Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 22, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | China Pharma Holdings, Inc. | ||
Trading Symbol | CPHI | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 47,339,557 | ||
Entity Public Float | $ 17,436,172 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001106644 | ||
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, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-34471 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 73-1564807 | ||
Entity Address, Address Line One | Second Floor, No. 17, Jinpan Road | ||
Entity Address, Address Line Two | Haikou | ||
Entity Address, City or Town | Hainan Province | ||
Entity Address, Country | CN | ||
Entity Address, Postal Zip Code | 570216 | ||
City Area Code | 86 | ||
Local Phone Number | 898-6681-1730 | ||
Title of 12(b) Security | Common Stock | ||
Security Exchange Name | NYSE | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | B F Borgers CPA PC | ||
Auditor Location | Lakewood, Colorado | ||
Auditor Firm ID | 5041 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 4,859,059 | $ 957,653 |
Banker’s acceptances | 91,362 | 53,736 |
Trade accounts receivable, less allowance for doubtful accounts of $18,312,707 and $18,150,493, respectively | 714,475 | 501,892 |
Other receivables, less allowance for doubtful accounts of $32,210 and $27,289, respectively | 29,564 | 27,652 |
Advances to suppliers | 471 | 2,238 |
Inventory | 3,339,686 | 3,705,119 |
Prepaid expenses | 58,792 | 73,668 |
Total Current Assets | 9,093,409 | 5,321,958 |
Property, plant and equipment, net | 13,280,559 | 15,564,200 |
Operating lease right of use asset | 127,958 | 49,687 |
Intangible assets, net | 147,841 | 182,146 |
TOTAL ASSETS | 22,649,767 | 21,117,991 |
Current Liabilities: | ||
Trade accounts payable | 926,749 | 1,234,594 |
Accrued expenses | 298,452 | 177,359 |
Other payables | 1,884,161 | 2,748,208 |
Advances from customers | 210,028 | 719,786 |
Borrowings from related parties | 2,779,690 | 2,134,428 |
Operating lease liability | 85,282 | 52,070 |
Construction loan facility | 2,298,886 | |
Current portion of lines of credit | 4,328,936 | 2,038,345 |
Total Current Liabilities | 10,513,298 | 11,403,676 |
Non-current Liabilities: | ||
Convertible, redeemable note payable, net of issue discount | 5,250,000 | |
Lines of credit, net of current portion | 904,228 | |
Operating lease liability, net of current portion | 44,181 | |
Deferred tax liability | 824,407 | 805,556 |
Total Liabilities | 16,631,886 | 13,113,460 |
Commitments and Contingencies (Note 9) | ||
Stockholders’ Equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 95,000,000 shares authorized; 47,339,557 shares and 45,579,557 shares issued and outstanding, respectively | 47,340 | 45,580 |
Additional paid-in capital | 25,645,367 | 24,452,684 |
Retained deficit | (32,238,655) | (28,839,179) |
Accumulated other comprehensive income | 12,563,829 | 12,345,446 |
Total Stockholders’ Equity | 6,017,881 | 8,004,531 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 22,649,767 | $ 21,117,991 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, less allowance for doubtful accounts (in Dollars) | $ 18,312,707 | $ 18,150,493 |
Other receivables, less allowance for doubtful accounts (in Dollars) | $ 32,210 | $ 27,289 |
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 95,000,000 | 95,000,000 |
Common stock, shares issued | 47,339,557 | 45,579,557 |
Common stock, shares outstanding | 47,339,557 | 45,579,557 |
Consolidated Statements of Oper
Consolidated Statements of Operations And Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 9,641,925 | $ 10,866,449 |
Cost of revenue | 9,292,655 | 8,913,543 |
Gross profit | 349,270 | 1,952,906 |
Operating expenses: | ||
Selling expenses | 1,495,007 | 2,215,394 |
General and administrative expenses | 1,651,024 | 1,822,655 |
Research and development expenses | 318,964 | 377,964 |
Bad debt (benefit) expense | (255,215) | 115,186 |
Total operating expenses | 3,209,780 | 4,531,199 |
Loss from operations | (2,860,510) | (2,578,293) |
Other income (expense): | ||
Interest income | 3,035 | 5,675 |
Interest expense | (542,001) | (294,159) |
Net other expense | (538,966) | (288,484) |
Loss before income taxes | (3,399,476) | (2,866,777) |
Income tax expense | ||
Net loss | (3,399,476) | (2,866,777) |
Other comprehensive income (loss) - foreign currency translation adjustment | 218,383 | 769,227 |
Comprehensive loss | $ (3,181,093) | $ (2,097,550) |
Loss per share: | ||
Basic and diluted (in Dollars per share) | $ (0.07) | $ (0.07) |
Weighted average shares outstanding (in Shares) | 46,129,256 | 43,623,273 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) | Common Stock | Additional Paid-in Capital | Retained Deficit | Accumulated Other Comprehensive Income | Total |
Balance at Dec. 31, 2019 | $ 43,580 | $ 23,590,204 | $ (25,972,402) | $ 11,576,219 | $ 9,237,601 |
Balance (in Shares) at Dec. 31, 2019 | 43,579,557 | ||||
Net loss for the year | (2,866,777) | (2,866,777) | |||
Foreign currency translation adjustment | 769,227 | 769,227 | |||
Conversion of Officer Wages to common stock | $ 2,000 | 862,480 | 864,480 | ||
Conversion of Officer Wages to common stock (in Shares) | 2,000,000 | ||||
Balance at Dec. 31, 2020 | $ 45,580 | 24,452,684 | (28,839,179) | 12,345,446 | 8,004,531 |
Balance (in Shares) at Dec. 31, 2020 | 45,579,557 | ||||
Stock option compensation | 15,243 | 15,243 | |||
Issuance of common stock in lieu of compensation | $ 1,760 | 1,177,440 | 1,179,200 | ||
Issuance of common stock in lieu of compensation (in Shares) | 1,760,000 | ||||
Net loss for the year | (3,399,476) | (3,399,476) | |||
Foreign currency translation adjustment | 218,383 | 218,383 | |||
Balance at Dec. 31, 2021 | $ 47,340 | $ 25,645,367 | $ (32,238,655) | $ 12,563,829 | $ 6,017,881 |
Balance (in Shares) at Dec. 31, 2021 | 47,339,557 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (3,399,476) | $ (2,866,777) |
Depreciation and amortization | 3,087,820 | 2,679,470 |
Bad debt (benefit) expense | (255,215) | 115,186 |
Stock option compensation | 15,243 | |
Original issue discount accretion | 250,000 | |
Changes in assets and liabilities: | ||
Trade accounts and other receivables | (545,534) | (613,678) |
Advances to suppliers | 1,798 | (1,708) |
Inventory | 1,011,905 | 807,592 |
Trade accounts payable | (332,779) | (214,015) |
Other payables and accrued expenses | 415,309 | (15,217) |
Change in bankers’ acceptance notes payable | (111,160) | |
Advances from customers | (520,414) | 169,736 |
Prepaid expenses | 21,505 | 8,311 |
Net Cash Used in Operating Activities | (249,838) | (42,260) |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (438,055) | (867,307) |
Net Cash Used in Investing Activities | (438,055) | (867,307) |
Cash Flows from Financing Activities: | ||
Payments of construction term loan | (2,325,039) | (2,174,669) |
Payments of line of credit | (2,526,542) | (72,489) |
Borrowings and interest from related party | 1,183,414 | 206,908 |
Repayments to related party | (562,659) | (191,639) |
Proceeds from convertible redeemable debt | 5,000,000 | |
Proceeds from lines of credit | 3,828,564 | 2,856,066 |
Net Cash (Used In) Provided By Financing Activities | 4,597,738 | 624,177 |
Effect of Exchange Rate Changes on Cash | (8,439) | 58,156 |
Net Increase in Cash, Cash Equivalents and Restricted Cash | 3,901,406 | (227,234) |
Cash and Cash Equivalents at Beginning of Period | 957,653 | 1,184,887 |
Cash, Cash Equivalents and Restricted Cash at End of Period | 4,859,059 | 957,653 |
Supplemental Cash Flow Information: | ||
Cash paid for income taxes | ||
Cash paid for interest | 218,232 | 237,530 |
Supplemental Noncash Investing and Financing Activities: | ||
Accounts receivable collected with banker’s acceptances | 601,021 | 687,347 |
Inventory purchased with banker’s acceptances | 565,079 | 682,791 |
Right-of-use assets obtained in exchange for operating lease obligations | 168,606 | 229,673 |
Conversion of officer wages to common stock | $ 864,480 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations – Onny acquired 100% of the ownership in Helpson on May 25, 2005, by entering into an Equity Transfer Agreement with Helpson’s three former shareholders. The transaction was approved by the Commercial Bureau of Hainan Province on June 12, 2005 and Helpson received the Certificate of Approval for Establishment of Enterprises with Foreign Investment in the PRC on the same day. Helpson received its business license evidencing its Wholly Foreign Owned Enterprise (“WFOE”) status on June 21, 2005. Helpson is principally engaged in the development, manufacture and marketing of pharmaceutical products for human use in connection with a variety of high-incidence and high-mortality diseases and medical conditions prevalent in the PRC. All of its operations are conducted in the PRC, where its manufacturing facilities are located. Helpson manufactures pharmaceutical products in the form of dry powder injectables, liquid injectables, tablets, capsules, and cephalosporin oral solutions. The majority of its pharmaceutical products are sold on a prescription basis and all have been approved for at least one or more therapeutic indications by the National Medical Products Administration (the “NMPA”, formerly China Food and Drug Administration, or CFDA) based upon demonstrated safety and efficacy. Liquidity and Going Concern As of December 31, 2021, the Company had cash and cash equivalents of $4.9 million and an accumulated deficit of $32.2 million. The Company’s Chairperson, Chief Executive Officer and Interim Chief Financial Officer has advanced an aggregate of $1,425,123 as of December 31, 2021 to provide working capital and enable the Company to make the required payments related to its construction loan facility. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to the production of its existing products, debt service costs and costs of selling and administrative costs. These conditions raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued. To alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, management plans to enhance the sales model of advance payment, and further strengthen its collection of accounts receivable. Further, the Company is currently exploring strategic alternatives to accelerate the launch of nutrition products. In addition, management believes that the Company’s existing fixed assets can serve as collateral to support additional bank loans. While the current plans will allow the Company to fund its operations in the next twelve months, there can be no assurance that the Company will be able to achieve its future strategic alternatives raising substantial doubt about its ability to continue as a going concern. Pursuant to the requirements of Accounting Standards Codification (ASC) 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Under ASC 205-40, the strategic alternatives being pursued by the Company cannot be considered probable at this time because none of the Company’s current plans have been finalized at the time of the issuance of these financial statements and the implementation of any such plan is not probable of being effectively implemented as none of the plans are entirely within the Company’s control. Accordingly, substantial doubt is deemed to exist about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. Consolidation and Basis of Presentation Helpson’s functional currency is the Chinese Renminbi. Helpson’s revenue and expenses are translated into United States dollars at the average exchange rate for the period. Assets and liabilities are translated at the exchange rate as of the end of the reporting period. Gains or losses from translating Helpson’s financial statements are included in accumulated other comprehensive income, which is a component of stockholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency of the entity that is party to the transaction are included in the results of operations. Accounting Estimates Cash and Cash Equivalents Trade Accounts Receivable and Allowance for Doubtful Accounts – Trade accounts receivable that have been fully allowed for and determined to be uncollectible are charged against the allowance in the period the determination is made. The Company charged of uncollectible trade accounts receivable balances in the amount of $0 and $687,715 against the allowance for the years ended December 31, 2021 and 2020, respectively. Customer balances outstanding for more than one year are allowed for at a greater rate than more current balances when calculating the allowance for doubtful accounts. Advances to Suppliers and Advances from Customers Inventory – Leases – At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term including any options to extend the lease that the Company is reasonably certain to exercise. The Company calculates the present value of lease payments using an incremental borrowing rate as the Company’s leases do not provide an implicit interest rate. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. At the lease commencement date, the Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. The Company may enter into leases with an initial term of 12 months or less (“Short-Term Leases”). For any Short-Term Leases, the Company records the rent expense on a straight-line basis and does not record the leases on the condensed balance sheet. After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. Valuation of Long-Lived Assets Property, Plant and Equipment Revenue Recognition The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company’s contracts are fixed price and reflect standalone pricing for each item. Due to the nature of the products sold, there are no returns. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon buyer’s designated carrier or the buyer picks up the goods at the Company’s warehouse. For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adoption rules. The Company has received advance deposits for orders less than one year. These advances total $210,028 and $719,786 and are recorded as a liability on the accompanying balance sheet as “Advances from customers” as of December 31, 2021 and 2020, respectively. Cost of Revenues Research and Development Credit Risk The Company has its cash in bank deposits primarily at state owned banks located in the PRC. Historically, deposits in PRC banks have been secured due to the state policy of protecting depositors’ interests. The PRC promulgated a Bankruptcy Law in August 2006, effective June 1, 2007, which contains provisions for the implementation of measures for the bankruptcy of PRC banks. Company bank accounts in China are not subject to a certain insurance coverage and will follow the provisions set forth in the PRC Bankruptcy Law should any bank where the Company has accounts declare bankruptcy. Interest Rate Risk Basic and Diluted Loss per Common Share As of December 31, 2021, the Company has potentially dilutive common shares related to the option to purchase 65,000 shares of common stock and the 3,500,000 shares issuable upon conversion of the Convertible Note Payable are excluded from the computation of diluted net loss per share for all periods presented because the effect is anti-dilutive due to net losses of the Company. Reclassification Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326) In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. In 2020, the Financial Accounting Standards Board issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to address the complexity in accounting for certain financial instruments with characteristics of liabilities and equity. Amongst other provisions, the amendments in this ASU significantly change the guidance on the issuer’s accounting for convertible instruments and the guidance on the derivative scope exception for contracts in an entity’s own equity such that fewer conversion features will require separate recognition, and fewer freestanding instruments, like warrants, will require liability treatment. The pronouncement will be effective for public business entities that are SEC smaller reporting company filers in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early application of the guidance will be permitted for all entities for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted the standard during fiscal 2021. From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 2 – INVENTORY Inventory consisted of the following: December 31, December 31, 2021 2020 Raw materials 2,131,584 $ 2,081,745 Work in process 622,380 662,999 Finished goods 585,722 960,375 Total Inventory $ 3,339,686 $ 3,705,119 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 3 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: December 31, December 31, 2021 2020 Permit of land use $ 441,783 $ 431,681 Building 10,258,885 10,024,303 Plant, machinery and equipment 30,122,235 29,018,708 Motor vehicle 337,375 329,660 Office equipment 278,892 259,175 Total 41,439,170 40,063,527 Less: accumulated depreciation (28,158,611 ) (24,499,327 ) Property, plant and equipment, net $ 13,280,559 $ 15,564,200 Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows: Asset Life - years Permit of land use 40 - 70 Building 20 - 49 Plant, machinery and equipment 5 - 10 Motor vehicle 5 - 10 Office equipment 3 - 5 Depreciation relating to office equipment was included in general and administrative expenses, while all other depreciation was included in cost of revenue. Depreciation expense was $3,049,706 and $2,643,820 for the years ended December 31, 2021 and 2020, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4 - INTANGIBLE ASSETS Intangible assets represent the cost of medical formulas approved for production by the NMPA. The Company did not obtain NMPA production approval for any new medical formulas during the years ended December 31, 2021 and 2020 and no costs were reclassified from advances to intangible assets during the years ended December 31, 2021 and 2020, respectively. Approved medical formulas are amortized from the date NMPA approval is obtained over their individually identifiable estimated useful life, which range from ten to thirteen years. It is at least reasonably possible that a change in the estimated useful lives of the medical formulas could occur in the near term due to changes in the demand for the drugs and medicines produced from these medical formulas. Amortization expense relating to intangible assets was $38,114 and $35,650 for the years ended December 31, 2021 and 2020, respectively which was included in the general and administrative expenses. Medical formulas typically do not have a residual value at the end of their amortization period. The Company evaluates each approved medical formula for impairment at the date of NMPA approval, when indications of impairment are present and also at the date of each financial statement. The Company’s evaluation is based on an estimated undiscounted net cash flow model, which considers currently available market data for the related drug and the Company’s estimated market share. If the carrying value of the medical formula exceeds the estimated future net cash flows, an impairment loss is recognized for the excess of the carrying value over the fair value of the medical formula, which is determined by the estimated discounted future net cash flows. No impairment loss was recognized during the years ended December 31, 2021 and 2020, respectively. Intangible assets consisted solely of NMPA approved medical formulas as follows: December 31, December 31, 2021 2020 Gross carrying amount $ 5,294,892 $ 5,173,818 Accumulated amortization (5,147,051 ) (4,991,672 ) Net carrying amount $ 147,841 $ 182,146 The estimated aggregate annual amortization expense for each of the next five years and thereafter is as follows: Year Amount 2022 38,567 2023 38,567 2024 38,567 2025 32,140 Total $ 147,841 |
Other Payables
Other Payables | 12 Months Ended |
Dec. 31, 2021 | |
Other Payables [Abstract] | |
