Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jun. 19, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | Lithium & Boron Technology, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 185,986,370 | |
Amendment Flag | false | |
Entity Central Index Key | 0001384135 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and equivalents | $ 350,545 | $ 160,024 |
Accounts receivable | 436,703 | 577,387 |
Notes receivable | 126,844 | 79,478 |
Other receivables | 19,912 | 354 |
Advances to suppliers, net | 48,451 | 7,490 |
Due from related party | 734,877 | 554,527 |
Inventories | 1,177,266 | 1,802,647 |
Total current assets | 2,894,598 | 3,181,907 |
NONCURRENT ASSETS | ||
Long-term prepaid expense | 15,384 | 0 |
Property and equipment, net | 1,306,905 | 1,403,681 |
Construction in progress | 1,610,768 | 1,635,912 |
Total noncurrent assets | 2,933,057 | 3,039,593 |
TOTAL ASSETS | 5,827,655 | 6,221,500 |
CURRENT LIABILITIES | ||
Accounts payable | 138,005 | 332,706 |
Unearned revenue | 105,435 | 117,188 |
Accrued liabilities and other payables | 1,152,342 | 1,095,698 |
Taxes payable | 322,121 | 295,255 |
Due to related parties | 789,805 | 678,533 |
Total current liabilities | 2,507,708 | 2,519,380 |
DEFERRED INCOME | 1,293,277 | 1,360,626 |
TOTAL LIABILITIES | 3,800,985 | 3,880,006 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 500,000,000 shares authorized, 185,968,370 shares issued and outstanding | 185,968 | 185,968 |
Paid-in capital deficiency | (6,666,351) | (6,666,351) |
Statutory reserve | 71,252 | 71,252 |
Accumulated other comprehensive loss | (73,796) | (14,600) |
Retained earnings | 8,509,597 | 8,765,225 |
TOTAL STOCKHOLDERS' EQUITY | 2,026,670 | 2,341,494 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 5,827,655 | $ 6,221,500 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 185,968,370 | 185,968,370 |
Common stock, shares outstanding | 185,968,370 | 185,968,370 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Sales | $ 1,010,498 | $ 1,327,372 |
Sales - related party | 0 | 58,379 |
Total sales | 1,010,498 | 1,385,751 |
Cost of sales | 930,744 | 1,224,059 |
Gross profit | 79,754 | 161,692 |
Selling | 56,205 | 100,402 |
Bad debts (reversal) | 2,568 | (91,888) |
General and administrative | 284,434 | 294,361 |
Total operating expenses | 343,207 | 302,875 |
Loss from operations | (263,453) | (141,183) |
Interest income | 33 | 1,244 |
Non-operating expenses | (14,349) | 0 |
Subsidy income | 47,141 | 47,060 |
Total non-operating income, net | 32,825 | 48,304 |
Loss before income tax | (230,628) | (92,879) |
Income tax expense | 0 | 0 |
Loss from continuing operations | (230,628) | (92,879) |
Loss from operations of discontinued entities, net of tax | 0 | (2,807) |
Net loss | (230,628) | (95,686) |
Foreign currency translation loss attributable to discontinued operations | 0 | (77,145) |
Foreign currency translation gain (loss) attributable to the Company | (59,196) | 32,271 |
Comprehensive loss | $ (289,824) | $ (140,560) |
Weighted average shares outstanding (in Shares) | 185,968,370 | 185,968,370 |
Loss per share from continuing operations (in Dollars per share) | $ 0 | $ 0 |
Loss per share from discontinued operations (in Dollars per share) | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (230,628) | $ (95,686) |
Depreciation | 76,346 | 79,975 |
Provision for (reversal of) bad debts | 2,568 | (91,888) |
Changes in deferred income | (47,141) | (47,060) |
Accounts receivable | 84,486 | (201,892) |
Other receivables | (19,856) | 19,525 |
Advances to suppliers | (44,268) | 17,822 |
Inventories | 606,756 | 353,783 |
Prepaid expense | (15,618) | 0 |
Accounts payable | (192,472) | (143,612) |
Unearned revenue | (10,102) | 152,076 |
Accrued liabilities and other payables | 32,719 | (23,414) |
Taxes payable | 31,882 | 56,999 |
Net cash provided by operating activities | 274,672 | 76,628 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Changes in due from related parties | (191,744) | 3,975,343 |
Changes in due to related parties | 112,986 | (3,996,828) |
Net cash used in financing activities | (78,758) | (21,485) |
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND EQUIVALENTS | (5,393) | 3,252 |
NET INCREASE IN CASH AND EQUIVALENTS | 190,521 | 58,395 |
CASH AND EQUIVALENTS, BEGINNING OF PERIOD | 160,024 | 163,145 |
CASH AND EQUIVALENTS, END OF PERIOD | 350,545 | 221,540 |
Income tax paid | 0 | 0 |
Interest paid | $ 0 | $ 0 |
STATEMENTS OF CHANGES IN CONSOL
STATEMENTS OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings, Appropriated [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2018 | $ 185,968 | $ (7,645,727) | $ 780,682 | $ (11,951) | $ 1,828,717 | $ (4,862,311) |
Balance (in Shares) at Dec. 31, 2018 | 185,968,370 | |||||
Net loss | (95,686) | (95,686) | ||||
Dividend accrued | (25,000) | (25,000) | ||||
Foreign currency translation gain (loss) | (44,874) | (44,874) | ||||
Balance at Mar. 31, 2019 | $ 185,968 | (7,645,727) | 780,682 | (56,825) | 1,708,031 | (5,027,871) |
Balance (in Shares) at Mar. 31, 2019 | 185,968,370 | |||||
Balance at Dec. 31, 2019 | $ 185,968 | (6,666,351) | 71,252 | (14,600) | 8,765,225 | $ 2,341,494 |
Balance (in Shares) at Dec. 31, 2019 | 185,968,370 | 185,968,370 | ||||
Net loss | (230,628) | $ (230,628) | ||||
Dividend accrued | (25,000) | (25,000) | ||||
Foreign currency translation gain (loss) | (59,196) | (59,196) | ||||
Balance at Mar. 31, 2020 | $ 185,968 | $ (6,666,351) | $ 71,252 | $ (73,796) | $ 8,509,597 | $ 2,026,670 |
Balance (in Shares) at Mar. 31, 2020 | 185,968,370 | 185,968,370 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of Operations [Text Block] | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Lithium & Boron Technology, Inc., (the “Company” or “Lithium Tech”), formerly known as SmartHeat, Inc. (“SmartHeat”), was incorporated August 4, 2006, in the State of Nevada. The Company currently produces boric acid in the People Republic of China (“PRC”) and plans to expand its manufacturing facilities through a joint venture to produce lithium carbonate for the electric vehicle battery market in China. The Company also plans to produce of lithium carbonate from existing ore deposits it purchases from an affiliated mining company. The Company formerly sold plated heat exchangers and heat pumps and sold these operations on September 30, 2019 recording them as discontinued operations. On December 31, 2018 (the “Closing Date”), the Company entered into and closed a Share Exchange Agreement and Plan of Reorganization, as amended on January 24, 2019 (the “Share Exchange Agreement”) with Mid-Heaven Sincerity International Resources Investment Co., Ltd (Mid-heaven BVI) and its shareholders Mao Zhang, Jian Zhang, and Ying Zhao, constituting all the shareholders of Mid-heaven BVI (the “Mid-heaven Shareholders”). Pursuant to the terms of the Share Exchange Agreement, the shareholders of Mid-Heaven BVI delivered all of the issued and outstanding shares of capital stock of Mid-Heaven BVI to the Company, for 106,001,971 shares of the Company’s Common Stock. Mid-heaven BVI, through two subsidiaries, Qinghai Mid-Heaven Sincerity Technology Co., Ltd (“Sincerity”) and Qinghai Mid-Heaven Sincerity Salt-Lake R&D Co., Ltd (“Salt-Lake”) owns 100% of Qing Hai Mid-Heaven Boron & Lithium Technology Company, Ltd. (“Qinghai Technology”). The Acquisition was structured as a tax-free reorganization. As a result of the share exchange agreement, Mid-heaven BVI’s shareholders own approximately 57% of the combined company. For accounting purposes, the transaction was accounted for as a reverse acquisition of the Company by Mid-heaven BVI. The main operating entity, Qinghai Technology was incorporated December 18, 2018. The business of Qinghai Technology was carved out of the business of Qinghai Zhongtian Boron &Lithium Mining Co., Ltd (“Qinghai Mining”) on December 20, 2018. Qinghai Mining was founded March 6, 2001 and engaged in manufacture and wholesale of boric acid and related compounds for industrial and consumer usage. Qinghai Technology obtains its raw material minerals exclusively from Qinghai Mining and currently processes boric acid by crushing and processing ore. On September 30, 2019, Heat HP, Inc. and Heat PHE, Inc, wholly owned subsidiaries of the Company, sold all of their respective equity interests in Jinhui, SmartHeat Investment, SmartHeat Trading, SmartHeat Pump and Heat Exchange for $353. The equity interests were sold to individuals and businesses located in the PRC. Each subsidiary was sold for nominal cash consideration as below and, as the transactions were structured as purchases of equity interests, the subsidiary companies retained all liabilities when purchased. Heat HP, Inc. and Heat PHE, Inc. did not have any operations and mainly serve the purpose as holding companies. SmartHeat Jinhui (Beijing) Energy Technology Ltd - 100 RMB ($15) SmartHeat (China) Investment Ltd - 400 RMB ($56) SmartHeat (Shanghai) Trading Co., Ltd - 400 RMB ($56) SmartHeat (Shenyang) Heat Pump Technology Co., Ltd - 400 RMB ($56) SanDeKe Co., Ltd - 600 RMB ($85) SmartHeat Heat Exchange Equipment Co - 600 RMB ($85) On October 23, 2019, the Company filed a certificate of amendment to its certificate of incorporation to change its name from “SmartHeat, Inc.” to “Lithium & Boron Technology, Inc.” to better reflect the operations of the Company. The name change became effective October 23, 2019. In December 2019, a novel strain of coronavirus (COVID-19) was reported in Wuhan, China. The World Health Organization declared the outbreak to constitute a “Public Health Emergency of International Concern.” This contagious disease outbreak, which continues to spread to additional countries, and disrupts supply chains and affecting production and sales across a range of industries as a result of quarantines, facility closures, and travel and logistics restrictions in connection with the outbreak. The COVID-19 outbreak impacted the Company’s operations for the first quarter of 2020. The Company had less production in the first quarter of 2020; the Company’s factory was reopened one month later than originally planned, and it did not resume the production one week after the