Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Newater Technology, Inc. |
Entity Central Index Key | 1,678,022 |
Trading Symbol | NEWA |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2017 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2,017 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 10,809,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 3,118,080 | $ 1,484,762 |
Restricted cash, current | 6,753,685 | 1,439,926 |
Accounts receivable, net | 6,050,495 | 2,637,236 |
Accounts receivable from related party, net | 1,060,977 | |
Notes receivable | 68,108 | |
Inventories | 10,279,397 | 4,840,234 |
Deferred cost of revenue | 2,547,580 | |
Advances to suppliers and other current assets, net | 2,885,510 | 2,528,411 |
Due from related parties | 3,563 | |
Total current assets | 31,634,747 | 14,063,217 |
Restricted cash, non-current | 500,000 | |
Property, plant and equipment, net | 10,449,466 | 1,199,611 |
Land use rights, net | 2,243,183 | 2,143,002 |
Deferred tax assets | 518,251 | 181,003 |
Other non-current assets | 4,591 | |
Total assets | 45,345,647 | 17,591,424 |
Current liabilities | ||
Accounts payable and bank acceptance notes to vendors | 4,903,058 | 1,844,077 |
Loans due within one year | 9,020,697 | 2,879,853 |
Due to related parties | 714,999 | |
Deferred income | 25,919 | |
Advances from customers | 1,408,208 | 833,742 |
Income tax payables | 501,921 | 329,212 |
Accrued expenses and other payables | 8,509,425 | 210,400 |
Total current liabilities | 24,343,309 | 6,838,202 |
Long term loans | 11,050 | |
Total liabilities | 24,354,359 | 6,838,202 |
Shareholders' equity | ||
Common shares ($0.001 par value, 200,000,000 shares authorized, 10,809,000 and 9,199,000 shares issued and outstanding as of December 31, 2017 and 2016, respectively) | 10,809 | 9,199 |
Additional paid-in capital | 15,059,181 | 7,949,466 |
Statutory reserves | 705,698 | 382,802 |
Retained earnings | 5,228,733 | 2,960,698 |
Accumulated other comprehensive loss | (13,133) | (548,943) |
Total shareholders' equity | 20,991,288 | 10,753,222 |
Total liabilities and shareholders' equity | $ 45,345,647 | $ 17,591,424 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 10,809,000 | 9,199,000 |
Common stock, shares outstanding | 10,809,000 | 9,199,000 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Net revenues | $ 25,339,497 | $ 11,985,055 | $ 3,318,833 |
Net revenues from related parties | 294,666 | 3,659,421 | |
Total revenues | 25,339,497 | 12,279,721 | 6,978,254 |
Cost of revenues | 17,077,129 | 7,182,081 | 778,903 |
Cost of revenues from related party | 556,692 | 2,984,968 | |
Total cost of revenues | 17,077,129 | 7,738,773 | 3,763,871 |
Gross profit | 8,262,368 | 4,540,948 | 3,214,383 |
Operating expenses: | |||
Selling, general and administrative | 5,575,086 | 3,146,521 | 1,643,313 |
Total operating expenses | 5,575,086 | 3,146,521 | 1,643,313 |
Income from operations | 2,687,282 | 1,394,427 | 1,571,070 |
Interest expense | 242,707 | 155,553 | 164,613 |
Interest income | (112,592) | (5,091) | (2,612) |
Government grants | (513,538) | (1,750,726) | |
Other expenses | 3,956 | 12,534 | 10,642 |
Total other expense (income) | (379,467) | (1,587,730) | 172,643 |
Income before income tax provisions | 3,066,749 | 2,982,157 | 1,398,427 |
Income tax provisions | 475,818 | 548,437 | 452,850 |
Net income | 2,590,931 | 2,433,720 | 945,577 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustment | 535,810 | (383,947) | (166,349) |
Total comprehensive income | $ 3,126,741 | $ 2,049,773 | $ 779,228 |
Earnings per common share | |||
Basic | $ 0.26 | $ 0.28 | $ 0.12 |
Diluted | $ 0.26 | $ 0.28 | $ 0.10 |
Weighted average number of common shares outstanding | |||
Basic | 9,864,479 | 8,767,738 | 8,200,000 |
Diluted | 9,864,479 | 8,767,738 | 9,160,087 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Total | Common Shares | Additional Paid-in Capital | Retained Earnings (Deficit) | Statutory Reserves | Accumulated Other Comprehensive Income (Loss) |
Beginning balance at Dec. 31, 2014 | $ 760,907 | $ 8,200 | $ 787,151 | $ (35,797) | $ 1,353 | |
Beginning balance, Shares at Dec. 31, 2014 | 8,200,000 | |||||
Net income | 945,577 | 945,577 | ||||
Capital contribution from owners | 2,212,796 | 2,212,796 | ||||
Statutory reserves | (92,995) | 92,995 | ||||
Foreign currency translation adjustment | (166,349) | (166,349) | ||||
Ending balance at Dec. 31, 2015 | 3,752,931 | $ 8,200 | 2,999,947 | 816,785 | 92,995 | (164,996) |
Ending balance, Shares at Dec. 31, 2015 | 8,200,000 | |||||
Net income | 2,433,720 | 2,433,720 | ||||
Capital contribution from owners | 198,917 | 198,917 | ||||
Statutory reserves | (289,807) | 289,807 | ||||
Issuance of common shares for debt conversion | 3,847,000 | $ 999 | 3,846,001 | |||
Issuance of common shares for debt conversion, Shares | 999,000 | |||||
Issuance of common shares for cash | 5,323,026 | 5,323,026 | ||||
Issuance of common shares for cash, Shares | ||||||
Capital distribution in connection with acquisition of a subsidiary | (4,418,425) | (4,418,425) | ||||
Foreign currency translation adjustment | (383,947) | (383,947) | ||||
Ending balance at Dec. 31, 2016 | 10,753,222 | $ 9,199 | 7,949,466 | 2,960,698 | 382,802 | (548,943) |
Ending balance, Shares at Dec. 31, 2016 | 9,199,000 | |||||
Net income | 2,590,931 | 2,590,931 | ||||
Statutory reserves | (322,896) | 322,896 | ||||
Issuance of common shares for cash | 7,111,325 | $ 1,610 | 7,109,715 | |||
Issuance of common shares for cash, Shares | 1,610,000 | |||||
Foreign currency translation adjustment | 535,810 | 535,810 | ||||
Ending balance at Dec. 31, 2017 | $ 20,991,288 | $ 10,809 | $ 15,059,181 | $ 5,228,733 | $ 705,698 | $ (13,133) |