OTHER PAYABLES | NOTE 5 – OTHER PAYABLES Other Payables consisted of the following: December 31, December 31, 2021 2020 Compensation payable to officer 715,506 $ 1,658,706 Compensation and interest to related parties $ 327,033 $ 297,487 Business taxes and other 841,622 792,015 Total Other Payables $ 1,884,161 $ 2,748,208 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS A member of the Company’s board of directors (“Board”) had previously advanced to the Company an aggregate amount of $1,354,567 as of December 31, 2021 and December 31, 2020 which is recorded as “Other payables – related parties” on the accompanying condensed consolidated balance sheets. The advances bear interest at a rate of 1.0% per year. Total interest expense years ended December 31, 2021 and 2020 was $13,546 and $13,546, respectively. Compensation and interest payable to the board member is included in Other payables in the accompanying condensed consolidated balance sheet totaling $327,033 and $297,487 as of December 31, 2021 and 2020, respectively. The Company received advances totaling $1,183,414 and repaid $562,659 of the advances during the year ended December 31, 2021 from its Chairperson, Chief Executive Officer and Interim Chief Financial Officer. Total amounts owed were $1,425,123 and $740,316 and are recorded as Other payables – related parties on the accompanying condensed consolidated balance sheets as of December 31, 2021 and 2020, respectively. On July 8, 2019 the Company entered into a loan agreement in exchange for cash of RMB 4,770,000 ($738,379) with its Chairperson, Chief Executive Officer and Interim Chief Financial Officer. The loan bears interest at a rate of 4.35% and is payable within one year of the loan agreement. The due date of the loan agreement was extended to July 10, 2021 and further extended to July 9, 2022 on identical terms. Total interest expense related to the loan for the years ended December 31, 2021 and 2020 was $30,194 and $43,083, respectively. Compensation payable to the Chairperson, Chief Executive Officer and Interim Chief Financial Officer is included in Other payables in the accompanying condensed consolidated balance sheet totaling $715,506 and $1,658,706 as of December 31, 2021 and 2020, respectively. As discussed more fully in Note 13, an aggregate of $1,179,200 of compensation was converted into a total of 1,760,000 shares of common stock at the market price of $0.67 per share from the Company’s 2010 Long-Term Incentive Plan, as amended. |
Banker's Acceptance Notes Payab
Banker's Acceptance Notes Payable | 12 Months Ended |
Dec. 31, 2021 | |
Banker's Acceptance Notes Payable [Abstract] | |
BANKER'S ACCEPTANCE NOTES PAYABLE | NOTE 7 – BANKER’S ACCEPTANCE NOTES PAYABLE In April 2016, the Company entered into a Banker’s Acceptance Note Agreement with a bank. Pursuant to the terms of the agreement, the Company can issue banker’s acceptance notes to any third party as payment of amounts owing to that third party. The Company is required to deposit with the bank an amount equal to the amounts represented by the banker’s acceptance notes issued to the third parties. The maximum amount that the Company can issue under this agreement is limited to the lesser of RMB30,000,000 (approximately $4.5 million) or the amount of cash available to deposit against the banker’s acceptance notes. In addition, the agreement calls for the payment of fees equal to 0.05% of the note amount to the bank. As of December 31, 2021 and 2020, the Company had no outstanding banker’s acceptance notes payable. |
Construction Loan Facility and
Construction Loan Facility and Lines of Credit | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
CONSTRUCTION LOAN FACILITY AND LINES OF CREDIT | NOTE 8 – CONSTRUCTION LOAN FACILITY AND LINES OF CREDIT The Company obtained a construction loan facility, dated June 21, 2013, in the aggregate amount of RMB 80,000,000 (approximately $13 million). The loan facility is for an eight-year term, which commenced on July 11, 2013, the initial draw-down date. The proceeds of the loan were used for and are collateralized by the construction of the Company’s new production facility and the included production line equipment and machinery. The loan bears interest based upon 110% of the PRC government’s eight-year term rate effective on the actual draw-down date, subject to annual adjustments based on 110% of the floating rate for the same type of loan on the anniversary from the draw-down date and its subsequent anniversary dates. The interest rate has remained at 5.39% on each of the July 10 anniversary dates since inception. The loan required interest-only payments for the first two years. Beginning July 11, 2015, the principal was due in at least two (2) annual installments with the first annual payment being due within six month period after July 10, 2015 and the second annual payment being due July 10, 2016 and each following year over the next five years through July 11, 2021 on the identical terms as described above for 2015. The Company has made all required payments due under the loan. During the year ended December 31, 2021, the Company made the remaining principal payments due under the loan in the amount of $2,325,039 (RMB 15,000,000). On September 18, 2021 the Company entered into a new line of credit with the same bank as discussed below. Lines of Credit In April 2020, the Company obtained a line of credit from Postal Savings Bank of China for an aggregate amount of RMB 10,000,000 (approximately $1.4 million), of which RMB 5,000,000 (approximately $0.7 million) was advanced in April 2020, and RMB 3,000,000 (approximately $0.4 million) was advanced in July 2020. The loan bears interest at a rate of 4.25% per annum. Advances on the line of credit are due two years from the date of the advance. A third party company has guaranteed the loan as being a second priority creditor in the collateral in certain land use rights and buildings next to the creditor of the construction loan facility as discussed above. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit. The Company has an additional RMB 2,000,000 (approximately $0.3 million) available under the line, subject to a risk review and approval by the third party guarantee company. Total interest expense under this facility for the years ended December 31, 2021 and 2020 was $44,629 and $29,103, respectively. The Company repaid RMB 1,600,000 (approximately $0.25 million) during the year ended December 31, 2021 as per the repayment schedule. On June 30, 2020 the Company obtained a line of credit with Bank of Communications for an aggregate amount of RMB 8,500,000 (approximately $1.2 million), all of which has been advanced. The loan bears interest at the rate of 4.05% per annum. The line of credit is due in one year on the anniversary date of the line of credit. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. On June 21, 2021 the Company paid the balance in full. On June 25, 2021 the Company entered into a new loan bearing an interest rate of 4.17%. The line of credit is due in one year on the anniversary date of the line of credit. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. Total interest expense under this facility for the years ended December 31, 2021 and 2020 was $54,294 and $25,500, respectively. The Company obtained a line of credit of RMB 3,200,000 (approximately $0.5 million) from China CITIC Bank in September 2020 and obtained an advance of RMB 2,343,340 (approximately $0.3 million), and the remaining of RMB 856,660 (approximately $0.1 million) in October 2020 under this line. The loan bears interest at the rate of 4.50% per annum. In September, 2021 the Company repaid the line of credit in full. Also in September, 2021 the Company entered into a new line a credit in the amount of RMB 3,200,000 (approximately $0.8 million) on the same terms. The line of credit is due on September 2, 2022. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. Total interest expense under this facility for the years ended December 31, 2021 and 2020 was $22,258 and $5,168, respectively. On July 12, 2021, the Company obtained a short-term loan of RMB 3 million (approximately US$460,000) from Haikou HaiHongXin microfinance Co., Ltd., with a monthly interest rate of 1.5%. The company paid off the loan in September 2021. Total interest paid on this loan was $16,051 and $0 for the years ended December 31, 2021 and 2020, respectively. This loan was guaranteed by Haikou Financing Guarantee Company. On September 18, 2021 the Company obtained a line of credit for RMB 10,000,000 (approximately $1.54 million) with Bank of China. The loan bears interest at the rate of 3.85% per annum. The line of credit is due September 18, 2022. The loan is collateralized by the Company’s new production facility. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit. Total interest paid on this loan was $15,582 and $0 for the years ended December 31, 2021 and 2020, respectively. Principal payments required for the remaining terms of the lines of credit as of December 31, 2021 are as follows: Year Lines of 2022 $ 4,328,936 $ 4,328,936 Fair Value of Construction Loan Facility |
Convertible Note Payable