factory reopened due to the shortage of master liquid pool resulting from the longer period of shutdown of the machine. The cost of coal increased during the first quarter of 2020 due to the overall lockdown in China. The Company’s sales also decreased for the first quarter of 2020 due to logistics restrictions put into place to curb travel. To facilitate the sales, the Company reduced the selling price by RMB 50 ($7) per ton to certain customers. The number of transportation vehicles has increased to meet the market’s shipping needs since April 2020. In addition, the Company was able to procure sulfuric acid, a major raw material, from a local supplier at lower prices than usual due to excess supplies on the market. The Company’s production and sales has been gradually increasing since April 2020. The impact of COVID-19 to the Company’s operation was mitigated as of this report date. Even though the Company was able to resume normal operations in HaiXi since its facilities are far removed from big cities which have more challenges with respect to monitoring and controlling the outbreak, but the Company’s executives, auditors and attorneys who are located in large cities in China and in the United States were subject to various travel and quarantine restrictions which delayed the compilation of information needed to timely file this report on Form 10-Q. On March 27, 2020 (PRC time), Qinghai Technology entered into an Investment Cooperation Agreement, Memorandum of Cooperation and Licensing Agreement with Xi'an Jinzang Membrane Environmental Protection Technology Co., Ltd. (Xi’an Jinzang) to produce up to 20,000 tons of battery grade lithium hydroxide and 10,000 tons of lithium carbonate annually, subject to funding. On April 15, 2020, the parties formed a joint venture company Qinghai Zhonglixinmo Technology Co., Ltd (Qinghai Zhongli or JV) to process brine supplied by Qinghai Technology. Qinghai Technology owns 51% of the joint venture and Xi’ Jinzang owns the remaining 49%. The Joint Venture cooperation agreement calls for a capital contribution of RMB 140 million ($19,746,000), which shall be paid in three phases according to the project construction progress: RMB 36 million ($5,077,000) to be paid within 10 days from the date of registration and establishment of the JV, RMB 72 million ($10,155,000) to be paid before July 31, 2020, and RMB 32 million ($4,513,000) to be paid before October 31,2020. All shareholders shall pay the capital in accordance with their respective shareholding ratio. The Company promises and guarantees that, during the existence of the project company, it will provide the JV with lithium bearing brine resources for free. During the construction and operation of the project, all parties agree to actively raise construction funds by means of bank loans, self-owned funds, etc. if the funds are not raised in time, the term of paid in capital can be extended accordingly upon consensus of all parties. Each party made an initial capital contribution of RMB 5 million ($0.71 million) in April 2020. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Going Concern The accompanying consolidated financial statements (“CFS”) were prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying CFS, the Company had net loss of $230,628 and $95,686 for the three months ended March 31, 2020 and 2019, respectively, which raise substantial doubt about the Company’s ability to continue as a going concern. In addition to current boric acid production business, the Company plans to produce lithium carbonate for the electric vehicle battery through a recently established joint venture. The Company also plans to produce lithium carbonate from existing ore deposits it purchases from an affiliated mining company. Management also intends to raise additional funds by way of a private or public offering, or by obtaining loans from banks or others. While the Company believes in the viability of its strategy to generate sufficient revenue and in its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The CFS do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern. Basis of Presentation The consolidated financial statements (“CFS”) were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The interim consolidated financial information as of March 31, 2020 and for the three-month periods ended March 31, 2020 and 2019 was prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures, which are normally included in CFS prepared in accordance with U.S. GAAP were not included. The interim consolidated financial information should be read in conjunction with the Financial Statements and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, previously filed with the SEC. In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of March 31, 2020, its consolidated results of operations and cash flows for the three months ended March 31, 2020 and 2019, as applicable, were made. Principles of Consolidation For the three months ended March 31, 2020, the accompanying CFS include the accounts of the Company’s US parent, and Mid-heaven BVI and its subsidiaries, Sincerity, Salt-Lake and Qinghai Technology, which are collectively referred to as the “Company.” For the three months ended March 31, 2019, the accompanying CFS include the accounts of the Company’s US parent, and its subsidiaries Heat HP and Heat PHE, and their subsidiaries SanDeKe, Jinhui, SmartHeat Investment, SmartHeat Trading, SmartHeat Pump, and Heat Exchange and Mid-heaven BVI and its subsidiaries, Sincerity, Salt-Lake and Qinghai Technology, which are collectively referred to as the “Company.” All significant intercompany accounts and transactions were eliminated in consolidation. Use of Estimates In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates. Cash and Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The following table presents in US dollars (“USD”) the amount of cash and equivalents held by the Company as of March 31, 2020 and December 31, 2019, respectively, based on the jurisdiction of deposit. The Company’s US parent holds cash and equivalents in US bank accounts denominated in USD. United States China Total March 31, 2020 - $ 350,545 $ 350,545 December 31, 2019 - $ 160,024 $ 160,024 Accounts Receivable, net The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Based on historical collection activity, the Company had allowance of $0 at March 31, 2020 and December 31, 2019. Advances to Suppliers, net The Company makes advances to certain vendors to purchase raw material, tools and equipment for production. The advances are interest-free and unsecured. As of March 31, 2020, and December 31, 2019, the Company had allowance for advances to suppliers of $2,529 and $0, respectively. In addition, as of March 31, 2020, the Company prepaid $28,000 to a third party company for purchasing the equipment and a land use right; total purchase price is $141,000, the remaining $113,000 will be paid within three days after the completion of the land certificate and related deed, or the prepayment will be returned to the Company it failure to obtain the land use certificate and related deed. Inventories, net Inventories are stated at the lower of cost or net realizable value with cost determined on a weighted-average basis. Management compares the cost of inventories with the net realizable value and an allowance is made to write down inventories to market value, if lower. Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; major additions, repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method with a 3% - 10% salvage value and estimated lives as follows: Buildings 20 years Structures and improvements 4-20 years Vehicles 4-8 years Office equipment 5 years Production equipment 3-10 years Equipment upgrade 5 years Depreciation of plant, property and equipment attributable to manufacturing is capitalized as part of inventories, and expensed to cost of sales when inventories are sold. Impairment of Long-Lived Assets Long-lived assets, which include tangible assets, such as property and equipment, goodwill and other intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable, but at least annually. Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized based on the excess of the carrying amount over the fair value (“FV”) of the assets. FV generally is determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of March 31, 2020 and December 31, 2019, there was no significant impairments of its long-lived assets. Effective on January 1, 2020, the Company adopted ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Deferred Income Deferred income consists primarily of government grants and subsidies for supporting the Company’s technology innovation and transformation of boric acid, lithium and magnesium sulfate projects. The Company uses most of the subsidies to purchase machinery and equipment. Deferred income is amortized to revenue (other income) over the life of the assets for which the grant and subsidy was used for. Subsidies for declared project fund require government inspection to ensure proper use of the funds for the designated project. Unearned Revenue The Company records payments received from customers in advance of their orders as unearned revenue. These orders normally are delivered (usually within one month) based upon contract terms and customer demand. Revenue Recognition The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs typically upon receipts of the goods by customers. