 million (equivalent to US$430,923) loan obtained by the Company in 2016 and 2017 from Renshou Shigao (see Note 5 - Borrowing). Pursuant to the agreement, Renshou Shigao reduced the interest payable from RMB0.8 million (equivalent to US$0.1 million) to RMB0.3 million (equivalent to US$0.04 million). On June 15, 2020, Sichuan Wetouch made full repayment of above principal and interests. iii) On August 14, 2020, Wetouch Holding Group Limited (“Wetouch Holding”) was incorporated under the laws of British Virgin Islands. It became the holding company of HK Wetouch on September 11, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation and Principles of Consolidation | (a) Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying consolidated financial statements include the financial statements of the HK Wetouch and its wholly owned subsidiary Sichuan Wetouch. All significant intercompany transactions and balances have been eliminated upon consolidation. |
Uses of Estimates | (b) Uses of estimates In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for estimated uncollectible receivables, inventory valuations, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, revenue recognition and realization of deferred tax assets. Actual results could differ from those estimates. |
Foreign Currency Translation | (c) Foreign Currency Translation The functional currency for HK Wetouch is Hong Kong dollar. The functional currency of Sichuan Wetouch is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements have been translated into US$. Assets and liabilities accounts are translated using the exchange rate at each reporting period end date. Equity accounts are translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: December 31, 2019 December 31, 2018 Year-end spot rate US$1=RMB 6.9618 US$1=RMB 6.8755 Average rate US$1=RMB 6.9081 US$1=RMB 6.6090 |
Cash and Cash Equivalents | (d) Cash and cash equivalents Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. |
Accounts Receivables, Net | (e) Accounts receivables, net Accounts receivables are presented net of allowance for doubtful accounts. The Company determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trend. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections. Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the collection is not probable. Allowance for uncollectable balances amounted to $70,874 and $71,764 as of December 31, 2019 and 2018, respectively. There were nil and US$21,583 bad debts provided for the years ended December 31, 2019 and 2018, respectively. |
Inventory | (f) Inventory Inventory consists of raw materials, work-in-process and finished goods and is stated at the lower of cost or net realizable value. Cost is determined using a weighted average. For work-in-process and manufactured inventories, cost consists of raw materials, direct labor and an allocated portion of the Company’s production overhead. The Company writes down excess and obsolete inventory to its estimated net realizable value based upon assumptions about future demand and market conditions. For finished goods and work-in-process, if the estimated net realizable value for an inventory item, which is the estimated selling price in the ordinary course of business, less reasonably predicable costs to completion and disposal, is lower than its cost, the specific inventory item is written down to its estimated net realizable value. Net realizable value for raw materials is based on replacement cost. Provisions for inventory write-downs are included in the cost of revenues in the consolidated statements of operations. Inventories are carried at this lower cost basis until sold or scrapped. No inventory reserve was recorded for the years ended December 31, 2019 and 2018, respectively. |
Fair Value of Financial Instruments | (g) Fair value of financial instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● 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, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 — inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses and other current assets, accounts payable, short-term bank loans, accrued expenses and other current liabilities, taxes payable and due to related parties, approximate the fair value of the respective assets and liabilities as of December 31, 2019 and 2018 based upon the short-term nature of the assets and liabilities. |
Property, Plant and Equipment, Net | (h) Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: Useful life Buildings 20 years Machinery and equipment 10 years Office and electric equipment 3 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. |
Intangible Assets, Net | (i) Intangible assets, net The Company’s intangible assets primarily includes land use rights and patent right. A land use right in the PRC represents an exclusive right to occupy, use and develop a piece of land during the contractual term of the land use right. The cost of a land use right is usually paid in one lump sum at the date the right is granted. The prepayment usually covers the entire period of the land use right. The lump sum advance payment is capitalized and recorded as land use right and then charged to expense on a straight-line basis over the period of the right, which is normally 50 years. Patents are recognized at cost of acquisition. They have a finite life and are carried at cost less any accumulated amortization and any impairment losses. Useful life Land use right 50 years Patents 10 years |
Impairment of Long-lived Assets | (j) Impairment of long-lived Assets Long-lived assets, such as property, plant and equipment, land use rights, are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as considered necessary. Assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long-lived assets was recognized for any of the years presented. |
Revenue Recognition | (k) Revenue recognition The Company adopted Accounting Standards Codification (“ASC”) 606 using the modified retrospective approach. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Therefore, no adjustments to opening retained earnings were necessary. ASC 606, Revenue from Contracts with customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. ASC 606 requires the use of a 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. The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that would result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams. In accordance to ASC 606, the Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company accounts for the revenue generated from sales of its products primarily to its customers in PRC and overseas, as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods, which the Company has control of the goods and has the ability to direct the use of goods to obtain substantially all the benefits. All of the Company’s contracts have one single performance obligation as the promise is to transfer the individual goods to customers, and there is no separately identifiable other promises in the contracts. The Company’s revenue streams are recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. The Company’s products are sold with no right of return and the Company does not provide other credits or sales incentive to customers. The Company’s sales are net of value added tax (“VAT”) and business tax and surcharges collected on behalf of tax authorities in respect of product sales. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contract assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing when an order is placed and when shipment or delivery occurs. As of December 31, 2019 and 2018, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. The Company generally warrants that its products will substantially conform to the agreed-upon specifications for three years from the date of shipment. The Company’s liability is limited to either a credit equal to the purchase price or replacement of the defective part. Returns, after sales services and technical support under warranty have historically been immaterial. As such, the Company does not record a specific warranty reserve or consider activities related to such warranty, if any, to be a separate performance obligation. Disaggregation of Revenues The Company disaggregates its revenue from contracts by geography, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the years ended December 31, 2019 and 2018 are disclosed in Note 13 to the financial statements. |
