Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 12, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Code Chain New Continent Ltd | |
Entity Central Index Key | 0001641398 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,188,958 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 001-37513 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,939,520 | $ 2,483,567 |
Short Term Investment | 3,036,938 | |
Notes receivable | 43,003 | |
Accounts receivable, net | 1,039,772 | 2,197,264 |
Other receivables, net | 1,820,365 | 52,616 |
Inventories | 1,248,906 | 1,197,065 |
Prepayments | 4,144,414 | 4,069,214 |
Discontinued operations - current assets | 1,544,177 | |
Total current assets | 13,229,915 | 11,586,906 |
PLANT AND EQUIPMENT, NET | 79,688 | 19,057 |
RIGHT-OF-USE ASSETS | 85,605 | 90,250 |
OTHER ASSETS | ||
Goodwill | 14,329,042 | 7,289,454 |
Intangible assets, net | 1,130,528 | |
Deferred tax assets | 3,531 | 37,532 |
Discontinued operations - non-current assets | 3,424,390 | |
Total other assets | 15,463,101 | 10,751,376 |
Total assets | 28,858,309 | 22,447,589 |
CURRENT LIABILITIES | ||
Short term loans - bank | 437,884 | |
Accounts payable | 920,480 | 344,108 |
Other payables and accrued liabilities | 2,585,341 | 4,121,862 |
Other payables - related parties | 641,570 | 1,336,902 |
Customer deposits | 1,040,124 | 146,771 |
Lease liabilities - current | 62,093 | 61,009 |
Taxes payable | 3,555 | 202 |
Discontinued operations - current liabilities | 10,174,066 | |
Total current liabilities | 5,691,047 | 16,184,920 |
OTHER LIABILITIES | ||
Lease liabilities - noncurrent | 60,681 | 61,580 |
Discontinued operations - non-current liabilities | 239,097 | |
Total other liabilities | 60,681 | 300,677 |
Total liabilities | 5,751,728 | 16,485,597 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 28,514,520 and 20,821,661 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively* | 2,851 | 2,082 |
Additional paid-in capital | 19,242,951 | 8,350,861 |
Retained earnings | 5,400,286 | (1,558,683) |
Accumulated other comprehensive loss | (1,539,507) | (832,268) |
Total shareholders' equity | 23,106,581 | 5,961,992 |
Total liabilities and shareholders' equity | $ 28,858,309 | $ 22,447,589 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 28,514,520 | 28,514,520 |
Common stock, shares outstanding | 20,821,661 | 20,821,661 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES | ||||
Equipment and systems | ||||
Fuel materials | 1,279,781 | 7,418,297 | 6,445,181 | 12,285,253 |
Trading and others | 46,482 | 473,468 | 46,482 | 639,297 |
TOTAL REVENUES | 1,326,263 | 7,891,765 | 6,491,663 | 12,924,550 |
COST OF REVENUES | ||||
Equipment and systems | ||||
Fuel materials | 1,189,205 | 7,423,011 | 6,172,177 | 12,312,714 |
Trading and others | 256,787 | 316,063 | ||
TOTAL COST OF REVENUES | 1,189,205 | 7,679,798 | 6,172,177 | 12,628,777 |
GROSS PROFIT | 137,058 | 211,967 | 319,486 | 295,773 |
OPERATING EXPENSES (INCOME) | ||||
Selling, general and administrative | 311,685 | (19,305) | 904,055 | 567,804 |
Provision for (recovery of) doubtful accounts | 969 | 405,022 | (134,769) | 289,873 |
TOTAL OPERATING EXPENSES (INCOME) | 312,654 | 385,717 | 769,286 | 857,677 |
INCOME FROM OPERATIONS | (175,596) | (173,750) | (449,800) | (561,904) |
OTHER INCOME (EXPENSE) | ||||
Interest income | 8,423 | (2) | 10,063 | |
Interest expense | (9,462) | (9,764) | (11,482) | (17,606) |
Investment income | 3,600 | 12,950 | ||
Other income (expense), net | (1) | 946 | (1) | |
Total other income (expense), net | 2,560 | (8,820) | 11,530 | (17,606) |
INCOME BEFORE INCOME TAXES FROM CONTINUING OPERATIONS | (173,036) | (182,570) | (438,270) | (579,510) |
PROVISION FOR INCOME TAXES | 1,567 | (5,279) | 50,111 | 42,239 |
INCOME FROM CONTINUING OPERATIONS | (174,603) | (177,291) | (488,381) | (621,749) |
Discontinued operations: | ||||
Income (loss) from discontinued operations, net of taxes | (4,446) | 1,537,297 | 495,733 | 1,250,309 |
Gain on disposal, net of taxes | 6,951,617 | 6,951,617 | ||
Income (loss) from discontinued operations, total | 6,947,171 | 1,537,297 | 7,447,350 | 1,250,309 |
Net income | 6,772,568 | 1,360,006 | 6,958,969 | 628,560 |
OTHER COMPREHENSIVE INCOME | ||||
Foreign currency translation adjustment | (382,301) | (558,490) | (707,240) | (47,405) |
COMPREHENSIVE INCOME (LOSS) | $ 6,390,267 | $ 801,516 | $ 6,251,729 | $ 581,155 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||
Basic and diluted | 27,640,684 | 21,735,542 | 27,640,684 | 20,867,311 |
Earnings per share from continuing operations | ||||
Basic and diluted | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.03) |
Earnings per share from discontinued operations | ||||
Basic and diluted | 0.25 | 0.07 | 0.27 | 0.06 |
Earnings per share available to common shareholders | ||||
Basic and diluted | $ 0.25 | $ 0.06 | $ 0.25 | $ 0.03 |
Condensed Statements of Changes
Condensed Statements of Changes in Shareholders' Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings Statutory Reserves | Retained Earnings Unrestricted | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2018 | $ 1,990 | $ 4,814,846 | $ 15,267,660 | $ (720,693) | $ 19,363,803 | ||
Balance, Shares at Dec. 31, 2018 | 19,895,935 | ||||||
Net income | 628,560 | 628,560 | |||||
Issuance of common stock for cash | $ 149 | 2,983,850 | 2,983,999 | ||||
Issuance of common stock for cash, Shares | 1,492,000 | ||||||
Conversion of warrants into common stock | $ 11 | (11) | |||||
Conversion of warrants into common stock, Shares | 106,903 | ||||||
Issuance of common stock for debt settlement | $ 13 | 261,334 | 261,347 | ||||
Issuance of common stock for debt settlement, Shares | 131,330 | ||||||
Issuance of common stock for debt settlement | $ 14 | 290,747 | 290,761 | ||||
Issuance of common stock for debt settlement, shares | 142,530 | ||||||
Foreign currency translation | (47,405) | (47,405) | |||||
Balance at Jun. 30, 2019 | $ 2,177 | 8,350,766 | 15,896,220 | (768,098) | 23,481,065 | ||
Balance, Shares at Jun. 30, 2019 | 21,768,698 | ||||||
Balance at Dec. 31, 2019 | $ 2,082 | 8,350,861 | (1,558,683) | (832,267) | 5,961,992 | ||
Balance, Shares at Dec. 31, 2019 | 20,821,661 | ||||||
Net income | 6,958,969 | 6,958,969 | |||||
Issuance of shares for acquisition | $ 400 | 7,199,600 | 7,200,000 | ||||
Issuance of shares for acquisition, shares | 4,000,000 | ||||||
Issuance of common stock for cash | $ 369 | 3,692,490 | 3,692,859 | ||||
Issuance of common stock for cash, Shares | 3,692,859 | ||||||
Foreign currency translation | (707,240) | (707,240) | |||||
Balance at Jun. 30, 2020 | $ 2,851 | $ 19,242,951 | $ 5,400,286 | $ (1,539,507) | $ 23,106,581 | ||
Balance, Shares at Jun. 30, 2020 | 28,514,520 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 6,958,969 | $ 628,560 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation of plant and equipment | 8,448 | 198,570 |
Amortization of intangible assets | 46 | 108,082 |
Gain on disposal of discontinued operations | (6,951,617) | |
Deferred tax provision | 33,692 | (8,229) |
Change in operating assets and liabilities | ||
Notes receivable | 42,679 | (640,167) |
Accounts receivables | 1,133,484 | (2,627,521) |
Other receivables | (32,423) | (202,197) |
Other receivable - related party | 13,260 | 41,297 |
Inventories | (69,803) | 638,092 |
Prepayments | (131,316) | (346,858) |
Accounts payable | 545,282 | 648,537 |
Other payables and accrued liabilities | (1,161,359) | (1,764,652) |
Customer deposits | 599,565 | 506,600 |
Lease liabilities | 13,377 | 51,948 |
Taxes payable | 3,380 | 475,649 |
Net cash used in operating activities | 1,005,664 | (2,292,289) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net increase in cash from acquisition of Wuge | 228,788 | |
Net decrease in cash from disposal of discontinued operations | (470,576) | |
Purchase of intangible assets | (1,138,664) | |
Purchase of financial products | (3,058,670) | |
Purchase of equipment | (63,814) | (16,796) |
Net cash (used in) provided by investing activities | (4,502,936) | (16,796) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 2,572,697 | 2,984,000 |
Proceeds from short-term loans - bank | 441,017 | |
Net cash provided by financing activities | 3,013,714 | 2,984,000 |
EFFECT OF EXCHANGE RATE ON CASH | (60,489) | (65,187) |
INCREASE IN CASH | (544,047) | 609,728 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 2,483,567 | 726,737 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 1,939,520 | 1,336,465 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for income tax | 16,419 | |
Cash paid for interest | 11,482 | 17,606 |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | ||
Issuance of common stock for warrants conversion | 11 | |
Issuance of common stock for debts settlement | 552,108 | |
Initial recognition of right-of-use assets and lease liabilities | $ 122,774 | $ 317,349 |
Nature of Business and Organiza
Nature of Business and Organization | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of business and organization | Note 1 – Nature of business and organization Code Chain New Continent Limited (the "Company" or "CCNC"), formerly known as TMSR Holding Company Limited and JM Global Holding Company, was a blank check company incorporated in Delaware on April 10, 2015. The Company was formed for the purpose of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business transaction, one or more operating businesses or assets. On June 20, 2018, CCNC completed a reincorporation and as a result, the Company changed its state of incorporation from Delaware to Nevada (the "Reincorporation"). The Articles of Incorporation and Bylaws of CCNC Nevada became the governing instruments of the Company, resulting in a 2-for-1 forward stock split of the Company's common stock (the "Forward Split). The Reincorporation and Forward Split were approved by shareholders holding the majority of the outstanding shares of common stock of CCNC Delaware on June 1, 2018 at the Annual Meeting of Shareholders. On February 6, 2018, China Sunlong Environmental Technology Inc. ("China Sunlong") consummated the business combination with the Company pursuant to a Share Exchange Agreement (the "Share Exchange Agreement") dated as of August 28, 2017 by and among (i) the Company; (ii) Zhong Hui Holding Limited; (iii) China Sunlong; (iv) each of the shareholders of China Sunlong named on Annex I of the Share Exchange Agreement (the "Sellers"); and (v) Chuanliu Ni, a Chinese citizen who is the Chief Executive Officer and director of China Sunlong, in the capacity as the representative for the Sellers. Pursuant to the Share Exchange Agreement, the Company acquired from the Sellers all of the issued and outstanding equity interests of China Sunlong in exchange for 17,990,856 newly-issued shares of common stock of the Company to the Sellers. 1,799,088 of these newly-issued shares are held in escrow for 18 months from the closing date of the Business Combination as a security for China Sunlong and the Sellers' indemnification obligations under the Share Exchange Agreement. This transaction is accounted for as a "reverse merger" and recapitalization at the date of the consummation of the transaction since the shareholders of China Sunlong owns the majority of the outstanding shares of the Company immediately following the completion of the transaction and the Company's operations was the operations of China Sunlong following the transaction. Accordingly, China Sunlong was deemed to be the accounting acquirer in the transaction and the transaction was treated as a recapitalization of China Sunlong. The financial statements of China Sunlong prior to February 6, 2018 are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of the Company. China Sunlong is a holding company incorporated on August 31, 2015, under the laws of the Cayman Islands. China Sunlong has no substantive operations other than holding all of the outstanding share capital of Shengrong Environmental Protection Holding Company Limited ("Shengrong BVI"). Shengrong BVI is a holding company incorporated on June 30, 2015, under the laws of the British Virgin Islands. Shengrong BVI has no substantive operations other than holding all of the outstanding share capital of Hong Kong Shengrong Environmental Technology Limited ("Shengrong HK"). Shengrong HK is also a holding company holding all of the outstanding equity of Shengrong Environmental Protection Technology (Wuhan) Co., Ltd. ("Shengrong WFOE"). The Company focuses on the industrial solid waste recycling and comprehensive utilization. The Company's main products are high efficiency permanent magnetic separators and comprehensive utilization systems for industrial solid wastes. The Company's headquarter is located in Hubei Province, in the People's Republic of China (the "PRC" or "China"). All of the Company's business activities are carried out by the wholly owned operating Chinese company, Hubei Shengrong Environmental Protection Energy-Saving Science and Technology Ltd. ("Hubei Shengrong") prior to May 1, 2018. On April 11, 2018, the Company, Shengrong WFOE and Hubei Shengrong, both of which are the Company's indirectly owned subsidiaries (collectively "Purchasers"), entered into a Share Purchase Agreement with Long Liao, Chunyong Zheng, Wuhan Modern Industrial Technology Research Institute, and Hubei Zhonggong Materials Group Co., Ltd. (collectively "Sellers" ) and Wuhan HOST Coating Materials Co., Ltd. ("Wuhan HOST"), a company incorporated in China engaging in the research, development, production and sale of coating materials. Pursuant to the Share Purchase Agreement, as supplemented on August 16, 2018, the Purchasers acquired all of the outstanding equity interests of Wuhan Host. In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million, of which $4.7 million or RMB equivalent shall be paid in cash and $6.0 million shall be paid in shares of common stock, of CCNC ("Share Consideration"). The Parties agree the Share Consideration shall be an aggregate of 1,012,932 shares of common stock of which is based on the closing price of US$4.64 on March 27, 2018. On March 31, 2017, China Sunlong completed its acquisition of 100% of the equity in TJComex International Group Corporation ("TJComex BVI"). At the closing of such acquisition, the selling shareholders of TJComex BVI received 5,935 shares of China Sunlong Common Stock valued at $926.71 per share for 100% of their equity in TJComex BVI. TJComex BVI owns 100% of the issued and outstanding capital stock of TJComex Hong Kong Company Limited ("TJComex HK"), a Hong Kong limited liability company, which owns 100% equity interest of Tianjin Corro Technological Consulting Co., Ltd. ("TJComex WFOE"), a wholly foreign owned enterprise incorporated under the laws of the PRC. Pursuant to certain contractual arrangements, TJComex WFOE controls Tianjin Commodity Exchange Co., Ltd. ("TJComex Tianjin"), a limited liability company incorporated under the law of the PRC. TJComex Tianjin is engaged in general merchandise trading business and related consulting services, and its headquarter is located in the city of Tianjin, PRC. On April 2, 2018, the Company disposed of its subsidiary, TJComex BVI in consideration of (i) its minimum contribution to the Company's results of operation and (ii) the unsatisfactory synergy between the TJComex BVI business and the rest of the Company's business. The Company's decision to dispose of TJComex BVI is to (i) improve the Company's overall financial condition and results of operations, (ii) reduce the complexity of the Company's business, (iii) focus the Company's resources on the solid waste recycling business as well as developing environmental control business opportunities; and (iv) make it possible for the Company to pursue acquisition opportunities for more compatible businesses. TJComex BVI was disposed to Chuanliu Ni, a Chinese citizen who is the director of China Sunlong. As of April 2, 2018, the net assets of TJComex BVI were $16,598 and is being recorded as a loss from disposal of subsidiary in the consolidated financial statements for the period ending December 31, 2018. As TJComex BVI operating revenue was less than 1% of the Company's revenue and the disposal did not constitute a strategic shift that will have a major effect on the Company's operations and financial results, the results of operations for TJComex BVI were not reported as discontinued operations under the guidance of Accounting Standards Codification 205. On October 10, 2017, Hubei Shengrong established a wholly owned subsidiary, Fujian Shengrong Environmental Protection Energy-Saving Science and Technology Ltd. ("Fujian Shengrong"), with registered capital of RMB 10,000,000 (approximately USD 1,518,120). Fujian Shengrong has no operations prior to May 30, 2018. On May 30, 2018, Hubei Shengrong and two unrelated entities entered into certain Capital Transfer and Contribution Agreement pursuant to which these two entities shall contribute cash of approximately USD 5.0 million (RMB 32.0 million) into Fujian Shengrong and Hubei Shengrong shall contribute approximately USD 1.3 million (RMB 8.0 million) which is the consideration for certain technology consulting services to be provided by Hubei Shengrong to the two entities. Upon completion of the contribution, the total registered capital of Fujian Shengrong increased to RMB 40.0 million (approximately USD 6.3 million) and Hubai Shengrong owns 20% and the two entities collectively own 80% of the equity interest of Fujian Shengrong. In August 2018, Hubei Shengrong transferred 20% equity interest of Fujian Shengrong to Shengrong WFOE. The Company will account for the investment in Fujian Shengrong using the cost method. Since Shengrong WFOE did not provide any cash contribution to Fujian Shengrong or technology services, the investment balance under the cost method investment on June 30, 2020 is $0. On November 30, 2018, the Company entered into a Share Purchase Agreement with Jirong Huang and Qihuang Wang (collectively "Sellers") and Jiangsu Rong Hai Electric Power Fuel Co., Ltd. ("Rong Hai"), a company incorporated in China engaging in the sale of fuel materials and harbor cargo handling services. Pursuant to the Share Purchase Agreement, CCNC shall issue an aggregate of 4,630,000 shares of CCNC's common stock to the Rong Hai Shareholders, in exchange for Rong Hai Shareholders' agreement to enter into, and their agreement to cause Rong Hai to enter into, certain VIE Agreements (the "Rong Hai VIE Agreements") with Shengrong WFOE, through which Shengrong WFOE shall have the right to control, manage and operate Rong Hai in return for a service fee approximately equal to 100% of Rong Hai's net income ("Acquisition"). On November 30, 2018, Shengrong WFOE, the Company's indirectly owned subsidiary, entered into a series of VIE Agreements with Rong Hai and the Rong Hai Shareholders. The VIE Agreements are designed to provide Shengrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. Rong Hai has the necessary license to carry out coal trading business in China. The Acquisition closed on November 30, 2018. Starting on November 30, 2018, the Company's business activities added coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap, of which business activities are carried out in Nantong, Jiang Su Province, PRC. On December 27, 2018, the Company, entered into an Equity Purchase Agreement with Hopeway International Enterprises Limited., a private limited company duly organized under the laws of British Virgin Islands (the "Hopeway"). Pursuant to the Equity Purchase Agreement, Shengrong WOFE shall sell 100% equity interests in Hubei Shengrong to Hopeway in exchange for Hopeway's agreement to irrevocably forfeit and cancel 8,523,320 shares of common stock of the Company, constituting all the shares owned by Hopeway. The transaction contemplated by the Equity Purchase Agreement is hereby referred as Disposition. The Company's decision to dispose of Hubei Shengrong is due to the planning mandates of Wuhan Municipal Government 2018 which manufactures should move away from city's downtown area. Therefore, due to the policy change, Hubei Shengrong is forced to close the existing facility, relocate