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government. VAT taxes are not affected by the income tax holiday. Cost of Sales Cost of sales (“COS”) consists primarily of material costs and direct labor and manufacturing overhead attributable to the production of the products. Write-down of inventory to lower of cost or net realizable value is also recorded in COS. Research and Development Costs Research and development (“R&D”) costs are expensed as incurred and included in general and administrative (“G&A”) expenses. These costs primarily consist of cost of materials used, salaries paid for the Company’s development department and fees paid to third parties. R&D costs for the three months ended March 31, 2020 and 2019 were immaterial. Share-Based Compensation The Company accounts for share-based compensation awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period. The Company accounts for share-based compensation awards to non-employees in accordance with FASB ASC Topic 718 and FASB ASC Subtopic 505-50, “Equity-Based Payments to Non-employees”. Share-based compensation associated with the issuance of equity instruments to non-employees is measured at the fair value of the equity instrument issued or committed to be issued, as this is more reliable than the fair value of the services received. The fair value is measured at the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. Effective January 1, 2020, the Company adopted ASU 2018-07, "Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting," which expands the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. An entity should apply the requirements of ASC 718 to non-employee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The adoption of ASU 2018-07 did not have an impact on the CFS. Income Taxes Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At March 31, 2020 and December 31, 2019, the Company did not take any uncertain positions that would necessitate recording a tax related liability. Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within China. Balances at financial institutions within China are not covered by insurance. The Company has not experienced any losses in such accounts. Certain other financial instruments, which subject the Company to concentration of credit risk, consist of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of its customers’ financial condition and customer payment practices to minimize collection risk on accounts receivable. The operations of the Company are located primarily in China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in China, as well as by the general state of the PRC economy. Basic and Diluted Earnings (Loss) per Share (EPS) Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similarly, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted EPS are based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to have been exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Foreign Currency Translation and Comprehensive Income (Loss) The accounts of the US parent company are maintained in USD. The functional currency of the Company’s China subsidiaries is the Chinese Yuan Renminbi (“RMB”). The accounts of the China subsidiaries were translated into USD in accordance with FASB ASC Topic 830, “Foreign Currency Matters. “Comprehensive Income.” Statement of Cash Flows In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” Fair Value (“FV”) of Financial Instruments Certain of the Company’s financial instruments, including cash and equivalents, notes receivable, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and the current market rate of interest. Fair Value Measurements and Disclosures ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. Effective January 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the FV hierarchy. As of March 31, 2020 and December 31, 2019, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. Leases On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02), as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet for all leases with terms longer than 12 months and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company concluded the adoption of this ASU did not have a material impact on the Company’s CFS since the Company does not have any lease that is longer than 12 months. Segment Reporting FASB ASC Topic 280, “Segment Reporting,” Reclassification Certain prior period balance sheet accounts were reclassified for the purpose of consistency with the current year’s presentation. New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its CFS. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on its CFS. |
INVENTORIES, NET
INVENTORIES, NET | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | 3. INVENTORIES, NET Inventories at March 31, 2020 and December 31, 2019, respectively, were as follows: 2020 2019 Raw materials $ 264,999 $ 311,049 Finished goods 912,267 1,491,598 Total $ 1,177,266 $ 1,802,647 |
NOTES RECEIVABLE - BANK ACCEPTA
NOTES RECEIVABLE - BANK ACCEPTANCES | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 4. NOTES RECEIVABLE – BANK ACCEPTANCES The Company sold goods to its customers and received notes (bank acceptances) from them in lieu of payments. These bank acceptances were issued by customers to the Company and would be honored by the applicable bank. The Company may hold a bank acceptance until the maturity for full payment, have the bank acceptance cashed out from the bank at a discount at an earlier date, or transfer the bank acceptance to its vendors in lieu of payment for their own obligations. As of March 31, 2020 and December 31, 2019, the Company had notes receivable of $126,844 and $79,478, respectively; and at March 31, 2020, the Company had $0.64 million notes receivable that were endorsed to its vendors, in lieu of payment. The Company was contingently liable for these notes receivable until paid. |
OTHER RECEIVABLES
OTHER RECEIVABLES | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Other Current Assets [Text Block] | 5. OTHER RECEIVABLES Other receivables consisted of the following at March 31, 2020 and December 31, 2019: 2020 2019 VAT tax receivable and prepaid shipping fee $ 19,558 $ - Other receivable – sale of discontinued operations 354 354 Total $ 19,912 $ 354 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | 6. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following at March 31, 2020 and December 31, 2019, respectively: 2020 2019 Structures and improvements $ 443,217 $ 450,136 Production equipment 2,414,173 2,451,859 Equipment upgrade 244,870 248,692 Total 3,102,260 3,150,687 Less: accumulated depreciation (1,795,355 ) (1,747,006 ) Property and equipment, net $ 1,306,905 $ 1,403,681 Depreciation for the three months ended March 31, 2020 and 2019 was $76,346 and $79,975, respectively. |
CONSTRUCTION IN PROGRESS (_CIP_
CONSTRUCTION IN PROGRESS (“CIP”) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Other Assets Disclosure [Text Block] | 7. CONSTRUCTION IN PROGRESS (“CIP”) As of March 31, 2020 and December 31, 2019, the Company had CIP of $1,610,768 and $1,635,912, respectively. The CIP was mainly for Test and Experimental Plant I, which does not have any production currently; the Company intends to transform the plant as a pilot plant for pure boric acid and lithium carbonate production. However, in 2019, the existing coal-supported boiler in Plant I was determined failure to meet the environment protection standard, and the CIP was delayed due to the Company is waiting for the installation and connection of the natural gas pipeline by the authority as a result of implementing the Coal-to-Gas conversion project by the authority for environmental protection purpose. Due to various factors including the Coronavirus outbreak, the government-implemented project of installation and connection of the natural gas pipeline keeps delaying, the Company is planning to sell the Test and Experimental Plant I to Qinghai Mining at cost. |
TAXES PAYABLE
TAXES PAYABLE | 3 Months Ended |
Mar. 31, 2020 | |
Tax Disclosure [Abstract] | |
Tax Disclosure [Text Block] | 8. TAXES PAYABLE Taxes payable consisted of the following March 31, 2020 and December 31, 2019, respectively: 2020 2019 Other $ 26,091 $ 29,350 VAT 296,030 265,905 Taxes payable $ 322,121 $ 295,255 |
ACCRUED LIABILITIES AND OTHER P
ACCRUED LIABILITIES AND OTHER PAYABLES | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 9. ACCRUED LIABILITIES AND OTHER PAYABLES Accrued liabilities and other payables consisted of the following at March 31, 2020 and December 31, 2019, respectively: 2020 2019 Advances from third parties $ 2,726 $ 1,049 Other 514,141 534,275 Accrued expenses 635,475 560,374 Total accrued liabilities and other payables $ 1,152,342 $ 1,095,698 Advances from third parties were short term, non-interest-bearing and due on demand. As of March 31, 2020 and December 31, 2019, other mainly was dividend payable to Northtech of $425,000 and $400,000, respectively; and payables for professional fees and other miscellaneous expenses of $89,141 and $134,275. As of March 31, 2020, accrued expenses mainly consisted of accrued salary $635,475 for Qinghai Technology including $600,000 accrued salary for three senior officers. As of December 31, 2019, accrued expenses mainly consisted of accrued payroll expense of $560,374 for Qinghai Technology including $480,000 accrued salary for three senior officers. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 10. RELATED PARTY TRANSACTIONS Qinghai Technology purchased raw material boron rock from Qinghai Mining (owned by three major shareholders of the Company); in addition, Qinghai Technology sometimes received no-interest short-term advances from Qinghai Mining for daily operation needs. As of March 31, 2020 and December 31, 2019, due from Qinghai Mining (representing the net amount of intercompany transactions between Qinghai Technology and Qinghai Mining) was $0.73 million and $0.55 million, respectively. Qinghai Technology purchased $113,528 and $192,570 boron ore from Qinghai Mining during the three months ended March 31, 2020 and 2019, respectively. On July 1, 2019, Qinghai Technology and Qinghai Mining entered a boron ore purchase contract for a term of one year. Qinghai Mining is to supply Qinghai Technology boron ore based on Qinghai Technology’s monthly production plan at a price of RMB 62 ($8.77) per ton. The price is adjustable in the future if there is a significant fluctuation of the market price for the boron ore. In the fourth quarter of 2019, this price was adjusted to RMB 70.46 ($10.21) per ton. In the first quarter of 2020, Qinghai Technology and Qinghai Mining entered a new purchase contract, the price for boron ore was adjusted to RMB 77.5 ($11.10) per ton, and the price for slag was RMB 30 ($4.23) per ton. Qinghai Technology used equipment that belongs to Qinghai Province DaChaiDan ZhongTian Resources Development Co., Ltd (“Zhongtian Resources”, owned by two major shareholders of the Company) for production. The depreciation of these fixed assets had an impact on the production costs of boric acid of the Company, and was included in the Company’s cost of sales. The depreciation of these fixed assets for the three months ended March 31, 2020 and 2019 was $6,263 and $8,984, respectively. Due to Zhongtian Resources resulting from using its equipment and payment of worker’s compensation made by Zhongtian Resource for Qinghai Technology was$54,633 and $49,125 at March 31, 2020 and December 31, 2019, respectively. Qinghai Technology sold boric acid to Qinghai Dingjia Zhixin Trading Co., Ltd (“Dingjia”, 90% owned by the son of the Company’s major shareholder). For the three months ended March 31, 2020 and 2019, the Company’s sales to Dingjia was $0 and $58,379, respectively. At March 31, 2020 and December 31, 2019, outstanding receivables from (payable to) Dingjia was$(0.06) million and $(0.06) million, respectively. In addition, at March 31, 2020 and December 31, 2019, the Company had $679,891 and $573,263 due to another major shareholder of the Company, resulting from certain Company operating expenses of the US parent company such as legal and audit fees that were paid by this major shareholder on behalf of the Company. This short term advance bore no interest, and was payable upon demand. The following table summarized the due from (to) related parties as of March 31, 2020 and December 31, 2019, respectively: 2020 2019 Related party name Due from Qinghai Mining $ 734,877 $ 554,527 Total $ 734,877 $ 554,527 Due to Dingjia $ 55,281 $ 56,144 Due to Zhongtian Resources 54,633 49,125 Due to A major shareholder 679,891 573,264 Total $ 789,805 $ 678,533 |
DEFERRED INCOME
DEFERRED INCOME | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Income [Abstract] | |
Deferred Income [Text Block] | 11. DEFERRED INCOME Deferred income consisted mainly of the government subsidy to the Company’s special projects. The detail of deferred income for the Company’s special projects at March 31, 2020 is: Government subsidy amount Project completion date Useful life in years Accumulated amortization Net Technology upgrade for using lean ore to produce magnesium sulfate $ 310,511 8/1/2013 10 $ 207,007 $ 103,504 Technical transformation for boric acid and magnesium sulfate produced from low grade ore 70,570 5/1/2015 10 34,697 35,873 Project of comprehensive utilization of DaChaiDan Solid Boron Mine 1,411,413 1/1/2018 10 317,568 1,093,845 Project of high value utilization of magnesium-rich waste liquid 64,925 7/9/2019 10 4,870 60,055 Total $ 1,857,419 $ 564,142 $ 1,293,277 The detail of deferred income for the Company’s special projects at December 31, 2019 is: Government subsidy amount Project completion date Useful life in years Accumulated amortization Net Technology upgrade for using lean ore to produce magnesium sulfate $ 315,358 8/1/2013 10 $ 202,355 $ 113,003 Technical transformation for boric acid and magnesium sulfate produced from low grade ore 71,672 5/1/2015 10 33,447 38,225 Project of comprehensive utilization of DaChaiDan Solid Boron Mine 1,433,445 1/1/2018 10 286,689 1,146,756 Project of high value utilization of magnesium-rich waste liquid 65,939 7/9/2019 10 3,297 62,642 Total $ 1,886,414 $ 525,788 $ 1,360,626 |
SUBSIDY INCOME
SUBSIDY INCOME | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense Disclosure [Text Block] | 12. SUBSIDY INCOME Subsidy income consisted of amortization of deferred income for declared special projects and government’s general incentive fund (recorded as income upon receipt) for the three months ended March 31, 2020 and 2019, respectively: Three Months Ended March 31, 2020 2019 Technology upgrade for using lean ore to produce magnesium sulfate $ 7,881 $ 8,152 Technical transformation for boric acid and magnesium sulfate produced from low grade ore 1,791 1,853 Project of comprehensive utilization of DaChaiDan Solid Boron Mine 35,822 37,055 Project of high value utilization of magnesium-rich waste liquid 1,647 - Total $ 47,141 $ 47,060 |
DEFERRED TAX ASSETS
DEFERRED TAX ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Tax Assets (Liabilities), Net Disclosure [Abstract] | |
Deferred Tax Assets (Liabilities), Net Disclosure [Text Block] | 13. DEFERRED TAX ASSETS As of March 31, 2020 and December 31, 2019, respectively, deferred tax assets consisted of the following: 2020 2019 Deferred tax asset –NOL of US parent company $ 972,955 $ 941,203 Less: valuation allowance (972,955 ) (941,203 ) Deferred tax assets, net $ - $ - The Company recorded a 100% valuation allowance for all deferred tax assets due to the uncertainty of its realization. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 14. INCOME TAXES The Company is subject to income taxes by entity on income arising in or derived from the tax jurisdiction in which each entity is domiciled. The Company’s PRC subsidiaries file their income tax returns online with PRC tax authorities. The H.R. 1 (the “Tax Reform”), effective for tax years beginning on or after January 1, 2018, except for certain provisions, resulted in changes to existing United States tax law, including various provisions that are expected to impact the Company. The Tax Reform Law reduces the federal corporate tax rate from 35% to 21% effective January 1, 2018 for the US entity of the Company. The US parent company, was incorporated in the US and has net operating losses (“NOL”) for income tax purposes, under the 2018 Tax Reform, the NOL arising in tax years beginning after 2017 may reduce 80% of a taxpayer’s taxable income, and be carried forward indefinitely. The US parent Company has NOL carry forwards for income taxes of approximately $972,955 at March 31, 2020. Management believes the realization of benefits from these losses remains uncertain due to the parent Company’s limited operating history and continuing losses. Accordingly, a 100% deferred tax asset valuation allowance was provided. The recently issued Coronavirus Aid, Relief and Economic Security Act (the CARES Act or the Act), provides four relief provisions for corporate taxpayers as follows: 1. Five-year net operating loss (NOL) carryback provision: the Act allows for the carryback of losses arising in a taxable year beginning after December 31, 2017, and before January 1, 2021, to each of the five taxable years preceding the taxable year of the loss. 2. Fiscal year NOL carryback fix from the Tax Cuts and Jobs Act (TCJA) of 2017: the Act corrects the language to provide fiscal year taxpayers who had NOLs arising in years that began prior to December 31, 2017 and ended after December 31, 2017 with the ability to carry back those NOLs. 3. Deferral of 80% income limitation on post-2017 NOLs to 2021: the Act suspends this 80% limitation for taxable years beginning before January 1, 2021, and instead allows the full offset of taxable income. For tax years beginning after December 31, 2020, the Act reinstates the 80% limitation. 4. Immediate Alternative Minimum Tax (“AMT”) tax credit refunds: the Act accelerates availability of AMT credits. The full remaining refundable AMT credit amount will be available for a corporation’s first taxable year beginning in 2019. Alternatively, a corporation may elect to use 100% of its AMT credits for its first taxable year beginning in 2018. The disposed entities - SanDeKe, Jinhui, SmartHeat Investment, SmartHeat Pump, SmartHeat Trading and Heat Exchange are subject to the regular 25% PRC income tax rate. Mid-Heaven BVI is a BVI company, and there is no income tax for companies domiciled in the BVI. Sincerity and Salt-Lake are governed by the Income Tax Law of the PRC concerning privately-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriate tax adjustments. Mid-Heaven BVI, Sincerity and Salt-Lake do not have any operations, and are not expected to have any operations in the future. Qinghai Technology enjoys 15% preferential PRC income tax rate. The following is a reconciliation of the difference between the actual provision for income taxes and the (benefit) provision computed by applying the federal statutory rate on income before income taxes for the three months ended March 31, 2020 and 2019, respectively: 2020 2019 Tax benefit at US federal statutory rates $ (48,432 ) $ (19,505 ) Foreign income taxed at different rates (3,177 ) 150 Tax holiday in PRC 7,943 2,562 Utilization of NOL - (8,074 ) Valuation allowance 43,666 24,867 Tax expense per financial statements - - |
MAJOR CUSTOMERS AND VENDORS
MAJOR CUSTOMERS AND VENDORS | 3 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | 15. MAJOR CUSTOMERS AND VENDORS For the three months ended March 31, 2020, four customers accounted for 16%, 14%, 13% and 12% of Company’s total sales. Accounts receivable from those major customers was $110,758 and $243,975 as of March 31, 2020 and December 31, 2019, respectively. Three customers accounted for 22%, 14% and 13%, respectively, of the Company’s sales for the three months ended March 31, 2019. Qinghai Technology purchased $113,528 and $192,570 boron ore (the main raw material) from Qinghai Mining during the three months ended March 31, 2020 and 2019, respectively. |
STATUTORY RESERVES AND RESTRICT
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Statutory Reserves Disclosure [Abstract] | |