Selling, General and Administrative Expenses | (l) Selling, General and Administrative Expenses Selling expenses represents primarily costs of payroll, benefits, commissions for sales representatives and advertising expenses. General and administrative expenses represents primarily payroll and benefits costs for administrative employees, rent and operating costs of office premises, depreciation and amortization of office facilities, professional fees and other administrative expenses. |
Research and Development Expense | (m) Research and Development Expense Research and development costs are expensed as incurred. |
Government Grant | (n) Government grant The Company follows other authoritative accounting guidance since there is no clear guidance with regard to government grants. Government grants are recognized at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognized as income over the periods necessary to match the grant to the costs it is compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis. |
Income Taxes | (o) Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination. 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. No significant penalties or interest relating to income taxes have been incurred during the years ended December 31, 2019 and 2018. The Company does not believe there was any uncertain tax provision at December 31, 2019 and 2018. The Company’s operating subsidiary in China is subject to the income tax laws of the PRC. No significant income was generated outside the PRC for the fiscal years ended December 31, 2019 and 2018. As of December 31, 2019, all of the Company’s tax returns of its PRC Subsidiary remain open for statutory examination by PRC tax authorities. |
Value Added Tax ("VAT") | (p) Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable or recoverable net of VAT payments in the accompanying consolidated financial statements. For export sales, VAT is not imposed on gross sales price, but the VAT related to purchasing raw materials is refunded after the export is completed. |
Earnings Per Share | (q) Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of December 31, 2019 and 2018, there were no dilutive shares. |
Comprehensive Income (loss) | (r) Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of income and comprehensive income. |
Recent Accounting Pronouncements | (s) Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale (AFS) debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The pronouncement will be effective for public business entities that are SEC filers in fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application of the guidance will be permitted for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company does not anticipate the guidance will have a material impact on its financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption. |
Accounts Receivable (Tables) (W
Accounts Receivable (Tables) (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Schedule of Accounts Receivable | Accounts receivable consists of the following: September 30, 2020 December 31 2019 Accounts receivable $ 17,861,595 $ 16,120,327 Allowance for doubtful accounts (72,672 ) (70,874 ) Accounts receivable, net $ 17,788,923 $ 16,049,453 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Tables) (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, net, consists of the following: September 30, 2020 December 31 2019 Buildings $ 9,928,163 $ 9,682,590 Machinery, equipment and furniture 5,603,249 5,464,652 Subtotal 15,531,412 15,147,242 Less: accumulated depreciation (6,160,993 ) (5,279,658 ) Property, plant and equipment, net $ 9,370,419 $ 9,867,584 |
Related Party Transactions (Tab
Related Party Transactions (Tables) (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Schedule of Related Party Transactions | Amounts due from related parties are as follows: Amounts due from related parties Relationship September 30, 2020 December 31, 2019 Note Mr. Shengyong Li General Manager of Sichuan Wetouch - 72 Employee advance Vision Touch Technology AG 100% owned by Mr. Yong Yang, Sales Director of Sichuan Wetouch 73,633 71,812 Operating expense paid on behalf of the related party/Company Total $ 73,633 $ 71,884 Amounts due to related parties are as follows: Relationship September 30, 2020 December 31, 2019 Note Chengdu Wetouch Technology Co., Ltd (“Chengdu Wetouch”) 94% owned by Mr. Guangde Cai & 2% by Mr. Shengyong Li $ 129,370 $ 121,306 Operating expense paid on behalf of the Company Meishan Vtouch Electronics Technology Co., Ltd. 95% owned by Mr. Guangde Cai and 5% by Chengdu Wetouch 74,453 397,947 Operating expense paid on behalf of the Company Australia Vtouch Technolody Co., Ltd. (i) 35.36% owned by Mr. Guangde Cai 4,341,331 4,233,949 Interest- free loan Mr. Guangde Cai Chairman and CEO of HK Wetouch 220,926 215,031 Payable to employee Mr. Yong Yang Sales Director of Sichuan Wetouch - 32,570 Payable to employee Total $ 4,766,080 $ 5,000,803 (i) As of September 30, 2020, RMB29.5 million (equivalent to US$4.3 million) was interest free advance provided by nine shareholders of Australia Vtouch Technology Co., Ltd, a related party, for the working capital purposes. |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Tables) (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following: September 30, 2020 December 31, 2019 Advance from customers $ 8,385 $ 11,719 Accrued payroll and employee benefits 169,602 248,745 Accrued interest expenses - 37,140 Other tax payables (i) 614,740 324,670 Penalty related to a loan default (ii) - 1,701,986 Others (iii) 40,492 16,598 Accrued expenses and other current liabilities $ 833,219 $ 2,340,858 (i) Other tax payables are mainly value added tax payable. (ii) Penalty payable of RMB6.0 million (equivalent to US$0.9 million) and RMB5.8 million (equivalent to US$0.8 million) was accrued for a loan default by Sichuan Wetouch obtained from Chengdu Bank in 2013 and guaranteed by a third party Chengdu SME Credit Guarantee Co., Ltd. (“Chengdu SME”) as of December 31, 2019. (see Note 9).On September 16, 2020, Sichuan Wetouch made a full repayment of RMB11.8 million (equivalent to US$1.7 million) of the above loan default penalties to Chengdu SME. (iii) Others mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses. |
Deferred Grants (Tables) (Wetou
Deferred Grants (Tables) (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Schedule of Remaining Deferred Grants | As of September 30, 2020, the remaining deferred grants as below: Years ended December 31 Three month ended December 31, 2020 $ 59,788 2021 239,149 2022 239,149 2023 172,806 Total deferred grants 710,892 less: current portion (235,655 ) Deferred grants- non-current $ 475,237 |
Revenues (Tables) (Wetouch Hold
Revenues (Tables) (Wetouch Holding Group Limited) | 9 Months Ended |
Sep. 30, 2020 | |
Wetouch Holding Group Limited [Member] | |
Schedule of Geographical Revenue Information | The Company’s geographical revenue information is set forth below: Three-Month Period Ended September 30, Nine-Month Period Ended September 30, 2020 2019 2020 2019 US$ US$ US$ US$ Sales in PRC $ 8,386,376 $ 8,723,761 $ 13,940,497 $ 20,371,987 Sales in Overseas —Republic of China (ROC, or Taiwan) 1,967,824 1,941,992 3,652,757 4,974,950 -South Korea 1,508,698 1,894,824 2,993,888 5,135,774 -Others 41,222 23,259 82,130 101,380 Sub-total 3,517,744 3,860,075 6,728,775 10,212,104 Total Revenue $ 11,904,120 $ 12,583,836 $ 20,669,272 $ 30,584,091 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Currency Exchange Rates | The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: December 31, 2019 December 31, 2018 Year-end spot rate US$1=RMB 6.9618 US$1=RMB 6.8755 Average rate US$1=RMB 6.9081 US$1=RMB 6.6090 |
Schedule of Estimated Useful Life of Property Plant and Equipment | Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: Useful life Buildings 20 years Machinery and equipment 10 years Office and electric equipment 3 years |
Schedule of Finite Lived Intangible Assets | Patents are recognized at cost of acquisition. They have a finite life and are carried at cost less any accumulated amortization and any impairment losses. Useful life Land use right 50 years Patents 10 years |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net (Tables) (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Schedule of Property and Equipment | Property, plant and equipment, net, consists of the following: December 31, 2019 December 31, 2018 Buildings $ 9,682,590 $ 9,804,124 Machinery, equipment and furniture 5,464,652 5,528,214 Subtotal 15,147,242 15,332,338 Less: accumulated depreciation (5,279,658 ) (4,362,015 ) Property, plant and equipment, net $ 9,867,584 $ 10,970,323 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Intangible Assets | Intangible assets, net mainly consist of the following: December 31, 2019 December 31, 2018 Patents $ 391,697 $ 396,614 Land use rights 952,455 964,410 Subtotal 1,344,152 1,361,024 Less: accumulated amortization for patents (234,456 ) (197,738 ) Accumulated amortization for land use right (120,644 ) (102,870 ) Subtotal (355,100 ) (300,608 ) Intangible assets, net $ 989,052 $ 1,060,416 |
