Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Apr. 15, 2021 | Jun. 30, 2020 | |
Document Information Line Items | |||
Entity Registrant Name | CHINA RECYCLING ENERGY CORP | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 3,177,050 | ||
Entity Public Float | $ 6,200,000 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000721693 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity File Number | 000-12536 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash | $ 107,804,013 | $ 16,221,297 |
Accounts receivable, net | 308,677 | 42,068,760 |
Interest receivable on sales type leases | 5,245,244 | |
Prepaid expenses | 55,420 | 52,760 |
Other receivables | 35,687 | 1,031,143 |
Total current assets | 108,203,797 | 64,619,204 |
NON-CURRENT ASSETS | ||
Investment in sales-type leases, net | 8,287,560 | |
Long term deposit | 16,799 | 15,712 |
Operating lease right-of-use assets, net | 54,078 | |
Asset subject to buyback | 28,916,924 | 27,044,385 |
Construction in progress | 23,824,202 | |
Total non-current assets | 28,933,723 | 59,225,937 |
TOTAL ASSETS | 137,137,520 | 123,845,141 |
CURRENT LIABILITIES | ||
Accounts payable | 76,074 | 2,200,220 |
Taxes payable | 3,145,612 | 4,087,642 |
Accrued interest on notes | 18,968 | |
Notes payable, net of unamortized OID of $144,355 | 3,005,645 | |
Accrued liabilities and other payables | 726,696 | 1,184,751 |
Operating lease liability | 56,755 | |
Due to related parties | 28,440 | 41,174 |
Interest payable on entrusted loans | 10,144,228 | 8,200,044 |
Entrusted loan payable | 21,896,744 | 20,480,214 |
Total current liabilities | 39,042,407 | 36,250,800 |
NONCURRENT LIABILITIES | ||
Accrued interest on notes | 368,362 | |
Income tax payable | 5,174,625 | 5,782,625 |
Notes payable, net of unamortized OID | 1,552,376 | |
Long term payable | 459,777 | 430,034 |
Entrusted loan payable | 306,518 | 286,689 |
Refundable deposit from customers for systems leasing | 544,709 | |
Total noncurrent liabilities | 5,940,920 | 8,964,795 |
Total liabilities | 44,983,327 | 45,215,595 |
CONTINGENCIES AND COMMITMENTS (NOTE 17 & 18) | ||
STOCKHOLDERS’ EQUITY | ||
Common stock, $0.001 par value; 10,000,000 shares authorized, 3,177,050 shares and 2,032,721 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 3,177 | 2,033 |
Additional paid in capital | 119,748,999 | 116,682,374 |
Statutory reserve | 15,155,042 | 14,525,712 |
Accumulated other comprehensive income (loss) | 273,440 | (6,132,614) |
Accumulated deficit | (43,026,465) | (46,447,959) |
Total Company stockholders’ equity | 92,154,193 | 78,629,546 |
TOTAL LIABILITIES AND EQUITY | $ 137,137,520 | $ 123,845,141 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Notes payable (in Dollars) | $ 144,355 | |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 3,177,050 | 2,032,721 |
Common stock, shares outstanding | 3,177,050 | 2,032,721 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | ||
Contingent rental income | $ 697,028 | |
Interest income on sales-type leases | 170,403 | |
Total operating income | 867,431 | |
Operating expenses | ||
Bad debt allowance (reversal) | (6,031,058) | 5,386,003 |
Impairment loss on fixed assets and construction in progress | 876,660 | |
Loss on disposal of systems | 1,242,694 | |
General and administrative | 204,039 | 2,469,162 |
Total operating (income) expenses | (5,827,019) | 9,974,519 |
Income (loss) from operations | 5,827,019 | (9,107,088) |
Non-operating income (expenses) | ||
Loss on note conversion | (502,393) | (173,886) |
Interest expense - inducement on note conversion | (893,958) | |
Interest income | 185,527 | 159,183 |
Interest expense | (1,463,721) | (2,101,440) |
Other income, net | 4,392 | 319,625 |
Total non-operating expenses, net | (1,776,195) | (2,690,476) |
Income (loss) before income tax | 4,050,824 | (11,797,564) |
Income tax benefit | (3,024,807) | |
Net income (loss) | 4,050,824 | (8,772,757) |
Other comprehensive items | ||
Foreign currency translation gain (loss) | 6,406,054 | (1,511,684) |
Comprehensive income (loss) | $ 10,456,878 | $ (10,284,441) |
Basic and diluted weighted average shares outstanding (in Shares) | 2,564,373 | 1,564,940 |
Basic and diluted income (loss) per share (in Dollars per share) | $ 1.58 | $ (5.61) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 4,050,824 | $ (8,772,757) |
Amortization of OID and debt issuing costs of notes | 61,895 | 97,161 |
Stock compensation expense | 10,999 | 148,625 |
Operating lease expenses | 55,519 | 66,262 |
Asset impairment loss | 876,660 | |
Bad debt allowance (reversal) | (6,031,058) | 5,386,003 |
Loss on disposal of 40% ownership of Fund Management Co | 46,461 | |
Loss on transfer of Chengli Boxing system | 624,133 | |
Loss on transfer of Xuzhou Huayu system | 397,033 | |
Loss on transfer of Shenqiu Phase I & II systems | 208,359 | |
Loss on disposal of fixed assets | 289 | |
Loss on note conversion | 502,393 | 173,886 |
Interest expense-inducement on note conversion | 893,958 | |
Changes in deferred tax | (3,024,807) | |
Changes in assets and liabilities: | ||
Interest receivable on sales type leases | (170,403) | |
Collection of principal and interest on sales type leases for Pucheng systems | 14,149,790 | |
Accounts receivable | 72,933,179 | 2,383,251 |
Prepaid expenses | (3,596) | (21,126) |
Other receivables | (3,549) | (135,938) |
Accounts payable | (2,153,320) | (2,837,609) |
Taxes payable | (2,164,906) | (1,317,882) |
Payment of lease liability | (58,226) | (63,555) |
Interest payable on entrusted loan | 1,302,610 | (9,091,732) |
Accrued liabilities and other payables | (404,087) | (36,932) |
Refundable deposit for systems leasing | (478,368) | |
Net cash provided by (used in) operating activities | 82,248,467 | (14,649,028) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property & equipment | (1,885) | |
Proceeds from disposal of property & equipment | 5,074 | |
Net cash provided by (used in) investing activities | (1,885) | 5,074 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of entrusted loan | (27,125,768) | |
Issuance of notes payable | 3,000,000 | 2,000,000 |
Issuance of common stock | 497,187 | 3,309,475 |
Net cash provided by financing activities | 3,497,187 | (21,816,293) |
EFFECT OF EXCHANGE RATE CHANGE ON CASH | 5,838,947 | (541,598) |
NET INCREASE (DECREASE) IN CASH | 91,582,716 | (37,001,845) |
CASH, BEGINNING OF PERIOD | 16,221,297 | 53,223,142 |
CASH, END OF PERIOD | 107,804,013 | 16,221,297 |
Supplemental cash flow data: | ||
Income tax paid | 221,934 | |
Interest paid | ||
Supplemental disclosure of non-cash operating activities | ||
Transfer of Tian’an project from construction in progress to accounts receivable | 24,095,685 | |
Transfer of Xuzhou Huayu Project and Shenqiu Phase I & II projects to Mr. Bai | 35,415,556 | |
Adoption of ASC 842-right-of-use asset | (118,234) | |
Adoption of ASC 842-operating lease liability | 118,234 | |
Supplemental disclosure of non-cash financing activities | ||
Conversion of notes into common shares | $ 2,057,191 | $ 1,612,392 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) | Common Stock | Paid in Capital | Statutory Reserves | Other Comprehensive (Loss)/Income | Accumulated Deficit | Non controlling Interest | Total |
Balance at Dec. 31, 2018 | $ 1,030 | $ 114,493,283 | $ 14,525,712 | $ (4,620,930) | $ (37,675,202) | $ (3,544,624) | $ 86,723,893 |
Balance (in Shares) at Dec. 31, 2018 | 1,029,528 | ||||||
Net income/loss for the year | (8,772,757) | (8,772,757) | |||||
Purchase of noncontrolling interest | (3,948,242) | 3,544,624 | (3,948,242) | ||||
Shares issued for equity financing | $ 396 | 3,309,079 | 3,309,475 | ||||
Shares issued for equity financing (in Shares) | 395,927 | ||||||
Issuance of common stock for stock compensation | $ 41 | 148,584 | 148,625 | ||||
Issuance of common stock for stock compensation (in Shares) | 41,250 | ||||||
Conversion of convertible notes including accrued interest into common shares | $ 185 | 2,014,791 | 2,014,976 | ||||
Conversion of convertible notes including accrued interest into common shares (in Shares) | 185,195 | ||||||
Conversion of long-term notes into common shares | $ 176 | 665,084 | 665,260 | ||||
Conversion of long-term notes into common shares (in Shares) | 175,400 | ||||||
Warrants exchanged into shares | $ 205 | (205) | |||||
Warrants exchanged into shares (in Shares) | 205,421 | ||||||
Foreign currency translation gain (loss) | (1,511,684) | (1,511,684) | |||||
Balance at Dec. 31, 2019 | $ 2,033 | 116,682,374 | 14,525,712 | (6,132,614) | (46,447,959) | 78,629,546 | |
Balance (in Shares) at Dec. 31, 2019 | 2,032,721 | ||||||
Net income/loss for the year | 4,050,824 | 4,050,824 | |||||
Shares issued for equity financing | $ 265 | 496,922 | 497,187 | ||||
Shares issued for equity financing (in Shares) | 265,250 | ||||||
Round-up of fractional shares due to reverse split | $ 9 | (9) | |||||
Round-up of fractional shares due to reverse split (in Shares) | 9,100 | ||||||
Transfer to statutory reserves | 629,330 | (629,330) | |||||
Issuance of common stock for stock compensation | $ 3 | 10,996 | 10,999 | ||||
Issuance of common stock for stock compensation (in Shares) | 3,333 | ||||||
Conversion of long-term notes into common shares | $ 867 | 2,558,716 | 2,559,583 | ||||
Conversion of long-term notes into common shares (in Shares) | 866,646 | ||||||
Foreign currency translation gain (loss) | 6,406,054 | 6,406,054 | |||||
Balance at Dec. 31, 2020 | $ 3,177 | $ 119,748,999 | $ 15,155,042 | $ 273,440 | $ (43,026,465) | $ 92,154,193 | |
Balance (in Shares) at Dec. 31, 2020 | 3,177,050 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS China Recycling Energy Corporation (the “Company” or “CREG”) is incorporated in Nevada state. The Company, through its subsidiaries, provides energy saving solutions and services, including selling and leasing energy saving systems and equipment to customers, and project investment in the Peoples Republic of China (“PRC”). The Company’s organizational chart as of December 31, 2020 is as follows: 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. Erdos contributed 7% of the total investment of the project, and Xi’an TCH Energy Technology Co., Ltd. (“Xi’an TCH”) contributed 93%. 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. 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 May 1, 2016, whereby Erdos TCH cancelled monthly minimum lease payments from Erdos, and started to charge 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. Since May 2019, Erdos TCH has ceased its operations due to renovations and furnace safety upgrades of Erdos, and the Company initially expected the resumption of operations in July 2020, but the resumption of operations was further delayed due to government’s request for Erdos’ production line rectification for lowering its energy consumption per unit of GDP, the Company expects to resume the production in July 2021. During this period, Erdos will compensate Erdos TCH RMB 1 million ($145,460) per month, until operations resume. In addition, Erdos TCH has 30% ownership in DaTangShiDai (BinZhou) Energy Savings Technology Co., Ltd. (“BinZhou Energy Savings”), 30% ownership in DaTangShiDai DaTong Recycling Energy Technology Co., Ltd. (“DaTong Recycling Energy”), and 40% ownership in DaTang ShiDai TianYu XuZhou Recycling Energy Technology Co, Ltd. (“TianYu XuZhou Recycling Energy”). These companies were incorporated in 2012 but there have not been any operations since then nor has any registered capital contribution been made. Pucheng Biomass Power Generation Projects On June 29, 2010, Xi’an TCH entered into a Biomass Power Generation (“BMPG”) Project Lease Agreement with Pucheng XinHengYuan 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 (“Pucheng Phase I”). 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 87,666 shares (post-reverse stock split) of common stock, par value $0.001 per share (the “Common Stock”) of the Company at $187.0 per share (post-reverse stock price). 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 systems 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 the Pucheng Phase I project terminated upon the effective date of the Pucheng Lease. The ownership of the two 12 MW BMPG systems will transfer to Pucheng at no additional charge when the Pucheng Lease expires. On September 29, 2019, Xi’an TCH entered into a Termination Agreement of the Lease Agreement of the Biomass Power Generation Project (the “Termination Agreement”) with Pucheng. Pursuant to the Termination Agreement, the parties agreed that: (i) Pucheng shall pay outstanding lease fees of RMB 97.6 million ($14 million) owed as of December 31, 2018 to Xi’an TCH before January 15, 2020; (ii) Xi’an TCH will waive the lease fees owed after January 1, 2019; (iii) Xi’an TCH will not return RMB 3.8 million ($542,857) in cash deposits paid by Pucheng; (iv) Xi’an TCH will transfer the Project to Pucheng at no additional cost after receiving RMB 97.6 million ($14 million) from Pucheng, and the original lease agreement between the parties will be formally terminated; and (v) if Pucheng fails to pay off RMB 97.6 million ($14 million) to Xi’an TCH before January 15, 2020, Xi’an TCH will still hold ownership of the Project and the original lease agreement shall still be valid. The Company recorded $2.67 million bad debt expense for Pucheng during the year ended December 31, 2019. Xi’an TCH received RMB 97.6 million ($14 million) in full on January 14, 2020 and the ownership of the system was transferred. Shenqiu Yuneng Biomass Power Generation Projects On September 28, 2011, Xi’an TCH and Shenqiu 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 of $286,000 (RMB 1,800,000) for 11 years. 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. As repayment for a loan made by Xi’an Zhonghong to Beijing Hongyuan Recycling Energy Investment Center, LLP (the “HYREF”) on January 10, 2019 (see further discussion in Note 9); on January 4, 2019, Xi’an Zhonghong, Xi’an TCH, and Mr. Chonggong Bai (or “Mr. Bai”), a resident of China, entered into a Projects Transfer Agreement (the “Agreement”), pursuant to which Xi’an TCH transferred two BMGP in Shenqiu (“Shenqiu Phase I and II Projects”) to Mr. Bai for RMB 127,066,000 ($18.55 million). As consideration for the transfer of the Shenqiu Phase I and II Projects to Mr. Bai (Note 9), Mr. Bai transferred 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 a loan made by Xi’an Zhonghong to HYREF on January 10, 2019. The transfer of the projects was completed on February 15, 2019. The Company recorded $208,359 loss from the transfer during the year ended December 31, 2019. Xi’an Hanneng was expected to own 47,150,000 shares of Xi’an Huaxin New Energy Co., Ltd for the repayment of Shenqiu system and Huayu system. However, Xi’an Hanneng was not able to obtain all the Huaxin shares due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report. On December 20, 2019, Mr. Bai and all the related parties therefore agreed to have Mr. Bai instead make a payment in cash for the transfer price of Shenqiu (see Note 9 for detail). 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”), of which it owns 90% of Zhonghong, with HYREF owning the other 10%. Zhonghong is engaged to provide energy saving solution and services, including constructing, selling and leasing energy saving systems and equipment to customers. On December 29, 2018, Shanghai TCH entered into a Share Transfer Agreement with HYREF, pursuant to which HYREF transferred its 10% ownership in Zhonghong to Shanghai TCH for RMB 3 million ($0.44 million). The transfer was completed on January 22, 2019. The Company owns 100% of Xi’an Zhonghong after the transaction. On July 24, 2013, Zhonghong entered into a Cooperative Agreement of CDQ and CDQ WHPG Project (Coke Dry Quenching Waste Heat Power Generation 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”). On December 29, 2018, Xi’an Zhonghong, Xi’an TCH, HYREF, Guohua Ku, and Mr. Chonggong Bai entered into a CDQ WHPG Station Fixed Assets Transfer Agreement, pursuant to which Xi’an Zhonghong transferred Chengli CDQ WHPG station (‘the Station”) as the repayment for the loan of RMB 188,639,400 ($27.54 million) to HYREF. Xi’an Zhonghong, Xi’an TCH, Guohua Ku and Chonggong Bai also agreed to a Buy Back Agreement for the Station when certain conditions are met (see Note 9). The transfer of the Station was completed January 22, 2019, at which time the Company recorded a $624,133 loss from this transfer. Since the original terms of the Buy Back Agreement are still valid, and the Buy Back possibility could occur; therefore, the loan principal and interest and the corresponding asset of the Station cannot be derecognized due to the existence of Buy Back clauses (see Note 9 for detail). 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 Projects 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 term of the Tianyu Agreement is 20 years. The construction of the Xuzhou Tian’an Project is anticipated to be completed by the second quarter of 2020. The Xuzhou Huayu Project has been on hold due to a conflict between Xuzhou Huayu Coking Co., Ltd. and local residents on certain pollution-related issues. On January 4, 2019, Xi’an Zhonghong, Xi’an TCH, and Mr. Chonggong Bai entered into a Projects Transfer Agreement (the “Agreement”), pursuant to which 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. Bai for RMB 120,000,000 ($17.52 million). Mr. Bai agreed that as consideration for the transfer of the Xuzhou Huayu Project to him, as well as Shenqiu discussed above, he would transfer all the equity shares of his wholly owned company, Xi’an Hanneng, to HYREF as repayment for the loan made by Xi’an Zhonghong to HYREF. (Note 9). The transfer of the project was completed on February 15, 2019. The Company recorded $397,033 loss from this transfer during the year ended December 31, 2019. On January 10, 2019, Mr. Chonggong Bai transferred all the equity shares of his wholly owned company, Xi’an Hanneng, to HYREF as repayment for the loan. Xi’an Hanneng was expected to own 47,150,000 shares of Xi’an Huaxin New Energy Co., Ltd for the repayment of Huayu system and Shenqiu system. As of September 30, 2019, Xi’an Hanneng already owned 29,948,000 shares of Huaxin, but was not able to obtain the remaining 17,202,000 shares due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report. On December 20, 2019, Mr. Bai and all the related parties agreed to have Mr. Bai instead making a payment in cash for the transfer price of Huayu (see Note 9 for detail). On January 10, 2020, Zhonghong, Tianyu and Huaxin signed a transfer agreement to transfer all assets under construction and related rights and interests of Xuzhou Tian’an Project to Tianyu for RMB 170 million including VAT ($24.37 million) in three installment payments. The 1st installment payment of RMB 50 million ($7.17 million) to be paid within 20 working days after the contract is signed. The 2nd installment payment of RMB 50 million ($7.34 million) is to be paid within 20 working days after completion of the project construction but no later than July 31, 2020. The final installment payment of RMB 70 million ($10.28 million) is to be paid before December 31, 2020. The Company received the payment in full for Tian’an Project as of December 31, 2020. 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 was to 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 is also to build a furnace to generate steam from the smoke pipeline’s waste heat and sell the steam to Zhongtai. 