Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 10, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NF Energy Saving Corp | |
Entity Central Index Key | 0001213660 | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Entity File Number | 000-50155 | |
Entity Incorporation State Country Code | DE | |
Entity Interactive Data Current | No | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 9,073,289 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 65,354 | $ 17,860 |
Restricted cash | 180,525 | 179,496 |
Accounts receivable, net | 348,083 | 1,274,980 |
Retention receivable, net | 25,590 | 65,529 |
Loan to related party | 601,951 | |
Inventories | 1,531,728 | 937,966 |
Prepayments and other receivables | 2,459,845 | 131,442 |
Total current assets | 5,213,076 | 2,607,273 |
NON-CURRENT ASSETS | ||
Property, plant and equipment, net | 16,802,665 | 17,958,136 |
Land use right, net | 2,348,558 | 2,460,668 |
Construction in progress | 24,722 | |
Total non-current assets | 19,151,223 | 20,443,526 |
TOTAL ASSETS | 24,364,299 | 23,050,799 |
CURRENT LIABILITIES | ||
Short-term bank borrowings | 5,652,561 | 5,816,961 |
Convertible promissory note, net | 3,647 | |
Derivative liability | 142,074 | |
Accounts payable, trade | 2,447,711 | 2,782,182 |
Accounts payable, trade-related parties | 386,879 | 416,547 |
Amount due to related parties | 2,464,568 | 918,033 |
Taxes payable | 1,110,621 | 1,086,589 |
Other payables and accrued liabilities | 2,349,163 | 2,045,066 |
Total current liabilities | 14,557,224 | 13,065,378 |
TOTAL LIABILITIES | 14,557,224 | 13,065,378 |
EQUITY | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 8,073,289 and 7,573,289 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 8,073 | 7,573 |
Additional paid-in capital | 14,594,825 | 12,555,325 |
Statutory reserves | 2,227,634 | 2,227,634 |
Accumulated deficit | (8,417,261) | (6,443,102) |
Accumulated other comprehensive income | 1,547,401 | 1,788,302 |
Total NF Energy Saving Corporation's equity | 9,960,672 | 10,135,732 |
NONCONTROLLING INTERESTS | (153,597) | (150,311) |
Total equity | 9,807,075 | 9,985,421 |
Total liabilities and equity | $ 24,364,299 | $ 23,050,799 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 8,073,289 | 7,573,289 |
Common stock, shares outstanding | 8,073,289 | 7,573,289 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
REVENUES | ||||
Products | $ 178,599 | $ 1,052,130 | $ 950,773 | $ 1,550,119 |
Services | 29,803 | 50,563 | 170,031 | 263,992 |
Total revenues, net | 208,402 | 1,102,693 | 1,120,804 | 1,814,111 |
COST OF REVENUES | ||||
Cost of products | 204,845 | 937,586 | 806,049 | 1,148,581 |
Cost of services | 76,169 | 19,108 | 224,813 | 196,303 |
Total cost of revenues | 281,014 | 956,694 | 1,030,862 | 1,344,884 |
GROSS PROFIT (LOSS) | (72,612) | 145,999 | 89,942 | 469,227 |
OPERATING EXPENSES: | ||||
Sales and marketing | 33,096 | 6,153 | 119,820 | 22,542 |
General and administrative | 326,211 | 364,550 | 1,487,943 | 2,631,731 |
Total operating expenses | 359,307 | 370,703 | 1,607,763 | 2,654,273 |
LOSS FROM OPERATIONS | (431,919) | (224,704) | (1,517,821) | (2,185,046) |
OTHER INCOME (EXPENSE) | ||||
Interest expense | (174,488) | (92,769) | (466,582) | (290,153) |
Other income | 58,718 | 2,598 | 11,021 | 3,759 |
Total other expense, net | (115,770) | (90,171) | (455,561) | (286,394) |
LOSS BEFORE INCOME TAXES | (547,689) | (314,875) | (1,973,382) | (2,471,440) |
PROVISION FOR INCOME TAXES | 16 | 114 | ||
NET LOSS | (547,689) | (314,891) | (1,973,382) | (2,471,554) |
Less: net income (loss) attributable to noncontrolling interest | (3,220) | (4,776) | 777 | (12,233) |
NET LOSS ATTRIBUTABLE TO NF ENERGY SAVING CORPORATION | (544,469) | (310,115) | (1,974,159) | (2,459,321) |
COMPREHENSIVE LOSS | ||||
NET LOSS | (547,689) | (314,891) | (1,973,382) | (2,471,554) |
OTHER COMPREHENSIVE LOSS | ||||
Foreign currency translation adjustment | (271,289) | (1,049,846) | (244,964) | (1,445,691) |
Total comprehensive loss | (818,978) | (1,364,737) | (2,218,346) | (3,917,245) |
Less: comprehensive income (loss) attributable to non-controlling interests | (1,260) | (7,001) | 3,286 | (6,232) |
COMPREHENSIVE LOSS ATTRIBUTABLE TO NF ENERGY SAVING CORPORATION | $ (817,718) | $ (1,357,736) | $ (2,221,632) | $ (3,911,013) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||
Basic and diluted (in shares) | 8,073,289 | 7,573,289 | 7,871,824 | 7,445,084 |
LOSS PER SHARE | ||||
Basic and diluted (in dollars per share) | $ (0.07) | $ (0.04) | $ (0.25) | $ (0.33) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,973,382) | $ (2,471,554) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 716,433 | 695,162 |
Gain on disposal of property | (43,712) | (730) |
Provision (reversal) of allowance for doubtful accounts | (75,203) | 1,462,898 |
Change in fair value of derivative liability | 2,132 | |
Amortization of discount on convertible promissory note | 1,239 | |
Impairment loss in construction in progress | 24,803 | |
Change in operating assets and liabilities | ||
Accounts and retention receivable | 970,444 | 3,637,343 |
Inventories | (634,860) | (2,506,962) |
Prepayments and other receivables | (67,709) | (459,222) |
Accounts payable, trade | (284,077) | 218,853 |
Other payables and accrued liabilities | 371,982 | 162,723 |
Taxes payable | 55,943 | |
Net cash provided by (used in) operating activities | (935,967) | 738,511 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from disposal of property, plant and equipment | 50,063 | 1,441 |
Loan to related party | (1,161,458) | |
Repayment from the related party loan | 540,294 | |
Net cash provided by (used in) investing activities | (571,101) | 1,441 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of share from placement | 500,000 | |
Amount from (to) related parties, net | 1,591,910 | (282,478) |
Repayment to bank demand notes | (1,028,935) | |
Proceeds from short-term bank borrowings | 5,835,897 | 6,614,583 |
Repayment on short-term bank borrowings | (5,838,815) | (6,614,583) |
Net cash provided by (used in) financing activities | 1,588,992 | (811,413) |
EFFECT OF EXCHANGE RATE ON CASH | (33,401) | (8,944) |
INCREASE (DECREASE) IN CASH | 48,523 | (80,405) |
CASH, CASH EQUIVALENTS, RESTRICTED CASH, beginning of period | 197,356 | 282,154 |
CASH, CASH EQUIVALENTS, RESTRICTED CASH, end of period | 245,879 | 201,749 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for income tax | 114 | |
Cash paid for interest expense | 434,198 | 290,477 |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | ||
Issuance of common share for subscription for potential equity acquisition | 2,040,000 | |
Issuance of convertible promissory note that received after the balance sheet date | $ 153,000 |
ORGANIZATION AND BUSINESS BACKG
ORGANIZATION AND BUSINESS BACKGROUND | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS BACKGROUND | 1. ORGANIZATION AND BUSINESS BACKGROUND Until October 2, 2019, the Company, through its subsidiaries, mainly operated in the energy technology business in the People’s of Republic of China (the “PRC”). On October 2, 2019, the Company acquired Boqi Zhengji Pharmacy Chain Co., Ltd. (“Boqi Pharmacy”), a China-based pharmacy chain company with both directly operated stores and franchisees. The Company’s energy technology business includes the provision of energy saving technology consulting, optimization design services, energy saving reconstruction of pipeline networks and contractual energy management services to China’s electric power, petrochemical, coal, metallurgy, construction, and municipal infrastructure development industries. The Company also engages in the manufacturing and sales of energy-saving flow control equipment. Description of subsidiaries Name Place of incorporation and Principal activities and place of operation Effective interest NF Energy Saving Investment Limited British Virgin Island, a limited liability company Investment holding 100 % NF Energy Equipment Limited Hong Kong, a limited liability company Investment holding 100 % Liaoning Nengfa Weiye Energy Technology Co., Ltd. (“Nengfa Energy”) The PRC, a limited liability company Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC 100 % Liaoning Nengfa Tiefa Import & Export Co., Ltd. (“Nengfa Tiefa Import & Export”) The PRC, a limited liability company Development and production of hi-tech and automatic-intelligence valve products 57 % NF Energy Saving Corporation (the “NFEC”) and its subsidiaries are hereinafter referred to as (the “Company”). |
GOING CONCERN UNCERTAINTIES
GOING CONCERN UNCERTAINTIES | 9 Months Ended |
Sep. 30, 2019 | |
Going Concern Uncertainties [Abstract] | |
