Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CHINA RECYCLING ENERGY CORP | |
Entity Central Index Key | 0000721693 | |
Trading Symbol | CREG | |
Amendment Flag | true | |
Amendment Description | In response to a comment letter received from the Securities and Exchange Commission (the "SEC"), dated December 4, 2018, China Recycling Energy Corporation (the "Company," "we," "us" or "our") is filing this Amendment No. 1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, originally filed with the SEC on May 15, 2018 (the "Original Form 10-Q") for the following purposes: reevaluate the leases for Erdos TCH as a result of a supplemental agreement effective on May 1, 2016, wherein Erdos TCH cancelled monthly minimum lease payments from Erdos, charged Erdos based on actual electricity sold at RMB 0.30 / Kwh, and concluded the lease payments that depend on a factor directly related to the future use of the leased property were contingent rentals and, accordingly, were excluded from minimum lease payments in their entirety. The Company therefore wrote off the net investment receivables of these leases on May 1, 2016. This Form 10-Q/A should be read in conjunction with the Company's periodic filings made with the SEC subsequent to the filing date of the Original Form 10-Q, including any amendments to those filings, as well as any Current Reports, filed on Form 8-K subsequent to the date of the Original Form 10-Q. In addition, in accordance with applicable rules and regulations promulgated by the SEC, the Company's Chief Executive Officer and Chief Financial Officer are providing currently dated certifications in connection with this Form 10-Q/A. The certifications are filed as Exhibits 31.3, 31.4, 32.3 and 32.4. Because this Form 10-Q/A sets forth the Original Form 10-Q in its entirety, it includes both items that have been changed as a result of the amended disclosures and items that are unchanged from the Original Form 10-Q. Other than the revision of the disclosures as discussed above, this Form 10-Q/A speaks as of the original filing date of the Original Form 10-Q and has not been updated to reflect other events occurring subsequent to the original filing date. This includes forward-looking statements and all other sections of this Form 10-Q/A that were not directly impacted by this amendment, which should be read in their historical context. | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q/A | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 8,310,198 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and equivalents | $ 53,208,386 | $ 49,830,243 |
Notes receivable | 620,219 | 979,462 |
Accounts receivable | 17,248,195 | 15,858,804 |
Current portion of investment in sales-type leases, net | 12,558,719 | 11,531,745 |
Interest receivable on sales type leases | 10,483,356 | 9,619,278 |
Prepaid expenses | 457,058 | 739,423 |
Other receivables | 1,280,231 | 1,169,660 |
Total current assets | 95,856,164 | 89,728,615 |
NON-CURRENT ASSETS | ||
Investment in sales-type leases, net | 46,208,501 | 46,110,374 |
Long term investment | 514,354 | 514,896 |
Long term deposit | 17,431 | 16,775 |
Property and equipment, net | 12,381 | 11,957 |
Construction in progress | 99,746,555 | 95,165,973 |
Total non-current assets | 146,499,222 | 141,819,975 |
TOTAL ASSETS | 242,355,386 | 231,548,590 |
CURRENT LIABILITIES | ||
Accounts payable | 3,244,223 | 3,229,163 |
Taxes payable | 2,623,770 | 2,423,780 |
Accrued liabilities and other payables | 1,716,649 | 1,618,316 |
Due to related parties | 41,129 | 43,623 |
Interest payable on entrusted loans | 10,472,162 | 8,131,256 |
Current portion of entrusted loan payable | 52,798,143 | 50,825,375 |
Total current liabilities | 70,896,076 | 66,271,513 |
NONCURRENT LIABILITIES | ||
Income tax payable | 6,998,625 | 6,998,625 |
Deferred tax liability, net | 2,119,260 | 2,157,414 |
Refundable deposit from customers for systems leasing | 1,129,117 | 1,086,591 |
Total noncurrent liabilities | 10,247,002 | 10,242,630 |
Total liabilities | 81,143,078 | 76,514,143 |
CONTINGENCIES AND COMMITMENTS | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 20,000,000 shares authorized, 8,310,198 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively | 8,310 | 8,310 |
Additional paid in capital | 111,796,813 | 111,796,813 |
Statutory reserve | 14,601,702 | 14,525,712 |
Accumulated other comprehensive income | 7,265,831 | 860,553 |
Retained earnings | 28,131,469 | 28,321,696 |
Total Company stockholders' equity | 161,804,125 | 155,513,084 |
Noncontrolling interest | (591,817) | (478,637) |
Total equity | 161,212,308 | 155,034,447 |
TOTAL LIABILITIES AND EQUITY | $ 242,355,386 | $ 231,548,590 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheets [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 8,310,198 | 8,310,198 |
Common stock, shares outstanding | 8,310,198 | 8,310,198 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue | ||
Sales of systems | ||
Contingent rental income | 1,422,831 | 1,771,032 |
Total revenue | 1,422,831 | 1,771,032 |
Cost of sales | ||
Cost of systems and contingent rental income | ||
Gross income | 1,422,831 | 1,771,032 |
Interest income on sales-type leases | 1,606,615 | 1,678,975 |
Total operating income | 3,029,446 | 3,450,007 |
Operating expenses | ||
General and administrative | 1,506,231 | 1,203,167 |
Total operating expenses | 1,506,231 | 1,203,167 |
Income from operations | 1,523,215 | 2,246,840 |
Non-operating income (expenses) | ||
Interest income | 37,204 | 36,033 |
Interest expense | (1,424,628) | (1,357,210) |
Other income (loss) | (1,741) | 4,523 |
Total non-operating expenses, net | (1,389,165) | (1,316,654) |
Income before income tax | 134,050 | 930,186 |
Income tax expense | 339,545 | 317,245 |
Income (loss) before noncontrolling interest | (205,495) | 612,941 |
Less: loss attributable to noncontrolling interest | (91,258) | (88,423) |
Net income (loss) attributable to China Recycling Energy Corporation | (114,237) | 701,364 |
Other comprehensive items | ||
Foreign currency translation gain attributable to China Recycling Energy Corporation | 6,405,278 | 843,107 |
Foreign currency translation loss attributable to noncontrolling interest | (21,922) | (554) |
Comprehensive income attributable to China Recycling Energy Corporation | 6,291,041 | 1,544,471 |
Comprehensive loss attributable to noncontrolling interest | $ (113,180) | $ (88,977) |
Basic weighted average shares outstanding | 8,310,198 | 8,310,198 |
Diluted weighted average shares outstanding | 8,310,198 | 8,310,198 |
Basic earnings / (loss) per share | $ (0.01) | $ 0.08 |
Diluted earnings / (loss) per share | $ (0.01) | $ 0.08 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Income (loss) including noncontrolling interest | $ (205,495) | $ 612,941 |
Adjustments to reconcile income (loss) including noncontrolling interest to net cash provided by (used in) operating activities: | ||
Changes in bad debt allowance | 99,879 | |
Depreciation and amortization | 42 | 379 |
Investment loss | 4,144 | (39,751) |
Changes in deferred tax | (118,450) | (21,977) |
Changes in assets and liabilities: | ||
Interest receivable on sales type leases | (471,136) | (1,678,975) |
Collection of principal on sales type leases | 992,791 | |
Prepaid expenses | 300,790 | 292,580 |
Other receivables | (62,605) | (198,314) |
Accounts receivable | (742,756) | (1,200,787) |
Notes receivable | 384,148 | (145,220) |
Construction in progress | (827,120) | (781,692) |
Accounts payable | (107,562) | 407,204 |
Taxes payable | 124,592 | 347,070 |
Interest payable on entrusted loan | 1,954,355 | 1,846,312 |
Accrued liabilities and other payables | (66,998) | (258,148) |
Net cash provided by (used in) operating activities | 1,258,619 | (818,378) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Changes of restricted cash | ||
Net cash provided by investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of loans | (145,220) | |
Repayment of notes payable | ||
Net cash used in financing activities | (145,220) | |
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND EQUIVALENTS | 2,119,524 | 262,168 |
NET INCREASE IN CASH AND EQUIVALENTS | 3,378,143 | (701,430) |
CASH AND EQUIVALENTS, BEGINNING OF PERIOD | 49,830,243 | 47,752,353 |
CASH AND EQUIVALENTS, END OF PERIOD | 53,208,386 | 47,050,923 |
Supplemental cash flow data: | ||
Income tax paid | 441,099 | 12,030 |
Interest paid | $ 216,817 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2018 | |
Organization and Description of Business [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS China Recycling Energy Corporation (the “Company” or “CREG”) was incorporated on May 8, 1980 as Boulder Brewing Company under the laws of the State of Colorado. On September 6, 2001, the Company changed its state of incorporation to the Nevada. In 2004, the Company changed its name from Boulder Brewing Company to China Digital Wireless, Inc. and on March 8, 2007, again changed its name from China Digital Wireless, Inc. to its current name, China Recycling Energy Corporation. The Company, through its subsidiaries, provides energy saving solutions and services, including selling and leasing energy saving systems and equipment to customers, project investment, investment management, economic information consulting, technical services, financial leasing, purchase of financial leasing assets, disposal and repair of financial leasing assets, consulting and ensuring of financial leasing transactions in the Peoples Republic of China (“PRC”). Erdos TCH – Joint Venture On April 14, 2009, the Company formed a joint venture (the “JV”) with Erdos Metallurgy Co., Ltd. (“Erdos”) to recycle waste heat from Erdos’ metal refining plants to generate power and steam to be sold back to Erdos. The name of the JV was Inner Mongolia Erdos TCH Energy Saving Development Co., Ltd. (“Erdos TCH”) with a term of 20 years. Total investment for the project was estimated at $79 million (RMB 500 million) with an initial investment of $17.55 million (RMB 120 million). Erdos contributed 7% of the total investment of the project, and Xi’an TCH Energy Technology Co., Ltd. (“Xi’an TCH”) contributed 93%. According to the parties’ agreement on profit distribution, Xi’an TCH and Erdos will receive 80% and 20%, respectively, of the profit from the JV until Xi’an TCH receives the complete return of its investment. Xi’an TCH and Erdos will then receive 60% and 40%, respectively, of the profit from the JV. On June 15, 2013, Xi’an TCH and Erdos entered into a share transfer agreement, pursuant to which Erdos sold its 7% ownership interest in the JV to Xi’an TCH for $1.29 million (RMB 8 million), plus certain accumulated profits as described below. Xi’an TCH paid the $1.29 million in July 2013 and, as a result, became the sole stockholder of the JV. In addition, Xi’an TCH paid Erdos accumulated profits from inception up to June 30, 2013 in accordance with a supplementary agreement entered on August 6, 2013. In August 2013, Xi’an TCH paid 20% of the accumulated profit (calculated under PRC GAAP) of $226,000 to Erdos. Erdos TCH currently has two power generation systems in Phase I with a total of 18 MW power capacity, and three power generation systems in Phase II with a total of 27 MW power capacity. On April 28, 2016, Erdos TCH and Erdos entered into a supplemental agreement, effective on May 1, 2016, whereby Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / KWH. The selling price of each KWH is determined annually based on prevailing market conditions. The Company evaluated the modified terms for payments based on actual electricity sold as minimum lease payments as defined in ASC 840-10-25-4, since lease payments that depend on a factor directly related to the future use of the leased property are contingent rentals and, accordingly, are excluded from minimum lease payments in their entirety. The Company wrote off the net investment receivables of these leases at the lease modification date. Pucheng Biomass Power Generation Projects On June 29, 2010, Xi’an TCH entered into a Biomass Power Generation (“BMPG”) Project Lease Agreement with PuchengXinHeng Yuan Biomass Power Generation Co., Ltd. (“Pucheng”), a limited liability company incorporated in China. Under this lease agreement, Xi’an TCH leased a set of 12 MW BMPG systems to Pucheng at a minimum of $279,400 (RMB 1,900,000) per month for 15 years. On September 11, 2013, Xi’an TCH entered into a BMPG Asset Transfer Agreement (the “Pucheng Transfer Agreement”) with Pucheng. The Pucheng Transfer Agreement provided for the sale by Pucheng to Xi’an TCH of a set of 12 MW BMPG systems with completion of system transformation for RMB 100 million ($16.48 million) in the form of 8,766,547 shares of common stock of the Company at $1.87 per share. These shares were issued to Pucheng on October 29, 2013. Also on September 11, 2013, Xi’an TCH entered into a BMPG Project Lease Agreement with Pucheng (the “Pucheng Lease”). Under the Pucheng Lease, Xi’an TCH leases this same set of 12 MW BMPG system to Pucheng, and combined this lease with the lease for the 12 MW BMPG station of Pucheng Phase I project, under a single lease to Pucheng for RMB 3.8 million ($0.63 million) per month (the “Pucheng Phase II Project”). The term for the combined lease is from September 2013 to June 2025. The lease agreement for the 12 MW station from Pucheng Phase I project terminated upon the effective date of the Pucheng Lease. The ownership of two 12 MW BMPG systems will transfer to Pucheng at no additional charge when the Pucheng Lease expires. Shenqiu Yuneng Biomass Power Generation Projects On May 25, 2011, Xi’an TCH entered into a Letter of Intent with ShenqiuYuNeng Thermal Power Co., Ltd. (“Shenqiu”) to reconstruct and transform a Thermal Power Generation System owned by Shenqiu into a 75T/H BMPG System for $3.57 million (RMB 22.5 million). The project commenced in June 2011 and was completed in the third quarter of 2011. On September 28, 2011, Xi’an TCH entered into a BMPG Asset Transfer Agreement with Shenqiu (the “Shenqiu Transfer Agreement”). Pursuant to the Shenqiu Transfer Agreement, Shenqiu sold Xi’an TCH a set of 12 MW BMPG systems (after Xi’an TCH converted the system for BMPG purposes). As consideration for the BMPG systems, Xi’an TCH agreed to pay Shenqiu $10,937,500 (RMB 70 million) in cash in three installments within six months upon the transfer of ownership of the systems. By the end of 2012, all the consideration was paid. On September 28, 2011, Xi’an TCH and Shenqiu also entered into a BMPG Project Lease Agreement (the “2011 Shenqiu Lease”). Under the 2011 Shenqiu Lease, Xi’an TCH agreed to lease a set of 12 MW BMPG systems to Shenqiu at a monthly rental rate of $286,000 (RMB 1,800,000) for 11 years. Upon expiration of the 2011 Shenqiu Lease, ownership of this system will transfer from Xi’an TCH to Shenqiu at no additional cost. In connection with the 2011 Shenqiu Lease, Shenqiu paid one month’s rent as a security deposit to Xi’an TCH, in addition to providing personal guarantees. On October 8, 2012, Xi’an TCH entered into a Letter of Intent for technical reformation of Shenqiu Project Phase II with Shenqiu for technical reformation to enlarge the capacity of the Shenqiu Project Phase I (the “Shenqiu Phase II Project”). The technical reformation involved the construction of another 12 MW BMPG system. After the reformation, the generation capacity of the power plant increased to 24 MW. The project commenced on October 25, 2012 and was completed during the first quarter of 2013. The total cost of the project was $11.1 million (RMB 68 million). On March 30, 2013, Xi’an TCH and Shenqiu entered into a BMPG Project Lease Agreement (the “2013 Shenqiu Lease”). Under the 2013 Shenqiu Lease, Xi’an TCH agreed to lease the second set of 12 MW BMPG systems to Shenqiu for $239,000 (RMB 1.5 million) per month for 9.5 years. When the 2013 Shenqiu Lease expires, ownership of this system will transfer from Xi’an TCH to Shenqiu at no additional cost. The Fund Management Company On June 25, 2013, Xi’an TCH and HongyuanHuifu Venture Capital Co. Ltd. (“HongyuanHuifu”) jointly established Hongyuan Recycling Energy Investment Management Beijing Co., Ltd. (the “Fund Management Company”) with registered capital of RMB 10 million ($1.45 million). Xi’an TCH made an initial capital contribution of RMB 4 million ($650,000) and has a 40% ownership interest in the Fund Management Company. With respect to the Fund Management Company, voting rights and dividend rights are allocated 80% and 20% between HongyuanHuifu and Xi’an TCH, respectively. The Fund Management Company is the general partner of Beijing Hongyuan Recycling Energy Investment Center, LLP (the “HYREF Fund”), a limited liability partnership established on July 18, 2013 in Beijing. The Fund Management Company made an initial capital contribution of RMB 5 million ($830,000) to the HYREF Fund. An initial total of RMB 460 million ($77 million) was fully subscribed by all partners for the HYREF Fund. The HYREF Fund has three limited partners: (1) China Orient Asset Management Co., Ltd., which made an initial capital contribution of RMB 280 million ($46.67 million) to the HYREF Fund and is a preferred limited partner; (2) HongyuanHuifu, which made an initial capital contribution of RMB 100 million ($16.67 million) to the HYREF Fund and is an ordinary limited partner; and (3) the Company’s wholly-owned subsidiary, Xi’an TCH, which made an initial capital contribution of RMB 75 million ($12.5 million) to the HYREF Fund and is a secondary limited partner. The term of the HYREF Fund’s partnership is six years from the date of its establishment, expiring July 18, 2019. The term is four years from the date of contribution for the preferred limited partner, and four years from the date of contribution for the ordinary limited partner. The total size of the HYREF Fund is RMB 460 million ($76.66 million). The HYREF Fund was formed for the purpose of investing in Xi’an Zhonghong New Energy Technology Co., Ltd., a 90% owned subsidiary of Xi’an TCH, for the construction of two coke dry quenching (“CDQ”) WHPG stations with Jiangsu Tianyu Energy and Chemical Group Co., Ltd. (“Tianyu”) and one CDQ WHPG station with Boxing County Chengli Gas Supply Co., Ltd. (“Chengli”). Chengli Waste Heat Power Generation Projects On July 19, 2013, Xi’an TCH formed a new company, “Xi’an Zhonghong New Energy Technology Co., Ltd.” (“Zhonghong”), with registered capital of RMB 30 million ($4.85 million). Xi’an TCH paid RMB 27 million ($4.37 million) and owns 90% of Zhonghong. Zhonghong is engaged to provide energy saving solution and services, including constructing, selling and leasing energy saving systems and equipment to customers. On July 24, 2013, Zhonghong entered into a Cooperative Agreement of CDQ and CDQ WHPG Project with Boxing County Chengli Gas Supply Co., Ltd. (“Chengli”). The parties entered into a supplement agreement on July 26, 2013. Pursuant to these agreements, Zhonghong will design, build and maintain a 25 MW CDQ system and a CDQ WHPG system to supply power to Chengli, and Chengli will pay energy saving fees (the “Chengli Project”). Chengli will contract the operation of the system to a third-party contractor that is mutually agreed to by Zhonghong. In addition, Chengli will provide the land for the CDQ system and CDQ WHPG system at no cost to Zhonghong. The term of the Agreements is for 20 years. The watt hours generated by the Chengli Project will be charged at RMB 0.42 ($0.068) per kilowatt hour (excluding tax). The operating time shall be based upon an average 8,000 hours annually. If the operating time is less than 8,000 hours per year due to a reason attributable to Chengli, then time charged shall be 8,000 hours a year, and if it is less than 8,000 hours due to a reason attributable to Zhonghong, then it shall be charged at actual operating hours. The construction of the Chengli Project was completed in the second quarter of 2015 and the project successfully completed commissioning tests in the first quarter of 2017. The Chengli Project is now operational, but will not begin operations until the Company receives the required power generating license, which the Company anticipates receiving in the second quarter of 2018. When operations begin, Chengli shall ensure its coking production line works properly and that working hours for the CDQ system are at least 8,000 hours per year, and Zhonghong shall ensure that working hours for the CDQ WHPG system are at least 7,200 hours per year. On July 22, 2013, Zhonghong entered into an Engineering, Procurement and Construction (“EPC”) General Contractor Agreement for the Boxing County Chengli Gas Supply Co., Ltd. CDQ Power Generation Project (the “Chengli Project”) with Xi’an Huaxin New Energy Co., Ltd. (“Huaxin”). Zhonghong, as the owner of the Chengli Project, contracted EPC services for a CDQ system and a 25 MW CDQ WHPG system for Chengli from Huaxin. Huaxin shall provide construction, equipment procurement, transportation, installation and adjustment, test run, construction engineering management and other necessary services to complete the Huaxin Project and ensure the CDQ system and CDQ WHPG system for Chengli meet the inspection and acceptance requirements and work normally. The Chengli Project is a turn-key project where Huaxin is responsible for monitoring the quality, safety, duration and cost of the Chengli Project. The total contract price is RMB 200 million ($33.34 million), which includes all the materials, equipment, labor, transportation, electricity, water, waste disposal, machinery and safety costs. Tianyu Waste Heat Power Generation Project On July 19, 2013, Zhonghong entered into a Cooperative Agreement (the “Tianyu Agreement”) for Energy Management of CDQ and CDQ WHPG Project with Jiangsu Tianyu Energy and Chemical Group Co., Ltd. (“Tianyu”). Pursuant to the Tianyu Agreement, Zhonghong will design, build, operate and maintain two sets of 25 MW CDQ systems and CDQ WHPG systems for two subsidiaries of Tianyu – Xuzhou Tian’an Chemical Co., Ltd. (“Xuzhou Tian’an”) and Xuzhou Huayu Coking Co., Ltd. (“Xuzhou Huayu”) – to be located at Xuzhou Tian’an and Xuzhou Huayu’s respective locations (the “Tianyu Project”). Upon completion of the Tianyu Project, Zhonghong will charge Tianyu an energy saving fee of RMB 0.534 ($0.087) per kilowatt hour (excluding tax). The operating time will be based upon an average 8,000 hours annually for each of Xuzhou Tian’an and Xuzhou