Ending balance, Shares at Dec. 31, 2017 | 10,809,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net income | $ 2,590,931 | $ 2,433,720 | $ 945,577 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Depreciation and amortization expense | 233,493 | 187,662 | 86,396 |
Bad debt expense | 229,707 | 76,459 | 39,173 |
Deferred income taxes | (312,997) | (82,162) | (106,401) |
Loss on disposal of property, plant and equipment | 6,199 | ||
Gain on disposal of subsidiary | (789) | ||
Changes in assets and liabilities: | |||
Accounts receivable | (3,345,269) | (1,410,115) | (1,411,777) |
Accounts receivable from related parties | 1,090,465 | 3,645,922 | (3,754,977) |
Notes receivable | 70,000 | (56,139) | 64,218 |
Inventories | (4,923,400) | (2,743,853) | (1,890,918) |
Deferred cost of revenue | (2,453,097) | ||
Advances to suppliers and other current assets | (412,955) | (2,289,933) | (540,737) |
Advances to supplier - related party | 793,106 | ||
Due from related parties | 703 | 75,469 | (1,023) |
Other non-current assets | 4,719 | 22,857 | 132,971 |
Accounts payable and bank acceptance notes to vendors | 2,825,887 | 1,079,258 | 582,555 |
Accounts payable to related party | (2,140,504) | 1,159,416 | |
Deferred income | (26,639) | (30,102) | 61,007 |
Advances from customers | 499,067 | 425,736 | (42,227) |
Due to related parties | 5,102 | (28,257) | (68,302) |
Income tax payables | 144,944 | (181,386) | 550,163 |
Accrued expenses and other payables | 589,638 | 352,502 | 437,151 |
Net cash used in operating activities | (3,189,701) | (663,655) | (2,958,430) |
Cash flows from investing activities | |||
Purchase of land use rights | (2,261,745) | ||
Purchase of property, plant and equipment | (1,482,360) | (66,641) | (1,218,404) |
Proceeds from disposal of property, plant and equipment | 9,296 | ||
Advances to third parties | (1,236,490) | (301,019) | (40,136) |
Repayments from third parties | 1,236,490 | 338,646 | |
Advances to related parties | (239,467) | (353,767) | |
Repayments from related parties | 2,960 | 473,320 | 20,871 |
Net change in restricted cash | (5,712,407) | (922,380) | (621,567) |
Cash received in connection with disposal of subsidiary | (1,209) | ||
Net cash used in investing activities | (7,191,807) | (2,980,495) | (2,203,707) |
Cash flows from financing activities | |||
Proceeds from issuances of common shares | 7,111,325 | 5,323,026 | |
Capital contribution from shareholders | 198,917 | 2,212,796 | |
Capital distribution in connection with acquisition of a subsidiary | (4,418,425) | ||
Borrowings from related parties | 2,558,661 | 478,969 | |
Repayment to related parties | (739,973) | (1,982,733) | (799,590) |
Proceeds from loans due within one year | 8,805,683 | 11,613,289 | 4,013,614 |
Repayment of loans | (3,283,830) | (8,142,563) | (642,178) |
Net cash provided by financing activities | 11,893,205 | 5,150,172 | 5,263,611 |
Effect of foreign exchange rate changes on cash and cash equivalents | 121,621 | (156,412) | (3,080) |
Net increase in cash and cash equivalents | 1,633,318 | 1,349,610 | 98,394 |
Cash and cash equivalents, beginning of the year | 1,484,762 | 135,152 | 36,758 |
Cash and cash equivalents, end of the year | 3,118,080 | 1,484,762 | 135,152 |
Supplemental cash flow information | |||
Cash paid for interest | 244,753 | 307,797 | 8,354 |
Cash paid for income taxes | 656,602 | 812,637 | 9,088 |
Non-cash investing and financing activities: | |||
Stock issued for debt conversion | 3,847,000 | ||
Properties acquired with loans | 206,000 | ||
Liabilities assumed in connection with purchase of property, plant and equipment | $ 7,445,478 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2017 | |
Organization [Abstract] | |
ORGANIZATION | Note 1 – ORGANIZATION Newater Technology, Inc. (“Newater Technology”) was incorporated on September 30, 2015 under the laws of the British Virgin Islands. On November 4, 2015, Newater Technology incorporated a wholly owned subsidiary, Newater HK Limited (“Newater HK”) in Hong Kong for the purpose of being a holding company for the equity interest in Yantai Jinzheng Eco-Technology Co., Ltd. (“Jinzheng”). Other than the equity interest in Newater HK, Newater Technology does not conduct any operations or own any material assets or liabilities except for cash, restricted cash and prepaid professional fees. Newater HK does not conduct any operations or own any material assets or liabilities except for cash, restricted cash, professional fees payable, and the 100% of the equity interest of Jinzheng which it acquired on January 25, 2016. Jinzheng was founded in Yantai City, Shandong Province, People’s Republic of China (“PRC”) on July 5, 2012 as a limited liability company. Prior to December 8, 2016, Jinzheng had a wholly owned subsidiary, Shandong Jinmo Recycled Water Resource Co., Ltd. (“Jinmo”), which was incorporated on March 19, 2015, in Yantai City, Shandong Province, PRC. Jinmo, prior to being disposed of in December 2016, and Jinzheng are engaged in the business of manufacturing and selling Disk Tube Reverse Osmosis (“DTRO”) and Disk Tube Nanofiltration (“DTNF”) membrane filtration products, delivering water purifying installation projects, and providing water treatment services. On January 25, 2016, and February 5, 2016, respectively, Newater HK entered into an equity transfer agreement and a supplementary equity transfer agreement with Yuebiao Li, Zhuo Zhang, and Yue Zhang, the shareholders of Jinzheng at the time, to acquire 100% of the equity interests in Jinzheng (“reorganization”). On December 8, 2016, the Company transferred 100% of its equity interests in Jinmo to a third party company, Beijing Hezhong Qingyuan Environmental Protection Science and Technology Co., Ltd., for a consideration of RMB 220,000 (approximately $31,678). As a result, Jinmo, prior to it being disposed of on December 8, 2016, Newater HK, and Jinzheng are referred to as subsidiaries. Newater Technology and its consolidated subsidiaries are collectively referred to herein as the “Company”, “we” and “us”, unless specific reference is made to an entity. Immediately before and after the reorganization, the shareholders of Jinzheng controlled Jinzheng and Newater Technology. Therefore, for accounting purposes, the reorganization is accounted for as a transaction between entities under common control. Accordingly, the accompanying consolidated financial statements have been prepared as if the current corporate structure had been in existence throughout the periods presented. The historical cost of the both parties are carried forward. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). This basis of accounting differs in certain material respects from that used for the preparation of the books of Jinzheng and Jinmo, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC (“PRC GAAP”), the accounting standards used in the places of their domicile. The accompanying consolidated financial statements reflect necessary adjustments not recorded in the books of Jinzheng and Jinmo to present them in conformity with U.S. GAAP. The accompanying consolidated financial statements consolidate the financial statements of Newater Technology, its 100% owned subsidiary Newater HK, Newater HK’s 100% owned subsidiary Jinzheng, and Jinzheng’s 100% owned subsidiary Jinmo prior to December 2016. All significant intercompany balances and transactions have been eliminated. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated statements of income and comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Foreign Currency Translation The accompanying consolidated financial statements are presented in United States dollar (“$”), which is the reporting currency of the Company. The functional currency of Newater Technology and Newater HK is United States dollar. The functional currency of Jinzheng and Jinmo is Renminbi (“RMB”). For the subsidiaries whose functional currencies are RMB, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the exchange rate at the end of the period, and equity is translated at historical exchange rates. The resulting translation adjustments are included in determining other comprehensive income or loss. Transaction gains and losses are reflected in the consolidated statements of income and comprehensive income. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions of future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as operating environment changes. Significant estimates and assumptions by management include, among others, useful lives and impairment of long-lived assets, allowance for doubtful accounts, contingencies and litigation, total costs in connection with service revenues, valuation of inventories and income taxes including the valuation allowance for deferred tax assets. While the Company believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all other highly liquid instruments with original maturities of three months or less. Restricted Cash The current portion of restricted cash includes bank deposits used to pledge bank acceptance notes, cash deposits pledged in exchange for guarantee service provided by third party and certificate of deposit pledged for bank loan obtained from a bank. The Company entered into credit agreements with commercial banks in China (“endorsing banks”) which agree to provide credit within stipulated limits. Within the stipulated credit limits, the Company can issue bank acceptance notes to its suppliers as payments for purchases. In order to issue bank acceptance notes, the Company is generally required to make initial deposits to the endorsing banks in amounts of certain percentage of the face amount of the bank acceptance notes to be issued by the Company. The cash in such accounts is restricted for use over the terms of the bank acceptance notes, which are normally three to six months. The non-current portion of restricted cash represents cash deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during an escrow period of two years following the closing date of August 2, 2017 of the Company’s initial public offering. Accounts Receivable and Allowance for Bad Debts The Company presents accounts receivables, net of allowances for doubtful accounts and returns, to ensure accounts receivable are not overstated due to being uncollectible. Accounts receivable consists principally of amounts due from trade customers. Credit is extended based on an evaluation of the customer’s financial condition and collateral is not generally required. Certain credit sales are made to industries that are subject to cyclical economic changes. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its clients to make required payments or to cover potential credit losses. Estimates are based on historical collection experience, current trends, credit policy and relationship between accounts receivable and revenues. In determining these estimates, the Company examines historical write-offs of its receivable and reviews each client’s account to identify any specific customer collection issues. Retentions Receivable Retentions receivable represent the amount withheld by customers until the warranty period, usually one to two years, is over. Retentions receivable which were expected to be collected within one year of $670,877 and $708,424 were included in the balance of accounts receivable as of December 31, 2017 and 2016, respectively. Retentions receivable which were expected to be collected after one year were presented separately as other non-current asset. Retentions receivable from related parties which were expected to be collected within one year of $0 and $53,833 were included in the balance of accounts receivable from related party, net as of December 31, 2017 and 2016, respectively. Inventories Inventories, consisting of raw materials, work in progress and finished goods are stated at the lower of cost or net realizable value utilizing the weighted average method. Cost includes all costs of purchase, cost of conversion and other costs incurred to bring the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to sell. The valuation of inventory requires the Company to estimate excess and slow moving inventories. The Company evaluates the recoverability of the inventory based on assumption about expected demand and market conditions. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Gains and losses on disposal of property, plant and equipment are recognized in the statement of income and comprehensive income based on the net disposal proceeds less the carrying amount of the assets. Depreciation of property, plant and equipment is calculated based on cost, less their estimated residual value, if any, using the straight-line method over their estimated useful lives. Estimated useful lives are as follows: Machinery equipment 10 years Computer software 10 years Electronic equipment 5 years Office equipment 5 years Motor vehicles 10 years Buildings 20 years Leasehold improvements The lesser of remaining lease term or 5 years Construction in progress mainly represents expenditures on the Company’s factory under construction. All direct costs relating to the acquisition or construction of the Company’s factory including interest cost are capitalized as construction in progress. Construction in progress is not depreciated until the asset is placed in service. Land Use Rights According to the law of China, the government owns all the land in China. Companies or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. Land use rights are being amortized using the straight-line method over the estimated useful life of 50 years. Impairment of Long-Lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. For the years ended December 31, 2017, 2016 and 2015, the Company did not record any impairment charges on long-lived assets. Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and cash equivalents, current portion of restricted cash, accounts receivable, notes receivables, inventories, deferred cost of revenue, advances to suppliers and other current assets, accounts payable and bank acceptance notes to vendors, loans due within one year, advances from customers, deferred income, income tax payables, and accrued expenses and other payables, the carrying amounts approximate their fair values due to the short maturities. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature. Operating Leases Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of income and comprehensive income on a straight-line basis over the lease period. Earnings per Share Basic earnings per common share is computed by dividing net earnings attributable to common shareholders by the weighted-average number of common shares outstanding during the year. Diluted earnings per share is computed by dividing net income attributable to common stockholders by the sum of the weighted average number of common stock outstanding and dilutive potential common stock during the year. Potentially dilutive common shares consist of common stock warrants using the treasury stock method. Common equivalent shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive. Revenue Recognition The Company derives its revenues from: (1) sale of products such as water purifying membranes and water purification equipment (“product revenues”); (2) sale of water purifying installation projects (“project revenues”); and (3) providing wastewater treatment services such as landfill leachate treatment and purification (“service revenues”). The Company recognizes revenue when title and risk of loss have transferred to the customer, collection of relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. Revenue consists of the invoiced value for the sales net of value-added tax (“VAT”), business tax, applicable local government levies, rebates, discounts and returns. The Company chooses its customers with scrutiny and keeps record of collection of receivable. Receivables from customers with solid credit condition and history are considered probable to be collected. There were no sales returns and allowances for the years ended December 31, 2017, 2016 and 2015. The Company does not provide unconditional right of return, pricing protection or any other concessions to its customers. Historically, warranty claims were immaterial. For product sales, transfer of title and risk of loss occur when the membranes and equipment are delivered. The following are the specific revenue recognition policies for project revenues and service revenues. Project Revenues The general contract terms of water purifying installation projects include project management, timeframe of the project, payment terms, rights and obligations of parties, acceptance criteria, and liability for breach of contract. The term of project management specifies the details such as design and manufacturing of the water-purifying equipment, site installation, trial runs and technical support and training. A general contract is normally completed within two months and does not include a general right of return. Transfer of title and risk of loss occur when the equipment is delivered and installed in accordance with the contractual terms. In instances where contractual terms include a provision for customer acceptance, revenue is recognized when either (i) the Company has previously demonstrated that the equipment meets the