GOING CONCERN UNCERTAINTIES | 2. GOING CONCERN UNCERTAINTIES The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had an accumulated deficit of $8,417,261 and negative working capital of $9,344,148 as of September 30, 2019 and incurred a net loss of $1,973,382 for the nine months ended September 30, 2019. Since 2014 the Company has generated operating losses and has incurred cash outflows from its operations. Management believes these factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months. The Company acquired Boqi Pharmacy in the third quarter of 2019 to diversify its business improve its financial position and cash flows. While we expect to continue making acquisitions and strategic alliances as part of our long-term business strategy, we there can be no assurance that the Company can realize the full benefits from any acquisitions such as increased revenue or enhanced financial position. Such acquisitions, if any, could adversely affect our consolidated financial statements. The continuation of the Company as a going concern through the next twelve months is dependent upon (1) the continued financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due, and (2) further implement management’s business plan to extend its operations and generate sufficient revenues and cash flow to meet its obligations. While the Company believes in the viability of its strategy to increase sales volume and in its ability to raise additional funds, there can be neither any assurance to that effect, nor any assurance that the Company will be successful in securing sufficient funds to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ● Basis of presentation and consolidation These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and reflected the activities of NFEC and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. The unaudited interim condensed consolidated financial information as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K/A for the fiscal year ended December 31, 2018 previously filed with the SEC on September 6, 2019. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of September 30, 2019 and its unaudited condensed consolidated results of operations for the three and nine months ended September 30, 2019 and 2018, and its unaudited condensed consolidated cash flows for the nine months ended September 30, 2019 and 2018, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future periods. ● Use of estimates In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates. ● Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. ● Cash and cash equivalents Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments. ● Restricted cash Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in a restricted cash account on the Company’s unaudited interim condensed consolidated balance sheet. The Company’s restricted cash balance is related to a contract performance guarantee bond. The balance of restricted cash was $180,525 and $179,496 as of September 30, 2019 and December 2018, respectively. ● Accounts receivable and allowance for doubtful accounts Accounts receivable are recorded at the invoiced amount, do not bear interest and are due within contractual payment terms, generally 30 to 90 days from shipment. Credit is granted based on evaluation of a customer’s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days are reviewed individually for collectability. At the end of each period, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For those receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of September 30, 2019 and December 31, 2018, the allowance for doubtful accounts was $11,017,242 and $11,327,271, respectively. ● Retention receivable and allowance for doubtful accounts Retention receivable is the amount of receivables withheld by a customer based upon 5-10% of the contract value, until a product warranty expires. The warranty period is usually 12 months. As of September 30, 2019 and December 31, 2018, the allowance for doubtful accounts was $900,777 and $942,376, respectively. ● Inventories Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a weighted average method. Costs include material, labor and manufacturing overhead costs. The Company reviews historical sales activity quarterly to determine excess, slow moving items and potentially obsolete items and also evaluates the impact of any anticipated changes in future demand. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand. As of September 30, 2019 and December 31, 2018, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs. ● Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: Expected useful lives Residual value Building 10 – 30 years 5% Plant and machinery 5 – 14 years 4 ~ 5% Furniture, fixture and equipment 5 years 4 ~ 13% Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. ● Land use right All lands in the PRC are owned by the PRC government. Under applicable law, the PRC government may sell the right to use the land for a specified period of time. Thus, the Company’s land purchases in the PRC are considered to be leaseholds and are stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreement on a straight-line basis, which is 50 years and will expire in 2059. ● Impairment of long-lived assets In accordance with the provisions of ASC Topic 360, “ Impairment or Disposal of Long-Lived Assets ● Revenue recognition Under ASC 606, Revenue from Contracts with Customers, revenue is recognized when control of the promised goods and services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods and services, net of value-added tax. The Company determines revenue recognition through the following steps: ■ Identify the contract with a customer; ■ Identify the performance obligations in the contract; ■ Determine the transaction price; ■ Allocate the transaction price to the performance obligations in the contract; and ■ Recognize revenue when (or as) the entity satisfies a performance obligation. ● Cost of revenue Cost of revenue consists primarily of material costs, direct labor, depreciation, and manufacturing overhead, which are directly attributable to the manufacture of products and the rendering of services or projects. Shipping and handling costs, associated with the distribution of finished products to customers, are borne by the customers. ● Comprehensive income ASC Topic 220, “Comprehensive Income”, ● Income taxes Income taxes are determined in accordance with the provisions of ASC Topic 740, “ Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For the nine months ended September 30, 2019 and 2018, the Company did not incur any interest and penalties associated with tax positions. As of September 30, 2019, the Company did not have any significant unrecognized uncertain tax positions. The Company conducts the majority of its business in the PRC and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority. ● Product warranty Under the terms of the contracts, the Company offers its customers a free product warranty on a case-by-case basis, depending upon the type of customer, nature and size of the infrastructure projects. Under such arrangements, a portion of the project contract value, usually 5-10% of contract value is retained by the customer, and the warranty period is usual 12 months. The Company records this portion of project contract value retained by the customer as retention receivable. As of September 30, 2019 and December 31, 2018, the Company reported $25,590 and $65,529, respectively, as retention receivable net of any allowance that the management estimate it was more likely can’t be received as the expiration of the warranty period. ● Net loss per share The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” ● Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the PRC maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement”, Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective period: September 30, September 30, Period-end RMB:US$1 exchange rate 7.0729 6.8665 Nine months end average RMB:US$1 exchange rate 6.8541 6.8032 ● Retirement plan costs Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying consolidated statements of operation as the related employee service is provided. ● Related parties Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence. ● Segment reporting ASC Topic 280, “ Segment Reporting ● Fair value of financial instruments The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and convertible promissory notes): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amounts due to related parties other payables and accrued liabilities approximate their fair values because of the short-term nature of these financial instruments. Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of its obligation under its finance lease and short-term bank borrowing approximate the carrying amount. The Company also follows the guidance of the ASC Topic 820-10, “ Fair Value Measurements and Disclosures ● Level 1 ● Level 2: ● Level 3: Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. ● Recent accounting pronouncements In January 2017, the Financial Accounting Standard Board (“FASB”) issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on its consolidated financial statements. In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits when evaluating disclosure requirements. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on the Company’s financial statements and footnote disclosures. In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We will be required to use a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The standard will be adopted upon the effective date for us beginning July 1, 2020. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. We are currently evaluating the impact of this standard in our consolidated financial statements, including accounting policies, processes, and systems. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2019 | |
Accounts And Retention Receivable [Abstract] | |
ACCOUNTS RECEIVABLE | 4. ACCOUNTS RECEIVABLE The majority of the Company’s sales are on open credit terms and in accordance with terms specified in the contracts governing the relevant transactions. The Company evaluates the need of an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible. If actual collections experience changes, revisions to the allowance may be required. Based upon the aforementioned criteria, the Company reversed a bad debt expense of $154,109 and reported bad debt expenses of $23,557 for its doubtful accounts for the three months ended September 30, 2019 and 2018, respectively, and reported bad debt expenses of $4,745 and $2,169,687 for its doubtful accounts for the nine months ended September 30, 2019 and 2018, respectively. September 30, December 31, Accounts receivable, cost $ 11,365,325 $ 12,602,251 Less: allowance for doubtful accounts (11,017,242 ) (11,327,271 ) Accounts receivable, net $ 348,083 $ 1,274,980 |
RETENTION RECEIVABLE
RETENTION RECEIVABLE | 9 Months Ended |
Sep. 30, 2019 | |
Retention Receivable [Abstract] | |
RETENTION RECEIVABLE | 5. RETENTION RECEIVABLE As of September 30, 2019 and December 31, 2018, the Company reported its retention receivable as follow: September 30, December 31, Retention receivable, cost $ 926,367 $ 1,007,905 Less: allowance for doubtful accounts (900,777 ) (942,376 ) Retention receivable, net $ 25,590 $ 65,529 The Company reversed a bad debt expense of $12,190 and $15,916 for the three months and nine months ended September 30, 2019, respectively. For the three months and nine months ended September 30, 2018, the Company did not report a bad debt expense with respect to its retention receivable. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2019 | |