Huayu. If the operating time is less than 8,000 hours per year due to a reason attributable to Tianyu, then time charged will be 8,000 hours a year. Because of the control of the overcapacity and pollution of the iron and steel and related industries, the government has imposed production limitations for the energy-intensive enterprises with heavy pollution, including Xuzhou Tian’an. Xuzhou Tian’an has slowed the construction process for its dry quenching production line which caused the delay of our project. The term of the Tianyu Agreement is 20 years. The construction of the Xuzhou Tian’an Project is anticipated to be completed by the third quarter of 2018. Xuzhou Tian’an will provide the land for the CDQ and CDQ WHPG systems for free. Xuzhou Tian’an also guarantees that it will purchase all the power generated by the CDQ WHPG systems. The Xuzhou Huayu Project is currently on hold due to a conflict between Xuzhou Huayu Coking Co., Ltd. and local residents on certain pollution-related issues. The local government has acted in its capacity to coordinate the resolution of this issue. The local residents were requested to move from the hygienic buffer zone of the project location with compensatory payments from the government. Xuzhou Huayu was required to stop production and implement technical innovations to mitigate pollution discharge including sewage treatment, dust collection, noise control, and recycling of coal gas. Currently, some local residents have moved. Xuzhou Huayu has completed the implementation of the technical innovations of sewage treatment, dust collection, and noise control, and the Company is waiting for local governmental agencies to approve these technical innovations so that we can resume construction. We expect to complete the recycling of coal gas in the second quarter of 2018. Once Huayu obtains the government’s acceptance and approval of the technical innovations, the project will resume. On July 22, 2013, Zhonghong entered into an EPC General Contractor Agreement for the Tianyu Project with Xi’an Huaxin New Energy Co., Ltd. (“Huaxin”). Zhonghong, as the owner of the Tianyu Project, contracted EPC services for two CDQ systems and two 25 MW CDQ WHPG systems for Tianyu to Huaxin. Huaxin shall provide construction, equipment procurement, transportation, installation and adjustment, test run, construction engineering management and other necessary services to complete the Tianyu Project and ensure the CDQ and CDQ WHPG systems for Tianyu meet the inspection and acceptance requirements and work normally. The Tianyu Project is a turn-key project where Huaxin is responsible for monitoring the quality, safety, duration and cost of the project. The total contract price is RMB 400 million ($66.68 million), which includes all the materials, equipment, labor, transportation, electricity, water, waste disposal, machinery and safety costs. Zhongtai Waste Heat Power Generation Energy Management Cooperative Agreement On December 6, 2013, Xi’an TCH entered into a CDQ and WHPG Energy Management Cooperative Agreement (the “Zhongtai Agreement”) with Xuzhou Zhongtai Energy Technology Co., Ltd. (“Zhongtai”), a limited liability company incorporated in Jiangsu Province, China. Pursuant to the Zhongtai Agreement, Xi’an TCH will design, build and maintain a 150 ton per hour CDQ system and a 25 MW CDQ WHPG system and sell the power to Zhongtai, and Xi’an TCH will also build a furnace to generate steam from the waste heat of the smoke pipeline and sell the steam to Zhongtai. The construction period of the Project is expected to be 18 months from the date when conditions are ready for construction to begin. Zhongtai will start to pay an energy saving service fee from the date when the WHPG station passes the required 72-hour test run. The payment term is 20 years. For the first 10 years, Zhongtai shall pay an energy saving fee at RMB 0.534 ($0.089) per kilowatt hour (KWH) (including value added tax) for the power generated from the system. For the second 10 years, Zhongtai shall pay an energy saving fee at RMB 0.402 ($0.067) per KWH (including value added tax). During the term of the contract the energy saving fee shall be adjusted at the same percentage as the change of local grid electricity price. Zhongtai shall also pay an energy saving fee for the steam supplied by Xi’an TCH at RMB 100 ($16.67) per ton (including value added tax). Zhongtai and its parent company will provide guarantees to ensure Zhongtai will fulfill its obligations under the Agreement. Upon the completion of the term, Xi’an TCH will transfer the systems to Zhongtai at RMB 1 ($0.16). Zhongtai shall provide waste heat to the systems for no less than 8,000 hours per year and waste gas volume no less than 150,000 Normal Meter Cubed (Nm3) per hour with a temperature no less than 950°C. If these requirements are not met, the term of the Agreement will be extended accordingly. If Zhongtai wants to terminate the Zhongtai Agreement early, it shall provide Xi’an TCH a 60 day notice and pay the termination fee and compensation for the damages to Xi’an TCH according to the following formula: (1) if it is less than five years into the term when Zhongtai requests termination, Zhongtai shall pay: Xi’an TCH’s total investment amount plus Xi’an TCH’s annual investment return times five years minus the years in which the system has already operated; or 2) if it is more than five years into the term when Zhongtai requests the termination, Zhongtai shall pay: Xi’an TCH’s total investment amount minus total amortization cost (the amortization period is 10 years). In March 2016, Xi’an TCH entered into a Transfer Agreement of CDQ and a CDQ WHPG system with Zhongtai and Xi’an Huaxin (the “Transfer Agreement”). Under the Transfer Agreement, Xi’an TCH agreed to transfer to Zhongtai all of the assets associated with the CDQ Waste Heat Power Generation Project (the “Project”), which is under construction pursuant to the Zhongtai Agreement. Additionally, Xi’an TCH agreed to transfer to Zhongtai the Engineering, Procurement and Construction (“EPC”) Contract for the CDQ Waste Heat Power Generation Project which Xi’an TCH had entered into with Xi’an Huaxin in connection with the Project. Xi’an Huaxin will continue to construct and complete the Project and Xi’an TCH agreed to transfer all its rights and obligation under the EPC Contract to Zhongtai. As consideration for the transfer of the Project, Zhongtai agreed to pay to Xi’an TCH an aggregate transfer price of RMB 167,360,000 ($25.77 million) including payments of: (i) RMB 152,360,000 ($23.46 million) for the construction of the Project; and (ii) RMB 15,000,000 ($2.31 million) as payment for partial loan interest accrued during the construction period. Those amounts have been, or will be, paid by Zhongtai to Xi’an TCH according to the following schedule: (a) RMB 50,000,000 ($7.70 million) was paid within 20 business days after the Transfer Agreement was signed; (b) RMB 30,000,000 ($4.32 million) was paid within 20 business days after the Project is completed, but no later than July 30, 2016; and (c) RMB 87,360,000 ($13.45 million) will be paid no later than July 30, 2017. Xuzhou Taifa Special Steel Technology Co., Ltd. (“Xuzhou Taifa”) guaranteed the payments from Zhongtai to Xi’an TCH. The ownership of the Project was conditionally transferred to Zhongtai following the initial payment of RMB 50,000,000 ($7.70 million) by Zhongtai to Xi’an TCH and the full ownership of the Project will be officially transferred to Zhongtai after it completes all payments pursuant to the Transfer Agreement. As of March 31, 2018, Xi’an TCH had received the first payment of $7.70 million and the second payment of $4.32 million. The Company recorded a $2.82 million loss from this transaction in 2016. As of the date of this report, the Company has not yet received the remaining payment of RMB 87,360,000 ($13.45 million). However, the Company received a repayment commitment letter from Zhongtai on February 23, 2018, in which Zhongtai committed to pay the remaining payment of RMB 87,360,000 ($13.45 million) no later than the end of July 2018. Formation of Zhongxun On March 24, 2014, Xi’an TCH incorporated a new subsidiary, Zhongxun Energy Investment (Beijing) Co., Ltd (“Zhongxun”) with registered capital of $5,695,502 (RMB 35,000,000), which must be contributed before October 1, 2028. Zhongxun is 100% owned by Xi’an TCH and will be mainly engaged in project investment, investment management, economic information consulting, and technical services. Zhongxun has not yet commenced operations as of the date of this report. Formation of Yinghua On February 11, 2015, the Company incorporated a new subsidiary, Shanghai Yinghua Financial Leasing Co., Ltd (“Yinghua”) with registered capital of $30,000,000, to be paid within 10 years from the date the business license is issued. Yinghua is 100% owned by the Company and will be mainly engaged in financial leasing, purchase of financial leasing assets, disposal and repair of financial leasing assets, consulting and ensuring of financial leasing transactions, and related factoring business. Yinghua has not yet commenced operations as of the date of this report. Summary of Sales-Type Lease at March 31, 2018 Status at March 31, 2018 As of March 31, 2018, Xi’an TCH leases the following systems: (i) BMPG systems to Pucheng Phase I and II (15 and 11-year terms, respectively); (ii) BMPG systems to Shenqiu Phase I (11-year term); and (iii) Shenqiu Phase II (9.5-year term). In addition, as of March 31, 2018, Erdos TCH leased power and steam generating systems for recycling waste heat from metal refining to Erdos (five systems) for a term of 20 years. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements included herein were prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) that are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) were omitted pursuant to such rules and regulations. Basis of Consolidation The consolidated financial statements (“CFS”) include the accounts of CREG and its subsidiaries, Shanghai Yinghua Financial Leasing Co., Ltd. (“Yinghua”) and Sifang Holdings, Sifang Holdings’ wholly owned subsidiaries, Huahong New Energy Technology Co., Ltd. (“Huahong”) and Shanghai TCH Energy Tech Co., Ltd. (“Shanghai TCH”), Shanghai TCH’s wholly-owned subsidiary, Xi’an TCH Energy Tech Co., Ltd. (“Xi’an TCH”) and Xi’an TCH’s subsidiaries, Erdos TCH Energy Saving Development Co., Ltd (“Erdos TCH”), 100% owned by Xi’an TCH (See note 1), Zhonghong, 90% owned by Xi’an TCH, and Zhongxun, 100% owned by Xi’an TCH. Substantially all the Company’s revenues are derived from the operations of Shanghai TCH and its subsidiaries, which represent substantially all the Company’s consolidated assets and liabilities as of March 31, 2018 and December 31, 2017, respectively. All significant inter-company accounts and transactions were eliminated in consolidation. Use of Estimates In preparing these CFS in accordance with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets as well as revenues and expenses during the period reported. Actual results may differ from these estimates. Revenue Recognition Sales-type Leasing and Related Revenue Recognition The Company constructs and leases waste energy recycling power generating projects to its customers. The Company typically transfers ownership of the waste energy recycling power generating projects to its customers at the end of the lease. The investment in these projects is recorded as investment in sales-type leases in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 840 , “Lease ,” Contingent Rental Income The Company records income from actual electricity usage in addition to minimum lease payments of each project as contingent rental income in the period contingent rental income is earned. Contingent rent is not part of minimum lease payments. Cash and Equivalents Cash and equivalents includes cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. Accounts Receivable As of March 31, 2018, the Company had accounts receivable of $17,248,195 (from the sales of CDQ and a CDQ WHPG system to Zhongtai and accounts receivable of Erdos TCH for electricity sold). As of December 31, 2017, the Company had accounts receivable of $15,858,804 (from the sales of CDQ and a CDQ WHPG system to Zhongtai and accounts receivable of Erdos TCH for electricity sold). Interest Receivable on Sales Type Leases As of March 31, 2018, the interest receivable on sales type leases was $10,483,356 mainly from recognized but not yet collected interest income for the Pucheng, Shenqiu systems. As of December 31, 2017, the interest receivable on sales type leases was $9,619,278. The Company maintains reserves for potential credit losses on receivables. Management reviews the composition of receivables and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of March 31, 2018, the Company had bad debt allowance for net investment receivable of $1,976,750 for Pucheng and Shenqiu systems. Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within China. Balances at financial institutions within China are not covered by insurance. The Company has not experienced any losses in such accounts. Certain other financial instruments, which subject the Company to concentration of credit risk, consist of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of its customers’ financial condition and customer payment practices to minimize collection risk on accounts receivable. The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method over the estimated lives as follows: Building 20 years Vehicles 2 - 5 years Office and Other Equipment 2 - 5 years Software 2 - 3 years Impairment of Long-lived Assets In accordance with FASB ASC Topic 360, “Property, Plant, and Equipment Notes Payable – Banker’s Acceptances The Company endorses banker’s acceptances that are issued from a bank to vendors as payment for its obligations. Most of the banker’s acceptances have maturity dates of less than six months following their issuance. Cost of Sales Cost of sales consists primarily of the direct material of the power generating system and expenses incurred directly for project construction for sales-type leasing and sales tax and additions for contingent rental income. Income Taxes Income taxes are accounted for using an asset and liability method. 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 follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC Topic 740, when tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. CREG is subject to U.S. corporate income taxes on its taxable income at a rate of up to 21% for taxable years beginning after December 31, 2017 and U.S. corporate income tax on its taxable income of up to 35% for prior tax years. On December 22, 2017, the Tax Cut and Jobs Act (“Tax Act”) was signed into law. The Tax Act introduced a broad range of tax reform measures that significantly change the federal income tax laws. The provisions of the Tax Act that may have significant impact on the Company include the permanent reduction of the corporate income tax rate from 35% to 21% effective for tax years including or commencing on January 1, 2018, one-time transition tax on post-1986 foreign unremitted earnings, provision for Global Intangible Low Tax Income (“GILTI”), deduction for Foreign Derived Intangible Income (“FDII”), repeal of corporate alternative minimum tax, limitation of various business deductions, and modification of the maximum deduction of net operating loss with no carryback but indefinite carryforward provision. Many provisions in the Tax Act are generally effective in tax years beginning after December 31, 2017. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump-sum payment. To the extent that portions of its U.S. taxable income, such as Subpart F income or GILTI, are determined to be from sources outside of the U.S., subject to certain limitations, the Company may be able to claim foreign tax credits to offset its U.S. income tax liabilities. Any remaining liabilities are accrued in the Company’s consolidated statements of comprehensive income and estimated tax payments are made when required by U.S. law. Noncontrolling Interests The Company follows FASB ASC Topic 810, “Consolidation,” The net income (loss) attributed to NCIs was separately designated in the accompanying statements of income and comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. Statement of Cash Flows In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, other receivables, accounts payable, accrued liabilities and short-term debts, the carrying amounts approximate their fair values due to their short maturities. Receivables on sales-type leases are based on interest rates implicit in the lease. FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” “Financial Instruments,” ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to FV measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” “Derivatives and Hedging.” The following are the considerations with respect to disclosures of FV of long-term debt obligations: As of March 31, 2018 and December 31, 2017, the Company did not have any long-term debt obligations. FV measurements and approximations for certain financial instruments are based on what a reporting entity would likely have to pay to transfer the financial obligation to an entity with a comparable credit rating. The Company’s bank loans and trust loans payable are privately held (i.e., nonpublic) debt; therefore, pricing inputs are not observable. For this reason, the Company classified bank loans and trust loans payable as a Level 3 FV measurement in the valuation hierarchy. For the Company’s long-term bank loans, and Zhonghong entrusted loans noted above, the Company believes the carrying amounts approximate their FV. Based on the Company’s understanding of the credit markets, the Company’s business is in a sector (energy-saving green) that is supported by the PRC government and the lending bank, the Company believes it could have obtained similar loans on similar terms and interest rates. In addition, in connection with the FV measurement, the Company considered nonperformance risk (including credit risk) relating to the debt obligations, including the following: (i) the Company is considered a low credit risk customer to the lending bank and its creditors; (ii) the Company has a good history of making timely payments and have never defaulted on any loans; and (iii) the Company has a stable and continuous cash inflow from collections from its sales-type lease of energy saving projects. As of March 31, 2018 and December 31, 2017, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at FV. Stock-Based Compensation The Company accounts for its stock-based compensation in accordance with FASB ASC Topic 718 “Compensation—Stock Compensation,” Equity.” Basic and Diluted Earnings per Share The Company presents net income (loss) per share (“EPS”) in accordance with FASB ASC Topic 260, “Earning Per Share.” The following table presents a reconciliation of basic and diluted EPS for the three months ended March 31, 2018 and 2017: Three Months Ended 2018 (Restated) 2017 Net income (loss) $ (114,237 ) $ 701,364 Weighted average shares outstanding – basic 8,310,198 8,310,198 Effect of dilutive securities: Options granted - - Weighted average shares outstanding – diluted 8,310,198 8,310,198 Earnings (loss) per share – basic $ (0.01 ) $ 0.08 Earnings (loss) per share – diluted $ (0.01 ) $ 0.08 Loss per basic and diluted share are the same due to anti-dilutive of the shares resulting from net loss for the three months ended March 31, 2018. Foreign Currency Translation and Comprehensive Income (Loss) The Company’s functional currency is the Renminbi (“RMB”). For financial reporting purposes, RMB were translated into United States Dollars (“USD” or “$”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income.” Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date. The Company follows FASB ASC Topic 220, “Comprehensive Income.” Segment Reporting FASB ASC Topic 280, “Segment Reporting,” New Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its CFS. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The standard should be applied prospectively on or after the effective date. The Company will evaluate the impact of adopting this standard prospectively upon any transactions of acquisitions or disposals of assets or businesses. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its FV, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of adopting this standard on its CFS. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future CFS. |
Notes Receivable - Bank Accepta
Notes Receivable - Bank Acceptance | 3 Months Ended |
Mar. 31, 2018 | |
Notes Receivable - Bank Acceptance/ Other Receivables [Abstract] | |
NOTES RECEIVABLE - BANK ACCEPTANCE | 3. NOTES RECEIVABLE – BANK ACCEPTANCE As of March 31, 2018 and December 31, 2017, the Company had outstanding notes receivable on-hand of $620,219 and $979,462, respectively, representing the bank acceptance that were issued by the suppliers to Erdos TCH and the payments were honored by the bank. Erdos TCH may hold the bank acceptance until the maturity for the full payment, or get cashed from the bank at a discount at an earlier date prior to maturity, or transfer the bank acceptance to its vendors in lieu of payment. As of March 31, 2018, Erdos TCH had $8.1 million bank acceptance that was transferred to one of its suppliers but haven’t matured; If the honored bank refuse to redeem the bank acceptance, then Erdos TCH would be obligated to redeem these bank acceptance. |
Investment in Sales-Type Leases
Investment in Sales-Type Leases, Net | 3 Months Ended |
Mar. 31, 2018 | |
Investment in Sales-Type Leases, Net [Abstract] | |
INVESTMENT IN SALES-TYPE LEASES, NET | 4. INVESTMENT IN SALES-TYPE LEASES, NET Under sales-type leases, Xi’an TCH leases the following systems: (i) BMPG systems to Pucheng Phase I and II (15 and 11 year terms, respectively); (ii) BMPG systems to Shenqiu Phase I (11-year term); and (iii) Shenqiu Phase II (9.5-year term). In addition, as of March 31, 2018, Erdos TCH leased power and steam generating systems from waste heat from metal refining to Erdos (five systems) for a term of twenty years. The components of the net investment in sales-type leases as of March 31, 2018 and December 31, 2017 are as follows: 2018 (Restated) 2017 (Restated) Total future minimum lease payments receivable $ 100,682,241 $ 99,155,214 Less: executory cost (6,458,859 ) (6,360,901 ) Less: unearned interest (22,996,056 ) (23,730,094 ) Less: realized interest income but not yet received (10,483,356 ) (9,619,278 ) Less: allowance for net investment receivable (1,976,750 ) (1,802,822 ) Investment in sales-type leases, net 58,767,220 57,642,119 Current portion 12,558,719 11,531,745 Noncurrent portion $ 46,208,501 $ 46,110,374 As of March 31, 2018, the future minimum rentals to be received on non-cancelable sales-type leases by years are as follows: 2019 $ 33,316,900 2020 13,549,403 2021 13,549,403 2022 13,549,403 2023 10,400,598 Thereafter 16,316,534 Total $ 100,682,241 |