specified criteria based on either seller or customer-specified objective criteria or (ii) upon formal acceptance received from the customer if the equipment has not been previously demonstrated to meet customer-specified objective criteria. The Company usually provides free after-sales service under project revenues, which includes warranty, technical support and training for a period ranging from one to two years. The actual after-sales expense was immaterial for the years ended December 31, 2017, 2016 and 2015. Service Revenues Service revenues are derived from the arrangements where the Company acts as a solution provider and purifies wastewater for customers. The general contract terms of wastewater treatment service include operation management, timeframe of the service, pricing and payment terms, rights and obligations of parties, testing criteria, and liability for breach of contract. The term of pricing and payment specifies the details such as a fixed price per unit and that the ownership of materials and equipment belongs to the Company. The Company recognizes service revenues using proportional performance method. Specifically, the revenues have been recognized based on the volume of wastewater purified multiplied by negotiated contract billing rates, an output method, assuming all other revenue recognition criteria are met. The Company had service revenues in the year ended December 31, 2017 for the first time. Cost of Revenues and Deferred Cost of Revenue The Company’s cost of revenues primarily consists of (i) materials and equipment costs, (ii) compensation and related overhead expenses for personnel involved in the customization of its products, delivery, installation and maintenance and services (“compensation and overhead costs”), (iii) contractor costs, and (iii) depreciation of equipment used in operations. For product sales and project revenues, all costs associated with the sales are expensed when revenues are recognized. For service revenues, when revenue is recognized over multiple periods in accordance with the Company’s revenue recognition policies, total costs are deferred and amortized over the same period that associated service revenue is recognized. The costs incurred but not expensed yet are recognized as “Deferred cost of revenue” on the accompanying consolidated balance sheets. As of December 31, 2017 and 2016, deferred cost of revenue totaled $2,547,580 and $0, respectively. Government Grants Government grants include cash subsidies received from the PRC government by the subsidiaries of the Company. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local businesses. The government grant is recognized in the consolidated statements of income and comprehensive income when cash is received and the relevant performance criteria specified in the grant are met. In the years ended December 31, 2017, 2016 and 2015, the Company received government grants of approximately $487,000 (RMB 3,289,975), $1,721,000 (RMB 11,432,000) and $61,000 (RMB 380,000), respectively, and recognized approximately $514,000 (or RMB 3,469,975, including RMB 3,289,975 from issuance in 2017 and RMB 180,000 from issuance in 2015), $1,751,000 (or RMB 11,632,000, including RMB 11,432,000 from issuance in 2016 and RMB 200,000 from issuance in 2015), and $0 in the consolidated statements of income and comprehensive income, respectively. As of December 31, 2017 and 2016, approximately $0 and $26,000 were recorded as deferred income, respectively. The details including performance criteria are as follows: Jinzheng received the following subsidies in 2015: ● RMB 180,000 as Jinzheng’s research and development plan was chosen as one of the annual key plans of Shandong Province. (“RMB 180K Subsidy”) ● RMB 200,000 as Jinzheng successfully applied for the subsidy of production and cooperation project of Yantai City, Laishan District. (“RMB 200K Subsidy”) The above subsidies were subject to further research and development obligations and were recorded as deferred income in 2015. The research and development projects required by the RMB 200K Subsidy and RMB 180K Subsidy were completed in the years ended December 31, 2016 and 2017, respectively. Therefore the RMB 200,000 and RMB 180,000 received in 2015 were recognized in consolidated statements of income and comprehensive income in the years ended December 31, 2016 and 2017, respectively. Jinzheng received the following subsidies in 2016: ● RMB 500,000 as Jinzheng successfully applied for the subsidy of university-industry cooperation and international cooperation projects (“RMB 500K Subsidy”). The recognition requirements for the RMB 500K Subsidy include research and development projects completed with higher education institutions and collaboration with foreign companies with advanced technologies. ● RMB 1,200,000 as Jinzheng successfully applied for the subsidy of special membrane project (“RMB 1.2M Subsidy”). The recognition requirements for the RMB 1.2M Subsidy include the commencement of special membrane project in Laishan District Economic Development Area in 2016 and tax payment of certain amount in the same year. ● RMB 9,732,000 as Jinzheng successfully applied for the high technology subsidy (“RMB 9.7M Subsidy”). There is no specific requirement for the RMB 9.7M Subsidy. The requirements of the above subsidies totaling RMB 11,432,000 received in 2016 were fully fulfilled and the subsidies were recognized in consolidated statements of income and comprehensive income for the year ended December 31, 2016. Jinzheng received the following subsidies in 2017: ● RMB 300,000 as Jinzheng successfully applied for the subsidy of innovation-driven development (“RMB 300K Subsidy”). ● RMB 2,594,000 as Jinzheng successfully applied for the