Inventory, Net [Abstract] | |
INVENTORIES | 6. INVENTORIES Inventories consisted of the following: September 30, December 31, Raw materials $ 619,607 $ 519,341 Work-in-process 98,684 322,132 Finished goods 813,437 96,493 $ 1,531,728 $ 937,966 For the three and nine months ended September 30, 2019 and 2018, no allowance for obsolete inventories was recorded by the Company. |
PREPAYMENTS AND OTHER RECEIVABL
PREPAYMENTS AND OTHER RECEIVABLES | 9 Months Ended |
Sep. 30, 2019 | |
Prepayments And Other Receivables [Abstract] | |
PREPAYMENTS AND OTHER RECEIVABLES | 7. PREPAYMENTS AND OTHER RECEIVABLES Prepayments and other receivables present the amount the Company advanced to suppliers for the purchase of materials or goods, prepayment to service renders, advances to employees for ordinary business purposes and prepayment for acquisitions. As of September 30, 2019, such amounts also included the initial issuance of shares of Company common stock for the purchase of Boqi Pharmacy. The table below sets forth the balances as of September 30, 2019 and December 31, 2018. September 30, December 31, Advance to suppliers $ 2,591,759 $ 2,712,936 Prepaid service expenses 43,000 - Proceeds of convertible note (1) 142,350 - Prepayment for acquisition (2) 2,040,000 - Other receivables 132,620 43,350 4,949,729 2,756,286 Less: allowance for doubtful accounts (2,489,884 ) (2,624,844 ) Property, plant and equipment, net $ 2,459,845 $ 131,442 (1) The Company issued a convertible note in the aggregate principal amount of $153,000 on September 27, 2019, the proceeds net of related issuance costs and discount was received on October 4, 2019. See Note [11] for the details related to the issuance of the convertible note. (2) On April 20, 2019, the Company issued 500,000 shares of its common stock, valued at $2,040,000, based on the $4.08 per share closing price of the Company’s common stock on the previous trading day (Friday, April 19, 2019), , to five individuals as the initial payment for the acquisition of Boqi Pharmacy. See Note [14] to the condensed financial statements for more information. Management evaluates the recoverable value of these balances periodically in accordance with the Company’s policy of credit and allowances for doubtful accounts. For the three and nine months ended September 30, 2019, the Company reversed an allowance of the doubtful accounts of $66,214 and $64,032. There was no allowance expense reserved or reversed for doubtful accounts for the three and nine months ended September 30, 2018. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | 8. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: September 30, December 31, Building $ 19,112,299 $ 19,658,330 Plant and machinery 5,656,157 5,949,422 Furniture, fixture and equipment 24,077 24,765 24,792,533 25,632,517 Less: accumulated depreciation (7,989,868 ) (7,674,381 ) Property, plant and equipment, net $ 16,802,665 $ 17,958,136 Depreciation expense for the three months ended September 30, 2019 and 2018 were $204,229 and $184,199, respectively. Depreciation expense for the nine months ended September 30, 2019 and 2018 were $671,274 and $647,584, respectively. |
LAND USE RIGHT
LAND USE RIGHT | 9 Months Ended |
Sep. 30, 2019 | |
Land Use Rights [Abstract] | |
LAND USE RIGHT | 9. LAND USE RIGHT Land use right consisted of the following: September 30, December 31, Land use right, at cost $ 2,917,464 $ 3,000,815 Less: accumulated amortization (568,906 ) (540,147 ) $ 2,348,558 $ 2,460,668 Amortization expenses for the three months ended September 30, 2019 and 2018 were $14,728 and $15,166, respectively. Amortization expenses for the nine months ended September 30, 2019 and 2018 were $45,159 and $47,578, respectively. The estimated amortization expense on the land use right in the next five years and thereafter is as follows: Year ending December 31: 2019 $ 15,053 2020 60,212 2021 60,212 2022 60,212 2023 60,212 Thereafter 2,092,657 Total: $ 2,348,558 |
SHORT-TERM BANK BORROWINGS
SHORT-TERM BANK BORROWINGS | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BANK BORROWINGS | 10. SHORT-TERM BANK BORROWINGS Short-term bank borrowings consist of the following: September 30, December 31, Equivalent to RMB 40,000,000 with a fixed interest rate at 6.09%, payable monthly, due March 18, 2019, which is guaranteed by related parties and for which buildings and land use rights were used as collateral. $ - $ 5,816,961 Equivalent to RMB 40,000,000 with a fixed interest rate at 8.5%, payable monthly, due March 18, 2020, which is guaranteed by related parties and for which buildings and land use rights were used as collateral. 5,652,561 - Total short-term bank borrowings $ 5,652,561 $ 5,816,961 For the three months ended September 30, 2019 and 2018, the Company reported interest expenses of $133,929 and $92,897, respectively. For the nine months ended September 30, 2019 and 2018, the Company reported interest expenses of $352,942 and $290,477, respectively. |
CONVERTIBLE PROMISSORY NOTES AN
CONVERTIBLE PROMISSORY NOTES AND EMBEDDED DERIVATIVE INSTRUCTIONS | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE PROMISSORY NOTES AND EMBEDDED DERIVATIVE INSTRUCTIONS | 11. CONVERTIBLE PROMISSORY NOTES AND EMBEDDED DERIVATIVE INSTRUCTIONS On September 27, 2019 the Company enter into an agreement with Power Up Lending Group Ltd (“Power Up” or the “Holder”) to sell a convertible note (the “Note”) of the Company to Power Up (the “Agreement”). The Note was issued at par value with a term of 12 month, carrying 6% annual interest and convertible into shares of the Company’s common stock. According to the Agreement, the Holder, at its option, has the right from time to time, and at any time on or prior to the later of (i) the Maturity Date and (ii) the date of payment of a default amount, each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of common stock of the Company.. The conversion price shall equal 65% of the Market Price of the common stock. The Market Price means the average of the lowest two (2) trading prices for the common stock during the fifteen (15) trading day period ending on the last complete trading day prior to the conversion date. The conversion price is subject to adjustment for stock splits, stock dividends and rights offerings by the Company. As of the date of this report, 500,795 shares of the Company’s common stock had been reserved for potential conversion under the Note. Upon evaluation, the Company determined that the Agreement contains an embedded beneficial conversion feature which met the definition of Debt with Conversion and Other Options under Accounting Standards Codification topic 470 (“ASC 470”). According to ASC 470, an embedded beneficial conversion feature present in a convertible instrument shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. An amount of $139,942 was allocated to the beneficial conversion feature (“BCF”) at issuance date of the Note and is being amortized over the life of the Note. In addition, $7,650 of issuance costs and $3,000 reimbursement to the Holder is being amortized over the life of the Note. During the three months ended September 30, 2019, $1,239 was amortized to expense. The balances of the Note was represented as following: September 30, December 31, Convertible note – principal $ 153,000 $ - Convertible note – discount (149,353 ) - $ 3,647 $ - Additionally, the Company accounted for the embedded conversion option liability in accordance with Accounting Standards Codification topic 815, Accounting for Derivative Instruments and Hedging Activities (“ASC 815”) as well as related interpretation of this standard. In accordance with this standard, derivative instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair values with gains or losses recognized in earnings. Embedded derivatives that are not clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument. The initial fair value of the embedded conversion option liability associated with the Note was valued using the Black-Scholes model. The assumptions used in the Black-Scholes option pricing model are as follows: September 30, Dividend yield 0 % Expected volatility 143.64 % Risk free interest rate 1.75 % Expected life (year) 0.99 The value of the conversion option liability underlying the convertible promissory note at September 30, 2019 was $142,074. The Company recognized a loss from the increase in the fair value of the conversion option liability in the amount of $2,132 during the three months ended September 30, 2019, representing the change in fair value. |
RELATED PARTIES AND RELATED PAR