Prepaid Expenses
Prepaid Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Prepaid Expenses [Abstract] | |
PREPAID EXPENSES | 6. OTHER RECEIVABLES As of March 31, 2018, other receivables mainly consisted of (i) advances to third parties of $8,166, bearing no interest, payable upon demand. As of December 31, 2017, other receivables mainly consisted of an advance to a third party of $7,652, bearing no interest, payable upon demand. |
Other Receivables
Other Receivables | 3 Months Ended |
Mar. 31, 2018 | |
Notes Receivable - Bank Acceptance/ Other Receivables [Abstract] | |
OTHER RECEIVABLES | 6. OTHER RECEIVABLES As of March 31, 2018, other receivables mainly consisted of (i) advances to third parties of $8,166, bearing no interest, payable upon demand; and (ii) maintenance cost and tax receivable of $4.15 million. As of December 31, 2017, other receivables mainly consisted of an advance to a third party of $7,652, bearing no interest, payable upon demand; and maintenance cost and tax receivable of $3.06 million. |
Long Term Investment
Long Term Investment | 3 Months Ended |
Mar. 31, 2018 | |
Long Term Investment [Abstract] | |
LONG TERM INVESTMENT | 7. LONG TERM INVESTMENT On June 25, 2013, Xi’an TCH with HongyuanHuifu Venture Capital Co. Ltd (“HongyuanHuifu”) jointly established Hongyuan Recycling Energy Investment Management Beijing Co., Ltd (the “Fund Management Company”) with registered capital of RMB 10 million ($1.6 million), to manage a fund that will be used for financing CDQ WHPG projects. Xi’an TCH made an initial capital contribution of RMB 4 million ($0.65 million) and has a 40% ownership interest in the Fund Management Company. Voting rights and dividend rights are allocated between HongyuanHuifu and Xi’an TCH at 80% and 20%, respectively. The Company accounted for this investment using the equity method. The Company recorded $(4,144) and $39,751 equity based investment (loss) during three months ended March 31, 2018 and 2017, respectively. On July 18, 2013, the HYREF Fund was established as a limited liability partnership in Beijing. Pursuant to the Partnership Agreement, the HYREF Fund has a general partner, the Fund Management Company, which made an initial capital contribution of RMB 5 million ($0.83 million) to the HYREF Fund. The HYREF Fund has three limited partners: (1) China Orient Asset Management Co., Ltd., which made an initial capital contribution of RMB 280 million ($46.67 million) and is a preferred limited partner, (2) HongyuanHuifu, which made an initial capital contribution of RMB 100 million ($16.67 million) and is an ordinary limited partner and (3) the Company’s wholly-owned subsidiary, Xian TCH, which made an initial capital contribution of RMB 75 million ($10.81 million) and is a secondary limited partner. The term of the HYREF Fund’s partnership is six years from the date of its establishment, July 18, 2013. The current term for (x) the preferred limited partner is four years from the date of its contribution and (y) the ordinary limited partner is four years from the date of its contribution. Unless otherwise approved by the general partner (the Fund Management Company), upon the expiration of their respective terms, each partner shall exit from the partnership automatically. The total size of the HYREF Fund is RMB 460 million ($75.0 million), and the purpose of the HYREF Fund is to invest in Zhonghong for constructing 3 new CDQ WHPG projects. Xi’an TCH owns 16.3% of the HYREF Fund. The Company accounted for this investment using the cost method. The Company netted off the investment of RMB 75 million ($10.81 million) by Xi’an TCH with the entrusted loan payable of the HYREF Fund. |
Construction in Progress
Construction in Progress | 3 Months Ended |
Mar. 31, 2018 | |
Construction in Progress [Abstract] | |
CONSTRUCTION IN PROGRESS | 8. CONSTRUCTION IN PROGRESS Construction in progress was for constructing power generation systems. As of March 31, 2018 and December 31, 2017, the Company’s construction in progress included: 2018 2017 Xuzhou Huayu $ 25,953,681 $ 24,976,178 Xuzhou Tian’an 40,150,636 37,814,637 Boxing County Chengli 33,642,238 32,375,158 Total $ 99,746,555 $ 95,165,973 As of March 31, 2018, the Company was committed to pay an additional (1) $12.72 million for the Xuzhou Huayu project, (2) $4.41 million for the Xuzhou Tian’an project, and (3) $4.91 million for Boxing County Chengli project. The Boxing County Chengli project has finished construction, but is waiting for government approval before beginning operations. |
Taxes Payable
Taxes Payable | 3 Months Ended |
Mar. 31, 2018 | |
Taxes Payable [Abstract] | |
TAXES PAYABLE | 9. TAXES PAYABLE Taxes payable consisted of the following as of March 31, 2018 and December 31, 2017: 2018 2017 Income - current $ 1,134,364 $ 1,097,768 VAT 1,286,626 1,145,363 Other 202,780 180,649 Total - current 2,623,770 2,423,780 Income - noncurrent $ 6,998,625 $ 6,998,625 Income tax payable was approximately $8.13 million at March 31, 2018, of which, $0.60 million current and $7.00 million noncurrent was from recording the estimated one-time transition tax on post-1986 foreign unremitted earnings under the Tax Cut and Jobs Act signed on December 22, 2017. An election is available for the US shareholder of foreign company to pay the tax liability in installments over a period of eight years with 8% of net tax liability in the first five years, 15% in the sixth year, 20% in the seventh year, and 25% in the eighth year. |
Accrued Liabilities and Other P
Accrued Liabilities and Other Payables | 3 Months Ended |
Mar. 31, 2018 | |
Accrued Liabilities and Other Payables [Abstract] | |
ACCRUED LIABILITIES AND OTHER PAYABLES | 10. ACCRUED LIABILITIES AND OTHER PAYABLES Accrued liabilities and other payables consisted of the following as of March 31, 2018 and December 31, 2017: 2018 2017 Employee training, labor union expenditure and social insurance payable $ 892,906 $ 852,316 Consulting, auditing, and legal expenses 480,057 480,057 Accrued payroll and welfare 327,896 261,793 Other 15,790 24,150 Total $ 1,716,649 $ 1,618,316 |
Deferred Tax Liability, Net
Deferred Tax Liability, Net | 3 Months Ended |
Mar. 31, 2018 | |
Deferred Tax Liability, Net [Abstract] | |
DEFERRED TAX LIABILITY, NET | 11. DEFERRED TAX LIABILITY, NET Deferred tax asset resulted from accrued employee social insurance that can be deducted for tax purposes in the future, and the difference between tax and accounting basis of cost of fixed assets which was capitalized for tax purposes and expensed as part of cost of systems in accordance with US GAAP. Deferred tax liability arose from the difference between tax and accounting basis of net investment in sales-type leases. As of March 31, 2018 and December 31, 2017, deferred tax liability consisted of the following: 2018 (Restated) 2017 (Restated ) Deferred tax asset — current (accrual of employee social insurance) $ 197,038 $ 189,617 Deferred tax liability — current (net investment in sales-type leases) (1,629,858 ) (1,520,537 ) Deferred tax liability, net of current deferred tax asset $ (1,432,820 ) $ (1,330,921 ) Deferred tax asset — noncurrent (depreciation of fixed assets) $ 10,371,498 $ 10,250,394 Deferred tax asset — noncurrent (asset impairment loss) 494,187 450,706 Deferred tax liability — noncurrent (net investment in sales-type leases) (11,552,125 ) (11,527,594 ) Deferred tax liability, net of noncurrent deferred tax asset $ (686,440 ) $ (826,493 ) Total Deferred tax liability, noncurrent per ASU 2015-17 $ (2,119,260 ) $ (2,157,414) |
Loans Payable
Loans Payable | 3 Months Ended |
Mar. 31, 2018 | |
Loans Payable [Abstract] | |
LOANS PAYABLE | 12. LOANS PAYABLE Entrusted Loan Payable The HYREF Fund (Beijing Hongyuan Recycling Energy Investment Center, LLP) established in July 2013 with total fund size of RMB 460 million ($75.0 million) invests in Xi’an Zhonghong for Zhonghong’s three new CDQ WHPG projects. The HYREF Fund invested RMB 3 million ($0.5 million) as an equity investment and RMB 457 million ($74.5 million) as a debt investment in Xi’an Zhonghong; in return for such investments, the HYREF Fund will receive interest from Zhonghong for the HYREF Fund’s debt investment. The RMB 457 million ($74.5 million) was released to Zhonghong through an entrusted bank, which is also the supervising bank for the use of the loan. The loan was deposited in a bank account at the Supervising Bank (the Industrial Bank Xi’an Branch) and is jointly supervised by Zhonghong and the Fund Management Company. Project spending shall be verified by the Fund Management Company to confirm that it is in accordance with the project schedule before the funds are released. All the operating accounts of Zhonghong have been opened with the branches of the Supervising Bank and the Supervising Bank has the right to monitor all bank accounts opened by Zhonghong. The entrusted bank will charge 0.1% of loan amount as service fee and will not take any lending risk. The loan was collateralized by the accounts receivable and the fixed assets of Shenqiu Phase I and II power generation systems, the accounts receivable and fixed assets of Zhonghong’s three CDQ WHPG systems, and a 27 million RMB capital contribution made by Xi’an TCH. Repayment of the loan (principal and interest) was also jointly and severally guaranteed by Xi’an TCH and the Chairman and CEO of the Company. In the fourth quarter of 2015, three power stations of Erdos TCH were pledged to Industrial Bank as an additional guarantee for the loan lent to Zhonghong’s three CDQ WHPG systems. In 2016, two additional power stations of Erdos TCH and Pucheng Phase I and II systems were pledged to Industrial Bank as an additional guarantee along with Xi’an TCH’s equity in Zhonghong. The loan agreement provides that Zhonghong shall also maintain a certain capital level in its account with the Supervising Bank to make sure it has sufficient funds to make interest payments when they are due: ● During the first three years from the first release of the loan, the balance in its account shall be no less than RMB 7.14 million ($1.19 million) on the 20th day of the second month of each quarter and no less than RMB 14.28 million ($2.38 million) on the 14th day of the last month of each quarter; ● During the fourth year from the first release of the loan, the balance in its account shall be no less than RMB 1.92 million ($0.32 million) on the 20th day of the second month of each quarter and no less than RMB 3.85 million ($0.64 million) on the 14th day of the last month of each quarter; and ● During the fifth year from the first release of the loan, the balance in its account shall be no less than RMB 96,300 ($16,050) on the 20th day of the second month of each quarter and no less than RMB 192,500 ($32,080) on the 14th day of the last month of each quarter. The term of this loan is for 60 months from July 31, 2013 to July 30, 2018. On August 6, 2016, Zhonghong was to repay principal of RMB 280 million ($42.22 million); on August 6, 2017, Zhonghong was supposed to repay principal of RMB 100 million ($16.27 million) and on July 30, 2018, Zhonghong shall repay the remainder of RMB 77 million ($12.52 million). The interest rate is 12.5%. During the term, Zhonghong shall maintain a minimal funding level and capital level in its designated account with the Supervising Bank to make sure it has sufficient funds to make principal payments when they are due. Notwithstanding the requirements, the HYREF Fund and Supervising Bank have verbally notified Zhonghong from the beginning that unlikely they will enforce these requirements for the purpose of the efficient utilization of working capital. As of March 31, 2018, the entrusted loan payable had an outstanding balance of $64.73 million, of which, $11.93 million was from the investment of Xi’an TCH; accordingly, the Company netted the loan payable of $11.93 million with the long-term investment to the HYREF Fund made by Xi’an TCH. For the three months ended March 31, 2018, the Company recorded interest expense of $1.13 million on this loan and capitalized $0.83 million interest to construction in progress. The Company had fully paid RMB 50 million ($7.54 million) of the RMB 280 million ($42.22 million), and on August 5, 2016, the Company entered into a supplemental agreement with the lender to extend the due date of the remaining RMB 230 million ($34.68 million) of the original RMB 280 million ($45.54 million) to August 6, 2017. During the year ended December 31, 2017, the Company negotiated with the lender again for further extending the remaining loan balance of RMB 230 million ($34.68 million), RMB 100 million ($16.27 million), and RMB 77 million ($12.52 million) (which included investment from Xi’an TCH of RMB 75 million and was netted off with the entrusted loan payable of the HYREF Fund in the balance sheet). The lender has tentatively agreed to extend the remaining loan balance for another two years until August 2019 with an adjusted annual interest rate of 9%, subject to the final approval from its headquarters. The related extension documents are currently going through the lender’s internal approval procedure. Due to the slow progress of the construction of the three CDQ WHPG projects, the Company applied for a lower interest rate from the lender in January 2017, and the lender tentatively agreed to lower the interest rate to 9% in December 2017 subject to the approval from its headquarters. The Company planned to repay the interest once the lender’s internal approval procedure is officially completed. As of March 31, 2018, the interest payable for this loan was $10.5 million. Bank Loan – Bank of Chongqing On April 11, 2014, Xi’an TCH entered into a loan agreement with Bank of Chongqing - Xi’an Branch, whereby Bank of Chongqing loaned $8.13 million (RMB 50 million) to Xi’an TCH for three years with maturity on April 10, 2017. The annual interest on the loan was 9.225%. Under the terms of the loan, Xi’an TCH was to make monthly interest payments and to make a principal payment of $0.81 million (RMB 5 million) on the 24 th Summary As of March 31, 2018, the future minimum repayment of all the loans including the entrusted loan to be made by years is as follows: 2018 $ 52,798,143 Total $ 52,798,143 |
Refundable Deposit from Custome
Refundable Deposit from Customers for Systems Leasing | 3 Months Ended |
Mar. 31, 2018 | |
Refundable Deposit from Customers for Systems Leasing [Abstract] | |
REFUNDABLE DEPOSIT FROM CUSTOMERS FOR SYSTEMS LEASING | 13. REFUNDABLE DEPOSIT FROM CUSTOMERS FOR SYSTEMS LEASING As of March 31, 2018 and December 31, 2017, the balance of refundable deposit from customers for systems leasing for Pucheng and Shengqiu was $1,129,117 and $1,086,591, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 14. RELATED PARTY TRANSACTIONS As of March 31, 2018 and December 31, 2017, the Company had $41,129 and $43,623 in advances from the Company’s management, which bear no interest, are unsecured, and are payable upon demand. |
Noncontrolling Interest
Noncontrolling Interest | 3 Months Ended |
Mar. 31, 2018 | |
Noncontrolling Interest [Abstract] | |
NONCONTROLLING INTEREST | 15. NONCONTROLLING INTEREST On July 15, 2013, Xi’an TCH and HYREF Fund jointly established Xi’an Zhonghong New Energy Technology (“Zhonghong”) with registered capital of RMB 30 million ($4.88 million), to manage new projects. Xi’an TCH paid RMB 27 million ($4.37 million) as its contribution of the registered capital to Zhonghong. Xi’an TCH owns 90% of Zhonghong while HYREF Fund owns 10% of Zhonghong as a non-controlling interest of Zhonghong. In addition, the HYREF Fund was 16.3% owned by Xi’an TCH and 1.1% owned by the Fund Management Company, and the Fund Management Company was 40% owned by Xi’an TCH as described in Note 7, which resulted in an additional indirect ownership of Xi’an TCH in Zhonghong of 1.7%; accordingly, the ultimate non-controlling interest (HYREF Fund) in Zhonghong became 8.3%. During the three months ended March 31, 2018 and 2017, the Company had losses of $91,258 and $88,423 that were attributable to noncontrolling interest, respectively. |
Income Tax
Income Tax | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax [Abstract] | |
INCOME TAX | 16. INCOME TAX The Company’s Chinese subsidiaries are governed by the Income Tax Law of the PRC concerning privately-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriate tax adjustments. Under the Chinese tax law, the tax treatment of finance and sales-type leases is similar to US GAAP. However, the local tax bureau continues to treat CREG sales-type leases as operating leases. Accordingly, the Company recorded deferred income taxes. The Company’s subsidiaries generate all of their income from their PRC operations. All of the Company’s Chinese subsidiaries’ effective income tax rate for 2018 and 2017 was 25%. Yinghua, Shanghai TCH, Xi’an TCH, Huahong, Zhonghong and Erdos TCH file separate income tax returns. There is no income tax for companies domiciled in the Cayman Islands. Accordingly, the Company’s CFS do not present any income tax provisions related to Cayman Islands tax jurisdiction, where Sifang Holding is domiciled. The US parent company, China Recycling Energy Corporation, is taxed in the US and, as of March 31, 2018, had net operating loss (“NOL”) carry forwards for income taxes of $14.43 million, which may be available to reduce future years’ taxable income as NOLs can be carried forward up to 20 years from the year the loss is incurred. Our management believes the realization of benefits from these losses may be uncertain due to the US parent company’s continuing operating losses. Accordingly, a 100% deferred tax asset valuation allowance was provided. The following table reconciles the US statutory rates to the Company’s effective tax rate for the three months ended March 31, 2018 and 2017, respectively: 2018 (Restated) 2017 (Restated) U.S. statutory rates 21.0 % 34.0 % Tax rate difference – current provision 7.4 % (8.0 )% Other 16.4 % (3.8 )% Permanent differences - % - % Valuation allowance on PRC NOL 190.8 % 11.9 % Valuation allowance on US NOL 17.7 % - % Tax (benefit) per financial statements 253.3 % 34.1 % The provision for income taxes expense for three months ended March 31, 2018 and 2017 consisted of the following: 2018 (Restated) 2017 (Restated) Income tax expense – current $ 457,995 $ 339,222 Income tax expense – deferred (118,450 ) (21,977 ) Total income tax expense $ 339,545 $ 317,245 On December 22, 2017, the Tax Cut and Jobs Act (“Tax Act”) was signed into law in the United States. The Tax Act introduced a broad range of tax reform measures that significantly change the federal income tax laws. The provisions of the Tax Act that may have significant impact on the Company include the permanent reduction of the corporate income tax rate from 35% to 21% effective for tax years including or commencing on January 1, 2018, a one-time transition tax on post-1986 foreign unremitted earnings, the provision for Global Intangible Low Tax Income (“GILTI”), the deduction for Foreign Derived Intangible Income (“FDII”), the repeal of corporate alternative minimum tax, the limitation of various business deductions, and the modification of the maximum deduction of net operating loss with no carryback but indefinite carryforward provision. Many provisions in the Tax Act are generally effective in tax years beginning after December 31, 2017. In 2017 the Company reflected the provisional income tax effects of the Tax Act under Accounting Standards Codification Topic 740, Income Taxes, and had approximately $7.61 million tax expense from recording the estimated one-time transition tax on post-1986 foreign unremitted earnings. The Company continues to examine the impact of certain provisions of the Tax Act that will become applicable in calendar year 2018 related to Base Erosion and Anti Abuse Tax (“BEAT”), GILTI, deduction for FDII, and other provisions that could affect its effective tax rate in the future. The Company will record the income tax effects of GILTI and other provisions of the Tax Act as incurred beginning in calendar year 2018. Also, because there may be additional state income tax implications, the Company will continue to monitor changes in state and local tax laws to determine if state and local taxing authorities intend to conform or deviate from changes to U.S. federal tax legislation as a result of the Tax Act. The prospects of supplemental legislation or regulatory processes to address questions that arise because of the Tax Act, or evolving technical interpretations of the tax law, may cause the final impact from the Tax Act to differ from the provisionally recorded amounts. The Company expects to complete its analysis within the measurement period allowed by Staff Accounting Bulletin (“SAB”) No.118, no later than the fourth quarter of calendar year 2018. China maintains a “closed” capital account, meaning companies, banks, and individuals cannot move money in or out of the country except in accordance with strict rules. The People’s Bank of China (PBOC) and State Administration of Foreign Exchange (SAFE) regulate the flow of foreign exchange in and out of the country. For inward or outward foreign currency transactions, the Company needs to make a timely declaration to the bank with sufficient supporting documents to declare the nature of the business transaction. |
Stock-Based Compensation Plan
Stock-Based Compensation Plan | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation Plan [Abstract] | |