Schedule of Intangible Assets Amortization Expense | Estimated future amortization expense for intangible assets is as follows: December 31, Total amortization expense 2020 $ 58,671 2021 58,671 2022 58,671 2023 57,038 2024 27,432 Thereafter 728,569 Total expense $ 989,052 |
Related Party Transactions (T_2
Related Party Transactions (Tables) (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Schedule of Related Party Transactions | Amounts due from related parties are as follows: Amounts due from December 31, related parties Relationship 2019 2018 Note Meishan Wetouch Electronics Technology Co., Ltd. 95% owned by Mr. Guangde Cai and 5% by Chengdu Wetouch Technology Co., Ltd (“Chengdu Wetouch”) $ - $ 107,603 Operating expense paid on behalf of the related party Mr. Shengyong Li General Manager of Sichuan Wetouch 72 - Employee advance Vision Touch Technology AG 100% owned by Mr. Yong Yang, Sales Director of Sichuan Wetouch 71,812 - Operating expense paid on behalf of the related party Total amounts due from related parties $ 71,884 $ 107,603 Amounts due to related parties are as follows: Amounts due to December 31, related parties Relationship 2019 2018 Note Chengdu Wetouch Technology Co., Ltd (“Chengdu Wetouch”) 94% owned by Mr. Guangde Cai & 2% by Mr. Shengyong Li $ 121,306 $ 117,607 Operating expense paid on behalf of the Company Meishan Wetouch Electronics Technology Co., Ltd. (“Meishan Wetouch”) 95% owned by Mr. Guangde Cai and 5% by Chengdu Wetouch 397,947 - Operating expense paid on behalf of the Company Australia Vtouch Technolody Co., Ltd.(i) 35.36% owned by Mr. Guangde Cai 4,233,949 4,287,092 Interest- free loan Sichuan Vtouch Trading Co., Ltd. 100% owned by Mr. Guangde Cai - 18,991 Operating expense paid on behalf of the Company Mr. Guangde Cai (ii) Chairman and CEO of the Company 215,031 13,423,113 Payable to employee/Interest free advance Mr. Guanying Cai (ii) Daughter of Mr. Guangde Cai - 622,628 Interest- free advance Mr. Shengyong Li (ii) General Manager of Sichuan Wetouch - 2,695 Interest- free advance Mr. Yong Yang Sales Director of Sichuan Wetouch 32,570 24,275 Employee advance/payable to employee Total amounts due to related parties $ 5,000,803 $ 18,496,401 (i) RMB29.5million (equivalent to US$4.2 million) was interest free advance provided by nine shareholders of Australia Vtouch Techonolody Co., Ltd, a related party, for the working capital purposes. (ii) On July 19, 2016, pursuant to a share transfer agreement, HK Wetouch acquired 100% of Sichuan Wetouch with advances from Mr. Guangde Cai, Ms. Guanying Cai and Mr. Shengyong Li. Thus RMB93.5 million (equivalent to US$14.0 million) was recorded as payable to related parties as non-interest bearing advances from our shareholders and senior management mentioned above. On September 30, 2019, the Company made full repayment of above US$14.0 million to Mr. Guangde Cai, Ms. Guanying Cai and Mr. Shengyong Li. |
Income Taxes (Tables) (Hong Kon
Income Taxes (Tables) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Components of the Income Tax Provision (benefit) | The components of the income tax provision (benefit) are as follows: For the Years Ended December 31, 2019 2018 Current tax provision Hong Kong $ - $ - China 2,724,662 2,136,180 2,724,662 2,136,180 Deferred tax provision (benefit) Hong Kong - - China - - - - Income tax provision $ 2,724,662 $ 2,136,180 |
Schedule of Income Tax Rate | The following table reconciles the China statutory rates to the Company’s effective tax rate for the years ended December 31, 2019 and 2018: For the Years Ended December 31, 2019 2018 PRC statutory income tax rate 25.0 % 25.0 % Effect of income tax holiday (10.0 )% (10.0 )% Non-deductible expenses in PRC 1.6 % 0.3 % Effective tax rate 16.6 % 15.3 % |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities (Tables) (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following: December 31, 2019 December 31, 2018 Advance from customers $ 11,719 $ 94,956 Accrued payroll and employee benefits 248,745 187,919 Accrued interest expenses 37,140 24,433 Other tax payables (i) 324,670 755,742 Penalty related to a loan default (ii) 1,701,986 850,686 Others (iii) 16,598 716,048 Accrued expenses and other current liabilities $ 2,340,858 $ 2,629,784 (i) Other tax payables are mainly value added tax payable. (ii) Penalty payable of RMB6.0 million (equivalent to US$0.9 million) and RMB5.8 million (equivalent to US$0.8 million) was accrued for a loan default by Sichuan Wetouch obtained from Chengdu Bank in 2013 and guaranteed by a third party Chengdu SME Credit Guarantee Co., Ltd. (“Chengdu SME”) as of December 31, 2019. On September 16, 2020, Sichuan Wetouch made a full repayment of RMB11.8 million (equivalent to US$1.7 million) of the loan default penalty to Chengdu SME (see Note 12). (iii) Others mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses. |
Deferred Grants (Tables) (Hong
Deferred Grants (Tables) (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Schedule of Remaining Deferred Grants | As of December 31, 2019, the remaining deferred grants are as below: US$ Years ended December 31 2020 $ 229,826 2021 229,826 2023 229,826 2024 176,199 Total deferred grants 865,677 less: current portion (229,826 ) Deferred grants- non-current 623,851 |
Revenues (Tables) (Hong Kong We
Revenues (Tables) (Hong Kong Wetouch Electronics Technology Limited) | 12 Months Ended |
Dec. 31, 2019 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | |
Schedule of Geographical Revenue Information | The Company’s geographical revenue information is set forth below: For the Years Ended December 31, 2019 2018 Sales in PRC $ 26,496,302 $ 27,663,759 Sales in Overseas -Republic of China (ROC, or Taiwan) 6,725,155 5,790,988 -South Korea 6,697,864 3,138,336 -Others 84,782 152,293 Sub-total 13,507,801 9,081,617 Total revenues $ 40,004,103 $ 36,745,376 |
Business Description and Reor_2
Business Description and Reorganization (Details Narrative) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] - HKD ($) | Oct. 09, 2020 | Sep. 11, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Jul. 19, 2016 |
Common stock, shares issued | 10,000 | 10,000 | |||
Common stock, shares outstanding | 10,000 | 10,000 | |||
Subsequent Event [Member] | |||||
Stock issued during the period exchange | 560 | ||||
Common stock, shares issued | 31,396,394 | ||||
Common stock, shares outstanding | 31,396,394 | ||||
BVI Shareholders [Member] | Subsequent Event [Member] | |||||
Stock issued during the period exchange | 28,000,000 | ||||
HK [Member] | |||||
Payments to acquired business | $ 10,000 | ||||
Sichuan Wetouch Technology Co. Ltd. [Member] | |||||
Ownership percentage | 100.00% |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) (Wetouch Holding Group Limited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Wetouch Holding Group Limited [Member] | ||||
Provision or write-off of accounts receivable |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts receivable | $ 17,861,595 | $ 16,120,327 |
Allowance for doubtful accounts | (72,672) | (70,874) |
Accounts receivable, net | $ 17,788,923 | $ 16,049,453 |
Property, Plant and Equipment_5
Property, Plant and Equipment, Net (Details Narrative) (Wetouch Holding Group Limited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Wetouch Holding Group Limited [Member] | ||||
Depreciation expense | $ 244,592 | $ 246,829 | $ 725,708 | $ 739,273 |
Property, Plant and Equipment_6
Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment (Details) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Subtotal | $ 15,531,412 | $ 15,147,242 |
Less: accumulated depreciation | (6,160,993) | (5,279,658) |
Property, plant and equipment, net | 9,370,419 | 9,867,584 |
Buildings [Member] | ||
Subtotal | 9,928,163 | 9,682,590 |
Machinery, Equipment and Furniture [Member] | ||
Subtotal | $ 5,603,249 | $ 5,464,652 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) (Wetouch Holding Group Limited) - Nov. 24, 2020 - Wetouch Holding Group Limited [Member] - Subsequent Event [Member] | USD ($) | CNY (¥) |
Repayment of related party transaction | $ | $ 4,300,000 | |
RMB [Member] | ||
Repayment of related party transaction | ¥ | ¥ 29,500,000 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | ||