RELATED PARTIES AND RELATED PARTIES TRANSACTIONS | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES AND RELATED PARTIES TRANSACTIONS | 12. RELATED PARTIES AND RELATED PARTIES TRANSACTIONS Accounts payable, trade-related parts As of September 30, 2019 and December 31, 2018, the Company reported trade payables of $386,879 and $416,547, respectively, due to Liaoning Bainianye New Energy Utilization Co., Ltd., (“Bainianye New Energy”), a company directly controlled by Ms. Lihua Wang (the Company’s former Chief Financial Officer) and Mr. Gang Li (the Company’s former Chief Executive Officer and one of the Company’s current directors). These trade payables arose from the Company’s prior year inventory purchases. During the three and nine months ended September 30, 2019, the Company did not enter into any inventory purchase transaction with Bainianye New Energy。 Amount Due to related parties As of September 30, 2019, the total amount due to related parties was $2,464,568, including: 1. Amount due to Mr. Gang Li (the Company’s former Chief Executive Officer and a current director) of $1,289,262, including: 1.1 a $678,647 loan from Mr. Gang Li with an annual interest rate of 8.5% that was incurred on February 1, 2019 and is due on January 31, 2020. For the three and nine months ended September 30, 2019, the Company reported interest expenses of $15,109 and $40,187, respectively. No such interest expenses were reported for the three and nine months ended September 30, 2018; 1.2 a $604,137 loan from Mr. Gang Li with an annual interest rate of 14.4% that was incurred on January 2, 2019 and is due on demand. For the three and nine months ended September 30, 2019, the Company reported interest expenses of $23,722 and $63,540, respectively. No such interest expenses were reported for the three and nine months September 30, 2018; and 1.3 $6,478 due to Mr. Gang Li that is free of interest and due on demand, which was advanced for our daily operating expenditures during 2018 and 2019. 2. As of December 31, 2018, $606,191 was due to Ms. Li Hua Wang (the Company’s former Chief Financial Officer), which is free from interest and due on demand. The Company has repaid $382,908 during the nine months ended September 30, 2019. As of September 30, 2019, the balance due was $223,283. 3. Amount due to Mr. Haibo Gong (Import & Export Company’s executive director) of $1,130 that is free of interest and due on demand. These funds were advanced in several transactions for our daily operating expenditures during 2018. 4. As of December 31, 2018, $158,512 was due to Mr. Haibo Gong, bearing interest of 18% and due on demand. This loan was repaid in full as of September 4, 2019. For the three and nine months ended September 30, 2019, the Company reported interest expenses of $5 and $6,944, respectively. 5. Amount due to Mr. Yongquan Bi, the former Chief Executive Officer (“CEO”) and Chairman of the Company, of $848,302 which is free of interest and due on demand. This amount consists of payments made by Mr. Yongquan Bi on behalf of the Company for our US operating expenditures during 2019. 6. $4,681 due to Mr. Yongjian Zhang, one of the Company’s directors, which is free of interest and due on demand, that was advanced in several transactions for our daily operating expenditures during 2018. 7. As of December 31, 2018, $149,421 was due to Liaoning Bainianye New Energy, which is free from interest and due on demand. These funds were advanced by Bainianye New Energy on behalf of the Company for our US operating expenditures during 2018. During the nine months ended September 30, 2019, the Company repaid $51,511 to Liaoning Bainianye New Energy and $97,910 remained due as of September 30, 2019. As of December 31, 2018, the total amount due to related parties was $918,033, including: 1. Amount due to Ms. Li Hua Wang (the Company’s former Chief Financial Officer) of $606,191, which is free from interest and due on demand. Of such amount, $382,908 was repaid during the nine months ended September 30, 2019. 2. Amount due to Mr. Haibo Gong (Import & Export Company’s executive director) of $162,421, including: 2.1 a $158,512 loan from Mr. Haibo Gong with annual interest rate of 18% and due on demand, was repaid in full as of September 4, 2019; and 2.2 $3,909 due to Mr. Haibo Gong that is free from interest and due on demand that was advanced in several transactions for our daily operating expenditures during 2018. 3. Amount due to Liaoning Bainianye New Energy of $149,421 , Loan to related party During the first quarter of 2019, Nengfa Weiye Tieling Valve Joint Stock Co., Ltd. (“Tieling Joint Stock”), which owns 43% of the equity interests of our 57%-owned subsidiary, Nengfa Tiefa Import & Export, borrowed $1,161,458 from the Company (the “Tieling Loan”) with the understanding that the loan would be repaid within one (1) year. Tieling Joint Stock repaid $540,294 of the Tieling Loan during the third quarter of 2019. As of September 30, 2019, $601,951 remained outstanding. The loan is free from interest and due on demand. |
OTHER PAYABLES AND ACCRUED LIAB
OTHER PAYABLES AND ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
OTHER PAYABLES AND ACCRUED LIABILITIES | 13. OTHER PAYABLES AND ACCRUED LIABILITIES Other payables and accrued liabilities consisted of the following: September 30, December 31, Customer deposits from overseas customers in Singapore $ 572,693 $ 356,799 Accrued operating expenses 416,016 705,479 Payables in dispute 1,130,886 879,780 Other payables 229,568 103,008 $ 2,349,163 $ 2,045,066 As of September 30, 2019 and December 31, 2018, the Company reported $1,130,886 and $879,780 as payables in dispute, which included: On August 1, 2018, one of NF Energy’s suppliers filed a lawsuit against NF Energy in the PRC for an outstanding payable of approximately RMB 6 million, or approximately $856,000. As of the date of this report, the parties have not reached any agreement or settlement. On January 10, 2019, one of NF Energy’s suppliers filed a lawsuit against NF Energy in the PRC for an outstanding payable of approximately RMB 700,000. The law suit was settled on April 8, 2019 and NF Energy was obligated to pay the supplier approximately RMB 710,000, or approximately $93,000. To date, the Company has paid RMB 50,000, or approximately $7,143, in connection with the settlement. On April 22, 2019, one of NF Energy’s suppliers filed a lawsuit against NF Energy in the PRC for an outstanding payable of RMB 1,278,181.8. On May 4, 2019, the parties entered into a court-supervised settlement where NF Energy agreed to pay the supplier approximately RMB 1.26 million, or approximately $182,000 in total. To date, the Company has not made any payment in connection with the settlement. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | 14. STOCKHOLDERS’ EQUITY The Company is authorized to issue 50,000,000 shares of common stock, $0.001 par value. As of September 30, 2019 and December 31, 2018, it had 8,073,289 shares and 7,573,289 shares of common stock outstanding, respectively. On March 12, 2018, the Company issued 500,000 shares of its common stock, at the price of $1.00 per share for aggregate consideration of $500,000, to Mr. Yongquan Bi, our Chairman and Chief Executive Officer. On April 11, 2019, the Company entered into a stock purchase agreement (the “Agreement”) with Lasting Wisdom Holdings Limited, a company organized under the laws of the British Virgin Islands, Pukung Limited, a company organized under the laws of Hong Kong, Beijing Xin Rong Xin Industrial Development Co., Ltd., a company organized under the laws of the PRC, Boqi Pharmacy and several additional individual sellers listed in the Agreement whereby the Company agreed to purchase 100% of the equity interests of Lasting Wisdom Holdings Limited (the “Shares”). In accordance with the Agreement, the total purchase price for the Shares is RMB 40 million plus 1.5 million shares of the Company’s common stock (the “Purchase Price”), which is based on an initial appraisal of the fair market value of the acquired company of RMB 100 million. The Purchase Price is subject to post-closing adjustments (contingent on a final appraisal of the fair market value of the acquired company). On April 20, 2019, the Company issued 500,000 shares of its common stock, to the five shareholders of Lasting Wisdom Holdings Limited as an initial payment and an additional 1,000,000 shares of common stock were issued to the shareholders of Lasting Wisdom Holdings Limited on October 2, 2019. The cash portion of the consideration has not been paid as yet. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | 15. NET LOSS PER SHARE Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. The dilutive effect of potential common shares outstanding is included in diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2019 and 2018: For the three months ended For the nine months ended 2019 2018 2019 2018 Net loss attributable to common shareholders $ (544,469 ) $ (310,115 ) $ (1,974,159 ) $ (2,459,321 ) Weighted average common shares outstanding – Basic and diluted 8,073,289 7,573,289 7,871,824 7,445,084 Net loss per share – Basic and diluted (0.07 ) $ (0.04 ) $ (0.25 ) $ (0.33 ) |
STATUTORY RESERVES
STATUTORY RESERVES | 9 Months Ended |
Sep. 30, 2019 | |
Statutory Reserves [Abstract] | |
STATUTORY RESERVES | 16. STATUTORY RESERVES Under the PRC Law, the Company’s subsidiaries are required to make appropriations to their statutory reserves based on after-tax net earnings and determined in accordance with generally accepted accounting principles of the People’s Republic of China (the “PRC GAAP”). Appropriation to the statutory reserve should be at least 10% of the after-tax net income until the reserve is equal to 50% of the registered capital. The statutory reserve is established for the purpose of providing employee facilities and other collective benefits to the employees and is non-distributable other than in liquidation. |
CONCENTRATIONS OF RISK