Statutory Reserves Disclosure [Text Block] | 16. STATUTORY RESERVES AND RESTRICTED NET ASSETS The Company’s ability to pay dividends primarily depends on the Company receiving funds from its subsidiaries. PRC laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of the subsidiary’s retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with US GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries. In accordance with the PRC Regulations on Enterprises with Foreign Investment and their articles of association, a foreign-invested enterprise (“FIE”) established in the PRC is required to provide certain statutory reserves, which are appropriated from net profit as reported in the FIE’s PRC statutory accounts. An FIE is required to allocate at least 10% of its annual after-tax profit to the surplus reserve until such reserve has reached 50% of its respective registered capital based on the FIE’s PRC statutory accounts. Appropriations to other funds are at the discretion of the BOD for all FIEs. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. Additionally, shareholders of an FIE are required to contribute capital to satisfy the registered capital requirement of the FIE. Until such contribution of capital is satisfied, the FIE is not allowed to repatriate profits to its shareholders, unless otherwise approved by the State Administration of Foreign Exchange. Sincerity, incorporated on July 9, 2018 in China as a wholly foreign-owned enterprise (“WFOE”) with registered capital of $1.00 million, has 10 years from the incorporation date to fulfill the registered capital requirement. Additionally, in accordance with the Company Laws of the PRC, a domestic enterprise is required to provide surplus reserve at least 10% of its annual after-tax profit until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. A domestic enterprise is also required to provide discretionary surplus reserve, at the discretion of the BOD, from the profits determined in accordance with the enterprise’s PRC statutory accounts. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. Qinghai Technology was established as domestic enterprises and therefore are subject to the above-mentioned restrictions on distributable profits. As a result of these PRC laws and regulations that require annual appropriations of 10% of after-tax income to be set aside prior to payment of dividends as general reserve fund, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company as a dividend. |
COMMITMENTS
COMMITMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Commitments Disclosure [Text Block] | 17. COMMITMENTS Capital Contribution Sincerity with registered capital of $1.00 million and Salt-Lake incorporated in China on September 6, 2018 with registered capital of RMB 6 million ($0.88 million) have 10 years from the incorporation date to fulfill the registered capital requirement. Under PRC company law, registered capital must be used in the operations of the domestic company within its approved business scope. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Loss Contingency [Abstract] | |
Contingencies Disclosure [Text Block] | 18. CONTINGENCIES The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments in China and foreign currency exchange. The Company’s results may be adversely affected by changes in PRC government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad and rates and methods of taxation, among other things. The Company’s sales, purchases and expense transactions in China are denominated in RMB and all of the Company’s assets and liabilities in China are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current PRC law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation in order to affect the remittance. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 19. SUBSEQUENT EVENTS The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the financial statements were issued and determined the Company has no material subsequent events. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Going Concern [Policy Text Block] | Going Concern The accompanying consolidated financial statements (“CFS”) were prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying CFS, the Company had net loss of $230,628 and $95,686 for the three months ended March 31, 2020 and 2019, respectively, which raise substantial doubt about the Company’s ability to continue as a going concern. In addition to current boric acid production business, the Company plans to produce lithium carbonate for the electric vehicle battery through a recently established joint venture. The Company also plans to produce lithium carbonate from existing ore deposits it purchases from an affiliated mining company. Management also intends to raise additional funds by way of a private or public offering, or by obtaining loans from banks or others. While the Company believes in the viability of its strategy to generate sufficient revenue and in its ability to raise additional funds on reasonable terms and conditions, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The CFS do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary if the Company is unable to continue as a going concern. |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation The consolidated financial statements (“CFS”) were prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The interim consolidated financial information as of March 31, 2020 and for the three-month periods ended March 31, 2020 and 2019 was prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures, which are normally included in CFS prepared in accordance with U.S. GAAP were not included. The interim consolidated financial information should be read in conjunction with the Financial Statements and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, previously filed with the SEC. In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of March 31, 2020, its consolidated results of operations and cash flows for the three months ended March 31, 2020 and 2019, as applicable, were made. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation For the three months ended March 31, 2020, the accompanying CFS include the accounts of the Company’s US parent, and Mid-heaven BVI and its subsidiaries, Sincerity, Salt-Lake and Qinghai Technology, which are collectively referred to as the “Company.” For the three months ended March 31, 2019, the accompanying CFS include the accounts of the Company’s US parent, and its subsidiaries Heat HP and Heat PHE, and their subsidiaries SanDeKe, Jinhui, SmartHeat Investment, SmartHeat Trading, SmartHeat Pump, and Heat Exchange and Mid-heaven BVI and its subsidiaries, Sincerity, Salt-Lake and Qinghai Technology, which are collectively referred to as the “Company.” All significant intercompany accounts and transactions were eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The following table presents in US dollars (“USD”) the amount of cash and equivalents held by the Company as of March 31, 2020 and December 31, 2019, respectively, based on the jurisdiction of deposit. The Company’s US parent holds cash and equivalents in US bank accounts denominated in USD. United States China Total March 31, 2020 - $ 350,545 $ 350,545 December 31, 2019 - $ 160,024 $ 160,024 |
Receivable [Policy Text Block] | Accounts Receivable, net The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Based on historical collection activity, the Company had allowance of $0 at March 31, 2020 and December 31, 2019. |
Advances to Suppliers [Policy Text Block] | Advances to Suppliers, net The Company makes advances to certain vendors to purchase raw material, tools and equipment for production. The advances are interest-free and unsecured. As of March 31, 2020, and December 31, 2019, the Company had allowance for advances to suppliers of $2,529 and $0, respectively. In addition, as of March 31, 2020, the Company prepaid $28,000 to a third party company for purchasing the equipment and a land use right; total purchase price is $141,000, the remaining $113,000 will be paid within three days after the completion of the land certificate and related deed, or the prepayment will be returned to the Company it failure to obtain the land use certificate and related deed. |
Inventory, Policy [Policy Text Block] | Inventories, net Inventories are stated at the lower of cost or net realizable value with cost determined on a weighted-average basis. Management compares the cost of inventories with the net realizable value and an allowance is made to write down inventories to market value, if lower. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; major additions, repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method with a 3% - 10% salvage value and estimated lives as follows: Buildings 20 years Structures and improvements 4-20 years Vehicles 4-8 years Office equipment 5 years Production equipment 3-10 years Equipment upgrade 5 years Depreciation of plant, property and equipment attributable to manufacturing is capitalized as part of inventories, and expensed to cost of sales when inventories are sold. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets Long-lived assets, which include tangible assets, such as property and equipment, goodwill and other intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable, but at least annually. Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized based on the excess of the carrying amount over the fair value (“FV”) of the assets. FV generally is determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company believes that, as of March 31, 2020 and December 31, 2019, there was no significant impairments of its long-lived assets. Effective on January 1, 2020, the Company adopted ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. |
Deferred Charges, Policy [Policy Text Block] | Deferred Income Deferred income consists primarily of government grants and subsidies for supporting the Company’s technology innovation and transformation of boric acid, lithium and magnesium sulfate projects. The Company uses most of the subsidies to purchase machinery and equipment. Deferred income is amortized to revenue (other income) over the life of the assets for which the grant and subsidy was used for. Subsidies for declared project fund require government inspection to ensure proper use of the funds for the designated project. |
Long-Duration Contracts Revenue Recognition, Policy [Policy Text Block] | Unearned Revenue The Company records payments received from customers in advance of their orders as unearned revenue. These orders normally are delivered (usually within one month) based upon contract terms and customer demand. |
Revenue [Policy Text Block] | Revenue Recognition The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs typically upon receipts of the goods by customers. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government. VAT taxes are not affected by the income tax holiday. |