STOCK-BASED COMPENSATION PLAN | 17. STOCK-BASED COMPENSATION PLAN Options to Employees On June 19, 2015, the stockholders of the Company approved the China Recycling Energy Corporation Omnibus Equity Plan (the “Plan”) at its annual meeting. The total shares of common stock authorized for issuance during the term of the Plan is 12,462,605 (prior to the 10:1 Reverse Stock Split). The Plan was effective immediately upon the adoption by our Board of Directors on April 24, 2015, subject to stockholder approval, and will terminate on the earliest to occur of (i) the 10th anniversary of the Plan’s effective date, or (ii) the date on which all shares available for issuance under the Plan shall have been issued as fully-vested shares. The stockholders approved the Plan at its annual meeting on June 19, 2015. On April 27, 2017, the Board approved the grant to the Company’s CFO of an option to purchase 5,000 shares of the Company’s common stock at an exercise price of $1.61 per share, with a term of 10 years. The option vested immediately upon the grant. The FV of the stock option granted is estimated on the date of the grant using the Black-Scholes option pricing model (“BSOPM”). The BSOPM has assumptions for risk free interest rates, dividends, stock volatility and expected life of an option grant. The risk-free interest rate is based upon market yields for United States Treasury debt securities at a maturity near the term remaining on the option. Dividend rates are based on the Company’s dividend history. The stock volatility factor is based on the historical volatility of the Company’s stock price. The expected life of an option grant is based on management’s estimate as no options have been exercised in the Plan to date. The FV of the option granted to employees is recognized as compensation expense over the vesting period of the stock option award. The FV of the options was calculated using the following assumptions, estimated life of ten years, volatility of 124%, risk free interest rate of 2.30%, and dividend yield of 0%. The FV of the 5,000 stock options was $7,647 at the grant date. Options to Independent Directors On March 31, 2015, the Board appointed Mr. Cangsang Huang as a member of the Company’s Board of Directors to fill a vacancy. In connection with the appointment, the Board authorized the Company to provide Mr. Huang with (i) compensation of $2,000 per month and (ii) the grant of an option to purchase 40,000 shares of the Company’s Common Stock, par value $0.001, at an exercise price of $1.02 per share (prior to the 10:1 Reverse Stock Split effective May 25, 2016), which was equal to the closing price per share of the Company’s Common Stock on March 31, 2015. Such options were only valid and exercisable upon stockholder approval. The options to Mr. Huang were not voted upon at the Company’s annual stockholder’s meeting on June 19, 2015 and were cancelled automatically. However, the Company’s Plan adopted by the Board on April 24, 2015 for providing equity awards to employees, directors and consultants was approved at the annual stockholder’s meeting; accordingly, the Compensation Committee of the Board of Directors approved a grant of 40,000 options (prior to the 10:1 Reverse Stock Split) to Mr. Huang at an exercise price of $1.02 per share under the Plan, which vested immediately on the date of grant, which was on October 10, 2015. The options may be exercised within five years of the date of the grant. The FV of the options was calculated using the following assumptions, estimated life of five years, volatility of 82%, risk free interest rate of 1.37%, and dividend yield of 0%. The FV of the 40,000 stock options was $26,528 at the grant date. The Company recorded $0and $0 compensation expense for stock options to employees during three months ended March 31, 2018 and 2017. The following table summarizes option activity with respect to employees and independent directors, the number of options reflects the 10:1 Reverse Stock Split effective May 25, 2016: Number of Shares Average Exercise Price per Share Weighted Average Remaining Contractual Term in Years Outstanding at January 1, 2016 4,000 $ 10.2 4.77 Exercisable at January 1, 2016 4,000 10.2 4.77 Granted - - - Exercised - - - Forfeited - - - Outstanding at December 31, 2016 4,000 10.2 3.77 Exercisable at December 31, 2016 4,000 10.2 3.77 Granted 5,000 1.6 10 Exercised - - - Forfeited - - - Outstanding at December 31, 2017 9,000 5.4 6.41 Exercisable at December 31, 2017 9,000 5.4 6.41 Granted - - - Exercised - - - Forfeited - - - Outstanding at March 31, 2018 9,000 $ 5.4 6.16 Exercisable at March 31, 2018 9,000 $ 5.4 6.16 |
Statutory Reserves
Statutory Reserves | 3 Months Ended |
Mar. 31, 2018 | |
Statutory Reserves [Abstract] | |
STATUTORY RESERVES | 18. STATUTORY RESERVES Pursuant to the corporate law of the PRC effective January 1, 2006, the Company is only required to maintain one statutory reserve by appropriating from its after-tax profit before declaration or payment of dividends. The statutory reserve represents restricted retained earnings. Surplus Reserve Fund The Company’s Chinese subsidiaries are required to transfer 10% of their net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. The maximum statutory reserve amount has not been reached for any subsidiary. The table below discloses the statutory reserve amount in the currency type registered for each Chinese subsidiary as of March 31, 2018. Name of Chinese Subsidiaries Registered Capital Maximum Statutory Reserve Amount Statutory reserve at March 31, 2018 (Restated) Shanghai TCH $ 29,800,000 $ 14,900,000 ¥ 6,564,303 ($1,003,859) Xi’an TCH ¥ 202,000,000 ¥ 101,000,000 ¥ 69,854,362 ($10,682,975) Erdos TCH ¥ 120,000,000 ¥ 60,000,000 ¥ 19,035,813 ($2,914,868) Xi’an Zhonghong ¥ 30,000,000 ¥ 15,000,000 Did not accrue yet due to accumulated deficit Shaanxi Huahong $ 2,500,300 $ 1,250,150 Did not accrue yet due to accumulated deficit Zhongxun ¥ 35,000,000 ¥ 17,500,000 Did not accrue yet due to accumulated deficit Common Welfare Fund The common welfare fund is a voluntary fund to which the Company can transfer 5% to 10% of its net income. This fund can only be utilized on capital items for the collective benefit of the Company’s employees, such as construction of dormitories, cafeteria facilities, and other staff welfare facilities. This fund is non-distributable other than upon liquidation. The Company does not participate in this fund. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Contingencies [Abstract] | |
CONTINGENCIES | 19. CONTINGENCIES The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. The Company’s sales, purchases and expense transactions are denominated in RMB and all of the Company’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation in order to make the remittance. The Company sells electricity to its customers and receives commercial notes (bank acceptance) from them in lieu of payments for accounts receivable. The Company discounts the commercial notes with the bank or endorses the commercial notes to vendors for payment of their own obligations or to get cash from third parties. Most of the commercial notes have a maturity of less than six (6) months. As of March 31, 2018, the Company had outstanding notes receivable of $620,219 and endorsed notes receivable to vendors of $1.35 million; at December 31, 2017, the Company had outstanding notes receivable of $979,462 and endorsed notes receivable to vendors of $1.41million. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2018 | |
Commitments [Abstract] | |
COMMITMENTS | 20. COMMITMENTS Lease Commitment On November 20, 2017, Xi’an TCH entered a lease agreement for its office use for a lease term from December 1, 2017 through November 30, 2020. The monthly rent is RMB 36,536 ($5,600) with quarterly payment in advance. At March 31, 2018, the future annual rental payment is approximately $67,200, $67,200 and $44,800 for next three years up to expiration of the lese. For the three months ended March 31, 2018 and 2017, the rental expense of Xi’an TCH was $16,800 and $59,065, respectively. Construction Commitment Refer to Note 1 for additional details related to lease commitments with Chengli, and Tianyu (and its subsidiaries Xuzhou Tian’an and Xuzhou Huayu), Note 8 for commitments on construction in progress. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 21. SUBSEQUENT EVENTS Security Purchase Agreement On July 11, 2018, the Company entered into a Securities Purchase Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (the “Purchaser”), pursuant to which the Company sold and issued to the Purchaser a Convertible Promissory Note (the “Note”) in the amount of $1,070,000. The Purchaser purchased the Note with an original issue discount of $50,000, and the Company agreed to pay to the Purchaser $20,000 for fees and costs incurred by Purchaser in connection with the consummation of the Purchase Agreement. The Note was sold to the Purchaser pursuant to an exemption from registration under Regulation D, promulgated under the Securities Act of 1933, as amended. The Note bears interest at the rate of 8% per annum. All outstanding principal and accrued interest on the Note will become due and payable on July 11, 2020, subject to a potential one-year extension period during which interest would not accrue. The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay a 125% premium on any amounts outstanding under the Note. Amounts outstanding under the Note may be converted at any time, at the Lender’s option, into shares of the Company’s common stock at a conversion price of $3.00 per share, subject to certain adjustments. During the term of the Note, the Company shall not, without the prior written consent of the Purchaser, enter into or effect certain fundamental business transactions. The Purchaser has the option to redeem the Note at any time after the six month anniversary of the date when the purchase price is delivered to the Company (“Purchase Price Date”) in the amounts of up to 50% of the amount outstanding during the nine month period after Purchase Price Date or any percentage of the amount outstanding under the Note at any time after the nine month anniversary of Purchase Price Date, with such redemption amounts paid in cash or shares of the Company’s common stock, or a combination thereof, at the Company’s election. Acquisition of 18% of Xinhuan On September 30, 2018, Shanghai TCH entered into an Equity Purchase Agreement with Mr. Jihua Wang (“Seller”), pursuant to which Xi’an TCH shall acquire 20% of the outstanding equity interests (the “Acquired Interests”) of Xi’an Xinhuan Energy Co., Ltd. (“Xinhuan”). Pursuant to the Purchase Agreement, Shanghai TCH shall purchase the Acquired Interests for an aggregate purchase price of RMB 320 million ($46.72 million) (the “Purchase Price”), which shall be paid as follows: (i) in cash RMB 60 million ($8.76 million); (ii) in the form of 2.6 million shares of the Company’s common stock using a value of $1.90 per share; and (iii) in the form of 17,376,950 shares of the Company’s preferred stock using a value of $1.90 per share. The preferred shares shall have no voting rights but shall have preferential dividend rights to participate in and receive a 15% premium on a per share basis for any dividends declared and paid by the Company on its common stock. The holder of the preferred shares shall have the right to convert the preferred shares into shares of the Company’s common stock on a 1:1 basis after the six month anniversary of the issuance of the preferred shares, but the Holder may only exercise such conversion right to the extent that, after giving effect to the issuance of common stock after such conversion, the Holder would beneficially own less than 20% of the Company’s issued and outstanding common stock. The payment of the Purchase Price in the form of the 2.6 million shares of common stock and 17,376,950 shares of the Company’s preferred stock (the “Share Payment”) is contingent on the Company receiving shareholder approval at a special shareholders meeting for the Share Payment, and to create the new class of preferred shares and increase the number of authorized shares of common stock. The shares of common and preferred stock subject to the Share Payment shall be sold and issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. In the event that the Share Payment and other matters are not approved at a special meeting of the Company’s shareholders, the parties to the Purchase Agreement shall negotiate another form of payment for the remaining portion of the Purchase Price. The parties to the Purchase Agreement agreed to complete the transactions contemplated thereby within 60 days of the date of the Purchase Agreement or upon the approval of the shareholders of the Company, whichever comes later, and Seller agreed to various restrictions on, and covenants in relation to, its activities pending the completion of the sale of the Acquired Interests. On November 21, 2018, Shanghai TCH and Mr. Jihua Wang entered into an Agreement of Supplementary and Amendment (the “Amendment Agreement”) to that Equity Purchase Agreement, dated September 30, 2018, by and between Shanghai TCH and Mr. Jihua Wang (the “Original Agreement”). Pursuant to the Amendment Agreement, Shanghai TCH agreed to (a) purchase an 18% equity interest in Xi’an Xinhuan Energy Co., Ltd. (“Xinhuan”) instead of the 20% equity interest contemplated by the Original Agreement; (b) pay an aggregate of RMB 288 million for such equity interests (the “Purchase Price) instead of the RMB 320 million contemplated by the Original Agreement; (c) pay RMB 228 million of the Purchase Price in shares of the Company’s capital stock (the “Share Payment”) instead of the RMB 260 million contemplated by the Original Agreement; (d) complete the Share Payment using a per share value of $1.70 for both common and preferred shares instead of the $1.90 contemplated by the Original Agreement; and (e) issue to Mr. Wang 16,837,340 preferred shares as a portion of the Share Payment instead of the 17,376,950 preferred shares contemplated by the Original Agreement. On March 29, 2019, Shanghai TCH Energy Technology Co., Ltd (“Shanghai TCH”), a wholly owned subsidiary of China Recycling Energy Corporation (the “Company”) entered into a Termination Agreement (the “Termination Agreement”) of Equity Purchase Agreement and Supplementary Amendment Agreement with Mr. Jihua Wang. Shanghai TCH originally entered into an Equity Purchase Agreement dated on September 30, 2018 and Supplementary Amendment Agreement of Equity Purchase Agreement dated on November 21, 2018 with Mr. Wang (the “Original Agreements”) to purchase an 18% equity interest in Xi’an Xinhuan Energy Co., Ltd. from Mr. Wang, as disclosed in the Form 8-Ks filed on October 2, 2018 and November 26, 2018. Pursuant to the Termination Agreement, the parties agree to cancel and terminate the Original Agreement upon the effective date of the Termination Agreement. Parties agree not to pursue any breach of contract liability against each other under Original Agreements. Security Purchase Agreements On October 29, 2018, China Recycling Energy Corporation entered into Securities Purchase Agreements with certain purchasers, pursuant to which the Company will offer to the Purchasers, in a registered direct offering, an aggregate of 1,985,082 shares (the “Shares”) of the Company’s common stock. The Shares will be sold to the Purchasers at a negotiated purchase price of $1.375 per share, for aggregate gross proceeds to the Company of approximately $2.75 million, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. In a concurrent private placement, the Company is also issuing to the each of the Purchasers a warrant to purchase one (1) share of the Company’s Common Stock for each Share purchased under the Purchase Agreement, pursuant to that certain Common Stock Purchase Warrant, by and between the Company and each Purchaser, for a purchase price of $0.125 per Warrant and aggregate gross proceeds to the Company of approximately $250,000, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. The Warrants will be exercisable on the date of issuance at an initial exercise price of $1.3725 per share and will expire on the five and a half year anniversary of the date of issuance. H.C. Wainwright & Co., LLC is acting as the Company’s exclusive placement agent in connection with the offerings under the Purchase Agreement and will receive an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company from the offerings, an aggregate of up to $75,000 for certain expenses and warrants to purchase our Common Stock in an amount equal to 7% of our Shares sold to the Purchasers in the offerings, or 138,956 shares of Common Stock, on substantially the same terms as the Warrants, with an initial exercise price of $1.875 per share and expiration date of October 29, 2023 (the “Placement Agent Warrants”). Repayment of HYREF loan On December 29, 2018, Xi’an Zhonghong, Xi’an TCH, Beijing Hongyuan Recycling Energy Investment Center, LLP (the “HYREF”), Guohua Ku, the Chairman and CEO of the Company, and Chonggong Bai entered into a CDQ WHPG Station Fixed Assets Transfer Agreement, pursuant to which Xi’an Zhonghong will transfer a CDQ WHPG station as the repayment of loan at RMB 188,639,400 (approximately US $27,538,598) to HYREF. Xi’an Zhonghong, Xi’an TCH, Guohua Ku and Chonggong Bai also agreed to buy back the CDQ WHPG Station when conditions under the Buy Back Agreement are met. On December 29, 2018, Xi’an TCH, Xi’an Zhonghong, HYREF, Guohua Ku, Chonggong Bai and Xi’an Hanneng Enterprises Management Consulting Co. Ltd. (“Xi’an Hanneng”) entered into a Buy Back Agreement. Pursuant to the Buy Back Agreement, Xi’an TCH, Xi’an Zhonghong, Guohua Ku and Chonggong Bai (the “Buyers”) jointly and severally agreed to buy back all outstanding capital equity of Xi’an Hanneng which was transferred to HYREF by Chonggong Bai, and a CDQ WHPG station in Boxing County which was transferred to HYREF by Xi’an Zhonghong. The buy-back price for the Xi’an Hanneng’s equity will be the higher of (i) the market price of the equity shares at the time of buy-back; or (ii) the original transfer price of the equity shares plus bank interest. HYREF may request that the Buyers buy back the equity shares of Xi’an Hanneng and/or the CDQ WHPG station if one of the following conditions is met: (i) HYREF holds the equity shares of Xi’an Hanneng until December 31, 2021; (ii) Xi’an Huaxin New Energy Co., Ltd., a subsidiary of Xi’an Hanneng is delisted from The National Equities Exchange And Quotations Co., Ltd., a Chinese over-the-counter trading system (the “NEEQ”); (iii) any of the Buyers or its affiliates has a credit problem, including not being able to issue an auditor report or standard auditor report or any control person or executive of the Buyers is involved in crimes and is under prosecution or has other material credit problems, to HYREF’s reasonable belief; (iv) if Xi’an Zhonghong fails to timely make repayment on principal or interest of the loan agreement, its supplemental agreement or extension agreement; (v) the Buyers or any party to the Debt Repayment Agreement materially breaches the Debt Repayment Agreement or its related transaction documents, including but not limited to the Share Transfer Agreement, the Pledged Assets Transfer Agreement, the Entrusted Loan Agreement and their guarantee agreements and supplemental agreements. On December 29, 2018, Xi’an TCH entered into a Share Transfer Agreement with Hongyuan Huifu Venture Capital Co. Ltd (“Hongyuan Huifu”), pursuant to which Xi’an TCH agreed to transfer its 40% ownership in Hongyuan Recycling Energy Investment Management Beijing Co., Ltd. (the “Fund Management Company”) to Hongyuan Huifu for consideration of RMB 3,453,867.31 (approximately US $504,214) (the “Fund Management Company Transfer Price”). On December 29, 2018, Xi’an TCH, Hongyuan Huifu and Fund Management Company entered into a supplemental agreement to the Share Transfer Agreement. Xi’an TCH owes the Fund Management Company RMB 18,306,666,67 (approximately US $2,672,506) in financial advisory fees, and the parties agreed that the Fund Management Company Transfer Price could be used to off-set the outstanding financial advisory fees. Upon the completion of this transaction, the Fund Management Company will owe RMB 3,453,867.31 to Hongyuan Huifu, and Xi’an TCH will owe RMB 14,852,799.36 (approximately US $2,168,291) to the Fund Management Company. On December 29, 2018, Shanghai TCH entered into a Share Transfer Agreement with Hongyuan Huifu, pursuant to which Hongyuan Huifu agreed to transfer its 10% ownership in Xi’an Zhonghong to Shanghai TCH for consideration of RMB 3 million (approximately US $437,956). On January 4, 2019, Xi’an Zhonghong, Xi’an TCH, and Mr. Chonggong Bai, a resident of China, entered into a Projects Transfer Agreement (the “Agreement”), pursuant to which Xi’an Zhonghong will transfer a CDQ WHPG station (under construction) located in Xuzhou City for Xuzhou Huayu Coking Co., Ltd. (“Xuzhou Huayu Project”) to Mr. Bai for RMB 120,000,000 (US$17,518,248) and Xi’an TCH will transfer two Biomass Power Generation Projects in Shenqiu (“Shenqiu Phase I and II Projects”) to Mr. Bai for RMB 127,066,000 (approximately US$18,549,781). Mr. Bai agreed to transfer all the equity shares of his wholly owned company, Xi’an Hanneng Enterprises Management Consulting Co. Ltd. (“Xi’an Hanneng”) to Beijing Hongyuan Recycling Energy Investment Center, LLP (the “HYREF”) as repayment for the RMB 247,066,000 (US$36,068,029) loan made by Xi’an Zhonghong to HYREE as consideration for the transfer of the Xuzhou Huayu Project and Shenqiu Phase I and II Projects. On January 22, 2019, Xi’an TCH completed the transaction contemplated in a Share Transfer Agreement (the “Fund Management Company Share Transfer Agreement”) which was entered on December 29, 2018. Pursuant to the Fund Management Company Share Transfer Agreement, Xi’an TCH transferred its 40% ownership in Hongyuan Recycling Energy Investment Management Beijing Co., Ltd. to Hongyuan Huifu Venture Capital Co. Ltd (“Hongyuan Huifu”) for consideration of RMB 3,453,867.31 (approximately US $504,214). On January 22, 2019, Shanghai TCH contemplated in a Share Transfer Agreement (the “Xi’an Zhonghong Share Transfer Agreement”) which was entered on December 29, 2018. Pursuant to the Xi’an Zhonghong Share Transfer Agreement, Hongyuan Huifu transferred its 10% ownership in Xi’an Zhonghong New Energy Technology Co., Ltd. to Shanghai TCH for consideration of RMB 3 million (approximately US $437,956). On January 22, 2019, Xi’an Zhonghong, completed the transaction contemplated in a CDQ WHPG Station Fixed Assets Transfer