Amounts due from related parties | $ 73,633 | $ 71,884 | |
Amounts due to related parties | $ 4,766,080 | 5,000,803 | |
Mr. Shengyong Li [Member] | |||
Related party transaction relationship | General Manager of Sichuan Wetouch | ||
Amounts due from related parties | 72 | ||
Vision Touch Technology AG [Member] | |||
Related party transaction relationship | 100% owned by Mr. Yong Yang, Sales Director of Sichuan Wetouch | ||
Amounts due from related parties | $ 73,633 | 71,812 | |
Chengdu Wetouch Technology Co., Ltd ("Chengdu Wetouch") [Member] | |||
Related party transaction relationship | 94% owned by Mr. Guangde Cai & 2% by Mr. Shengyong Li | ||
Amounts due to related parties | $ 129,370 | 121,306 | |
Meishan Vtouch Electronics Technology Co., Ltd. [Member] | |||
Related party transaction relationship | 95% owned by Mr. Guangde Cai and 5% by Chengdu Wetouch | ||
Amounts due to related parties | $ 74,453 | 397,947 | |
Australia Vtouch Technolody Co., Ltd. [Member] | |||
Related party transaction relationship | [1] | 35.36% owned by Mr. Guangde Cai | |
Amounts due to related parties | [1] | $ 4,341,331 | 4,233,949 |
Mr. Guangde Cai [Member] | |||
Related party transaction relationship | Chairman and CEO of HK Wetouch | ||
Amounts due to related parties | $ 220,926 | 215,031 | |
Mr. Yong Yang [Member] | |||
Related party transaction relationship | Sales Director of Sichuan Wetouch | ||
Amounts due to related parties | $ 32,570 | ||
[1] | As of September 30, 2020, RMB29.5 million (equivalent to US$4.3 million) was interest free advance provided by nine shareholders of Australia Vtouch Technology Co., Ltd, a related party, for the working capital purposes. |
Related Party Transactions - _2
Related Party Transactions - Schedule of Related Party Transactions (Details) (Wetouch Holding Group Limited) (Parenthetical) - 9 months ended Sep. 30, 2020 - Wetouch Holding Group Limited [Member] - Australia Vtouch Technology Co., Ltd. [Member] | USD ($) | CNY (¥) |
Advance interest fee | $ | $ 4,300,000 | |
RMB [Member] | ||
Advance interest fee | ¥ | ¥ 29,500,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] | 9 Months Ended | 36 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Oct. 20, 2023 | Oct. 11, 2020 | |
Preferential income tax rate | 15.00% | |||
Effective income tax rates | 12.10% | 17.20% | ||
Statutory income tax rate | 25.00% | |||
Minimum [Member] | Forecast [Member] | ||||
Preferential income tax rate | 15.00% |
Accrued Expenses and Other Cu_5
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | |
Advance from customers | $ 8,385 | $ 11,719 | |
Accrued payroll and employee benefits | 169,602 | 248,745 | |
Accrued interest expenses | 37,140 | ||
Other tax payables | [1] | 614,740 | 324,670 |
Penalty related to a loan default | [2] | 1,701,986 | |
Others | [3] | 40,492 | 16,598 |
Accrued expenses and other current liabilities | $ 833,219 | $ 2,340,858 | |
[1] | Other tax payables are mainly value added tax payable. | ||
[2] | Penalty payable of RMB6.0 million (equivalent to US$0.9 million) and RMB5.8 million (equivalent to US$0.8 million) was accrued for a loan default by Sichuan Wetouch obtained from Chengdu Bank in 2013 and guaranteed by a third party Chengdu SME Credit Guarantee Co., Ltd. ("Chengdu SME") as of December 31, 2019. (see Note 9).On September 16, 2020, Sichuan Wetouch made a full repayment of RMB11.8 million (equivalent to US$1.7 million) of the above loan default penalties to Chengdu SME. | ||
[3] | Others mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses. |
Accrued Expenses and Other Cu_6
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) (Wetouch Holding Group Limited) (Parenthetical) - Wetouch Holding Group Limited [Member] | Sep. 16, 2020USD ($) | Sep. 16, 2020CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) |
Penalty payable | $ | $ 900,000 | $ 900,000 | ||||
Accrued loan | $ | $ 800,000 | $ 800,000 | ||||
Repayment of loan default penalties | $ | $ 1,700,000 | |||||
RMB [Member] | ||||||
Penalty payable | ¥ | ¥ 6,000,000 | ¥ 6,000,000 | ||||
Accrued loan | ¥ | ¥ 5,800,000 | ¥ 5,800,000 | ||||
Repayment of loan default penalties | ¥ | ¥ 11,800,000 |
Deferred Grants (Details Narrat
Deferred Grants (Details Narrative) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 27, 2014USD ($) | Jan. 27, 2014CNY (¥) | Jan. 14, 2013USD ($) | Jan. 14, 2013CNY (¥) |
Deferred grants | $ | $ 235,655 | $ 229,826 | $ 800,000 | $ 1,800,000 | ||
RMB [Member] | ||||||
Deferred grants | ¥ | ¥ 4,800,000 | ¥ 11,200,000 |
Deferred Grants - Schedule of R
Deferred Grants - Schedule of Remaining Deferred Grants (Details) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 27, 2014 | Jan. 14, 2013 |
Three month ended December 31, 2020 | $ 59,788 | |||
2021 | 239,149 | |||
2022 | 239,149 | |||
2023 | 172,806 | |||
Total deferred grants | 710,892 | |||
less: current portion | (235,655) | $ (229,826) | $ (800,000) | $ (1,800,000) |
Deferred grants- non-current | $ 475,237 | $ 635,851 |
Risks and Uncertainties (Detail
Risks and Uncertainties (Details Narrative) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] - CNY (¥) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Customer Concentration Risk [Member] | Customer One [Member] | ||||
Concentration risk, percentage | 18.50% | 17.90% | 18.00% | 17.40% |
Customer Concentration Risk [Member] | Customer Two [Member] | ||||
Concentration risk, percentage | 16.30% | 15.60% | 17.30% | 16.70% |
Customer Concentration Risk [Member] | Customer Three [Member] | ||||
Concentration risk, percentage | 15.00% | 15.40% | 14.50% | 16.00% |
Customer Concentration Risk [Member] | Customer Four [Member] | ||||
Concentration risk, percentage | 12.50% | 12.60% | 13.50% | 11.50% |
Customer Concentration Risk [Member] | Customer Five [Member] | ||||
Concentration risk, percentage | 12.50% | 11.20% | 11.40% | 11.00% |
Revenue [Member] | ||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Revenue [Member] | Ten Customers [Member] | ||||
Concentration risk, percentage | 81.80% | 98.50% | 97.00% | 64.70% |
Accounts Receivable [Member] | Customers One [Member] | ||||
Concentration risk, percentage | 17.60% | |||
Accounts Receivable [Member] | Customers Two [Member] | ||||
Concentration risk, percentage | 15.00% | |||
Accounts Receivable [Member] | Customers Three [Member] | ||||
Concentration risk, percentage | 14.60% | |||
Accounts Receivable [Member] | Customers Four [Member] | ||||
Concentration risk, percentage | 14.00% | |||
Accounts Receivable [Member] | Customers Five [Member] | ||||
Concentration risk, percentage | 11.60% | |||
Raw Material Purchases [Member] | Supplier [Member] | ||||
Concentration risk, percentage | 10.00% | |||
Raw Material Purchases [Member] | Two Supplier [Member] | ||||
Concentration risk, percentage | 28.10% | |||
Raw Material Purchases [Member] | One Supplier [Member] | ||||
Concentration risk, percentage | 13.30% | |||
Raw Material Purchases [Member] | Three Supplier [Member] | ||||
Concentration risk, percentage | 36.70% | 34.00% | ||
RMB [Member] | Maximum [Member] | ||||
Bank deposits | ¥ 500,000 | ¥ 500,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] | Sep. 30, 2020USD ($) | Sep. 30, 2020CNY (¥) | Sep. 16, 2020USD ($) | Sep. 16, 2020CNY (¥) | May 13, 2020CNY (¥) | Nov. 21, 2019USD ($) | Nov. 21, 2019CNY (¥) | Sep. 11, 2019USD ($) | Sep. 11, 2019CNY (¥) | Aug. 22, 2018USD ($) | Aug. 22, 2018CNY (¥) | Oct. 21, 2014USD ($) | Jul. 31, 2014USD ($) | Jul. 31, 2014CNY (¥) | Jul. 31, 2014USD ($) | Mar. 19, 2014USD ($) | Jul. 05, 2013USD ($) | Dec. 31, 2020CNY (¥) | Sep. 30, 2020CNY (¥) | Mar. 12, 2020USD ($) | Mar. 12, 2020CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | May 26, 2015USD ($) | May 26, 2015CNY (¥) | Oct. 21, 2014CNY (¥) | Jul. 31, 2014CNY (¥) | Jul. 04, 2014USD ($) | Jul. 04, 2014CNY (¥) | May 23, 2014USD ($) | May 23, 2014CNY (¥) | Apr. 21, 2014USD ($) | Apr. 21, 2014CNY (¥) | Mar. 19, 2014CNY (¥) | Jul. 05, 2013CNY (¥) |
Repayment of loan default penalties | $ | $ 1,700,000 | |||||||||||||||||||||||||||||||||||
Bank of Chengdu [Member] | Chengdu Wetouch Technology Co., Ltd ("Chengdu Wetouch") [Member] | Guarantee to Debt Instrument Loan One [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,600,000 | $ 2,600,000 | ||||||||||||||||||||||||||||||||||
Debt instrument, description | Sichuan Wetouch, Mr. Guangde Cai and his 60% controlled Xinjiang Wetouch and his 95% controlled Meishan Wetouch, as well as two unrelated individuals acting as counter guarantors for this loan. | |||||||||||||||||||||||||||||||||||