and build a new facility, which is expected to take approximately 7-8 years. As a result, Hubei Shengrong will not be able to keep the production running and will generate no income in the foreseeable future. Management believed it is very difficult, if possible at all, to continue manufacturing of solid waste recycling systems. As such, the Company has been actively seeking to dispose Hubei Shengrong while retaining the research and development and sale of solid waste recycling systems business. Upon closing of the Disposition, Hopeway will become the sole shareholder of Hubei Shengrong and as a result, assume all assets and obligations of Hubei Shengrong except the research and development team and intellectual property rights in connection with the solid waste recycling systems business shall be assigned to Shengrong WFOE as part of the Disposition. As Shengrong WFOE has significant continuing involvement in the sale of solid waste recycling systems business and the processed industrial waste materials trading business, this restructuring did not constitute a strategic shift that will have a major effect on the Company's operations and financial results. Therefore, the results of operations for Hubei Shengrong were not reported as discontinued operations under the guidance of Accounting Standards Codification 205. In April 2019, TMSR Holdings Limited ("TMSR HK"), our indirect wholly owned subsidiary, was incorporated under the laws of Hong Kong. In August 2019, Tongrong Technology (Jiangsu) Co., Ltd. ("Tongrong WFOE"), our indirect wholly owned subsidiary, was incorporated under the laws of PRC. In August 2019, Citi Profit Investment Holding Limited ("Citi Profit"), an exempted company formed under the laws of the British Virgin Islands, became our wholly owned subsidiary. TMSR HK, Tongrong WFOE and Citi Profit are all holding companies that do not have any substantive business operations. On January 3, 2020, the Company entered into a share purchase agreement with Sichuan Wuge Network Games Co., Ltd. ("Wuge") and all the shareholders of Wuge, including Wei Xu, Bibo Lin, Jiangsu Lingkong Network Joint Stock Co., Ltd., which is controlled by Wei Xu, and Anhui Shuziren Network Technology Co., Ltd., which is also controlled by Wei Xu. Pursuant to the share purchase agreement, on January 24, 2020, the Company issued an aggregate of 4,000,000 shares of TMSR's common stock to the shareholders of Wuge, in exchange for Wuge's shareholders' agreement to enter into, and their agreement to cause Wuge to enter into, certain VIE agreements (the "Wuge VIE Agreements") with Tongrong WFOE, through which Tongrong WFOE has the right to control, manage and operate Wuge in return for a service fee equal to 100% of Wuge's net income. On April 30, 2020, Tongrong WFOE entered into a series of assignment agreements with Shengrong WFOE, Rong Hai and shareholders of Rong Hai, pursuant to which Shengrong WFOE assign all its rights and obligations under the Rong Hai VIE Agreements to Tongrong WFOE. The Rong Hai VIE Agreements and the Assignment Agreements grant Tongrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. The assignment does not have any impact on Company's consolidated financial statements. Effective May 18, 2020, the Company changed its corporate name from "TMSR Holding Company Limited" to "Code Chain New Continent Limited" pursuant to a Certificate of Amendment to the Company's Articles of Incorporation filed with the Secretary of State of the State of Nevada. In connection with the name change, effective May 18, 2020, the ticker symbol of the Company's common stock and warrants changed from "TMSR" and "TMSRW" to "CCNC" and "CCNCW", respectively. On June 30, 2020, the Company entered into a share purchase agreement with Jiazhen Li, former CEO of the Company (the "Buyer"), Long Liao and Chunyong Zheng, who are former shareholders of Wuhan HOST Coating Materials Co., Ltd., an indirect subsidiary of the Company, (collectively the "Payees"). Pursuant to the Agreement, the Company agreed to sell, and the Buyer agreed to purchase all the issued and outstanding ordinary shares of China Sunlong (the "Sunlong Shares"). The Payees have a prior relationship with the Buyer and have agreed to be responsible for the payment of the purchase price on behalf of Buyer. The purchase price for the Sunlong Shares shall be $1,732,114, payable in consideration of cancellation of 1,012,932 shares of the Company owned by the Payees (the "CCNC Shares"). The CCNC Shares are valued at $1.71 per share, based on the closing price of the Company's common stock on June 30, 2020. The accompanying consolidated financial statements reflect the activities of CCNC and each of the following entities: Name Background Ownership China Sunlong 3 ● A Cayman Islands company 100% owned by the Company Shengrong BVI 3 ● ● A British Virgin Island company Incorporated on June 30, 2015 100% owned by China Sunlong Citi Profit BVI A British Virgin Island company Incorporated on April 2019 100% owned by the Company Shengrong HK 3 ● ● A Hong Kong company Incorporated on September 25, 2015 100% owned by Shengrong BVI TMSR HK ● ● A Hong Kong company Incorporated on April 2019 100% owned by Citi Profit BVI Shengrong WFOE 3 ● A PRC limited liability company and deemed a wholly foreign owned enterprise ("WFOE") 100% owned by Shengrong HK ● ● ● ● Incorporated on March 1, 2016 Registered capital of USD 12,946 (HKD100,000), fully funded Purchase and sales of high efficiency permanent magnetic separator and comprehensive utilization system Trading of processed industrial waste materials Tongrong WFOE ● ● A PRC limited liability company and deemed a wholly foreign owned enterprise ("WFOE") Incorporated on August 2019 100% owned by TMSR HK Hubei Shengrong 2 ● ● A PRC limited liability company Incorporated on January 14, 2009 100% owned by Shengrong WFOE ● Registered capital of USD 4,417,800 (RMB 30,000,000), fully funded ● ● Production and sales of high efficiency permanent magnetic separator and comprehensive utilization system. Trading of processed industrial waste materials Wuhan HOST 3 ● ● ● A PRC limited liability company Incorporated on October 27, 2010 Registered capital of USD 750,075 (RMB 5,000,000), fully funded 100% owned by Shengrong WFOE ● Research, development, production and sale of coating materials. Shanghai Host Coating Materials Co., Ltd. ("Shanghai HOST") 3 ● ● ● A PRC limited liability company Incorporated on December 11, 2014 Registered capital of USD 3,184,371 (RMB 20,000,000), to be fully funded by November 2024 ● No operations and no capital contribution has been made as of December 31, 2018 80% owned by Wuhan HOST Wuhan HOST Coating Materials Xiaogan Co., Ltd. ("Xiaogan HOST") 3 ● ● ● ● A PRC limited liability company Incorporated on December 25, 2018 Registered capital of USD 11,595,379 (RMB 80,000,000), to be fully funded by December 2028 No operations and no capital contribution has been made as of December 31, 2018 90% owned by Wuhan HOST Jiangsu Rong Hai Electric Power Fuel Co., Ltd. ("Rong Hai") ● ● ● ● A PRC limited liability company Incorporated on May 20, 2009 Registered capital of USD 3,171,655 (RMB 20,180,000), fully funded Coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap VIE of Tongrong WFOE Wuge ● ● A PRC limited liability company Incorporated on July 4, 2019 VIE of Tongrong WFOE TJComex BVI 1 ● ● A British Virgin Island company Incorporated on March 8, 2016 100% owned by China Sunlong TJComex HK 1 ● ● A Hong Kong company Incorporated on March 19, 2014 100% owned by TJComex BVI TJComex WFOE 1 ● A PRC limited liability company and deemed a wholly foreign owned enterprise ("WFOE") 100% owned by TJComex HK ● Incorporated on March 10, 2004 ● Registered capital of USD 200,000 TJComex Tianjin 1 ● A PRC limited liability company Incorporated on November 19, 2007 100% owned by TJComex WFOE ● Registered capital of USD 7,809,165 (RMB 55,000,000) ● General merchandise trading business and related consulting services 1 Disposed on April 2, 2018 2 Disposed on December 27, 2018 3 Disposed on June 30, 2020 Contractual Arrangements Rong Hai and Wuge are controlled through contractual agreements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of five agreements, consulting services agreement, equity pledge agreement, call option agreement, voting rights proxy agreement, and operating agreement (collectively the "Contractual Arrangements"). Material terms of each of the Rong Hai VIE Agreements are described below: Consulting Services Agreement Pursuant to the consulting services agreement between Rong Hai and Shengrong WFOE dated November 30, 2018, Shengrong WFOE has the exclusive right to provide consulting services to Rong Hai relating to Rong Hai's business, including but not limited to business consulting services, human resources development, and business development. Shengrong WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. Shengrong WFOE has the right to determine the service fees based on Rong Hai's actual operation on a quarterly basis. This consulting services agreement took effect upon execution and shall remain in full force and effective until Rong Hai's valid operation term expires. Shengrong WFOE may, at its discretion, decide to renew or terminate this consulting services agreement. Equity Pledge Agreement. Under the equity pledge agreement among Shengrong WFOE, Rong Hai and the shareholders of Rong Hai dated November 30, 2018, the shareholders pledged all of their equity interests in Rong Hai to Shengrong WFOE to guarantee Rong Hai's performance of relevant obligations and indebtedness under the consulting services agreement. In addition, the shareholders of Rong Hai have completed the registration of the equity pledge under the agreement with the competent local authority. If Rong Hai breaches its obligation under the consulting services agreement, Shengrong WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This equity pledge agreement took effect upon execution and shall remain in full force and effective until Rong Hai and Shengrong WFOE's satisfaction of all contractual obligations and settlement of all secured indebtedness. Upon Shengrong WFOE's request, Rong Hai shall extend its operation period to sustain the effectiveness of this equity pledge agreement. Call Option Agreement Under the call option agreement among Shengrong WFOE, Rong Hai and the shareholders of Rong Hai dated November 30, 2018, each of the shareholders of Rong Hai irrevocably granted to WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Rong Hai. Also, Shengrong WFOE or its designee has the right to acquire any and all of its assets of Rong Hai. Without Shengrong WFOE's prior written consent, Rong Hai's shareholders cannot transfer their equity interests in Rong Hai, and Rong Hai cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This call option agreement shall took effect upon execution. Rong Hai and Shengrong WFOE shall not terminate this call option agreement under any circumstances for any reason unless it is early terminated by Shengrong WFOE or by the requirements under the applicable laws. This call option agreement shall be terminated provided that all equity interest or assets under this option is transferred to Shengrong WFOE or its designee. Voting Rights Proxy Agreement Under the voting rights proxy agreement among Shengrong WFOE and the shareholders of Rong Hai dated November 30, 2018, each shareholder of Rong Hai irrevocably appointed Shengrong WFOE as its attorney-in-fact to exercise on such shareholder's behalf any and all rights that such shareholder has in respect of his equity interests in Rong Hai, including but limited to the power to vote on its behalf on all matters of Rong Hai requiring shareholder approval in accordance with the articles of association of Rong Hai. The voting rights proxy agreement took effect upon execution of and shall remain in effect indefinitely for the maximum period of time permitted by law in consideration of Shengrong WFOE. Operating Agreement Pursuant to the operating agreement among Shengrong WFOE, Rong Hai and the shareholders of Rong Hai dated November 30, 2018, Rong Hai and the shareholders of Rong Hai agreed not to enter into any transaction that could materially affect Rong Hai's assets, obligations, rights or operations without prior written consent from Shengrong WFOE, including but not limited to the amendment of the articles of association of Rong Hai. Rong Hai and its shareholders agree to accept and follow our corporate policies provided by Shengrong WFOE in connection with Rong Hai's daily operations, financial management and the employment and dismissal of Rong Hai's employees. Rong Hai agreed that it should seek guarantee from Shengrong WFOE first if any guarantee is needed for Rong Hai's performance of any contract or loan in the course of its business operation. This operating agreement took effect upon execution and shall remain in full force and effective until Rong Hai's valid operation term expires. Either party of Shengrong WFOE and Rong Hai shall complete approval or registration procedures for the extension of its business term three months prior to the expiration of its business term, for the purpose of the maintenance of the effectiveness of this operating agreement. Material terms of each of the Wuge VIE Agreements are described below: Technical Consultation and Services Agreement. Pursuant to the technical consultation and services agreement between Wuge and Tongrong WFOE dated January 3, 2020, Tongrong WFOE has the exclusive right to provide consultation services to Wuge relating to Wuge's business, including but not limited to business consultation services, human resources development, and business development. Tongrong WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. Tongrong WFOE has the right to determine the service fees based on Wuge's actual operation on a quarterly basis. This agreement will be effective as long as Wuge exists. Tongrong WFOE may terminate this agreement at any time by giving a 30 days' prior written notice to Wuge. Equity Pledge Agreement. Under the equity pledge agreement among Tongrong WFOE, Wuge and Wuge Shareholders dated January 3, 2020, Wuge Shareholders pledged all of their equity interests in Wuge to Tongrong WFOE to guarantee Wuge's performance of relevant obligations and indebtedness under the technical consultation and services agreement. In addition, Wuge Shareholders will complete the registration of the equity pledge under the agreement with the competent local authority. If Wuge breaches its obligation under the technical consultation and services agreement, Tongrong WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the Wuge Shareholders cease to be shareholders of Wuge. Equity Option Agreement. Under the equity option agreement among Tongrong WFOE, Wuge and Wuge Shareholders dated January 3, 2020, each of Wuge Shareholders irrevocably granted to Tongrong WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Wuge. Also, Tongrong WFOE or its designee has the right to acquire any and all of its assets of Wuge. Without Tongrong WFOE's prior written consent, Wuge's shareholders cannot transfer their equity interests in Wuge and Wuge cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This pledge will remain effective until all options have been exercised. Voting Rights Proxy and Financial Support Agreement. Under the voting rights proxy and financial support agreement among Tongrong WFOE, Wuge and Wuge Shareholders dated January 3, 2020, each Wuge Shareholder irrevocably appointed Tongrong WFOE as its attorney-in-fact to exercise on such shareholder's behalf any and all rights that such shareholder has in respect of his equity interests in Wuge, including but not limited to the power to vote on its behalf on all matters of Wuge requiring shareholder approval in accordance with the articles of association of Wuge. The proxy agreement is for a term of 20 years and can be extended by Tongrong WFOE unilaterally by prior written notice to the other parties. The Company's Board of Directors determined that the certain operating subsidiaries, namely, Wuhan Host, and Shengrong WFOE have been designated as discontinued operations. The Company's board intends to sell these businesses based on their values as continuing going concerns. The Company's assets and liabilities on its consolidated balance sheets at June 30, 2020 and December 31, 2019 and its statements of operations for the six months ended June 30, 2020 and 2019 have been grouped and re-grouped based on this designation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Note 2 – Summary of significant accounting policies Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). Interim results are not necessarily indicative of results to be expected for the full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s annual report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission on April 17, 2020. Principles of consolidation The unaudited condensed financial statements of the Company include the accounts of CCNC and its wholly owned subsidiaries and VIE. All intercompany transactions and balances are eliminated upon consolidation. Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of intangible assets, deferred revenues and plant and equipment, impairment of long-lived assets, collectability of receivables, inventory valuation allowance, present value of lease liabilities and realization of deferred tax assets. Actual results could differ from these estimates. Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive loss amounted to $(1,540,111) and $(832,267) as of June 30, 2020 and December 31, 2019, respectively. The balance sheet amounts, with the exception of shareholders’ equity at June 30, 2020 and December 31, 2019 were translated at 7.08 RMB and 7.14 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the six months ended June 30, 2020 and 2019 were 7.03 RMB and 6.78 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. Accounts receivable, net Accounts receivable include trade accounts due from customers. An allowance for doubtful accounts may be established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Inventories Inventories are comprised of raw materials and work in progress and are stated at the lower of cost or net realizable value using the first-in-first-out method in Shengrong WFOE and weighted average method in Wuhan HOST and Rong Hai. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and recognize an impairment charge against the inventory when the carrying value exceeds net realizable value. As of June 30, 2020 and December 31, 2019, no obsolescence and cost in excess of net realizable value were recognized. Prepayments Prepayments are funds deposited or advanced to outside vendors for future inventory or services purchases. As a standard practice in China, many of the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends. Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method after consideration of the estimated useful lives of the assets and estimated residual value. The estimated useful lives and residual value are as follows: Useful Life Estimated Building 5 – 20 years 5 % Office equipment and furnishing 5 years 5 % Production equipment 3-10 years 5 % Automobile 5 years 5 % Leasehold improvements Shorter of the remaining lease terms or estimated useful lives 0 % The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Intangible assets Intangible assets represent land use rights and patents, and they are stated at cost, less accumulated amortization. Research and development costs associated with internally developed patents are expensed when incurred. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. All land in the PRC is owned by the government; however, the government grants “land use rights.” The Company has obtained the rights to use various parcels of land. The patents have finite useful lives and are amortized using a straight-line method that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The Company amortizes the cost of the land use rights and patents, over their useful life using the straight-line method. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The estimated useful lives are as follows: Useful Life Land use rights 50 years Patents 10 - 20 years Software 5 years Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of income. Impairment losses on goodwill are not reversed. In 2019, the Company recorded approximately $3.42 million in impairment to its Wuhan Host and Shengrong WFOE operating units. The entities were located at the epicenter of the COVID 19 virus. Accordingly, those entities were materially adversely impacted. Impairment for long-lived assets Long-lived assets, including plant, equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. In 2019, the Company recognized approximately $4.89 million in impairment to long lived assets related to Wuhan Host and Shengrong WFOE. Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits, short term loans and taxes payable to approximate their fair values because of their short term nature. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value 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 assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Customer deposits In Shengrong WFOE, customer deposits represent amounts advanced by customers on product orders. Generally, the Company requires 3% to 10% advanced deposits from the customers upon the signing of the sales contracts. At various stages of the sales contract execution, the Company generally collects certain amounts of advanced deposits from the customers based on the approximate amount of cash flows needed at each stage. Customer deposits are reduced when the related sale is recognized in accordance with the Company’s revenue recognition policy. In Wuhan HOST, customer deposits represent amounts advanced by customers on product orders. Generally, the Company requires 95% to 100% advanced deposits from the customers upon signing of the sales contracts. A few customers with good credit history are not required to make any deposit. Customer deposits are reduced when the related sale is recognized in accordance with the Company’s revenue recognition policy. Revenue recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s revenue, other than retainage revenues, was recognized based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. However, the impact of the Company’s retainage revenue was not material as of the date of adoption, and as a result, did not result in an adjustment. The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time except for the retainage revenues where the retainage periods are recognized over the retainage period, usually is a period of twelve months. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition except its retainage revenues. An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange. Revenue from equipment and systems, revenue from coating and fuel materials, and revenue from trading and others are recognized at the date of goods delivered and title passed to customers, when a formal arrangement exists, the price is fixed or determinable, the Company has no other significant obligations and collectability is reasonably assured. Such revenues are recognized at a point in time after all performance obligations are satisfied under the new five-step model. In addition, training service revenues are recognized when the services are rendered and the Company has no other obligations, and collectability is reasonably assured. These revenues are recognized at a point in time. Prior to January 1, 2018, the Company allowed its customers to retain 5% to 10% of the contract price as warranty retainage during the retainage period of 12 months to guarantee product quality. Retainage is considered as a payment term included as a part of the contract price, and was recognized as revenue upon the shipment of products. Due to nature of the retainage, the Company’s policy is to record revenue the full value of the contract without VAT, including any retainage, since the Company has experienced insignificant warranty retainage claims historically. Due to the infrequent and insignificant amount of warranty retainage claims, the ability to collect retainage was reasonably assured and was recognized at the time of shipment. On January 1, 2018, upon the adoption of ASU 2014-09 (ASC 606), revenues from product warranty retainage are recognized over the retainage period over 12 months. For the six months ended June 30, 2020, less than 5% of our retainage revenues were recognized in our consolidated revenues and included in the Company’s equipment and systems revenues in the accompanying statements of income and comprehensive income. Payments received before all of the relevant criteria for revenue recognition are recorded as customer deposits. The Company’s disaggregate revenue streams are summarized as follows: For the Three Months Ended For the Six Months Ended 2020 2019 2020 2019 Revenues – Equipment and systems $ - $ - $ - $ - Revenues –fuel materials 1,279,781 7,418,297 6,445,181 12,285,253 Revenues – Trading and others 46,482 473,468 46,482 639,297 Total revenues $ 1,326,263 $ 7,891,765 $ 6,491,663 $ 12,924,550 Gross versus Net Revenue Reporting Starting from July 2016, in the normal course of the Company’s trading of industrial waste materials business, the Company directly purchases the processed industrial waste materials from the Company’s suppliers under the Company’s specifications and drop ships the materials directly to the Company’s customers. The Company would inspect the materials at its customers’ site, during which inspection it temporarily assumes legal title to the materials, and after which inspection legal title is transferred to its customers. In these situations, the Company generally collects the sales proceed directly from the Company’s customers and pay for the inventory purchases to the Company’s suppliers separately. The determination of whether revenues should be reported on a gross or net basis is based on the Company’s assessment of whether it is the principal or an agent in the transaction. In determining whether the Company is the principal or an agent, the Company follows the new accounting guidance for principal-agent considerations. Since the Company is the primary obligor and is responsible for (i) fulfilling the processed industrial waste materials delivery, (ii) controlling the inventory by temporarily assume legal title to the materials after inspecting the products from our vendors before passing the materials to our customers, and (iii) bearing the back-end risk of inventory loss with respect to any product return from the Company’s customers, the Company has concluded that it is the principal in these arrangements, and therefore report revenues and cost of revenues on a gross basis. Research and Development (“R&D”) Expenses Research and development expenses include salaries and other compensation-related expenses paid to the Company’s research and product development personnel while they are working on R&D projects, as well as raw materials used for the R&D projects. R&D expenses incurred by the Company are included in the selling, general and administrative expenses and totaled $0 and $219,675 for the six months ended June 30, 2020 and 2019, respectively. Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes is accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company incurred no such penalties and interest for the six months ended June 30, 2020 and 2019. As of June 30, 2020, the Company’s PRC tax returns filed for 2017, 2018 and 2019 remain subject to examination by any applicable tax authorities. Earnings per share Basic earnings per share are computed by dividing income available to common shareholders of the Company by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares. 9,079,348 and 10,500,000 of outstanding warrants which is equivalent to convertible of 4,539,674 and 5,250,000 common shares were excluded from the diluted earnings per share calculation due to its antidilutive effect for the six months ended June 30, 2020 and 2019, respectively. 824,000 of outstanding options were excluded from the diluted earnings per share calculation due to its antidilutive effect for the six months ended June 30, 2020 and 2019. Recently issued accounting pronouncements In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU would have a material effect on the Company’s unaudited condensed consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Business Combination and Restru
Business Combination and Restructuring | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Business combination and restructuring | Note 3 – Business combination and restructuring TJ Comex BVI On April 2, 2018, the Company disposed of its subsidiary, TJComex BVI, in consideration of (i) its minimum contribution to the Company's results of operation and (ii) the unsatisfactory synergy between the TJComex BVI business and the rest of the Company's business. The Company's decision to dispose TJComex BVI is to (i) improve the Company's overall financial condition and results of operations, (ii) reduce the complexity of the Company's business, (iii) focus the Company's resources on the solid waste recycling business as well as developing environmental control business opportunities; and (iv) make it possible for the Company to pursue acquisition opportunities for more compatible business. TJComex BVI was disposed to Chuanliu Ni, a Chinese citizen who is the Chief Executive Officer and director of China Sunlong, for no consideration. As of April 2, 2018, the net assets of TJComex BVI were $16,598 and will be recorded as a loss from disposal of subsidiary in the consolidated financial statements for the year ended December 31, 2018. As TJComex BVI operating revenue was less than 1% of the Company's revenue and the disposal did not constitute a strategic shift that will have a major effect on the Company's operations and financial results, the results of operations for TJComex BVI were not reported as discontinued operations under the guidance of Accounting Standards Codification 205. Wuhan HOST On April 11, 2018, the Company, Shengrong WFOE and Hubei Shengrong, both of which are the Company's indirectly owned subsidiaries (collectively "Purchasers"), entered into a Share Purchase Agreement (the "Purchase Agreement") with Long Liao, Chunyong Zheng, Wuhan Modern Industrial Technology Research Institute, and Hubei Zhonggong Materials Group Co., Ltd. (collectively "Sellers" ) and Wuhan HOST Coating Materials Co., Ltd. ("Wuhan HOST"), a company incorporated in China engaging in the research, development, production and sale of coating materials. Pursuant to the Purchase Agreement, the Purchasers acquired all of the outstanding equity interests of Wuhan Host (the "Acquisition"). In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million ("Total Consideration"), of which $ 5.2 million or RMB equivalent shall be paid in cash ("Cash Consideration") and $6.0 million shall be paid in shares of common stock ("Common Stock"), par value $0.0001, of CCNC ("Share Consideration"). The Parties agree the Share Consideration shall be an aggregate of 1,293,104 shares of common stock of which is based on the closing price of US$4.64 on March 27, 2018. The Share Consideration shall be issued in three equal installments, which shall be subject to lock-up of 12, 24 and 36 months, respectively. The Purchase Agreement contains representations, warranties and covenants customary for acquisitions of this type. The Acquisition closed on May 1, 2018. On August 16, 2018, The Purchasers and the Sellers entered into a supplement agreement ("Supplement Agreement"), which modified the terms of consideration set forth in the Purchase Agreement entered between Purchasers and Sellers on April 11, 2018. Pursuant to the Supplement Agreement, in exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million ("Total Consideration"), of which $6.5 million or RMB equivalent shall be paid in cash ("Cash Consideration") and $4.7 million shall be paid in shares of common stock ("Common Stock"), par value $0.0001, of CCNC ("Share Consideration"). In the Supplement Agreement, both Purchasers and Sellers also agreed to delete the section 3.3 of the Share Purchase Agreement, a section that stipulates the Share Consideration shall be issued in three equal installments. The Company's acquisition of Wuhan HOST was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Wuhan HOST based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Wuhan HOST based on a valuation performed by an independent valuation firm engaged by the Company: Total consideration at fair value $ 11,200,000 Fair Value Cash $ 276,626 Other current assets 6,763,767 Plant and equipment 6,499,268 Other noncurrent assets 2,139,987 Goodwill 7,544,008 Total asset 23,223,656 Total liabilities (12,023,656 ) Net asset acquired $ 11,200,000 Approximately $7.5 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of the Company and Wuhan HOST. None of the goodwill is expected to be deductible for income tax purposes. The Company's Board of Directors has determined that it will discontinue Wuhan Host, and identify a buyer for the Wuhan Host in 2020. The Company recognized an impairment charge of approximately $3.42 million. Rong Hai On November 30, 2018, the Company entered into a Share Purchase Agreement (the "Purchase Agreement") with Jirong Huang and Qihuang Wang (collectively "Sellers") and Jiangsu Rong Hai Electric Power Fuel Co., Ltd. ("Rong Hai"), a company incorporated in China engaging in the sale of fuel materials and harbor cargo handling services. Pursuant to the SPA, CCNC shall issue an aggregate of 4,630,000 shares of CCNC's common stock to the Rong Hai Shareholders, in exchange for Rong Hai Shareholders' agreement to enter into, and their agreement to cause Rong Hai to enter into, certain VIE Agreements (the "Rong Hai VIE Agreements") with Shengrong WFOE, through which Shengrong WFOE shall have the right to control, manage and operate Rong Hai in return for a service fee approximately equal to 100% of Rong Hai's net income ("Acquisition"). On November 30, 2018, Shengrong WFOE, the Company's indirectly owned subsidiary, entered into a series of VIE Agreements with Rong Hai and the Rong Hai Shareholders. The VIE Agreements are designed to provide WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Rong Hai, including absolute rights to control the management, operations, assets, property and revenue of Rong Hai. Rong Hai has the necessary license to carry out coal trading business in China. The Acquisition closed on November 30, 2018. The Company's acquisition of Rong Hai was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Rong Hai based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The Company's acquisition of Rong Hai was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Rong Hai based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Rong Hai based on a valuation performed by an independent valuation firm engaged by the Company: Total consideration at fair value $ 9,260,000 Fair Value Cash $ 717,056 Other current assets 5,980,230 Plant and equipment 28,875 Other noncurrent assets 116,655 Goodwill 7,307,470 Total asset 14,150,286 Total liabilities (4,890,286 ) Net asset acquired $ 9,260,000 Approximately $7.3 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of the Company and Rong Hai. None of the goodwill is expected to be deductible for income tax purposes. Hubei Shengrong On December 27, 2018, the Company, entered into an Equity Purchase Agreement (the "EPA") with Hopeway International Enterprises Limited., a private limited company duly organized under the laws of British Virgin Islands (the "Hopeway" or "Purchaser"). Pursuant to the EPA, Shengrong WOFE shall sell 100% equity interests in Hubei Shengrong to the Purchaser in exchange for the Purchaser's agreement ("Consideration") to irrevocably forfeit and cancel 8,523,320 shares of common stock of the Company (the "Shares"), constituting all the shares owned by the Purchaser. The transaction contemplated by the EPA is hereby referred as Disposition. The Company's decision to dispose of Hubei Shengrong is due to the planning mandates of Wuhan Municipal Government 2018 which manufactures should move away from city's downtown area. Therefore, due to the policy change, Hubei Shengrong is forced to close the existing facility, relocate and build a new facility, which is expected to take approximately 7-8 years. As a result, Hubei Shengrong will not be able to keep the production running and will generate no income in the foreseeable future. Management believed it is very difficult, if possible at all, to continue manufacturing of solid waste recycling systems. As such, the Company has been actively seeking to dispose Hubei Shengrong while retaining the research and development and sale of solid waste recycling systems business. Upon closing of the Disposition, the Purchaser will become the sole shareholder of Hubei Shengrong and as a result, assume all assets and obligations of Hubei Shengrong except the research and development team and intellectual property rights in connection with the solid waste recycling systems business shall be assigned to Shengrong WFOE as part of the Disposition. As Shengrong WFOE has significant continuing involvement in the sale of solid waste recycling systems business and the processed industrial waste materials trading business, the results of operations for Hubei Shengrong were not reported as discontinued operations under the guidance of Accounting Standards Codification 205. Hopeway is jointly owned by Ms. Jiazhen Li, the Company's chief executive officer, and Mr. Xiaonian Zhang, the Company's president and director. As Hopeway is a related party under common control with the Company under Ms. Li and Mr. Zhang, no gain or loss are recognized in this disposition and the net consideration of the transaction are recognized as addition to capital as opposed to a gain. Total fair value of the consideration of the cancelled 8,523,320 shares of common stock was determined by using the average closing stock price of the Company held by Hopeway during the period from February 6, 2018 to December 27, 2018 at $3.56 per share. As of December 27, 2018, the net assets of Hubei Shengrong and reconciliation of reduction of capital are as follows: December 27, CURRENT ASSETS Cash and cash equivalents $ 47,994 Accounts receivable, net 9,410,436 Accounts receivable - related party, net 761,794 Other receivables 48,718 Other receivable - related party 2,158 Inventories 5,332,990 Prepayments 31,793,810 Total current assets 47,397,900 PLANT AND EQUIPMENT, NET 203,992 OTHER ASSETS Other assets 7,269 Deferred tax assets 780,550 Total other assets 787,819 Total assets $ 48,389,711 CURRENT LIABILITIES Short term loans - bank $ 2,180,708 Accounts payable 95,854 Other payables and accrued liabilities 156,498 Other payables - related parties 507,183 Customer deposits 347,853 Taxes payable 16,602,841 Total current liabilities 19,890,937 OTHER LIABILITIES Deferred rent liabilities 30,763 Total other liabilities 30,763 Total liabilities $ 19,921,700 Total net assets $ 28,468,011 Total consideration (30,362,135 ) Currency translation adjustment 900,281 Total addition to paid-in-capital $ 993,843 Wuge On January 3, 2020, the Company entered into a share purchase agreement with Sichuan Wuge Network Games Co., Ltd. ("Wuge") and all the shareholders of Wuge ("Wuge Shareholders"). Pursuant to the share purchase agreement, the Company agreed to issue an aggregate of 4,000,000 shares of CCNC's common stock to the Wuge Shareholders, in exchange for Wuge Shareholders' agreement to enter into, and their agreement to cause Wuge to enter into, certain VIE agreements ("VIE Agreements") with Tongrong WFOE the Company's indirectly owned subsidiary, through which Tongrong WFOE shall have the right to control, manage and operate Wuge in return for a service fee equal to 100% of Wuge's net income (the "Acquisition"). On January 3, 2020, Tongrong WFOE entered into a series of VIE Agreements with Wuge and the Wuge Shareholders. The VIE Agreements are designed to provide Tongrong WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Wuge, including absolute rights to control the management, operations, assets, property and revenue of Wuge. Wuge has all necessary license to carry out its business in China.Wuge is a technology company in development stage. It was incorporated in China in July 2019. Wuge Manor, the game Wuge is developing, is the world's first game that combines Internet of Things (IoT) and e-commerce that is based on Code Chain platform. Through the game, players will be able to have access to hundreds of vendors and business owners in over 100 cities in China, participate in activities those businesses set up and collect points, which can be redeemed as equipment in the game or coupons usable when making purchase at that business. In addition, Wuge produced electronic tokens that can be stored in the Code Chain system to purchase virtual property based on real estate. The Acquisition closed on January 24, 2020. The Company's acquisition of Wuge was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Wuge based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Wuge based on a valuation performed by an independent valuation firm engaged by the Company: Total consideration at fair value $ 7,200,000 Fair Value Cash $ 228,788 Other current assets 20,834 Plant and equipment 6,024 Other noncurrent assets 8,097 Goodwill 7,343,209 Total asset 7,606,952 Total liabilities (406,952 ) Net asset acquired $ 7,200,000 Approximately $7.3 millions of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of the Company and Wuge. None of the goodwill is expected to be deductible for income tax purposes. |