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 obligations under the EPC Contract to Zhongtai. As consideration for the transfer of the Project, Zhongtai agreed to pay to Xi’an TCH RMB 167,360,000 ($25.77 million) including (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 to be paid within 20 business days after the Transfer Agreement was signed; (b) RMB 30,000,000 ($4.32 million) was to be paid within 20 business days after the Project was completed, but no later than July 30, 2016; and (c) RMB 87,360,000 ($13.45 million) was to 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. The Company recorded a $2.82 million loss from this transaction in 2016. In 2016, Xi’an TCH had received the first payment of $7.70 million and the second payment of $4.32 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; in July 2018, Zhongtai and the Company reached a further oral agreement to extend the repayment term of RMB 87,360,000 ($13.45 million) by another two to three months. In January 2020, Zhongtai paid RMB 10 million ($1.41 million); in March 2020, Zhongtai paid RMB 20 million ($2.82 million); in June 2020, Zhongtai paid RMB 10 million ($1.41 million); and in December 2020, Zhongtai paid RMB 30 million ($4.28 million), which was payment in full. Accordingly, the Company reversed the bad debt expense of $5.80 million which had been recorded earlier. Formation of Zhongxun On March 24, 2014, Xi’an TCH incorporated a 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 nor has any capital contribution been made as of the date of this report. Formation of Yinghua On February 11, 2015, the Company incorporated a 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 nor has any capital contribution been made as of the date of this report. Reverse Stock Split On April 13, 2020, the Company filed a certificate of change (“Certificate of Change”) with the Secretary of State of the State of Nevada, pursuant to which, on April 13, 2020, the Company effected a reverse stock split of its Common Stock, at a rate of 1-for-10, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of Common Stock (the “Reverse Stock Split”). The accompanying consolidated financial statements and related disclosure in for periods prior to the Reverse Stock Split have been retroactively restated to reflect this reverse stock split. Other Events In December 2019, a novel strain of coronavirus (COVID-19) was reported in and the World Health Organization has declared the outbreak to constitute a “Public Health Emergency of International Concern.” This pandemic, which continues to spread to additional countries, and is disrupting supply chains and affecting production and sales across a range of industries as a result of quarantines, facility closures, and travel and logistics restrictions in connection with the outbreak. However, as a result of PRC government’s effort on disease control, most cities in China were reopened, the outbreak in China is under the control. The Company disposed all of its systems and currently holds only five power generating systems through Erdos TCH, the Company initially expected to resume production of these five power generating systems in July 2020 from the renovation and furnace safety upgrade, but the resumption of operations was further delayed due to government’s request for Erdos’ production line rectification for lowering its energy consumption per unit of GDP; the Company expects the resumption date to be July 2021. As of this report date, there are some new Covid-19 cases discovered in a few provinces of China, however, the number of new cases is not significant due to PRC government’s strict control. On December 22, 2020, Shanghai TCH entered into an Equity Acquisition Agreement with Xi’an Taiying Energy Saving Technology Co., Ltd., a PRC company (“Xi’an Taiying”) and its three shareholders to purchase all of the issued and outstanding shares of stock of Xi’an Taiying. The purchase price for said shares shall consist of (i) 619,525 shares of common stock at an issuance price of $4.37 per share, (ii) 60,000,000 shares of Series A convertible stock and (iii) a cash payment of RMB 1,617,867,026 (approximately $247 million at a conversion rate of 1:6.55). The shares shall be issued within 15 business days after approval by the Board of Directors and/or shareholders of the Company and Nasdaq approval and the cash shall be paid in three tranches – RMB 390 million (approximately $59.5 million) within 10 days after the agreement is executed, RMB 300 million (approximately $45.8 million) by March 31, 2021 and RMB 927,867,026 (approximately $141.7 million) within 10 days after the shares of Xi’an Taiying are registered to Buyer. As of the date of this report, the Company has not obtained and there is no assurance that the Company will be able to obtain necessary approval to proceed with the transaction. In addition, the Company is currently renegotiating the payment terms with the sellers for paying less shares but does not know when the renegotiation will be completed. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements (“CFS”) were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Basis of Consolidation The 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, 1) Erdos TCH Energy Saving Development Co., Ltd (“Erdos TCH”), 100% owned by Xi’an TCH (See note 1), 2) Zhonghong, 90% owned by Xi’an TCH and 10% owned by Shanghai TCH, and 3) 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 December 31, 2020. However, there was no revenue for the Company for the year ended December 31, 2020. All significant inter-company accounts and transactions were eliminated in consolidation. Uses and Sources of Liquidity For the year ended December 31, 2020, the Company had a net income of $4.05 million based on receipts of accounts receivable which had previously been reserved as bad debt allowance and was reversed in 2020. For the year ended December 31, 2019, the Company had net loss of $8.77 million. The Company had an accumulated deficit of $43.03 million as of December 31, 2020. The Company disposed all of its systems and currently holds only five power generating systems through Erdos TCH, which is expected to resume production in July 2021. The Company is in the process of transforming and expanding into an energy storage integrated solution provider. The Company plans to pursue disciplined and targeted expansion strategies for market areas the Company currently does not serve. The Company actively seeks and explores opportunities to apply energy storage technologies to new industries or segments with high growth potential, including industrial and commercial complexes, large scale photovoltaic (PV) and wind power stations, remote islands without electricity, and smart energy cities with multi-energy supplies. The Company had cash of $107.80 million as of December 31, 2020, and has raised additional $38.25 million in a private offering in March 2021. The Company’s cash flow forecast indicate it will have sufficient cash to funds its operations for the next 12 months from the date of issuance of these financial statements. The historical operating results indicate the Company has recurring losses from operations which rise the question related to the Company’s ability to continue as a going concern. However, the Company had $107.80 million cash on hand at December 31, 2020 as a result of collection the full payment from all the projects that had been disposed earlier. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering, or debt financing including bank loans. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. 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. On an on-going basis, management evaluates their estimates, including those related to allowances for bad debt and inventory obsolescence, impairment loss on fixed assets and construction in progress, income taxes, and contingencies and litigation. Management bases their estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Revenue Recognition A) Sales-type Leasing and Related Revenue Recognition On January 1, 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under ASC Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under Topic 840. (See Operating lease below as relates to the Company as a lessee). The Company’s sales type lease contracts for revenue recognition fall under ASC 842. During the years ended December 31, 2020 and 2019, the Company did not sell any new power generating projects. The Company constructs and leases waste energy recycling power generating projects to its customers. The Company typically transfers legal ownership of the waste energy recycling power generating projects to its customers at the end of the lease. Prior to January 1, 2019, the investment in these projects was recorded as investment in sales-type leases in accordance with ASC Topic 840 , “Lease ,” The Company finances construction of waste energy recycling power generating projects. The sales and cost of sales are recognized at the inception of the lease, which is when the control is transferred to the lessee. The Company accounts for the transfer of control as a sales type lease in accordance with ASC 842-10-25-2. The underlying asset is derecognized, and revenue is recorded when collection of payments is probable. This is in accordance with the revenue recognition principle in ASC 606 - Revenue from contracts with customers. The investment in sales-type leases consists of the sum of the minimum lease payments receivable less unearned interest income and estimated executory cost. Minimum lease payments are part of the lease agreement between the Company (as the lessor) and the customer (as the lessee). The discount rate implicit in the lease is used to calculate the present value of minimum lease payments. The minimum lease payments consist of the gross lease payments net of executory costs and contingent rentals, if any. Unearned interest is amortized to income over the lease term to produce a constant periodic rate of return on net investment in the lease. While revenue is recognized at the inception of the lease, the cash flow from the sales-type lease occurs over the course of the lease, which results in interest income and reduction of receivables. Revenue is recognized net of value-added tax. B) Contingent Rental Income The Company records income from actual electricity generated of each project in the period the income is earned, which is when the electricity is generated. Contingent rent is not part of minimum lease payments. Operating Leases On January 1, 2019, the Company adopted Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with its historical accounting under Topic 840. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company elected the package of practical expedients permitted under the transition guidance, which allowed it to carry forward its historical lease classification, its assessment on whether a contract was or contains a lease, and its initial direct costs for any leases that existed prior to January 1, 2019. The Company also elected to combine its lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. The Company leased an office in Xi’an, China as the Company’s headquarter; upon adoption, the Company recognized total Right of Use Asset (“ROU”) of $116,917, with corresponding liabilities of $116,917 on the consolidated balance sheets. The ROU assets include adjustments for prepayments and accrued lease payments. The adoption did not impact its beginning retained earnings, or its prior year consolidated statements of income and statements of cash flows. At December 31, 2020, the ROU was $0 as the lease was expired in November 2020. Under Topic 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of its leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options. Operating leases are included in operating lease right-of-use assets and operating lease liabilities (current and non-current), on the consolidated balance sheets. Cash Cash include 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. Accounts Receivable The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable 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 December 31, 2020, the Company had gross accounts receivable of $342,974 of Erdos TCH for electricity sold. As of December 31, 2019, the Company had gross accounts receivable of $48.06 million; of which, $35.42 million was for transferring the ownership of Huayu and Shenqiu Phase I and II systems to Mr. Bai; $10.03 million was from the sales of CDQ and a CDQ WHPG system to Zhongtai, and $2.61 million accounts receivable of Erdos TCH for electricity sold. As of December 31, 2020, the Company had bad debt allowance of $34,297 for Erdos TCH due to the customer not making the payments as scheduled. As of December 31, 2019, the Company had bad debt allowance of $5,733,781 for Zhongtai and $261,430 for Erdos TCH due to the customer not making the payments as scheduled. During the year ended December 31, 2020, the Company recognized a reversal of the bad debt allowance of $6,031,058, of which $5,799,094 was for Zhongtai and $231,964 was for Erdos TCH as a result of payment collection from Zhongtai and Erdos TCH. As of December 31, 2020, the Company received the payment in full from all the projects which had been disposed earlier. 2020 2019 Xuzhou Zhongtai project $ - $ 10,034,116 Bai Chonggong (for Shenqiu and Huayu projects) - 35,415,556 Xuzhou Tian’an project - - Receivable of electricity sales of Erdos 342,974 2,614,299 Total accounts receivable 342,974 48,063,971 Bad debt allowance (34,297 ) (5,995,210 ) Accounts receivable, net 308,677 $ 42,068,761 Interest Receivable on Sales Type Leases As of December 31, 2020, the interest receivable on sales type leases was $0. As of December 31, 2019, the interest receivable on sales type leases was $5,245,244, mainly from recognized but not yet collected interest income for the Pucheng systems. The ownership of Pucheng systems was transferred to Pucheng as a result of full payment received by Xi’an TCH in January 2020. Investment in sales-type leases, net As of December 31, 2020, the Company had net investment in sales-type leases of $0. As of December 31, 2019, the Company had net investment in sales-type leases of $8,287,560 (after bad debt allowance for investment in sales-type leases of $24,416,441 for the Pucheng system). 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. Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within China. Balances at financial institutions and state-owned banks within the PRC are covered by insurance up to RMB 500,000 (US$77,000) per bank. Any balance over RMB 500,000 (US$77,000) per bank in PRC will not be covered. At December 31, 2020, cash held in the PRC bank of $107,510,548 was not covered by such 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 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: 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 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 FASB 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 FASB ASC Topic 740, when tax returns are filed, it is likely 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. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At December 31, 2020 and 2019, the Company did not take any uncertain positions that would necessitate recording a tax related liability. 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. Effective on January 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the FV hierarchy. The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC 480, “Distinguishing Liabilities from Equity,” “Derivatives and Hedging.” As of December 31, 2020 and 2019, the Company did not have any long-term debt obligations; and 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 share-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. The Company accounts for share-based compensation awards to non-employees in accordance with FASB ASC Topic 718 and FASB ASC Subtopic 505-50, “Equity-Based Payments to Non-employees”. Share-based compensation associated with the issuance of equity instruments to non-employees is measured at the fair value of the equity instrument issued or committed to be issued, as this is more reliable than the fair value of the services received. The fair value is measured at the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. Effective on January 1, 2020, the Company adopted ASU 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which expands the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. An entity should apply the requirements of ASC 718 to non-employee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The adoption of ASU 2018-07 did not have an impact on the Company’s financial statements. 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.” For the years ended December 31, 2020 and 2019, the basic and diluted loss per share were the same due to the anti-dilutive features of the warrants and options. For the years ended December 31, 2020 and 2019, 31,311 shares and 406,764 shares (post-reverse stock split), respectively; purchasable under warrants and options were excluded from the EPS calculation as these were not dilutive due to the exercise price was more than the stock market price. 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 June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its CFS. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on its financial statements. 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. |
Investment in Sales-Type Leases
Investment in Sales-Type Leases, Net | 12 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
INVESTMENT IN SALES-TYPE LEASES, NET | 3. INVESTMENT IN SALES-TYPE LEASES, NET Under sales-type leases, as of December 31, 2019, Xi’an TCH leases BMPG systems to Pucheng (Phase I and II, 15 and 11 year terms, respectively); The components of the net investment in sales-type leases as of December 31, 2020 and 2019 are as follows: 2020 2019 Total future minimum lease payments receivable $ - $ 56,477,739 Less: executory cost - (3,623,100 ) Less: unearned interest - (14,905,393 ) Less: realized interest income but not yet received - (5,245,244 ) Less: allowance for net investment receivable - (24,416,442 ) Investment in sales-type leases, net - 8,287,560 Current portion - - Noncurrent portion $ - $ 8,287,560 The ownership of Pucheng systems was transferred to Pucheng in January 2020 as a result of receiving full payment from Pucheng to Xi’an TCH. |
Other Receivables
Other Receivables | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
OTHER RECEIVABLES | 4. OTHER RECEIVABLES As of December 31, 2020, other receivables mainly consisted of (i) advances to third parties of $7,663, bearing no interest, payable upon demand, ii) advance to employees of $11,011, iii) advance to suppliers of $4,791 and (iv) others of $12,222 including social insurance receivable of $4,579. As of December 31, 2019, other receivables mainly consisted of (i) advances to third parties of $7,167, bearing no interest, payable upon demand, (ii) tax and maintenance cost receivable of $1,001,527 for Xi’an TCH, and iii) others of $22,449. |
Asset Subject to Buyback and Co
Asset Subject to Buyback and Construction in Progress | 12 Months Ended |
Dec. 31, 2020 | |
Asset Subject To Buyback And Construction In Progress [Abstract] | |
ASSET SUBJECT TO BUYBACK AND CONSTRUCTION IN PROGRESS | 5. ASSET SUBJECT TO BUYBACK AND CONSTRUCTION IN PROGRESS Asset subject to buyback As of December 31, 2020 and 2019, the Company had asset subject to buyback of $28.92 million and $27.04 million, respectively, which was for the Chengli project. The Chengli project finished construction, and was transferred to the Company’s fixed assets at a cost of $35.24 million (without impairment loss) and ready to be put into operation as of December 31, 2018. On January 22, 2019, Xi’an Zhonghong completed the transfer of Chengli CDQ WHPG project as the partial repayment for the loan and accrued interest of RMB 188,639,400 ($27.54 million) to HYREF (see Note 9). However, because the loan was not deemed repaid due to the buyback right (See Note 9 for detail), the Company kept the loan and the Chengli project in its books as fixed assets for accounting purposes. Construction in Progress As of December 31, 2020 and 2019, the Company’s construction in progress included: 2020 2019 Xuzhou Tian’an $ - $ 37,759,277 Less: assets impairment allowance - (13,935,075 ) Total $ - $ 23,824,202 On January 10, 2020, Zhonghong, Tianyu and Huaxin signed a transfer agreement to transfer all assets under construction and related rights and interests of Xuzhou Tian’an Project to Tianyu for RMB 170 million including $0.6 million VAT (total of $24.37 million) in three installment payments. The Company recorded impairment loss of $13.9 million as of December 31, 2019. The 1st installment payment of RMB 50 million ($7.17 million) was to be paid within 20 working days after the contract was signed. The 2nd installment payment of RMB 50 million ($7.17 million) was to be paid within 20 working days after completion of the project construction but no later than July 31, 2020. The final installment payment of RMB 70 million ($10.03 million) was to be paid before December 31, 2020. As of December 31, 2020, the Company received the payment in full for Tian’an Project. |
Taxes Payable
Taxes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Tax Payable [Abstract] | |
TAXES PAYABLE | 6. TAXES PAYABLE Taxes payable consisted of the following as of December 31, 2020 and 2019: 2020 2019 Income tax – current $ 2,746,757 $ 2,118,432 Value-added tax 322,652 1,708,298 Other taxes 76,203 260,912 Total – current 3,145,612 4,087,642 Income tax – noncurrent $ 5,174,625 $ 5,782,625 Income tax payable included $7.61 million ($2.44 million included in current above and $5.17 million noncurrent) 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 U.S. shareholders of a 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. The Company made such an election. |
Accrued Liabilities and Other P