Cost of Goods and Service [Policy Text Block] | Cost of Sales Cost of sales (“COS”) consists primarily of material costs and direct labor and manufacturing overhead attributable to the production of the products. Write-down of inventory to lower of cost or net realizable value is also recorded in COS. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development Costs Research and development (“R&D”) costs are expensed as incurred and included in general and administrative (“G&A”) expenses. These costs primarily consist of cost of materials used, salaries paid for the Company’s development department and fees paid to third parties. R&D costs for the three months ended March 31, 2020 and 2019 were immaterial |
Income Tax, Policy [Policy Text Block] | Income Taxes Income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in the statement of income. At March 31, 2020 and December 31, 2019, the Company did not take any uncertain positions that would necessitate recording a tax related liability. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Credit Risk Cash includes cash on hand and demand deposits in accounts maintained within China. Balances at financial institutions within China are not covered by insurance. The Company has not experienced any losses in such accounts. Certain other financial instruments, which subject the Company to concentration of credit risk, consist of accounts and other receivables. The Company does not require collateral or other security to support these receivables. The Company conducts periodic reviews of its customers’ financial condition and customer payment practices to minimize collection risk on accounts receivable. The operations of the Company are located primarily in China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in China, as well as by the general state of the PRC economy. |
Earnings Per Share, Policy [Policy Text Block] | Basic and Diluted Earnings (Loss) per Share (EPS) Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similarly, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted EPS are based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to have been exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation and Comprehensive Income (Loss) The accounts of the US parent company are maintained in USD. The functional currency of the Company’s China subsidiaries is the Chinese Yuan Renminbi (“RMB”). The accounts of the China subsidiaries were translated into USD in accordance with FASB ASC Topic 830, “Foreign Currency Matters. “Comprehensive Income.” |
Statement of Cash Flows [Policy Text Block] | Statement of Cash Flows In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value (“FV”) of Financial Instruments Certain of the Company’s financial instruments, including cash and equivalents, notes receivable, accrued liabilities and accounts payable, carrying amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each qualify as financial instruments and are a reasonable estimate of their FV because of the short period of time between the origination of such instruments and their expected realization and the current market rate of interest. |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements and Disclosures ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the FV measurement. Effective January 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the FV hierarchy. As of March 31, 2020 and December 31, 2019, the Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. |
Lessee, Leases [Policy Text Block] | Leases On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02), as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet for all leases with terms longer than 12 months and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company concluded the adoption of this ASU did not have a material impact on the Company’s CFS since the Company does not have any lease that is longer than 12 months. |
Segment Reporting, Policy [Policy Text Block] | Segment Reporting FASB ASC Topic 280, “Segment Reporting,” |
Reclassification, Comparability Adjustment [Policy Text Block] | Reclassification Certain prior period balance sheet accounts were reclassified for the purpose of consistency with the current year’s presentation. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its CFS. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on its CFS. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) [Line Items] | |
Schedule of Cash and Cash Equivalents [Table Text Block] | The following table presents in US dollars (“USD”) the amount of cash and equivalents held by the Company as of March 31, 2020 and December 31, 2019, respectively, based on the jurisdiction of deposit. The Company’s US parent holds cash and equivalents in US bank accounts denominated in USD. United States China Total March 31, 2020 - $ 350,545 $ 350,545 December 31, 2019 - $ 160,024 $ 160,024 |
Property and Equipment, Useful Lives [Member] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) [Line Items] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; major additions, repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method with a 3% - 10% salvage value and estimated lives as follows: Buildings 20 years Structures and improvements 4-20 years Vehicles 4-8 years Office equipment 5 years Production equipment 3-10 years Equipment upgrade 5 years |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories at March 31, 2020 and December 31, 2019, respectively, were as follows: 2020 2019 Raw materials $ 264,999 $ 311,049 Finished goods 912,267 1,491,598 Total $ 1,177,266 $ 1,802,647 |
OTHER RECEIVABLES (Tables)
OTHER RECEIVABLES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Other receivables consisted of the following at March 31, 2020 and December 31, 2019: 2020 2019 VAT tax receivable and prepaid shipping fee $ 19,558 $ - Other receivable – sale of discontinued operations 354 354 Total $ 19,912 $ 354 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment, Net [Member] | |
PROPERTY AND EQUIPMENT, NET (Tables) [Line Items] | |
Property, Plant and Equipment [Table Text Block] | Property and equipment consisted of the following at March 31, 2020 and December 31, 2019, respectively: 2020 2019 Structures and improvements $ 443,217 $ 450,136 Production equipment 2,414,173 2,451,859 Equipment upgrade 244,870 248,692 Total 3,102,260 3,150,687 Less: accumulated depreciation (1,795,355 ) (1,747,006 ) Property and equipment, net $ 1,306,905 $ 1,403,681 |
TAXES PAYABLE (Tables)
TAXES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Tax Disclosure [Abstract] | |
Schedule of Taxes Payable [Table Text Block] | Taxes payable consisted of the following March 31, 2020 and December 31, 2019, respectively: 2020 2019 Other $ 26,091 $ 29,350 VAT 296,030 265,905 Taxes payable $ 322,121 $ 295,255 |
ACCRUED LIABILITIES AND OTHER_2
ACCRUED LIABILITIES AND OTHER PAYABLES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | Accrued liabilities and other payables consisted of the following at March 31, 2020 and December 31, 2019, respectively: 2020 2019 Advances from third parties $ 2,726 $ 1,049 Other 514,141 534,275 Accrued expenses 635,475 560,374 Total accrued liabilities and other payables $ 1,152,342 $ 1,095,698 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | The following table summarized the due from (to) related parties as of March 31, 2020 and December 31, 2019, respectively: 2020 2019 Related party name Due from Qinghai Mining $ 734,877 $ 554,527 Total $ 734,877 $ 554,527 Due to Dingjia $ 55,281 $ 56,144 Due to Zhongtian Resources 54,633 49,125 Due to A major shareholder 679,891 573,264 Total $ 789,805 $ 678,533 |
DEFERRED INCOME (Tables)
DEFERRED INCOME (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Income [Abstract] | |
Schedule of Other Nonoperating Income, by Component [Table Text Block] | The detail of deferred income for the Company’s special projects at March 31, 2020 is: Government subsidy amount Project completion date Useful life in years Accumulated amortization Net Technology upgrade for using lean ore to produce magnesium sulfate $ 310,511 8/1/2013 10 $ 207,007 $ 103,504 Technical transformation for boric acid and magnesium sulfate produced from low grade ore 70,570 5/1/2015 10 34,697 35,873 Project of comprehensive utilization of DaChaiDan Solid Boron Mine 1,411,413 1/1/2018 10 317,568 1,093,845 Project of high value utilization of magnesium-rich waste liquid 64,925 7/9/2019 10 4,870 60,055 Total $ 1,857,419 $ 564,142 $ 1,293,277 Government subsidy amount Project completion date Useful life in years Accumulated amortization Net Technology upgrade for using lean ore to produce magnesium sulfate $ 315,358 8/1/2013 10 $ 202,355 $ 113,003 Technical transformation for boric acid and magnesium sulfate produced from low grade ore 71,672 5/1/2015 10 33,447 38,225 Project of comprehensive utilization of DaChaiDan Solid Boron Mine 1,433,445 1/1/2018 10 286,689 1,146,756 Project of high value utilization of magnesium-rich waste liquid 65,939 7/9/2019 10 3,297 62,642 Total $ 1,886,414 $ 525,788 $ 1,360,626 |
SUBSIDY INCOME (Tables)
SUBSIDY INCOME (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | Subsidy income consisted of amortization of deferred income for declared special projects and government’s general incentive fund (recorded as income upon receipt) for the three months ended March 31, 2020 and 2019, respectively: Three Months Ended March 31, 2020 2019 Technology upgrade for using lean ore to produce magnesium sulfate $ 7,881 $ 8,152 Technical transformation for boric acid and magnesium sulfate produced from low grade ore 1,791 1,853 Project of comprehensive utilization of DaChaiDan Solid Boron Mine 35,822 37,055 Project of high value utilization of magnesium-rich waste liquid 1,647 - Total $ 47,141 $ 47,060 |
DEFERRED TAX ASSETS (Tables)
DEFERRED TAX ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Tax Assets (Liabilities), Net Disclosure [Abstract] | |