Variable Interest Entity
Variable Interest Entity | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entity [Abstract] | |
Variable interest entity | Note 4 – Variable interest entity On November 30, 2018, Tongrong WFOE entered into Contractual Arrangements with Rong Hai and its shareholders upon executing of the "Purchase Agreement". The significant terms of these Contractual Arrangements are summarized in "Note 1 - Nature of business and organization" above. As a result, the Company classifies Rong Hai as VIE. On January 3, 2020, Tongrong WFOE entered into Contractual Arrangements with Wuge and its shareholders upon executing of the "Purchase Agreement". The significant terms of these Contractual Arrangements are summarized in "Note 1 - Nature of business and organization" above. As a result, the Company classifies Wuge as VIE. A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Tongrong WFOE is deemed to have a controlling financial interest and be the primary beneficiary of Rong Hai and Wuge because it has both of the following characteristics: (1) The power to direct activities at Rong Hai and Wuge that most significantly impact such entity's economic performance, and (2) The obligation to absorb losses of, and the right to receive benefits from Rong Hai and Wuge that could potentially be significant to such entity. Accordingly, the accounts of Rong Hai and Wuge are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, their financial positions and results of operations are included in the Company's consolidated financial statements beginning on November 30, 2018. The carrying amount of the VIE's assets and liabilities are as follows: June 30, December 31, 2020 2019 Current assets $ 9,201,684 $ 8,687,451 Property, plants and equipment, Intangible Assets 1,165,027 19,057 Other noncurrent assets 89,136 127,782 Goodwill 14,329,042 7,289,454 Total assets 24,786,889 16,123,744 Current liabilities 8,264,556 6,067,264 Non-current liabilities 60,681 61,580 Total liabilities 8,325,237 6,128,844 Net assets $ 16,459,652 $ 9,994,900 June 30, December 31, 2020 2019 Short-term loan $ 437,884 $ - Accounts payable 880,713 619,329 Other payables and accrued liabilities 74,154 301,230 Other payables – related party 5,766,063 5,082,068 Tax payables 3,525 202 Customer Advances 1,040,124 3,426 Lease liabilities 62,093 61,009 Total current liabilities 8,264,556 6,067,264 Lease liabilities - noncurrent 60,681 61,580 Total liabilities $ 8,325,237 $ 6,128,844 The summarized operating results of the VIE's are as follows: For the 2020 Operating revenues $ 6,491,663 Gross profit 326,254 Income from operations (337,537) Net income $ (387,648) |
Accounts Receivable, Net
Accounts Receivable, Net | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Accounts receivable, net | Note 5 – Accounts receivable, net Accounts receivable consist of the following: June 30, December 31, Accounts receivable $ 1,153,142 $ 2,221,319 Less: Allowance for doubtful accounts (113,370) (24,055 ) Total accounts receivable, net $ 1,039,772 $ 2,197,264 Movement of allowance for doubtful accounts is as follows: June 30, December 31, Beginning balance $ 24,055 $ 732,846 Beginning balance from Wuhan HOST - 260,764 Beginning balance from Rong Hai 24,055 472,082 Addition 90,308 - Recovery - (708,791 ) Exchange rate effect (993 ) - Ending balance $ 113,370 $ 24,055 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 6 – Inventories Inventories consist of the following: June 30, December 31, Raw materials $ - $ - Work in progress - - Finished Goods 1,248,906 1,197,065 Total inventories $ 1,248,906 $ 1,197,065 |
Plant and Equipment, Net
Plant and Equipment, Net | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Plant and equipment, net | Note 7 – Plant and equipment, net Plant and equipment consist of the following: June 30, December 31, Office equipment and furniture $ 62,972 $ 39,688 Automobile 251,523 209,057 Subtotal 314,495 248,745 Less: accumulated depreciation (234,807 ) (229,688 ) Total $ 79,688 $ 19,057 Depreciation expense for the six months ended June 30, 2020 and 2019 amounted to $8,403 and $198,570, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net | Note 8 – Intangible assets, net Intangible assets consist of the following: March 31, December 31, Development of technology $ 1,129,681 $ - Less: accumulated amortization - - Net intangible assets $ 1,129,681 $ - Amortization expense for the three months ended March 31, 2020 and 2019 amounted to $0 and $0, respectively. |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award Warrant Forfeitures In Period | |
Goodwill | Note 9 – Goodwill The changes in the carrying amount of goodwill by business units are as follows : Wuhan HOST Rong Hai Wuge Total Balance as of December 31, 2019 $ 3,424,390 $ 7,289,454 $ - $ 10,713,844 Goodwill acquired through acquisition - - 7,140,304 7,140,304 Disposal of the company (3,424,390 ) - - (3,424,390 ) Foreign currency translation adjustment - (106,364 ) 5,648 (100,716 ) Balance as of June 30, 2020 $ - $ 7,183,090 $ 7,145,952 $ 14,329,042 |
Related Party Balances and Tran
Related Party Balances and Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related party balances and transactions | Note 10 – Related party balances and transactions Related party balances Other payables – related parties: Name of related party Relationship June 30, December 31, Chuanliu Ni Chief Executive Officer and director of a former subsidiary $ 325,907 $ 325,907 Zhong Hui Holding Limited Shareholder of the Company 140,500 140,500 Chengdu Yuan Code Chain Technology Co. Ltd A company controlled by former shareholder of the Company 103,719 - Qihai Wang Shareholder of the Company 71,444 166,673 Jiangsu Longying Education Technology Co. Ltd A company in which shareholder hold shares - 422,868 Jiangsu Longhai Film Culture Media Co. Ltd Under common control of shareholder of the Company - 280,954 Total $ 641,570 $ 1,336,902 The above payables represent interest free loans and advances. These loans and advances are unsecured and due on demand. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 11 – Debt Short term loan Short term loan due to bank is as follows: Short term loans Maturities Weighted average interest rate Collateral/Guarantee June 30, December 31, Loan from Bank of Jiangsu March 25, 2021 4.5 % Guaranteed by Qihai Wang's personal property $ 247,193 - Loan from Bank of Jiangsu January 12, 2021 5.22 % Guaranteed by Qihai Wang's personal property $ 190,691 - Interest expense for the three months ended June 30, 2020 and 2019 amounted to $9,473 and $9,764, respectively, and for the six months ended June 30, 2020 and 2019 amounted to $11,482 and $17,606, respectively. |
Taxes
Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Taxes | Note 12 – Taxes Income tax United States CCNC was organized in the state of Delaware in April 2015 and re-incorporated in the state of Nevada in June 2018. CCNC's U.S. net operating loss for the six months ended June 30, 2020 amounted to approximately $90,000. As of June 30, 2020, CCNC's net operating loss carry forward for United States income taxes was approximately $19,000. The net operating loss carry forwards are available to reduce future years' taxable income through year 2038. Management believes that the realization of the benefits from these losses appears uncertain due to the Company's operating history and continued losses in the United States. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management reviews this valuation allowance periodically and makes changes accordingly. On December 22, 2017, the "Tax Cuts and Jobs Act" ("The 2017 Tax Act") was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. The 2017 Tax Act imposed a global intangible low-taxed income tax ("GILTI"), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. The Company determined that there are no impact of GILTI for the six months ended June 30, 2020 and 2019, which the Company believes that it will be imposed a minimum tax rate of 10.5% and to the extent foreign tax credits are available to reduce its US corporate tax, which may result in no additional US federal income tax being due. Cayman Islands China Sunlong is incorporated in the Cayman Islands and are not subject to tax on income or capital gains under current Cayman Islands law. In addition, upon payments of dividends by China Sunlong to its shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Shengrong BVI is incorporated in the British Virgin Islands and are not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong Shengrong HK is incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, Shengrong HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. PRC Shengrong WFOE, Tongrong WFOE, Wuhan HOST,Wuge and Rong Hai are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the "EIT Laws"), Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments. Significant components of the provision for income taxes are as follows: For the For the Current $ 1,810 $ 234,473 Deferred (243 ) (38,229 ) Total provision for income taxes $ 1,567 $ 196,244 For the For the Current $ 16,419 $ 255,301 Deferred 33,692 (8,229 ) Total provision for income taxes $ 50,111 $ 247,072 Deferred tax assets Bad debt allowances must be approved by the Chinese tax authority prior to being deducted as an expense item on the tax return. Significant components of deferred tax assets were as follows: June 30, December 31, Net operating losses carried forward – U.S. $ 19,106 $ 17,309 Net operating losses carried forward – PRC - - Bad debt allowance 3,531 37,532 Valuation allowance (19,106 ) (17,309 ) Deferred tax assets, net $ 3,531 $ 37,532 Value added tax Enterprises or individuals who sell commodities, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with PRC laws. The value added tax ("VAT") standard rates are 6% to 17% of the gross sales price and changed to 6% to 16% of gross sales starting in May 2018. The VAT standard rates changed to 6% to 13% of the gross sales prices starting in April 2019. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company's finished products can be used to offset the VAT due on sales of the finished products and services. Taxes payable consisted of the following: June 30, December 31, VAT taxes payable $ 1,550 $ - Income taxes payable 1,900 - Other taxes payable 105 202 Total $ 3,555 $ 202 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Note 13 – Leases Effective January 1, 2019, the Company adopted ASU 2016-02, "Leases" (Topic 842), and elected the package of practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. The Company adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. The impact of the adoption on January 1, 2019 increased the right-of-uses and lease liabilities by approximately $298,000. The Company had an office lease agreement with a 5-year lease term starting in December 2016 until December 2021 and another office lease agreement with a 5-year lease term starting in January 2018 until January 2023. Upon adoption of ASU 2016-02, the Company recognized lease labilities of approximately $298,000, with corresponding Right-of-use ("ROU") assets of the same amount based on the present value of the future minimum rental payments of the new lease, using an effective interest rate of 4.75%, which is determined using an incremental borrowing rate. The weighted average remaining lease term of its existing leases is 3.22 years. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. For the three months ended June 30, 2020 and 2019, rent expenses amounted to $7,966 and $24,941, respectively. For the six months ended June 30, 2020 and 2019, rent expenses amounted to $16,047 and $51,948, respectively. The five-year maturity of the Company's lease obligations is presented below: Twelve months ended June 30, Operating 2020 $ 124,377 2021 99,501 2022 76,957 2023 23,900 Total lease payments 324,735 Less: interest (201,961 ) Present value of lease liabilities $ 122,774 |
Concentration of Risk
Concentration of Risk | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration of risk | Note 14 – Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. As of June 30, 2020 and December 31, 2019, no cash were deposited with various financial institutions located in the U.S. As of June 30, 2020 and December 31, 2019, $1,939,520 and $4,003,554 and were deposited with various financial institutions located in the PRC, respectively. As of June 30, 2020 and December 31, 2019, $0 and $354 were deposited with one financial institution located in Hong Kong, respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company's assessment of its customers' creditworthiness and its ongoing monitoring of outstanding balances. Customer and vendor concentration risk For the three months ended June 30, 2020, one customers accounted for 98.3% of the Company's revenues. For the three months ended June 30, 2019, three customers accounted for 22.2%, 21.8% and 20.0% of the Company's revenues. For the six months ended June 30, 2020, one customers accounted for 99.3% of the Company's revenues. For the six months ended June 30, 2019, four customers accounted for 15.0%, 14.3%,14.1% and 12.9% of the Company's revenues. As of June 30, 2020, two customer accounted for 50.7% and 45.4% of the Company's accounts receivable; and one customer accounted for 100% of the Company's Customer Advances. As of June 30, 2019, two customer accounted for 42.1% and 15.7% of the Company's accounts receivable; and four customer accounted for 20.7%,17.7%,17.1% and 15.5% of the Company's Customer Advances. For the three months ended June 30, 2020, one suppliers accounted for 87.1% of the Company's total purchases. For the three months ended June 30, 2019, two suppliers accounted for 26.7% and 13.2% of the Company's total purchases. For the six months ended June 30, 2020, four suppliers accounted for 30.1%, 28.7%, 18.2% and 12.7% of the Company's total purchases. For the six months ended June 30, 2019, three suppliers accounted for 32.5%, 11.9% and 11.1% of the Company's total purchases. As of June 30, 2020, three suppliers accounted for 58.9%, 19.04% and 10.6% of the Company's prepayments; and four suppliers accounted for 33.4%, 30.9%, 17.5% and 15.2% of the Company's total accounts payable. As of June 30, 2019, three suppliers accounted for 39.6%, 18.7% and 12.4% of the Company's prepayments; and three suppliers accounted for 28.1%, 21.5% and 16.7% of the Company's total accounts payable. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Equity | Note 15 – Equity Restricted net assets The Company's ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by Shengrong WFOE only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Shengrong WFOE. Shengrong WFOE, Wuhan HOST, Rong Hai are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Shengrong WFOE may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. Wuhan HOST and Rong Hai may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange. As of June 30, 2020 and December 31, 2019, Shengrong WFOE, Wuhan HOST, and Rong Hai, collectively attributed $0 of retained earnings for their statutory reserves as they have accumulated losses. As a result of the foregoing restrictions, Shengrong WFOE, Tongrong WFOE, Wuge, Wuhan Host and Rong Hai are restricted in their ability to transfer their net assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Shengrong WFOE, Tongrong WFOE, Wuge, Wuhan Host and Rong Hai from transferring funds to China Sunlong in the form of dividends, loans and advances. As of June 30, 2020 and December 31, 2019, amounts restricted are the net assets of Shengrong WFOE, Tongrong WFOE, Wuge, Wuhan Host and Rong Hai which amounted to $2,123,588 and $(7,263,520), respectively. Stock split On June 1, 2018, the Company's shareholder approved a 2 for 1 stock split of the Company's common stock at the Annual Meeting of Shareholders. The stock split was effected on June 20, 2018, pursuant to the completion of the reincorporation from Delaware to Nevada. All shares and per share amounts used herein and in the accompanying consolidated financial statements have been retroactively restated to reflect the stock split. Common stock On June 23, 2018, the Company issued an aggregate of 26,693 shares of the Company's common stock, par value $0.0001 per share, to certain non-U.S. purchasers at a purchase price of $5.00 per share for an aggregate offering price of $133,335 pursuant to certain securities purchase agreement dated April 20, 2018 and June 22, 2018. The issuances were pursuant to the exemption from registration under Regulation S promulgated under the Securities Act of 1933, as amended. On February 12, 2019, the Company's warrant holders converted 294,971 of the Company's warrants into 52,077 shares of the Company's common stock using cashless exercises method. On February 20, 2019, the Company's warrant holders converted 415,355 of the Company's warrants into 54,826 shares of the Company's common stock using cashless exercises method. On March 11, 2019, the Board granted an aggregate of 131,330 shares of restricted common stock, with a fair value of $261,347, determined using the closing price of $1.99 on March 11, 2019, to repay the debt the Company owed to two unrelated third parties. As the carrying value of the debt equaled to the fair value of the 131,330 common shares at $1.99 per share, no gain or loss were recognized upon this debt settlement. On March 15, 2019, the Board granted an aggregate of 142,530 shares of restricted common stock, with a fair value of $290,761, determined using the closing price of $2.04 on March 15, 2019, to repay the debt the Company owed to one unrelated third party. As the carrying value of the debt equaled to the fair value of the 142,530 common shares at $2.04 per share, no gain or loss were recognized upon this debt settlement. On April 4, 2019, the Company entered into certain securities purchase agreement with certain "non-U.S. Persons" as defined in Regulation S of the Securities Act of 1933, as amended pursuant to which the Company agreed to sell 1,492,000 shares of its common stock, par value $0.0001 per share, at a per share purchase price of $2.00. The net proceeds to the Company from this offering were approximately $2.9 million. On November 20, 2019, the company wrote off 947,037 common shares. On December 23, 2019, TMSR Holding Company Limited (the "Company") entered into certain securities purchase agreement (the "SPA") with certain "non-U.S. Persons" (the "Purchasers") as defined in Regulation S of the Securities Act of 1933, as amended (the "Securities Act") pursuant to which the Company agreed to sell 3,692,859 shares of its common stock ("Common Stock"), par value $0.0001 per share, at a per share purchase price of $1.00. The net proceeds to the Company from this offering will be approximately $3.66 million. On January 3, 2020, the Company entered into a Share Purchase Agreement with Wuge and all the shareholders of Wuge ("Wuge Shareholders"). Wuge Shareholders are Wei Xu, Bibo Lin, Jiangsu Lingkong Network Joint Stock Co., Ltd., which is controlled by Wei Xu, and Anhui Shuziren Network Technology Co., Ltd., which is controlled by Wei Xu. Pursuant to the SPA, TMSR shall issue an aggregate of 4,000,000 shares of TMSR's common stock to the Wuge Shareholders, in exchange for Wuge Shareholders' agreement to enter into, and their agreement to cause Wuge to enter into, certain VIE agreements ("VIE Agreements") with Tongrong Technology (Jiangsu) Co., Ltd. ("WFOE"), the Company's indirectly owned subsidiary, through which WFOE shall have the right to control, manage and operate Wuge in return for a service fee equal to 100% of Wuge's net income ("Acquisition"). On January 24, 2020, the Company completed the Acquisition and issued the Shares to the Wuge Shareholders. Warrants and options On July 29, 2015, the Company sold 10,000,000 units at a purchase price of $5.00 per unit ("Public Units") in its initial public offering. Each Public Unit consists of one share of the Company's common stock, $0.0001 par value, and one warrant. Each warrant will entitle the holder to purchase one-half of one share of common stock at an exercise price of $2.88 per half share ($5.75 per whole share). Warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. The warrants will become exercisable on 30 days after the consummation of its initial Business Combination with China Sunlong on February 6, 2018. The warrants will expire February 5, 2023. The warrants will be redeemable by the Company at a price of $0.01 per warrant upon 30 days prior written notice after the warrants become exercisable, only in the event that the last sale price of the common stock equals or exceeds $12.