Accrued Liabilities and Other Payables | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES AND OTHER PAYABLES | 7. ACCRUED LIABILITIES AND OTHER PAYABLES Accrued liabilities and other payables consisted of the following as of December 31, 2020 and 2019: 2020 2019 Education and union fund and social insurance payable $ 373,740 $ 843,807 Consulting and legal expenses 31,090 40,602 Accrued payroll and welfare 255,278 254,882 Other 66,588 45,460 Total $ 726,696 $ 1,184,751 |
Deferred Tax, Net
Deferred Tax, Net | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Tax Assets Liabilities Net Disclosure [Abstract] | |
DEFERRED TAX, NET | 8. DEFERRED TAX, NET Deferred tax assets resulted from asset impairment loss which was temporarily non-tax deductible for tax purposes but expensed in accordance with US GAAP, interest income in sales-type leases which was recognized as income for tax purposes but not for book purpose as it did not meet revenue recognition in accordance with US GAAP, 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 December 31, 2020 and 2019, net deferred tax assets consisted of the following: 2020 2019 Non-current deferred tax assets Accrued expenses $ 70,019 $ 189,050 Interest income in sales-type leases on cash basis - 853,265 Depreciation of fixed assets - 2,938,605 Assets impairment loss - 7,537,556 Write-off Erdos TCH net investment in sales-type leases 6,155,300 6,349,604 US NOL 254,035 3,246,655 PRC NOL 10,849,690 10,424,558 Non-current deferred tax liabilities Net investment in sales-type leases - (6,685,021 ) Net non-current deferred tax assets 17,329,044 24,854,272 Less: valuation allowance for deferred tax assets (17,329,044 ) (24,854,272 ) Non-current deferred tax assets, net $ - $ - |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | 9. LOANS PAYABLE Entrusted Loan Payable (HYREF Loan) The HYREF Fund was established in July 2013 with a total fund size of RMB 460 million ($77 million) invested 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 was to receive interest from Zhonghong for the HYREF Fund’s debt investment. 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 ($4.39 million) capital contribution made by Xi’an TCH in Zhonghong. 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 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 term of this loan was for 60 months from July 31, 2013 to July 30, 2018, with an interest rate of 12.5%. On August 6, 2016, Zhonghong was required to repay principal of RMB 280 million ($42.22 million), of which the Company paid RMB 50 million ($7.54 million); while on August 6, 2017, Zhonghong was initially supposed to repay principal of RMB 100 million ($16.27 million) and on July 30, 2018, Zhonghong was initially supposed to repay the remainder of RMB 77 million ($12.52 million). During the term, Zhonghong was to 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 verbally notified Zhonghong from the beginning that it was unlikely that they would enforce these requirements for the purpose of the efficient utilization of working capital. The Company had 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 to further extend 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 had tentatively agreed to extend the remaining loan balance until August 2019 with an adjusted annual interest rate of 9%, subject to the final approval from its headquarters. The headquarters did not approve the extension proposal with an adjusted annual interest rate of 9%; however, on December 29, 2018, the Company worked out with the lender an alternative repayment proposal as described below. As of December 31, 2018, the entrusted loan payable had an outstanding balance of $59.29 million, of which, $10.92 million was from the investment of Xi’an TCH; accordingly, the Company netted the loan payable of $10.92 million with the long-term investment to the HYREF Fund made by Xi’an TCH. As of December 31, 2019, the interest payable for this loan was $8.20 million and the outstanding balance for this loan was $20.77 million including a non-current portion of $0.29 million. As of December 31, 2020, the interest payable for this loan was $10.14 million and the outstanding balance for this loan was $22.20 million including a non-current portion of $0.30 million. The Company recorded interest expense of $1.30 million and $1.72 million for the years ended December 31, 2020 and 2019. Repayment of HYREF loan 1. Transfer of Chengli project as partial repayment On December 29, 2018, Xi’an Zhonghong, Xi’an TCH, HYREF, Guohua Ku, and Chonggong Bai entered into a CDQ WHPG Station Fixed Assets Transfer Agreement, pursuant to which Xi’an Zhonghong transferred Chengli CDQ WHPG station as the repayment for the loan of RMB 188,639,400 ($27.54 million) to HYREF, the transfer of which was completed on January 22, 2019. Xi’an TCH is a secondary limited partner of HYREF. The fair value of the CDQ WHPG station applied in the transfer was determined by the parties based upon the appraisal report issued by Zhonglian Assets Appraisal Group (Shaanxi) Co., Ltd. as of August 15, 2018. However, per the discussion below, Xi’an Zhonghong, Xi’an TCH, Guohua Ku and Chonggong Bai (the “ Buyers” 2. Buy Back Agreement 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, 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 (see 5 below), 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 was based on 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. The buy-back price for the Station was based on the higher of (i) the fair value of the Station on the date transferred; or (ii) the loan balance at the date of the transfer plus interest accrued through that date. HYREF could 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., is delisted from The National Equities Exchange And Quotations Co., Ltd., a Chinese over-the-counter trading system (the “NEEQ”); (iii) Xi’an Huaxin New Energy, or 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. Due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report, on December 19, 2019, Xi’an TCH, Xi’an Zhonghong, Guohua Ku and Chonggong Bai jointly and severally agreed to buy back all outstanding capital equity of Xi’an Hanneng which was transferred to HYREF by Chonggong Bai earlier. The total buy back price was RMB 261,727,506 ($37.52 million) including accrued interest of RMB 14,661,506 ($2.10 million), and was paid in full by Xi’an TCH on December 20, 2019. The Company might be contingently liable for the difference between the fair value of the transferred asset and the loan and related interest if the fair value of the transferred asset at the time of the exercise of the buyback option is higher than the loan and related accrued interest. Based on an appraisal, as of December 31, 2020, the asset was valued at $27.97 million while the loan and related interest was $32.35 million. On April 9, 2021, the buyers and HYREF entered a Termination of Fulfillment Agreement (termination agreement). Under the termination agreement, the original buyback agreement was terminated upon signing of the termination agreement. HYREF will not execute the buy-back option and will not ask for any additional payment from the buyers other than keeping the CDQ WHPG station (also see Note 19). Due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report, on December 19, 2019, Xi’an TCH, Xi’an Zhonghong, Guohua Ku and Chonggong Bai jointly and severally agreed to buy back all outstanding capital equity of Xi’an Hanneng which was transferred to HYREF by Chonggong Bai earlier. The total buy back price was RMB 261,727,506 ($37.52 million) including accrued interest of RMB 14,661,506 ($2.10 million), and was paid in full by Xi’an TCH. 3. Xi’an TCH transferred 40% ownership in the Fund Management Company to Hongyuan Huifu for partial payment of financial advisory fee 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 transferred 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 ($504,000) (the “Fund Management Company Transfer Price”). On January 22, 2019, Xi’an TCH completed the 40% ownership transfer transaction. The Company had $46,461 loss from the sale of a 40% equity interest in Fund Management Company during the year ended December 31, 2019. 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 18,306,667 ($2,672,000) in financial advisory fees, and the parties agreed that the Fund Management Company Transfer Price could be used to offset the outstanding financial advisory fees. Upon the completion of this transaction, the Fund Management Company owed RMB 3,453,867 ($502,400) to Hongyuan Huifu, and Xi’an TCH owed RMB 14,852,800 ($2,168,000) to the Fund Management Company. As of December 31, 2020, Xi’an TCH paid in full of $2,168,000 to the Fund Management Company. 4. HYREF Fund transferred 10% ownership in Xi’an Zhonghong to Shanghai TCH (Long-Term Payable) On December 29, 2018, Shanghai TCH entered into a Share Transfer Agreement with HYREF, pursuant to which HYREF agreed to transfer its 10% ownership in Xi’an Zhonghong to Shanghai TCH for RMB 3 million ($460,000), and was recorded as long-term payable in the Company’s balance sheet. On January 22, 2019, Hongyuan Huifu completed the transfer of its 10% ownership in Xi’an Zhonghong to Shanghai TCH, Xi’an Zhonghong then became a 100% subsidiary of the Company. The Company did not record any gain or loss for this purchase as the controlling interest did not change. 5. Transfer of Xuzhou Huayu Project and Shenqiu Phase I & II project to Mr. Bai for partial repayment of HYREF loan On January 4, 2019, Xi’an Zhonghong, Xi’an TCH, and Mr. Chonggong Bai entered into a Projects Transfer Agreement, pursuant to which 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. Bai for RMB 120,000,000 ($17.52 million) 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 ($18.55 million). Mr. Bai agreed to transfer all the equity shares of his wholly owned company, Xi’an Hanneng, to HYREF as repayment for the RMB 247,066,000 ($36.07 million) loan made by Xi’an Zhonghong to HYREF as consideration for the transfer of the Xuzhou Huayu Project and Shenqiu Phase I and II Projects. On February 15, 2019, Xi’an Zhonghong completed the transfer of the Xuzhou Huayu Project and Xi’an TCH completed the transfer of Shenqiu Phase I and II Projects to Mr. Bai, and on January 10, 2019, Mr. Bai transferred all the equity shares of his wholly owned company, Xi’an Hanneng, to HYREF as repayment of Xi’an Zhonghong’s loan to HYREF as consideration for the transfer of the Xuzhou Huayu Project and Shenqiu Phase I and II Projects. Xi’an Hanneng is a holding company and was supposed to own 47,150,000 shares of Xi’an Huaxin New Energy Co., Ltd. (“Huaxin”), so that HYREF will indirectly receive and own such shares of Xi’an Huaxin as the repayment for the loan of Zhonghong. Xi’an Hanneng already owned 29,948,000 shares of Huaxin; however, Xi’an Hanneng was not able to obtain the remaining 17,202,000 shares due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report. On December 19, 2019, Xi’an TCH, Xi’an Zhonghong, Guohua Ku and Chonggong Bai jointly and severally agreed to buy back all outstanding capital equity of Xi’an Hanneng which was transferred to HYREF by Chonggong Bai earlier. The total buy back price was RMB 261,727,506 ($37.52 million) including accrued interest of RMB 14,661,506 ($2.10 million), and was paid in full by Xi’an TCH on December 20, 2019. On December 20, 2019, Mr. Bai, Xi’an TCH and Xi’an Zhonghong agreed to have Mr. Bai repay the Company in cash for the transfer price of Xuzhou Huayu and Shenqiu in five installment payments. The 1 st nd rd th 6. The lender agreed to extend the repayment of RMB 77.00 million ($11.04 million) to July 8, 2023; of which, RMB 75.00 million ($10.81 million) was Xi’an TCH’s investment into the HYREF fund as a secondary limited partner, and 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. A reconciliation of repayment of HYREF loan (entrusted loan) by three Projects at December 31, 2020 was as follows: Transfer price for Chengli Project $ 28,910,696 Entrusted loan payable at December 31, 2020, net with Xi’an TCH investment in entrusted loan (current and noncurrent) $ 22,203,262 Transfer price for Xuzhou Huayu Project 18,391,086 Interest payable on entrusted loan at December 31, 2020 10,144,228 Transfer price for Shenqiu Phase I and II Projects 19,474,015 Add back: Xi’an TCH investment in entrusted loan 11,494,429 Less: interest accrued from September 20, 2018 to December 31, 2020 (cut-off date for interest calculation for repayment was September 20, 2018) (3,130,276 ) Less: portion of loan with repayment due date extended to year 2023 (11,800,947 ) Add back: interest & penalty repaid by Xi’an TCH 9,186,358 Add back: loan principle repaid by Xi’an TCH 28,678,743 $ 66,775,797 $ 66,775,797 |
Refundable Deposits from Custom
Refundable Deposits from Customers for Systems Leasing | 12 Months Ended |
Dec. 31, 2020 | |
Refundable Deposit From Customers For Systems Leasing [Abstract] | |
REFUNDABLE DEPOSITS FROM CUSTOMERS FOR SYSTEMS LEASING | 10. REFUNDABLE DEPOSITS FROM CUSTOMERS FOR SYSTEMS LEASING As of December 31, 2020 and 2019, the balance of refundable deposits from customers for systems leasing was $0 and $544,709 (for Pucheng systems), respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 11. RELATED PARTY TRANSACTIONS As of December 31, 2020 and 2019, the Company had $28,440 and $41,174, respectively, in advances from the Company’s management, which bear no interest, are unsecured, and are payable upon demand. |
Note Payables, Net
Note Payables, Net | 12 Months Ended |
Dec. 31, 2020 | |
Convertible Note Payable Net [Abstract] | |
NOTE PAYABLES, NET | 12. NOTE PAYABLES, NET Convertible Notes / Promissory Notes in January and February 2019 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 of $1,050,000. The Purchaser purchased the Note with an original issue discount of $50,000. The Note bears interest at 8%. 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 125% of any amounts outstanding under the Note and being prepaid. 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 as discussed in the July 2018 Note above. The conversion feature did not require bifurcation and derivative accounting as the conversion price was greater than the market price of the Company common shares, there was no beneficial conversion feature to recognize. 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 of $1,050,000. The Purchaser purchased the Note with an original issue discount of $50,000. The Note bears interest at 8%. 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 125% of any amounts outstanding under the Note and being prepaid. 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 as discussed above in the July 2018 Note. The conversion feature did not require bifurcation and derivative accounting and as the conversion price was greater than the market value of the Company common shares, there was no beneficial conversion feature to recognize. Pursuant to an Exchange Agreement dated April 14, 2019 (the “Exchange Agreement”), the Company and Iliad Research and Trading, L.P. agreed to exchange the above two notes (the “Original Notes”) with two new promissory notes (the “Exchange Notes”). Upon execution of the agreement, the notes holder surrendered the Convertible Notes to the Company and the Company issued to the holder the Exchange Notes. Upon surrender, the two Convertible Notes were cancelled and the remaining amount owed to Holder hereafter be evidenced solely by the Exchange Notes ($1,173,480 and $ 1,165,379 for the January and February 2019 notes, respectively). All outstanding principal and accrued interest on the Exchange Notes will become due and payable on January 31, 2021 and February 27, 2021, respectively. The Exchange Notes bore interest at 8% and did not grant conversion options to the Purchaser. The Company’s obligations under the Exchange Notes could be prepaid at any time, provided that in such circumstance the Company would have paid 125% of any amounts outstanding under the Exchange Notes. Beginning on the date that is six months from the issue date of the respective Original Notes (the “Issue Dates”) and at any time thereafter until the Exchange Notes are paid in full, Purchaser shall have the right to redeem up to $750,000 of the outstanding balance during months six to eight following the respective Issue Date and any amount thereafter. The exchange of the Convertible Notes with Promissory Notes did not cause substantially different terms, and did not meet the conditions described in ASC 405-20-40-1, and therefore was accounted for as a modification and not an extinguishment; accordingly, the Company did not recognize any gain or loss for the exchange of the notes under ASC 470-50-40-8. During the year ended December 31, 2020, the Company amortized OID of $56,250 and recorded $80,204 interest expense. During the year ended December 31, 2019, the Company amortized OID of $43,750 and recorded $368,362 interest expense (including $106,680 and $105,944 in exchange fees, respectively) for these two notes. As a result of default in the redemption request by the lender made on August 1, 2019, the Company and the lender entered into a forbearance agreement in which the lender agreed not to enforce its rights under the agreement and agreed not to make any Redemptions pursuant to the Section 4 of the Note before October 1, 2019. Under the term of the forbearance agreement, in the event Lender delivers after October 1, 2019 a Redemption Notice to Borrower and the Redemption Amount set forth therein is not paid in cash to Lender within three Trading Days, then the applicable Redemption Amount shall be increased by 25% (the “First Adjustment,” and such increase to the Redemption Amount, the “First Adjusted Redemption Amount”). In the event the First Adjusted Redemption Amount is not paid within three Trading Days after the date of First Adjustment, then the First Adjusted Redemption Amount shall be increased in accordance with the following formula: $0.50 divided by the lowest Closing Trade Price of the Common Stock during the 20 Trading Days prior to the date of the Second Adjustment and the resulting quotient multiplied by the First Adjusted Redemption Amount (the “Second Adjustment,” and such increase to the First Adjusted Redemption Amount, the “Second Adjusted Redemption Amount”), provided, however, that such formula shall only be applied if the resulting quotient is greater than one and such formula shall in no event be used to reduce the First Adjusted Redemption Amount. In 2019, the Company entered into a series of Exchange Agreements with Iliad Research and Trading, L.P. Pursuant to the Agreement, the Company and Lender partitioned five Promissory Notes in the original total principal amount of $797,000 from a Promissory Note issued by the Company on April 14, 2019. The Company and Lender exchanged the Partitioned Note for the delivery of total 175,400 shares (post-reverse stock split) of the Company’s Common Stock. The Company recorded $131,740 gain on conversion of these portion of the note. However, on December 16, 2019, the Company and the lender amended the September 11, 2019 forbearance agreement to increase the adjustment ratio described above from $0.50 to $0.30 (pre-reverse stock split price). The outstanding balance of the Note shall be reduced by an amount equal to the total outstanding balance of the Partitioned Note. The investor made adjustments of $305,626 to increase the principle of the notes during the year ended December 31, 2019 under the term of the September 11 th During the first quarter of 2020, Company entered into three Exchange Agreements with Iliad Research and Trading, L.P. Pursuant to the Agreement, the Company and Lender partitioned three new Promissory Notes in the original total principal amount of $430,000 from a Promissory Note issued by the Company on April 14, 2019. The Company and Lender exchanged the Partitioned Note for the delivery of total 143,333 shares (post-reverse stock split) of the Company’s Common Stock. The Company recorded $103,167 loss on conversion of these portion of the note. During the second quarter of 2020, Company entered into four Exchange Agreements with Iliad Research and Trading, L.P. Pursuant to the Agreement, the Company and Lender partitioned four new Promissory Notes in the original total principal amount of $819,586 from a Promissory Note issued by the Company on April 14, 2019. The Company and Lender exchanged the Partitioned Note for the delivery of total 304,710 shares (post-reverse stock split) of the Company’s Common Stock. The Company recorded $49,837 gain on conversion of these portion of the note. In addition, the investor also made adjustments of $145,000 to increase the principle of the notes during the second quarter of 2020 under the term of the September 11 th On May 15, 2020, the Company entered into a Forbearance