subsidy of special membrane project (“RMB 2.6M Subsidy”). ● RMB 200,000 as Jinzheng was chosen as one of the Provincial Industrial Design Centers in Shandong Province. ● RMB 100,000 as Jinzheng was chosen as the City DTRO Membrane Engineering Lab of Yantai City in Shandong Province. ● RMB 95,975 as Jinzheng successfully applied for the subsidy on interest expense incurred by the Company for loans obtained. The requirements of the above subsidies totaling RMB 3,289,975 received in 2017 were fully fulfilled and the subsidies were recognized as government grants in consolidated statements of income and comprehensive income for the year ended December 31, 2017. Research and Development Research and development costs are expensed as incurred. The costs primarily consist of raw materials consumed in research and development activities and salaries paid for the development and improvement of the Company’s products. Research and development costs for the years ended December 31, 2017, 2016 and 2015 were $1,355,648, $622,051 and $434,974, respectively, and are included in general and administrative expenses. Selling Expenses Selling expenses consist primarily of advertising, salaries, travelling and shipping and handling costs incurred during the selling activities. Advertising and transportation expenses are charged to expense as incurred. Advertising costs in the amounts of $1,519, $7,931 and $8,816 for the years ended December 31, 2017, 2016 and 2015, respectively, are included in selling expenses. Shipping and handling costs amounting to $14,178, $11,663 and $41,002 for the years ended December 31, 2017, 2016 and 2015, respectively, are included in selling expenses. Income Taxes The Company accounts for income taxes under the provision of FASB ASC 740-10, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Comprehensive Income/Loss ASC 220 “Comprehensive Income” established standards for reporting and display of comprehensive income/loss, its components and accumulated balances. Components of comprehensive income/loss include net income/loss and foreign currency translation adjustments. As of December 31, 2017 and 2016, the only component of accumulated other comprehensive income/loss was foreign currency translation adjustments. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are cash, restricted cash, notes receivables and accounts receivable arising from its normal business activities. The Company places its cash and restricted cash in what it believes to be credit-worthy financial institutions. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its notes receivable and accounts receivable credit risk exposure beyond such allowance is limited. Related Parties Transactions A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related parties may be individuals or corporate entities. Segment Reporting The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker has been identified as the chief executive officer of the Company who reviews financial information of separate operating segments based on U.S. GAAP. The chief operating decision maker now reviews results analyzed by customer. This analysis is only presented at the revenue level with no allocation of direct or indirect costs. Consequently, the Company has determined that it has only one operating segment. Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (ASC 606)”. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for fiscal years and interim periods within those years beginning after December 15, 2017, and early adoption is permitted for periods beginning after December 15, 2016. The Company elected to adopt the new standard effective January 1, 2018. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company elected adopting the standard using the modified retrospective method. Under this method, the Company will recognize the cumulative effect of adoption as an adjustment to its opening balance of retained earnings. The Company has identified its revenue streams and assessed each for the impacts. The Company expects the adoption of Topic 606 will not have a material impact in the timing or amount of revenue recognized, including the presentation of revenues in the Company’s consolidated statements of income and comprehensive income. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The amendments in ASU 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments in this ASU are effective for public business entities for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The amendments may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company adopted this amendment effective January 1, 2017. The adoption did not have an impact on our consolidated financial statements and related disclosures other than for reclassification of current deferred tax items to non-current for all periods presented. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 specifies the accounting for leases. For operating leases, ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. ASU 2016-02 is effective for publicly-traded companies for annual reporting periods, and interim periods within those years, beginning after December 15, 2018. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees may not apply a full retrospective transition approach. The Company plans to adopt the standard effective January 1, 2019. The Company anticipates this standard will have a material impact on the Company’s consolidated balance sheets. However, the Company does not expect the adoption will have a material impact on the consolidated statements of income and comprehensive income. While the Company is continuing to assess potential impacts of the standards, it’s expected that the most significant impact will be the recognition of a right-of-use asset and a lease liability for the ongoing leases. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. These amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company elected to adopt the standard effective January 1, 2018, and anticipates this standard will not have a material impact on the Company’s consolidated statements of cash flows. In January 2017, the FASB issued ASU 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)”. This pronouncement amends the SEC’s reporting requirements for public filers in regard to new accounting pronouncements or existing pronouncements that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not yet adopted accounting pronouncements with these consolidated financial statements. |