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which notice of redemption is given. The sponsor of the Company purchased, simultaneously with the closing of the Public Offering on July 29, 2015, 500,000 units at $5.00 per unit in a private placement for an aggregate price of $2,500,000. Each unit purchased is substantially identical to the units sold in the Public Offering. The Company sold to the underwriter (and/or its designees), for $100, as additional compensation, an option to purchase up to a total of 800,000 units exercisable at $5.00 per unit (or an aggregate exercise price of $4,000,000) upon the closing of the Public Offering. Since the option is not exercisable until the earliest on the closing the initial Business Combination, the option will effectively represent the right to purchase up to 800,000 shares of common stock and 800,000 warrants to purchase 400,000 shares at $5.75 per full share for an aggregate maximum amount of $6,300,000. The units issuable upon exercise of this option are identical to those issued in the Public Offering. In July 2016, the board of directors of the Company appointed two new directors. In August 2016, the sponsor of the Company granted an option to each of the two new directors to acquire 12,000 shares of common stock at a price of $4.90 per share vested immediately and exercisable commencing six months after closing of the initial Business Combination and expiring five years from the closing of the initial Business Combination. The aforementioned warrants and options are deemed to be effective on February 6, 2018, the date of the consummation of its initial business combination with China Sunlong, as the Company was deemed to be the accounting acquiree in the transaction and the transaction was treated as a recapitalization of China Sunlong. The summary of warrant activity is as follows: Exercisable Weighted Average Warrants Number of Exercise Contractual Outstanding Shares Price Life December 31, 2019 9,079,348 4,539,674 $ 5.75 3.14 Granted/Acquired - - $ - - Forfeited - - $ - - Exercised - - - - June 30, 2020 9,079,348 4,539,674 $ 5.75 2.64 The summary of option activity is as follows: Weighted Average Average Remaining Options Exercise Contractual Outstanding Price Life December 31, 2019 824,000 $ 5.00 4.16 Granted/Acquired - $ - - Forfeited - $ - - Exercised - $ - - June 30, 2020 824,000 $ 5.00 2.64 |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 16 – Contingencies The Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. On February 27, 2013, Wuhan HOST entered into a contract to purchase land use rights for a parcel of land in E Zhou City, Hubei, China, for $1,212,478. The Company has paid to the local government $781,349, a balance of $431,129 has not been paid; however, the government has already issued to the Company all the necessary certificates transferring title of the land use rights for the parcel of land to the Company, and has not taken action to collect any remaining unpaid balance. If the government determines that it wishes to collect an unpaid balance, the total cost to the Company would be $431,129. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment reporting | Note 17 – Segment reporting The Company follows ASC 280, Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance. The Company's chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being income from operations. The Company's has discontinued Wuhan Host and Shengrong WFOE. The Company's remain business segment and operations is Rong Hai. The Company's consolidated results of operations and consolidated financial position from continuing operations are almost all attributable to Rong Hai; accordingly, management believes that the consolidated balance sheets and statement of operations provide the relevant information to assess Rong Hai's performance. The following represents assets by division as of: Total assets as of June 30, December 31, Hubei Shengrong and Shengrong WFOE $ - $ - Wuhan HOST - - Rong Hai and Tongrong WFOE 17,710,457 17,407,872 Wuge 2,198,636 - CCNC, China Sunlong, Shengrong BVI and Shengrong HK 8,949,216 71,521 Total Assets $ 28,858,309 $ 17,479,393 |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 18 – Discontinued Operations The following depicts the financial position for the discounted operations of Wuhan Host, Shengrong WOFE, Shengrong HK and China Sunlong as of June 30, 2020 and December 31, 2019, and the result of operations for the discounted operations of Wuhan Host, Shengrong WOFE, Shengrong HK and China Sunlong for the six months ended June 30, 2020 and 2019. June 30, December 31, Financial Position 2020 2019 CURRENT ASSETS Cash and cash equivalents - 1,544,177 Total current assets - 1,544,177 PLANT AND EQUIPMENT, NET - - OTHER ASSETS Goodwill - 3,424,390 Intangible assets, net - - Deferred tax assets - - Total other assets - 3,424,390 Total assets - 4,968,567 CURRENT LIABILITIES Accounts payable - 2,288,195 Other payables and accrued liabilities - 1,332,430 Other payables - related parties - 3,108,908 Customer deposits - 3,019,264 Lease liabilities - current - 98,582 Taxes payable - 326,687 Total current liabilities - 10,174,066 OTHER LIABILITIES Third party loan - noncurrent - 143,345 Lease liabilities - noncurrent - 95,752 Total other liabilities - 239,097 Total liabilities - 10,413,163 Net Assets - (5,444,596 ) Results of Operations For the six months For the REVENUES Equipment and systems $ - $ 2,971,542 Coating and fuel materials - 4,163,919 Trading and others - - TOTAL REVENUES - 7,135,461 COST OF REVENUES Equipment and systems - 1,208,838 Coating and fuel materials - 3,665,496 Trading and others - - TOTAL COST OF REVENUES - 4,874,334 GROSS PROFIT - 2,261,127 OPERATING EXPENSES (INCOME) Selling, general and administrative (495,733 ) 843,129 Provision for (recovery of) doubtful accounts - - TOTAL OPERATING EXPENSES (495,733 ) 843,129 INCOME FROM OPERATIONS 495,733 1,417,998 OTHER INCOME (EXPENSE) Interest income - 869 Other income (expense), net - 36,275 Total other income (expense), net - 37,144 INCOME (LOSS) BEFORE INCOME TAXES 495,733 1,455,142 PROVISION FOR INCOME TAXES - 204,833 NET (LOSS) INCOME $ 495,733 $ 1,250,309 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 19 – Subsequent events On August 11, 2020, pursuant to certain securities purchase agreements dated May 1, 2020, the Company issued 1,674,428 shares of its common, at a per share purchase price of $1.50, to the eleven investors. The gross proceeds to the Company from this private placement were approximately $2.51 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). Interim results are not necessarily indicative of results to be expected for the full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s annual report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission on April 17, 2020. |
Principles of consolidation | Principles of consolidation The unaudited condensed financial statements of the Company include the accounts of CCNC and its wholly owned subsidiaries and VIE. All intercompany transactions and balances are eliminated upon consolidation. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of intangible assets, deferred revenues and plant and equipment, impairment of long-lived assets, collectability of receivables, inventory valuation allowance, present value of lease liabilities and realization of deferred tax assets. Actual results could differ from these estimates. |
Foreign currency translation and transaction | Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive loss amounted to $(1,540,111) and $(832,267) as of June 30, 2020 and December 31, 2019, respectively. The balance sheet amounts, with the exception of shareholders’ equity at June 30, 2020 and December 31, 2019 were translated at 7.08 RMB and 7.14 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the six months ended June 30, 2020 and 2019 were 7.03 RMB and 6.78 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. |
Accounts receivable, net | Accounts receivable, net Accounts receivable include trade accounts due from customers. An allowance for doubtful accounts may be established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. |
Inventories | Inventories Inventories are comprised of raw materials and work in progress and are stated at the lower of cost or net realizable value using the first-in-first-out method in Shengrong WFOE and weighted average method in Wuhan HOST and Rong Hai. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and recognize an impairment charge against the inventory when the carrying value exceeds net realizable value. As of June 30, 2020 and December 31, 2019, no obsolescence and cost in excess of net realizable value were recognized. |
Prepayments | Prepayments Prepayments are funds deposited or advanced to outside vendors for future inventory or services purchases. As a standard practice in China, many of the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends. |
Plant and equipment | Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method after consideration of the estimated useful lives of the assets and estimated residual value. The estimated useful lives and residual value are as follows: Useful Life Estimated Building 5 – 20 years 5 % Office equipment and furnishing 5 years 5 % Production equipment 3-10 years 5 % Automobile 5 years 5 % Leasehold improvements Shorter of the remaining lease terms or estimated useful lives 0 % The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. |
Intangible assets | Intangible assets Intangible assets represent land use rights and patents, and they are stated at cost, less accumulated amortization. Research and development costs associated with internally developed patents are expensed when incurred. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. All land in the PRC is owned by the government; however, the government grants "land use rights." The Company has obtained the rights to use various parcels of land. The patents have finite useful lives and are amortized using a straight-line method that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The Company amortizes the cost of the land use rights and patents, over their useful life using the straight-line method. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The estimated useful lives are as follows: Useful Life Land use rights 50 years Patents 10 - 20 years Software 5 years |
Goodwill | Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of income. Impairment losses on goodwill are not reversed. In 2019, the Company recorded approximately $3.42 million in impairment to its Wuhan Host and Shengrong WFOE operating units. The entities were located at the epicenter of the COVID 19 virus. Accordingly, those entities were materially adversely impacted. |
Impairment for long-lived assets | Impairment for long-lived assets Long-lived assets, including plant, equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. In 2019, the Company recognized approximately $4.89 million in impairment to long lived assets related to Wuhan Host and Shengrong WFOE. |
Fair value measurement | Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits, short term loans and taxes payable to approximate their fair values because of their short term nature. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value 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 assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. |
Customer deposits | Customer deposits In Shengrong WFOE, customer deposits represent amounts advanced by customers on product orders. Generally, the Company requires 3% to 10% advanced deposits from the customers upon the signing of the sales contracts. At various stages of the sales contract execution, the Company generally collects certain amounts of advanced deposits from the customers based on the approximate amount of cash flows needed at each stage. Customer deposits are reduced when the related sale is recognized in accordance with the Company’s revenue recognition policy. In Wuhan HOST, customer deposits represent amounts advanced by customers on product orders. Generally, the Company requires 95% to 100% advanced deposits from the customers upon signing of the sales contracts. A few customers with good credit history are not required to make any deposit. Customer deposits are reduced when the related sale is recognized in accordance with the Company’s revenue recognition policy. |
Revenue recognition | Revenue recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s revenue, other than retainage revenues, was recognized based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. However, the impact of the Company’s retainage revenue was not material as of the date of adoption, and as a result, did not result in an adjustment. The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time except for the retainage revenues where the retainage periods are recognized over the retainage period, usually is a period of twelve months. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition except its retainage revenues. An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange. Revenue from equipment and systems, revenue from coating and fuel materials, and revenue from trading and others are recognized at the date of goods delivered and title passed to customers, when a formal arrangement exists, the price is fixed or determinable, the Company has no other significant obligations and collectability is reasonably assured. Such revenues are recognized at a point in time after all performance obligations are satisfied under the new five-step model. In addition, training service revenues are recognized when the services are rendered and the Company has no other obligations, and collectability is reasonably assured. These revenues are recognized at a point in time. Prior to January 1, 2018, the Company allowed its customers to retain 5% to 10% of the contract price as warranty retainage during the retainage period of 12 months to guarantee product quality. Retainage is considered as a payment term included as a part of the contract price, and was recognized as revenue upon the shipment of products. Due to nature of the retainage, the Company’s policy is to record revenue the full value of the contract without VAT, including any retainage, since the Company has experienced insignificant warranty retainage claims historically. Due to the infrequent and insignificant amount of warranty retainage claims, the ability to collect retainage was reasonably assured and was recognized at the time of shipment. On January 1, 2018, upon the adoption of ASU 2014-09 (ASC 606), revenues from product warranty retainage are recognized over the retainage period over 12 months. For the six months ended June 30, 2020, less than 5% of our retainage revenues were recognized in our consolidated revenues and included in the Company’s equipment and systems revenues in the accompanying statements of income and comprehensive income. Payments received before all of the relevant criteria for revenue recognition are recorded as customer deposits. The Company’s disaggregate revenue streams are summarized as follows: For the Three Months Ended For the Six Months Ended 2020 2019 2020 2019 Revenues – Equipment and systems $ - $ - $ - $ - Revenues –fuel materials 1,279,781 7,418,297 6,445,181 12,285,253 Revenues – Trading and others 46,482 473,468 46,482 639,297 Total revenues $ 1,326,263 $ 7,891,765 $ 6,491,663 $ 12,924,550 Gross versus Net Revenue Reporting Starting from July 2016, in the normal course of the Company’s trading of industrial waste materials business, the Company directly purchases the processed industrial waste materials from the Company’s suppliers under the Company’s specifications and drop ships the materials directly to the Company’s customers. The Company would inspect the materials at its customers’ site, during which inspection it temporarily assumes legal title to the materials, and after which inspection legal title is transferred to its customers. In these situations, the Company generally collects the sales proceed directly from the Company’s customers and pay for the inventory purchases to the Company’s suppliers separately. The determination of whether revenues should be reported on a gross or net basis is based on the Company’s assessment of whether it is the principal or an agent in the transaction. In determining whether the Company is the principal or an agent, the Company follows the new accounting guidance for principal-agent considerations. Since the Company is the primary obligor and is responsible for (i) fulfilling the processed industrial waste materials delivery, (ii) controlling the inventory by temporarily assume legal title to the materials after inspecting the products from our vendors before passing the materials to our customers, and (iii) bearing the back-end risk of inventory loss with respect to any product return from the Company’s customers, the Company has concluded that it is the principal in these arrangements, and therefore report revenues and cost of revenues on a gross basis. |
Research and Development ("R&D") Expenses | Research and Development (“R&D”) Expenses Research and development expenses include salaries and other compensation-related expenses paid to the Company’s research and product development personnel while they are working on R&D projects, as well as raw materials used for the R&D projects. R&D expenses incurred by the Company are included in the selling, general and administrative expenses and totaled $0 and $219,675 for the six months ended June 30, 2020 and 2019, respectively. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes is accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company incurred no such penalties and interest for the six months ended June 30, 2020 and 2019. As of June 30, 2020, the Company’s PRC tax returns filed for 2017, 2018 and 2019 remain subject to examination by any applicable tax authorities. |