Agreement with the Lender. The Lender had delivered a redemption notice to the Company on November 4, 2019 pursuant to the terms of the Exchange Agreement dated April 14, 2019 and the Company failed to pay the amount provided therein. Accordingly, the Lender has the right to accelerate the maturity date of the Note and cause the outstanding balance to be increased by 25%. The Lender agreed with the Company to withdraw the November 4, 2019 redemption notice as if it was never made and agreed that as of May 15, 2020 there is no default under the Note. The Company did not pay any consideration to the Lender for this forbearance. The outstanding balance of the Note as of May 15, 2020 is $1,271,720, and under the new Forbearance Agreement, if the Lender delivers a redemption notice and the amount set forth in such notice is not paid in cash to Lender within three trading days, the applicable redemption amount shall be increased to 25%. During the third quarter of 2020, Company entered into three Exchange Agreements with Iliad Research and Trading, L.P. Pursuant to the Agreements, the Company and Lender partitioned three new Promissory Notes in the original total principal amount of $600,000 from a Promissory Note issued by the Company on April 14, 2019. The Company and Lender exchanged the Partitioned Note for the delivery of total 242,699 shares (post-reverse stock split) of the Company’s Common Stock. The Company recorded $36,023 loss on conversion of these portion of the note. In addition, under the term of the forbearance agreement, as the investor delivered redemption notices totaling $1,050,000 which were not paid within 5 days, per the forbearance agreement, adjustments of $262,500 were made to increase the principle of the notes during the third quarter of 2020. These transactions were recorded as credit to additional paid in capital of $636,023, which was the fair value of the shares issued based on the stock price on the date of the exchange. The $36,023 loss on conversion and $262,500 principle adjustment discussed above resulted in a loss on note redemption/ conversion of $298,523 in the statement of operations for the three months ended September 30,2020. During the fourth quarter of 2020, Company entered into three Exchange Agreements with Iliad Research and Trading, L.P. Pursuant to the Agreements, the Company and Lender partitioned three new Promissory Notes in the original total principal amount of $600,000 from a Promissory Note issued by the Company on April 14, 2019. The Company and Lender exchanged the Partitioned Note for the delivery of total 175,904 shares (post-reverse stock split) of the Company’s Common Stock. The Company recorded $5,540 loss on conversion of these portion of the note. As of December 31, 2020, two Notes that were issued in January and February 2019 were repaid in full by the Company’s shares. Promissory Notes in December 2020 On December 4, 2020, the Company entered into a Note Purchase Agreement with an institutional investor, pursuant to which the Company sold and issued to the Purchaser a Promissory Note of $3,150,000. The Purchaser purchased the Note with an original issue discount of $150,000, which was recognized as a debt discount and will be amortized using the interest method over the life of the note. The Note bears interest at 8% per annum and has a term of 24 months. All outstanding principal and accrued interest on the Note will become due and payable on December 3, 2022. The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay 125% of any amounts outstanding under the Note and being prepaid. Beginning on the date that is six months from the issue date of the Note, Purchaser shall have the right to redeem any amount of this Note up to $500,000 per calendar month by providing written notice to the Company. During the year ended December 31, 2020, the Company amortized OID of $5,645 and recorded $18,968 interest expense on this Note. |
Shares Issued for Equity Financ
Shares Issued for Equity Financing and Stock Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
SHARES ISSUED FOR EQUITY FINANCING AND STOCK COMPENSATION | 13. SHARES ISSUED FOR EQUITY FINANCING AND STOCK COMPENSATION Private Placement in February 2019 On February 13, 2019, CREG 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 sold to the Purchaser in a private placement 1,600,000 shares (pre-reverse stock split) of the Company’s common stock, par value $0.001 per share, at $10.13 per share, for $1,620,800. The Company was required to 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. The Private Placement was completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. The Company filed the registration statement on May 24, 2019, and was declared effective on June 4, 2019. Registered Direct Offering and Private Placement in April 2019 On April 15, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain purchasers (the “Purchasers”), pursuant to which the Company offered to the Purchasers, in a registered direct offering, 2,359,272 shares (pre-reverse stock split) of common stock. The Shares were sold to the Purchasers at a negotiated purchase price of $0.80 per share, for gross proceeds to the Company of $1,887,417, before deducting $200,000 in placement agent fees and other estimated offering expenses payable by the Company. In a concurrent private placement, the Company also issued to the each of the Purchasers a warrant to purchase 0.75 of a share of the Company’s Common Stock for each share purchased under the Purchase Agreement, or 1,769,454 warrants (pre-reverse stock split). The Warrants are exercisable beginning on the six month anniversary of the date of issuance at an exercise price of $0.9365 per share, and expire on the five and one-half year anniversary of the date of issuance. H.C. Wainwright & Co., LLC acted as the Company’s exclusive placement agent in connection with the offerings under the Purchase Agreement and received cash fee of 7% of the gross proceeds received by the Company from the offerings (or $132,119), up to $75,000 for certain expenses, $10,000 for clearing expenses and warrants to purchase the Company’s Common Stock in an amount equal to 7% of our Shares sold to the Purchasers in the offerings, or 165,149 shares of Common Stock, on substantially the same terms as the Warrants, except that the Placement Agent Warrants have an initial exercise price of $1.00 per share, are exercisable commencing on the later of (i) six months of the issuance date or (ii) the date on which the Company increases the number of its authorized shares, and expire on April 15, 2024. The warrants issued in this private placement were classified as equity instruments. The Company accounted for the warrants issued in the private placement based on the fair value method under ASC Topic 505, and the FV of the warrants was calculated using the Black-Scholes model under the following assumptions: estimated life of 5.5 years for Investor Warrants and 5 years for Placement Agent Warrants, volatility of 100%, risk-free interest rate of 2.41% and dividend yield of 0%. The FV of the warrants issued to investors at grant date was $855,246, and the FV of the warrants issued to the placement agent at grant date was $75,901. On November 22, 2019, the Company entered into an Exchange Agreement (the “First Exchange Agreement”) with certain investors who had been party to that certain Securities Purchase Agreement dated October 29, 2018. Pursuant to the First Exchange Agreement, the Company and the October Investors agreed to exchange the outstanding warrant issued by the Company to the October Investors pursuant to the October Securities Purchase Agreement into shares of common stock of the Company, with an exchange ratio of 1 share of October Warrant Stock for 0.5 shares of common stock, according to the terms and conditions of the First Exchange Agreement. On November 22, 2019, the Company entered into a Second Exchange Agreement (the “Second Exchange Agreement”) with certain investors who had been party to that certain Securities Purchase Agreement dated April 15, 2019 by and among the Company and such investors. Pursuant to the Second Exchange Agreement, the Company and the April Investors agreed to exchange the outstanding warrant issued by the Company to the April Investors pursuant to the April Securities Purchase Agreement into shares of common stock of the Company, with an exchange ratio of 1 share of April Warrant Stock for 0.6 shares of common stock, according to the terms and conditions of the Second Exchange Agreement. The Company let the warrant holders exercised the 375,454 warrants (post-reverse stock split) into 205,421 common shares (post-reverse stock split) of the Company at a cashless exercise method. The fair value of these shares was the additional cost to the Company for the issuance of the shares under securities purchase agreements previously entered (described above). However, since the warrants were initially equity classified as they met the qualifications for equity classification under ASC 815-40, accordingly, the modification upon exercise of these warrants had no impact to the Company’s financial statements. Following is a summary of the activities of warrants that were issued from equity financing (post-reverse stock split) for the years ended December 31, 2020 and 2019: Number of Average Weighted Outstanding at January 1, 2019 212,404 $ 14.1 5.29 Exercisable at January 1, 2019 212,404 $ 14.1 5.29 Granted 193,460 9.5 5.25 Exchanged (375,454 ) - - Forfeited - - - Expired - - - Outstanding at December 31, 2019 30,411 14.0 4.21 Exercisable at December 31, 2019 30,411 14.0 4.21 Granted - - - Exercised - - - Forfeited - - - Expired - - - Outstanding at December 31, 2020 30,411 $ 14.0 3.21 Exercisable at December 31, 2020 30,411 $ 14.0 3.21 Shares Issued for Stock Compensation On March 16, 2020, the Company’s Board of Director agreed to issue 3,333 shares of the Company’s Common Stock (post-reverse stock split) to the Company’s law firm. The shares are earned in full and non-refundable as of March 9, 2020. The FV of these shares are $10,999 on March 9, 2020. Shares Issued for Equity Financing On August 24, 2020 and September 28, 2020, the Company entered into Securities Purchase Agreements with the purchaser and offered and sold to such purchaser 265,250 shares of Common Stock at negotiated purchase prices (132,000 shares at $2.15 per share and 133,250 shares at $2.34 per share) without reference to the market price and received the net proceeds was $497,187 after deducting the placement agent commission and certain expenses. These 265,250 shares were offered and sold in a registered public offering pursuant to the prospectus supplement dated August 24, 2020, and the original prospectus contained in an effective shelf registration statement on Form S-3 (the “Registration Statement”), which was originally filed with the Securities and Exchange Commission on December 1, 2017, and was declared effective on December 8, 2017 (File No. 333-221868). |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | 14. 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 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 the Company’s 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 2020 and 2019 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, CREG is taxed in the US and, as of December 31, 2020, had net operating loss (“NOL”) carry forwards for income taxes of $1.21 million; for federal income tax purposes, the NOL arising in tax years beginning after 2017 may only reduce 80% of a taxpayer’s taxable income, and may be carried forward indefinitely. However, the coronavirus Aid, Relief and Economic Security Act (“the CARES Act”) issued in March 2020, provides tax relief to both corporate and noncorporate taxpayers by adding a five-year carryback period and temporarily repealing the 80% limitation for NOLs arising in 2018, 2019 and 2020. The 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. As of December 31, 2020, the Company’s PRC subsidiaries had $43.40 million NOL that can be carried forward to offset future taxable income for five years from the year the loss is incurred. The NOL was mostly from Xi’an TCH, Erdos TCH and Zhonghong. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets due to the recurring losses from operations of these entities, accordingly, the Company recorded a 100% deferred tax valuation allowance for PRC NOL. The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the years ended December 31, 2020 and 2019, respectively: 2020 2019 U.S. statutory rates 21.0 % (21.0 )% Tax rate difference – current provision 5.1 % (3.4 )% Reversal of temporary difference due to disposal of Shenqiu - % (18.8 )% Permanent differences 2.9 % 2.0 % Change in valuation allowance (29.0 )% 15.6 % Tax (benefit) per financial statements - % (25.6 )% The provision for income tax expense for the years ended December 31, 2020 and 2019 consisted of the following: 2020 2019 Income tax expense – current $ - $ - Income tax benefit – deferred - (3,024,807 ) Total income tax benefit $ - $ (3,024,807 ) |
Stock-Based Compensation Plan
Stock-Based Compensation Plan | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION PLAN | 15. STOCK-BASED COMPENSATION PLAN Options to Employees and Directors 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 124,626 (post-reverse stock split). The Plan was effective immediately upon its adoption by the 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 their annual meeting on June 19, 2015. The following table summarizes option activity with respect to employees and independent directors, and the number of options reflects the Reverse Stock Split effective April 13, 2020: Number of Average Weighted Outstanding at January 1, 2019 900 $ 54.3 5.41 Exercisable at January 1, 2019 900 $ 54.3 5.41 Granted - - - Exercised - - - Forfeited - - - Outstanding at December 31, 2019 900 54.3 4.41 Exercisable at December 31, 2019 900 54.3 4.41 Granted - - - Exercised - - - Expired (400 ) 102.0 - Outstanding at December 31, 2020 500 $ 16.1 6.32 Exercisable at December 31, 2020 500 $ 54.3 6.32 |
Statutory Reserves
Statutory Reserves | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Reserves [Abstract] | |
STATUTORY RESERVES | 16. 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. During the year ended December 31, 2020, the Company transferred $629,330, which is 10% of Xi’an TCH’s net income to the statutory reverse. 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 December 31, 2020 and 2019: Name of Chinese Subsidiaries Registered Maximum Statutory reserve at Statutory Shanghai TCH $ 29,800,000 $ 14,900,000 ¥6,564,303 ($1,003,859) ¥6,564,303 ($1,003,859) Xi’an TCH ¥ 202,000,000 ¥ 101,000,000 ¥73,700,706 ($11,236,314) ¥69,359,820 ($10,606,984) Erdos TCH ¥ 120,000,000 ¥ 60,000,000 ¥19,035,814 ($2,914,869) ¥19,035,814 ($2,914,869) Xi’an Zhonghong ¥ 30,000,000 ¥ 15,000,000 Did not accrue yet due to accumulated deficit Did not accrue yet due to accumulated deficit Shaanxi Huahong $ 2,500,300 $ 1,250,150 Did not accrue yet due to accumulated deficit Did not accrue yet due to accumulated deficit Zhongxun ¥ 35,000,000 ¥ 17,500,000 Did not accrue yet due to accumulated deficit 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 | 12 Months Ended |
Dec. 31, 2020 | |
Loss Contingency [Abstract] | |
CONTINGENCIES | 17. CONTINGENCIES 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. 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. Remittances in currencies other than RMB may require certain supporting documentation in order to make the remittance. 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. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | 18. COMMITMENTS Lease Commitment On November 20, 2017, Xi’an TCH entered into a lease for its office with a term from December 1, 2017 through November 30, 2020. The monthly rent is RMB 36,536 ($5,600) with quarterly payment in advance. This lease was expired in November 2020. The Company entered a new lease contract for the same location for a period from January 1, 2021 through December 31, 2023 with monthly rent of RMB 36,536 ($5,600), to be paid every half year in advance. For the years ended December 31, 2020 and 2019, the rental expense of the Company was $61,508 and $86,874 (including Beijing office rent of $19,674), respectively. The Company adopted ASC 842 on CFS on January 1, 2019. The components of lease costs, lease term and discount rate with respect of the office lease with an initial term of more than 12 months are as follows: Year Ended December 31, Operating lease cost – amortization of ROU $ 54,694 Operating lease cost – interest expense on lease liability $ 825 Weighted Average Remaining Lease Term - Operating leases - Weighted Average Discount Rate - Operating leases 3 % Employment Agreement On May 8, 2020, the Company entered an employment agreement with Yongjiang Shi, the Company’s CFO for a term of 24 months. The monthly salary is RMB 16,000 ($2,300). The Company will grant the CFO no less than 5,000 shares of the Company’s Common Stock annually. Investment Banking Engagement Agreement On October 10, 2019, the Company entered an investment banking engagement agreement with an investment banker firm to engage them as the exclusive lead underwriter for a registered securities offering of up to $20 million. The Company shall pay to the investment banker an equity retainer fee of 15,000 shares (post-reverse stock split) of the restricted Common Stock of the Company (10,000 shares was issued within 10 business days of signing the agreement, and remaining 5,000 shares will be paid upon completion of the offering). The agreement expired in March 2021. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 19. SUBSEQUENT EVENTS The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were issued and determined the Company has the following material subsequent events: On February 23, 2021, the Company entered into certain securities purchase agreements with several non-U.S. investors (the “Purchasers”), pursuant to which the Company agreed to sell to the Purchasers, an aggregate of up to 3,320,000 shares of common stock of the Company, at $11.522 per share, which is the five-day average closing price immediately prior to signing the Purchase Agreements. One of the purchaser is the Company’s CEO (also is the Company’s Chairman), he purchased 1,000,000 common shares of the Company. On March 11, 2021, the Company received approximately $38.25 million proceeds from the issuance of 3,320,000 shares under the securities purchase agreements, there was no any fees paid in connection with this financing. On April 2, 2021, the Company entered into a Note Purchase Agreement with an institutional investor, pursuant to which the Company sold and issued to the Purchaser a Promissory Note of $5,250,000. The Purchaser purchased the Note with an original issue discount of $250,000, which was recognized as a debt discount and will be amortized using the interest method over the life of the note. The Note bears interest at 8% per annum and has a term of 24 months. All outstanding principal and accrued interest on the Note will become due and payable on April 1, 2023. The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay 125% of any amounts outstanding under the Note and being prepaid. Beginning on the date that is six months from the issue date of the Note, Purchaser shall have the right to redeem any amount of this Note up to $825,000 per calendar month by providing written notice to the Company. On April 9, 20201, Xi’an TCH, Xi’an Zhonghong, Guohua Ku, Chonggong Bai and HYREF entered a Termination of Fulfillment Agreement (termination agreement). Under the termination agreement, the original buyback agreement entered on December 19, 2019 shall be terminated upon the effective date of the termination agreement. HYREF will not execute the buy-back option and will not ask for any additional payment from the buyers other than keeping the CDQ WHPG station. The Company will record a gain of approximately $4.8 million from transferring the CDP WHPG station to HYREF as partial repayment of the entrusted loan resulting from the termination of the buy-back agreement. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements (“CFS”) were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). |
Basis of Consolidation | Basis of Consolidation The 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, 1) Erdos TCH Energy Saving Development Co., Ltd (“Erdos TCH”), 100% owned by Xi’an TCH (See note 1), 2) Zhonghong, 90% owned by Xi’an TCH and 10% owned by Shanghai TCH, and 3) 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 December 31, 2020. However, there was no revenue for the Company for the year ended December 31, 2020. All significant inter-company accounts and transactions were eliminated in consolidation. |