Convertible Note Payable | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTE PAYABLE | NOTE 9 – CONVERTIBLE NOTE PAYABLE On November 17, 2021, the Company entered into a Securities Purchase Agreement (the “Agreement”) pursuant to which the Company issued an unsecured convertible promissory note (the “Note”) to an institutional accredited investor Streeterville Capital, LLC (the “Investor”). The Note matures fifteen months after the purchase price of the Note is delivered from the Investor to the Company (the “Purchase Price Date”). The Note has the original principal amount of $5,250,000 and Investor gave consideration of $5,000,000, reflecting original issue discount of $250,000. The transaction contemplated under the Agreement was closed on November 19, 2021 and the Company anticipates using the proceeds for general working capital purposes. The Note is convertible into 3,500,000 shares of the Company’s common stock at a price of $1.50 per share through April 19, 2022. Thereafter, the Note is convertible into 1,750,000 shares at a price of $3.00 per share. Interest accrues on the outstanding balance of the Note at 5% per annum compounded daily. Upon the occurrence of an Event of Default as defined in the Note, interest accrues at the lesser of 22% per annum or the maximum rate permitted by applicable law. In addition, upon any Event of Default, the Investor may accelerate the outstanding balance payable under the Note, which will increase automatically upon such acceleration by 15% or 5%, depending on the nature of the Event of Default. Pursuant to the terms of the Agreement and the Note, the Company must obtain Investor’s consent for certain fundamental transactions such as consolidation, merger with or into another entity (excerpt for a reincorporation merger), disposition of substantial assets, change of control, reorganization or recapitalization. Any occurrence of a fundamental transaction without Investor’s prior written consent will be deemed an Event of Default. Investor may redeem all or any part the outstanding balance of the Note, subject to $500,000 per calendar month, at any time after one hundred twenty-one (121) days from the Purchase Price Date upon three trading days’ notice, in cash or converting into shares of the Company’s common stock, at a price equal to 85% multiplied by the lowest daily volume weighted average price during the ten trading days immediately preceding the applicable redemption conversion, subject to certain adjustments and ownership limitations specified in the Note. The Note provides for liquidated damages upon failure to comply with any of the terms or provisions of the Note. The Company may prepay the outstanding balance of the Note with the Investor’s consent. At inception, the Note was redeemable into 8,811,430 shares based on the lowest volume weighted average price of $0.595817 on the inception date of November 19, 2021. As of December 31, 2021, the Note was convertible into 11,975,447 shares of common stock based on the lowest volume weighted average price of $0.438397 on that date. The original issue discount of $250,000 was fully earned at the inception of the Note, and accordingly was recognized as interest expense in the accompanying statement of operations for the year ended December 31, 2021. Total interest expense for the years ended December 31, 2021 and 2020 was $279,979 and $0, respectively. On March 21, 2022 the Investor delivered its notice of redemption for $100,000 of the Note at the lowest volume weighted average price of $0.3113 during the ten trading days immediately preceding the applicable redemption conversion. Accordingly, the Company issued a total of 321,233 shares of common stock to the Investor on March 23, 2022. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | NOTE 10 - LEASES The Company has leases for certain office and production facilities in the PRC which are classified as operating leases. The leases contain payment terms for fixed amounts. Options to extend are recognized as part of the lease liabilities and recognized as right to use assets when management estimates to renew the lease. There are no residual value guarantees, no variable lease payments, and no restrictions or covenants imposed by leases. The discount rate used in measuring the lease liabilities and right of use assets was determined by reviewing the Company’s incremental borrowing rate at the initial measurement date. For the years ended December 31, 2021 and 2020, operating lease cost was $92,085 and $96,552, respectively and cash paid for amounts included in the measurement of lease liabilities for operating cash flows from operating leases was $98,845 and $102,624, respectively. As of December 31, 2021 and 2020, the Company reported operating lease right of use assets of $127,958 and $49,687, respectively and operating use liabilities of $85,282 and $52,070, respectively. As of December 31, 2021, its operating leases had a weighted average remaining lease term of 1.50 years and a weighted average discount rate of 4.75%. Minimum lease payments for the Company’s operating lease liabilities were as follows for the twelve month periods ended December 31: 2022 $ 89,590 2023 44,795 Total undiscounted cash flows 134,385 Less: Imputed interest (4,923 ) 129,462 Less: Operating lease liabilities, current portion (85,282 ) Operating lease liabilities, net of current portion $ 44,180 The Company has leases with terms less than one year for certain provincial sales offices that are not material. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 - INCOME TAXES Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect of a change in tax laws or rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Liabilities are established for uncertain tax positions expected to be taken in income tax returns when such positions are judged to meet the “more-likely-than-not” threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax positions are included as a component of other expenses. Through December 31, 2021, the Company has not identified any uncertain tax positions that it has taken. U.S. income tax returns for the years ended December 31, 2018 through December 31, 2021 and the Chinese income tax return for the year ended December 31, 2021 are open for possible examination. Under the current tax law in the PRC, the Company is and will be subject to the enterprise income tax rate of 25%. There was no provision for income taxes for the years ended December 31, 2021 and 2020, respectively due to continued net losses of the Company. Following is a reconciliation of income taxes calculated at the federal statutory rates to the provision for income taxes: Years Ended December 31, 2021 2020 (Benefit) tax at statutory rate of 25% $ (849,869 ) $ (716,694 ) Prior year refund received - - Other, primarily the difference in U.S. tax rates 8,440 8,190 Change in valuation allowance 841,429 708,504 Income tax expense $ - $ - The temporary differences which give rise to the deferred income tax assets and liability are as follows: December 31, 2021 2020 Deferred income tax assets: Allowance for doubtful trade receivables $ 4,578,177 $ 4,537,623 Allowance for doubtful other receivables 8,052 6,822 Inventory obsolescence reserve 137,549 568,182 Stock compensation 3,201 - Expenses not deductible in current year 1,187,760 1,160,601 Advances for intangible assets impairment 10,685,714 10,441,373 Lease liability, net 376 596 PRC net operating loss carry forward 5,779,437 9,542,576 U.S. net operating loss carry forward 1,602,243 1,409,380 Total deferred income tax assets 23,982,509 27,667,153 Valuation allowance (23,982,509 ) (27,667,153 ) Net deferred income tax asset $ - $ - Deferred income tax liability: Intangible assets $ 824,407 $ 805,556 As of December 31, 2021, the Company had net operating loss carryforwards for PRC tax purposes of approximately $23.1 million which are available to offset any future taxable income through 2026. Approximately $20.4 million of these carryforwards expired in December 2021. The Company also has net operating losses for United States federal income tax purposes of approximately $7.6 million of which $5.1 million is available to offset future taxable income, if any, through 2039, and $2.5 million are available for carryforward indefinitely subject to a limitation of 80% of taxable income for each tax year. U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those differences become deductible or tax loss carry forwards are utilized. Management considers projected future taxable income and tax planning strategies in making this assessment. Based upon an assessment of the level of historical taxable income and projections for future taxable income over the periods on which the deferred tax assets are deductible or can be utilized, management believes it is not likely for the Company to realize all benefits of the deferred tax assets as of December 31, 2021 and 2020. Therefore, the Company provided for a valuation allowance against its deferred tax assets of $23,982,509 and $27,666,557 as of December 31, 2021 and 2020, respectively. The Company also incurred various other taxes, comprised primarily of business taxes, value-added taxes, urban construction taxes, education surcharges and others. Any unpaid amounts are reflected on the balance sheets as accrued taxes payable. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 12 – FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, a hierarchy has been established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; and Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. The Company uses fair value to measure the value of the banker’s acceptance notes it holds as of December 30, 2021 and 2020. The banker’s acceptance notes are recorded at cost which approximates fair value. The Company held the following assets and liabilities recorded at fair value: Fair Value Measurements at December 31, Reporting Date Using Description 2021 Level 1 Level 2 Level 3 Banker’s acceptance notes $ 91,362 $ - $ 91,362 $ - Total $ 91,362 $ - $ 91,362 $ - Fair Value Measurements at December 31, Reporting Date Using Description 2020 Level 1 Level 2 Level 3 Banker’s acceptance notes $ 53,736 $ - $ 53,736 $ - Total $ 53,736 $ - $ 53,736 $ - |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 13 - STOCKHOLDERS’ EQUITY The Company is authorized to issue 95,000,000 shares of common stock, $0.001 par value, and 5,000,000 shares of preferred stock, $0.001 par value. The preferred stock may be issued in series with such designations, preferences, stated values, rights, qualifications or limitations as determined solely by the Company’s Board. According to relevant PRC laws, companies registered in the PRC, including the Company’s PRC subsidiary, Helpson, are required to allocate at least 10% of their after tax income, as determined under the accounting standards and regulations in the PRC, to statutory surplus reserve accounts until the reserve account balances reach 50% of the company’s registered capital prior to their remittance of funds out of the PRC. Allocations to these reserves and funds can only be used for specific purposes and are not transferrable to the parent company in the form of loans, advances or cash dividends. The amount designated for general and statutory capital reserves is $8,145,000 as of December 31, 2021 and 2020. 