Earnings per share | Earnings per share Basic earnings per share are computed by dividing income available to common shareholders of the Company by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares. 9,079,348 and 10,500,000 of outstanding warrants which is equivalent to convertible of 4,539,674 and 5,250,000 common shares were excluded from the diluted earnings per share calculation due to its antidilutive effect for the six months ended June 30, 2020 and 2019, respectively. 824,000 of outstanding options were excluded from the diluted earnings per share calculation due to its antidilutive effect for the six months ended June 30, 2020 and 2019. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU would have a material effect on the Company’s unaudited condensed consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Nature of Business and Organi_2
Nature of Business and Organization (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of activities of TMSR and related entities | Name Background Ownership China Sunlong 3 ● A Cayman Islands company 100% owned by the Company Shengrong BVI 3 ● ● A British Virgin Island company Incorporated on June 30, 2015 100% owned by China Sunlong Citi Profit BVI A British Virgin Island company Incorporated on April 2019 100% owned by the Company Shengrong HK 3 ● ● A Hong Kong company Incorporated on September 25, 2015 100% owned by Shengrong BVI TMSR HK ● ● A Hong Kong company Incorporated on April 2019 100% owned by Citi Profit BVI Shengrong WFOE 3 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by Shengrong HK ● ● ● ● Incorporated on March 1, 2016 Registered capital of USD 12,946 (HKD100,000), fully funded Purchase and sales of high efficiency permanent magnetic separator and comprehensive utilization system Trading of processed industrial waste materials Tongrong WFOE ● ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) Incorporated on August 2019 100% owned by TMSR HK Hubei Shengrong 2 ● ● A PRC limited liability company Incorporated on January 14, 2009 100% owned by Shengrong WFOE ● Registered capital of USD 4,417,800 (RMB 30,000,000), fully funded ● ● Production and sales of high efficiency permanent magnetic separator and comprehensive utilization system. Trading of processed industrial waste materials Wuhan HOST 3 ● ● ● A PRC limited liability company Incorporated on October 27, 2010 Registered capital of USD 750,075 (RMB 5,000,000), fully funded 100% owned by Shengrong WFOE ● Research, development, production and sale of coating materials. Shanghai Host Coating Materials Co., Ltd. (“Shanghai HOST”) 3 ● ● ● A PRC limited liability company Incorporated on December 11, 2014 Registered capital of USD 3,184,371 (RMB 20,000,000), to be fully funded by November 2024 ● No operations and no capital contribution has been made as of December 31, 2018 80% owned by Wuhan HOST Wuhan HOST Coating Materials Xiaogan Co., Ltd. (“Xiaogan HOST”) 3 ● ● ● ● A PRC limited liability company Incorporated on December 25, 2018 Registered capital of USD 11,595,379 (RMB 80,000,000), to be fully funded by December 2028 No operations and no capital contribution has been made as of December 31, 2018 90% owned by Wuhan HOST Jiangsu Rong Hai Electric Power Fuel Co., Ltd. (“Rong Hai”) ● ● ● ● A PRC limited liability company Incorporated on May 20, 2009 Registered capital of USD 3,171,655 (RMB 20,180,000), fully funded Coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap VIE of Tongrong WFOE Wuge ● ● A PRC limited liability company Incorporated on January 3, 2020 VIE of Tongrong WFOE TJComex BVI 1 ● ● A British Virgin Island company Incorporated on March 8, 2016 100% owned by China Sunlong TJComex HK 1 ● ● A Hong Kong company Incorporated on March 19, 2014 100% owned by TJComex BVI TJComex WFOE 1 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by TJComex HK ● Incorporated on March 10, 2004 ● Registered capital of USD 200,000 TJComex Tianjin 1 ● A PRC limited liability company Incorporated on November 19, 2007 100% owned by TJComex WFOE ● Registered capital of USD 7,809,165 (RMB 55,000,000) ● General merchandise trading business and related consulting services 1 Disposed on April 2, 2018 2 Disposed on December 27, 2018 3 Disposed on June 30, 2020 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of plant and equipment | Useful Life Estimated Building 5 – 20 years 5 % Office equipment and furnishing 5 years 5 % Production equipment 3-10 years 5 % Automobile 5 years 5 % Leasehold improvements Shorter of the remaining lease terms or estimated useful lives 0 % |
Schedule of estimated useful lives of intangible assets | Useful Life Land use rights 50 years Patents 10 - 20 years Software 5 years |
Schedule of disaggregate revenue | For the Three Months Ended For the Six Months Ended 2020 2019 2020 2019 Revenues – Equipment and systems $ - $ - $ - $ - Revenues –fuel materials 1,279,781 7,418,297 6,445,181 12,285,253 Revenues – Trading and others 46,482 473,468 46,482 639,297 Total revenues $ 1,326,263 $ 7,891,765 $ 6,491,663 $ 12,924,550 |
Business Combination and Rest_2
Business Combination and Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Schedule of reconciliation of reduction of capital | December 27, CURRENT ASSETS Cash and cash equivalents $ 47,994 Accounts receivable, net 9,410,436 Accounts receivable - related party, net 761,794 Other receivables 48,718 Other receivable - related party 2,158 Inventories 5,332,990 Prepayments 31,793,810 Total current assets 47,397,900 PLANT AND EQUIPMENT, NET 203,992 OTHER ASSETS Other assets 7,269 Deferred tax assets 780,550 Total other assets 787,819 Total assets $ 48,389,711 CURRENT LIABILITIES Short term loans - bank $ 2,180,708 Accounts payable 95,854 Other payables and accrued liabilities 156,498 Other payables - related parties 507,183 Customer deposits 347,853 Taxes payable 16,602,841 Total current liabilities 19,890,937 OTHER LIABILITIES Deferred rent liabilities 30,763 Total other liabilities 30,763 Total liabilities $ 19,921,700 Total net assets $ 28,468,011 Total consideration (30,362,135 ) Currency translation adjustment 900,281 Total addition to paid-in-capital $ 993,843 |
Wuhan HOST [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Schedule of the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date | Total consideration at fair value $ 11,200,000 Fair Value Cash $ 276,626 Other current assets 6,763,767 Plant and equipment 6,499,268 Other noncurrent assets 2,139,987 Goodwill 7,544,008 Total asset 23,223,656 Total liabilities (12,023,656 ) Net asset acquired $ 11,200,000 |
Rong Hai [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Schedule of the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date | Total consideration at fair value $ 9,260,000 Fair Value Cash $ 717,056 Other current assets 5,980,230 Plant and equipment 28,875 Other noncurrent assets 116,655 Goodwill 7,307,470 Total asset 14,150,286 Total liabilities (4,890,286 ) Net asset acquired $ 9,260,000 |
Wuge [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Schedule of the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date | Total consideration at fair value $ 7,200,000 Fair Value Cash $ 228,788 Other current assets 20,834 Plant and equipment 6,024 Other noncurrent assets 8,097 Goodwill 7,343,209 Total asset 7,606,952 Total liabilities (406,952 ) Net asset acquired $ 7,200,000 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entity [Abstract] | |
Schedule of carrying amount of the VIE's assets and liabilities | June 30, December 31, 2020 2019 Current assets $ 9,201,684 $ 8,687,451 Property, plants and equipment, Intangible Assets 1,165,027 19,057 Other noncurrent assets 89,136 127,782 Goodwill 14,329,042 7,289,454 Total assets 24,786,889 16,123,744 Current liabilities 8,264,556 6,067,264 Non-current liabilities 60,681 61,580 Total liabilities 8,325,237 6,128,844 Net assets $ 16,459,652 $ 9,994,900 June 30, December 31, 2020 2019 Short-term loan $ 437,884 $ - Accounts payable 880,713 619,329 Other payables and accrued liabilities 74,154 301,230 Other payables – related party 5,766,063 5,082,068 Tax payables 3,525 202 Customer Advances 1,040,124 3,426 Lease liabilities 62,093 61,009 Total current liabilities 8,264,556 6,067,264 Lease liabilities - noncurrent 60,681 61,580 Total liabilities $ 8,325,237 $ 6,128,844 |
Schedule of operating results of VIE's | For the 2020 Operating revenues $ 6,491,663 Gross profit 326,254 Income from operations (337,537) Net income $ (387,648) |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of accounts receivable | June 30, December 31, Accounts receivable $ 1,153,142 $ 2,221,319 Less: Allowance for doubtful accounts (113,370) (24,055 ) Total accounts receivable, net $ 1,039,772 $ 2,197,264 |
Schedule of movement of allowance for doubtful accounts | June 30, December 31, Beginning balance $ 24,055 $ 732,846 Beginning balance from Wuhan HOST - 260,764 Beginning balance from Rong Hai 24,055 472,082 Addition 90,308 - Recovery - (708,791 ) Exchange rate effect (993 ) - Ending balance $ 113,370 $ 24,055 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | June 30, December 31, Raw materials $ - $ - Work in progress - - Finished Goods 1,248,906 1,197,065 Total inventories $ 1,248,906 $ 1,197,065 |
Plant and Equipment, Net (Table
Plant and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of plant and equipment | June 30, December 31, Office equipment and furniture $ 62,972 $ 39,688 Automobile 251,523 209,057 Subtotal 314,495 248,745 Less: accumulated depreciation (234,807 ) (229,688 ) Total $ 79,688 $ 19,057 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | March 31, December 31, Development of technology $ 1,129,681 $ - Less: accumulated amortization - - Net intangible assets $ 1,129,681 $ - |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award Warrant Forfeitures In Period | |
Schedule of goodwill by business units | Wuhan HOST Rong Hai Wuge Total Balance as of December 31, 2019 $ 3,424,390 $ 7,289,454 $ - $ 10,713,844 Goodwill acquired through acquisition - - 7,140,304 7,140,304 Disposal of the company (3,424,390 ) - - (3,424,390 ) Foreign currency translation adjustment - (106,364 ) 5,648 (100,716 ) Balance as of June 30, 2020 $ - $ 7,183,090 $ 7,145,952 $ 14,329,042 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of other payables - related parties | Name of related party Relationship June 30, December 31, Chuanliu Ni Chief Executive Officer and director of a former subsidiary $ 325,907 $ 325,907 Zhong Hui Holding Limited Shareholder of the Company 140,500 140,500 Chengdu Yuan Code Chain Technology Co. Ltd A company controlled by former shareholder of the Company 103,719 - Qihai Wang Shareholder of the Company 71,444 166,673 Jiangsu Longying Education Technology Co. Ltd A company in which shareholder hold shares - 422,868 Jiangsu Longhai Film Culture Media Co. Ltd Under common control of shareholder of the Company - 280,954 Total $ 641,570 $ 1,336,902 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of short term loan due to bank | Short term loans Maturities Weighted average interest rate Collateral/Guarantee June 30, December 31, Loan from Bank of Jiangsu March 25, 2021 4.5 % Guaranteed by Qihai Wang's personal property $ 247,193 - Loan from Bank of Jiangsu January 12, 2021 5.22 % Guaranteed by Qihai Wang's personal property $ 190,691 - |
Taxes (Tables)
Taxes (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the provision for income taxes | For the For the Current $ 1,810 $ 234,473 Deferred (243 ) (38,229 ) Total provision for income taxes $ 1,567 $ 196,244 For the For the Current $ 16,419 $ 255,301 Deferred 33,692 (8,229 ) Total provision for income taxes $ 50,111 $ 247,072 |
Schedule of components of deferred tax assets | June 30, December 31, Net operating losses carried forward – U.S. $ 19,106 $ 17,309 Net operating losses carried forward – PRC - - Bad debt allowance 3,531 37,532 Valuation allowance (19,106 ) (17,309 ) Deferred tax assets, net $ 3,531 $ 37,532 |
Schedule of taxes payable | June 30, December 31, VAT taxes payable $ 1,550 $ - Income taxes payable 1,900 - Other taxes payable 105 202 Total $ 3,555 $ 202 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of operating lease | Twelve months ended June 30, Operating 2020 $ 124,377 2021 99,501 2022 76,957 2023 23,900 Total lease payments 324,735 Less: interest (201,961 ) Present value of lease liabilities $ 122,774 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of warrant activity | Exercisable Weighted Average Warrants Number of Exercise Contractual Outstanding Shares Price Life December 31, 2019 9,079,348 4,539,674 $ 5.75 3.14 Granted/Acquired - - $ - - Forfeited - - $ - - Exercised - - - - June 30, 2020 9,079,348 4,539,674 $ 5.75 2.64 |
Schedule of option activity | Weighted Average Average Remaining Options Exercise Contractual Outstanding Price Life December 31, 2019 824,000 $ 5.00 4.16 Granted/Acquired - $ - - Forfeited - $ - - Exercised - $ - - June 30, 2020 824,000 $ 5.00 2.64 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting Tables Abstract | |
Schedule of assets by division | Total assets as of June 30, December 31, Hubei Shengrong and Shengrong WFOE $ - $ - Wuhan HOST - - Rong Hai and Tongrong WFOE 17,710,457 17,407,872 Wuge 2,198,636 - CCNC, China Sunlong, Shengrong BVI and Shengrong HK 8,949,216 71,521 Total Assets $ 28,858,309 $ 17,479,393 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of financial position and result of operations for the discounted operations | June 30, December 31, Financial Position 2020 2019 CURRENT ASSETS Cash and cash equivalents - 1,544,177 Total current assets - 1,544,177 PLANT AND EQUIPMENT, NET - - OTHER ASSETS Goodwill - 3,424,390 Intangible assets, net - - Deferred tax assets - - Total other assets - 3,424,390 Total assets - 4,968,567 CURRENT LIABILITIES Accounts payable - 2,288,195 Other payables and accrued liabilities - 1,332,430 Other payables - related parties - 3,108,908 Customer deposits - 3,019,264 Lease liabilities - current - 98,582 Taxes payable - 326,687 Total current liabilities - 10,174,066 OTHER LIABILITIES Third party loan - noncurrent - 143,345 Lease liabilities - noncurrent - 95,752 Total other liabilities - 239,097 Total liabilities - 10,413,163 Net Assets - (5,444,596 ) Results of Operations For the six months For the REVENUES Equipment and systems $ - $ 2,971,542 Coating and fuel materials - 4,163,919 Trading and others - - TOTAL REVENUES - 7,135,461 COST OF REVENUES Equipment and systems - 1,208,838 Coating and fuel materials - 3,665,496 Trading and others - - TOTAL COST OF REVENUES - 4,874,334 GROSS PROFIT - 2,261,127 OPERATING EXPENSES (INCOME) Selling, general and administrative (495,733 ) 843,129 Provision for (recovery of) doubtful accounts - - TOTAL OPERATING EXPENSES (495,733 ) 843,129 INCOME FROM OPERATIONS 495,733 1,417,998 OTHER INCOME (EXPENSE) Interest income - 869 Other income (expense), net - 36,275 Total other income (expense), net - 37,144 INCOME (LOSS) BEFORE INCOME TAXES 495,733 1,455,142 PROVISION FOR INCOME TAXES - 204,833 NET (LOSS) INCOME $ 495,733 $ 1,250,309 |
Nature of Business and Organi_3
Nature of Business and Organization (Details) | 6 Months Ended | |
Jun. 30, 2020 | ||
China Sunlong [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A Cayman Islands company | |
Ownership | 100% owned by the Company | [1] |
Shengrong BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A British Virgin Island company Incorporated on June 30, 2015 | |
Ownership | 100% owned by China Sunlong | [1] |
Shengrong HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A Hong Kong company Incorporated on September 25, 2015 | |
Ownership | 100% owned by Shengrong BVI | [1] |
Shengrong WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company and deemed a wholly foreign owned enterprise ("WFOE") Incorporated on March 1, 2016 Registered capital of USD 12,946 (HKD100,000), fully funded Purchase and sales of high efficiency permanent magnetic separator and comprehensive utilization system Trading of processed industrial waste materials | |
Ownership | 100% owned by Shengrong HK | [1] |
Hubei Shengrong [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company Incorporated on January 14, 2009 Registered capital of USD 4,417,800 (RMB 30,000,000), fully funded Production and sales of high efficiency permanent magnetic separator and comprehensive utilization system. Trading of processed industrial waste materials | |
Ownership | 100% owned by Shengrong WFOE | [2] |
Wuhan HOST [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company Incorporated on October 27, 2010 Registered capital of USD 750,075 (RMB 5,000,000), fully funded Research, development, production and sale of coating materials. | |
Ownership | 100% owned by Shengrong WFOE | [1] |
Shanghai Host Coating Materials Co., Ltd. ("Shanghai HOST") [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company Incorporated on December 11, 2014 Registered capital of USD 3,184,371 (RMB 20,000,000), to be fully funded by November 2024 No operations and no capital contribution has been made as of December 31, 2018 | |
Ownership | 80% owned by Wuhan HOST | [1] |
Wuhan HOST Coating Materials Xiaogan Co., Ltd. (“Xiaogan HOST”) [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company Incorporated on December 25, 2018 Registered capital of USD 11,595,379 (RMB 80,000,000), to be fully funded by December 2028 No operations and no capital contribution has been made as of December 31, 2018 | |
Ownership | 90% owned by Wuhan HOST | [1] |
Jiangsu Rong Hai Electric Power Fuel Co., Ltd. (“Rong Hai”) [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company Incorporated on May 20, 2009 Registered capital of USD 3,171,655 (RMB 20,180,000), fully funded Coal wholesales and sales of coke, steels, construction materials, mechanical equipment and steel scrap | |
Ownership | VIE of Tongrong WFOE | |
TJComex BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A British Virgin Island company Incorporated on March 8, 2016 | |
Ownership | 100% owned by China Sunlong | [3] |
TJComex HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A Hong Kong company Incorporated on March 19, 2014 | |
Ownership | 100% owned by TJComex BVI | [3] |
TJComex WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company and deemed a wholly foreign owned enterprise ("WFOE") Incorporated on March 10, 2004 Registered capital of USD 200,000 | |
Ownership | 100% owned by TJComex HK | [3] |
TJComex Tianjin [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company Incorporated on November 19, 2007 Registered capital of USD 7,809,165 (RMB 55,000,000) General merchandise trading business and related consulting services | |
Ownership | 100% owned by TJComex WFOE | [3] |
Citi Profit BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A British Virgin Island company Incorporated on April 2019 | |
Ownership | 100% owned by the Company | |
TMSR HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A Hong Kong company Incorporated on April 2019 | |
Ownership | 100% owned by Citi Profit BVI | |
Tongrong WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) Incorporated on August 2019 | |
Ownership | 100% owned by TMSR HK | |
Wuge [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | A PRC limited liability company Incorporated on July 4, 2019 | |
Ownership | VIE of Tongrong WFOE | |
[1] | Disposed on June 30, 2020 | |
[2] | Disposed on December 27, 2018 | |
[3] | Disposed on April 2, 2018 |
Nature of Business and Organi_4
Nature of Business and Organization (Details Textual) | Jan. 24, 2020 | Jan. 03, 2020 | Apr. 11, 2018 | Feb. 06, 2018shares | Mar. 31, 2017 | Nov. 30, 2018shares | May 30, 2018 | Jun. 30, 2020 | Dec. 27, 2018shares | Apr. 02, 2018USD ($) | Oct. 10, 2017USD ($) | Oct. 10, 2017CNY (¥) |
Nature of Business and Organization (Textual) | ||||||||||||
Exchange for newly-issued shares of common stock | 17,990,856 | |||||||||||