Deyang Bank Co., Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Two [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 1,300,000 | |||||||||||||||||||||||||||||||||||
Deyang Bank Co., Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Three [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,200,000 | |||||||||||||||||||||||||||||||||||
Sichuan Tianfu Bank Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Four [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,300,000 | |||||||||||||||||||||||||||||||||||
Agricultural Bank of China Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Five [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,700,000 | |||||||||||||||||||||||||||||||||||
Chengdu Bank Co, Ltd Gaoxin Branch [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Six [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,200,000 | |||||||||||||||||||||||||||||||||||
Sichuan Yitong Financing Guarantee Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Seven [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 3,500,000 | |||||||||||||||||||||||||||||||||||
Debt instrument, description | Sichuan Wetouch, Chengdu Wetouch, Mr.Guangde Cai and his 60% owned Xinjiang Wetouch, together with one unrelated guarantee company Sichuan Yitong Financing Guarantee Co., Ltd. | |||||||||||||||||||||||||||||||||||
Repayment of loan during period | $ | $ 1,500,000 | |||||||||||||||||||||||||||||||||||
RMB [Member] | ||||||||||||||||||||||||||||||||||||
Repayment of loan default penalties | ¥ 11,800,000 | |||||||||||||||||||||||||||||||||||
RMB [Member] | Xinjiang Wetouch [Member] | Guarantee to Debt Instrument Loan One [Member] | ||||||||||||||||||||||||||||||||||||
Repayment of loan during period | ¥ 5,900,000 | |||||||||||||||||||||||||||||||||||
RMB [Member] | Bank of Chengdu [Member] | Chengdu Wetouch Technology Co., Ltd ("Chengdu Wetouch") [Member] | Guarantee to Debt Instrument Loan One [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 17,000,000 | |||||||||||||||||||||||||||||||||||
RMB [Member] | Deyang Bank Co., Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Two [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 9,000,000 | |||||||||||||||||||||||||||||||||||
RMB [Member] | Deyang Bank Co., Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Three [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 15,000,000 | |||||||||||||||||||||||||||||||||||
RMB [Member] | Sichuan Tianfu Bank Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Four [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 14,900,000 | |||||||||||||||||||||||||||||||||||
RMB [Member] | Agricultural Bank of China Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Five [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 17,300,000 | |||||||||||||||||||||||||||||||||||
RMB [Member] | Chengdu Bank Co, Ltd Gaoxin Branch [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Six [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 15,000,000 | |||||||||||||||||||||||||||||||||||
RMB [Member] | Sichuan Yitong Financing Guarantee Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Seven [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 26,000,000 | |||||||||||||||||||||||||||||||||||
Repayment of loan during period | ¥ 10,500,000 | |||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | 8,900,000 | $ 8,900,000 | ||||||||||||||||||||||||||||||||||
Repayment of loan during period | $ | 8,000,000 | |||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Related to 30% of Remaining Loan Repaid By Chengdu SME [Member] | ||||||||||||||||||||||||||||||||||||
Loan, default penalty | $ | 800,000 | 800,000 | $ 800,000 | $ 800,000 | ||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Related to 70% of Remaining Loan Repaid By Chengdu SME [Member] | ||||||||||||||||||||||||||||||||||||
Loan, default penalty | $ | $ 900,000 | $ 900,000 | $ 900,000 | $ 900,000 | ||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Bank of Chengdu [Member] | ||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 8.61% | 8.61% | ||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | 55,000,000 | |||||||||||||||||||||||||||||||||||
Repayment of loan during period | ¥ 5,000,000 | |||||||||||||||||||||||||||||||||||
Debt instrument, maturity date | Aug. 22, 2018 | Aug. 22, 2018 | ||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | Related to 30% of Remaining Loan Repaid By Chengdu SME [Member] | ||||||||||||||||||||||||||||||||||||
Loan, default penalty | ¥ 5,800,000 | ¥ 5,800,000 | 5,800,000 | |||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | Related to 70% of Remaining Loan Repaid By Chengdu SME [Member] | ||||||||||||||||||||||||||||||||||||
Loan, default penalty | ¥ 6,000,000 | ¥ 6,000,000 | ¥ 6,000,000 | |||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | ||||||||||||||||||||||||||||||||||||
Loan, default penalty | $ | $ 1,700,000 | $ 1,700,000 | ||||||||||||||||||||||||||||||||||
Repayment of loan during period | $ | $ 8,000,000 | |||||||||||||||||||||||||||||||||||
Repayment of loan default penalties | $ | $ 1,700,000 | |||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | Bank of Chengdu [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 9,800,000 | |||||||||||||||||||||||||||||||||||
Debt instrument, description | Chengdu SME Credit Guarantee Co., Ltd ("Chengdu SME"), a third party, provided a 70% guarantee and Bank of Chengdu retained 30% of the risk, while Chengdu Wetouch and Mr. Guangde Cai (related parties, see Note 4) provided joint and several liability guarantee for 100% of the loan. | |||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | ||||||||||||||||||||||||||||||||||||
Loan, default penalty | ¥ 11,800,000 | |||||||||||||||||||||||||||||||||||
Repayment of loan during period | ¥ 55,000,000 | |||||||||||||||||||||||||||||||||||
Repayment of loan default penalties | ¥ 11,800,000 | |||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | Bank of Chengdu [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 60,000,000 | |||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | ||||||||||||||||||||||||||||||||||||
Asset recovery, value | $ | $ 1,700,000 | |||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | Chengdu Bank Co, Ltd [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,200,000 | |||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | RMB [Member] | ||||||||||||||||||||||||||||||||||||
Asset recovery, value | ¥ 12,000,000 | |||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | RMB [Member] | Forecast [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 12,000,000 | |||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | RMB [Member] | Chengdu Bank Co, Ltd [Member] | ||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ 15,000,000 | |||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | Shigaotianfu Investment and Renshou Tenvi [Member] | Chengdu Bank Co, Ltd [Member] | ||||||||||||||||||||||||||||||||||||
Debt instrument, description | To support the local economic development as well as Chengdu Wetouch, two government-backed companies, Sichuan Renshou Shigao Tianfu Investment Co., Ltd. ("Shigaotianfu Investment") and Renshou Tengyi Landscaping Co., Ltd. ("Renshou Tenyi") provided their bank deposits of RMB 12.0 million (equivalent to US$1.7 million) as pledge, while Mr. Guangde Cai and Sichuan Wetouch also provided counter-guarantee | |||||||||||||||||||||||||||||||||||
Pledged bank deposits for debt, value | $ | $ 1,700,000 | |||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | Shigaotianfu Investment and Renshou Tenvi [Member] | RMB [Member] | Chengdu Bank Co, Ltd [Member] | ||||||||||||||||||||||||||||||||||||
Pledged bank deposits for debt, value | ¥ 12,000,000 |
Revenues - Schedule of Geograph
Revenues - Schedule of Geographical Revenue Information (Details) (Wetouch Holding Group Limited) - Wetouch Holding Group Limited [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Sales in PRC | $ 8,386,376 | $ 8,723,761 | $ 13,940,497 | $ 20,371,987 |
Sub-total | 3,517,744 | 3,860,075 | 6,728,775 | 10,212,104 |
Total Revenue | 11,904,120 | 12,583,836 | 20,669,272 | 30,584,091 |
Republic of China (ROC, or Taiwan) [Member] [Member] | ||||
Sub-total | 1,967,824 | 1,941,992 | 3,652,757 | 4,974,950 |
South Korea [Member] | ||||
Sub-total | 1,508,698 | 1,894,824 | 2,993,888 | 5,135,774 |
Others [Member] | ||||
Sub-total | $ 41,222 | $ 23,259 | $ 82,130 | $ 101,380 |
Description of Business (Detail
Description of Business (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) | Jul. 19, 2016 |
Hong Kong Wetouch Electronics Technology Limited [Member] | Sichuan Wetouch Technology Co., Ltd [Member] | |