2010 Incentive Plan On November 12, 2010, the Company’s Board adopted the Company’s 2010 Incentive Plan (the “Plan”), which was then approved by stockholders on December 22, 2010. On October 17, 2019, the Board of Directors approved the First Amendment to the 2010 Incentive Plan (the “Amendment”), pursuant to which the term of the 2010 Incentive Plan was extended to December 31, 2029. The Amendment was adopted by the stockholders on December 19, 2019. On October 25, 2021, the Board of Directors approved, and on December 27, 2021 our stockholders adopted the Amendment No.2 to the Plan to increase the number of shares of the Common Stock, that are reserved thereunder by 5,000,000 shares from 4,000,000 shares to 9,000,000 shares. The Plan gave the Company the ability to grant stock options, restricted stock, stock appreciation rights and performance units to its employees, directors and consultants, or those who will become employees, directors and consultants of the Company and/or its subsidiaries. The Plan currently allows for equity awards of up to 9,000,000 shares of common stock. Through December 31, 2021, there were 3,935,000 shares of stock and stock options granted and outstanding under the Plan. A total of 65,000 options were outstanding as of December 31, 2021 under the Plan. As such, there are 5,000,000 additional shares available for issuance under the Plan. On September 9, 2021 the Company issued an aggregate of 1,760,000 fully vested shares of common stock at the price of $0.67 per share, representing the closing market price on that date to its Chairperson, Chief Executive Officer and Interim Chief Financial Officer under the Plan, as amended, to partially offset certain unpaid cash compensation totaling $1,179,200. Also on September 9, 2021 the Company issued an option to purchase 65,000 shares of common stock at an exercise price at $1.47 per share, under the Plan. The Option vests immediately and expires on September 9, 2024. On December 23, 2020 the Board approved the issuance of 2,000,000 shares of common stock from the Company’s 2010 Long-Term Incentive Plan, as amended for the partial conversion of unpaid compensation totaling $864,480 to the Chairperson, Chief Executive Officer and Interim Chief Financial Officer as discussed in Note 6. As of December 31, 2021, there was no remaining unrecognized compensation expense related to stock options or restricted stock grants. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 14 – REVENUE The following table summarizes the Company’s revenues disaggregated by revenue source and geography based on the Company’s PRC based business locations: For the Years Ended December 31, 2021 2020 Domestic Pharmaceuticals $ 9,641,925 $ 9,132,216 Export Medical Test Kits - 1,734,233 $ 9,641,925 $ 10,866,449 There were no sales of medical test kits within the PRC. |
Risks & Uncertainties
Risks & Uncertainties | 12 Months Ended |
Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
RISKS & UNCERTAINTIES | NOTE 15 – RISKS & UNCERTAINTIES Current vulnerability due to certain concentrations For the year ended December 31, 2021, no customer accounted for more than 10% of sales and three customers accounted for 52.1%, 11.2% and 10.2% of accounts receivable. Three suppliers accounted for 24.8%, 12.7% and 11.8% of raw material purchases, and three different products accounted for 20.7%, 17.7% and 13.5% of revenue. For the year ended December 31, 2020, one customer accounted for 16.0% of sales and three customers respectively accounted for 52.0%, 11.2% and 10.2% of accounts receivable. Three suppliers respectively accounted for 20.7%, 17.75 and 13.5% of raw material purchases, and three different products respectively accounted for 32.6%, 19.9% and 16.0% of revenue. Nature of Operations Impact from the New Coronavirus Global Pandemic (“COVID-19”) Economic environment - In addition, all of the Company’s revenue is denominated in the PRC’s currency of Renminbi (RMB), which must be converted into other currencies before remittance out of the PRC. Both the conversion of RMB into foreign currencies and the remittance of foreign currencies abroad require approval of the PRC government. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations – Onny acquired 100% of the ownership in Helpson on May 25, 2005, by entering into an Equity Transfer Agreement with Helpson’s three former shareholders. The transaction was approved by the Commercial Bureau of Hainan Province on June 12, 2005 and Helpson received the Certificate of Approval for Establishment of Enterprises with Foreign Investment in the PRC on the same day. Helpson received its business license evidencing its Wholly Foreign Owned Enterprise (“WFOE”) status on June 21, 2005. Helpson is principally engaged in the development, manufacture and marketing of pharmaceutical products for human use in connection with a variety of high-incidence and high-mortality diseases and medical conditions prevalent in the PRC. All of its operations are conducted in the PRC, where its manufacturing facilities are located. Helpson manufactures pharmaceutical products in the form of dry powder injectables, liquid injectables, tablets, capsules, and cephalosporin oral solutions. The majority of its pharmaceutical products are sold on a prescription basis and all have been approved for at least one or more therapeutic indications by the National Medical Products Administration (the “NMPA”, formerly China Food and Drug Administration, or CFDA) based upon demonstrated safety and efficacy. |
Liquidity and Going Concern | Liquidity and Going Concern As of December 31, 2021, the Company had cash and cash equivalents of $4.9 million and an accumulated deficit of $32.2 million. The Company’s Chairperson, Chief Executive Officer and Interim Chief Financial Officer has advanced an aggregate of $1,425,123 as of December 31, 2021 to provide working capital and enable the Company to make the required payments related to its construction loan facility. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to the production of its existing products, debt service costs and costs of selling and administrative costs. These conditions raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued. To alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, management plans to enhance the sales model of advance payment, and further strengthen its collection of accounts receivable. Further, the Company is currently exploring strategic alternatives to accelerate the launch of nutrition products. In addition, management believes that the Company’s existing fixed assets can serve as collateral to support additional bank loans. While the current plans will allow the Company to fund its operations in the next twelve months, there can be no assurance that the Company will be able to achieve its future strategic alternatives raising substantial doubt about its ability to continue as a going concern. Pursuant to the requirements of Accounting Standards Codification (ASC) 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Under ASC 205-40, the strategic alternatives being pursued by the Company cannot be considered probable at this time because none of the Company’s current plans have been finalized at the time of the issuance of these financial statements and the implementation of any such plan is not probable of being effectively implemented as none of the plans are entirely within the Company’s control. Accordingly, substantial doubt is deemed to exist about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above. |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation Helpson’s functional currency is the Chinese Renminbi. Helpson’s revenue and expenses are translated into United States dollars at the average exchange rate for the period. Assets and liabilities are translated at the exchange rate as of the end of the reporting period. Gains or losses from translating Helpson’s financial statements are included in accumulated other comprehensive income, which is a component of stockholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency of the entity that is party to the transaction are included in the results of operations. |
Accounting Estimates | Accounting Estimates |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Trade Accounts Receivable and Allowance for Doubtful Accounts | Trade Accounts Receivable and Allowance for Doubtful Accounts – Trade accounts receivable that have been fully allowed for and determined to be uncollectible are charged against the allowance in the period the determination is made. The Company charged of uncollectible trade accounts receivable balances in the amount of $0 and $687,715 against the allowance for the years ended December 31, 2021 and 2020, respectively. Customer balances outstanding for more than one year are allowed for at a greater rate than more current balances when calculating the allowance for doubtful accounts. |
Advances to Suppliers and Advances from Customers | Advances to Suppliers and Advances from Customers |
Inventory | Inventory – |
Leases | Leases – At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term including any options to extend the lease that the Company is reasonably certain to exercise. The Company calculates the present value of lease payments using an incremental borrowing rate as the Company’s leases do not provide an implicit interest rate. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. At the lease commencement date, the Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. The Company may enter into leases with an initial term of 12 months or less (“Short-Term Leases”). For any Short-Term Leases, the Company records the rent expense on a straight-line basis and does not record the leases on the condensed balance sheet. After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. |