CONCENTRATIONS OF RISK | 9 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF RISK | 17. CONCENTRATIONS OF RISK The Company is exposed to the following concentrations of risk: (a) Major customers For the three months ended September 30, 2019, no customer accounted for more than 10% of the Company’s revenues. For the nine months ended September 30, 2019, the customers who accounted for than 10% of the Company’s revenues and its outstanding accounts receivable as of the balance sheet date are presented as follow: For the nine months ended As of Customers Revenues Percentage of revenues Accounts receivable Customer A $ 126,406 11 % $ - Customer B 331,394 30 % - $ 457,800 41 % $ - For the three and nine months ended September 30, 2018, the customers that accounted for 10% or more of the Company’s revenues and its outstanding accounts receivable balances as at balance sheet date, are presented as follows: For the three months ended As of Customers Revenues Percentage of revenues Accounts receivable Customer C $ 913,530 83 % $ 8,482,625 For the nine months ended As of Customers Revenues Percentage of revenues Accounts receivable Customer D $ 1,027,561 57 % $ 8,482,625 For the nine months ended September 30, 2019, revenues contributed from customers located outside of the PRC accounted for $467,179 or approximately 52% of revenues. For the nine months ended September 30, 2018, all of the Company’s customers were located in the PRC. (b) Major vendors For the three and nine months ended September 30, 2019, the vendors who accounted for 10% or more of the Company’s purchases and its outstanding balances as at balance sheet dates, are presented as follows: For the three months ended As of Venders Purchases Percentage of total purchases Accounts payable Vender A $ 175,587 26 % $ 472,894 Vender B 80,369 12 % - $ 255,956 38 % $ 472,894 For the nine months ended As of Venders Purchases Percentage of total purchases Accounts payable Vender A $ 175,587 23 % $ 472,894 Vender B 80,369 10 % - $ 255,956 33 % $ 472,894 For the three and nine months ended September 30, 2018, no vendor accounted for 10% of the Company’s purchases. (c) Credit risk Financial instruments that are potentially subject to credit risk consist principally of trade receivables. Since the late 2018, the Company had enhanced its credit evaluation process to monitor credit risk in its trade receivables. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. The significant drop of write-offs from 2018 to 2019 indicates the result of the enhanced credit evaluation process. (d) Interest rate risk As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates. The Company manages interest rate risk by varying the issuance and maturity dates of fixed rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As of September 30, 2019 and December 31, 2018, short-term bank borrowings and convertible promissory notes were at fixed rates. (e) Exchange rate risk The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in RMB and a significant portion of the assets and liabilities are denominated in RMB. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and RMB. If RMB depreciates against US$, the value of RMB revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk. (f) Economic and political risks The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | 18. SUBSEQUENT EVENT On October 14, 2019, we entered into an $83,000 convertible note with Power Up. The note was issued at a discounted value of $80,000 with a term of 12 month, carrying 6% annual interest and convertible into shares of the Company’s common stock. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | ● Basis of presentation and consolidation These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and reflected the activities of NFEC and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. The unaudited interim condensed consolidated financial information as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K/A for the fiscal year ended December 31, 2018 previously filed with the SEC on September 6, 2019. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of September 30, 2019 and its unaudited condensed consolidated results of operations for the three and nine months ended September 30, 2019 and 2018, and its unaudited condensed consolidated cash flows for the nine months ended September 30, 2019 and 2018, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future periods. |
Use of estimates | ● Use of estimates In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates. |
Reclassification | ● Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. |
Cash and cash equivalents | ● Cash and cash equivalents Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments. |
Restricted cash | ● Restricted cash Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in a restricted cash account on the Company’s unaudited interim condensed consolidated balance sheet. The Company’s restricted cash balance is related to a contract performance guarantee bond. The balance of restricted cash was $180,525 and $179,496 as of September 30, 2019 and December 2018, respectively. |
Accounts receivable and allowance for doubtful accounts | ● Accounts receivable and allowance for doubtful accounts Accounts receivable are recorded at the invoiced amount, do not bear interest and are due within contractual payment terms, generally 30 to 90 days from shipment. Credit is granted based on evaluation of a customer’s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days are reviewed individually for collectability. At the end of each period, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For those receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of September 30, 2019 and December 31, 2018, the allowance for doubtful accounts was $11,017,242 and $11,327,271, respectively. |
Retention receivable and allowance for doubtful accounts | ● Retention receivable and allowance for doubtful accounts Retention receivable is the amount of receivables withheld by a customer based upon 5-10% of the contract value, until a product warranty expires. The warranty period is usually 12 months. As of September 30, 2019 and December 31, 2018, the allowance for doubtful accounts was $900,777 and $942,376, respectively. |
Inventories | ● Inventories Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a weighted average method. Costs include material, labor and manufacturing overhead costs. The Company reviews historical sales activity quarterly to determine excess, slow moving items and potentially obsolete items and also evaluates the impact of any anticipated changes in future demand. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand. As of September 30, 2019 and December 31, 2018, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs. |
Property, plant and equipment | ● Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: Expected useful lives Residual value Building 10 – 30 years 5% Plant and machinery 5 – 14 years 4 ~ 5% Furniture, fixture and equipment 5 years 4 ~ 13% Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. |
Land use right | ● Land use right All lands in the PRC are owned by the PRC government. Under applicable law, the PRC government may sell the right to use the land for a specified period of time. Thus, the Company’s land purchases in the PRC are considered to be leaseholds and are stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreement on a straight-line basis, which is 50 years and will expire in 2059. |
Impairment of long-lived assets | ● Impairment of long-lived assets In accordance with the provisions of ASC Topic 360, “ Impairment or Disposal of Long-Lived Assets |
Revenue recognition | ● Revenue recognition Under ASC 606, Revenue from Contracts with Customers, revenue is recognized when control of the promised goods and services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods and services, net of value-added tax. The Company determines revenue recognition through the following steps: ■ Identify the contract with a customer; ■ Identify the performance obligations in the contract; ■ Determine the transaction price; ■ Allocate the transaction price to the performance obligations in the contract; and ■ Recognize revenue when (or as) the entity satisfies a performance obligation. |
Cost of revenue | ● Cost of revenue Cost of revenue consists primarily of material costs, direct labor, depreciation, and manufacturing overhead, which are directly attributable to the manufacture of products and the rendering of services or projects. Shipping and handling costs, associated with the distribution of finished products to customers, are borne by the customers. |
Comprehensive income | ● Comprehensive income ASC Topic 220, “Comprehensive Income”, |
Income taxes | ● Income taxes Income taxes are determined in accordance with the provisions of ASC Topic 740, “ Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For the nine months ended September 30, 2019 and 2018, the Company did not incur any interest and penalties associated with tax positions. As of September 30, 2019, the Company did not have any significant unrecognized uncertain tax positions. The Company conducts the majority of its business in the PRC and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority. |
Product warranty | ● Product warranty Under the terms of the contracts, the Company offers its customers a free product warranty on a case-by-case basis, depending upon the type of customer, nature and size of the infrastructure projects. Under such arrangements, a portion of the project contract value, usually 5-10% of contract value is retained by the customer, and the warranty period is usual 12 months. The Company records this portion of project contract value retained by the customer as retention receivable. As of September 30, 2019 and December 31, 2018, the Company reported $25,590 and $65,529, respectively, as retention receivable net of any allowance that the management estimate it was more likely can’t be received as the expiration of the warranty period. |
Net loss per share | ● Net loss per share The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” |
Foreign currencies translation | ● Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the PRC maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement”, Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective period: September 30, September 30, Period-end RMB:US$1 exchange rate 7.0729 6.8665 Nine months end average RMB:US$1 exchange rate 6.8541 6.8032 |
Retirement plan costs | ● Retirement plan costs Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying consolidated statements of operation as the related employee service is provided. |
Related parties | ● Related parties Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence. |
Segment reporting | ● Segment reporting ASC Topic 280, “ Segment Reporting |