Business acquisition, description of equity interest acquired | (v) Chuanliu Ni, a Chinese citizen who is the Chief Executive Officer and director of China Sunlong, in the capacity as the representative for the Sellers. Pursuant to the Share Exchange Agreement, the Companyacquired from the Sellers all of the issued and outstanding equity interests of China Sunlong in exchange for 17,990,856 newly-issued shares of common stock of the Companyto the Sellers. 1,799,088 of these newly-issued shares are held in escrow for 18 months from the closing date of the Business Combination. | |||||||||||
RMB [Member] | ||||||||||||
Nature of Business and Organization (Textual) | ||||||||||||
Registered capital | ¥ | ¥ 10,000,000 | |||||||||||
TjCome BVI [Member] | ||||||||||||
Nature of Business and Organization (Textual) | ||||||||||||
Business acquisition, description of equity interest acquired | China Sunlong completed its acquisition of 100% of the equity in TJComex International Group Corporation ("TJComex BVI"). At the closing of such acquisition, the selling shareholders of TJComex BVI received 5,935 shares of China Sunlong Common Stock valued at $926.71 per share for 100% of their equity in TJComex BVI. TJComex BVI owns 100% of the issued and outstanding capital stock of TJComex Hong Kong Company Limited ("TJComex HK"), a Hong Kong limited liability company, which owns 100% equity interest of Tianjin Corro Technological Consulting Co., Ltd. ("TJComex WFOE"), a wholly foreign owned enterprise incorporated under the laws of the PRC. Pursuant to certain contractual arrangements, TJComex WFOE controls Tianjin Commodity Exchange Co., Ltd. ("TJComex Tianjin"), a limited liability company incorporated under the law of the PRC. TJComex Tianjin is engaged in general merchandise trading business and related consulting services, and its headquarter is located in the city of Tianjin, PRC. | |||||||||||
Net assets | $ | $ 16,598 | |||||||||||
Hubei Shengrong [Member] | ||||||||||||
Nature of Business and Organization (Textual) | ||||||||||||
Registered capital | $ | $ 1,518,120 | |||||||||||
Business combination, description | Hubei Shengrong and two unrelated entities entered into certain Capital Transfer and Contribution Agreement pursuant to which these two entities shall contribute cash of approximately USD 5.0 million (RMB 32.0 million) into Fujian Shengrong and Hubei Shengrong shall contribute approximately USD 1.3 million (RMB 8.0 million) which is the consideration for certain technology consulting services to be provided by Hubei Shengrong to the two entities. Upon completion of the contribution, the total registered capital of Fujian Shengrong increased to RMB 40.0 million (approximately USD 6.3 million) and Hubai Shengrong owns 20% and the two entities collectively own 80% of the equity interest of Fujian Shengrong. In August, 2018, Hubei Shengrong transferred 20% equity interest of Fujian Shengrong to Shengrong WFOE. The Company will account for the investment in Fujian Shengrong using the cost method. Since Shengrong WFOE did not provide any cash contribution to Fujian Shengrong or technology services, the investment balance under the cost method investment on June 30, 2020 is $0. | |||||||||||
Wuhan HOST Coating Materials Co., Ltd. [Member] | ||||||||||||
Nature of Business and Organization (Textual) | ||||||||||||
Business combination, description | In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million, of which $4.7 million or RMB equivalent shall be paid in cash and $6.0 million shall be paid in shares of common stock, of CCNC ("Share Consideration"). The Parties agree the Share Consideration shall be an aggregate of 1,012,932 shares of common stock of which is based on the closing price of US$4.64 on March 27, 2018. | |||||||||||
Equity Purchase Agreement [Member] | ||||||||||||
Nature of Business and Organization (Textual) | ||||||||||||
Forfeit and cancellation of shares | 8,523,320 | |||||||||||
Purchase Agreement [Member] | ||||||||||||
Nature of Business and Organization (Textual) | ||||||||||||
Exchange for newly-issued shares of common stock | 4,630,000 | |||||||||||
Business combination, description | The Company issued an aggregate of 4,000,000 shares of TMSR's common stock ("TMSR Shares") to the shareholders of Wuge, in exchange for Wuge's shareholders' agreement to enter into, and their agreement to cause Wuge to enter into, certain VIE agreements (the "Wuge VIE Agreements") with Tongrong WFOE, through which Tongrong WFOE has the right to control, manage and operate Wuge in return for a service fee equal to 100% of Wuge's net income. | The purchase price for the Sunlong Shares shall be $1,732,114, payable in consideration of cancellation of 1,012,932 shares of the Company owned by the Payees (the “CCNC Shares”). The CCNC Shares are valued at $1.71 per share, based on the closing price of the Company’s common stock on June 30, 2020. | ||||||||||
Operating Agreement [Member] | ||||||||||||
Nature of Business and Organization (Textual) | ||||||||||||
Agreement term | 20 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Plant and equipment, Estimated Residual Value | 5.00% |
Building [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Plant and equipment, Useful Life | 5 years |
Building [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Plant and equipment, Useful Life | 20 years |
Office equipment and furnishing [Member] | |
Property, Plant and Equipment [Line Items] | |
Plant and equipment, Useful Life | 5 years |
Plant and equipment, Estimated Residual Value | 5.00% |
Production equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Plant and equipment, Estimated Residual Value | 5.00% |
Production equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Plant and equipment, Useful Life | 3 years |
Production equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Plant and equipment, Useful Life | 10 years |
Automobile [Member] | |
Property, Plant and Equipment [Line Items] | |
Plant and equipment, Useful Life | 5 years |
Plant and equipment, Estimated Residual Value | 5.00% |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Plant and equipment, Estimated Residual Value | 0.00% |
Property and equipment, Useful Life, description | Shorter of the remaining lease terms or estimated useful lives |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 6 Months Ended |
Jun. 30, 2020 | |
Software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives for intangible assets | 5 years |
Patents [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives for intangible assets | 10 years |
Patents [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives for intangible assets | 20 years |
Land use rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives for intangible assets | 50 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Revenues - Equipment and systems | ||||
Revenues - fuel materials | 1,279,781 | 7,418,297 | 6,445,181 | 12,285,253 |
Revenues - Trading and others | 46,482 | 473,468 | 46,482 | 639,297 |
Total revenues | $ 1,326,263 | $ 7,891,765 | $ 6,491,663 | $ 12,924,550 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Textual) | |||
Accumulated other comprehensive income (loss) | $ (1,539,507) | $ (832,268) | |
Foreign currency translation, description | The balance sheet amounts, with the exception of shareholders’ equity at June 30, 2020 and December 31, 2019 were translated at 7.08 RMB and 7.14 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the six months ended June 30, 2020 and 2019 were 7.03 RMB and 6.78 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. | ||
Description of warranty revenue | The Company allowed its customers to retain 5% to 10% of the contract price as warranty retainage during the retainage period of 12 months to guarantee product quality. Retainage is considered as a payment term included as a part of the contract price, and was recognized as revenue upon the shipment of products. Due to nature of the retainage, the Company’s policy is to record revenue the full value of the contract without VAT, including any retainage, since the Company has experienced insignificant warranty retainage claims historically. Due to the infrequent and insignificant amount of warranty retainage claims, the ability to collect retainage was reasonably assured and was recognized at the time of shipment. On January 1, 2018, upon the adoption of ASU 2014-09 (ASC 606), revenues from product warranty retainage are recognized over the retainage period over 12 months. For the six months ended June 30, 2020, less than 5% of our retainage revenues were recognized in our consolidated revenues and included in the Company’s equipment and systems revenues in the accompanying statements of income and comprehensive income. | ||
Research and development expense | $ 0 | $ 219,675 | |
Outstanding warrants | 9,079,348 | 10,500,000 | |
Outstanding options | 824,000 | ||
Common shares excluded from diluted earnings per share | 4,539,674 | 5,250,000 | |
Income tax benefit, percentage | 50.00% | ||
Hubei Shengrong [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Customer deposits, description | The Company requires 3% to 10% advanced deposits from the customers upon the signing of the sales contracts. | ||
Wuhan Host [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Customer deposits, description | The Company requires 95% to 100% advanced deposits from the customers upon signing of the sales contracts. | ||
Impairment Units | 3,420,000 | ||
Impairment of long lived assets | 4,890,000 | ||
Shengrong WFOE [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Impairment Units | 3,420,000 | ||
Impairment of long lived assets | $ 4,890,000 |
Business Combination and Rest_3
Business Combination and Restructuring (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 27, 2018 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Cash | $ 47,994 | |
Other current assets | 31,793,810 | |
Plant and equipment | 203,992 | |
Total asset | 48,389,711 | |
Total liabilities | (19,921,700) | |
Net asset acquired | $ 28,468,011 | |
Wuhan HOST [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total consideration at fair value | $ 11,200,000 | |
Cash | 276,626 | |
Other current assets | 6,763,767 | |
Plant and equipment | 6,499,268 | |
Other noncurrent assets | 2,139,987 | |
Goodwill | 7,544,008 | |
Total asset | 23,223,656 | |
Total liabilities | (12,023,656) | |
Net asset acquired | 11,200,000 | |
Rong Hai [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total consideration at fair value | 9,260,000 | |
Cash | 717,056 | |
Other current assets | 5,980,230 | |
Plant and equipment | 28,875 | |
Other noncurrent assets | 116,655 | |
Goodwill | 7,307,470 | |
Total asset | 14,150,286 | |
Total liabilities | (4,890,286) | |
Net asset acquired | 9,260,000 | |
Wuge [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total consideration at fair value | 7,300,000 | |
Cash | 228,788 | |
Other current assets | 20,834 | |
Plant and equipment | 6,024 | |
Other noncurrent assets | 8,097 | |
Goodwill | 7,343,209 | |
Total asset | 7,606,952 | |
Total liabilities | (406,952) | |
Net asset acquired | $ 7,200,000 |
Business Combination and Rest_4
Business Combination and Restructuring (Details 1) | Dec. 27, 2018USD ($) |
CURRENT ASSETS | |
Cash and cash equivalents | $ 47,994 |
Accounts receivable, net | 9,410,436 |
Accounts receivable - related party, net | 761,794 |
Other receivables | 48,718 |
Other receivable - related party | 2,158 |
Inventories | 5,332,990 |
Prepayments | 31,793,810 |
Total current assets | 47,397,900 |
PLANT AND EQUIPMENT, NET | 203,992 |
OTHER ASSETS | |
Other assets | 7,269 |
Deferred tax assets | 780,550 |
Total other assets | 787,819 |
Total assets | 48,389,711 |
CURRENT LIABILITIES | |
Short term loans - bank | 2,180,708 |
Accounts payable | 95,854 |
Other payables and accrued liabilities | 156,498 |
Other payables - related parties | 507,183 |
Customer deposits | 347,853 |
Taxes payable | 16,602,841 |
Total current liabilities | 19,890,937 |
OTHER LIABILITIES | |
Deferred rent liabilities | 30,763 |
Total other liabilities | 30,763 |
Total liabilities | 19,921,700 |
Total net assets | 28,468,011 |
Total consideration | (30,362,135) |
Currency translation adjustment | 900,281 |
Total addition to paid-in-capital | $ 993,843 |
Business Combination and Rest_5
Business Combination and Restructuring (Details Textual) - USD ($) | Apr. 16, 2018 | Apr. 11, 2018 | Nov. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jan. 03, 2020 | Dec. 31, 2019 | Dec. 27, 2018 | Aug. 16, 2018 | Apr. 02, 2018 |
Business Combination and Restructuring (Textual) | ||||||||||
Common stock par value | $ 0.0001 | $ 0.0001 | ||||||||
Goodwill acquisition | $ 7,140,304 | |||||||||
Payments of cash consideration | 470,576 | |||||||||
Rong Hai [Member] | ||||||||||
Business Combination and Restructuring (Textual) | ||||||||||
Total Consideration | 9,260,000 | |||||||||
Goodwill acquisition | $ 7,300,000 | |||||||||
Wuhan HOST [Member] | ||||||||||
Business Combination and Restructuring (Textual) | ||||||||||
Business combination, description | The Purchasers and the Sellers entered into a supplement agreement ("Supplement Agreement"), which modified the terms of consideration set forth in the Purchase Agreement entered between Purchasers and Sellers on April 11, 2018. Pursuant to the Supplement Agreement, in exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million ("Total Consideration"), of which $6.5 million or RMB equivalent shall be paid in cash ("Cash Consideration") and $4.7 million shall be paid in shares of common stock ("Common Stock"), par value $0.0001, of CCNC ("Share Consideration"). | In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million ("Total Consideration"), of which $ 5.2 million or RMB equivalent shall be paid in cash ("Cash Consideration") and $6.0 million shall be paid in shares of common stock ("Common Stock"), par value $0.0001, of CCNC ("Share Consideration"). The Parties agree the Share Consideration shall be an aggregate of 1,293,104 shares of common stock of which is based on the closing price of US$4.64 on March 27, 2018. The Share Consideration shall be issued in three equal installments, which shall be subject to lock-up of 12, 24 and 36 months, respectively. The Purchase Agreement contains representations, warranties and covenants customary for acquisitions of this type. The Acquisition closed on May 1, 2018. | The Company, Shengrong WFOE and Hubei Shengrong, both of which are the Company's indirectly owned subsidiaries (collectively "Purchasers"), entered into a Share Purchase Agreement (the "Purchase Agreement") with Long Liao, Chunyong Zheng, Wuhan Modern Industrial Technology Research Institute, and Hubei Zhonggong Materials Group Co., Ltd. (collectively "Sellers" ) and Wuhan HOST Coating Materials Co., Ltd. ("Wuhan HOST"), a company incorporated in China engaging in the research, development, production and sale of coating materials. Pursuant to the Purchase Agreement, the Purchasers acquired all of the outstanding equity interests of Wuhan Host (the "Acquisition"). In exchange for the transfer of 100% equity interest of Wuhan Host, Purchasers shall pay a total consideration of $11.2 million ("Total Consideration"), of which $ 5.2 million or RMB equivalent shall be paid in cash ("Cash Consideration") and $6.0 million shall be paid in shares of common stock ("Common Stock"), par value $0.0001, of CCNC ("Share Consideration"). The Parties agree the Share Consideration shall be an aggregate of 1,293,104 shares of common stock of which is based on the closing price of US$4.64 on March 27, 2018. The Share Consideration shall be issued in three equal installments, which shall be subject to lock-up of 12, 24 and 36 months, respectively. The Purchase Agreement contains representations, warranties and covenants customary for acquisitions of this type. The Acquisition closed on May 1, 2018. | |||||||
Total Consideration | $ 11,200,000 | |||||||||
Goodwill acquisition | 7,500,000 | |||||||||
Payments of cash consideration | 6,500,000 | |||||||||
Wuhan HOST [Member] | Board of Directors [Member] | ||||||||||
Business Combination and Restructuring (Textual) | ||||||||||
Goodwill impairment loss | 3,420,000 | |||||||||
Tjcomex Bvi [Member] | ||||||||||
Business Combination and Restructuring (Textual) | ||||||||||
Net assets | $ 16,598 | |||||||||
Wuge [Member] | ||||||||||
Business Combination and Restructuring (Textual) | ||||||||||
Goodwill impairment loss | 7,500,000 | |||||||||
Total Consideration | $ 7,300,000 | |||||||||
Purchase Agreement [Member] | ||||||||||
Business Combination and Restructuring (Textual) | ||||||||||
Aggregate shares issued | 4,630,000 | 4,000,000 | ||||||||
Goodwill acquisition | $ 7,300,000 | |||||||||
Percentage of service fee | 100.00% | |||||||||
Equity Agreement [Member] | ||||||||||
Business Combination and Restructuring (Textual) | ||||||||||
Forfeit and cancellation of shares | 8,523,320 | |||||||||
Stock price per share | $ 3.56 | |||||||||
Percentage of equity interest | 100.00% | |||||||||
Supplement Agreement [Member] | ||||||||||
Business Combination and Restructuring (Textual) | ||||||||||
Cash consideration | $ 4,700,000 | |||||||||
Common stock par value | $ 0.0001 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Short-term loan | $ 437,884 | $ 437,884 | ||||
Accounts payable | 920,480 | 920,480 | 344,108 | |||
Other payables and accrued liabilities | 2,585,341 | 2,585,341 | 4,121,862 | |||
Other payables - related party | 641,570 | 641,570 | $ 641,570 | 1,336,902 | ||
Tax payables | 3,555 | 3,555 | 202 | |||
Total current liabilities | 5,691,047 | 5,691,047 | 16,184,920 | |||
Total liabilities | 5,751,728 | 5,751,728 | 16,485,597 | |||
Operating revenues | 1,189,205 | $ 7,679,798 | 6,172,177 | $ 12,628,777 | ||
Gross profit | 137,058 | 211,967 | 319,486 | 295,773 | ||
Income from operations | (175,596) | $ (173,750) | (449,800) | $ (561,904) | ||
Variable Interest Entities [Member] | ||||||
Current assets | 9,201,684 | 9,201,684 | 8,687,451 | |||
Property, plants and equipment, Intangible Assets | 1,165,027 | 1,165,027 | 19,057 | |||
Other noncurrent assets | 89,136 | 89,136 | 127,782 | |||
Goodwill | 14,329,042 | 14,329,042 | 7,289,454 | |||
Total assets | 24,786,889 | 24,786,889 | 16,123,744 | |||
Current liabilities | 8,264,556 | 8,264,556 | 6,067,264 | |||
Non-current liabilities | 60,681 | 60,681 | 61,580 | |||
Total liabilities | 8,325,237 | 8,325,237 | 6,128,844 | |||
Net assets | 16,459,652 | 16,459,652 | 9,994,900 | |||
Short-term loan | 437,884 | 437,884 | ||||
Accounts payable | 880,713 | 880,713 | 619,329 | |||
Other payables and accrued liabilities | 74,154 | 74,154 | 301,230 | |||
Other payables - related party | 5,766,063 | 5,766,063 | 5,082,068 | |||
Tax payables | 3,525 | 3,525 | 202 | |||
Customer Advances | 1,040,124 | 1,040,124 | 3,426 | |||
Lease liabilities | 62,093 | 62,093 | 61,009 | |||
Total current liabilities | 8,264,556 | 8,264,556 | 6,067,264 | |||
Lease liabilities - noncurrent | 60,681 | 60,681 | 61,580 | |||
Total liabilities | $ 8,325,237 | 8,325,237 | $ 6,128,844 | |||
Operating revenues | 6,491,663 | |||||
Gross profit | 326,254 | |||||
Income from operations | (337,537) | |||||
Net income | $ (387,648) |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable | $ 1,153,142 | $ 2,221,319 |
Less: Allowance for doubtful accounts | (113,370) | (24,055) |
Total accounts receivable, net | $ 1,039,772 | $ 2,197,264 |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||
Beginning balance | $ 24,055 | $ 732,846 |
Beginning balance from Wuhan HOST | 260,764 | |
Beginning balance from Rong Hai | 24,055 | 472,082 |
Addition | 90,308 | |
Recovery | (708,791) | |
Exchange rate effect | (993) | |
Ending balance | $ 113,370 | $ 24,055 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | ||
Work in progress | ||
Finished Goods | 1,248,906 | 1,248,906 |
Total inventories | $ 1,248,906 | $ 1,197,065 |
Plant and Equipment, Net (Detai
Plant and Equipment, Net (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 314,495 | $ 248,745 |
Less: accumulated depreciation | (234,807) | (229,688) |
Total | 79,688 | 19,057 |
Office equipment and furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 62,972 | 39,688 |
Automobile [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 251,523 | $ 209,057 |
Plant and Equipment, Net (Det_2