Summary of Deferred Tax Liability Not Recognized [Table Text Block] | As of March 31, 2020 and December 31, 2019, respectively, deferred tax assets consisted of the following: 2020 2019 Deferred tax asset –NOL of US parent company $ 972,955 $ 941,203 Less: valuation allowance (972,955 ) (941,203 ) Deferred tax assets, net $ - $ - |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The following is a reconciliation of the difference between the actual provision for income taxes and the (benefit) provision computed by applying the federal statutory rate on income before income taxes for the three months ended March 31, 2020 and 2019, respectively: 2020 2019 Tax benefit at US federal statutory rates $ (48,432 ) $ (19,505 ) Foreign income taxed at different rates (3,177 ) 150 Tax holiday in PRC 7,943 2,562 Utilization of NOL - (8,074 ) Valuation allowance 43,666 24,867 Tax expense per financial statements - - |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) | Mar. 27, 2020USD ($) | Mar. 27, 2020CNY (¥) | Sep. 30, 2019USD ($) | Sep. 30, 2019CNY (¥) | Dec. 31, 2018shares | Aug. 23, 2013 | Apr. 30, 2020USD ($) | Apr. 30, 2020CNY (¥) |
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Number of Wholly Owned Subsidiaries Created | 2 | |||||||
Qinghai Technology [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 51.00% | 51.00% | ||||||
Agreement, Description | Investment Cooperation Agreement, Memorandum of Cooperation and Licensing Agreement with Xi'an Jinzang Membrane Environmental Protection Technology Co., Ltd. (Xi’an Jinzang) to produce up to 20,000 tons of battery grade lithium hydroxide and 10,000 tons of lithium carbonate annually, subject to funding | Investment Cooperation Agreement, Memorandum of Cooperation and Licensing Agreement with Xi'an Jinzang Membrane Environmental Protection Technology Co., Ltd. (Xi’an Jinzang) to produce up to 20,000 tons of battery grade lithium hydroxide and 10,000 tons of lithium carbonate annually, subject to funding | ||||||
Proceeds from Contributed Capital | $ 19,746,000 | ¥ 140,000,000 | $ 710,000 | ¥ 5,000,000 | ||||
Xi'an Jinzang Membrane Environmental Protection Technology Co., Ltd. (Xi'an Jinzang) [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 49.00% | 49.00% | ||||||
Mid-Haven Sincerity International Resources Investment Co., Ltd (Mid-Haven) [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | shares | 106,001,971 | |||||||
Number of Subsidiaries | 2 | |||||||
Equity Method Investment, Ownership Percentage | 57.00% | |||||||
Mid-Haven Sincerity International Resources Investment Co., Ltd (Mid-Haven) [Member] | Qing Hai Mid-Haven Boron & Lithium Technology Company, Ltd. ("Qing Hai Technology") [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 100.00% | |||||||
Heat HP, Inc. and Heat PHE, Inc. [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Sales of Business, Affiliate and Productive Assets | $ | $ 353 | |||||||
Heat HP, Inc. and Heat PHE, Inc. [Member] | SmartHeat Jinhui (Beijing) Energy Technology Ltd. [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Sales of Business, Affiliate and Productive Assets | 15 | ¥ 100 | ||||||
Heat HP, Inc. and Heat PHE, Inc. [Member] | SmartHeat (China) Investment Ltd. [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Sales of Business, Affiliate and Productive Assets | 56 | 400 | ||||||
Heat HP, Inc. and Heat PHE, Inc. [Member] | SmartHeat (Shanghai) Trading Co., Ltd. [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Sales of Business, Affiliate and Productive Assets | 56 | 400 | ||||||
Heat HP, Inc. and Heat PHE, Inc. [Member] | SmartHeat (Shenyang) Heat Pump Technology Co., Ltd. [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Sales of Business, Affiliate and Productive Assets | 56 | 400 | ||||||
Heat HP, Inc. and Heat PHE, Inc. [Member] | SanDeke Co., Ltd. [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Sales of Business, Affiliate and Productive Assets | 85 | 600 | ||||||
Heat HP, Inc. and Heat PHE, Inc. [Member] | SmartHeat Heat Exchange Equipment Co. [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Sales of Business, Affiliate and Productive Assets | $ 85 | ¥ 600 | ||||||
Date of Registration and Establishment of JV [Member] | Qinghai Technology [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Contributed Capital | $ 5,077,000 | ¥ 36,000,000 | ||||||
Payment before July 31, 2020 [Member] | Qinghai Technology [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Contributed Capital | 10,155,000 | 72,000,000 | ||||||
Payment before October 31, 2020 [Member] | Qinghai Technology [Member] | ||||||||
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details) [Line Items] | ||||||||
Proceeds from Contributed Capital | $ 4,513,000 | ¥ 32,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||||
Net Income (Loss) Attributable to Parent | $ (230,628) | $ (95,686) | ||
Accounts Receivable, Allowance for Credit Loss | $ 0 | 0 | $ 0 | |
Allowance for Doubtful Other Receivables, Current | 2,529 | $ 2,529 | ||
Allowance for Advances to Suppliers | $ 0 | |||
Increase (Decrease) in Prepaid Expenses, Other | 28,000 | |||
Property, Plant and Equipment, Additions | 141,000 | |||
Payments to Acquire Property, Plant, and Equipment | $ 113,000 | |||
Number of Operating Segments | 1 | |||
Minimum [Member] | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||||
Property, Plant and Equipment, Salvage Value, Percentage | 3.00% | 3.00% | ||
Maximum [Member] | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||||
Property, Plant and Equipment, Salvage Value, Percentage | 10.00% | 10.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Cash and Cash Equivalents - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
UNITED STATES | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | $ 0 | $ 0 |
CHINA | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | 350,545 | 160,024 |
GERMANY | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and equivalents | $ 350,545 | $ 160,024 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Estimated Useful Lives of Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Useful Life | 20 years |
Building and Building Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Useful Life | 4 years |
Building and Building Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Useful Life | 20 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Useful Life | 4 years |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Useful Life | 8 years |
Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Useful Life | 5 years |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Useful Life | 5 years |
Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Useful Life | 3 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Useful Life | 10 years |
INVENTORIES, NET (Details) - S
INVENTORIES, NET (Details) - Schedule of Inventories - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Inventories [Abstract] | ||
Raw materials | $ 264,999 | $ 311,049 |
Finished goods | 912,267 | 1,491,598 |
Total | $ 1,177,266 | $ 1,802,647 |
NOTES RECEIVABLE - BANK ACCEP_2
NOTES RECEIVABLE - BANK ACCEPTANCES (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Financing Receivable, after Allowance for Credit Loss, Current | $ 126,844 | $ 79,478 |
Bank Acceptances Executed and Outstanding | $ 640,000 |
OTHER RECEIVABLES (Details) - S
OTHER RECEIVABLES (Details) - Schedule of Receivables, Prepayments and Deposits - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Receivables, Prepayments and Deposits [Abstract] | ||
VAT tax receivable and prepaid shipping fee | $ 19,558 | $ 0 |
Other receivable – sale of discontinued operations | 354 | 354 |
Total | $ 19,912 | $ 354 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 76,346 | $ 79,975 |
PROPERTY AND EQUIPMENT, NET (D
PROPERTY AND EQUIPMENT, NET (Details) - Schedule of Property, Plant and Equipment - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property & equipment, gross | $ 3,102,260 | $ 3,150,687 |
Less: accumulated depreciation | (1,795,355) | (1,747,006) |
Property and equipment, net | 1,306,905 | 1,403,681 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property & equipment, gross | 443,217 | 450,136 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property & equipment, gross | 2,414,173 | 2,451,859 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property & equipment, gross | $ 244,870 | $ 248,692 |
CONSTRUCTION IN PROGRESS (_CI_2
CONSTRUCTION IN PROGRESS (“CIP”) (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Disclosure Text Block Supplement [Abstract] | ||
Construction in Progress, Gross | $ 1,610,768 | $ 1,635,912 |
TAXES PAYABLE (Details) - Sched
TAXES PAYABLE (Details) - Schedule of Taxes Payable - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Taxes Payable [Abstract] | ||
Other | $ 26,091 | $ 29,350 |
VAT | 296,030 | 265,905 |
Taxes payable | $ 322,121 | $ 295,255 |
ACCRUED LIABILITIES AND OTHER_3
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) [Line Items] | ||
Accrued Salaries, Current | $ 635,475 | $ 560,374 |
Northtech [Member] | ||
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) [Line Items] | ||
Dividends Payable | 400,000 | |
Accounts Payable, Other | 89,141 | 134,275 |
Northtech [Member] | Northtech [Member] | ||
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) [Line Items] | ||
Dividends Payable | 425,000 | |
Qinghai Technology [Member] | ||
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) [Line Items] | ||
Accrued Salaries, Current | $ 600,000 | $ 480,000 |
Number of Officers | 3 | 3 |
ACCRUED LIABILITIES AND OTHER_4
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) - Schedule of Accrued Liabilities and Other Payables - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Accrued Liabilities and Other Payables [Abstract] | ||
Advances from third parties | $ 2,726 | $ 1,049 |
Other | 514,141 | 534,275 |
Accrued expenses | 635,475 | 560,374 |
Total accrued liabilities and other payables | $ 1,152,342 | $ 1,095,698 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | Jul. 01, 2019USD ($) | Jul. 01, 2019CNY (¥) | Mar. 31, 2020USD ($) | Mar. 31, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||||
Depreciation | $ 76,346 | $ 79,975 | ||||||
Related Party Transaction, Due from (to) Related Party | 789,805 | $ 678,533 | $ 678,533 | |||||
Revenue from Related Parties | 0 | 58,379 | ||||||