Fair value of financial instruments | ● Fair value of financial instruments The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and convertible promissory notes): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amounts due to related parties other payables and accrued liabilities approximate their fair values because of the short-term nature of these financial instruments. Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of its obligation under its finance lease and short-term bank borrowing approximate the carrying amount. The Company also follows the guidance of the ASC Topic 820-10, “ Fair Value Measurements and Disclosures ● Level 1 ● Level 2: ● Level 3: Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Recent accounting pronouncements | ● Recent accounting pronouncements In January 2017, the Financial Accounting Standard Board (“FASB”) issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on its consolidated financial statements. In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits when evaluating disclosure requirements. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on the Company’s financial statements and footnote disclosures. In June 2016, the FASB issued a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We will be required to use a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The standard will be adopted upon the effective date for us beginning July 1, 2020. Adoption of the standard will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. We are currently evaluating the impact of this standard in our consolidated financial statements, including accounting policies, processes, and systems. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
ORGANIZATION AND BUSINESS BAC_2
ORGANIZATION AND BUSINESS BACKGROUND (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of description of subsidiaries | Description of subsidiaries Name Place of incorporation and Principal activities and place of operation Effective interest NF Energy Saving Investment Limited British Virgin Island, a limited liability company Investment holding 100 % NF Energy Equipment Limited Hong Kong, a limited liability company Investment holding 100 % Liaoning Nengfa Weiye Energy Technology Co., Ltd. (“Nengfa Energy”) The PRC, a limited liability company Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC 100 % Liaoning Nengfa Tiefa Import & Export Co., Ltd. (“Nengfa Tiefa Import & Export”) The PRC, a limited liability company Development and production of hi-tech and automatic-intelligence valve products 57 % |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of expected useful lives | Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: Expected useful lives Residual value Building 10 – 30 years 5% Plant and machinery 5 – 14 years 4 ~ 5% Furniture, fixture and equipment 5 years 4 ~ 13% |
Schedule of exchange rates | Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective period: September 30, September 30, Period-end RMB:US$1 exchange rate 7.0729 6.8665 Nine months end average RMB:US$1 exchange rate 6.8541 6.8032 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounts And Retention Receivable [Abstract] | |
Schedule of accounts receivable | Based upon the aforementioned criteria, the Company reversed a bad debt expense of $154,109 and reported bad debt expenses of $23,557 for its doubtful accounts for the three months ended September 30, 2019 and 2018, respectively, and reported bad debt expenses of $4,745 and $2,169,687 for its doubtful accounts for the nine months ended September 30, 2019 and 2018, respectively. September 30, December 31, Accounts receivable, cost $ 11,365,325 $ 12,602,251 Less: allowance for doubtful accounts (11,017,242 ) (11,327,271 ) Accounts receivable, net $ 348,083 $ 1,274,980 |
RETENTION RECEIVABLE (Tables)
RETENTION RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Retention Receivable [Abstract] | |
Schedule of retention receivable | As of September 30, 2019 and December 31, 2018, the Company reported its retention receivable as follow: September 30, December 31, Retention receivable, cost $ 926,367 $ 1,007,905 Less: allowance for doubtful accounts (900,777 ) (942,376 ) Retention receivable, net $ 25,590 $ 65,529 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory, Net [Abstract] | |
Schedule of inventories | Inventories consisted of the following: September 30, December 31, Raw materials $ 619,607 $ 519,341 Work-in-process 98,684 322,132 Finished goods 813,437 96,493 $ 1,531,728 $ 937,966 |
PREPAYMENTS AND OTHER RECEIVA_2
PREPAYMENTS AND OTHER RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Prepayments And Other Receivables [Abstract] | |
Schedule of prepayments and other receivables | The table below sets forth the balances as of September 30, 2019 and December 31, 2018. September 30, December 31, Advance to suppliers $ 2,591,759 $ 2,712,936 Prepaid service expenses 43,000 - Proceeds of convertible note (1) 142,350 - Prepayment for acquisition (2) 2,040,000 - Other receivables 132,620 43,350 4,949,729 2,756,286 Less: allowance for doubtful accounts (2,489,884 ) (2,624,844 ) Property, plant and equipment, net $ 2,459,845 $ 131,442 (1) The Company issued a convertible note in the aggregate principal amount of $153,000 on September 27, 2019, the proceeds net of related issuance costs and discount was received on October 4, 2019. See Note [11] for the details related to the issuance of the convertible note. (2) On April 20, 2019, the Company issued 500,000 shares of its common stock, valued at $2,040,000, based on the $4.08 per share closing price of the Company’s common stock on the previous trading day (Friday, April 19, 2019), , to five individuals as the initial payment for the acquisition of Boqi Pharmacy. See Note [14] to the condensed financial statements for more information. |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Property, plant and equipment consisted of the following: September 30, December 31, Building $ 19,112,299 $ 19,658,330 Plant and machinery 5,656,157 5,949,422 Furniture, fixture and equipment 24,077 24,765 24,792,533 25,632,517 Less: accumulated depreciation (7,989,868 ) (7,674,381 ) Property, plant and equipment, net $ 16,802,665 $ 17,958,136 |
LAND USE RIGHT (Tables)
LAND USE RIGHT (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Land Use Rights [Abstract] | |
Schedule of land use right | Land use right consisted of the following: September 30, December 31, Land use right, at cost $ 2,917,464 $ 3,000,815 Less: accumulated amortization (568,906 ) (540,147 ) $ 2,348,558 $ 2,460,668 |
Schedule of estimated amortization expense on land use right | The estimated amortization expense on the land use right in the next five years and thereafter is as follows: Year ending December 31: 2019 $ 15,053 2020 60,212 2021 60,212 2022 60,212 2023 60,212 Thereafter 2,092,657 Total: $ 2,348,558 |
SHORT-TERM BANK BORROWINGS (Tab
SHORT-TERM BANK BORROWINGS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of short-term bank borrowings | Short-term bank borrowings consist of the following: September 30, December 31, Equivalent to RMB 40,000,000 with a fixed interest rate at 6.09%, payable monthly, due March 18, 2019, which is guaranteed by related parties and for which buildings and land use rights were used as collateral. $ - $ 5,816,961 Equivalent to RMB 40,000,000 with a fixed interest rate at 8.5%, payable monthly, due March 18, 2020, which is guaranteed by related parties and for which buildings and land use rights were used as collateral. 5,652,561 - Total short-term bank borrowings $ 5,652,561 $ 5,816,961 |
CONVERTIBLE PROMISSORY NOTES _2
CONVERTIBLE PROMISSORY NOTES AND EMBEDDED DERIVATIVE INSTRUCTIONS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payble | During the three months ended September 30, 2019, $1,239 was amortized to expense. The balances of the Note was represented as following: September 30, December 31, Convertible note – principal $ 153,000 $ - Convertible note – discount (149,353 ) - $ 3,647 $ - |
Schedule of assumptions used in the Black-Scholes option pricing model | The assumptions used in the Black-Scholes option pricing model are as follows: September 30, Dividend yield 0 % Expected volatility 143.64 % Risk free interest rate 1.75 % Expected life (year) 0.99 |
OTHER PAYABLES AND ACCRUED LI_2
OTHER PAYABLES AND ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of other payables and accrued liabilities | Other payables and accrued liabilities consisted of the following: September 30, December 31, Customer deposits from overseas customers in Singapore $ 572,693 $ 356,799 Accrued operating expenses 416,016 705,479 Payables in dispute 1,130,886 879,780 Other payables 229,568 103,008 $ 2,349,163 $ 2,045,066 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2019 and 2018: For the three months ended For the nine months ended 2019 2018 2019 2018 Net loss attributable to common shareholders $ (544,469 ) $ (310,115 ) $ (1,974,159 ) $ (2,459,321 ) Weighted average common shares outstanding – Basic and diluted 8,073,289 7,573,289 7,871,824 7,445,084 Net loss per share – Basic and diluted (0.07 ) $ (0.04 ) $ (0.25 ) $ (0.33 ) |
CONCENTRATIONS OF RISK (Tables)
CONCENTRATIONS OF RISK (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedule of revenues and outstanding accounts receivable | For the nine months ended September 30, 2019, the customers who accounted for than 10% of the Company’s revenues and its outstanding accounts receivable as of the balance sheet date are presented as follow: For the nine months ended As of Customers Revenues Percentage of revenues Accounts receivable Customer A $ 126,406 11 % $ - Customer B 331,394 30 % - $ 457,800 41 % $ - For the three months ended As of Customers Revenues Percentage of revenues Accounts receivable Customer C $ 913,530 83 % $ 8,482,625 For the nine months ended As of Customers Revenues Percentage of revenues Accounts receivable Customer D $ 1,027,561 57 % $ 8,482,625 For the three months ended As of Venders Purchases Percentage of total purchases Accounts payable Vender A $ 175,587 26 % $ 472,894 Vender B 80,369 12 % - $ 255,956 38 % $ 472,894 For the nine months ended As of Venders Purchases Percentage of total purchases Accounts payable Vender A $ 175,587 23 % $ 472,894 Vender B 80,369 10 % - $ 255,956 33 % $ 472,894 |
ORGANIZATION AND BUSINESS BAC_3
ORGANIZATION AND BUSINESS BACKGROUND (Details) | 9 Months Ended |
Sep. 30, 2019 | |
NF Energy Saving Investment Limited [Member] | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Place of incorporation and kind of legal entity | British Virgin Island, a limited liability company |
Principal activities and place of operation | Investment holding |
Effective interest held | 100.00% |