Agreement (the “Fixed Assets Transfer Agreement”) which was entered on December 29, 2018. Pursuant to the Fixed Assets Transfer Agreement, Xi’an Zhonghong transferred a CDQ WHPG station to Beijing Hongyuan Recycling Energy Investment Center, LLP (“HYREF”) as the repayment of a loan for RMB 188,639,400 (approximately US $27,538,598) owed to HYREF. Xi’an TCH is a secondary limited partner of HYREF. The consideration of the CDQ WHPG station is determined by the parties based upon the appraisal report issued by Zhonglian Assets Appraisal Group (Shaanxi) Co., Ltd. as of August 15, 2018. On February 15, 2019, Xi’an TCH and Xi’an Zhonghong completed the transfer of assets contemplated in a Projects Transfer Agreement (the “Agreement”) which was entered on January 4, 2019. Pursuant to the Agreement, Xi’an Zhonghong transferred a CDQ WHPG station (under construction) located in Xuzhou City for Xuzhou Huayu Coking Co., Ltd. (“Xuzhou Huayu Project”) to Mr. Chonggong Bai for RMB 120,000,000 (US$17,518,248) and Xi’an TCH transferred two Biomass Power Generation Projects in Shenqiu (“Shenqiu Phase I and II Projects”) to Mr. Bai for RMB 127,066,000 (approximately US$18,549,781). Mr. Bai agreed to transfer all the equity shares of his wholly owned company, Xi’an Hanneng to Beijing Hongyuan Recycling Energy Investment Center, LLP (the “HYREF”) as repayment by Xi’an Zhonghong for the RMB 247,066,000 (US$36,068,029) loan to HYREE as consideration for the transfer of the Xuzhou Huayu Project and Shenqiu Phase I and II Projects. Securities Purchase Agreement On January 31, 2019, the Company entered into a Securities Purchase Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (the “Purchaser”), pursuant to which the Company sold and issued to the Purchaser a Convertible Promissory Note (the “Note”) in the amount of $1,050,000. The Purchaser purchased the Note with an original issue discount of $50,000. The Note was sold to the Purchaser pursuant to an exemption from registration under Regulation D, promulgated under the Securities Act of 1933, as amended. The Note bears interest at the rate of 8% per annum. All outstanding principal and accrued interest on the Note will become due and payable on January 30, 2021, subject to a potential one-year extension period during which interest would not accrue. The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay a 125% premium on any amounts outstanding under the Note. Amounts outstanding under the Note may be converted at any time, at the Lender’s option, into shares of the Company’s common stock at a conversion price of $3.00 per share, subject to certain adjustments. On February 13, 2019, China Recycling Energy Corporation entered into a Securities Purchase Agreement (the “Agreement”) with Great Essential Investment, Ltd. a company incorporated in the British Virgin Islands (the “Purchaser”), pursuant to which the Company agreed to sell to the Purchaser in a private placement 1,600,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “ Common Stock Private Placement On February 27, 2019, the Company entered into a Securities Purchase Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (the “Purchaser”), pursuant to which the Company sold and issued to the Purchaser a Convertible Promissory Note (the “Note”) in the amount of $1,050,000. The Purchaser purchased the Note with an original issue discount of $50,000. The Note was sold to the Purchaser pursuant to an exemption from registration under Regulation D, promulgated under the Securities Act of 1933, as amended. The Note bears interest at the rate of 8% per annum. All outstanding principal and accrued interest on the Note will become due and payable on February 26, 2021, subject to a potential one-year extension period during which interest would not accrue. The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay a 125% premium on any amounts outstanding under the Note. Amounts outstanding under the Note may be converted at any time, at the Lender’s option, into shares of the Company’s common stock at a conversion price of $3.00 per share, subject to certain adjustments. |
Restatement
Restatement | 3 Months Ended |
Mar. 31, 2018 | |
Restatement [Abstract] | |
RESTATEMENT | 22. RESTATEMENT On April 28, 2016, Erdos TCH and Erdos entered a supplemental agreement, effective on May 1, 2016, Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / Kwh. The Company evaluated the modified terms for payments based on actual electricity sold as minimum lease payments as defined in ASC 840-10-25-4, since lease payments that depend on a factor directly related to the future use of the leased property are contingent rentals and are excluded from minimum lease payments in their entirety; accordingly, the Company wrote off the net investment receivables of these leases at lease modification date. The consolidated financial statements for the three months ended March 31, 2018 and 2017, and as of March 31, 2018 were restated to reflect the above determination. The following table presents the effects of the restatement on the accompanying consolidated balance sheet at March 31, 2018: As Previously Reported Restated Net Adjustment Accounts receivable 13,892,910 17,248,195 3,355,285 Current portion of investment in sales-type leases, net 14,462,637 12,558,719 (1,903,918 ) Interest receivable on sales type leases 10,871,828 10,483,356 (388,472 ) Other receivables 4,166,751 1,280,231 (2,886,520 ) Investment in sales-type leases, net (Non-current) 102,418,107 46,208,501 (56,209,606 ) Total Assets 300,388,617 242,355,386 (58,033,231 ) Deferred tax liability, net 9,025,026 2,119,260 (6,905,766 ) Total Liabilities 88,048,844 81,143,078 (6,905,766 ) Statutory reserve 14,830,811 14,601,702 (229,109 ) Accumulated other comprehensive income 9,965,698 7,265,831 (2,699,867 ) Retained earnings 76,329,958 28,131,469 (48,198,489 ) Total Company stockholders' equity 212,931,590 161,804,125 (51,127,465 ) Total liabilities and equity 300,388,617 242,355,386 (58,033,231 ) The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the three months ended March 31, 2018: As Previously Reported Restated Net Adjustment Contingent rental income - 1,422,831 1,422,831 Interest income on sales-type leases 2,006,039 1,606,615 (399,424 ) Total operating income 2,006,039 3,029,446 1,023,407 General and administrative expenses 353,507 1,506,231 1,152,724 Income from operations 1,652,532 1,523,215 (129,317 ) Income before income tax 263,367 134,050 (129,317 ) Income tax expense 508,159 339,545 (168,614 ) Net loss attributable to China Recycling Energy Corporation (153,534 ) (114,237 ) 39,297 Foreign currency translation gain 8,331,071 6,405,278 (1,925,793 ) Comprehensive income attributable to China Recycling Energy Corporation 8,177,537 6,291,041 (1,886,496 ) The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the three months ended March 31, 2017: As Previously Reported Restated Net Adjustment Contingent rental income - 1,771,032 1,771,032 Interest income on sales-type leases 2,128,016 1,678,975 (449,041 ) Total operating income 2,128,016 3,450,007 1,321,991 General and administrative expenses 109,061 1,203,167 1,094,106 Income from operations 2,018,955 2,246,840 227,885 - Income before income tax 702,301 930,186 227,885 Income tax expense 416,303 317,245 (99,058 ) - Net income attributable to China Recycling Energy Corporation 374,421 701,364 326,943 Foreign currency translation gain 1,105,984 843,107 (262,877 ) Comprehensive income attributable to China Recycling Energy Corporation 1,480,405 1,544,471 64,066 The following table presents the effects of the restatement on the accompanying consolidated statement of cash flows for the three months ended March 31, 2018: As Previously Reported Restated Net Adjustment Income including noncontrolling interest (244,792 ) (205,495 ) 39,297 Changes in deferred tax 50,164 (118,450 ) (168,614 ) Interest receivable on sales type leases (595,397 ) (471,136 ) 124,261 Collection of principal on sales type leases 1,131,561 992,791 (138,770 ) Accounts receivable - (742,756 ) (742,756 ) Other receivables (949,187 ) (62,605 ) 886,582 Net cash provided by operating activities 1,258,619 1,258,619 - The following table presents the effects of the restatement on the accompanying consolidated statement of cash flows for the three months ended March 31, 2017: As Previously Reported Restated Net Adjustment Income including noncontrolling interest 285,998 612,941 326,943 Changes in deferred tax 77,081 (21,977 ) (99,058 ) Interest receivable on sales type leases (1,806,915 ) (1,678,975 ) 127,940 Collection of principal on sales type leases 55,579 - (55,579 ) Accounts receivable - (1,200,787 ) (1,200,787 ) Other receivables (1,098,855 ) (198,314 ) 900,541 Net cash used in operating activities (818,378 ) (818,378 ) - |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements included herein were prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) that are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) were omitted pursuant to such rules and regulations. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements (“CFS”) include the accounts of CREG and its subsidiaries, Shanghai Yinghua Financial Leasing Co., Ltd. (“Yinghua”) and Sifang Holdings, Sifang Holdings’ wholly owned subsidiaries, Huahong New Energy Technology Co., Ltd. (“Huahong”) and Shanghai TCH Energy Tech Co., Ltd. (“Shanghai TCH”), Shanghai TCH’s wholly-owned subsidiary, Xi’an TCH Energy Tech Co., Ltd. (“Xi’an TCH”) and Xi’an TCH’s subsidiaries, Erdos TCH Energy Saving Development Co., Ltd (“Erdos TCH”), 100% owned by Xi’an TCH (See note 1), Zhonghong, 90% owned by Xi’an TCH, and Zhongxun, 100% owned by Xi’an TCH. Substantially all the Company’s revenues are derived from the operations of Shanghai TCH and its subsidiaries, which represent substantially all the Company’s consolidated assets and liabilities as of March 31, 2018 and December 31, 2017, respectively. All significant inter-company accounts and transactions were eliminated in consolidation. |
Use of Estimates | Use of Estimates In preparing these CFS in accordance with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets as well as revenues and expenses during the period reported. Actual results may differ from these estimates. |
Revenue Recognition | Revenue Recognition Sales-type Leasing and Related Revenue Recognition The Company constructs and leases waste energy recycling power generating projects to its customers. The Company typically transfers ownership of the waste energy recycling power generating projects to its customers at the end of the lease. The investment in these projects is recorded as investment in sales-type leases in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 840 , “Lease ,” Contingent Rental Income The Company records income from actual electricity usage in addition to minimum lease payments of each project as contingent rental income in the period contingent rental income is earned. Contingent rent is not part of minimum lease payments. |
Cash and Equivalents | Cash and Equivalents Cash and equivalents includes cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. |
Accounts Receivable | Accounts Receivable As of March 31, 2018, the Company had accounts receivable of $17,248,195 (from the sales of CDQ and a CDQ WHPG system to Zhongtai and accounts receivable of Erdos TCH for electricity sold). As of December 31, 2017, the Company had accounts receivable of $15,858,804 (from the sales of CDQ and a CDQ WHPG system to Zhongtai and accounts receivable of Erdos TCH for electricity sold). |
Interest Receivable on Sales Type Leases | Interest Receivable on Sales Type Leases As of March 31, 2018, the interest receivable on sales type leases was $10,483,356 mainly from recognized but not yet collected interest income for the Pucheng, Shenqiu systems. As of December 31, 2017, the interest receivable on sales type leases was $9,619,278. The Company maintains reserves for potential credit losses on receivables. Management reviews the composition of receivables and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. As of March 31, 2018, the Company had bad debt allowance for net investment receivable of $1,976,750 for Pucheng and Shenqiu systems. |
Concentration of Credit Risk | Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within China. Balances at financial institutions within China are not covered by insurance. The Company has not experienced any losses in such accounts. Certain other financial instruments, which subject the Company to concentration of credit risk, consist of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of its customers’ financial condition and customer payment practices to minimize collection risk on accounts receivable. The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method over the estimated lives as follows: Building 20 years Vehicles 2 - 5 years Office and Other Equipment 2 - 5 years Software 2 - 3 years |
Impairment of Long-lived Assets | Impairment of Long-lived Assets In accordance with FASB ASC Topic 360, “Property, Plant, and Equipment |
Notes Payable - Banker's Acceptances | Notes Payable – Banker’s Acceptances The Company endorses banker’s acceptances that are issued from a bank to vendors as payment for its obligations. Most of the banker’s acceptances have maturity dates of less than six months following their issuance. |
Cost of Sales | Cost of Sales Cost of sales consists primarily of the direct material of the power generating system and expenses incurred directly for project construction for sales-type leasing and sales tax and additions for contingent rental income. |
Income Taxes | Income Taxes Income taxes are accounted for using an asset and liability method. 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 follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC Topic 740, when tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. CREG is subject to U.S. corporate income taxes on its taxable income at a rate of up to 21% for taxable years beginning after December 31, 2017 and U.S. corporate income tax on its taxable income of up to 35% for prior tax years. On December 22, 2017, the Tax Cut and Jobs Act (“Tax Act”) was signed into law. The Tax Act introduced a broad range of tax reform measures that significantly change the federal income tax laws. The provisions of the Tax Act that may have significant impact on the Company include the permanent reduction of the corporate income tax rate from 35% to 21% effective for tax years including or commencing on January 1, 2018, one-time transition tax on post-1986 foreign unremitted earnings, provision for Global Intangible Low Tax Income (“GILTI”), deduction for Foreign Derived Intangible Income (“FDII”), repeal of corporate alternative minimum tax, limitation of various business deductions, and modification of the maximum deduction of net operating loss with no carryback but indefinite carryforward provision. Many provisions in the Tax Act are generally effective in tax years beginning after December 31, 2017. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump-sum payment. To the extent that portions of its U.S. taxable income, such as Subpart F income or GILTI, are determined to be from sources outside of the U.S., subject to certain limitations, the Company may be able to claim foreign tax credits to offset its U.S. income tax liabilities. Any remaining liabilities are accrued in the Company’s consolidated statements of comprehensive income and estimated tax payments are made when required by U.S. law. |
Noncontrolling Interests | Noncontrolling Interests The Company follows FASB ASC Topic 810, “Consolidation,” The net income (loss) attributed to NCIs was separately designated in the accompanying statements of income and comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. |
Statement of Cash Flows | Statement of Cash Flows In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, other receivables, accounts payable, accrued liabilities and short-term debts, the carrying amounts approximate their fair values due to their short maturities. Receivables on sales-type leases are based on interest rates implicit in the lease. FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” “Financial Instruments,” ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to FV measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” “Derivatives and Hedging.” The following are the considerations with respect to disclosures of FV of long-term debt obligations: As of March 31, 2018 and December 31, 2017, the Company did not have any long-term debt obligations. FV measurements and approximations for certain financial instruments are based on what a reporting entity would likely have to pay to transfer the financial obligation to an entity with a comparable credit rating. The Company’s bank loans and trust loans payable are privately held (i.e., nonpublic) debt; therefore, pricing inputs are not observable. For this reason, the Company classified bank loans and trust loans payable as a Level 3 FV measurement in the valuation hierarchy. For the Company’s long-term bank loans, and Zhonghong entrusted loans noted above, the Company believes the carrying amounts approximate their FV. Based on the Company’s understanding of the credit markets, the Company’s business is in a sector (energy-saving green) that is supported by the PRC government and the lending bank, the Company believes it could have obtained similar loans on similar terms and interest rates. In addition, in connection with the FV measurement, the Company considered nonperformance risk (including credit risk) relating to the debt obligations, including the following: (i) the Company is considered a low credit risk customer to the lending bank and its creditors; (ii) the Company has a good history of making timely payments and have never defaulted on any loans; and (iii) the Company has a stable and continuous cash inflow from collections from its sales-type lease of energy saving projects. As of March 31, 2018 and December 31, 2017, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at FV. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation in accordance with FASB ASC Topic 718 “Compensation—Stock Compensation,” Equity.” |
Basic and Diluted Earnings per Share | Basic and Diluted Earnings per Share The Company presents net income (loss) per share (“EPS”) in accordance with FASB ASC Topic 260, “Earning Per Share.” The following table presents a reconciliation of basic and diluted EPS for the three months ended March 31, 2018 and 2017: Three Months Ended 2018 (Restated) 2017 Net income (loss) $ (114,237 ) $ 701,364 Weighted average shares outstanding – basic 8,310,198 8,310,198 Effect of dilutive securities: Options granted - - Weighted average shares outstanding – diluted 8,310,198 8,310,198 Earnings (loss) per share – basic $ (0.01 ) $ 0.08 Earnings (loss) per share – diluted $ (0.01 ) $ 0.08 Loss per basic and diluted share are the same due to anti-dilutive of the shares resulting from net loss for the three months ended March 31, 2018. |
Foreign Currency Translation and Comprehensive Income (Loss) | Foreign Currency Translation and Comprehensive Income (Loss) The Company’s functional currency is the Renminbi (“RMB”). For financial reporting purposes, RMB were translated into United States Dollars (“USD” or “$”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income.” Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date. The Company follows FASB ASC Topic 220, “Comprehensive Income.” |
Segment Reporting | Segment Reporting FASB ASC Topic 280, “Segment Reporting,” |
New Accounting Pronouncements | New Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its CFS. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The standard should be applied prospectively on or after the effective date. The Company will evaluate the impact of adopting this standard prospectively upon any transactions of acquisitions or disposals of assets or businesses. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its FV, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of adopting this standard on its CFS. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future CFS. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of property and equipment estimated lives | Building 20 years Vehicles 2 - 5 years Office and Other Equipment 2 - 5 years Software 2 - 3 years |
Schedule of reconciliation of basic and diluted earnings per share | Three Months Ended 2018 (Restated) 2017 Net income (loss) $ (114,237 ) $ 701,364 Weighted average shares outstanding – basic 8,310,198 8,310,198 Effect of dilutive securities: Options granted - - Weighted average shares outstanding – diluted 8,310,198 8,310,198 Earnings (loss) per share – basic $ (0.01 ) $ 0.08 Earnings (loss) per share – diluted $ (0.01 ) $ 0.08 |
Investment in Sales-Type Leas_2
Investment in Sales-Type Leases, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investment in Sales-Type Leases, Net [Abstract] | |
Schedule of net investment in sales-type leases | 2018 (Restated) 2017 (Restated) Total future minimum lease payments receivable $ 100,682,241 $ 99,155,214 Less: executory cost (6,458,859 ) (6,360,901 ) Less: unearned interest (22,996,056 ) (23,730,094 ) Less: realized interest income but not yet received (10,483,356 ) (9,619,278 ) Less: allowance for net investment receivable (1,976,750 ) (1,802,822 ) Investment in sales-type leases, net 58,767,220 57,642,119 Current portion 12,558,719 11,531,745 Noncurrent portion $ 46,208,501 $ 46,110,374 |
Schedule of future minimum rentals to be received on non-cancelable sales-type leases by years | 2019 $ 33,316,900 2020 13,549,403 2021 13,549,403 2022 13,549,403 2023 10,400,598 Thereafter 16,316,534 Total $ 100,682,241 |
Construction in Progress (Table
Construction in Progress (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Construction in Progress [Abstract] | |
Schedule of construction in progress | 2018 2017 Xuzhou Huayu $ 25,953,681 $ 24,976,178 Xuzhou Tian’an 40,150,636 37,814,637 Boxing County Chengli 33,642,238 32,375,158 Total $ 99,746,555 $ 95,165,973 |
Taxes Payable (Tables)
Taxes Payable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Taxes Payable [Abstract] | |
Schedule of taxes payable | 2018 2017 Income - current $ 1,134,364 $ 1,097,768 VAT 1,286,626 1,145,363 Other 202,780 180,649 Total - current 2,623,770 2,423,780 Income - noncurrent $ 6,998,625 $ 6,998,625 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Payables (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accrued Liabilities and Other Payables [Abstract] | |