Ownership percentage | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | Apr. 01, 2019 | May 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for uncollectable balances | $ 70,874 | $ 71,764 | ||
Bad debts | 21,583 | |||
Inventory reserve | ||||
Income tax percentage description | Greater than 50% | |||
Penalties or interest | ||||
Value added tax rate | 13.00% | 16.00% | 17.00% | |
Value added tax, description | The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. | |||
Dilutive shares | ||||
Land Use Right [Member] | ||||
Intangible asset useful lives | 50 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Currency Exchange Rates (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | Dec. 31, 2019 | Dec. 31, 2018 |
Year-End Spot Rate US$1=RMB [Member] | ||
Foreign exchange rate | 6.9618 | 6.8755 |
Average Rate US$1=RMB [Member] | ||
Foreign exchange rate | 6.9081 | 6.6090 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Property Plant and Equipment (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | 12 Months Ended |
Dec. 31, 2019 | |
Buildings [Member] | |
Property, Plant and equipment, estimated useful lives | 20 years |
Machinery and Equipment [Member] | |
Property, Plant and equipment, estimated useful lives | 10 years |
Office and Electric Equipment [Member] | |
Property, Plant and equipment, estimated useful lives | 3 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Finite Lived Intangible Assets (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | 12 Months Ended |
Dec. 31, 2019 | |
Land Use Right [Member] | |
Intangible asset useful lives | 50 years |
Patents [Member] | |
Intangible asset useful lives | 10 years |
Property, Plant and Equipment_7
Property, Plant and Equipment, Net (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | ||
Depreciation expense | $ 979,270 | $ 1,025,012 |
Property, Plant and Equipment_8
Property, Plant and Equipment, Net - Schedule of Property and Equipment (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Subtotal | $ 15,147,242 | $ 15,332,338 |
Less: accumulated depreciation | (5,279,658) | (4,362,015) |
Property, plant and equipment, net | 9,867,584 | 10,970,323 |
Buildings [Member] | ||
Subtotal | 9,682,590 | 9,804,124 |
Machinery, Equipment and Furniture [Member] | ||
Subtotal | $ 5,464,652 | $ 5,528,214 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Hong Kong Wetouch Electronics Technology Limited [Member] | ||
Amortization expense | $ 58,671 | $ 61,326 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Subtotal | $ 1,344,152 | $ 1,361,024 |
Less: accumulated amortization Subtotal | (355,100) | (300,608) |
Intangible assets, net | 989,052 | 1,060,416 |
Patents [Member] | ||
Subtotal | 391,697 | 396,614 |
Less: accumulated amortization Subtotal | (234,456) | (197,738) |
Land Use Right [Member] | ||
Subtotal | 952,455 | 964,410 |
Less: accumulated amortization Subtotal | $ (120,644) | $ (102,870) |
Intangible Assets, Net - Sche_2
Intangible Assets, Net - Schedule of Intangible Assets Amortization Expense (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
2020 | $ 58,671 | |
2021 | 58,671 | |
2022 | 58,671 | |
2023 | 57,038 | |
2024 | 27,432 | |
Thereafter | 728,569 | |
Total expense | $ 989,052 | $ 1,060,416 |
Borrowings (Details Narrative)
Borrowings (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | Jun. 15, 2020USD ($) | Jun. 15, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Apr. 02, 2017CNY (¥) | Sep. 02, 2016CNY (¥) |
Interest expense | $ 16,884 | $ 741,936 | ||||
Sichuan Renshou Shigao Tianfu Investment Co., Ltd. [Member] | ||||||
Annual interest rate | 8.20% | |||||
Sichuan Wetouch Technology Co., Ltd [Member] | ||||||
Annual interest rate | 8.20% | |||||
Repayment of short term bank loans | $ 430,923 | |||||
Interest expense | 12,707 | 24,433 | ||||
Sichuan Wetouch Technology Co., Ltd [Member] | RMB [Member] | ||||||
Repayment of short term bank loans | ¥ | ¥ 3,000,000 | |||||
Sichuan Wetouch Technology Co., Ltd [Member] | Six-Month Loan [Member] | ||||||
Borrowings | 143,641 | 145,444 | ||||
Sichuan Wetouch Technology Co., Ltd [Member] | Six-Month Loan [Member] | RMB [Member] | ||||||
Borrowings | ¥ | ¥ 1,000,000 | |||||
Sichuan Wetouch Technology Co., Ltd [Member] | Six-Month Loan One [Member] | ||||||
Borrowings | $ 287,282 | $ 290,888 | ||||
Sichuan Wetouch Technology Co., Ltd [Member] | Six-Month Loan One [Member] | RMB [Member] | ||||||
Borrowings | ¥ | ¥ 2,000,000 |
Related Party Transactions - _3
Related Party Transactions - Schedule of Related Party Transactions (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Amounts due from related parties | $ 71,884 | $ 107,603 | |
Amounts due to related parties | $ 5,000,803 | 18,496,401 | |
Meishan Wetouch Electronics Technology Co., Ltd. [Member] | |||
Related party transaction relationship | 95% owned by Mr. Guangde Cai and 5% by Chengdu Wetouch Technology Co., Ltd ("Chengdu Wetouch") | ||
Amounts due from related parties | 107,603 | ||
Mr. Shengyong Li [Member] | |||
Related party transaction relationship | General Manager of Sichuan Wetouch | ||
Amounts due from related parties | $ 72 | ||
Amounts due to related parties | [1] | 2,695 | |
Vision Touch Technology AG [Member] | |||
Related party transaction relationship | 100% owned by Mr. Yong Yang, Sales Director of Sichuan Wetouch | ||
Amounts due from related parties | $ 71,812 | ||
Chengdu Wetouch Technology Co., Ltd ("Chengdu Wetouch") [Member] | |||
Related party transaction relationship | 94% owned by Mr. Guangde Cai & 2% by Mr. Shengyong Li | ||
Amounts due to related parties | $ 121,306 | 117,607 | |
Meishan Wetouch Electronics Technology Co., Ltd. ("Meishan Wetouch") [Member] | |||
Related party transaction relationship | 95% owned by Mr. Guangde Cai and 5% by Chengdu Wetouch | ||
Amounts due to related parties | $ 397,947 | ||
Australia Vtouch Technolody Co., Ltd. [Member] | |||
Related party transaction relationship | 35.36% owned by Mr. Guangde Cai | ||
Amounts due to related parties | [2] | $ 4,233,949 | 4,287,092 |
Sichuan Vtouch Trading Co., Ltd. [Member] | |||
Related party transaction relationship | 100% owned by Mr. Guangde Cai | ||
Amounts due to related parties | 18,991 | ||
Mr. Guangde Cai [Member] | |||
Related party transaction relationship | Chairman and CEO of the Company | ||
Amounts due to related parties | [1] | $ 215,031 | 13,423,113 |
Mr. Guanying Cai [Member] | |||
Related party transaction relationship | Daughter of Mr. Guangde Cai | ||
Amounts due to related parties | [1] | 622,628 | |
Mr. Yong Yang [Member] | |||
Related party transaction relationship | Sales Director of Sichuan Wetouch | ||
Amounts due to related parties | $ 32,570 | $ 24,275 | |
[1] | On July 19, 2016, pursuant to a share transfer agreement, HK Wetouch acquired 100% of Sichuan Wetouch with advances from Mr. Guangde Cai, Ms. Guanying Cai and Mr. Shengyong Li. Thus RMB93.5 million (equivalent to US$14.0 million) was recorded as payable to related parties as non-interest bearing advances from our shareholders and senior management mentioned above. On September 30, 2019, the Company made full repayment of above US$14.0 million to Mr. Guangde Cai, Ms. Guanying Cai and Mr. Shengyong Li. | ||
[2] | RMB29.5million (equivalent to US$4.2 million) was interest free advance provided by nine shareholders of Australia Vtouch Techonolody Co., Ltd, a related party, for the working capital purposes. |
Related Party Transactions - _4
Related Party Transactions - Schedule of Related Party Transactions (Details) (Hong Kong Wetouch Electronics Technology Limited) (Parenthetical) - Hong Kong Wetouch Electronics Technology Limited [Member] | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Jul. 19, 2016USD ($) | Jul. 19, 2016CNY (¥) |
Mr. Guangde Cai, Ms. Guanying Cai and Mr. Shengyong Li [Member] | |||||
Repayment of related party | $ 14,000,000 | ||||
Australia Vtouch Technolody Co., Ltd. [Member] | |||||
Advance interest fee | $ 4,200,000 | ||||
Australia Vtouch Technolody Co., Ltd. [Member] | RMB [Member] | |||||
Advance interest fee | ¥ | ¥ 29,500,000 | ||||
Sichuan Vtouch Trading Co., Ltd. [Member] | Share Transfer Agreement [Member] | |||||
Acquired percentage | 100.00% | 100.00% | |||
Sichuan Vtouch Trading Co., Ltd. [Member] | Share Transfer Agreement [Member] | Our Shareholders and Senior Management [Member] | |||||
Advances from affiliate | $ 14,000,000 | ||||
Sichuan Vtouch Trading Co., Ltd. [Member] | RMB [Member] | Share Transfer Agreement [Member] | Our Shareholders and Senior Management [Member] | |||||
Advances from affiliate | ¥ | ¥ 93,500,000 |
Income Taxes (Details Narrati_2