NF Energy Equipment Limited [Member] | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Place of incorporation and kind of legal entity | Hong Kong, a limited liability company |
Principal activities and place of operation | Investment holding |
Effective interest held | 100.00% |
Liaoning Nengfa Weiye Energy Technology Co Ltd [Member] | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Place of incorporation and kind of legal entity | The PRC, a limited liability company |
Principal activities and place of operation | Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC |
Effective interest held | 100.00% |
Liaoning Nengfa Tiefa Import Export Co ltd [Member] | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
Place of incorporation and kind of legal entity | The PRC, a limited liability company |
Principal activities and place of operation | Development and production of hi-tech and automatic-intelligence valve products |
Effective interest held | 57.00% |
ORGANIZATION AND BUSINESS BAC_4
ORGANIZATION AND BUSINESS BACKGROUND (Details Narrative) | Oct. 02, 2019 |
Organization and Business Background (Textual) | |
Ownership, description | The Company acquired Boqi Zhengji Pharmacy Chain Co., Ltd. (“Boqi Pharmacy”), a China-based pharmacy chain company with more than 300 stores, including both directly operated stores and franchisees. |
GOING CONCERN UNCERTAINTIES (De
GOING CONCERN UNCERTAINTIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Going Concern Uncertainties | ||||
Net loss | $ (544,469) | $ (310,115) | $ (1,974,159) | $ (2,459,321) |
Accumulated deficit | 8,417,261 | 8,417,261 | ||
Negative working capital | $ 9,344,148 | $ 9,344,148 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Building [Member] | |
Residual value | 5.00% |
Building [Member] | Maximum [Member] | |
Expected useful lives | 30 years |
Building [Member] | Minimum [Member] | |
Expected useful lives | 10 years |
Plant and Machinery [Member] | Maximum [Member] | |
Expected useful lives | 14 years |
Residual value | 5.00% |
Plant and Machinery [Member] | Minimum [Member] | |
Expected useful lives | 5 years |
Residual value | 4.00% |
Furniture Fixtures and Equipment [Member] | |
Expected useful lives | 5 years |
Furniture Fixtures and Equipment [Member] | Maximum [Member] | |
Residual value | 13.00% |
Furniture Fixtures and Equipment [Member] | Minimum [Member] | |
Residual value | 4.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | Sep. 30, 2019 | Sep. 30, 2018 |
Accounting Policies [Abstract] | ||
Period-end RMB:US$1 exchange rate | 7.0729 | 6.8665 |
Three month end average RMB:US$1 exchange rate | 6.8541 | 6.8032 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies (Textual) | |||
Minimum likelihood of tax benefits being realized upon settlement | 50.00% | ||
Warrant Period | 12 months | ||
Allowance for doubtful accounts | $ 11,017,242 | $ 11,327,271 | |
Restricted cash balance | 180,525 | 179,496 | |
Product warrantya retention receivable | 25,590 | 65,529 | |
Allowance for doubtful accounts retentions receivable | 900,777 | $ 942,376 | |
Impairment loss | $ (43,712) | $ (730) | |
Minimum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Retention receivable percentage | 5.00% | ||
Maximum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Retention receivable percentage | 10.00% | ||
Use Rights [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Finite lived intangible assets, useful Life | 50 years | ||
Finite lived intangible assets amortization period | 2059 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts And Retention Receivable [Abstract] | ||
Accounts receivable, cost | $ 11,365,325 | $ 12,602,251 |
Less: allowance for doubtful accounts | (11,017,242) | (11,327,271) |
Accounts receivable, net | $ 348,083 | $ 1,274,980 |
ACCOUNTS RECEIVABLE (Details Na
ACCOUNTS RECEIVABLE (Details Narrativel) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounts Receivable (Textual) | ||||
Provision for doubtful accounts | $ 154,109 | $ 23,557 | $ (75,203) | $ 1,462,898 |
RETENTION RECEIVABLE (Details)
RETENTION RECEIVABLE (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Retention Receivable [Abstract] | ||
Retention receivable, cost | $ 926,367 | $ 1,007,905 |
Less: allowance for doubtful accounts | (900,777) | (942,376) |
Retention receivable, net | $ 25,590 | $ 65,529 |
RETENTION RECEIVABLE (Details N
RETENTION RECEIVABLE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Retention Receivable [Abstract] | ||
Reversed a bad debt expense | $ 12,190 | $ 15,916 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 619,607 | $ 519,341 |
Work-in-process | 98,684 | 322,132 |
Finished goods | 813,437 | 96,493 |
Total inventory | $ 1,531,728 | $ 937,966 |
PREPAYMENTS AND OTHER RECEIVA_3
PREPAYMENTS AND OTHER RECEIVABLES (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | ||
Prepayments And Other Receivables Details [Abstract] | |||
Advance to suppliers | $ 2,591,759 | $ 2,712,936 | |
Prepaid service expenses | 43,000 | ||
Proceeds of convertible note | [1] | 142,350 | |
Prepayment for acquisition | [2] | 2,040,000 | |
Other receivables | 132,620 | 43,350 | |
Prepayments and other receivables gross | 4,949,729 | 2,756,286 | |
Less: allowance for doubtful accounts | (2,489,884) | (2,624,844) | |
Property, plant and equipment, net | $ 2,459,845 | $ 131,442 | |
[1] | The Company issued a convertible note in the aggregate principal amount of $153,000 on September 27, 2019, the proceeds net of related issuance costs and discount was received on October 4, 2019. See Note [11] for the details related to the issuance of the convertible note. | ||
[2] | On April 20, 2019, the Company issued 500,000 shares of its common stock, valued at $2,040,000, based on the $4.08 per share closing price of the Company's common stock on the previous trading day (Friday, April 19, 2019),to five individuals as the initial payment for the acquisition of Boqi Pharmacy. See Note [14] to the condensed financial statements for more information. |
PREPAYMENTS AND OTHER RECEIVA_4
PREPAYMENTS AND OTHER RECEIVABLES (Detail Narrative) - USD ($) | Apr. 20, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 27, 2019 | Dec. 31, 2018 |
Prepayments and other receivables (Textual) | |||||||
Shares of common stock | 500,000 | ||||||
Shares issued value of common stock | $ 2,040,000 | ||||||
Share price (in dollars per share) | $ 4.08 | $ 4.08 | |||||
Allowance of the doubtful accounts | $ 66,214 | $ 0 | $ 64,032 | $ 0 | |||
Convertible Notes Payable [Member] | |||||||
Prepayments and other receivables (Textual) | |||||||
Convertible note - principal | $ 153,000 | $ 153,000 | $ 153,000 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Building | $ 19,112,299 | $ 19,658,330 |
Plant and machinery | 5,656,157 | 5,949,422 |
Furniture, fixture and equipment | 24,077 | 24,765 |
Property, plant and equipment, gross | 24,792,533 | 25,632,517 |
Less: accumulated depreciation | (7,989,868) | (7,674,381) |
Property, plant and equipment, net | $ 16,802,665 | $ 17,958,136 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment (Textual) | ||||
Depreciation expense | $ 204,229 | $ 184,199 | $ 671,274 | $ 647,584 |
LAND USE RIGHT (Details)
LAND USE RIGHT (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Land Use Rights [Abstract] | ||
Land use right, at cost | $ 2,917,464 | $ 3,000,815 |
Less: accumulated amortization | (568,906) | (540,147) |
Land use right, net | $ 2,348,558 | $ 2,460,668 |
LAND USE RIGHT (Details 1)
LAND USE RIGHT (Details 1) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Land Use Right [Abstract] | ||
2019 | $ 15,053 | |
2020 | 60,212 | |
2021 | 60,212 | |
2022 | 60,212 | |
2023 | 60,212 | |
Thereafter | 2,092,657 | |
Total: | $ 2,348,558 | $ 2,460,668 |
LAND USE RIGHT (Details Narrati
LAND USE RIGHT (Details Narrativel) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Land use right (Textual) | ||||
Amortization expense | $ 14,728 | $ 15,166 | $ 45,159 | $ 47,578 |
SHORT-TERM BANK BORROWINGS (Det
SHORT-TERM BANK BORROWINGS (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Short-term Debt [Line Items] | ||
Total short-term bank borrowings | $ 5,652,561 | $ 5,816,961 |
Short Term Loan One [Member] | Guarantee Type Related party [Member] | ||
Short-term Debt [Line Items] | ||
Total short-term bank borrowings | 5,816,961 | |
Short Term Loan One [Member] | Guarantee Type Related party One [Member] | ||
Short-term Debt [Line Items] | ||
Total short-term bank borrowings | $ 5,652,561 |
SHORT-TERM BANK BORROWINGS (D_2
SHORT-TERM BANK BORROWINGS (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018CNY (¥) | Sep. 30, 2019CNY (¥) | |
Short-Term Bank Borrowings (Textual) | ||||||
Interest expenses | $ | $ 133,929 | $ 92,897 | $ 352,942 | $ 290,477 | ||
Short Term Loan One [Member] | Guarantee Type Related party One [Member] | ||||||
Short-Term Bank Borrowings (Textual) | ||||||
Short-term bank borrowings | ¥ 40,000,000 | |||||
Effective interest rate, per annum | 8.50% | |||||
Debt instrument, maturity date | Mar. 18, 2020 | |||||
Short Term Loan One [Member] | Guarantee Type Related party [Member] | ||||||
Short-Term Bank Borrowings (Textual) | ||||||
Short-term bank borrowings | ¥ 40,000,000 | |||||
Effective interest rate, per annum | 6.09% | |||||
Debt instrument, maturity date | Mar. 18, 2019 |
CONVERTIBLE PROMISSORY NOTES _3
CONVERTIBLE PROMISSORY NOTES AND EMBEDDED DERIVATIVE INSTRUCTIONS (Details) - USD ($) | Sep. 30, 2019 | Sep. 27, 2019 | Dec. 31, 2018 |
Convertible promissory note, net | $ 3,647 | ||
Convertible Notes Payable [Member] | |||
Convertible note - principal | 153,000 | $ 153,000 | |
Convertible note - discount | (149,353) | ||
Convertible promissory note, net | $ 3,647 |
CONVERTIBLE PROMISSORY NOTES _4
CONVERTIBLE PROMISSORY NOTES AND EMBEDDED DERIVATIVE INSTRUCTIONS (Details 1) | 9 Months Ended |
Sep. 30, 2019 | |
Dividend Yield [Member] | |
Fair value | 0 |
Expected Volatility [Member] | |
Fair value | 143.64 |
Risk Free Interest Rate [Member] | |
Fair value | 1.75 |
Expected life [Member] | |
Term | 11 months 26 days |
CONVERTIBLE PROMISSORY NOTES _5