Schedule of accrued liabilities and other payables | 2018 2017 Employee training, labor union expenditure and social insurance payable $ 892,906 $ 852,316 Consulting, auditing, and legal expenses 480,057 480,057 Accrued payroll and welfare 327,896 261,793 Other 15,790 24,150 Total $ 1,716,649 $ 1,618,316 |
Deferred Tax Liability, Net (Ta
Deferred Tax Liability, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Deferred Tax Liability, Net [Abstract] | |
Schedule of deferred tax liability | 2018 (Restated) 2017 (Restated ) Deferred tax asset — current (accrual of employee social insurance) $ 197,038 $ 189,617 Deferred tax liability — current (net investment in sales-type leases) (1,629,858 ) (1,520,537 ) Deferred tax liability, net of current deferred tax asset $ (1,432,820 ) $ (1,330,921 ) Deferred tax asset — noncurrent (depreciation of fixed assets) $ 10,371,498 $ 10,250,394 Deferred tax asset — noncurrent (asset impairment loss) 494,187 450,706 Deferred tax liability — noncurrent (net investment in sales-type leases) (11,552,125 ) (11,527,594 ) Deferred tax liability, net of noncurrent deferred tax asset $ (686,440 ) $ (826,493 ) Total Deferred tax liability, noncurrent per ASU 2015-17 $ (2,119,260 ) $ (2,157,414) |
Loans Payable (Tables)
Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Loans Payable [Abstract] | |
Schedule of future minimum repayment pf loans | 2018 $ 52,798,143 Total $ 52,798,143 |
Income Tax (Tables)
Income Tax (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax [Abstract] | |
Schedule of reconciles US statutory rates to effective tax rate | \ 2018 (Restated) 2017 (Restated) U.S. statutory rates 21.0 % 34.0 % Tax rate difference – current provision 7.4 % (8.0 )% Other 16.4 % (3.8 )% Permanent differences - % - % Valuation allowance on PRC NOL 190.8 % 11.9 % Valuation allowance on US NOL 17.7 % - % Tax (benefit) per financial statements 253.3 % 34.1 % |
Schedule of provision for income taxes expense | 2018 (Restated) 2017 (Restated) Income tax expense – current $ 457,995 $ 339,222 Income tax expense – deferred (118,450 ) (21,977 ) Total income tax expense $ 339,545 $ 317,245 |
Stock-Based Compensation Plan (
Stock-Based Compensation Plan (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-Based Compensation Plan [Abstract] | |
Summary of option activity with respect to employees and independent directors | Number of Shares Average Exercise Price per Share Weighted Average Remaining Contractual Term in Years Outstanding at January 1, 2016 4,000 $ 10.2 4.77 Exercisable at January 1, 2016 4,000 10.2 4.77 Granted - - - Exercised - - - Forfeited - - - Outstanding at December 31, 2016 4,000 10.2 3.77 Exercisable at December 31, 2016 4,000 10.2 3.77 Granted 5,000 1.6 10 Exercised - - - Forfeited - - - Outstanding at December 31, 2017 9,000 5.4 6.41 Exercisable at December 31, 2017 9,000 5.4 6.41 Granted - - - Exercised - - - Forfeited - - - Outstanding at March 31, 2018 9,000 $ 5.4 6.16 Exercisable at March 31, 2018 9,000 $ 5.4 6.16 |
Statutory Reserves (Tables)
Statutory Reserves (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Statutory Reserves [Abstract] | |
Schedule of maximum statutory reserve amount | Name of Chinese Subsidiaries Registered Capital Maximum Statutory Reserve Amount Statutory reserve at March 31, 2018 (Restated) Shanghai TCH $ 29,800,000 $ 14,900,000 ¥ 6,564,303 ($1,003,859) Xi’an TCH ¥ 202,000,000 ¥ 101,000,000 ¥ 69,854,362 ($10,682,975) Erdos TCH ¥ 120,000,000 ¥ 60,000,000 ¥ 19,035,813 ($2,914,868) Xi’an Zhonghong ¥ 30,000,000 ¥ 15,000,000 Did not accrue yet due to accumulated deficit Shaanxi Huahong $ 2,500,300 $ 1,250,150 Did not accrue yet due to accumulated deficit Zhongxun ¥ 35,000,000 ¥ 17,500,000 Did not accrue yet due to accumulated deficit |
Restatement (Tables)
Restatement (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restatement [Abstract] | |
Schedule of restatement on consolidated balance sheet | As Previously Reported Restated Net Adjustment Accounts receivable 13,892,910 17,248,195 3,355,285 Current portion of investment in sales-type leases, net 14,462,637 12,558,719 (1,903,918 ) Interest receivable on sales type leases 10,871,828 10,483,356 (388,472 ) Other receivables 4,166,751 1,280,231 (2,886,520 ) Investment in sales-type leases, net (Non-current) 102,418,107 46,208,501 (56,209,606 ) Total Assets 300,388,617 242,355,386 (58,033,231 ) Deferred tax liability, net 9,025,026 2,119,260 (6,905,766 ) Total Liabilities 88,048,844 81,143,078 (6,905,766 ) Statutory reserve 14,830,811 14,601,702 (229,109 ) Accumulated other comprehensive income 9,965,698 7,265,831 (2,699,867 ) Retained earnings 76,329,958 28,131,469 (48,198,489 ) Total Company stockholders' equity 212,931,590 161,804,125 (51,127,465 ) Total liabilities and equity 300,388,617 242,355,386 (58,033,231 ) |
Schedule of restatement on consolidated statement of income and comprehensive income | The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the three months ended March 31, 2018: As Previously Reported Restated Net Adjustment Contingent rental income - 1,422,831 1,422,831 Interest income on sales-type leases 2,006,039 1,606,615 (399,424 ) Total operating income 2,006,039 3,029,446 1,023,407 General and administrative expenses 353,507 1,506,231 1,152,724 Income from operations 1,652,532 1,523,215 (129,317 ) Income before income tax 263,367 134,050 (129,317 ) Income tax expense 508,159 339,545 (168,614 ) Net loss attributable to China Recycling Energy Corporation (153,534 ) (114,237 ) 39,297 Foreign currency translation gain 8,331,071 6,405,278 (1,925,793 ) Comprehensive income attributable to China Recycling Energy Corporation 8,177,537 6,291,041 (1,886,496 ) The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the three months ended March 31, 2017: As Previously Reported Restated Net Adjustment Contingent rental income - 1,771,032 1,771,032 Interest income on sales-type leases 2,128,016 1,678,975 (449,041 ) Total operating income 2,128,016 3,450,007 1,321,991 General and administrative expenses 109,061 1,203,167 1,094,106 Income from operations 2,018,955 2,246,840 227,885 - Income before income tax 702,301 930,186 227,885 Income tax expense 416,303 317,245 (99,058 ) - Net income attributable to China Recycling Energy Corporation 374,421 701,364 326,943 Foreign currency translation gain 1,105,984 843,107 (262,877 ) Comprehensive income attributable to China Recycling Energy Corporation 1,480,405 1,544,471 64,066 |
Schedule of restatement on consolidated statement of cash flows | The following table presents the effects of the restatement on the accompanying consolidated statement of cash flows for the three months ended March 31, 2018: As Previously Reported Restated Net Adjustment Income including noncontrolling interest (244,792 ) (205,495 ) 39,297 Changes in deferred tax 50,164 (118,450 ) (168,614 ) Interest receivable on sales type leases (595,397 ) (471,136 ) 124,261 Collection of principal on sales type leases 1,131,561 992,791 (138,770 ) Accounts receivable - (742,756 ) (742,756 ) Other receivables (949,187 ) (62,605 ) 886,582 Net cash provided by operating activities 1,258,619 1,258,619 - The following table presents the effects of the restatement on the accompanying consolidated statement of cash flows for the three months ended March 31, 2017: As Previously Reported Restated Net Adjustment Income including noncontrolling interest 285,998 612,941 326,943 Changes in deferred tax 77,081 (21,977 ) (99,058 ) Interest receivable on sales type leases (1,806,915 ) (1,678,975 ) 127,940 Collection of principal on sales type leases 55,579 - (55,579 ) Accounts receivable - (1,200,787 ) (1,200,787 ) Other receivables (1,098,855 ) (198,314 ) 900,541 Net cash used in operating activities (818,378 ) (818,378 ) - |
Organization and Description _2
Organization and Description of Business (Details) | Feb. 11, 2015USD ($) | Dec. 06, 2013 | Sep. 11, 2013USD ($)$ / sharesMWshares | Sep. 11, 2013CNY (¥)MW | Oct. 08, 2012USD ($)MW | Apr. 14, 2009USD ($) | Dec. 29, 2018USD ($) | Dec. 29, 2018CNY (¥) | Apr. 28, 2016 | Mar. 31, 2016USD ($) | Mar. 31, 2016CNY (¥) | Mar. 24, 2014USD ($) | Jul. 31, 2013USD ($) | Jul. 24, 2013 | Jul. 19, 2013USD ($) | Jul. 19, 2013CNY (¥) | Jul. 18, 2013USD ($) | Jul. 18, 2013CNY (¥) | Jun. 25, 2013USD ($) | Jun. 15, 2013USD ($) | Jun. 15, 2013CNY (¥) | Mar. 30, 2013USD ($) | Mar. 30, 2013CNY (¥) | Sep. 28, 2011USD ($)MW | Sep. 28, 2011CNY (¥)MW | Jun. 29, 2010USD ($)MW | Jun. 29, 2010CNY (¥)MW | Mar. 31, 2018USD ($)MW | Mar. 31, 2018CNY (¥)MW | Mar. 31, 2018CNY (¥) | Mar. 24, 2014CNY (¥) | Sep. 11, 2013CNY (¥)shares | Aug. 31, 2013USD ($) | Jul. 22, 2013USD ($) | Jul. 22, 2013CNY (¥) | Jul. 19, 2013CNY (¥) | Jul. 18, 2013CNY (¥) | Jun. 25, 2013CNY (¥) | Oct. 08, 2012CNY (¥) | May 25, 2011USD ($) | May 25, 2011CNY (¥) | Apr. 14, 2009CNY (¥) |
Biomass Power Generation Asset Transfer Agreement [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 12 | 12 | ||||||||||||||||||||||||||||||||||||||||
Purchase price for power generation systems | $ 16,480,000 | ¥ 100,000,000 | ||||||||||||||||||||||||||||||||||||||||
Common stock issuable for power generation systems | shares | 8,766,547 | 8,766,547 | ||||||||||||||||||||||||||||||||||||||||
Common stock issuable per share for power generation systems | $ / shares | $ 1.87 | |||||||||||||||||||||||||||||||||||||||||
Lease amount per month | $ 630,000 | ¥ 3,800,000 | ||||||||||||||||||||||||||||||||||||||||
Biomass Power Generation Project Lease Agreement [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Leasing fees | $ 279,400 | ¥ 1,900,000 | ||||||||||||||||||||||||||||||||||||||||
Lease period | 15 years | 15 years | ||||||||||||||||||||||||||||||||||||||||
Zhongtai Waste Heat Power Generation Energy Management Cooperative Agreement [Member] | Zhongtai [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Description of long-term contract for purchase of electric power | <div>The construction period of the Project is expected to be 18 months from the date when conditions are ready for construction to begin. Zhongtai will start to pay an energy saving service fee from the date when the WHPG station passes the required 72-hour test run. The payment term is 20 years. For the first 10 years, Zhongtai shall pay an energy saving fee at RMB 0.534 ($0.089) per kilowatt hour (KWH) (including value added tax) for the power generated from the system. For the second 10 years, Zhongtai shall pay an energy saving fee at RMB 0.402 ($0.067) per KWH (including value added tax). During the term of the contract the energy saving fee shall be adjusted at the same percentage as the change of local grid electricity price. Zhongtai shall also pay an energy saving fee for the steam supplied by Xi’an TCH at RMB 100 ($16.67) per ton (including value added tax). Zhongtai and its parent company will provide guarantees to ensure Zhongtai will fulfill its obligations under the Agreement. Upon the completion of the term, Xi’an TCH will transfer the systems to Zhongtai at RMB 1 ($0.16). Zhongtai shall provide waste heat to the systems for no less than 8,000 hours per year and waste gas volume no less than 150,000 Normal Meter Cubed (Nm3) per hour with a temperature no less than 950°C. If these requirements are not met, the term of the Agreement will be extended accordingly. If Zhongtai wants to terminate the Zhongtai Agreement early, it shall provide Xi’an TCH a 60 day notice and pay the termination fee and compensation for the damages to Xi’an TCH according to the following formula: (1) if it is less than five years into the term when Zhongtai requests termination, Zhongtai shall pay: Xi’an TCH’s total investment amount plus Xi’an TCH’s annual investment return times five years minus the years in which the system has already operated; or 2) if it is more than five years into the term when Zhongtai requests the termination, Zhongtai shall pay: Xi’an TCH’s total investment amount minus total amortization cost (the amortization period is 10 years).</div> | |||||||||||||||||||||||||||||||||||||||||
Xian Zhonghong New Energy Technology Co., Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 4,850,000 | ¥ 30,000,000 | ||||||||||||||||||||||||||||||||||||||||
Contribution percentage in total investment | 90.00% | 90.00% | 90.00% | 90.00% | ||||||||||||||||||||||||||||||||||||||
Energy saving solution and services cost | $ 4,370,000 | ¥ 27,000,000 | ||||||||||||||||||||||||||||||||||||||||
Boxing County Chengli Gas Supply Co Ltd [Member] | EPC General Contractor Agreement [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Contract price for materials equipment | $ 33,340,000 | ¥ 200,000,000 | ||||||||||||||||||||||||||||||||||||||||
Shenqiu Project [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 12 | 12 | 12 | |||||||||||||||||||||||||||||||||||||||
Leasing fees | $ 286,000 | ¥ 1,800,000 | ||||||||||||||||||||||||||||||||||||||||
Lease period | 11 years | 11 years | ||||||||||||||||||||||||||||||||||||||||
Total cost of project | $ 11,100,000 | ¥ 68,000,000 | ||||||||||||||||||||||||||||||||||||||||
Consideration of thermal power generation project | $ 3,570,000 | ¥ 22,500,000 | ||||||||||||||||||||||||||||||||||||||||
Consideration of power generation project | $ 10,937,500 | ¥ 70,000,000 | ||||||||||||||||||||||||||||||||||||||||
Hongyuan Huifu [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 80.00% | |||||||||||||||||||||||||||||||||||||||||
Chengli Waste Heat Power Generation Projects [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Description of long-term contract for purchase of electric power | The watt hours generated by the Chengli Project will be charged at RMB 0.42 ($0.068) per kilowatt hour (excluding tax). The operating time shall be based upon an average 8,000 hours annually. If the operating time is less than 8,000 hours per year due to a reason attributable to Chengli, then time charged shall be 8,000 hours a year, and if it is less than 8,000 hours due to a reason attributable to Zhonghong, then it shall be charged at actual operating hours. The construction of the Chengli Project was completed in the second quarter of 2015 and the project successfully completed commissioning tests in the first quarter of 2017. The Chengli Project is now operational, but will not begin operations until the Company receives the required power generating license, which the Company anticipates receiving in the second quarter of 2018. When operations begin, Chengli shall ensure its coking production line works properly and that working hours for the CDQ system are at least 8,000 hours per year, and Zhonghong shall ensure that working hours for the CDQ WHPG system are at least 7,200 hours per year. | |||||||||||||||||||||||||||||||||||||||||
Project agreement terms | 20 years | |||||||||||||||||||||||||||||||||||||||||
Tianyu Waste Heat Power Generation Project [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Contract price for materials equipment | $ 66,680,000 | ¥ 400,000,000 | ||||||||||||||||||||||||||||||||||||||||
Description of long-term contract for purchase of electric power | Upon completion of the Tianyu Project, Zhonghong will charge Tianyu an energy saving fee of RMB 0.534 ($0.087) per kilowatt hour (excluding tax). The operating time will be based upon an average 8,000 hours annually for each of Xuzhou Tian'an and Xuzhou Huayu. If the operating time is less than 8,000 hours per year due to a reason attributable to Tianyu, then time charged will be 8,000 hours a year. | Upon completion of the Tianyu Project, Zhonghong will charge Tianyu an energy saving fee of RMB 0.534 ($0.087) per kilowatt hour (excluding tax). The operating time will be based upon an average 8,000 hours annually for each of Xuzhou Tian'an and Xuzhou Huayu. If the operating time is less than 8,000 hours per year due to a reason attributable to Tianyu, then time charged will be 8,000 hours a year. | ||||||||||||||||||||||||||||||||||||||||
Project agreement terms | 15 years | 15 years | ||||||||||||||||||||||||||||||||||||||||
Formation of Zhongxun [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 5,695,502 | ¥ 35,000,000 | ||||||||||||||||||||||||||||||||||||||||
Ownership percentage | 100.00% | |||||||||||||||||||||||||||||||||||||||||
Biomass Power Generation System [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 12 | 12 | ||||||||||||||||||||||||||||||||||||||||
Erdos Metallurgy Co., Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Term of joint ventures | 20 years | |||||||||||||||||||||||||||||||||||||||||
Investment cost | $ 79,000,000 | ¥ 500,000,000 | ||||||||||||||||||||||||||||||||||||||||
Erdos Metallurgy Co., Ltd [Member] | Phase Two [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 27 | 27 | ||||||||||||||||||||||||||||||||||||||||
Erdos Metallurgy Co., Ltd [Member] | Initial Investment [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Investment cost | $ 17,550,000 | ¥ 120,000,000 | ||||||||||||||||||||||||||||||||||||||||
Erdos TCH [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Contribution percentage in total investment | 7.00% | 7.00% | 7.00% | 7.00% | ||||||||||||||||||||||||||||||||||||||
Construction cost | $ 1,290,000 | ¥ 8,000,000 | ||||||||||||||||||||||||||||||||||||||||
Accumulated profit | $ 226,000 | |||||||||||||||||||||||||||||||||||||||||
Description of long-term contract for purchase of electric power | Erdos TCH and Erdos entered into a supplemental agreement, effective on May 1, 2016, whereby Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / KWH. | |||||||||||||||||||||||||||||||||||||||||
Erdos TCH [Member] | Initial Investment [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 20.00% | |||||||||||||||||||||||||||||||||||||||||
Erdos TCH [Member] | After Return of Initial Investment [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 40.00% | |||||||||||||||||||||||||||||||||||||||||
Xi'an TCH [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Contribution percentage in total investment | 93.00% | 93.00% | ||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 20.00% | |||||||||||||||||||||||||||||||||||||||||
Percentage of accumulated profit | 20.00% | |||||||||||||||||||||||||||||||||||||||||
Minority interest decrease from redemptions | $ 1,290,000 | |||||||||||||||||||||||||||||||||||||||||
Xi'an TCH [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
First payment received | $ 504,000 | ¥ 3,453,867.31 | ||||||||||||||||||||||||||||||||||||||||
Xi'an TCH [Member] | Zhongtai Waste Heat Power Generation Energy Management Cooperative Agreement [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Initial payments to Xi'an TCH | $ 7,700,000 | ¥ 50,000,000 | ||||||||||||||||||||||||||||||||||||||||
Description of waste heat power generation energy management cooperative agreement | Zhongtai agreed to pay to Xi'an TCH an aggregate transfer price of RMB 167,360,000 ($25.77 million) including payments of: (i) RMB 152,360,000 ($23.46 million) for the construction of the Project; and (ii) RMB 15,000,000 ($2.31 million) as payment for partial loan interest accrued during the construction period. Those amounts have been, or will be, paid by Zhongtai to Xi'an TCH according to the following schedule: (a) RMB 50,000,000 ($7.70 million) was paid within 20 business days after the Transfer Agreement was signed; (b) RMB 30,000,000 ($4.32 million) was paid within 20 business days after the Project is completed, but no later than July 30, 2016; and (c) RMB 87,360,000 ($13.45 million) will be paid no later than July 30, 2017. Xuzhou Taifa Special Steel Technology Co., Ltd. ("Xuzhou Taifa") guaranteed the payments from Zhongtai to Xi'an TCH. The ownership of the Project was conditionally transferred to Zhongtai following the initial payment of RMB 50,000,000 ($7.70 million) by Zhongtai to Xi'an TCH and the full ownership of the Project will be officially transferred to Zhongtai after it completes all payments pursuant to the Transfer Agreement. As of March 31, 2018, Xi'an TCH had received the first payment of $7.70 million and the second payment of $4.32 million. The Company recorded a $2.82 million loss from this transaction in 2016. As of the date of this report, the Company has not yet received the remaining payment of RMB 87,360,000 ($13.45 million). However, the Company received a repayment commitment letter from Zhongtai on February 23, 2018, in which Zhongtai committed to pay the remaining payment of RMB 87,360,000 ($13.45 million) no later than the end of July 2018. | Zhongtai agreed to pay to Xi'an TCH an aggregate transfer price of RMB 167,360,000 ($25.77 million) including payments of: (i) RMB 152,360,000 ($23.46 million) for the construction of the Project; and (ii) RMB 15,000,000 ($2.31 million) as payment for partial loan interest accrued during the construction period. Those amounts have been, or will be, paid by Zhongtai to Xi'an TCH according to the following schedule: (a) RMB 50,000,000 ($7.70 million) was paid within 20 business days after the Transfer Agreement was signed; (b) RMB 30,000,000 ($4.32 million) was paid within 20 business days after the Project is completed, but no later than July 30, 2016; and (c) RMB 87,360,000 ($13.45 million) will be paid no later than July 30, 2017. Xuzhou Taifa Special Steel Technology Co., Ltd. ("Xuzhou Taifa") guaranteed the payments from Zhongtai to Xi'an TCH. The ownership of the Project was conditionally transferred to Zhongtai following the initial payment of RMB 50,000,000 ($7.70 million) by Zhongtai to Xi'an TCH and the full ownership of the Project will be officially transferred to Zhongtai after it completes all payments pursuant to the Transfer Agreement. As of March 31, 2018, Xi'an TCH had received the first payment of $7.70 million and the second payment of $4.32 million. The Company recorded a $2.82 million loss from this transaction in 2016. As of the date of this report, the Company has not yet received the remaining payment of RMB 87,360,000 ($13.45 million). However, the Company received a repayment commitment letter from Zhongtai on February 23, 2018, in which Zhongtai committed to pay the remaining payment of RMB 87,360,000 ($13.45 million) no later than the end of July 2018. | ||||||||||||||||||||||||||||||||||||||||
Payments to Xi'an TCH | $ 25,770,000 | ¥ 167,360,000 | ||||||||||||||||||||||||||||||||||||||||