Income Taxes (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | Jan. 01, 2008 | Dec. 31, 2019 | Dec. 31, 2018 |
Income tax rate | 16.60% | 15.30% | |
Statutory income tax | 25.00% | 25.00% | |
Deferred tax assets | |||
Corporate Income Tax [Member] | |||
Income tax description | The CIT Law and its implementation rules impose a withholding income tax at 10%, unless reduced by a tax treaty or arrangement, on the amount of dividends distributed by a PRC-resident enterprise to its immediate holding company outside the PRC that are related to earnings accumulated beginning on January 1, 2008. | ||
Hong Kong [Member] | |||
Income tax rate | 16.50% | ||
PRC [Member] | |||
Statutory income tax | 25.00% | ||
Income tax description | Under PRC CIT Law, domestic enterprises and Foreign Investment Enterprises ("FIEs") are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on a case-by-case basis by local government as preferential tax treatment to High and New Technology Enterprises ("HNTEs"). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for their HNTE status every three years. Sichuan Wetouch was approved as a HNTE and is entitled to a reduced income tax rate of 15% beginning October 11, 2014 and renewed with a new term from October 11, 2017 to October 11, 2020. |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of the Income Tax Provision (benefit) (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current tax provision | $ 2,724,662 | $ 2,136,180 |
Deferred tax provision (benefit) | ||
Income tax provision | 2,724,662 | 2,136,180 |
Hong Kong [Member] | ||
Current tax provision | ||
Deferred tax provision (benefit) | ||
China [Member] | ||
Current tax provision | 2,724,662 | 2,136,180 |
Deferred tax provision (benefit) |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Rate (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
PRC statutory income tax rate | 25.00% | 25.00% |
Effect of income tax holiday | (10.00%) | (10.00%) |
Non-deductible expenses in PRC | 1.60% | 0.30% |
Effective tax rate | 16.60% | 15.30% |
Accrued Expenses and Other Cu_7
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |
Advance from customers | $ 11,719 | $ 94,956 | |
Accrued payroll and employee benefits | 248,745 | 187,919 | |
Accrued interest expenses | 37,140 | 24,433 | |
Other tax payables | [1] | 324,670 | 755,742 |
Penalty related to a loan default | [1] | 1,701,986 | 850,686 |
Others | [2] | 16,598 | 716,048 |
Accrued expenses and other current liabilities | $ 2,340,858 | $ 2,629,784 | |
[1] | Penalty payable of RMB6.0 million (equivalent to US$0.9 million) and RMB5.8 million (equivalent to US$0.8 million) was accrued for a loan default by Sichuan Wetouch obtained from Chengdu Bank in 2013 and guaranteed by a third party Chengdu SME Credit Guarantee Co., Ltd. ("Chengdu SME") as of December 31, 2019. On September 16, 2020, Sichuan Wetouch made a full repayment of RMB11.8 million (equivalent to US$1.7 million) of the loan default penalty to Chengdu SME (see Note 12). | ||
[2] | Others mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses. |
Accrued Expenses and Other Cu_8
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) (Hong Kong Wetouch Electronics Technology Limited) (Parenthetical) - 12 months ended Dec. 31, 2019 - Hong Kong Wetouch Electronics Technology Limited [Member] | USD ($) | CNY (¥) | CNY (¥) |
Penalty payable | $ | $ 900,000 | ||
Accrued loan | $ | 800,000 | ||
Repayment of loan default penalties | $ | $ 1,700,000 | ||
RMB [Member] | |||
Penalty payable | ¥ | ¥ 6,000,000 | ||
Accrued loan | ¥ | ¥ 5,800,000 | ||
Repayment of loan default penalties | ¥ | ¥ 11,800,000 |
Deferred Grants (Details Narr_2
Deferred Grants (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 27, 2014USD ($) | Jan. 27, 2014CNY (¥) | Jan. 14, 2013USD ($) | Jan. 14, 2013CNY (¥) |
Deferred grants | $ | $ 229,826 | $ 232,710 | $ 800,000 | $ 1,800,000 | ||
RMB [Member] | ||||||
Deferred grants | ¥ | ¥ 4,800,000 | ¥ 11,200,000 |
Deferred Grants - Schedule of_2
Deferred Grants - Schedule of Remaining Deferred Grants (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 27, 2014 | Jan. 14, 2013 |
2020 | $ 229,826 | |||
2021 | 229,826 | |||
2023 | 229,826 | |||
2024 | 176,199 | |||
Total deferred grants | 865,677 | |||
less: current portion | (229,826) | $ (232,710) | $ (800,000) | $ (1,800,000) |
Deferred grants- non-current | $ 635,851 | $ 876,542 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥) | |
Ordinary shares, shares authorized | shares | 10,000 | 10,000 | ||
Ordinary shares, par value | $ / shares | $ 0.1288 | $ 0.1288 | ||
Ordinary Shares, shares issued | shares | 10,000 | 10,000 | ||
Reserve fund | $ | $ 1,715,524 | |||
Minimum [Member] | ||||
Statutory surplus reserve | 10.00% | 10.00% | ||
Maximum [Member] | ||||
Statutory surplus reserve | 50.00% | 50.00% | ||
HK [Member] | ||||
Ordinary shares, par value | $ / shares | $ 1 | |||
RMB [Member] | ||||
Reserve fund | ¥ | ¥ 12,216,247 |
Risks and Uncertainties (Deta_2
Risks and Uncertainties (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - CNY (¥) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||
Concentration risk, percentage | 16.70% | 25.50% |
Revenue [Member] | Customer Concentration Risk [Member] | Customers Two [Member] | ||
Concentration risk, percentage | 16.60% | 17.60% |
Revenue [Member] | Customer Concentration Risk [Member] | Customers Three [Member] | ||
Concentration risk, percentage | 13.10% | 15.30% |
Revenue [Member] | Customer Concentration Risk [Member] | Customers Four [Member] | ||
Concentration risk, percentage | 12.60% | 10.20% |
Revenue [Member] | Customer Concentration Risk [Member] | Customers Five [Member] | ||
Concentration risk, percentage | 11.60% | |
Revenue [Member] | Customer Concentration Risk [Member] | Ten Customers [Member] | ||
Concentration risk, percentage | 98.60% | 99.00% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||
Concentration risk, percentage | 18.60% | 17.30% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customers Two [Member] | ||
Concentration risk, percentage | 17.40% | 14.70% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customers Three [Member] | ||
Concentration risk, percentage | 15.80% | 14.00% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customers Four [Member] | ||
Concentration risk, percentage | 14.00% | 13.70% |
Raw Material Purchases [Member] | Supplier [Member] | Maximum [Member] | ||
Concentration risk, percentage | 10.00% | 10.00% |
Raw Material Purchases [Member] | Three Suppliers [Member] | ||
Concentration risk, percentage | 33.70% | |
Raw Material Purchases [Member] | One Supplier [Member] | ||
Concentration risk, percentage | 14.80% | |
RMB [Member] | ||
Bank deposits | ¥ 500,000 |
Commitments and Contingencies_4
Commitments and Contingencies (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] | Sep. 16, 2020USD ($) | Sep. 16, 2020CNY (¥) | May 13, 2020CNY (¥) | Dec. 31, 2019USD ($) | Nov. 21, 2019USD ($) | Nov. 21, 2019CNY (¥) | Sep. 11, 2019USD ($) | Sep. 11, 2019CNY (¥) | Aug. 22, 2018USD ($) | Aug. 22, 2018CNY (¥) | Oct. 21, 2014USD ($) | Jul. 31, 2014USD ($) | Jul. 31, 2014CNY (¥) | Jul. 31, 2014USD ($) | Mar. 19, 2014USD ($) | Jul. 05, 2013USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2020CNY (¥) | Mar. 12, 2020USD ($) | Mar. 12, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | May 26, 2015USD ($) | May 26, 2015CNY (¥) | Oct. 21, 2014CNY (¥) | Jul. 31, 2014CNY (¥) | Jul. 04, 2014USD ($) | Jul. 04, 2014CNY (¥) | May 23, 2014USD ($) | May 23, 2014CNY (¥) | Apr. 21, 2014USD ($) | Apr. 21, 2014CNY (¥) | Mar. 19, 2014CNY (¥) | Jul. 05, 2013CNY (¥) |
Repayment of loan default penalties | $ | $ 1,700,000 | ||||||||||||||||||||||||||||||||||||
Bank of Chengdu [Member] | Chengdu Wetouch Technology Co., Ltd ("Chengdu Wetouch") [Member] | Guarantee to Debt Instrument Loan One [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,600,000 | $ 2,600,000 | |||||||||||||||||||||||||||||||||||
Debt instrument, description | Sichuan Wetouch, Mr. Guangde Cai and his 60% controlled Xinjiang Wetouch and his 95% controlled Meishan Wetouch, as well as two unrelated individuals acting as counter guarantors for this loan. | ||||||||||||||||||||||||||||||||||||
Deyang Bank Co., Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Two [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 1,300,000 | ||||||||||||||||||||||||||||||||||||
Deyang Bank Co., Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Three [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,200,000 | ||||||||||||||||||||||||||||||||||||