CONVERTIBLE PROMISSORY NOTES AND EMBEDDED DERIVATIVE INSTRUCTIONS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Sep. 27, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Derivative liability | $ 142,074 | |||
Change in fair value of derivative liability | 2,132 | |||
Convertible Notes Payable [Member] | ||||
Beneficial conversion feature | 139,942 | |||
Issuance cost | 7,650 | |||
Reimbursement expenses | 3,000 | |||
Derivative liability | 142,074 | |||
Change in fair value of derivative liability | $ 2,132 | |||
Power Up Lending Group Ltd [Member] | Convertible Notes Payable [Member] | ||||
Number of shares converted (in shares) | 500,795 | |||
Description of conversion | The conversion price shall equal 65% of the Market Price of the common stock. | |||
Description of market price | The Market Price means the average of the lowest two (2) trading prices for the common stock during the fifteen (15) trading day period ending on the last complete trading day prior to the conversion date. The conversion price is subject to adjustment for stock splits, stock dividends and rights offerings by the Company | |||
Interest rate | 6.00% | |||
Maturity term | 12 month |
RELATED PARTIES AND RELATED P_2
RELATED PARTIES AND RELATED PARTIES TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Related Parties And Related Parties Transactions (Textual) | ||||
Amounts due to related parties | $ 386,879 | $ 386,879 | $ 416,547 | |
Due to related party | 2,464,568 | 2,464,568 | 918,033 | |
Amount due from related parties | 601,951 | 601,951 | ||
Equity interests | 57.00% | |||
Trade payables | 386,879 | 386,879 | 416,547 | |
Mr. Haibo Gong [Member] | ||||
Related Parties And Related Parties Transactions (Textual) | ||||
Due to related party | 1,130 | 1,130 | $ 162,421 | |
Description for due to related party | 2.1 a $158,512 loan from Mr. Haibo Gong with annual interest rate of 18% and due on demand, was repaid in full as of September 4, 2019; and 2.2 $3,909 due to Mr. Haibo Gong that is free from interest and due on demand that was advanced in several transactions for our daily operating expenditures during 2018. | |||
Mr. Gang Li [Member] | ||||
Related Parties And Related Parties Transactions (Textual) | ||||
Due to related party | 1,289,262 | $ 1,289,262 | ||
Description for due to related party | 1.1 a $678,647 loan from Mr. Gang Li with an annual interest rate of 8.5% that was incurred on February 1, 2019 and is due on January 31, 2020. For the three and nine months ended September 30, 2019, the Company reported interest expenses of $15,109 and $40,187, respectively. No such interest expenses were reported for the three and nine months ended September 30, 2018; 1.2 a $604,137 loan from Mr. Gang Li with an annual interest rate of 14.4% that was incurred on January 2, 2019 and is due on demand. For the three and nine months ended September 30, 2019, the Company reported interest expenses of $23,722 and $63,540, respectively. No such interest expenses were reported for the three and nine months September 30, 2018; and 1.3 $6,478 due to Mr. Gang Li that is free of interest and due on demand, which was advanced for our daily operating expenditures during 2018 and 2019. | |||
Liaoning Bainianye New Energy [Member] | ||||
Related Parties And Related Parties Transactions (Textual) | ||||
Due to related party | $ 149,421 | |||
Description for due to related party | As of December 31, 2018, $149,421 was due to Liaoning Bainianye New Energy, which is free from interest and due on demand. These funds were advanced by Bainianye New Energy on behalf of the Company for our US operating expenditures during 2018. During the nine months ended September 30, 2019, the Company repaid $51,511 to Liaoning Bainianye New Energy and $97,910 remained due as of September 30, 2019. | |||
Ms. Li Hua Wang [Member] | ||||
Related Parties And Related Parties Transactions (Textual) | ||||
Due to related party | 267,542 | $ 267,542 | $ 606,191 | |
Description for due to related party | Of such amount, $382,908 was repaid during the nine months ended September 30, 2019. | |||
Tieling Joint Stock [Member] | ||||
Related Parties And Related Parties Transactions (Textual) | ||||
Amount due from related parties | 601,951 | 601,951 | ||
Equity interests | 43.00% | |||
Description of borrowing | Nengfa Tiefa Import & Export, borrowed approximately $1,161,458 million from the Company | |||
Amount repaid | 540,294 | |||
Mr. Yongjian Zhang [Member] | ||||
Related Parties And Related Parties Transactions (Textual) | ||||
Due to related party | 4,681 | 4,681 | ||
Mr. Yongjian Bi [Member] | ||||
Related Parties And Related Parties Transactions (Textual) | ||||
Due to related party | $ 848,302 | $ 848,302 |
OTHER PAYABLES AND ACCRUED LI_3
OTHER PAYABLES AND ACCRUED LIABILITIES (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Customer deposits from overseas customers in Singapore | $ 572,693 | $ 356,799 |
Accrued operating expenses | 416,016 | 705,479 |
Payables in disputes | 1,130,886 | 879,780 |
Other payable | 229,568 | 103,008 |
Other payables and accrued liabilities | $ 2,349,163 | $ 2,045,066 |
OTHER PAYABLES AND ACCRUED LI_4
OTHER PAYABLES AND ACCRUED LIABILITIES (Details Narrative) - USD ($) | Apr. 08, 2019 | Jan. 10, 2019 | Sep. 30, 2019 | May 04, 2019 | Apr. 22, 2019 | Dec. 31, 2018 | Aug. 01, 2018 |
Other Payables and Accrued Liabilities (Textual) | |||||||
Payables with disputes | $ 1,130,886 | $ 879,780 | |||||
Dispute payable in approximation | $ 856,000 | ||||||
Settlement amount from other parties | $ 182,000 | ||||||
Payments of supplier | $ 93,000 | ||||||
RMB [Member] | PRC [Member] | |||||||
Other Payables and Accrued Liabilities (Textual) | |||||||
Unpaid outstanding payable | $ 1,278,182 | $ 6,000,000 | |||||
Settlement amount from other parties | $ 7,143 | $ 1,260,000 | |||||
Outstanding payable | 700,000 | ||||||
Payments of supplier | $ 50,000 | $ 710,000 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Oct. 02, 2019 | Apr. 20, 2019 | Apr. 11, 2019 | Mar. 12, 2018 | Sep. 30, 2019 | Dec. 31, 2018 |
Stockholders Equity (Textuals) | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||||
Common stock, authorized | 50,000,000 | 50,000,000 | ||||
Common stock, issued | 8,073,289 | 7,573,289 | ||||
Common stock, outstanding | 8,073,289 | 7,573,289 | ||||
Equity interest issued , number of shares | 500,000 | |||||
Lasting Wisdom Holdings Limited [Member] | ||||||
Stockholders Equity (Textuals) | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Stock purchase agreement, description | In accordance with the Agreement, the total purchase price for the Shares is RMB 40 million plus 1.5 million shares of the Company’s common stock (the “Purchase Price”), which is based on an initial appraisal of the fair market value of the acquired company of RMB 100 million. | |||||
Lasting Wisdom Holdings Limited [Member] | Five Shareholders [Member] | ||||||
Stockholders Equity (Textuals) | ||||||
Equity interest issued , number of shares | 1,000,000 | 500,000 | ||||
Mr. Yongquan Bi [Member] | ||||||
Stockholders Equity (Textuals) | ||||||
Number of share issued | 500,000 | |||||
Price per share | $ 1 | |||||
Aggregate amount of consideration | $ 500,000 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net loss attributable to common shareholders | $ (544,469) | $ (310,115) | $ (1,974,159) | $ (2,459,321) |
Weighted average common shares outstanding - Basic and diluted | 8,073,289 | 7,573,289 | 7,871,824 | 7,445,084 |
Net loss per share - Basic and diluted | $ (0.07) | $ (0.04) | $ (0.25) | $ (0.33) |
STATUTORY RESERVES (Details)
STATUTORY RESERVES (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Statutory Reserves [Abstract] | |
Appropriation to statutory reserve, description | Appropriation to the statutory reserve should be at least 10% of the after-tax net income until the reserve is equal to 50% of the registered capital. |
CONCENTRATIONS OF RISK (Details
CONCENTRATIONS OF RISK (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Concentration Risk [Line Items] | ||||
Revenues | $ 457,800 | |||
Percentage of revenues | 38.00% | 41.00% | ||
Accounts receivable | ||||
Customer A [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenues | $ 126,406 | |||
Percentage of revenues | 11.00% | |||
Accounts receivable | ||||
Customer B [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenues | $ 331,394 | |||
Percentage of revenues | 30.00% | |||
Accounts receivable | ||||
Customer C [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenues | $ 913,530 | |||
Percentage of revenues | 83.00% | |||
Accounts receivable | $ 8,482,625 | $ 8,482,625 | ||
Customer D [Member] | ||||
Concentration Risk [Line Items] | ||||
Revenues | $ 1,027,561 | |||
Percentage of revenues | 57.00% | |||
Accounts receivable | $ 8,482,625 | $ 8,482,625 |
CONCENTRATIONS OF RISK (Detai_2
CONCENTRATIONS OF RISK (Details 1) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Purchases | $ 255,956 | $ 255,956 |
Percentage of total purchases | 38.00% | 41.00% |
Accounts payable | $ 472,894 | $ 472,894 |
Vender A [Member] | ||
Purchases | $ 175,587 | $ 175,587 |
Percentage of total purchases | 26.00% | 23.00% |
Accounts payable | $ 472,894 | $ 472,894 |
Vender B [Member] | ||
Purchases | $ 80,369 | $ 80,369 |
Percentage of total purchases | 12.00% | 10.00% |
Accounts payable |
CONCENTRATIONS OF RISK (Detai_3
CONCENTRATIONS OF RISK (Details Narrative) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019Customers | Sep. 30, 2019USD ($)Customers | Sep. 30, 2018Customers | |
Concentrations of Risk (Textual) | |||
Number of customers | Customers | 3 | 3 | 1 |
Percentage of revenues | 38.00% | 41.00% | |
PRC [Member] | |||
Concentrations of Risk (Textual) | |||
Percentage of revenues | 52.00% | ||
Revenues | $ | $ 467,179 |
SUBSEQUENT EVENT (Details Narra
SUBSEQUENT EVENT (Details Narrative) - Power Up [Member] - Convertible Notes Payable [Member] - Subsequent Event [Member] | Oct. 14, 2019USD ($) |
Notes Payable | $ 83,000 |
Note term | With a term of 12 month |
Discounted value of note | $ 80,000 |
Annual interest | 6.00% |