Uses and Sources of Liquidity | Uses and Sources of Liquidity For the year ended December 31, 2020, the Company had a net income of $4.05 million based on receipts of accounts receivable which had previously been reserved as bad debt allowance and was reversed in 2020. For the year ended December 31, 2019, the Company had net loss of $8.77 million. The Company had an accumulated deficit of $43.03 million as of December 31, 2020. The Company disposed all of its systems and currently holds only five power generating systems through Erdos TCH, which is expected to resume production in July 2021. The Company is in the process of transforming and expanding into an energy storage integrated solution provider. The Company plans to pursue disciplined and targeted expansion strategies for market areas the Company currently does not serve. The Company actively seeks and explores opportunities to apply energy storage technologies to new industries or segments with high growth potential, including industrial and commercial complexes, large scale photovoltaic (PV) and wind power stations, remote islands without electricity, and smart energy cities with multi-energy supplies. The Company had cash of $107.80 million as of December 31, 2020, and has raised additional $38.25 million in a private offering in March 2021. The Company’s cash flow forecast indicate it will have sufficient cash to funds its operations for the next 12 months from the date of issuance of these financial statements. The historical operating results indicate the Company has recurring losses from operations which rise the question related to the Company’s ability to continue as a going concern. However, the Company had $107.80 million cash on hand at December 31, 2020 as a result of collection the full payment from all the projects that had been disposed earlier. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering, or debt financing including bank loans. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. |
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. On an on-going basis, management evaluates their estimates, including those related to allowances for bad debt and inventory obsolescence, impairment loss on fixed assets and construction in progress, income taxes, and contingencies and litigation. Management bases their estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. |
Revenue Recognition | Revenue Recognition A) Sales-type Leasing and Related Revenue Recognition On January 1, 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under ASC Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with our historical accounting under Topic 840. (See Operating lease below as relates to the Company as a lessee). The Company’s sales type lease contracts for revenue recognition fall under ASC 842. During the years ended December 31, 2020 and 2019, the Company did not sell any new power generating projects. The Company constructs and leases waste energy recycling power generating projects to its customers. The Company typically transfers legal ownership of the waste energy recycling power generating projects to its customers at the end of the lease. Prior to January 1, 2019, the investment in these projects was recorded as investment in sales-type leases in accordance with ASC Topic 840 , “Lease ,” The Company finances construction of waste energy recycling power generating projects. The sales and cost of sales are recognized at the inception of the lease, which is when the control is transferred to the lessee. The Company accounts for the transfer of control as a sales type lease in accordance with ASC 842-10-25-2. The underlying asset is derecognized, and revenue is recorded when collection of payments is probable. This is in accordance with the revenue recognition principle in ASC 606 - Revenue from contracts with customers. The investment in sales-type leases consists of the sum of the minimum lease payments receivable less unearned interest income and estimated executory cost. Minimum lease payments are part of the lease agreement between the Company (as the lessor) and the customer (as the lessee). The discount rate implicit in the lease is used to calculate the present value of minimum lease payments. The minimum lease payments consist of the gross lease payments net of executory costs and contingent rentals, if any. Unearned interest is amortized to income over the lease term to produce a constant periodic rate of return on net investment in the lease. While revenue is recognized at the inception of the lease, the cash flow from the sales-type lease occurs over the course of the lease, which results in interest income and reduction of receivables. Revenue is recognized net of value-added tax. B) Contingent Rental Income The Company records income from actual electricity generated of each project in the period the income is earned, which is when the electricity is generated. Contingent rent is not part of minimum lease payments. |
Operating Leases | Operating Leases On January 1, 2019, the Company adopted Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with its historical accounting under Topic 840. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company elected the package of practical expedients permitted under the transition guidance, which allowed it to carry forward its historical lease classification, its assessment on whether a contract was or contains a lease, and its initial direct costs for any leases that existed prior to January 1, 2019. The Company also elected to combine its lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term. The Company leased an office in Xi’an, China as the Company’s headquarter; upon adoption, the Company recognized total Right of Use Asset (“ROU”) of $116,917, with corresponding liabilities of $116,917 on the consolidated balance sheets. The ROU assets include adjustments for prepayments and accrued lease payments. The adoption did not impact its beginning retained earnings, or its prior year consolidated statements of income and statements of cash flows. At December 31, 2020, the ROU was $0 as the lease was expired in November 2020. Under Topic 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of its leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options. Operating leases are included in operating lease right-of-use assets and operating lease liabilities (current and non-current), on the consolidated balance sheets. |
Cash | Cash Cash include 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. |
Accounts Receivable | Accounts Receivable The Company’s policy is to maintain an allowance for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable 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 December 31, 2020, the Company had gross accounts receivable of $342,974 of Erdos TCH for electricity sold. As of December 31, 2019, the Company had gross accounts receivable of $48.06 million; of which, $35.42 million was for transferring the ownership of Huayu and Shenqiu Phase I and II systems to Mr. Bai; $10.03 million was from the sales of CDQ and a CDQ WHPG system to Zhongtai, and $2.61 million accounts receivable of Erdos TCH for electricity sold. As of December 31, 2020, the Company had bad debt allowance of $34,297 for Erdos TCH due to the customer not making the payments as scheduled. As of December 31, 2019, the Company had bad debt allowance of $5,733,781 for Zhongtai and $261,430 for Erdos TCH due to the customer not making the payments as scheduled. During the year ended December 31, 2020, the Company recognized a reversal of the bad debt allowance of $6,031,058, of which $5,799,094 was for Zhongtai and $231,964 was for Erdos TCH as a result of payment collection from Zhongtai and Erdos TCH. As of December 31, 2020, the Company received the payment in full from all the projects which had been disposed earlier. 2020 2019 Xuzhou Zhongtai project $ - $ 10,034,116 Bai Chonggong (for Shenqiu and Huayu projects) - 35,415,556 Xuzhou Tian’an project - - Receivable of electricity sales of Erdos 342,974 2,614,299 Total accounts receivable 342,974 48,063,971 Bad debt allowance (34,297 ) (5,995,210 ) Accounts receivable, net 308,677 $ 42,068,761 |
Interest Receivable on Sales Type Leases | Interest Receivable on Sales Type Leases As of December 31, 2020, the interest receivable on sales type leases was $0. As of December 31, 2019, the interest receivable on sales type leases was $5,245,244, mainly from recognized but not yet collected interest income for the Pucheng systems. The ownership of Pucheng systems was transferred to Pucheng as a result of full payment received by Xi’an TCH in January 2020. |
Investment in sales-type leases, net | Investment in sales-type leases, net As of December 31, 2020, the Company had net investment in sales-type leases of $0. As of December 31, 2019, the Company had net investment in sales-type leases of $8,287,560 (after bad debt allowance for investment in sales-type leases of $24,416,441 for the Pucheng system). 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. |
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 and state-owned banks within the PRC are covered by insurance up to RMB 500,000 (US$77,000) per bank. Any balance over RMB 500,000 (US$77,000) per bank in PRC will not be covered. At December 31, 2020, cash held in the PRC bank of $107,510,548 was not covered by such 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 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: 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 |
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 FASB 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 FASB ASC Topic 740, when tax returns are filed, it is likely 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. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At December 31, 2020 and 2019, the Company did not take any uncertain positions that would necessitate recording a tax related liability. |
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. Effective on January 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the FV hierarchy. The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC 480, “Distinguishing Liabilities from Equity,” “Derivatives and Hedging.” As of December 31, 2020 and 2019, the Company did not have any long-term debt obligations; and 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 share-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. The Company accounts for share-based compensation awards to non-employees in accordance with FASB ASC Topic 718 and FASB ASC Subtopic 505-50, “Equity-Based Payments to Non-employees”. Share-based compensation associated with the issuance of equity instruments to non-employees is measured at the fair value of the equity instrument issued or committed to be issued, as this is more reliable than the fair value of the services received. The fair value is measured at the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. Effective on January 1, 2020, the Company adopted ASU 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,” which expands the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. An entity should apply the requirements of ASC 718 to non-employee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The adoption of ASU 2018-07 did not have an impact on the Company’s financial statements. |
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.” For the years ended December 31, 2020 and 2019, the basic and diluted loss per share were the same due to the anti-dilutive features of the warrants and options. For the years ended December 31, 2020 and 2019, 31,311 shares and 406,764 shares (post-reverse stock split), respectively; purchasable under warrants and options were excluded from the EPS calculation as these were not dilutive due to the exercise price was more than the stock market price. |
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 June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its CFS. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on its financial statements. 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_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of bad debt allowance | 2020 2019 Xuzhou Zhongtai project $ - $ 10,034,116 Bai Chonggong (for Shenqiu and Huayu projects) - 35,415,556 Xuzhou Tian’an project - - Receivable of electricity sales of Erdos 342,974 2,614,299 Total accounts receivable 342,974 48,063,971 Bad debt allowance (34,297 ) (5,995,210 ) Accounts receivable, net 308,677 $ 42,068,761 |
Schedule of property and equipment estimated lives | Vehicles 2 - 5 years Office and Other Equipment 2 - 5 years Software 2 - 3 years |
Investment in Sales-Type Leas_2
Investment in Sales-Type Leases, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments [Abstract] | |
Schedule of net investment in sales-type leases | 2020 2019 Total future minimum lease payments receivable $ - $ 56,477,739 Less: executory cost - (3,623,100 ) Less: unearned interest - (14,905,393 ) Less: realized interest income but not yet received - (5,245,244 ) Less: allowance for net investment receivable - (24,416,442 ) Investment in sales-type leases, net - 8,287,560 Current portion - - Noncurrent portion $ - $ 8,287,560 |
Asset Subject to Buyback and _2
Asset Subject to Buyback and Construction in Progress (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Asset Subject To Buyback And Construction In Progress [Abstract] | |
Schedule of construction in progress | 2020 2019 Xuzhou Tian’an $ - $ 37,759,277 Less: assets impairment allowance - (13,935,075 ) Total $ - $ 23,824,202 |
Taxes Payable (Tables)
Taxes Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tax Payable [Abstract] | |
Schedule of taxes payable | 2020 2019 Income tax – current $ 2,746,757 $ 2,118,432 Value-added tax 322,652 1,708,298 Other taxes 76,203 260,912 Total – current 3,145,612 4,087,642 Income tax – noncurrent $ 5,174,625 $ 5,782,625 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Payables (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities and other payables | 2020 2019 Education and union fund and social insurance payable $ 373,740 $ 843,807 Consulting and legal expenses 31,090 40,602 Accrued payroll and welfare 255,278 254,882 Other 66,588 45,460 Total $ 726,696 $ 1,184,751 |
Deferred Tax, Net (Tables)
Deferred Tax, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Tax Assets Liabilities Net Disclosure [Abstract] | |
Schedule of deferred tax liability | 2020 2019 Non-current deferred tax assets Accrued expenses $ 70,019 $ 189,050 Interest income in sales-type leases on cash basis - 853,265 Depreciation of fixed assets - 2,938,605 Assets impairment loss - 7,537,556 Write-off Erdos TCH net investment in sales-type leases 6,155,300 6,349,604 US NOL 254,035 3,246,655 PRC NOL 10,849,690 10,424,558 Non-current deferred tax liabilities Net investment in sales-type leases - (6,685,021 ) Net non-current deferred tax assets 17,329,044 24,854,272 Less: valuation allowance for deferred tax assets (17,329,044 ) (24,854,272 ) Non-current deferred tax assets, net $ - $ - |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of reconciliation of repayment of HYREF loan (entrusted loan) | Transfer price for Chengli Project $ 28,910,696 Entrusted loan payable at December 31, 2020, net with Xi’an TCH investment in entrusted loan (current and noncurrent) $ 22,203,262 Transfer price for Xuzhou Huayu Project 18,391,086 Interest payable on entrusted loan at December 31, 2020 10,144,228 Transfer price for Shenqiu Phase I and II Projects 19,474,015 Add back: Xi’an TCH investment in entrusted loan 11,494,429 Less: interest accrued from September 20, 2018 to December 31, 2020 (cut-off date for interest calculation for repayment was September 20, 2018) (3,130,276 ) Less: portion of loan with repayment due date extended to year 2023 (11,800,947 ) Add back: interest & penalty repaid by Xi’an TCH 9,186,358 Add back: loan principle repaid by Xi’an TCH 28,678,743 $ 66,775,797 $ 66,775,797 |
Shares Issued for Equity Fina_2
Shares Issued for Equity Financing and Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | Number of Average Weighted Outstanding at January 1, 2019 212,404 $ 14.1 5.29 Exercisable at January 1, 2019 212,404 $ 14.1 5.29 Granted 193,460 9.5 5.25 Exchanged (375,454 ) - - Forfeited - - - Expired - - - Outstanding at December 31, 2019 30,411 14.0 4.21 Exercisable at December 31, 2019 30,411 14.0 4.21 Granted - - - Exercised - - - Forfeited - - - Expired - - - Outstanding at December 31, 2020 30,411 $ 14.0 3.21 Exercisable at December 31, 2020 30,411 $ 14.0 3.21 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciles U.S. statutory rates to effective tax rate | 2020 2019 U.S. statutory rates 21.0 % (21.0 )% Tax rate difference – current provision 5.1 % (3.4 )% Reversal of temporary difference due to disposal of Shenqiu - % (18.8 )% Permanent differences 2.9 % 2.0 % Change in valuation allowance (29.0 )% 15.6 % Tax (benefit) per financial statements - % (25.6 )% |
Schedule of provision for income tax expense | 2020 2019 Income tax expense – current $ - $ - Income tax benefit – deferred - (3,024,807 ) Total income tax benefit $ - $ (3,024,807 ) |
Stock-Based Compensation Plan (
Stock-Based Compensation Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of option activity with respect to employees and independent directors | Number of Average Weighted Outstanding at January 1, 2019 900 $ 54.3 5.41 Exercisable at January 1, 2019 900 $ 54.3 5.41 Granted - - - Exercised - - - Forfeited - - - Outstanding at December 31, 2019 900 54.3 4.41 Exercisable at December 31, 2019 900 54.3 4.41 Granted - - - Exercised - - - Expired (400 ) 102.0 - Outstanding at December 31, 2020 500 $ 16.1 6.32 Exercisable at December 31, 2020 500 $ 54.3 6.32 |
Statutory Reserves (Tables)
Statutory Reserves (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Reserves [Abstract] | |
Schedule of maximum statutory reserve amount | Name of Chinese Subsidiaries Registered Maximum Statutory reserve at Statutory Shanghai TCH $ 29,800,000 $ 14,900,000 ¥6,564,303 ($1,003,859) ¥6,564,303 ($1,003,859) Xi’an TCH ¥ 202,000,000 ¥ 101,000,000 ¥73,700,706 ($11,236,314) ¥69,359,820 ($10,606,984) Erdos TCH ¥ 120,000,000 ¥ 60,000,000 ¥19,035,814 ($2,914,869) ¥19,035,814 ($2,914,869) Xi’an Zhonghong ¥ 30,000,000 ¥ 15,000,000 Did not accrue yet due to accumulated deficit Did not accrue yet due to accumulated deficit Shaanxi Huahong $ 2,500,300 $ 1,250,150 Did not accrue yet due to accumulated deficit Did not accrue yet due to accumulated deficit Zhongxun ¥ 35,000,000 ¥ 17,500,000 Did not accrue yet due to accumulated deficit Did not accrue yet due to accumulated deficit |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease cost | Year Ended December 31, Operating lease cost – amortization of ROU $ 54,694 Operating lease cost – interest expense on lease liability $ 825 Weighted Average Remaining Lease Term - Operating leases - Weighted Average Discount Rate - Operating leases 3 % |
Organization and Description _2
Organization and Description of Business (Details) | Jan. 10, 2020 | Mar. 31, 2016 | Feb. 11, 2015 | Sep. 11, 2013USD ($)$ / shares$ / itemshares | Sep. 11, 2013CNY (¥) | Apr. 14, 2009 | Dec. 22, 2020 | Sep. 29, 2019 | Dec. 29, 2018 | Mar. 24, 2014 | Jul. 31, 2013USD ($) | Jul. 19, 2013CNY (¥) | Jun. 25, 2013 | Jun. 15, 2013USD ($) | Jun. 15, 2013CNY (¥) | Mar. 30, 2013USD ($) | Mar. 30, 2013CNY (¥) | Sep. 28, 2011USD ($) | Sep. 28, 2011CNY (¥) | Jun. 29, 2010USD ($) | Jun. 29, 2010CNY (¥) | Dec. 31, 2020shares | Dec. 31, 2019USD ($) | Jan. 04, 2019USD ($) | Jan. 04, 2019CNY (¥) | Sep. 11, 2013CNY (¥)$ / itemshares | Jul. 18, 2013USD ($) |
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Amount of ownership interest | $ 1,290,000 | ||||||||||||||||||||||||||
Lease period | 11 years | 11 years | |||||||||||||||||||||||||
Common stock issuable for power generation systems | shares | 87,666 | 87,666 | |||||||||||||||||||||||||
Reverse stock split of common stock per share | $ / item | 0.001 | 0.001 | |||||||||||||||||||||||||
Lease amount per month | $ 630,000 | ¥ 3,800,000 | |||||||||||||||||||||||||
Leases, description | The purchase price for said shares shall consist of (i) 619,525 shares of common stock at an issuance price of $4.37 per share, (ii) 60,000,000 shares of Series A convertible stock and (iii) a cash payment of RMB 1,617,867,026 (approximately $247 million at a conversion rate of 1:6.55). The shares shall be issued within 15 business days after approval by the Board of Directors and/or shareholders of the Company and Nasdaq approval and the cash shall be paid in three tranches – RMB 390 million (approximately $59.5 million) within 10 days after the agreement is executed, RMB 300 million (approximately $45.8 million) by March 31, 2021 and RMB 927,867,026 (approximately $141.7 million) within 10 days after the shares of Xi’an Taiying are registered to Buyer. | ||||||||||||||||||||||||||