Loss from transaction | 2,820,000 | |||||||||||||||||||||||||||||||||||||||||
First payment received | $ 7,700,000 | ¥ 50,000,000 | 7,700,000 | |||||||||||||||||||||||||||||||||||||||
Second payment received | 4,320,000 | |||||||||||||||||||||||||||||||||||||||||
Xi'an TCH [Member] | Transfer Agreement [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Payments to Xi'an TCH | $ 13,450,000 | ¥ 87,360,000 | ||||||||||||||||||||||||||||||||||||||||
Xi'an TCH [Member] | Hongyuan Huifu [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 650,000 | ¥ 4,000,000 | ||||||||||||||||||||||||||||||||||||||||
Xi'an TCH [Member] | Initial Investment [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 80.00% | |||||||||||||||||||||||||||||||||||||||||
Xi'an TCH [Member] | After Return of Initial Investment [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 60.00% | |||||||||||||||||||||||||||||||||||||||||
Xi'an TCH [Member] | Biomass Power Generation System [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Leasing fees | $ 239,000 | ¥ 1,500,000 | ||||||||||||||||||||||||||||||||||||||||
Lease period | 9 years 6 months | 9 years 6 months | ||||||||||||||||||||||||||||||||||||||||
HYREF Fund [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 830,000 | ¥ 5,000,000 | ||||||||||||||||||||||||||||||||||||||||
Subscribed amount of initial capital contribution | 77,000,000 | 460,000,000 | ||||||||||||||||||||||||||||||||||||||||
Total fund capital contribution | $ 76,660,000 | 460,000,000 | ||||||||||||||||||||||||||||||||||||||||
Partnership expiration | Jul. 18, 2019 | Jul. 18, 2019 | ||||||||||||||||||||||||||||||||||||||||
Payments to Xi'an TCH | $ 12,500,000 | ¥ 75,000,000 | ||||||||||||||||||||||||||||||||||||||||
HYREF Fund [Member] | China Orient Asset Management Co., Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Subscribed amount of initial capital contribution | 46,670,000 | 280,000,000 | ||||||||||||||||||||||||||||||||||||||||
HYREF Fund [Member] | Hongyuan Huifu [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Subscribed amount of initial capital contribution | $ 16,670,000 | ¥ 100,000,000 | ||||||||||||||||||||||||||||||||||||||||
Hongyuan Recycling Energy Investment Management Beijing Co., Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 1,450,000 | ¥ 10,000,000 | ||||||||||||||||||||||||||||||||||||||||
Ownership percentage | 40.00% | |||||||||||||||||||||||||||||||||||||||||
Formation of Yinghua [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 30,000,000 | |||||||||||||||||||||||||||||||||||||||||
Lease period | 10 years | |||||||||||||||||||||||||||||||||||||||||
Ownership percentage | 100.00% | |||||||||||||||||||||||||||||||||||||||||
Sales-Type Lease [Member] | ||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | ||||||||||||||||||||||||||||||||||||||||||
Description of lease term | Xi'an TCH leases the following systems: (i) BMPG systems to Pucheng Phase I and II (15 and 11-year terms, respectively); (ii) BMPG systems to Shenqiu Phase I (11-year term); and (iii) Shenqiu Phase II (9.5-year term). In addition, as of March 31, 2018, Erdos TCH leased power and steam generating systems for recycling waste heat from metal refining to Erdos (five systems) for a term of 20 years. | Xi'an TCH leases the following systems: (i) BMPG systems to Pucheng Phase I and II (15 and 11-year terms, respectively); (ii) BMPG systems to Shenqiu Phase I (11-year term); and (iii) Shenqiu Phase II (9.5-year term). In addition, as of March 31, 2018, Erdos TCH leased power and steam generating systems for recycling waste heat from metal refining to Erdos (five systems) for a term of 20 years. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 20 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Office and Other Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Office and Other Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 5 years |
Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of reconciliation of basic and diluted earnings per share | ||
Net income (loss) | $ (114,237) | $ 701,364 |
Weighted average shares outstanding - basic | 8,310,198 | 8,310,198 |
Effect of dilutive securities: | ||
Options granted | ||
Weighted average shares outstanding - diluted | 8,310,198 | 8,310,198 |
Earnings (loss) per share - basic | $ (0.01) | $ 0.08 |
Earnings (loss) per share - diluted | $ (0.01) | $ 0.08 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Summary of Significant Accounting Policies (Textual) | ||
Accounts receivable | $ 17,248,195 | $ 15,858,804 |
Interest receivable on sales type leases | 10,483,356 | 9,619,278 |
Bad debt allowance for net investment receivable | $ 1,976,750 | $ 1,802,822 |
Description of corporate income tax rate | The provisions of the Tax Act that may have significant impact on the Company include the permanent reduction of the corporate income tax rate from 35% to 21% effective for tax years including or commencing on January 1, 2018. | |
U.S. corporate income taxes | 21.00% | |
U.S. corporate income taxes for prior | 35.00% | |
Xi'an TCH [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Equity method investment, ownership percentage | 100.00% | |
Erdos TCH [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Equity method investment, ownership percentage | 100.00% | |
Zhonghong [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Equity method investment, ownership percentage | 90.00% |
Notes Receivable - Bank Accep_2
Notes Receivable - Bank Acceptance (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Notes Receivable - Bank Acceptance (Textual) | ||
Outstanding notes receivable | $ 620,219 | $ 979,462 |
Bank acceptance transferred | $ 8,100,000 |
Investment in Sales-Type Leas_3
Investment in Sales-Type Leases, Net (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Investment in Sales-Type Leases, Net [Abstract] | ||
Total future minimum lease payments receivable | $ 100,682,241 | $ 99,155,214 |
Less: executory cost | (6,458,859) | (6,360,901) |
Less: unearned interest | (22,996,056) | (23,730,094) |
Less: realized interest income but not yet received | (10,483,356) | (9,619,278) |
Less: allowance for net investment receivable | (1,976,750) | (1,802,822) |
Investment in sales-type leases, net | 58,767,220 | 57,642,119 |
Current portion | 12,558,719 | 11,531,745 |
Noncurrent portion | $ 46,208,501 | $ 46,110,374 |
Investment in Sales-Type Leas_4
Investment in Sales-Type Leases, Net (Details 1) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Investment in Sales-Type Leases, Net [Abstract] | ||
2019 | $ 33,316,900 | |
2020 | 13,549,403 | |
2021 | 13,549,403 | |
2022 | 13,549,403 | |
2023 | 10,400,598 | |
Thereafter | 16,316,534 | |
Total | $ 100,682,241 | $ 99,155,214 |
Investment in Sales-Type Leas_5
Investment in Sales-Type Leases, Net (Details Textual) | 3 Months Ended |
Mar. 31, 2018 | |
Investment in Sales-Type Leases, Net (Textual) | |
Sale leaseback transaction lease, Terms | (i) BMPG systems to Pucheng Phase I and II (15 and 11 year terms, respectively); (ii) BMPG systems to Shenqiu Phase I (11-year term); and (iii) Shenqiu Phase II (9.5-year term). In addition, as of March 31, 2018, Erdos TCH leased power and steam generating systems from waste heat from metal refining to Erdos (five systems) for a term of twenty years. |
Prepaid Expenses (Details)
Prepaid Expenses (Details) ¥ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($) | Mar. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | |
Prepaid Expenses (Textual) | |||
Percentage of funds raised | 2.00% | 2.00% | |
Consulting fee | $ 1,500,000 | ¥ 9.2 | |
Percentage of funds actually contributed | 2.00% | 2.00% | |
Prepaid consulting expense | $ 420,000 | $ 710,000 | |
Prepaid tax | $ 35,358 | $ 34,026 |
Other Receivables (Details)
Other Receivables (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Other Receivables (Textual) | ||
Advance to third party | $ 8,166 | $ 7,652 |
Long Term Investment (Details)
Long Term Investment (Details) ¥ in Millions | 1 Months Ended | 3 Months Ended | ||||
Jul. 18, 2013USD ($)Projects | Jun. 25, 2013USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Jul. 18, 2013CNY (¥) | Jun. 25, 2013CNY (¥) | |
HYREF Fund [Member] | ||||||
Long Term Investment (Textual) | ||||||
Investment cost | $ 830,000 | ¥ 5 | ||||
Subscribed amount of initial capital contribution | $ 10,810,000 | ¥ 75 | ||||
Number of investments | Projects | 3 | |||||
Term of investment | 6 years | |||||
Xi'an TCH [Member] | ||||||
Long Term Investment (Textual) | ||||||
Original investment by subsidiary | $ 650,000 | ¥ 4 | ||||
Profit distribution percentage | 20.00% | |||||
Percentage of owned fund | 16.30% | 16.30% | ||||
Equity based investment (loss) | $ | $ (4,144) | $ 39,751 | ||||
Xi'an TCH [Member] | Ownership Interest [Member] | ||||||
Long Term Investment (Textual) | ||||||
Profit distribution percentage | 40.00% | |||||
Xi'an TCH [Member] | HYREF Fund [Member] | ||||||
Long Term Investment (Textual) | ||||||
Cost method investments | $ 10,810,000 | ¥ 75 | ||||
China Orient Asset Management Co., Ltd. [Member] | HYREF Fund [Member] | ||||||
Long Term Investment (Textual) | ||||||
Original investment by subsidiary | 46,670,000 | 280 | ||||
Hongyuan Recycling Energy Investment Management Beijing Co., Ltd [Member] | ||||||
Long Term Investment (Textual) | ||||||
Registered capital | $ 1,600,000 | ¥ 10 | ||||
HongyuanHuifu [Member] | ||||||
Long Term Investment (Textual) | ||||||
Profit distribution percentage | 80.00% | |||||
HongyuanHuifu [Member] | Xi'an TCH [Member] | ||||||
Long Term Investment (Textual) | ||||||
Subscribed amount of initial capital contribution | 16,670,000 | 100 | ||||
Zhonghong [Member] | ||||||
Long Term Investment (Textual) | ||||||
Total fund capital contribution | $ 75,000,000 | ¥ 460 |
Construction in Progress (Detai
Construction in Progress (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Construction in Progress [Line Items] | ||
Total | $ 99,746,555 | $ 95,165,973 |
Xuzhou Huayu [Member] | ||
Schedule of Construction in Progress [Line Items] | ||
Total | 25,953,681 | 24,976,178 |
Xuzhou Tian'an [Member] | ||
Schedule of Construction in Progress [Line Items] | ||
Total | 40,150,636 | 37,814,637 |
Boxing County Chengli [Member] | ||
Schedule of Construction in Progress [Line Items] | ||
Total | $ 33,642,238 | $ 32,375,158 |
Construction in Progress (Det_2
Construction in Progress (Details Textual) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Xuzhou Huayu project [Member] | |
Construction in Progress (Textual) | |
Additional construction in progress | $ 12,720 |
Xuzhou Tian'an project [Member] | |
Construction in Progress (Textual) | |
Additional construction in progress | 4,410 |
Boxing County Chengli project [Member] | |
Construction in Progress (Textual) | |
Additional construction in progress | $ 4,910 |
Taxes Payable (Details)
Taxes Payable (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Taxes Payable [Line Items] | ||
Income - current | $ 1,134,364 | $ 1,097,768 |
VAT | 1,286,626 | 1,145,363 |
Other | 202,780 | 180,649 |
Total - current | 2,623,770 | 2,423,780 |
Income - noncurrent | $ 6,998,625 | $ 6,998,625 |
Taxes Payable (Details Textual)
Taxes Payable (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Taxes Payable (Textual) | ||
Income tax payable, current | $ 2,623,770 | $ 2,423,780 |
Income tax payable, noncurrent | 6,998,625 | $ 6,998,625 |
Income tax payable | $ 8,130,000 | |
Tax liability installments, description | An election is available for the US shareholder of foreign company to pay the tax liability in installments over a period of eight years with 8% of net tax liability in the first five years, 15% in the sixth year, 20% in the seventh year, and 25% in the eighth year. |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Payables (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities [Line Items] | ||
Total | $ 1,716,649 | $ 1,618,316 |
Employee training, labor union expenditure and social insurance payable [Member] | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Total | 892,906 | 852,316 |
Consulting, auditing, and legal expenses [Member] | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Total | 480,057 | 480,057 |
Accrued payroll and welfare [Member] | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Total | 327,896 | 261,793 |
Other [Member] | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Total | $ 15,790 | $ 24,150 |
Deferred Tax Liability, Net (De
Deferred Tax Liability, Net (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Summary of deferred tax liability | ||
Deferred tax asset - current (accrual of employee social insurance) | $ 197,038 | $ 189,617 |
Deferred tax liability - current (net investment in sales-type leases) | (1,629,858) | (1,520,537) |
Deferred tax liability, net of current deferred tax asset | (1,432,820) | (1,330,921) |
Deferred tax asset - noncurrent (depreciation of fixed assets) | 10,371,498 | 10,250,394 |
Deferred tax asset - noncurrent (asset impairment loss) | 494,187 | 450,706 |
Deferred tax liability - noncurrent (net investment in sales-type leases) | (11,552,125) | (11,527,594) |
Deferred tax liability, net of noncurrent deferred tax asset | (686,440) | (826,493) |
Total Deferred tax liability, noncurrent per ASU 2015-17 | $ (2,119,260) | $ (2,157,414) |
Loans Payable (Details)
Loans Payable (Details) | Mar. 31, 2018USD ($) |
Future minimum repayment | |
2018 | $ 52,798,143 |
Total | $ 52,798,143 |
Loans Payable (Details Textual)
Loans Payable (Details Textual) $ in Thousands, ¥ in Millions | Aug. 06, 2017USD ($) | Aug. 06, 2017CNY (¥) | Aug. 05, 2016USD ($) | Aug. 05, 2016CNY (¥) | Jul. 31, 2013CNY (¥) | Mar. 31, 2018USD ($) | Dec. 31, 2017 | Mar. 31, 2018CNY (¥) | Aug. 06, 2017CNY (¥) | Aug. 06, 2016USD ($) | Aug. 06, 2016CNY (¥) | Jul. 31, 2013USD ($) | Jul. 31, 2013CNY (¥) |
Loans Payable (Textual) | |||||||||||||
Percentage of service fee on loan | 0.10% | ||||||||||||
Long term debt maturities repayments of principal in fourth year | $ 16,270 | ¥ 100 | |||||||||||
Long term debt maturities repayments of principal in fifth year | 12,520 | ¥ 77 | |||||||||||
Interest rate | 9.00% | 9.00% | |||||||||||
Interest rate terms | The Company applied for a lower interest rate from the lender in January 2017, and the lender tentatively agreed to lower the interest rate to 9% in December 2017 subject to the approval from its headquarters. The Company planned to repay the interest once the lender's internal approval procedure is officially completed. As of March 31, 2018, the interest payable for this loan was $10.5 million. | ||||||||||||
Remaining debt amount | $ 45,540 | ¥ 280 | $ 34,680 | ¥ 230 | |||||||||
Term of loan, description | The term of this loan is for 60 months from July 31, 2013 to July 30, 2018. | ||||||||||||
Description of remaining loan balance | The Company negotiated with the lender again for further extending the remaining loan balance of RMB 230 million ($34.68 million), RMB 100 million ($16.27 million), and RMB 77 million ($12.52 million) (which included investment from Xi'an TCH of RMB 75 million and was netted off with the entrusted loan payable of the HYREF Fund in the balance sheet). The lender has tentatively agreed to extend the remaining loan balance for another two years until August 2019 with an adjusted annual interest rate of 9%, subject to the final approval from its headquarters. | The Company negotiated with the lender again for further extending the remaining loan balance of RMB 230 million ($34.68 million), RMB 100 million ($16.27 million), and RMB 77 million ($12.52 million) (which included investment from Xi'an TCH of RMB 75 million and was netted off with the entrusted loan payable of the HYREF Fund in the balance sheet). The lender has tentatively agreed to extend the remaining loan balance for another two years until August 2019 with an adjusted annual interest rate of 9%, subject to the final approval from its headquarters. | |||||||||||
Xi'an TCH [Member] | |||||||||||||
Loans Payable (Textual) | |||||||||||||
Capitalized interest to construction in progress | ¥ | ¥ 27 | ||||||||||||
Entrusted loan [Member] | |||||||||||||
Loans Payable (Textual) | |||||||||||||
Debt investments | $ 74,500 | ¥ 457 | |||||||||||
Loan payable for first three years, description | During the first three years from the first release of the loan, the balance in its account shall be no less than RMB 7.14 million ($1.19 million) on the 20th day of the second month of each quarter and no less than RMB 14.28 million ($2.38 million) on the 14th day of the last month of each quarter. | ||||||||||||
Loan payable for fourth year, description | During the fourth year from the first release of the loan, the balance in its account shall be no less than RMB 1.92 million ($0.32 million) on the 20th day of the second month of each quarter and no less than RMB 3.85 million ($0.64 million) on the 14th day of the last month of each quarter. | ||||||||||||
Loan payable for fifth year, description | During the fifth year from the first release of the loan, the balance in its account shall be no less than RMB 96,300 ($16,050) on the 20th day of the second month of each quarter and no less than RMB 192,500 ($32,080) on the 14th day of the last month of each quarter. | ||||||||||||
Long term debt maturities repayments of principal in third year | $ 42,220 | ¥ 280 | |||||||||||
Interest rate | 12.50% | 12.50% | |||||||||||
Interest expense | $ 1,130 | ||||||||||||
Capitalized interest to construction in progress | 830 | ||||||||||||
Loan payable outstanding balance | 64,730 | ||||||||||||
Debt amount paid | 7,540 | ¥ 50 | |||||||||||
Entrusted loan [Member] | Xi'an TCH [Member] | |||||||||||||
Loans Payable (Textual) | |||||||||||||
Loan payable | 11,930 | ||||||||||||
Capitalized interest to construction in progress | $ 11,930 | ||||||||||||
Zhonghong [Member] | |||||||||||||
Loans Payable (Textual) | |||||||||||||
Debt investments | 74,500 | 457 | |||||||||||
Total fund capital contribution | 75,000 | 460 | |||||||||||
Long term debt maturities repayments of principal in third year | $ 42,220 | ¥ 280 | |||||||||||
HYREF Fund [Member] | |||||||||||||
Loans Payable (Textual) | |||||||||||||
Equity investments | $ 500 | ¥ 3 |
Loans Payable (Details Textual
Loans Payable (Details Textual 1) | Apr. 11, 2014USD ($) | Apr. 11, 2014CNY (¥) | Mar. 31, 2018 | Apr. 11, 2014CNY (¥) |
Loans Payable (Textual) | ||||
Interest rate | 9.00% | |||
Bank of Chongqing [Member] | ||||
Loans Payable (Textual) | ||||
Bank loans payable issued | $ 8,130,000 | ¥ 50,000,000 | ||
Debt instrument, maturity term | 3 years | 3 years | ||
Debt instrument, maturity date | Apr. 10, 2017 | Apr. 10, 2017 | ||
Interest rate | 9.225% | 9.225% | ||
Monthly interest payments to make a principal payment | $ 810,000 | ¥ 5,000,000 | ||
Remaining loans receivable | 7,320,000 | 45,000,000 | ||
Re-guarantee service fee | $ 155,280 | ¥ 950,000 |
Refundable Deposit from Custo_2
Refundable Deposit from Customers for Systems Leasing (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Pucheng and Shengqiu [Member] | ||
Refundable Deposit from Customers for Systems Leasing (Textual) | ||
Balance of refundable deposit from customers | $ 1,129,117 | $ 1,086,591 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Related Party Transactions (Textual) | ||
Advance to related party | $ 41,129 | $ 43,623 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) ¥ in Millions | Jul. 15, 2013USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Jul. 15, 2013CNY (¥) |
Noncontrolling Interest (Textual) | ||||
Net losses attributable to noncontrolling interest | $ 91,258 | $ 88,423 | ||
Xi'an TCH [Member] | ||||
Noncontrolling Interest (Textual) | ||||
Equity investments | $ 4,370,000 | ¥ 27 | ||
Indirect ownership, description | The HYREF Fund was 16.3% owned by Xi'an TCH and 1.1% owned by the Fund Management Company, and the Fund Management Company was 40% owned by Xi'an TCH as described in Note 7, which resulted in an additional indirect ownership of Xi'an TCH in Zhonghong of 1.7%; accordingly, the ultimate non-controlling interest (HYREF Fund) in Zhonghong became 8.3%. | |||
Noncontrolling interest, ownership percentage | 90.00% | 90.00% | ||
Zhonghong [Member] | ||||
Noncontrolling Interest (Textual) | ||||
Registered capital | $ 4,880,000 | ¥ 30 | ||
Noncontrolling interest, ownership percentage | 10.00% | 10.00% |
Income Tax (Details)
Income Tax (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of reconciles US statutory rates to effective tax rate | ||
U.S. statutory rates | 21.00% | 34.00% |
Tax rate difference - current provision | 7.40% | (8.00%) |
Other | 16.40% | (3.80%) |
Permanent differences | ||
Valuation allowance on PRC NOL | 190.80% | 11.90% |
Valuation allowance on US NOL | 17.70% | |
Tax (benefit) per financial statements | 253.30% | 34.10% |
Income Tax (Details 1)
Income Tax (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of provision for income tax expenses | ||
Income tax expense - current | $ 457,995 | $ 339,222 |
Income tax expense - deferred | (118,450) | (21,977) |
Total income tax expense | $ 339,545 | $ 317,245 |
Income Tax (Details Textual)
Income Tax (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | |
Dec. 22, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax (Textual) | |||
Effective income tax rate | 253.30% | 34.10% | |
Provisional tax expense | $ 339,545 | $ 317,245 | |
Deferred tax asset valuation allowance | 100.00% | ||
Operating income loss carryforwards, period | 20 years | ||
Net operating loss carry forward | $ 14,430,000 | ||
Income tax, description | The provisions of the Tax Act that may have significant impact on the Company include the permanent reduction of the corporate income tax rate from 35% to 21% effective for tax years including or commencing on January 1, 2018, a one-time transition tax on post-1986 foreign unremitted earnings, the provision for Global Intangible Low Tax Income ("GILTI"), the deduction for Foreign Derived Intangible Income ("FDII"), the repeal of corporate alternative minimum tax, the limitation of various business deductions, and the modification of the maximum deduction of net operating loss with no carryback but indefinite carryforward provision. Many provisions in the Tax Act are generally effective in tax years beginning after December 31, 2017. | ||
Chinese subsidiaries [Member] | |||
Income Tax (Textual) | |||
Effective income tax rate | 25.00% | 25.00% | |