Valuation of Long-Lived Assets | Valuation of Long-Lived Assets |
Property, Plant and Equipment | Property, Plant and Equipment |
Revenue Recognition | Revenue Recognition The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company’s contracts are fixed price and reflect standalone pricing for each item. Due to the nature of the products sold, there are no returns. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon buyer’s designated carrier or the buyer picks up the goods at the Company’s warehouse. For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adoption rules. The Company has received advance deposits for orders less than one year. These advances total $210,028 and $719,786 and are recorded as a liability on the accompanying balance sheet as “Advances from customers” as of December 31, 2021 and 2020, respectively. |
Cost of Revenues | Cost of Revenues |
Research and Development | Research and Development |
Credit Risk | Credit Risk The Company has its cash in bank deposits primarily at state owned banks located in the PRC. Historically, deposits in PRC banks have been secured due to the state policy of protecting depositors’ interests. The PRC promulgated a Bankruptcy Law in August 2006, effective June 1, 2007, which contains provisions for the implementation of measures for the bankruptcy of PRC banks. Company bank accounts in China are not subject to a certain insurance coverage and will follow the provisions set forth in the PRC Bankruptcy Law should any bank where the Company has accounts declare bankruptcy. |
Interest Rate Risk [Policy Text Block] | Interest Rate Risk |
Loss Per Share | Basic and Diluted Loss per Common Share As of December 31, 2021, the Company has potentially dilutive common shares related to the option to purchase 65,000 shares of common stock and the 3,500,000 shares issuable upon conversion of the Convertible Note Payable are excluded from the computation of diluted net loss per share for all periods presented because the effect is anti-dilutive due to net losses of the Company. |
Reclassification | Reclassification |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326) In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. In 2020, the Financial Accounting Standards Board issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to address the complexity in accounting for certain financial instruments with characteristics of liabilities and equity. Amongst other provisions, the amendments in this ASU significantly change the guidance on the issuer’s accounting for convertible instruments and the guidance on the derivative scope exception for contracts in an entity’s own equity such that fewer conversion features will require separate recognition, and fewer freestanding instruments, like warrants, will require liability treatment. The pronouncement will be effective for public business entities that are SEC smaller reporting company filers in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early application of the guidance will be permitted for all entities for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted the standard during fiscal 2021. From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption. |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | December 31, December 31, 2021 2020 Raw materials 2,131,584 $ 2,081,745 Work in process 622,380 662,999 Finished goods 585,722 960,375 Total Inventory $ 3,339,686 $ 3,705,119 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | December 31, December 31, 2021 2020 Permit of land use $ 441,783 $ 431,681 Building 10,258,885 10,024,303 Plant, machinery and equipment 30,122,235 29,018,708 Motor vehicle 337,375 329,660 Office equipment 278,892 259,175 Total 41,439,170 40,063,527 Less: accumulated depreciation (28,158,611 ) (24,499,327 ) Property, plant and equipment, net $ 13,280,559 $ 15,564,200 |
Schedule of estimated useful lives of the assets | Asset Life - years Permit of land use 40 - 70 Building 20 - 49 Plant, machinery and equipment 5 - 10 Motor vehicle 5 - 10 Office equipment 3 - 5 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | December 31, December 31, 2021 2020 Gross carrying amount $ 5,294,892 $ 5,173,818 Accumulated amortization (5,147,051 ) (4,991,672 ) Net carrying amount $ 147,841 $ 182,146 |
Schedule of aggregate annual amortization expense | Year Amount 2022 38,567 2023 38,567 2024 38,567 2025 32,140 Total $ 147,841 |
Other Payables (Tables)
Other Payables (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Payables [Abstract] | |
Schedule of other payables | December 31, December 31, 2021 2020 Compensation payable to officer 715,506 $ 1,658,706 Compensation and interest to related parties $ 327,033 $ 297,487 Business taxes and other 841,622 792,015 Total Other Payables $ 1,884,161 $ 2,748,208 |
Construction Loan Facility an_2
Construction Loan Facility and Lines of Credit (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of principal payments | Year Lines of 2022 $ 4,328,936 $ 4,328,936 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block [Abstract] | |
Schedule of operating lease liabilities | 2022 $ 89,590 2023 44,795 Total undiscounted cash flows 134,385 Less: Imputed interest (4,923 ) 129,462 Less: Operating lease liabilities, current portion (85,282 ) Operating lease liabilities, net of current portion $ 44,180 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of income taxes calculated at federal statutory rates to provision for income taxes | Years Ended December 31, 2021 2020 (Benefit) tax at statutory rate of 25% $ (849,869 ) $ (716,694 ) Prior year refund received - - Other, primarily the difference in U.S. tax rates 8,440 8,190 Change in valuation allowance 841,429 708,504 Income tax expense $ - $ - |
Schedule of temporary differences to deferred income tax assets and liability | December 31, 2021 2020 Deferred income tax assets: Allowance for doubtful trade receivables $ 4,578,177 $ 4,537,623 Allowance for doubtful other receivables 8,052 6,822 Inventory obsolescence reserve 137,549 568,182 Stock compensation 3,201 - Expenses not deductible in current year 1,187,760 1,160,601 Advances for intangible assets impairment 10,685,714 10,441,373 Lease liability, net 376 596 PRC net operating loss carry forward 5,779,437 9,542,576 U.S. net operating loss carry forward 1,602,243 1,409,380 Total deferred income tax assets 23,982,509 27,667,153 Valuation allowance (23,982,509 ) (27,667,153 ) Net deferred income tax asset $ - $ - Deferred income tax liability: Intangible assets $ 824,407 $ 805,556 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities recorded at fair value | Fair Value Measurements at December 31, Reporting Date Using Description 2021 Level 1 Level 2 Level 3 Banker’s acceptance notes $ 91,362 $ - $ 91,362 $ - Total $ 91,362 $ - $ 91,362 $ - Fair Value Measurements at December 31, Reporting Date Using Description 2020 Level 1 Level 2 Level 3 Banker’s acceptance notes $ 53,736 $ - $ 53,736 $ - Total $ 53,736 $ - $ 53,736 $ - |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Ssdule of revenues | For the Years Ended December 31, 2021 2020 Domestic Pharmaceuticals $ 9,641,925 $ 9,132,216 Export Medical Test Kits - 1,734,233 $ 9,641,925 $ 10,866,449 |
Organization and Significant _2
Organization and Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | May 25, 2005 | |
Organization and Significant Accounting Policies (Details) [Line Items] | |||
Cash and cash equivalents | $ 4,900,000 | ||
Accumulated deficit | 32,200,000 | ||
Bad debt expense | 255,215 | $ 115,186 | |
Uncollectible trade accounts receivable | 0 | 687,715 | |
Advances from customers | $ 210,028 | $ 719,786 | |
Purchase of common stock (in Shares) | 65,000 | ||
Shares issuable upon conversion of the convertible note payable (in Shares) | 3,500,000 | ||
Management [Member] | |||
Organization and Significant Accounting Policies (Details) [Line Items] | |||
Working capital | $ 1,425,123 | ||
Onny Investment Limited [Member] | |||
Organization and Significant Accounting Policies (Details) [Line Items] | |||
Equity method investment, ownership percentage | 100.00% | ||
Hainan Helpson Medical & Biotechnology Co., Ltd [Member] | |||
Organization and Significant Accounting Policies (Details) [Line Items] | |||
Equity method investment, ownership percentage | 100.00% | 100.00% |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of inventory - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of inventory [Abstract] | ||
Raw materials | $ 2,131,584 | $ 2,081,745 |
Work in process | 622,380 | 662,999 |
Finished goods | 585,722 | 960,375 |
Total Inventory | $ 3,339,686 | $ 3,705,119 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expanse | $ 3,049,706 | $ 2,643,820 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Details) - Schedule of property, plant and equipment - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of property, plant and equipment [Abstract] | ||
Permit of land use | $ 441,783 | $ 431,681 |
Building | 10,258,885 | 10,024,303 |
Plant, machinery and equipment | 30,122,235 | 29,018,708 |
Motor vehicle | 337,375 | 329,660 |
Office equipment | 278,892 | 259,175 |
Total | 41,439,170 | 40,063,527 |
Less: accumulated depreciation | (28,158,611) | (24,499,327) |
Property, plant and equipment, net | $ 13,280,559 | $ 15,564,200 |
Property, Plant and Equipment_4
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets | 12 Months Ended |
Dec. 31, 2021 | |
Minimum [Member] | Permit Of Land Use [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 40 years |
Minimum [Member] | Building [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 20 years |
Minimum [Member] | Plant, Machinery and Equipment [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 5 years |
Minimum [Member] | Motor Vehicle [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 5 years |