Description of business agreement | The Company recorded $397,033 loss from this transfer during the year ended December 31, 2019. On January 10, 2019, Mr. Chonggong Bai transferred all the equity shares of his wholly owned company, Xi’an Hanneng, to HYREF as repayment for the loan. Xi’an Hanneng was expected to own 47,150,000 shares of Xi’an Huaxin New Energy Co., Ltd for the repayment of Huayu system and Shenqiu system. As of September 30, 2019, Xi’an Hanneng already owned 29,948,000 shares of Huaxin, but was not able to obtain the remaining 17,202,000 shares due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report. On December 20, 2019, Mr. Bai and all the related parties agreed to have Mr. Bai instead making a payment in cash for the transfer price of Huayu (see Note 9 for detail). | ||||||||||||||||||||||||||
Cooperative agreement, description | 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 term of the Tianyu Agreement is 20 years. The construction of the Xuzhou Tian’an Project is anticipated to be completed by the second quarter of 2020. | ||||||||||||||||||||||||||
Registered capital | $ 17,520,000 | ¥ 120,000,000 | |||||||||||||||||||||||||
Description of waste heat power generation energy management cooperative agreement | As consideration for the transfer of the Project, Zhongtai agreed to pay to Xi’an TCH RMB 167,360,000 ($25.77 million) including (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 to be paid within 20 business days after the Transfer Agreement was signed; (b) RMB 30,000,000 ($4.32 million) was to be paid within 20 business days after the Project was completed, but no later than July 30, 2016; and (c) RMB 87,360,000 ($13.45 million) was to 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. The Company recorded a $2.82 million loss from this transaction in 2016. In 2016, Xi’an TCH had received the first payment of $7.70 million and the second payment of $4.32 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; in July 2018, Zhongtai and the Company reached a further oral agreement to extend the repayment term of RMB 87,360,000 ($13.45 million) by another two to three months. In January 2020, Zhongtai paid RMB 10 million ($1.41 million); in March 2020, Zhongtai paid RMB 20 million ($2.82 million); in June 2020, Zhongtai paid RMB 10 million ($1.41 million); and in December 2020, Zhongtai paid RMB 30 million ($4.28 million), which was payment in full. Accordingly, the Company reversed the bad debt expense of $5.80 million which had been recorded earlier. | ||||||||||||||||||||||||||
Description of register captial | On March 24, 2014, Xi’an TCH incorporated a 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 nor has any capital contribution been made as of the date of this report. Formation of Yinghua On February 11, 2015, the Company incorporated a 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 nor has any capital contribution been made as of the date of this report. Reverse Stock Split On April 13, 2020, the Company filed a certificate of change (“Certificate of Change”) with the Secretary of State of the State of Nevada, pursuant to which, on April 13, 2020, the Company effected a reverse stock split of its Common Stock, at a rate of 1-for-10, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of Common Stock (the “Reverse Stock Split”). The accompanying consolidated financial statements and related disclosure in for periods prior to the Reverse Stock Split have been retroactively restated to reflect this reverse stock split. Other Events In December 2019, a novel strain of coronavirus (COVID-19) was reported in and the World Health Organization has declared the outbreak to constitute a “Public Health Emergency of International Concern.” This pandemic, which continues to spread to additional countries, and is disrupting supply chains and affecting production and sales across a range of industries as a result of quarantines, facility closures, and travel and logistics restrictions in connection with the outbreak. However, as a result of PRC government’s effort on disease control, most cities in China were reopened, the outbreak in China is under the control. The Company disposed all of its systems and currently holds only five power generating systems through Erdos TCH, the Company initially expected to resume production of these five power generating systems in July 2020 from the renovation and furnace safety upgrade, but the resumption of operations was further delayed due to government’s request for Erdos’ production line rectification for lowering its energy consumption per unit of GDP; the Company expects the resumption date to be July 2021. As of this report date, there are some new Covid-19 cases discovered in a few provinces of China, however, the number of new cases is not significant due to PRC government’s strict control. On December 22, 2020, Shanghai TCH entered into an Equity Acquisition Agreement with Xi’an Taiying Energy Saving Technology Co., Ltd. | ||||||||||||||||||||||||||
Biomass Power Generation Project Lease Agreement [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Payment of transfer price | $ 18,550,000 | ¥ 127,066,000 | |||||||||||||||||||||||||
Loss from the transfer | $ 208,359 | ||||||||||||||||||||||||||
Shenqiu Project [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Leasing fees | $ 286,000 | ¥ 1,800,000 | |||||||||||||||||||||||||
Description of register captial | the Company incorporated a 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 nor has any capital contribution been made as of the date of this report. Reverse Stock Split On April 13, 2020, the Company filed a certificate of change (“Certificate of Change”) with the Secretary of State of the State of Nevada, pursuant to which, on April 13, 2020, the Company effected a reverse stock split of its Common Stock, at a rate of 1-for-10, accompanied by a corresponding decrease in the Company’s issued and outstanding shares of Common Stock (the “Reverse Stock Split”). The accompanying consolidated financial statements and related disclosure in for periods prior to the Reverse Stock Split have been retroactively restated to reflect this reverse stock split. Other Events In December 2019, a novel strain of coronavirus (COVID-19) was reported in and the World Health Organization has declared the outbreak to constitute a “Public Health Emergency of International Concern.” This pandemic, which continues to spread to additional countries, and is disrupting supply chains and affecting production and sales across a range of industries as a result of quarantines, facility closures, and travel and logistics restrictions in connection with the outbreak. However, as a result of PRC government’s effort on disease control, most cities in China were reopened, the outbreak in China is under the control. The Company disposed all of its systems and currently holds only five power generating systems through Erdos TCH, the Company initially expected to resume production of these five power generating systems in July 2020 from the renovation and furnace safety upgrade, but the resumption of operations was further delayed due to government’s request for Erdos’ production line rectification for lowering its energy consumption per unit of GDP; the Company expects the resumption date to be July 2021. As of this report date, there are some new Covid-19 cases discovered in a few provinces of China, however, the number of new cases is not significant due to PRC government’s strict control. On December 22, 2020, Shanghai TCH entered into an Equity Acquisition Agreement with Xi’an Taiying Energy Saving Technology Co., Ltd. | ||||||||||||||||||||||||||
Biomass Power Generation Project Lease Agreement [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Leasing fees | $ 279,400 | ¥ 1,900,000 | |||||||||||||||||||||||||
Lease period | 15 years | 15 years | |||||||||||||||||||||||||
Sale value of TCH | $ 16,480,000 | ¥ 100,000,000 | |||||||||||||||||||||||||
Common stock issuable per share for power generation systems | $ / shares | $ 187 | ||||||||||||||||||||||||||
DaTong Recycling Energy [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Maturity term | 20 years | ||||||||||||||||||||||||||
Ownership percentage | 30.00% | ||||||||||||||||||||||||||
Erdos Metallurgy Company Limited [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Ownership percentage | 7.00% | 7.00% | 7.00% | ||||||||||||||||||||||||
Xi'an TCH Energy Technology Co., Ltd. [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Ownership percentage | 93.00% | ||||||||||||||||||||||||||
Xian Tch [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Ownership, Description | 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. | ||||||||||||||||||||||||||
Leases, description | Pursuant to the Termination Agreement, the parties agreed that: (i) Pucheng shall pay outstanding lease fees of RMB 97.6 million ($14 million) owed as of December 31, 2018 to Xi’an TCH before January 15, 2020; (ii) Xi’an TCH will waive the lease fees owed after January 1, 2019; (iii) Xi’an TCH will not return RMB 3.8 million ($542,857) in cash deposits paid by Pucheng; (iv) Xi’an TCH will transfer the Project to Pucheng at no additional cost after receiving RMB 97.6 million ($14 million) from Pucheng, and the original lease agreement between the parties will be formally terminated; and (v) if Pucheng fails to pay off RMB 97.6 million ($14 million) to Xi’an TCH before January 15, 2020, Xi’an TCH will still hold ownership of the Project and the original lease agreement shall still be valid. The Company recorded $2.67 million bad debt expense for Pucheng during the year ended December 31, 2019. Xi’an TCH received RMB 97.6 million ($14 million) in full on January 14, 2020 and the ownership of the system was transferred. | ||||||||||||||||||||||||||
Xian Tch [Member] | Biomass Power Generation Project Lease Agreement [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Leasing fees | $ 239,000 | ||||||||||||||||||||||||||
Erdos TCH [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Amount of ownership interest | $ 1,290,000 | ¥ 8,000,000 | |||||||||||||||||||||||||
Leases, description | During this period, Erdos will compensate Erdos TCH RMB 1 million ($145,460) per month, until operations resume. | ||||||||||||||||||||||||||
Erdos TCH [Member] | Biomass Power Generation Project Lease Agreement [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Leasing fees | ¥ | ¥ 1,500,000 | ||||||||||||||||||||||||||
Lease period | 9 years 6 months | 9 years 6 months | |||||||||||||||||||||||||
Da Tang Shi Dai [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Ownership percentage | 30.00% | ||||||||||||||||||||||||||
TianYu XuZhou Recycling Energy [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Ownership percentage | 40.00% | ||||||||||||||||||||||||||
Hongyuan Huifu Venture Capital Co. Ltd [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Initial capital contribution, description | 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 87,666 shares (post-reverse stock split) of common stock, par value $0.001 per share (the “Common Stock”) of the Company at $187.0 per share (post-reverse stock price). | ||||||||||||||||||||||||||
Description of business agreement | pursuant to which Xi’an Zhonghong transferred Chengli CDQ WHPG station (‘the Station”) as the repayment for the loan of RMB 188,639,400 ($27.54 million) to HYREF. Xi’an Zhonghong, Xi’an TCH, Guohua Ku and Chonggong Bai also agreed to a Buy Back Agreement for the Station when certain conditions are met (see Note 9). The transfer of the Station was completed January 22, 2019, at which time the Company recorded a $624,133 loss from this transfer. | ||||||||||||||||||||||||||
Transfer Agreement, description | Zhonghong, Tianyu and Huaxin signed a transfer agreement to transfer all assets under construction and related rights and interests of Xuzhou Tian’an Project to Tianyu for RMB 170 million including VAT ($24.37 million) in three installment payments. The 1st installment payment of RMB 50 million ($7.17 million) to be paid within 20 working days after the contract is signed. The 2nd installment payment of RMB 50 million ($7.34 million) is to be paid within 20 working days after completion of the project construction but no later than July 31, 2020. The final installment payment of RMB 70 million ($10.28 million) is to be paid before December 31, 2020. The Company received the payment in full for Tian’an Project as of December 31, 2020. | ||||||||||||||||||||||||||
Xi'an Huaxin New Energy Co., Ltd [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Repayment of loan | shares | 47,150,000 | ||||||||||||||||||||||||||
HYREF Fund [Member] | China Orient Asset Management Co., Ltd [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Subscribed amount of initial capital contribution | ¥ 0.90 | $ 0.10 | |||||||||||||||||||||||||
Xi'an Zhonghong New Energy Technology Co [Member] | |||||||||||||||||||||||||||
Organization and Description of Business (Details) [Line Items] | |||||||||||||||||||||||||||
Ownership, Description | Zhonghong is engaged to provide energy saving solution and services, including constructing, selling and leasing energy saving systems and equipment to customers. On December 29, 2018, Shanghai TCH entered into a Share Transfer Agreement with HYREF, pursuant to which HYREF transferred its 10% ownership in Zhonghong to Shanghai TCH for RMB 3 million ($0.44 million). The transfer was completed on January 22, 2019. The Company owns 100% of Xi’an Zhonghong after the transaction. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Business acquisition, description | The 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, 1) Erdos TCH Energy Saving Development Co., Ltd (“Erdos TCH”), 100% owned by Xi’an TCH (See note 1), 2) Zhonghong, 90% owned by Xi’an TCH and 10% owned by Shanghai TCH, and 3) 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 December 31, 2020. | |||
Net income | $ 4,050,824 | $ (8,772,757) | ||
Net loss | 8,770,000 | |||
Accumulated deficit | (43,026,465) | (46,447,959) | ||
Cash | 107,804,013 | 16,221,297 | $ 53,223,142 | |
Cash on hand | 107,800,000 | |||
Recognized total Right of Use Asset (“ROU”) | 54,078 | |||
Accounts receivable, description | As of December 31, 2019, the Company had gross accounts receivable of $48.06 million; of which, $35.42 million was for transferring the ownership of Huayu and Shenqiu Phase I and II systems to Mr. Bai; $10.03 million was from the sales of CDQ and a CDQ WHPG system to Zhongtai, and $2.61 million accounts receivable of Erdos TCH for electricity sold. As of December 31, 2020, the Company had bad debt allowance of $34,297 for Erdos TCH due to the customer not making the payments as scheduled. As of December 31, 2019, the Company had bad debt allowance of $5,733,781 for Zhongtai and $261,430 for Erdos TCH due to the customer not making the payments as scheduled. During the year ended December 31, 2020, the Company recognized a reversal of the bad debt allowance of $6,031,058, of which $5,799,094 was for Zhongtai and $231,964 was for Erdos TCH as a result of payment collection from Zhongtai and Erdos TCH. | |||
Interest receivable on sales type leases | $ 0 | 5,245,244 | ||
Net investment in sales-type leases | 0 | |||
Bad debt allowance for net investment receivable | 8,287,560 | 24,416,441 | ||
Asset impairment loss | $ 0 | $ 0 | ||
Shares of antidilutive securities under warrants and option (in Shares) | 31,311 | 406,764 | ||
Subsequent Event [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Private offering value | $ 38,250,000 | |||
Xian Tch [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Recognized total Right of Use Asset (“ROU”) | $ 116,917 | |||
Operating lease liability | $ 116,917 | |||
PRC [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Description of insurance policy | Any balance over RMB 500,000 (US$77,000) per bank in PRC will not be covered. At December 31, 2020, cash held in the PRC bank of $107,510,548 was not covered by such insurance. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of bad debt allowance - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 342,974 | $ 48,063,971 |
Bad debt allowance | (34,297) | (5,995,210) |
Accounts receivable, net | 308,677 | 42,068,761 |
Xuzhou Zhongtai project [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 10,034,116 | |
Bai Chonggong (for Shenqiu and Huayu projects) [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | 35,415,556 | |
Xuzhou Tian'an project [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | ||
Receivable of electricity sales of Erdos [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable | $ 342,974 | $ 2,614,299 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated lives | 12 Months Ended |
Dec. 31, 2020 | |
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 |
Investment in Sales-Type Leas_3
Investment in Sales-Type Leases, Net (Details) - Schedule of net investment in sales-type leases - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of net investment in sales-type leases [Abstract] | ||
Total future minimum lease payments receivable | $ 56,477,739 | |
Less: executory cost | (3,623,100) | |
Less: unearned interest | (14,905,393) | |
Less: realized interest income but not yet received | (5,245,244) | |
Less: allowance for net investment receivable | (24,416,442) | |
Investment in sales-type leases, net | 8,287,560 | |
Current portion | ||
Noncurrent portion | $ 8,287,560 |
Other Receivables (Details)
Other Receivables (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Advance to third party | $ 7,663 | $ 7,167 |
Advance to employees | 11,011 | |
Advance to suppliers | 4,791 | |
Other receivables | 12,222 | 22,449 |
Social insurance | $ 4,579 | |
Tax and maintenance cost receivable | $ 1,001,527 |
Asset Subject to Buyback and _3
Asset Subject to Buyback and Construction in Progress (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 22, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Subject to Buyback and Construction in Progress (Details) [Line Items] | ||||
Transferred of shares, description | On January 22, 2019, Xi’an Zhonghong completed the transfer of Chengli CDQ WHPG project as the partial repayment for the loan and accrued interest of RMB 188,639,400 ($27.54 million) to HYREF (see Note 9). However, because the loan was not deemed repaid due to the buyback right (See Note 9 for detail), the Company kept the loan and the Chengli project in its books as fixed assets for accounting purposes. | |||
Property and equipment, description | On January 10, 2020, Zhonghong, Tianyu and Huaxin signed a transfer agreement to transfer all assets under construction and related rights and interests of Xuzhou Tian’an Project to Tianyu for RMB 170 million including $0.6 million VAT (total of $24.37 million) in three installment payments. The Company recorded impairment loss of $13.9 million as of December 31, 2019. The 1st installment payment of RMB 50 million ($7.17 million) was to be paid within 20 working days after the contract was signed. The 2nd installment payment of RMB 50 million ($7.17 million) was to be paid within 20 working days after completion of the project construction but no later than July 31, 2020. The final installment payment of RMB 70 million ($10.03 million) was to be paid before December 31, 2020. | |||
Chengali [Member] | ||||
Asset Subject to Buyback and Construction in Progress (Details) [Line Items] | ||||
Net property and equipment | $ 28,920 | $ 27,040 | ||
Fixed assets cost | $ 35,240 |
Asset Subject to Buyback and _4
Asset Subject to Buyback and Construction in Progress (Details) - Schedule of construction in progress - Xuzhou Tian’an [Member] - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Asset Subject to Buyback and Construction in Progress (Details) - Schedule of construction in progress [Line Items] | ||
Xuzhou Tian’an | $ 37,759,277 | |
Less: assets impairment allowance | (13,935,075) | |
Total | $ 23,824,202 |
Taxes Payable (Details)
Taxes Payable (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Tax Payable [Abstract] | |
Income Tax payable | $ 7,610 |
Current tax payable | 2,440 |
Tax payable, noncurrent | $ 5,170 |
Income tax liability of installment, description | An election is available for the U.S. shareholders of a 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. |
Taxes Payable (Details) - Sched
Taxes Payable (Details) - Schedule of taxes payable | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Schedule of taxes payable [Abstract] | ||
Income tax – current | $ 2,746,757 | $ 2,118,432 |