PRC [Member] | |||
Income Tax (Textual) | |||
Effective income tax rate | 25.00% | ||
One-time transition tax [Member] | |||
Income Tax (Textual) | |||
Provisional tax expense | $ 7,610,000 |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plan (Details) - Employees and independent directors [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Shares | |||
Outstanding, Beginning balance | 9,000 | 4,000 | 4,000 |
Exercisable, Beginning balance | 9,000 | 4,000 | 4,000 |
Granted | 5,000 | ||
Exercised | |||
Forfeited | |||
Outstanding, Ending balance | 9,000 | 9,000 | 4,000 |
Exercisable, Ending balance | 9,000 | 9,000 | 4,000 |
Average Exercise Price per Share | |||
Outstanding, Beginning balance | $ 5.4 | $ 10.2 | $ 10.2 |
Exercisable, Beginning balance | 5.4 | 10.2 | 10.2 |
Granted | 1.6 | ||
Exercised | |||
Forfeited | |||
Outstanding, Ending balance | 5.4 | 5.4 | 10.2 |
Exercisable, Ending balance | $ 5.4 | $ 5.4 | $ 10.2 |
Weighted Average Remaining Contractual Term in Years | |||
Outstanding, Beginning balance | 6 years 4 months 28 days | 3 years 9 months 7 days | 4 years 9 months 7 days |
Exercisable, Beginning balance | 6 years 4 months 28 days | 3 years 9 months 7 days | 4 years 9 months 7 days |
Granted | 0 years | 10 years | 0 years |
Exercised | 0 years | 0 years | 0 years |
Forfeited | 0 years | 0 years | 0 years |
Outstanding, Ending balance | 6 years 1 month 27 days | 6 years 4 months 28 days | 3 years 9 months 7 days |
Exercisable, Ending balance | 6 years 1 month 27 days | 6 years 4 months 28 days | 3 years 9 months 7 days |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plan (Details Textual) - USD ($) | Apr. 27, 2017 | May 25, 2016 | Jun. 19, 2015 | Apr. 24, 2015 | Mar. 31, 2015 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Stock-Based Compensation Plan (Textual) | ||||||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||||
Reverse stock split | Options reflects the 10:1 Reverse Stock Split. | 10:1 Reverse Stock Split. | 10:1 Reverse Stock Split. | |||||
Compensation expense for stock options | $ 0 | $ 0 | ||||||
CFO [Member] | ||||||||
Stock-Based Compensation Plan (Textual) | ||||||||
Share based payment award, grants | 5,000 | |||||||
Options exercise price per share | $ 1.61 | |||||||
Options estimated life | 10 years | |||||||
Expected volatility rate | 124.00% | |||||||
Risk free interest rate | 2.30% | |||||||
Dividend yield | 0.00% | |||||||
Grant date | $ 7,647 | |||||||
Stock options | 5,000 | |||||||
Mr. Cangsang Huang [Member] | ||||||||
Stock-Based Compensation Plan (Textual) | ||||||||
Options exercise price per share | $ 1.02 | |||||||
Net number of share options granted | 40,000 | |||||||
Reverse stock split | 10:1 Reverse Stock Split. | |||||||
Independent directors [Member] | ||||||||
Stock-Based Compensation Plan (Textual) | ||||||||
Share based payment award, grants | 40,000 | |||||||
Closing price of stock | $ 1.02 | |||||||
Common stock, par value | $ 0.001 | |||||||
Compensation per month | $ 2,000 | |||||||
Options estimated life | 5 years | |||||||
Expected volatility rate | 82.00% | |||||||
Risk free interest rate | 1.37% | |||||||
Dividend yield | 0.00% | |||||||
Grant date | $ 26,528 | |||||||
Stock options | 40,000 | |||||||
Equity Plan [Member] | ||||||||
Stock-Based Compensation Plan (Textual) | ||||||||
Share based payment award, grants | 12,462,605 |
Statutory Reserves (Details)
Statutory Reserves (Details) - 3 months ended Mar. 31, 2018 | USD ($) | CNY (¥) |
Shanghai TCH [Member] | ||
Schedule Of Statutory Reserves [Line Items] | ||
Registered Capital | $ | $ 29,800,000 | |
Maximum Statutory Reserve Amount | $ | 14,900,000 | |
Statutory reserve | 1,003,859 | ¥ 6,564,303 |
Xi'an TCH [Member] | ||
Schedule Of Statutory Reserves [Line Items] | ||
Registered Capital | 202,000,000 | |
Maximum Statutory Reserve Amount | 101,000,000 | |
Statutory reserve | 10,682,975 | 69,854,362 |
Erdos TCH [Member] | ||
Schedule Of Statutory Reserves [Line Items] | ||
Registered Capital | 120,000,000 | |
Maximum Statutory Reserve Amount | 60,000,000 | |
Statutory reserve | $ 2,914,868 | 19,035,813 |
Xi'an Zhonghong [Member] | ||
Schedule Of Statutory Reserves [Line Items] | ||
Registered Capital | 30,000,000 | |
Maximum Statutory Reserve Amount | 15,000,000 | |
Statutory reserve, description | Did not accrue yet due to accumulated deficit. | |
Shaanxi Huahong [Member] | ||
Schedule Of Statutory Reserves [Line Items] | ||
Registered Capital | $ | $ 2,500,300 | |
Maximum Statutory Reserve Amount | $ | $ 1,250,150 | |
Statutory reserve, description | Did not accrue yet due to accumulated deficit. | |
Zhongxun [Member] | ||
Schedule Of Statutory Reserves [Line Items] | ||
Registered Capital | 35,000,000 | |
Maximum Statutory Reserve Amount | ¥ 17,500,000 | |
Statutory reserve, description | Did not accrue yet due to accumulated deficit. |
Statutory Reserves (Details Tex
Statutory Reserves (Details Textual) | 3 Months Ended |
Mar. 31, 2018 | |
Surplus Reserve Fund [Member] | |
Statutory Reserves (Textual) | |
Description of fund | The Company's Chinese subsidiaries are required to transfer 10% of their net income, as determined under PRC accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company's registered capital. |
Total reserve percentage, description | The remaining reserve balance after such issue is not less than 25% of the registered capital. |
Common Welfare Fund [Member] | |
Statutory Reserves (Textual) | |
Description of fund | The common welfare fund is a voluntary fund to which the Company can transfer 5% to 10% of its net income. |
Contingencies (Details)
Contingencies (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Contingencies (Textual) | ||
Notes receivable, outstanding | $ 620,219 | $ 979,462 |
Vendors [Member] | ||
Contingencies (Textual) | ||
Notes receivable, outstanding | $ 1,350,000 | $ 1,410,000 |
Commitments (Details)
Commitments (Details) | 1 Months Ended | 3 Months Ended | ||
Nov. 20, 2017 | Mar. 31, 2018USD ($) | Mar. 31, 2018CNY (¥) | Mar. 31, 2017USD ($) | |
Commitments (Textual) | ||||
Lease agreement, description | Xi'an TCH entered a lease agreement for its office use for a lease term from December 1, 2017 through November 30, 2020. | |||
Monthly rental payment | $ 5,600 | ¥ 36,536 | ||
Rental expense | 16,800 | $ 59,065 | ||
Annual rental payment in 2018 | 67,200 | |||
Annual rental payment in 2019 | 67,200 | |||
Annual rental payment in 2020 | $ 44,800 |
Subsequent Events (Details)
Subsequent Events (Details) | Jul. 11, 2018USD ($)$ / shares | Feb. 27, 2019USD ($)$ / shares | Feb. 15, 2019USD ($) | Feb. 15, 2019CNY (¥) | Feb. 13, 2019 | Jan. 31, 2019USD ($)$ / shares | Jan. 22, 2019USD ($) | Jan. 22, 2019CNY (¥) | Jan. 04, 2019USD ($) | Jan. 04, 2019CNY (¥) | Dec. 29, 2018USD ($) | Dec. 29, 2018CNY (¥) | Nov. 21, 2018USD ($) | Nov. 21, 2018CNY (¥) | Oct. 29, 2018USD ($)$ / sharesshares | Sep. 30, 2018USD ($)shares | Sep. 30, 2018CNY (¥)shares | Mar. 31, 2018 |
Xi'an TCH [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Equity interest percentage | 100.00% | |||||||||||||||||
Subsequent Event [Member] | HYREF Fund [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Repayment of loan | $ 27,540,000 | ¥ 188,639,400 | ||||||||||||||||
Subsequent Event [Member] | Xi'an TCH [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Equity interest percentage | 40.00% | 40.00% | ||||||||||||||||
Consideration fee | $ 504,000 | ¥ 3,453,867.31 | ||||||||||||||||
Financial advisory fee, description | Xi'an TCH owes the Fund Management Company RMB 18,306,666,67 (approximately US $2,672,506) in financial advisory fees, and the parties agreed that the Fund Management Company Transfer Price could be used to off-set the outstanding financial advisory fees. Upon the completion of this transaction, the Fund Management Company will owe RMB 3,453,867.31 to Hongyuan Huifu, and Xi'an TCH will owe RMB 14,852,799.36 (approximately US $2,168,291) to the Fund Management Company. | Xi'an TCH owes the Fund Management Company RMB 18,306,666,67 (approximately US $2,672,506) in financial advisory fees, and the parties agreed that the Fund Management Company Transfer Price could be used to off-set the outstanding financial advisory fees. Upon the completion of this transaction, the Fund Management Company will owe RMB 3,453,867.31 to Hongyuan Huifu, and Xi'an TCH will owe RMB 14,852,799.36 (approximately US $2,168,291) to the Fund Management Company. | ||||||||||||||||
Subsequent Event [Member] | Shanghai TCH [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Equity interest percentage | 10.00% | 10.00% | ||||||||||||||||
Consideration fee | $ 437,956 | ¥ 3,000,000,000 | ||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Convertible promissory note amount | $ 1,070,000 | $ 1,050,000 | $ 1,050,000 | |||||||||||||||
Original issue discount | $ 50,000 | $ 50,000 | $ 50,000 | |||||||||||||||
Interest rate | 8.00% | 8.00% | 8.00% | |||||||||||||||
Circumstance pay | 125.00% | 125.00% | ||||||||||||||||
Conversion price | $ / shares | $ 3 | $ 3 | $ 3 | |||||||||||||||
Payment of purchaser fees and costs | $ 20,000 | |||||||||||||||||
Subsequent event, description | All outstanding principal and accrued interest on the Note will become due and payable on July 11, 2020, subject to a potential one-year extension period during which interest would not accrue. The Company's obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay a 125% premium on any amounts outstanding under the Note. | |||||||||||||||||
Purchase agreement, description | The Company agreed to sell to the Purchaser in a private placement 1,600,000 shares (the "Shares") of the Company's common stock, par value $0.001 per share (the "Common Stock"), at $1.013 per share for $1,620,800 (the "Private Placement"). The Company shall file a registration statement for the registration of the Shares for their resale by the Purchaser within 100 days from the effective date of this Agreement. | |||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | H.C. Wainwright & Co Llc [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Common stock, gross proceeds | $ 75,000 | |||||||||||||||||
Shares, Issued | shares | 138,956 | |||||||||||||||||
Warrants esercise price | $ / shares | $ 1.875 | |||||||||||||||||
Warrants and Rights Outstanding, Maturity Date | Oct. 29, 2023 | |||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Common stock, gross proceeds | $ 2,750,000 | |||||||||||||||||
Shares, Issued | shares | 1,985,082 | |||||||||||||||||
Price per share | $ / shares | $ 1.375 | |||||||||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Warrant [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Price per share | $ / shares | $ 1.3725 | |||||||||||||||||
Warrants, gross proceeds | $ 250,000 | |||||||||||||||||
Warrants esercise price | $ / shares | $ 0.125 | |||||||||||||||||
Warrant term | 5 years | |||||||||||||||||
Subsequent Event [Member] | Equity Purchase Agreement [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Interest rate | 20.00% | 20.00% | ||||||||||||||||
Subsequent event, description | Acquired Interests for an aggregate purchase price of RMB 320 million ($46.72 million) (the "Purchase Price"), which shall be paid as follows: (i) in cash RMB 60 million ($8.76 million); (ii) in the form of 2.6 million shares of the Company's common stock using a value of $1.90 per share; and (iii) in the form of 17,376,950 shares of the Company's preferred stock using a value of $1.90 per share. The preferred shares shall have no voting rights but shall have preferential dividend rights to participate in and receive a 15% premium on a per share basis for any dividends declared and paid by the Company on its common stock. | Acquired Interests for an aggregate purchase price of RMB 320 million ($46.72 million) (the "Purchase Price"), which shall be paid as follows: (i) in cash RMB 60 million ($8.76 million); (ii) in the form of 2.6 million shares of the Company's common stock using a value of $1.90 per share; and (iii) in the form of 17,376,950 shares of the Company's preferred stock using a value of $1.90 per share. The preferred shares shall have no voting rights but shall have preferential dividend rights to participate in and receive a 15% premium on a per share basis for any dividends declared and paid by the Company on its common stock. | ||||||||||||||||
Acquired Interests | $ 46,720,000 | ¥ 320,000,000 | ||||||||||||||||
Subsequent Event [Member] | Equity Purchase Agreement [Member] | Common Stock [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Payment For Purchase Price Form Of Shares | shares | 2,600,000 | 2,600,000 | ||||||||||||||||
Subsequent Event [Member] | Equity Purchase Agreement [Member] | Preferred Stock [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Payment For Purchase Price Form Of Shares | shares | 17,376,950 | 17,376,950 | ||||||||||||||||
Subsequent Event [Member] | Amendment Agreement [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Subsequent event, description | (a) purchase an 18% equity interest in Xi'an Xinhuan Energy Co., Ltd. ("Xinhuan") instead of the 20% equity interest contemplated by the Original Agreement; (b) pay an aggregate of RMB 288 million for such equity interests (the "Purchase Price) instead of the RMB 320 million contemplated by the Original Agreement; (c) pay RMB 228 million of the Purchase Price in shares of the Company's capital stock (the "Share Payment") instead of the RMB 260 million contemplated by the Original Agreement; (d) complete the Share Payment using a per share value of $1.70 for both common and preferred shares instead of the $1.90 contemplated by the Original Agreement; and (e) issue to Mr. Wang 16,837,340 preferred shares as a portion of the Share Payment instead of the 17,376,950 preferred shares contemplated by the Original Agreement. | (a) purchase an 18% equity interest in Xi'an Xinhuan Energy Co., Ltd. ("Xinhuan") instead of the 20% equity interest contemplated by the Original Agreement; (b) pay an aggregate of RMB 288 million for such equity interests (the "Purchase Price) instead of the RMB 320 million contemplated by the Original Agreement; (c) pay RMB 228 million of the Purchase Price in shares of the Company's capital stock (the "Share Payment") instead of the RMB 260 million contemplated by the Original Agreement; (d) complete the Share Payment using a per share value of $1.70 for both common and preferred shares instead of the $1.90 contemplated by the Original Agreement; and (e) issue to Mr. Wang 16,837,340 preferred shares as a portion of the Share Payment instead of the 17,376,950 preferred shares contemplated by the Original Agreement. | ||||||||||||||||
Subsequent Event [Member] | Projects Transfer Agreement [Member] | HYREF Fund [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Debt payments | $ 36,068,029 | ¥ 247,066,000 | ||||||||||||||||
Repayment of loan | $ 36,068,029 | ¥ 247,066,000 | ||||||||||||||||
Subsequent Event [Member] | Projects Transfer Agreement [Member] | Xuzhou Huayu project [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Debt payments | 17,518,248 | 120,000,000 | 17,518,248 | 120,000,000 | ||||||||||||||
Subsequent Event [Member] | Projects Transfer Agreement [Member] | Shenqiu Phase I And Ii Projects [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Debt payments | $ 18,549,781 | ¥ 127,066,000 | $ 18,549,000 | ¥ 127,066,000 | ||||||||||||||
Subsequent Event [Member] | Fund Management Company Share Transfer Agreement [Member] | Hongyuan Huifu [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Debt payments | $ 504,214 | ¥ 3,453,867 | ||||||||||||||||
Equity interest percentage | 40.00% | 40.00% | ||||||||||||||||
Subsequent Event [Member] | Xian Zhonghong Share Transfer Agreement [Member] | Hongyuan Huifu [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Debt payments | $ 437,956,000 | ¥ 3,000,000 | ||||||||||||||||
Equity interest percentage | 10.00% | 10.00% | ||||||||||||||||
Subsequent Event [Member] | Fixed Assets Transfer Agreement [Member] | HYREF Fund [Member] | ||||||||||||||||||
Subsequent Events (Textual) | ||||||||||||||||||
Debt payments | $ 27,538,598 | ¥ 188,639,400 |
Restatement (Details)
Restatement (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Change in Accounting Estimate [Line Items] | ||
Accounts receivable | $ 17,248,195 | $ 15,858,804 |
Current portion of investment in sales-type leases, net | 12,558,719 | 11,531,745 |
Interest receivable on sales-type leases | 10,483,356 | 9,619,278 |
Other receivables | 1,280,231 | 1,169,660 |
Investment in sales-type leases, net | 46,208,501 | 46,110,374 |
Property and equipment, net | 12,381 | 11,957 |
Total assets | 242,355,386 | 231,548,590 |
Deferred tax liability, net (current) | 1,432,820 | 1,330,921 |
Deferred tax liability, net (non-current) | 2,119,260 | 2,157,414 |
Total liabilities | 81,143,078 | 76,514,143 |
Statutory reserve | 14,601,702 | 14,525,712 |
Accumulated other comprehensive income | 7,265,831 | 860,553 |
Retained earnings | 28,131,469 | 28,321,696 |
Total company stockholders' equity | 161,804,125 | 155,513,084 |
Total liabilities and equity | 242,355,386 | $ 231,548,590 |
As Previously Reported [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Accounts receivable | 13,892,910 | |
Current portion of investment in sales-type leases, net | 14,462,637 | |
Interest receivable on sales-type leases | 10,871,828 | |
Other receivables | 4,166,751 | |
Investment in sales-type leases, net | 102,418,107,000 | |
Total assets | 300,388,617 | |
Deferred tax liability, net (current) | 9,025,026 | |
Total liabilities | 88,048,844 | |
Statutory reserve | 14,830,811 | |
Accumulated other comprehensive income | 9,965,698 | |
Retained earnings | 76,329,958 | |
Total company stockholders' equity | 212,931,590 | |
Total liabilities and equity | 300,388,617 | |
Net Adjustment [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Accounts receivable | 3,355,285 | |
Current portion of investment in sales-type leases, net | (1,903,918) | |
Interest receivable on sales-type leases | (388,472) | |
Other receivables | (2,886,520) | |
Investment in sales-type leases, net | (56,209,606,000) | |
Total assets | (58,033,231) | |
Deferred tax liability, net (current) | (6,905,766) | |
Total liabilities | (6,905,766) | |
Statutory reserve | (229,109) | |
Accumulated other comprehensive income | (2,699,867) | |
Retained earnings | (48,198,489) | |
Total company stockholders' equity | (51,127,465) | |
Total liabilities and equity | $ (58,033,231) |
Restatement (Details 1)
Restatement (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Change in Accounting Estimate [Line Items] | ||
Contingent rental income | $ 1,422,831 | $ 1,771,032 |
Gross profit (loss) | 1,422,831 | 1,771,032 |
Interest income on sales-type leases | 1,606,615 | 1,678,975 |
General and administrative expenses | 1,506,231 | 1,203,167 |
Income from operations | 1,523,215 | 2,246,840 |
Income (loss) from operations | (1,389,165) | (1,316,654) |
Income (loss) before income tax | 134,050 | 930,186 |
Income tax expense | 339,545 | 317,245 |
Net income (loss )attributable to China Recycling Energy Corporation | (114,237) | 701,364 |
Foreign currency translation loss | 6,405,278 | 843,107 |
Comprehensive loss attributable to China Recycling Energy Corporation | 6,291,041 | 1,544,471 |
As Previously Reported [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Contingent rental income | ||
Interest income on sales-type leases | 2,006,039 | 2,128,016 |
Total operating income | 2,006,039 | 2,128,016 |
General and administrative expenses | 353,507 | 109,061 |
Income from operations | 1,652,532 | 2,018,955 |
Income (loss) before income tax | 263,367 | 702,301 |
Income tax expense | 508,159 | 416,303 |
Net income (loss )attributable to China Recycling Energy Corporation | (153,534) | 374,421 |
Foreign currency translation loss | 8,331,071 | 1,105,984 |
Comprehensive loss attributable to China Recycling Energy Corporation | 8,177,537 | 1,480,405 |
Net Adjustment [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Contingent rental income | 1,422,831 | 1,771,032 |
Interest income on sales-type leases | (399,424) | (449,041) |
Total operating income | 1,023,407 | 1,321,991 |
General and administrative expenses | 1,152,724 | 1,094,106 |
Income from operations | (129,317) | 227,885 |
Income (loss) before income tax | (129,317) | 227,885 |
Income tax expense | (168,614) | (99,058) |
Net income (loss )attributable to China Recycling Energy Corporation | 39,297 | 326,943 |
Foreign currency translation loss | (1,925,793) | (262,877) |
Comprehensive loss attributable to China Recycling Energy Corporation | $ (1,886,496) | $ 64,066 |
Restatement (Details 2)
Restatement (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Change in Accounting Estimate [Line Items] | ||
Income (loss) including noncontrolling interest | $ (205,495) | $ 612,941 |
Depreciation and amortization | 42 | 379 |
Changes in deferred tax | (118,450) | (21,977) |
Interest receivable on sales-type leases | 471,136 | 1,678,975 |
Collection of principal on sales type leases | (992,791) | |
Accounts receivable | (742,756) | (1,200,787) |
Other receivables | (62,605) | (198,314) |
Previously Reported [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Income (loss) including noncontrolling interest | (244,792) | 285,998 |
Changes in deferred tax | 50,164 | 77,081 |
Interest receivable on sales-type leases | (595,397) | (1,806,915) |
Collection of principal on sales type leases | 1,131,561 | 55,579 |
Accounts receivable | ||
Other receivables | (949,187) | (1,098,855) |
Net cash provided by operating activities | 1,258,619 | (818,378) |
Restatement Adjustment [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Income (loss) including noncontrolling interest | 39,297 | 326,943 |
Changes in deferred tax | (168,614) | (99,058) |
Interest receivable on sales-type leases | 124,261 | 127,940 |
Collection of principal on sales type leases | (138,770) | (55,579) |
Accounts receivable | (742,756) | (1,200,787) |
Other receivables | 886,582 | 900,541 |
Net cash provided by operating activities |
Restatement (Details Textual)
Restatement (Details Textual) | 3 Months Ended |
Mar. 31, 2018 | |
Change in Accounting Estimate [Line Items] | |
Description of supplemental agreement | Erdos TCH and Erdos entered a supplemental agreement, effective on May 1, 2016, Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / Kwh. |