Minimum [Member] | Office Equipment [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 3 years |
Maximum [Member] | Permit Of Land Use [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 70 years |
Maximum [Member] | Building [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 49 years |
Maximum [Member] | Plant, Machinery and Equipment [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 10 years |
Maximum [Member] | Motor Vehicle [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 10 years |
Maximum [Member] | Office Equipment [Member] | |
Property, Plant and Equipment (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Estimated useful lives | 5 years |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets useful life, description | Approved medical formulas are amortized from the date NMPA approval is obtained over their individually identifiable estimated useful life, which range from ten to thirteen years. | |
Amortization expense relating to intangible assets | $ 38,114 | $ 35,650 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of intangible assets [Abstract] | ||
Gross carrying amount | $ 5,294,892 | $ 5,173,818 |
Accumulated amortization | (5,147,051) | (4,991,672) |
Net carrying amount | $ 147,841 | $ 182,146 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of aggregate annual amortization expense - amortization Expense [Member] | Dec. 31, 2021USD ($) |
Intangible Assets (Details) - Schedule of aggregate annual amortization expense [Line Items] | |
2022 | $ 38,567 |
2023 | 38,567 |
2024 | 38,567 |
2025 | 32,140 |
Total | $ 147,841 |
Other Payables (Details) - Sche
Other Payables (Details) - Schedule of other payables - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of other payables [Abstract] | ||
Compensation payable to officer | $ 715,506 | $ 1,658,706 |
Compensation and interest to related parties | 327,033 | 297,487 |
Business taxes and other | 841,622 | 792,015 |
Total Other Payables | $ 1,884,161 | $ 2,748,208 |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 12 Months Ended | |||
Dec. 23, 2020 | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) | Jul. 08, 2019USD ($) | Jul. 08, 2019CNY (¥) | |
Related Party Transactions (Details) [Line Items] | |||||
Advance received | $ 1,354,567 | ||||
Interest rate | 1.00% | ||||
Interest expense | $ 13,546 | $ 13,546 | |||
Other payables | 327,033 | 297,487 | |||
Borrowings from related parties | 1,425,123 | 740,316 | |||
Other payables | 715,506 | 1,658,706 | |||
Aggregate Note payable | 1,179,200 | ||||
Compensation converted | 1,760,000 | ||||
Partial conversion, description | the Board approved the issuance of 2,000,000 shares of common stock from the Company’s 2010 Long-Term Incentive Plan, as amended for the partial conversion of unpaid compensation totaling $864,480 to the Chairperson, Chief Executive Officer and Interim Chief Financial Officer. The shares were issued at a market price of $0.43 per share based on the average of the closing prices during the five trading days prior to the issuance date, and higher than the closing price of $0.42 per share on the issuance date. | ||||
Chief Executive Officer [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Advance received | 1,183,414 | ||||
Chief Financial Officer [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Repaid advance | $ 562,659 | ||||
Market price per share (in Dollars per share) | $ / shares | $ 0.67 | ||||
Management [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Interest rate | 4.35% | 4.35% | |||
Interest expense | $ 30,194 | $ 43,083 | |||
Loan agreement to borrow cash | $ (738,379) | ¥ 4,770,000 |
Banker's Acceptance Notes Pay_2
Banker's Acceptance Notes Payable (Details) - 1 months ended Apr. 30, 2016 $ in Millions | USD ($) | CNY (¥) |
Banker's Acceptance Notes Payable (Details) [Line Items] | ||
Maximum amount of agreement | $ | $ 4.5 | |
Agreement payments fees, description | In addition, the agreement calls for the payment of fees equal to 0.05% of the note amount to the bank. | |
RMB [Member] | ||
Banker's Acceptance Notes Payable (Details) [Line Items] | ||
Maximum amount of agreement | ¥ | ¥ 30,000,000 |
Construction Loan Facility an_3
Construction Loan Facility and Lines of Credit (Details) | Sep. 18, 2021 | Jun. 30, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Apr. 30, 2021 | Dec. 31, 2021CNY (¥) | Jul. 12, 2021USD ($) | Jul. 12, 2021CNY (¥) | Jun. 25, 2021 | Jun. 30, 2020CNY (¥) | Apr. 30, 2020CNY (¥) | Jun. 21, 2013USD ($) | Jun. 21, 2013CNY (¥) |
Construction Loan Facility and Lines of Credit (Details) [Line Items] | |||||||||||||
Line of credit amount | $ 1,200,000 | ¥ 8,500,000 | $ 13,000,000 | ¥ 80,000,000 | |||||||||
Description of loan interest rates | The loan bears interest based upon 110% of the PRC government’s eight-year term rate effective on the actual draw-down date, subject to annual adjustments based on 110% of the floating rate for the same type of loan on the anniversary from the draw-down date and its subsequent anniversary dates. The interest rate has remained at 5.39% on each of the July 10 anniversary dates since inception. The loan required interest-only payments for the first two years. Beginning July 11, 2015, the principal was due in at least two (2) annual installments with the first annual payment being due within six month period after July 10, 2015 and the second annual payment being due July 10, 2016 and each following year over the next five years through July 11, 2021 on the identical terms as described above for 2015. | ||||||||||||
Principal Payments | $ 2,325,039 | ¥ 15,000,000 | |||||||||||
Lines of credit description | the Company obtained a line of credit with Bank of Communications for an aggregate amount of RMB 8,500,000 (approximately $1.2 million), all of which has been advanced. The loan bears interest at the rate of 4.05% per annum. The line of credit is due in one year on the anniversary date of the line of credit. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. On June 21, 2021 the Company paid the balance in full. On June 25, 2021 the Company entered into a new loan bearing an interest rate of 4.17%. The line of credit is due in one year on the anniversary date of the line of credit. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. Total interest expense under this facility for the years ended December 31, 2021 and 2020 was $54,294 and $25,500, respectively. | the Company obtained a line of credit from Postal Savings Bank of China for an aggregate amount of RMB 10,000,000 (approximately $1.4 million), of which RMB 5,000,000 (approximately $0.7 million) was advanced in April 2020, and RMB 3,000,000 (approximately $0.4 million) was advanced in July 2020. The loan bears interest at a rate of 4.25% per annum. Advances on the line of credit are due two years from the date of the advance. A third party company has guaranteed the loan as being a second priority creditor in the collateral in certain land use rights and buildings next to the creditor of the construction loan facility as discussed above. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit. The Company has an additional RMB 2,000,000 (approximately $0.3 million) available under the line, subject to a risk review and approval by the third party guarantee company. Total interest expense under this facility for the years ended December 31, 2021 and 2020 was $44,629 and $29,103, respectively. The Company repaid RMB 1,600,000 (approximately $0.25 million) during the year ended December 31, 2021 as per the repayment schedule. | |||||||||||
Interest rates description | The loan bears interest at the rate of 4.05% per annum. | ||||||||||||
Interest rate | 1.00% | 1.00% | |||||||||||
Total interest expense | $ 542,001 | $ 294,159 | |||||||||||
Short-term loan | $ 460,000 | ¥ 3,000,000 | |||||||||||
Interest amount | 0 | ¥ 16,051 | |||||||||||
Haikou HaiHongXin microfinance Co., Ltd., [Member] | |||||||||||||
Construction Loan Facility and Lines of Credit (Details) [Line Items] | |||||||||||||
Interest rate | 1.50% | 1.50% | |||||||||||
Bank of Communications [Member] | |||||||||||||
Construction Loan Facility and Lines of Credit (Details) [Line Items] | |||||||||||||
Interest rate | 4.17% | ||||||||||||
Total interest expense | 54,294 | 25,500 | |||||||||||
China CITIC Bank [Member] | |||||||||||||
Construction Loan Facility and Lines of Credit (Details) [Line Items] | |||||||||||||
Total interest expense | $ 22,258 | 5,168 | |||||||||||
Line of credit, description | The Company obtained a line of credit of RMB 3,200,000 (approximately $0.5 million) from China CITIC Bank in September 2020 and obtained an advance of RMB 2,343,340 (approximately $0.3 million), and the remaining of RMB 856,660 (approximately $0.1 million) in October 2020 under this line. The loan bears interest at the rate of 4.50% per annum. In September, 2021 the Company repaid the line of credit in full. Also in September, 2021 the Company entered into a new line a credit in the amount of RMB 3,200,000 (approximately $0.8 million) on the same terms. The line of credit is due on September 2, 2022. | ||||||||||||
Bank of China [Member] | |||||||||||||
Construction Loan Facility and Lines of Credit (Details) [Line Items] | |||||||||||||
Interest amount | $ 15,582 | $ 0 | |||||||||||
Line of credit description | On September 18, 2021 the Company obtained a line of credit for RMB 10,000,000 (approximately $1.54 million) with Bank of China. The loan bears interest at the rate of 3.85% per annum. The line of credit is due September 18, 2022. The loan is collateralized by the Company’s new production facility. In addition, the Company’s Chief Executive Officer and Chair of the Board personally guaranteed the new line of credit. | ||||||||||||
RMB [Member] | |||||||||||||
Construction Loan Facility and Lines of Credit (Details) [Line Items] | |||||||||||||
Line of credit amount | ¥ | ¥ 10,000,000 |
Construction Loan Facility an_4
Construction Loan Facility and Lines of Credit (Details) - Schedule of principal payments - Lines of Credit [Member] | Dec. 31, 2021USD ($) |