Qinghai Technology and Qinghai Mining Boron Ore Purchase Contract [Member] | ||||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||||
Related Party Transaction, Description of Transaction | Qinghai Mining is to supply Qinghai Technology boron ore based on Qinghai Technology’s monthly production plan at a price of RMB 62 ($8.77) per ton. The price is adjustable in the future if there is a significant fluctuation of the market price for the boron ore. | Qinghai Mining is to supply Qinghai Technology boron ore based on Qinghai Technology’s monthly production plan at a price of RMB 62 ($8.77) per ton. The price is adjustable in the future if there is a significant fluctuation of the market price for the boron ore. | ||||||
Related Party Transaction, Amounts of Transaction | $ 8.77 | ¥ 62 | 11.10 | ¥ 77.5 | 10.21 | ¥ 70.46 | ||
Qinghai Technology and Qinghai Mining Slag Purchase Contract [Member] | ||||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||||
Related Party Transaction, Amounts of Transaction | $ 4.23 | ¥ 30 | ||||||
Qinghai Mining [Member] | ||||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||||
Number of Investors | 3 | 3 | ||||||
Due to Related Parties, Current | $ 730,000 | 550,000 | 550,000 | |||||
Related Party Transaction, Purchases from Related Party | 113,528 | 192,570 | ||||||
Zhongtian Resources [Member] | ||||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||||
Depreciation | 6,263 | 8,984 | ||||||
Related Party Transaction, Due from (to) Related Party | (54,633) | (49,125) | (49,125) | |||||
Dingjia [Member] | ||||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||||
Related Party Transaction, Due from (to) Related Party | 60,000 | $ 60,000 | $ 60,000 | |||||
Equity Method Investment, Ownership Percentage | 90.00% | 90.00% | ||||||
Revenue from Related Parties | 0 | $ 58,379 | ||||||
Majority Shareholder [Member] | ||||||||
RELATED PARTY TRANSACTIONS (Details) [Line Items] | ||||||||
Due to Related Parties | $ 679,891 | $ 573,263 | $ 573,263 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details) - Schedule of Related Party Transactions - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||
Due from (to), net | $ 789,805 | $ 678,533 |
Total | 734,877 | 554,527 |
Qinghai Mining [Member] | ||
Related Party Transaction [Line Items] | ||
Due to | 734,877 | 554,527 |
Dingjia [Member] | ||
Related Party Transaction [Line Items] | ||
Due to | 55,281 | 56,144 |
Due from (to), net | 60,000 | 60,000 |
Zhongtian Resources [Member] | ||
Related Party Transaction [Line Items] | ||
Due to | 54,633 | 49,125 |
Due from (to), net | (54,633) | (49,125) |
Majority Shareholder [Member] | ||
Related Party Transaction [Line Items] | ||
Due to | $ 679,891 | $ 573,264 |
DEFERRED INCOME (Details) - Sch
DEFERRED INCOME (Details) - Schedule of Other Nonoperating Income, by Component - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
DEFERRED INCOME (Details) - Schedule of Other Nonoperating Income, by Component [Line Items] | ||
Government subsidy amount | $ 1,857,419 | $ 1,886,414 |
Amortization | 564,142 | 525,788 |
Net | 1,293,277 | 1,360,626 |
Technology upgrade for using lean ore to produce magnesium sulfate [Member] | ||
DEFERRED INCOME (Details) - Schedule of Other Nonoperating Income, by Component [Line Items] | ||
Government subsidy amount | $ 310,511 | $ 315,358 |
Project completion date | Aug. 1, 2013 | Aug. 1, 2013 |
Useful life in years | 10 years | 10 years |
Amortization | $ 207,007 | $ 202,355 |
Net | 103,504 | 113,003 |
Technical transformation for boric acid and magnesium sulfate produced from low grade ore [Member] | ||
DEFERRED INCOME (Details) - Schedule of Other Nonoperating Income, by Component [Line Items] | ||
Government subsidy amount | $ 70,570 | $ 71,672 |
Project completion date | May 1, 2015 | May 1, 2015 |
Useful life in years | 10 years | 10 years |
Amortization | $ 34,697 | $ 33,447 |
Net | 35,873 | 38,225 |
Project of comprehensive utilization of DaChaiDan Solid Boron Mine [Member] | ||
DEFERRED INCOME (Details) - Schedule of Other Nonoperating Income, by Component [Line Items] | ||
Government subsidy amount | $ 1,411,413 | $ 1,433,445 |
Project completion date | Jan. 1, 2018 | Jan. 1, 2018 |
Useful life in years | 10 years | 10 years |
Amortization | $ 317,568 | $ 286,689 |
Net | 1,093,845 | 1,146,756 |
Project of high value utilization of magnesium-rich waste liquid [Member] | ||
DEFERRED INCOME (Details) - Schedule of Other Nonoperating Income, by Component [Line Items] | ||
Government subsidy amount | $ 64,925 | $ 65,939 |
Project completion date | Jul. 9, 2019 | Jul. 9, 2019 |
Useful life in years | 10 years | 10 years |
Amortization | $ 4,870 | $ 3,297 |
Net | $ 60,055 | $ 62,642 |
SUBSIDY INCOME (Details) - Sche
SUBSIDY INCOME (Details) - Schedule of Other Nonoperating Income (Expense) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
SUBSIDY INCOME (Details) - Schedule of Other Nonoperating Income (Expense) [Line Items] | ||
Other income | $ 47,141 | $ 47,060 |
Technology upgrade for using lean ore to produce magnesium sulfate [Member] | ||
SUBSIDY INCOME (Details) - Schedule of Other Nonoperating Income (Expense) [Line Items] | ||
Other income | 7,881 | 8,152 |
Technical transformation for boric acid and magnesium sulfate produced from low grade ore [Member] | ||
SUBSIDY INCOME (Details) - Schedule of Other Nonoperating Income (Expense) [Line Items] | ||
Other income | 1,791 | 1,853 |
Project of comprehensive utilization of DaChaiDan Solid Boron Mine [Member] | ||
SUBSIDY INCOME (Details) - Schedule of Other Nonoperating Income (Expense) [Line Items] | ||
Other income | 35,822 | 37,055 |
Project of high value utilization of magnesium-rich waste liquid [Member] | ||
SUBSIDY INCOME (Details) - Schedule of Other Nonoperating Income (Expense) [Line Items] | ||
Other income | $ 1,647 | $ 0 |
DEFERRED TAX ASSETS (Details)
DEFERRED TAX ASSETS (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Deferred Tax Assets (Liabilities), Net Disclosure [Abstract] | |
Deferred Tax Assets Valuation Allowance, Percentage | 100.00% |
DEFERRED TAX ASSETS (Details) -
DEFERRED TAX ASSETS (Details) - Schedule of Deferred Tax Liability - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
DEFERRED TAX ASSETS (Details) - Schedule of Deferred Tax Liability [Line Items] | ||
Less: valuation allowance | $ (972,955) | $ (941,203) |
Deferred tax assets, net | 0 | 0 |
Foreign Tax Authority [Member] | ||
DEFERRED TAX ASSETS (Details) - Schedule of Deferred Tax Liability [Line Items] | ||
Deferred tax asset – noncurrent NOL | $ 972,955 | $ 941,203 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2020 | Dec. 31, 2019 |
INCOME TAXES (Details) [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | ||
Reduction to Taxable Income, Percent | 80.00% | |||
Operating Loss Carryforwards (in Dollars) | $ 972,955 | |||
Deferred Tax Assets Valuation Allowance, Percentage | 100.00% | |||
SmartHeat (Shanghai) Trading Co., Ltd. [Member] | Foreign Tax Authority [Member] | ||||
INCOME TAXES (Details) [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Percent | 25.00% | |||
Mid-Haven Sincerity International Resources Investment Co., Ltd (Mid-Haven) [Member] | Foreign Tax Authority [Member] | ||||
INCOME TAXES (Details) [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Percent | 25.00% | |||
Qing Hai Mid-Haven Boron & Lithium Technology Company, Ltd. ("Qing Hai Technology") [Member] | Foreign Tax Authority [Member] | ||||
INCOME TAXES (Details) [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 15.00% |
INCOME TAXES (Details) - Schedu
INCOME TAXES (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Tax at US federal statutory rates | $ (48,432) | $ (19,505) |
Foreign income taxed at different rates | (3,177) | 150 |
Tax holiday in PRC | 7,943 | 2,562 |
Utilization of NOL | 0 | (8,074) |
Valuation allowance | 43,666 | 24,867 |
Tax expense per financial statements | $ 0 | $ 0 |
MAJOR CUSTOMERS AND VENDORS (De
MAJOR CUSTOMERS AND VENDORS (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||
MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | |||
Accounts Receivable, after Allowance for Credit Loss, Current (in Dollars) | $ 110,758 | $ 243,975 | |
Customer Concentration Risk [Member] | Customer One [Member] | Revenue Benchmark [Member] | |||
MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | |||
Concentration Risk, Percentage | 16.00% | 22.00% | |
Customer Concentration Risk [Member] | Customer Two [Member] | Revenue Benchmark [Member] | |||
MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | |||
Concentration Risk, Percentage | 14.00% | 14.00% | |
Customer Concentration Risk [Member] | Customer Three [Member] | Revenue Benchmark [Member] | |||
MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | |||
Concentration Risk, Percentage | 13.00% | 13.00% | |
Customer Concentration Risk [Member] | Customer Four [Member] | Revenue Benchmark [Member] | |||
MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | |||
Concentration Risk, Percentage | 12.00% | ||
Supplier Concentration Risk [Member] | Accounts Payable [Member] | |||
MAJOR CUSTOMERS AND VENDORS (Details) [Line Items] | |||
Accounts Payable (in Dollars) | $ 113,528 | $ 192,570 |
STATUTORY RESERVES AND RESTRI_2
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) | 3 Months Ended |
Mar. 31, 2020 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) [Line Items] | |
After-Tax Income, Percentage, Appropriations | 10.00% |
Foreign Invested Enterprise [Member] | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) [Line Items] | |
Statutory Reserves, Description | An FIE is required to allocate at least 10% of its annual after-tax profit to the surplus reserve until such reserve has reached 50% of its respective registered capital based on the FIE’s PRC statutory accounts. |
Domestic Enterprise [Member] | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) [Line Items] | |
Statutory Reserves, Description | Additionally, in accordance with the Company Laws of the PRC, a domestic enterprise is required to provide surplus reserve at least 10% of its annual after-tax profit until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. |