Value-added tax | 322,652 | 1,708,298 |
Other taxes | 76,203 | 260,912 |
Total – current | $ 3,145,612 | $ 4,087,642 |
Income tax – noncurrent | 5,174,625 | 5,782,625 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Payables (Details) - Schedule of accrued liabilities and other payables - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities and Other Payables (Details) - Schedule of accrued liabilities and other payables [Line Items] | ||
Total | $ 726,696 | $ 1,184,751 |
Education and union fund and social insurance payable [Member] | ||
Accrued Liabilities and Other Payables (Details) - Schedule of accrued liabilities and other payables [Line Items] | ||
Total | 373,740 | 843,807 |
Consulting and legal expenses [Member] | ||
Accrued Liabilities and Other Payables (Details) - Schedule of accrued liabilities and other payables [Line Items] | ||
Total | 31,090 | 40,602 |
Accrued payroll and welfare [Member] | ||
Accrued Liabilities and Other Payables (Details) - Schedule of accrued liabilities and other payables [Line Items] | ||
Total | 255,278 | 254,882 |
Other [Member] | ||
Accrued Liabilities and Other Payables (Details) - Schedule of accrued liabilities and other payables [Line Items] | ||
Total | $ 66,588 | $ 45,460 |
Deferred Tax, Net (Details) - S
Deferred Tax, Net (Details) - Schedule of deferred tax liability - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Non-current deferred tax assets | ||
Accrued expenses | $ 70,019 | $ 189,050 |
Interest income in sales-type leases on cash basis | 853,265 | |
Depreciation of fixed assets | 2,938,605 | |
Assets impairment loss | 7,537,556 | |
Write-off Erdos TCH net investment in sales-type leases | 6,155,300 | 6,349,604 |
US NOL | 254,035 | 3,246,655 |
PRC NOL | 10,849,690 | 10,424,558 |
Non-current deferred tax liabilities | ||
Net investment in sales-type leases | (6,685,021) | |
Net non-current deferred tax assets | 17,329,044 | 24,854,272 |
Less: valuation allowance for deferred tax assets | (17,329,044) | (24,854,272) |
Non-current deferred tax assets, net |
Loans Payable (Details)
Loans Payable (Details) | Dec. 19, 2019USD ($) | Dec. 19, 2019CNY (¥) | Dec. 20, 2019 | Dec. 19, 2019USD ($) | Dec. 19, 2019CNY (¥) | Dec. 29, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2020CNY (¥) | Dec. 19, 2019CNY (¥) | Jan. 22, 2019 | Jan. 04, 2019USD ($) | Jan. 04, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 29, 2018CNY (¥) | Jul. 30, 2018USD ($) | Jul. 30, 2018CNY (¥) | Aug. 06, 2017USD ($) | Aug. 06, 2017CNY (¥) | Aug. 06, 2016USD ($) | Aug. 06, 2016CNY (¥) |
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Long term debt maturities repayments of principal in fourth year | $ 16,270,000 | ¥ 100,000,000 | ||||||||||||||||||||
Description of remaining loan balance | The Company had 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 to further extend 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 had tentatively agreed to extend the remaining loan balance until August 2019 with an adjusted annual interest rate of 9%, subject to the final approval from its headquarters. The headquarters did not approve the extension proposal with an adjusted annual interest rate of 9%; however, on December 29, 2018, the Company worked out with the lender an alternative repayment proposal as described below. As of December 31, 2018, the entrusted loan payable had an outstanding balance of $59.29 million, of which, $10.92 million was from the investment of Xi’an TCH; accordingly, the Company netted the loan payable of $10.92 million with the long-term investment to the HYREF Fund made by Xi’an TCH. As of December 31, 2019, the interest payable for this loan was $8.20 million and the outstanding balance for this loan was $20.77 million including a non-current portion of $0.29 million. | The Company had 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 to further extend 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 had tentatively agreed to extend the remaining loan balance until August 2019 with an adjusted annual interest rate of 9%, subject to the final approval from its headquarters. The headquarters did not approve the extension proposal with an adjusted annual interest rate of 9%; however, on December 29, 2018, the Company worked out with the lender an alternative repayment proposal as described below. As of December 31, 2018, the entrusted loan payable had an outstanding balance of $59.29 million, of which, $10.92 million was from the investment of Xi’an TCH; accordingly, the Company netted the loan payable of $10.92 million with the long-term investment to the HYREF Fund made by Xi’an TCH. As of December 31, 2019, the interest payable for this loan was $8.20 million and the outstanding balance for this loan was $20.77 million including a non-current portion of $0.29 million. | ||||||||||||||||||||
Loan payable outstanding balance | $ 10,920,000 | |||||||||||||||||||||
Loan payable | $ 300,000 | |||||||||||||||||||||
Interest payable for loan | 10,140,000 | |||||||||||||||||||||
Outstanding loan balance | 22,200,000 | |||||||||||||||||||||
Interest expense | 1,300,000 | $ 1,720,000 | ||||||||||||||||||||
Total buy back price | $ 37,520,000 | $ 37,520,000 | 37,520,000 | ¥ 261,727,506 | ¥ 261,727,506 | |||||||||||||||||
Accrued Interest | 2,100,000 | ¥ 14,661,506 | ||||||||||||||||||||
Loan asset value | 27,970,000 | |||||||||||||||||||||
Loan and related interest | $ 32,350,000 | |||||||||||||||||||||
Description of fund management supplemental agreement | The Company recorded $397,033 loss from this transfer during the year ended December 31, 2019. On January 10, 2019, Mr. Chonggong Bai transferred all the equity shares of his wholly owned company, Xi’an Hanneng, to HYREF as repayment for the loan. Xi’an Hanneng was expected to own 47,150,000 shares of Xi’an Huaxin New Energy Co., Ltd for the repayment of Huayu system and Shenqiu system. As of September 30, 2019, Xi’an Hanneng already owned 29,948,000 shares of Huaxin, but was not able to obtain the remaining 17,202,000 shares due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report. On December 20, 2019, Mr. Bai and all the related parties agreed to have Mr. Bai instead making a payment in cash for the transfer price of Huayu (see Note 9 for detail). | The Company recorded $397,033 loss from this transfer during the year ended December 31, 2019. On January 10, 2019, Mr. Chonggong Bai transferred all the equity shares of his wholly owned company, Xi’an Hanneng, to HYREF as repayment for the loan. Xi’an Hanneng was expected to own 47,150,000 shares of Xi’an Huaxin New Energy Co., Ltd for the repayment of Huayu system and Shenqiu system. As of September 30, 2019, Xi’an Hanneng already owned 29,948,000 shares of Huaxin, but was not able to obtain the remaining 17,202,000 shares due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report. On December 20, 2019, Mr. Bai and all the related parties agreed to have Mr. Bai instead making a payment in cash for the transfer price of Huayu (see Note 9 for detail). | ||||||||||||||||||||
Transfer price installment payments, description | Mr. Bai, Xi’an TCH and Xi’an Zhonghong agreed to have Mr. Bai repay the Company in cash for the transfer price of Xuzhou Huayu and Shenqiu in five installment payments. The 1st payment of RMB 50 million ($7.17 million) is due on January 5, 2020, the 2nd payment of RMB 50 million ($7.17 million) was due on February 5, 2020, the 3rd payment of RMB 50 million ($7.17 million) was due on April 5, 2020, the 4th payment of RMB 50 million ($7.17 million) is due on June 30, 2020, and the final payment of RMB 47,066,000 ($6.75 million) is due on September 30, 2020. As of December 31, 2020, the Company has received the full payment of RMB 247 million ($36.28 million) from Mr. Bai. | |||||||||||||||||||||
Lender repayment, description | The lender agreed to extend the repayment of RMB 77.00 million ($11.04 million) to July 8, 2023; of which, RMB 75.00 million ($10.81 million) was Xi’an TCH’s investment into the HYREF fund as a secondary limited partner, and 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. | |||||||||||||||||||||
Hongyuan Huifu [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Debt amount paid | $ 504,000 | ¥ 3,453,867 | ||||||||||||||||||||
Ownership percentage | 40.00% | 40.00% | ||||||||||||||||||||
Shanghai TCH [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Transfer agreement, description | Shanghai TCH entered into a Share Transfer Agreement with HYREF, pursuant to which HYREF agreed to transfer its 10% ownership in Xi’an Zhonghong to Shanghai TCH for RMB 3 million ($460,000), and was recorded as long-term payable in the Company’s balance sheet. On January 22, 2019, Hongyuan Huifu completed the transfer of its 10% ownership in Xi’an Zhonghong to Shanghai TCH, Xi’an Zhonghong then became a 100% subsidiary of the Company. The Company did not record any gain or loss for this purchase as the controlling interest did not change. | |||||||||||||||||||||
Zhonghong [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Interest rate | 12.50% | 12.50% | ||||||||||||||||||||
Long term debt maturities repayments of principal in third year | $ 42,220,000 | ¥ 280,000,000 | ||||||||||||||||||||
Debt amount paid | $ 7,540,000 | ¥ 50,000,000 | ||||||||||||||||||||
Long term debt maturities repayments of principal in fifth year | $ 12,520,000 | ¥ 77,000,000 | ||||||||||||||||||||
HYREF [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Ownership percentage | 10.00% | 10.00% | ||||||||||||||||||||
Xuzhou Huayu project [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Loan payable | $ 17,520,000 | ¥ 120,000,000 | ||||||||||||||||||||
Xuzhou Huayu project [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Debt amount paid | 18,550,000 | 127,066,000 | ||||||||||||||||||||
Loan payable | $ 36,070,000 | ¥ 247,066,000 | ||||||||||||||||||||
Transfer Agreement [Member] | Hongyuan Huifu [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Ownership percentage | 40.00% | 40.00% | 40.00% | |||||||||||||||||||
Transfer Agreement [Member] | HYREF [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Loan payable | $ 27,540,000 | ¥ 188,639,400 | ||||||||||||||||||||
HYREF loan (entrusted loan) [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Loan payable outstanding balance | 59,290,000 | |||||||||||||||||||||
Mr. Chonggong Bai [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Description of remaining loan balance | Xi’an Hanneng is a holding company and was supposed to own 47,150,000 shares of Xi’an Huaxin New Energy Co., Ltd. (“Huaxin”), so that HYREF will indirectly receive and own such shares of Xi’an Huaxin as the repayment for the loan of Zhonghong. Xi’an Hanneng already owned 29,948,000 shares of Huaxin; however, Xi’an Hanneng was not able to obtain the remaining 17,202,000 shares due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report. | Xi’an Hanneng is a holding company and was supposed to own 47,150,000 shares of Xi’an Huaxin New Energy Co., Ltd. (“Huaxin”), so that HYREF will indirectly receive and own such shares of Xi’an Huaxin as the repayment for the loan of Zhonghong. Xi’an Hanneng already owned 29,948,000 shares of Huaxin; however, Xi’an Hanneng was not able to obtain the remaining 17,202,000 shares due to halted trading of Huaxin stock by NEEQ for not filing its 2018 annual report. | ||||||||||||||||||||
Limited Partner [Member] | HYREF loan (entrusted loan) [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Loan payable | $ 10,920,000 | |||||||||||||||||||||
HYREF loan (entrusted loan) [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Total fund capital contribution | $ 77,000,000 | ¥ 460,000,000 | ||||||||||||||||||||
Description of equity investment | 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 was to receive interest from Zhonghong for the HYREF Fund’s debt investment. 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 ($4.39 million) capital contribution made by Xi’an TCH in Zhonghong. 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 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 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 was to receive interest from Zhonghong for the HYREF Fund’s debt investment. 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 ($4.39 million) capital contribution made by Xi’an TCH in Zhonghong. 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 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. | ||||||||||||||||||||
Xi’an TCH [Member] | ||||||||||||||||||||||
Loans Payable (Details) [Line Items] | ||||||||||||||||||||||
Total buy back price | 37,520,000 | 37,520,000 | ¥ 261,727,506 | |||||||||||||||||||
Accrued Interest | $ 2,100,000 | ¥ 14,661,506 | $ 2,100,000 | ¥ 14,661,506 | ||||||||||||||||||
Ownership percentage | 40.00% | |||||||||||||||||||||
Loss from sale | $ 46,461 | |||||||||||||||||||||
Description of fund management supplemental agreement | 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 18,306,667 ($2,672,000) in financial advisory fees, and the parties agreed that the Fund Management Company Transfer Price could be used to offset the outstanding financial advisory fees. Upon the completion of this transaction, the Fund Management Company owed RMB 3,453,867 ($502,400) to Hongyuan Huifu, and Xi’an TCH owed RMB 14,852,800 ($2,168,000) to the Fund Management Company. As of December 31, 2020, Xi’an TCH paid in full of $2,168,000 to the Fund Management Company. |
Loans Payable (Details) - Sched
Loans Payable (Details) - Schedule of reconciliation of repayment of HYREF loan (entrusted loan) - HYREF loan (entrusted loan) [Member] | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Loans Payable (Details) - Schedule of reconciliation of repayment of HYREF loan (entrusted loan) [Line Items] | |
Reconciliation of repayment of HYREF loan (entrusted loan) | $ 66,775,797 |
Entrusted loan payable at December 31, 2020, net with Xi’an TCH investment in entrusted loan (current and noncurrent) | 66,775,797 |
Less: interest accrued from September 20, 2018 to December 31, 2020 (cut-off date for interest calculation for repayment was September 20, 2018) | (3,130,276) |
Less: portion of loan with repayment due date extended to year 2023 | (11,800,947) |
Add back: interest & penalty repaid by Xi’an TCH | 9,186,358 |
Add back: loan principle repaid by Xi’an TCH | 28,678,743 |
Transfer price for Chengli Project [Member] | |
Loans Payable (Details) - Schedule of reconciliation of repayment of HYREF loan (entrusted loan) [Line Items] | |
Reconciliation of repayment of HYREF loan (entrusted loan) | 28,910,696 |
Entrusted loan payable at December 31, 2020, net with Xi’an TCH investment in entrusted loan (current and noncurrent) | 22,203,262 |
Transfer price for Xuzhou Huayu Project [Member] | |
Loans Payable (Details) - Schedule of reconciliation of repayment of HYREF loan (entrusted loan) [Line Items] | |
Reconciliation of repayment of HYREF loan (entrusted loan) | 18,391,086 |
Entrusted loan payable at December 31, 2020, net with Xi’an TCH investment in entrusted loan (current and noncurrent) | 10,144,228 |
Transfer price for Shenqiu Phase I and II Projects [Member] | |
Loans Payable (Details) - Schedule of reconciliation of repayment of HYREF loan (entrusted loan) [Line Items] | |
Reconciliation of repayment of HYREF loan (entrusted loan) | 19,474,015 |
Entrusted loan payable at December 31, 2020, net with Xi’an TCH investment in entrusted loan (current and noncurrent) | $ 11,494,429 |
Refundable Deposits from Cust_2
Refundable Deposits from Customers for Systems Leasing (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Refundable Deposit From Customers For Systems Leasing [Abstract] | ||
Balance of refundable deposits from customers | $ 0 | $ 544,709 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Advances from related party | $ 28,440 | $ 41,174 |
Note Payables, Net (Details)
Note Payables, Net (Details) - USD ($) | May 15, 2020 | Dec. 04, 2020 | Feb. 27, 2019 | Jan. 31, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 |
Note Payables, Net (Details) [Line Items] | ||||||||||
Conversion price (in Dollars per share) | $ 600,000 | |||||||||
Amortized OID | $ 43,750 | |||||||||
Principle adjustment amount | $ 262,500 | |||||||||
Additional paid capital | $ 119,748,999 | $ 119,748,999 | 116,682,374 | |||||||
Conversion price | 36,023 | |||||||||
Loss on note redemption | (893,958) | |||||||||
Additional paid in capital | $ 636,023 | |||||||||
Amortization of OID and debt issuing costs of convertible note | 61,895 | 97,161 | ||||||||
Securities Purchase Agreement [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Convertible promissory note amount | $ 1,050,000 | $ 1,050,000 | ||||||||
Original issue discount | $ 50,000 | $ 50,000 | ||||||||
Interest rate | 8.00% | 8.00% | ||||||||
Percentage of amounts outstanding | 125.00% | 125.00% | ||||||||
Conversion price (in Dollars per share) | $ 3 | $ 3 | ||||||||
Promissory Note [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Principal amount | $ 430,000 | |||||||||
Promissory Notes in December 2020 [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Agreement, description | the Company entered into a Note Purchase Agreement with an institutional investor, pursuant to which the Company sold and issued to the Purchaser a Promissory Note of $3,150,000. The Purchaser purchased the Note with an original issue discount of $150,000, which was recognized as a debt discount and will be amortized using the interest method over the life of the note. The Note bears interest at 8% per annum and has a term of 24 months. All outstanding principal and accrued interest on the Note will become due and payable on December 3, 2022. The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay 125% of any amounts outstanding under the Note and being prepaid. Beginning on the date that is six months from the issue date of the Note, Purchaser shall have the right to redeem any amount of this Note up to $500,000 per calendar month by providing written notice to the Company. | |||||||||
Interest expense | 18,968 | |||||||||
Amortization of OID and debt issuing costs of convertible note | 5,645 | |||||||||
Investor [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Principle adjustment amount | 305,626 | |||||||||
Trading, L.P. [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Agreement, description | The Company and Lender exchanged the Partitioned Note for the delivery of total 242,699 shares (post-reverse stock split) of the Company’s Common Stock. The Company recorded $36,023 loss on conversion of these portion of the note. In addition, under the term of the forbearance agreement, as the investor delivered redemption notices totaling $1,050,000 which were not paid within 5 days, per the forbearance agreement, adjustments of $262,500 were made to increase the principle of the notes during the third quarter of 2020. | |||||||||
Agreement, description | Pursuant to the Agreement, the Company and Lender partitioned four new Promissory Notes in the original total principal amount of $819,586 from a Promissory Note issued by the Company on April 14, 2019. The Company and Lender exchanged the Partitioned Note for the delivery of total 304,710 shares (post-reverse stock split) of the Company’s Common Stock. The Company recorded $49,837 gain on conversion of these portion of the note. In addition, the investor also made adjustments of $145,000 to increase the principle of the notes during the second quarter of 2020 under the term of the September 11th forbearance agreement and the amendment to forbearance agreement dated on December 16, 2019. | |||||||||
Additional paid capital | $ 769,749 | |||||||||
Conversion price | 819,586 | |||||||||
Gain (loss) on conversion amount | $ 49,837 | |||||||||
Net conversion price | 145,000 | |||||||||
Loss on note redemption | 95,163 | |||||||||
Exchange Agreement [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Convertible promissory note amount | 600,000 | $ 600,000 | ||||||||
Interest rate | 8.00% | 8.00% | ||||||||
Exchange notes | $ 1,165,379 | $ 1,173,480 | ||||||||
Agreement, description | The Company’s obligations under the Exchange Notes could be prepaid at any time, provided that in such circumstance the Company would have paid 125% of any amounts outstanding under the Exchange Notes. Beginning on the date that is six months from the issue date of the respective Original Notes (the “Issue Dates”) and at any time thereafter until the Exchange Notes are paid in full, Purchaser shall have the right to redeem up to $750,000 of the outstanding balance during months six to eight following the respective Issue Date and any amount thereafter. | |||||||||
Amortized OID | 56,250 | $ 56,250 | ||||||||
Interest expense | $ 80,204 | 368,362 | ||||||||