Plant and Equipment, Net (Details Textual) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Plant and Equipment, Net (Textual) | ||
Depreciation and amortization expense | $ 8,403 | $ 198,570 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Less: accumulated amortization | $ (46) | |
Net intangible assets | 1,130,528 | |
Development of technology [Member] | ||
Intangible assets, gross | 1,130,023 | |
Software [Member] | ||
Intangible assets, gross | $ 551 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details Textual) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Intangible assets, net (Textual) | ||
Amortization expense | $ 46 | $ 108,082 |
Goodwill (Details)
Goodwill (Details) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Beginning Balance | $ 7,289,454 |
Goodwill impairments | 7,140,304 |
Disposal of the company | (3,424,390) |
Foreign currency translation adjustment | (100,716) |
Ending Balance | 14,329,042 |
Wuhan HOST [Member] | |
Beginning Balance | 3,424,390 |
Disposal of the company | (3,424,390) |
Foreign currency translation adjustment | |
Ending Balance | |
Rong Hai [Member] | |
Beginning Balance | 7,289,454 |
Foreign currency translation adjustment | (106,364) |
Ending Balance | 7,183,090 |
Wuge [Member] | |
Beginning Balance | |
Goodwill impairments | 7,140,304 |
Foreign currency translation adjustment | 5,648 |
Ending Balance | $ 7,145,952 |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Other payables - related parties | $ 641,570 | $ 641,570 | $ 1,336,902 |
Chuanliu Ni [Member] | |||
Related Party Transaction [Line Items] | |||
Name of related party | Chuanliu Ni | ||
Relationship | Chief Executive Officer and director of a former subsidiary | ||
Other payables - related parties | $ 325,907 | 325,907 | |
Zhong Hui Holding Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Name of related party | Zhong Hui Holding Limited | ||
Relationship | Shareholder of the Company | ||
Other payables - related parties | $ 140,500 | 140,500 | |
Chengdu Yuan Code Chain Technology Co. LTD [Member] | |||
Related Party Transaction [Line Items] | |||
Name of related party | Chengdu Yuan Code Chain Technology Co. Ltd | ||
Relationship | A company controlled by former shareholder of the Company | ||
Other payables - related parties | $ 103,719 | ||
Qihai Wang [Member] | |||
Related Party Transaction [Line Items] | |||
Name of related party | Qihai Wang | ||
Relationship | Shareholder of the Company | ||
Other payables - related parties | $ 71,444 | 166,673 | |
Jiangsu Longying Education Technology Co. LTD [Member] | |||
Related Party Transaction [Line Items] | |||
Name of related party | Jiangsu Longying Education Technology Co. Ltd | ||
Relationship | A company in which shareholder hold shares | ||
Other payables - related parties | 422,868 | ||
Jiangsu Longhai Film Culture Media Co. Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Name of related party | Jiangsu Longhai Film Culture Media Co. Ltd | ||
Relationship | Under common control of shareholder of the Company | ||
Other payables - related parties | $ 280,954 |
Debt (Details)
Debt (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Bank of Jiangsu [Member] | ||
Short-term Debt [Line Items] | ||
Short term loans | Loan from Bank of Jiangsu | Loan from Bank of Jiangsu |
Maturities | March 25, 2021 | March 25, 2021 |
Weighted average interest rate | 4.50% | 4.50% |
Collateral/Guarantee | Guaranteed by Qihai Wang’s personal property | Guaranteed by Qihai Wang’s personal property |
Short term loan due to bank | $ 247,193 | |
Bank of Jiangsu One [Member] | ||
Short-term Debt [Line Items] | ||
Short term loans | Loan from Bank of Jiangsu | Loan from Bank of Jiangsu |
Maturities | January 12, 2021 | January 12, 2021 |
Weighted average interest rate | 5.22% | 5.22% |
Collateral/Guarantee | Guaranteed by Qihai Wang’s personal property | Guaranteed by Qihai Wang’s personal property |
Short term loan due to bank | $ 190,691 |
Debt (Details Textual)
Debt (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt (Textual) | ||||
Interest expense | $ 9,473 | $ 9,764 | $ 11,482 | $ 17,606 |
Taxes (Details)
Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Current | $ 1,810 | $ 234,473 | $ 16,419 | $ 255,301 |
Deferred | (243) | (38,229) | 33,692 | (8,229) |
Total provision for income taxes | $ 1,567 | $ (5,279) | $ 50,111 | $ 42,239 |
Taxes (Details 1)
Taxes (Details 1) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating losses carried forward - U.S. | $ 19,106 | $ 17,309 |
Net operating losses carried forward - PRC | ||
Bad debt allowance | 3,531 | 37,532 |
Valuation allowance | (19,106) | (17,309) |
Deferred tax assets, net | $ 3,531 | $ 37,532 |
Taxes (Details 2)
Taxes (Details 2) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
VAT taxes payable | $ 1,550 | |
Income taxes payable | 1,900 | |
Other taxes payable | 105 | 202 |
Total | $ 3,555 | $ 202 |
Taxes (Details Textual)
Taxes (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | ||
Apr. 30, 2019 | May 30, 2018 | Dec. 22, 2017 | Jun. 30, 2020 | |
Maximum [Member] | ||||
Taxes (Textual) | ||||
Value added tax | 13.00% | 16.00% | 17.00% | |
Minimum [Member] | ||||
Taxes (Textual) | ||||
Value added tax | 6.00% | 6.00% | 6.00% | |
UNITED STATES | ||||
Taxes (Textual) | ||||
Net operating loss | $ 90,000 | |||
Net operating loss carry forward | $ 19,000 | |||
Deferred tax asset valuation allowance, description | The Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. | |||
Corporate tax rate, description | The "Tax Cuts and Jobs Act" ("The 2017 Tax Act") was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. The 2017 Tax Act imposed a global intangible low-taxed income tax ("GILTI"), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. The Company determined that there are no impact of GILTI for the six months ended June 30, 2020 and 2019, which the Company believes that it will be imposed a minimum tax rate of 10.5% and to the extent foreign tax credits are available to reduce its US corporate tax, which may result in no additional US federal income tax being due. | |||
Hong Kong [Member] | ||||
Taxes (Textual) | ||||
Foreign tax rate, percentage | 16.50% | |||
China [Member] | ||||
Taxes (Textual) | ||||
Foreign tax rate, percentage | 25.00% |
Leases (Details)
Leases (Details) | Jun. 30, 2020USD ($) |
Twelve months ended June 30, | |
2020 | $ 124,377 |
2021 | 99,501 |
2022 | 76,957 |
2023 | 23,900 |
Total lease payments | 324,735 |
Less: interest | (201,961) |
Present value of lease liabilities | $ 122,774 |
Leases (Details Textual)
Leases (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Leases (Textual) | |||||
Lease liabilities | $ 298,000 | ||||
Description office lease agreement | The Company had an office lease agreement with a 5-year lease term starting in December 2016 until December 2021 and another office lease agreement with a 5-year lease term starting in January 2018 until January 2023. | ||||
Effective interest rate | 4.75% | ||||
Weighted average remaining lease term | 3 years 2 months 19 days | ||||
Rent expenses | $ 7,966 | $ 24,941 | $ 16,047 | $ 51,948 | |
Lease liabilities with right-of-use assets | $ 298,000 |
Concentration of Risk (Details)
Concentration of Risk (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Hong Kong [Member] | |||||
Concentration Risk [Line Items] | |||||
Deposit for concentration risk | $ 0 | $ 0 | $ 354 | ||
PRC [Member] | |||||
Concentration Risk [Line Items] | |||||
Deposit for concentration risk | $ 1,939,520 | $ 1,939,520 | $ 4,003,554 | ||
Revenues [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 98.30% | 22.00% | 99.30% | 15.00% | |
Revenues [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 21.80% | 14.30% | |||
Revenues [Member] | Customer Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 20.00% | 14.10% | |||
Revenues [Member] | Customer Four [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 12.90% | ||||
Customer Advances [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 100.00% | 20.70% | |||
Customer Advances [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 17.70% | ||||
Customer Advances [Member] | Customer Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 17.10% | ||||
Customer Advances [Member] | Customer Four [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 15.50% | ||||
Accounts Receivable [Member] | Customer One [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 50.70% | 42.10% | |||
Accounts Receivable [Member] | Customer Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 45.40% | 15.70% | |||
Prepayments [Member] | Suppliers One [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 58.90% | 39.60% | |||
Prepayments [Member] | Suppliers Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 19.04% | 18.70% | |||
Prepayments [Member] | Suppliers Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 10.60% | 12.40% | |||
Accounts Payable [Member] | Suppliers One [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 33.40% | 28.10% | |||
Accounts Payable [Member] | Suppliers Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 30.90% | 21.50% | |||
Accounts Payable [Member] | Suppliers Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 17.50% | 16.70% | |||
Accounts Payable [Member] | Suppliers Four [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 15.20% | ||||
Total Purchases [Member] | Suppliers One [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 87.10% | 26.70% | 30.10% | 32.50% | |
Total Purchases [Member] | Suppliers Two [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 13.20% | 28.70% | 11.90% | ||
Total Purchases [Member] | Suppliers Three [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 18.20% | 11.10% | |||
Total Purchases [Member] | Suppliers Four [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of concentration risk | 12.70% |
Equity (Details)
Equity (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Warrants Outstanding | |
Warrants Outstanding, December 31, 2019 | 9,079,348 |
Granted/Acquired | |
Forfeited | |
Exercised | |
Warrants Outstanding, March 31, 2020 | 9,079,348 |
Exercisable Into Number of Shares | |
Exercisable Into Number of Shares, December 31, 2019 | 4,539,674 |
Granted/Acquired | |
Forfeited | |
Exercised | |
Exercisable Into Number of Shares, March 31, 2020 | 4,539,674 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price, December 31, 2019 | $ / shares | $ 5.75 |
Granted/Acquired | $ / shares | |
Forfeited | $ / shares | |
Exercised | $ / shares | |
Weighted Average Exercise Price, March 31, 2020 | $ / shares | $ 5.75 |
Average Remaining Contractual Life | |
Average Remaining Contractual Life, December 31, 2019 | 3 years 1 month 20 days |
Average Remaining Contractual Life, March 31, 2020 | 2 years 7 months 21 days |
Equity (Details 1)
Equity (Details 1) - Employee Stock Option [Member] | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Options Outstanding | |
Options Outstanding, December 31, 2019 | shares | 824,000 |
Granted/Acquired | shares | |
Forfeited | shares | |
Exercised | shares | |
Options Outstanding, March 31, 2020 | shares | 824,000 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price, December 31, 2019 | $ / shares | $ 5 |
Granted/Acquired | $ / shares | |
Forfeited | $ / shares | |
Exercised | $ / shares | |
Weighted Average Exercise Price, March 31, 2020 | $ / shares | $ 5 |
Average Remaining Contractual Life | |
Average Remaining Contractual Life, December 31, 2019 | 4 years 1 month 27 days |
Average Remaining Contractual Life, March 31, 2020 | 2 years 7 months 21 days |
Equity (Details Textual)
Equity (Details Textual) - USD ($) | Apr. 04, 2019 | Mar. 15, 2019 | Mar. 11, 2019 | Feb. 20, 2019 | Feb. 12, 2019 | Jan. 03, 2020 | Dec. 23, 2019 | Nov. 20, 2019 | Jun. 23, 2018 | Aug. 31, 2016 | Jul. 29, 2015 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Equity (Textual) | ||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||||||||||
Right to purchase shares of common stock | 9,079,348 | 10,500,000 | ||||||||||||
Shareholder stock split, description | On June 1, 2018, the Company's shareholder approved a 2 for 1 stock split of the Company's common stock at the Annual Meeting of Shareholders. | |||||||||||||
Share Purchase Agreement [Member] | ||||||||||||||
Equity (Textual) | ||||||||||||||
Aggregate exercise price of stock option | $ 4,000,000 | |||||||||||||
Share purchase agreement, description | The Company entered into a Share Purchase Agreement with Wuge and all the shareholders of Wuge ("Wuge Shareholders"). Wuge Shareholders are Wei Xu, Bibo Lin, Jiangsu Lingkong Network Joint Stock Co., Ltd., which is controlled by Wei Xu, and Anhui Shuziren Network Technology Co., Ltd., which is controlled by Wei Xu. Pursuant to the SPA, TMSR shall issue an aggregate of 4,000,000 shares of TMSR's common stock ("TMSR Shares") to the Wuge Shareholders, in exchange for Wuge Shareholders' agreement to enter into, and their agreement to cause Wuge to enter into, certain VIE agreements ("VIE Agreements") with Tongrong Technology (Jiangsu) Co., Ltd. ("WFOE"), the Company's indirectly owned subsidiary, through which WFOE shall have the right to control, manage and operate Wuge in return for a service fee equal to 100% of Wuge's net income ("Acquisition"). On January 24, 2020, the Company completed the Acquisition and issued the Shares to the Wuge Shareholders. | |||||||||||||
Restricted Stock [Member] | ||||||||||||||
Equity (Textual) | ||||||||||||||
Description of granted board of restricted common stock | the Board granted an aggregate of 142,530 shares of restricted common stock, with a fair value of $290,761, determined using the closing price of $2.04 on March 15, 2019, to repay the debt the Company owed to one unrelated third party. As the carrying value of the debt equaled to the fair value of the 142,530 common shares at $2.04 per share, no gain or loss were recognized upon this debt settlement. | The Board granted an aggregate of 131,330 shares of restricted common stock, with a fair value of $261,347, determined using the closing price of $1.99 on March 11, 2019, to repay the debt the Company owed to two unrelated third parties. As the carrying value of the debt equaled to the fair value of the 131,330 common shares at $1.99 per share, no gain or loss were recognized upon this debt settlement. | ||||||||||||
Shengrong WFOE, Tongrong WFOE, Wuge, Wuhan Host and Rong Hai [Member] | ||||||||||||||
Equity (Textual) | ||||||||||||||
Retained earnings for statutory reserves | $ 0 | $ 0 | ||||||||||||
Restricted net assets | $ 2,123,588 | $ (7,263,520) | ||||||||||||
Common Stock [Member] | ||||||||||||||
Equity (Textual) | ||||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||
Share price | $ 2 | $ 1 | ||||||||||||
Common stock aggregate to issued | 26,693 | |||||||||||||
Common stock purchase price | $ 5 | |||||||||||||
Aggregate offering price | $ 133,335 | |||||||||||||
Common stock shares, issued | 1,492,000 | 3,692,859 | ||||||||||||
Net proceeds from offering costs | $ 2,900,000 | $ 3,660,000 | ||||||||||||
Company wrote off common shares | 947,037 | |||||||||||||
Warrants And Options [Member] | ||||||||||||||
Equity (Textual) | ||||||||||||||
Common stock sold | 10,000,000 | |||||||||||||
Common stock sale price | $ 5 | |||||||||||||
Common stock, par value | $ 0.0001 | |||||||||||||
Common stock rights, description | Each warrant will entitle the holder to purchase one-half of one share of common stock at an exercise price of $2.88 per half share ($5.75 per whole share). | |||||||||||||
Warrant redemption, description | The warrants will be redeemable by the Company at a price of $0.01 per warrant upon 30 days prior written notice after the warrants become exercisable, only in the event that the last sale price of the common stock equals or exceeds $12.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which notice of redemption is given. | |||||||||||||
Private placement for an aggregate price | $ 2,500,000 | |||||||||||||
Purchase of private placement for an aggregate price offering | 500,000 | |||||||||||||
Share price | $ 5 | |||||||||||||
Additional compensation | $ 100 | |||||||||||||
Stock option exercisable, shares | 800,000 | |||||||||||||
Aggregate exercise price of stock option | $ 800,000 | |||||||||||||
Right to purchase shares of common stock | 800,000 | |||||||||||||
Warrants to purchase per share | $ 5.75 | |||||||||||||
Aggregate maximum amount of warrants | 400,000 | |||||||||||||
Aggregate maximum amount | $ 6,300,000 | |||||||||||||
Warrant [Member] | ||||||||||||||
Equity (Textual) | ||||||||||||||
Stock option exercisable, shares | 4,539,674 | 4,539,674 | ||||||||||||
Converted warrants shares | 415,355 | 294,971 | ||||||||||||
Common stock using cashless exercises | 54,826 | 52,077 | ||||||||||||
Director [Member] | ||||||||||||||
Equity (Textual) | ||||||||||||||
Share price | $ 4.90 | |||||||||||||
Shares acquired by two new directors | 12,000 |
Contingencies (Details)
Contingencies (Details) | 1 Months Ended |
Feb. 27, 2013 | |
Commitments and Contingencies (Textual) | |
Land purchase contract, description | Wuhan HOST entered into a contract to purchase land use rights for a parcel of land in E Zhou City, Hubei, China, for $1,212,478. The Company has paid to the local government $781,349, a balance of $431,129 has not been paid; however, the government has already issued to the Company all the necessary certificates transferring title of the land use rights for the parcel of land to the Company, and has not taken action to collect any remaining unpaid balance. If the government determines that it wishes to collect an unpaid balance, the total cost to the Company would be $431,129. |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Total Assets | $ 28,858,309 | $ 22,447,589 |
Hubei Shengrong and Shengrong WFOE [Member] | ||
Total Assets | ||
Wuhan Host [Member] | ||
Total Assets | ||
Rong Hai and Tongrong WFOE [Member] | ||
Total Assets | 17,710,457 | 17,407,872 |
Wuge [Member] | ||
Total Assets | 2,198,636 | |
CCNC, China Sunlong, Shengrong BVI And Shengrong HK [Member] | ||
Total Assets | $ 8,949,216 | $ 71,521 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,544,177 | |
Total current assets | 1,544,177 | |
PLANT AND EQUIPMENT, NET | ||
OTHER ASSETS | ||
Goodwill | 3,424,390 | |
Intangible assets, net | ||
Deferred tax assets | ||
Total other assets | 3,424,390 | |
Total assets | 4,968,567 | |
CURRENT LIABILITIES | ||
Accounts payable | 2,288,195 | |
Other payables and accrued liabilities | 1,332,430 | |
Other payables - related parties | 3,108,908 | |
Customer deposits | 3,019,264 | |
Lease liabilities - current | 98,582 | |
Taxes payable | 326,687 | |
Total current liabilities | 10,174,066 | |
OTHER LIABILITIES | ||
Third party loan - noncurrent | 143,345 | |
Lease liabilities - noncurrent | 95,752 | |
Total other liabilities | 239,097 | |
Total liabilities | 10,413,163 | |
Net Assets | $ (5,444,596) |
Discontinued Operations (Deta_2
Discontinued Operations (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES | ||||
Equipment and systems | $ 2,971,542 | |||
Coating and fuel materials | 4,163,919 | |||
Trading and others | ||||
TOTAL REVENUES | 7,135,461 | |||
COST OF REVENUES | ||||
Equipment and systems | 1,208,838 | |||
Coating and fuel materials | 3,665,496 | |||
Trading and others | ||||
TOTAL COST OF REVENUES | 4,874,334 | |||
GROSS PROFIT | 2,261,127 | |||
OPERATING EXPENSES (INCOME) | ||||
Selling, general and administrative | (495,733) | 843,129 | ||
Provision for (recovery of) doubtful accounts | ||||
TOTAL OPERATING EXPENSES | (495,733) | 843,129 | ||
INCOME FROM OPERATIONS | 495,733 | 1,417,998 | ||
OTHER INCOME (EXPENSE) | ||||
Interest income | 869 | |||
Other income (expense), net | 36,275 | |||
Total other income (expense), net | 37,144 | |||
INCOME (LOSS) BEFORE INCOME TAXES | 495,733 | 1,455,142 | ||
PROVISION FOR INCOME TAXES | 204,833 | |||
NET (LOSS) INCOME | $ (4,446) | $ 1,537,297 | $ 495,733 | $ 1,250,309 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Aug. 11, 2020USD ($)$ / sharesshares |
Subsequent events (Textual) | |
Common shares issued | shares | 1,674,428 |
Purchase price per share | $ / shares | $ 1.50 |
Gross proceeds | $ | $ 2,510,000 |