Sichuan Tianfu Bank Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Four [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,300,000 | ||||||||||||||||||||||||||||||||||||
Agricultural Bank of China Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Five [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,700,000 | ||||||||||||||||||||||||||||||||||||
Chengdu Bank Co, Ltd Gaoxin Branch [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Six [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,200,000 | ||||||||||||||||||||||||||||||||||||
Sichuan Yitong Financing Guarantee Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Seven [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 3,500,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument, description | Sichuan Wetouch, Chengdu Wetouch, Mr.Guangde Cai and his 60% owned Xinjiang Wetouch, together with one unrelated guarantee company Sichuan Yitong Financing Guarantee Co., Ltd. | ||||||||||||||||||||||||||||||||||||
Repayment of loan during period | $ | $ 1,500,000 | ||||||||||||||||||||||||||||||||||||
RMB [Member] | |||||||||||||||||||||||||||||||||||||
Repayment of loan default penalties | ¥ | ¥ 11,800,000 | ||||||||||||||||||||||||||||||||||||
RMB [Member] | Xinjiang Wetouch [Member] | Guarantee to Debt Instrument Loan One [Member] | |||||||||||||||||||||||||||||||||||||
Repayment of loan during period | ¥ | ¥ 5,900,000 | ||||||||||||||||||||||||||||||||||||
RMB [Member] | Bank of Chengdu [Member] | Chengdu Wetouch Technology Co., Ltd ("Chengdu Wetouch") [Member] | Guarantee to Debt Instrument Loan One [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 17,000,000 | ||||||||||||||||||||||||||||||||||||
RMB [Member] | Deyang Bank Co., Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Two [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 9,000,000 | ||||||||||||||||||||||||||||||||||||
RMB [Member] | Deyang Bank Co., Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Three [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 15,000,000 | ||||||||||||||||||||||||||||||||||||
RMB [Member] | Sichuan Tianfu Bank Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Four [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 14,900,000 | ||||||||||||||||||||||||||||||||||||
RMB [Member] | Agricultural Bank of China Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Five [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 17,300,000 | ||||||||||||||||||||||||||||||||||||
RMB [Member] | Chengdu Bank Co, Ltd Gaoxin Branch [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Six [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 15,000,000 | ||||||||||||||||||||||||||||||||||||
RMB [Member] | Sichuan Yitong Financing Guarantee Co.,Ltd [Member] | Sichuan Wetouch Mr. Guangde Cai [Member] | Guarantee to Debt Instrument Loan Seven [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 26,000,000 | ||||||||||||||||||||||||||||||||||||
Repayment of loan during period | ¥ | ¥ 10,500,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | 8,900,000 | $ 8,900,000 | |||||||||||||||||||||||||||||||||||
Repayment of loan during period | $ | 8,000,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Related to 30% of Remaining Loan Repaid By Chengdu SME [Member] | |||||||||||||||||||||||||||||||||||||
Loan, default penalty | $ | 800,000 | 800,000 | $ 800,000 | $ 800,000 | |||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Related to 70% of Remaining Loan Repaid By Chengdu SME [Member] | |||||||||||||||||||||||||||||||||||||
Loan, default penalty | $ | $ 900,000 | $ 900,000 | $ 900,000 | $ 900,000 | |||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Bank of Chengdu [Member] | |||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 8.61% | 8.61% | |||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | 55,000,000 | ||||||||||||||||||||||||||||||||||||
Repayment of loan during period | ¥ | ¥ 5,000,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument, maturity date | Aug. 22, 2018 | Aug. 22, 2018 | |||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | Related to 30% of Remaining Loan Repaid By Chengdu SME [Member] | |||||||||||||||||||||||||||||||||||||
Loan, default penalty | ¥ | ¥ 5,800,000 | ¥ 5,800,000 | 5,800,000 | ||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | Related to 70% of Remaining Loan Repaid By Chengdu SME [Member] | |||||||||||||||||||||||||||||||||||||
Loan, default penalty | ¥ | ¥ 6,000,000 | ¥ 6,000,000 | ¥ 6,000,000 | ||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | |||||||||||||||||||||||||||||||||||||
Loan, default penalty | $ | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | ||||||||||||||||||||||||||||||||||
Repayment of loan during period | $ | $ 8,000,000 | ||||||||||||||||||||||||||||||||||||
Repayment of loan default penalties | $ | $ 1,700,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | Bank of Chengdu [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 9,800,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument, description | Chengdu SME Credit Guarantee Co., Ltd ("Chengdu SME"), a third party, provided a 70% guarantee and Bank of Chengdu retained 30% of the risk, while Chengdu Wetouch and Mr. Guangde Cai (related parties, see Note 4) provided joint and several liability guarantee for 100% of the loan. | ||||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | |||||||||||||||||||||||||||||||||||||
Loan, default penalty | ¥ | ¥ 11,800,000 | ||||||||||||||||||||||||||||||||||||
Repayment of loan during period | ¥ | ¥ 55,000,000 | ||||||||||||||||||||||||||||||||||||
Repayment of loan default penalties | ¥ | ¥ 11,800,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | RMB [Member] | Bank of Chengdu [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 60,000,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | |||||||||||||||||||||||||||||||||||||
Asset recovery, value | $ | 1,700,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | Chengdu Bank Co, Ltd [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ | $ 2,200,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | RMB [Member] | |||||||||||||||||||||||||||||||||||||
Asset recovery, value | $ | $ 12,000,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | RMB [Member] | Forecast [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 12,000,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | RMB [Member] | Chengdu Bank Co, Ltd [Member] | |||||||||||||||||||||||||||||||||||||
Loan obtained during period | ¥ | ¥ 15,000,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | Shigaotianfu Investment and Renshou Tenvi [Member] | Chengdu Bank Co, Ltd [Member] | |||||||||||||||||||||||||||||||||||||
Debt instrument, description | To support the local economic development as well as Chengdu Wetouch, two government-backed companies, Sichuan Renshou Shigao Tianfu Investment Co., Ltd. ("Shigaotianfu Investment") and Renshou Tengyi Landscaping Co., Ltd. ("Renshou Tenyi") provided their bank deposits of RMB 12.0 million (equivalent to US$1.7 million) as pledge, while Mr. Guangde Cai and Sichuan Wetouch also provided counter-guarantee | ||||||||||||||||||||||||||||||||||||
Pledged bank deposits for debt, value | $ | $ 1,700,000 | ||||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | Shigaotianfu Investment and Renshou Tenvi [Member] | RMB [Member] | Chengdu Bank Co, Ltd [Member] | |||||||||||||||||||||||||||||||||||||
Pledged bank deposits for debt, value | ¥ | ¥ 12,000,000 |
Revenues - Schedule of Geogra_2
Revenues - Schedule of Geographical Revenue Information (Details) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Sales in PRC | $ 26,496,302 | $ 27,663,759 |
Sub-total | 13,507,801 | 9,081,617 |
Total revenues | 40,004,103 | 36,745,376 |
Republic of China (ROC, or Taiwan) [Member] | ||
Sub-total | 6,725,155 | 5,790,988 |
South Korea [Member] | ||
Sub-total | 6,697,864 | 3,138,336 |
Others [Member] | ||
Sub-total | $ 84,782 | $ 152,293 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) (Hong Kong Wetouch Electronics Technology Limited) - Hong Kong Wetouch Electronics Technology Limited [Member] - Renshou Shigao [Member] - Repayment Agreement [Member] | 12 Months Ended | |||||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | |
Loans | $ | $ 430,923 | $ 430,923 | ||||
Minimum [Member] | ||||||
Interest payable | $ | $ 100,000 | |||||
Maximum [Member] | ||||||
Interest payable | $ | $ 40,000 | |||||
RMB [Member] | ||||||
Loans | ¥ | ¥ 3,000,000 | ¥ 3,000,000 | ||||
RMB [Member] | Minimum [Member] | ||||||
Interest payable | ¥ | ¥ 800,000 | |||||
RMB [Member] | Maximum [Member] | ||||||
Interest payable | ¥ | ¥ 300,000 |