Debt Instrument [Line Items] | |
2022 | $ 4,328,936 |
Total | $ 4,328,936 |
Convertible Note Payable (Detai
Convertible Note Payable (Details) | 1 Months Ended | 12 Months Ended | |||||
Apr. 19, 2022$ / shares | Mar. 21, 2022USD ($)$ / shares | Nov. 19, 2021$ / sharesshares | Nov. 17, 2021USD ($) | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Mar. 23, 2022shares | |
Convertible Note Payable (Details) [Line Items] | |||||||
Notes matures | 15 months | ||||||
Original principal amount | $ 5,250,000 | ||||||
Investor consideration | 5,000,000 | ||||||
Original issue discount | $ 250,000 | $ 250,000 | |||||
Note converted into common stock | 1,750,000 | ||||||
Converted common stock price per share (in Dollars per share) | $ / shares | $ 3 | ||||||
Interest accrues on note, description | Interest accrues on the outstanding balance of the Note at 5% per annum compounded daily. Upon the occurrence of an Event of Default as defined in the Note, interest accrues at the lesser of 22% per annum or the maximum rate permitted by applicable law. In addition, upon any Event of Default, the Investor may accelerate the outstanding balance payable under the Note, which will increase automatically upon such acceleration by 15% or 5%, depending on the nature of the Event of Default. | ||||||
Redeem of outstanding note | $ 500,000 | ||||||
Percentage of common stock price on weighted average price | 85.00% | ||||||
Note redeemable into shares (in Shares) | shares | 8,811,430 | 11,975,447 | |||||
Weighted average price (in Dollars per share) | $ / shares | $ 0.3113 | $ 0.595817 | $ 0.438397 | ||||
Total interest expense | $ 279,979 | $ 0 | |||||
Common stock issued to investor (in Shares) | shares | 321,233 | ||||||
Subsequent Event [Member] | |||||||
Convertible Note Payable (Details) [Line Items] | |||||||
Note converted into common stock | 3,500,000 | ||||||
Converted common stock price per share (in Dollars per share) | $ / shares | $ 1.5 | ||||||
Redeem of outstanding note | $ 100,000 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases (Textual) | ||
Operating lease cost | $ 92,085 | $ 96,552 |
Cash flows from operating leases | 98,845 | 102,624 |
Operating lease right of use assets | 127,958 | 49,687 |
Operating leases liabilities | $ 85,282 | $ 52,070 |
Weighted average remaining lease term | 1 year 6 months | |
Weighted average discount rate | 4.75% |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating lease liabilities | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of operating lease liabilities [Abstract] | |
2022 | $ 89,590 |
2023 | 44,795 |
Total undiscounted cash flows | 134,385 |
Less: Imputed interest | (4,923) |
Total | 129,462 |
Less: Operating lease liabilities, current portion | (85,282) |
Operating lease liabilities, net of current portion | $ 44,180 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Enterprise income tax rate | 25.00% | |
Net operating loss carryforwards for PRC tax | $ 23,100,000 | |
Net operating loss expiration, description | Approximately $20.4 million of these carryforwards expired in December 2021. The Company also has net operating losses for United States federal income tax purposes of approximately $7.6 million of which $5.1 million is available to offset future taxable income, if any, through 2039, and $2.5 million are available for carryforward indefinitely subject to a limitation of 80% of taxable income for each tax year. | |
Description of federal corporate income tax rate | The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. | |
Valuation allowance for deferred tax assets | $ 23,982,509 | $ 27,666,557 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of reconciliation of income taxes calculated at federal statutory rates to provision for income taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of reconciliation of income taxes calculated at federal statutory rates to provision for income taxes [Abstract] | ||
(Benefit) tax at statutory rate of 25% | $ (849,869) | $ (716,694) |
Prior year refund received | ||
Other, primarily the difference in U.S. tax rates | 8,440 | 8,190 |
Change in valuation allowance | 841,429 | 708,504 |
Income tax expense |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of reconciliation of income taxes calculated at federal statutory rates to provision for income taxes (Parentheticals) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of reconciliation of income taxes calculated at federal statutory rates to provision for income taxes [Abstract] | ||
(Benefit) tax at statutory rate | 25.00% | 25.00% |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of temporary differences to deferred income tax assets and liability - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred income tax assets: | ||
Allowance for doubtful trade receivables | $ 4,578,177 | $ 4,537,623 |
Allowance for doubtful other receivables | 8,052 | 6,822 |
Inventory obsolescence reserve | 137,549 | 568,182 |
Stock compensation | 3,201 | |
Expenses not deductible in current year | 1,187,760 | 1,160,601 |
Advances for intangible assets impairment | 10,685,714 | 10,441,373 |
Lease liability, net | 376 | 596 |
PRC net operating loss carry forward | 5,779,437 | 9,542,576 |
U.S. net operating loss carry forward | 1,602,243 | 1,409,380 |
Total deferred income tax assets | 23,982,509 | 27,667,153 |
Valuation allowance | (23,982,509) | (27,667,153) |
Net deferred income tax asset | ||
Deferred income tax liability: | ||
Intangible assets | $ 824,407 | $ 805,556 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value [Line Items] | ||
Banker’s acceptance notes | $ 91,362 | $ 53,736 |
Total | 91,362 | 53,736 |
Level 1 [Member] | ||
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value [Line Items] | ||
Banker’s acceptance notes | ||
Total | ||
Level 2 [Member] | ||
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value [Line Items] | ||
Banker’s acceptance notes | 91,362 | 53,736 |
Total | 91,362 | 53,736 |
Level 3 [Member] | ||
Fair Value Measurements (Details) - Schedule of assets and liabilities recorded at fair value [Line Items] | ||
Banker’s acceptance notes | ||
Total |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Sep. 09, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 23, 2022 | Dec. 23, 2020 | Nov. 12, 2010 |
Stockholders' Equity (Details) [Line Items] | ||||||
Common stock, shares authorized | 95,000,000 | 95,000,000 | ||||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | ||||
After tax income, percentage | 10.00% | |||||
Reserve account balances, percentage | 50.00% | |||||
General and statutory capital reserves amount (in Dollars) | $ 8,145,000 | $ 8,145,000 | ||||
Common stock reserved shares | 5,000,000 | |||||
Total option outstanding | 65,000 | |||||
Additional shares available for issuance | 5,000,000 | |||||
Issuance of common stock | 321,233 | |||||
Purchase of common stock | 65,000 | |||||
Exercise price (in Dollars per share) | $ 1.47 | |||||
Fair value of options granted (in Dollars) | $ 15,243 | |||||
Market price per share (in Dollars per share) | $ 0.67 | |||||
Volatility rate | 118.40% | |||||
Risk free interest rate | 0.75% | |||||
Expected life | 1 year 6 months | |||||
2010 Long-Term Incentive Plan [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Issuance of common stock | 2,000,000 | |||||
Minimum [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Common stock reserved shares | 4,000,000 | |||||
Maximum [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Common stock reserved shares | 9,000,000 | |||||
Common Stock [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Issuance of common stock | 1,760,000 | |||||
Price per share (in Dollars per share) | $ 0.67 | |||||
Total unpaid cash compensation (in Dollars) | $ 1,179,200 | |||||
2010 Incentive Plan [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Common stock issued | 9,000,000 | |||||
Stock and stock option granted and outstanding | 3,935,000 | |||||
Chairperson [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Issuance of common stock | 864,480 |
Revenue (Details) - Schedule of
Revenue (Details) - Schedule of revenues - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Revenue | $ 9,641,925 | $ 10,866,449 |
Domestic Pharmaceuticals [Member] | ||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Revenue | 9,641,925 | 9,132,216 |
Export Medical Test Kits [Member] | ||
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items] | ||
Revenue | $ 1,734,233 |
Risks & Uncertainties (Details)
Risks & Uncertainties (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 16.00% | |
Sales Revenue, Net [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 10.00% | 16.00% |
Number of customers | 3 | 1 |
Accounts Receivable [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 52.00% | |
Number of customers | 3 | |
Raw Material Purchases [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Number of suppliers | 3 | 3 |
Raw Material Purchases [Member] | Suppliers One [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 24.80% | 20.70% |
Raw Material Purchases [Member] | Suppliers Two [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 12.70% | 17.75% |
Raw Material Purchases [Member] | Suppliers Three [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 11.80% | |
Revenue One [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 20.70% | 13.50% |
Revenue Two [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 17.70% | 32.60% |
Revenue Three [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 13.50% | 19.90% |
Customer One [Member] | Accounts Receivable [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 11.20% | |
Customer Two [Member] | Accounts Receivable [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 11.20% | 10.20% |
Customer Three [Member] | Accounts Receivable [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 10.20% | |
Accounts Receivable [Member] | Customer One [Member] | ||
Risks & Uncertainties (Details) [Line Items] | ||
Concentrations risk, percentage | 52.10% |