Gain (loss) on conversion amount | $ 5,540 | |||||||||
Loss on note redemption | $ 298,523 | |||||||||
Shares converted (in Shares) | 175,904 | |||||||||
Exchange Agreement [Member] | Note One [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Exchange fees | 106,680 | |||||||||
Exchange Agreement [Member] | Note Two [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Exchange fees | $ 105,944 | |||||||||
Forbearance Agreement [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Agreement, description | Under the term of the forbearance agreement, in the event Lender delivers after October 1, 2019 a Redemption Notice to Borrower and the Redemption Amount set forth therein is not paid in cash to Lender within three Trading Days, then the applicable Redemption Amount shall be increased by 25% (the “First Adjustment,” and such increase to the Redemption Amount, the “First Adjusted Redemption Amount”). In the event the First Adjusted Redemption Amount is not paid within three Trading Days after the date of First Adjustment, then the First Adjusted Redemption Amount shall be increased in accordance with the following formula: $0.50 divided by the lowest Closing Trade Price of the Common Stock during the 20 Trading Days prior to the date of the Second Adjustment and the resulting quotient multiplied by the First Adjusted Redemption Amount (the “Second Adjustment | the Company entered into a series of Exchange Agreements with Iliad Research and Trading, L.P. Pursuant to the Agreement, the Company and Lender partitioned five Promissory Notes in the original total principal amount of $797,000 from a Promissory Note issued by the Company on April 14, 2019. The Company and Lender exchanged the Partitioned Note for the delivery of total 175,400 shares (post-reverse stock split) of the Company’s Common Stock. The Company recorded $131,740 gain on conversion of these portion of the note. However, on December 16, 2019, the Company and the lender amended the September 11, 2019 forbearance agreement to increase the adjustment ratio described above from $0.50 to $0.30 (pre-reverse stock split price). The outstanding balance of the Note shall be reduced by an amount equal to the total outstanding balance of the Partitioned Note. The investor made adjustments of $305,626 to increase the principle of the notes during the year ended December 31, 2019 under the term of the September 11th forbearance agreement and the amendment to forbearance agreement dated on December 16, 2019. | ||||||||
Exchange Agreements Two [Member] | ||||||||||
Note Payables, Net (Details) [Line Items] | ||||||||||
Total shares of common stock (in Shares) | 143,333 | 143,333 | ||||||||
Loss on conversion of debt | $ 103,167 | |||||||||
Increase decrease outstanding balance, percentage | 25.00% | |||||||||
Debt instrument outstanding balance | $ 1,271,720 | |||||||||
Percentage of redemption amount increased | 25.00% |
Shares Issued for Equity Fina_3
Shares Issued for Equity Financing and Stock Compensation (Details) - USD ($) | Aug. 24, 2020 | Mar. 09, 2020 | Nov. 22, 2019 | Oct. 10, 2019 | Sep. 28, 2020 | Mar. 16, 2020 | Apr. 15, 2019 | Feb. 13, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Shares Issued for Equity Financing and Stock Compensation (Details) [Line Items] | ||||||||||
Aggregate shares | 2,359,272 | |||||||||
Par value (in Dollars per share) | $ 0.001 | $ 0.001 | ||||||||
Gross proceeds (in Dollars) | $ 1,887,417 | |||||||||
Sale of stock, description | the Company entered an investment banking engagement agreement with an investment banker firm to engage them as the exclusive lead underwriter for a registered securities offering of up to $20 million. The Company shall pay to the investment banker an equity retainer fee of 15,000 shares (post-reverse stock split) of the restricted Common Stock of the Company (10,000 shares was issued within 10 business days of signing the agreement, and remaining 5,000 shares will be paid upon completion of the offering). The agreement expired in March 2021. | The Shares were sold to the Purchasers at a negotiated purchase price of $0.80 per share, for gross proceeds to the Company of $1,887,417, before deducting $200,000 in placement agent fees and other estimated offering expenses payable by the Company. | ||||||||
Purchase price per warrant (in Dollars per share) | $ 0.80 | |||||||||
Warrant to purchase of shares | 0.75 | |||||||||
Warrants to purchase of common stock share | 1,769,454 | |||||||||
Issuance of exercise price (in Dollars per share) | $ 0.9365 | |||||||||
Placement warrants, description | H.C. Wainwright & Co., LLC acted as the Company’s exclusive placement agent in connection with the offerings under the Purchase Agreement and received cash fee of 7% of the gross proceeds received by the Company from the offerings (or $132,119), up to $75,000 for certain expenses, $10,000 for clearing expenses and warrants to purchase the Company’s Common Stock in an amount equal to 7% of our Shares sold to the Purchasers in the offerings, or 165,149 shares of Common Stock, on substantially the same terms as the Warrants, except that the Placement Agent Warrants have an initial exercise price of $1.00 per share, are exercisable commencing on the later of (i) six months of the issuance date or (ii) the date on which the Company increases the number of its authorized shares, and expire on April 15, 2024. | |||||||||
Gross proceeds of the offerings (in Dollars) | $ 132,119 | |||||||||
Volatility | 100.00% | |||||||||
Risk-free interest rate | 2.41% | |||||||||
Dividend yield | 0.00% | |||||||||
Fair value of warrants (in Dollars) | $ 75,901 | |||||||||
Warrants exercised | 375,454 | |||||||||
Warrants split in common share | 205,421 | |||||||||
Shares issued for equity financing | 265,250 | 265,250 | ||||||||
Purchase price of shares | 132,000 | 133,250 | ||||||||
Purchase price per share (in Dollars per share) | $ 2.15 | $ 2.34 | ||||||||
Net proceeds (in Dollars) | $ 497,187 | |||||||||
Public offering shares | 265,250 | |||||||||
First Exchange Agreement [Member] | ||||||||||
Shares Issued for Equity Financing and Stock Compensation (Details) [Line Items] | ||||||||||
Exchange ratio, description | the Company, with an exchange ratio of 1 share of October Warrant Stock for 0.5 shares of common stock, | |||||||||
Second Exchange Agreement [Member] | ||||||||||
Shares Issued for Equity Financing and Stock Compensation (Details) [Line Items] | ||||||||||
Exchange ratio, description | the Company, with an exchange ratio of 1 share of April Warrant Stock for 0.6 shares of common stock | |||||||||
Private Placement [Member] | ||||||||||
Shares Issued for Equity Financing and Stock Compensation (Details) [Line Items] | ||||||||||
Aggregate shares | 1,600,000 | |||||||||
Par value (in Dollars per share) | $ 0.001 | |||||||||
Sale price per share (in Dollars per share) | $ 10.13 | |||||||||
Gross proceeds (in Dollars) | $ 1,620,800 | |||||||||
Estimated life | 5 years | |||||||||
Investor Warrants [Member] | ||||||||||
Shares Issued for Equity Financing and Stock Compensation (Details) [Line Items] | ||||||||||
Estimated life | 5 years 6 months | |||||||||
Fair value of warrants (in Dollars) | $ 855,246 | |||||||||
Board of Director [Member] | ||||||||||
Shares Issued for Equity Financing and Stock Compensation (Details) [Line Items] | ||||||||||
Aggregate shares | 3,333 | |||||||||
Fair value of shares (in Dollars) | $ 10,999 |
Shares Issued for Equity Fina_4
Shares Issued for Equity Financing and Stock Compensation (Details) - Schedule of warrant activity - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Shares Issued for Equity Financing and Stock Compensation (Details) - Schedule of warrant activity [Line Items] | ||
Number of Warrants, Beginning balance | 30,411 | 212,404 |
Average Exercise Price (post-reverse stock split price), Beginning balance | $ 14 | $ 14.1 |
Weighted Average Remaining Contractual Term in Years, Beginning balance | 5 years 105 days | |
Number of Warrants, Beginning balance, Exercisable | 30,411 | 212,404 |
Average Exercise Price (post-reverse stock split price), Beginning balance, Exercisable | $ 14 | $ 14.1 |
Weighted Average Remaining Contractual Term in Years, Beginning balance, Exercisable | 5 years 105 days | |
Number of Warrants, Granted | 193,460 | |
Average Exercise Price (post-reverse stock split price), Granted | $ 9.5 | |
Weighted Average Remaining Contractual Term in Years, Granted | 5 years 3 months | |
Number of Warrants, Exercised | ||
Average Exercise Price (post-reverse stock split price), Exercised | ||
Weighted Average Remaining Contractual Term in Years, Exercised | ||
Number of Warrants, Exchanged | (375,454) | |
Average Exercise Price (post-reverse stock split price), Exchanged | ||
Weighted Average Remaining Contractual Term in Years, Exchanged | ||
Number of Warrants, Forfeited | ||
Average Exercise Price (post-reverse stock split price), Forfeited | ||
Weighted Average Remaining Contractual Term in Years, Forfeited | ||
Number of Warrants, Expired | ||
Average Exercise Price (post-reverse stock split price), Expired | ||
Weighted Average Remaining Contractual Term in Years, Expired | ||
Number of Warrants, Ending balance | 30,411 | 30,411 |
Average Exercise Price (post-reverse stock split price), Ending balance | $ 14 | $ 14 |
Weighted Average Remaining Contractual Term in Years, Ending balance | 3 years 76 days | 4 years 76 days |
Number of Warrants, Exercisable, Ending balance | 30,411 | 30,411 |
Average Exercise Price (post-reverse stock split price), Exercisable Ending balance | $ 14 | $ 14 |
Weighted Average Remaining Contractual Term in Years, Ending balance | 3 years 76 days | 4 years 76 days |
Income Tax (Details)
Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax (Details) [Line Items] | ||
Tax rate | 25.00% | 25.00% |
Income tax, description | The US parent company, CREG is taxed in the US and, as of December 31, 2020, had net operating loss (“NOL”) carry forwards for income taxes of $1.21 million; for federal income tax purposes, the NOL arising in tax years beginning after 2017 may only reduce 80% of a taxpayer’s taxable income, and may be carried forward indefinitely. However, the coronavirus Aid, Relief and Economic Security Act (“the CARES Act”) issued in March 2020, provides tax relief to both corporate and noncorporate taxpayers by adding a five-year carryback period and temporarily repealing the 80% limitation for NOLs arising in 2018, 2019 and 2020. The 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. | |
PRC [Member] | ||
Income Tax (Details) [Line Items] | ||
Tax rate | 25.00% | |
Net operating loss carry forwards (in Dollars) | $ 43,400 | |
Percentage of deferred tax valuation allowance | 100.00% |
Income Tax (Details) - Schedule
Income Tax (Details) - Schedule of reconciles U.S. statutory rates to effective tax rate | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of reconciles U.S. statutory rates to effective tax rate [Abstract] | ||
U.S. statutory rates | 21.00% | (21.00%) |
Tax rate difference – current provision | 5.10% | (3.40%) |
Reversal of temporary difference due to disposal of Shenqiu | (18.80%) | |
Permanent differences | 2.90% | 2.00% |
Change in valuation allowance | (29.00%) | 15.60% |
Tax (benefit) per financial statements | (25.60%) |
Income Tax (Details) - Schedu_2
Income Tax (Details) - Schedule of provision for income tax expense - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of provision for income tax expense [Abstract] | ||
Income tax expense – current | ||
Income tax benefit – deferred | (3,024,807) | |
Total income tax benefit | $ (3,024,807) |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plan (Details) | Jun. 19, 2015shares |
Share-based Payment Arrangement [Abstract] | |
Shares of common stock authorized for issuance | 124,626 |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plan (Details) - Schedule of option activity with respect to employees and independent directors - Independent Directors Compensation Plan [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Stock-Based Compensation Plan (Details) - Schedule of option activity with respect to employees and independent directors [Line Items] | ||
Number of Shares, Beginning balance | 900 | 900 |
Average Exercise Price per Share (post-reverse stock split price), Beginning balance | $ 54.3 | |
Weighted Average Remaining Contractual Term in Years, Beginning balance | 5 years 149 days | |
Number of Shares, Exercisable, Beginning balance | 900 | 900 |
Average Exercise Price per Share (post-reverse stock split price), Exercisable, Beginning balance | $ 54.3 | $ 54.3 |
Weighted Average Remaining Contractual Term in Years, Exercisable, Beginning balance | 5 years 149 days | |
Number of Shares, Granted | ||
Average Exercise Price per Share (post-reverse stock split price), Granted | ||
Weighted Average Remaining Contractual Term in Years, Granted | ||
Number of Shares, Exercised | ||
Average Exercise Price per Share (post-reverse stock split price), Exercised | ||
Weighted Average Remaining Contractual Term in Years, Exercised | ||
Number of Shares, Forfeited / Expired | (400) | |
Average Exercise Price per Share (post-reverse stock split price), Forfeited / Expired | $ 102 | |
Weighted Average Remaining Contractual Term in Years, Forfeited / Expired | ||
Number of Shares, Ending balance | 500 | 900 |
Average Exercise Price per Share (post-reverse stock split price), Ending balance | $ 16.1 | $ 54.3 |
Weighted Average Remaining Contractual Term in Years, Ending balance | 6 years 116 days | 4 years 149 days |
Number of Shares, Exercisable, Ending balance | 500 | 900 |
Average Exercise Price per Share (post-reverse stock split price), Exercisable, Ending balance | $ 54.3 | $ 54.3 |
Weighted Average Remaining Contractual Term in Years, Exercisable, Ending balance | 6 years 116 days | 4 years 149 days |
Statutory Reserves (Details)
Statutory Reserves (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Statutory Reserves (Details) [Line Items] | |
Description of statutory reverse | the Company transferred $629,330, which is 10% of Xi’an TCH’s net income to the statutory reverse. |
Statutory reverse percentage | 10% |
Statutory Surplus Reserve Fund [Member] | |
Statutory Reserves (Details) [Line Items] | |
Percentage of net income | 10.00% |
Statutory surplus reserve of registered capital, percentage | 50.00% |
Surplus reserve fund, description | The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. |
Common Welfare Fund [Member] | Minimum [Member] | |
Statutory Reserves (Details) [Line Items] | |
Percentage of net income | 5.00% |
Common Welfare Fund [Member] | Maximum [Member] | |
Statutory Reserves (Details) [Line Items] | |
Percentage of net income | 10.00% |
Statutory Reserves (Details) -
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount | 12 Months Ended | ||
Dec. 31, 2020USD ($) | Dec. 31, 2019 | Dec. 31, 2020CNY (¥) | |
Shanghai TCH [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [Line Items] | |||
Registered Capital | $ 29,800,000 | ||
Maximum Statutory Reserve Amount | $ 14,900,000 | ||
Statutory reserve, description | ($1,003,859) | ($1,003,859) | |
Shanghai TCH [Member] | RMB [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [Line Items] | |||
Statutory reserve, description | 6,564,303 | 6,564,303 | |
Xi’an TCH [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [Line Items] | |||
Registered Capital | 202,000,000 | ||
Maximum Statutory Reserve Amount | 101,000,000 | ||
Statutory reserve, description | ($11,236,314) | ($10,606,984) | |
Xi’an TCH [Member] | RMB [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [Line Items] | |||
Statutory reserve, description | 73,700,706 | 69,359,820 | |
Erdos TCH [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [Line Items] | |||
Registered Capital | 120,000,000 | ||
Maximum Statutory Reserve Amount | 60,000,000 | ||
Statutory reserve, description | ($2,914,869) | ($2,914,869) | |
Erdos TCH [Member] | RMB [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [Line Items] | |||
Statutory reserve, description | 19,035,814 | 19,035,814 | |
Xi’an Zhonghong [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [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 | Did not accrue yet due to accumulated deficit | |
Xi’an Zhonghong [Member] | RMB [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [Line Items] | |||
Statutory reserve, description | Did not accrue yet due to accumulated deficit | Did not accrue yet due to accumulated deficit | |
Shaanxi Huahong [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [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 | Did not accrue yet due to accumulated deficit | |
Shaanxi Huahong [Member] | RMB [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [Line Items] | |||
Statutory reserve, description | Did not accrue yet due to accumulated deficit | Did not accrue yet due to accumulated deficit | |
Zhongxun [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [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 | Did not accrue yet due to accumulated deficit | |
Zhongxun [Member] | RMB [Member] | |||
Statutory Reserves (Details) - Schedule of maximum statutory reserve amount [Line Items] | |||
Statutory reserve, description | Did not accrue yet due to accumulated deficit | Did not accrue yet due to accumulated deficit |
Commitments (Details)
Commitments (Details) | May 08, 2020USD ($)shares | May 08, 2020CNY (¥)shares | Oct. 10, 2019 | Apr. 15, 2019 | Nov. 20, 2017USD ($) | Nov. 20, 2017CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Commitments (Details) [Line Items] | ||||||||
Lease agreement, description | lease for its office with a term from December 1, 2017 through November 30, 2020. | lease for its office with a term from December 1, 2017 through November 30, 2020. | ||||||
Monthly rental payment | $ 5,600 | ¥ 36,536 | ||||||
Rental expense | $ 19,674 | |||||||
Common stock annually (in Shares) | shares | 5,000 | 5,000 | ||||||
Description of engagement agreement | the Company entered an investment banking engagement agreement with an investment banker firm to engage them as the exclusive lead underwriter for a registered securities offering of up to $20 million. The Company shall pay to the investment banker an equity retainer fee of 15,000 shares (post-reverse stock split) of the restricted Common Stock of the Company (10,000 shares was issued within 10 business days of signing the agreement, and remaining 5,000 shares will be paid upon completion of the offering). The agreement expired in March 2021. | The Shares were sold to the Purchasers at a negotiated purchase price of $0.80 per share, for gross proceeds to the Company of $1,887,417, before deducting $200,000 in placement agent fees and other estimated offering expenses payable by the Company. | ||||||
New Lease Contract [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Lease agreement, description | The Company entered a new lease contract for the same location for a period from January 1, 2021 through December 31, 2023 | The Company entered a new lease contract for the same location for a period from January 1, 2021 through December 31, 2023 | ||||||
Monthly rental payment | $ 5,600 | ¥ 36,536 | ||||||
Chief Financial Officer [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Monthly salary | $ 2,300 | ¥ 16,000 | ||||||
Beijing Office [Member] | ||||||||
Commitments (Details) [Line Items] | ||||||||
Rental expense | $ 61,508 | $ 86,874 |
Commitments (Details) - Schedul
Commitments (Details) - Schedule of lease cost | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Schedule of lease cost [Abstract] | |
Operating lease cost – amortization of ROU | $ 54,694 |
Operating lease cost – interest expense on lease liability | $ 825 |
Weighted Average Remaining Lease Term - Operating leases | |
Weighted Average Discount Rate - Operating leases | 3.00% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Apr. 09, 2021USD ($) | Apr. 02, 2021USD ($) | Mar. 11, 2021USD ($)shares | Feb. 23, 2021$ / sharesshares |
Subsequent Events (Details) [Line Items] | ||||
Promissory note | $ 5,250,000 | |||
Original issue discount | $ 250,000 | |||
Note bears interest | 8.00% | |||
Outstanding note percentage | 125.00% | |||
Redeem amount | $ 825,000 | |||
Gain on transferring asset | $ 4,800,000 | |||
Securities Purchase Agreement [Member] | ||||
Subsequent Events (Details) [Line Items] | ||||
Shares of common stock (in Shares) | shares | 3,320,000 | |||
Shares price per share (in Dollars per share) | $ / shares | $ 11.522 | |||
Proceeds from received amount | $ 38,250,000 | |||
Issuance of shares (in Shares) | shares | 3,320,000 | |||
CEO [Member] | ||||
Subsequent Events (Details) [Line Items] | ||||
Number of purchaser | 1 | |||
Purchase shares of common stock (in Shares) | shares | 1,000,000 |