Reclassification
Reclassification | 12 Months Ended |
Dec. 31, 2017 | |
Reclassification [Abstract] | |
RECLASSIFICATION | Note 3 – RECLASSIFICATION Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings or financial position. |
Disposal
Disposal | 12 Months Ended |
Dec. 31, 2017 | |
Disposal [Abstract] | |
DISPOSAL | Note 4 – DISPOSAL On December 8, 2016, the Company sold all of the assets and liabilities of Jinmo to a third party for proceeds of approximately $31,678 (RMB 220,000), which resulted in a gain on the transaction of $789. Including the gain on the sale transaction, Jinmo contributed $14,511 to income before income taxes provisions for the year ended December 31, 2016. Jinmo has historically been reported as a component of the Company’s operations and contributed $21,799 to income before income taxes provisions for the year ended December 31, 2015. The disposal did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results and as such, the disposal was not classified as discontinued operations in the accompanying consolidated financial statements for the year ended December 31, 2016. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Cash [Abstract] | |
RESTRICTED CASH | Note 5 – RESTRICTED CASH The current portion of restricted cash includes the bank deposit pledged for the bank acceptance notes issued to suppliers in the amount of $1,499,990, deposits for guarantee service provided by Yantai Financing Guarantee Co., Ltd. in the amount of $153,695 and certificate of deposits of $5,100,000 in the offshore bank account of Newater HK pledged for the short term loan of $4,610,845 (RMB 30,000,000) obtained from Industrial and Commercial Bank of China. Also see Note 12 for details on the short term loans. As of December 31, 2017 and 2016, the Company had current portion of restricted cash of $6,753,685 and $1,439,926, respectively. As of December 31, 2017, the Company had non-current portion of restricted cash of $500,000 which was held as security in an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during an escrow period of two years following the closing date on August 2, 2017. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable, Net [Abstract] | |
ACCOUNTS RECEIVABLE, NET | Note 6 – ACCOUNTS RECEIVABLE, NET The net book value of accounts receivable consisted of the following as of December 31, 2017 and 2016: December 31, December 31, Accounts receivable $ 6,326,723 $ 2,674,134 Less: allowance for doubtful accounts (276,228 ) (36,898 ) Accounts receivable, net $ 6,050,495 $ 2,637,236 The movement of allowance for doubtful accounts consisted of the following: December 31, December 31, Allowance for doubtful accounts, beginning balance $ 36,898 $ 39,473 Increase 231,926 - Decrease - - Effects of foreign exchange rate 7,404 (2,575 ) Allowance for doubtful accounts, ending balance $ 276,228 $ 36,898 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
INVENTORIES | Note 7 – INVENTORIES At December 31, 2017 and 2016, inventories consisted of the following: December 31, December 31, Raw materials $ 2,833,317 $ 1,707,610 Work in progress 7,446,080 3,132,624 Finished goods - - 10,279,397 4,840,234 Less: write-down of inventories - - Inventories $ 10,279,397 $ 4,840,234 Certain inventories have been pledged to obtain short term loans. See Note 12 for details. |
Advances to Suppliers and Other
Advances to Suppliers and Other Current Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Advances to Suppliers and Other Current Assets, Net [Abstract] | |
ADVANCES TO SUPPLIERS AND OTHER CURRENT ASSETS, NET | Note 8 – ADVANCES TO SUPPLIERS AND OTHER CURRENT ASSETS, NET As of December 31, 2017 and 2016, advances to suppliers and other current assets consisted of the following: December 31, December 31, Other current assets VAT-input $ 651,056 $ - Others 393,581 610,216 Total other current assets 1,044,637 610,216 Advances to suppliers 1,840,873 1,991,343 Total 2,885,510 2,601,559 Less: allowance for doubtful accounts - (73,148 ) Advances to suppliers and other current assets, net $ 2,885,510 $ 2,528,411 Other current assets include the value added tax pending for deduction, advances to employees for business travels or business development purpose and other miscellaneous receivables such as utility fees, social insurances, personal income tax paid in advance on behalf of employees and deposits, which include guarantee deposit, rent deposit, and security deposit for bidding customer projects. The Company advanced RMB 2,000,000 (approximately $307,700) to Yantai Yezhan Economic and Trade Ltd., Co. on August 10, 2016. The loan bears annual interest of 5% and was due in six months. On September 29, 2016, the loan was fully repaid along with interest. The Company advanced RMB 8,500,000 (approximately $1,236,490) to Yantai Runtai Medical Co., Ltd. on February 22, 2017. The loan bears an annual interest rate of 10% and was due in six months. On August 22, 2017, the loan was extended for another 4 months with the same interest rate. As of December 31, 2017, the loan was fully repaid along with interest. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | Note 9 – PROPERTY, PLANT AND EQUIPMENT, NET As of December 31, 2017 and 2016, property, plant and equipment consisted of the following: December 31, December 31, Machinery equipment $ 1,143,605 $ 941,333 Electronic equipment 117,220 69,037 Office equipment 81,248 62,542 Motor vehicles 932,877 194,961 Buildings 106,038 89,661 Computer software 81,939 23,825 Construction in progress 8,350,135 - Leasehold improvements 80,053 50,011 Total property, plant and equipment 10,893,115 1,431,370 Less: accumulated depreciation (443,649 ) (231,759 ) Property, plant and equipment, net $ 10,449,466 $ 1,199,611 During the year ended December 31, 2017, the liabilities assumed in connection with purchase of property, plant and equipment totaled $7,445,478. The liabilities were included in accrued expenses and other payables in the accompanying consolidated balance sheets as of December 31, 2017. Depreciation expense for the years ended December 31, 2017, 2016 and 2015, was $188,995, $165,906 and $86,396, respectively. Certain properties and equipment have been pledged to obtain short term loans. See Note 12 for details. |
Land Use Rights, Net
Land Use Rights, Net | 12 Months Ended |
Dec. 31, 2017 | |
Land Use Rights, Net [Abstract] | |
LAND USE RIGHTS, NET | Note 10 – LAND USE RIGHTS, NET As of December 31, 2017 and 2016, land use rights consisted of the following: December 31, December 31, Cost $ 2,311,611 $ 2,163,815 Less: accumulated amortization (68,428 ) (20,813 ) Land use rights, net $ 2,243,183 $ 2,143,002 Amortization expense for the years ended December 31, 2017, 2016 and 2015 was $44,498, $21,756 and $0, respectively. On July 19, 2016, the Company entered into a land use rights transfer agreement with Yantai Aotesai Energy Ltd., pursuant to which the Company purchased the land use rights of a parcel of land of 32,442 square meters located in Laishan District Economic Development Area for a total consideration of approximately $2,248,829 (RMB 14,598,725). The land use rights were placed into use in the year ended December 31, 2016, when the full payments were made. Certificate of the land use rights was obtained in March 2017. The land use rights have been pledged to obtain short term loans and other guarantees. See Note 12 for details. |
Deferred Tax Assets
Deferred Tax Assets | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Tax Assets [Abstract] | |
DEFERRED TAX ASSETS | Note 11 – DEFERRED TAX ASSETS The components of the deferred tax assets are as follows: December 31, December 31, Deferred tax assets, non-current Unpaid accrued expenses $ 52,474 $ 57,221 Allowance for doubtful accounts 41,434 5,859 Expense cut-off - 10,972 Others 424,343 106,951 Deferred tax assets 518,251 181,003 Less: valuation allowance - - Deferred tax assets, non-current $ 518,251 $ 181,003 Deferred taxation is calculated under the liability method in respect of taxation effect arising from all timing differences, which are expected with reasonable probability to realize in the foreseeable future. The Company’s subsidiary registered in the PRC is subject to income taxes within the PRC at the applicable tax rate. |
Loans
Loans | 12 Months Ended |
Dec. 31, 2017 | |
Loans [Abstract] | |
LOANS | Note 12 – LOANS Loans and related guarantees are comprised of the following: Guarantees and Pledges December 31, December 31, Bank of Qingdao, Yantai Branch Yantai Financing Guarantee Co., Ltd.; $ 1,536,948 $ - Industrial and Commercial Bank of China, Yantai Economic Development Zone Branch Pledged by the Company with certificate of deposit of $5,100,000 4,610,845 - Bank of China, Yantai Bonded Port Areas Branch Yantai Runtai Medical Co., Ltd. (“Runtai”); - 1,151,941 Bank of China, Yantai Bonded Port Areas Branch Runtai; 1,229,559 - Yantai Branch, China Everbright Bank Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company and his wife; - 215,990 Huaxia Bank Co., Ltd., Yantai Xingfu Branch Runtai; - 1,439,926 Huaxia Bank Co., Ltd.; Yantai Xingfu Branch Runtai; 1,536,948 - Daqing Yahualong Lubricating Oil Selling Ltd. - 71,996 eCapital (China) Leasing Co., Ltd. 88,266 - Total short term loans 9,002,566 - Volkswagen Finance (China) Co., Ltd. 29,181 - Total loans 9,031,747 2,879,853 Less: short term loans and current portion of long term loans 9,020,697 - Long term loans - due over one year $ 11,050 $ - On February 2, 2015, the Company entered into a one-year loan contract with Beijing Bangruisi Investment Co., Ltd. (“Bangruisi”), pursuant to which the Company borrowed $2,310,643 (RMB 15,000,000) with an annual interest rate of 10%, and Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company, transferred 1% of the Company’s equity interest to a person assigned by Bangruisi as the pledge. Bangruisi would have the option to extend the loan for another year upon maturity. In addition, Bangruisi would have the right to convert all or part of the loan into contributed capital of Jinzheng at a price of $2,310,643 (RMB 15,000,000) for 20% equity interest within two years from inception of the loan and the right would not expire in case of early repayment. Furthermore, the Company granted Bangruisi a transferable option to acquire a maximum of 5% of the Company’s equity interest by a consideration of $770,214 (RMB 5,000,000). If Bangruisi decides to purchase less than 5% of the Company’s equity interest, the consideration would be adjusted proportionately. The 5% interest could be repurchased by Yuebiao Li and Zhuo Zhang with a price of $1,540,428 (RMB 10,000,000) upon the consent of Bangruisi. If the Company were to accept capital contributions at terms which were more favorable to other investors, Yuebiao Li and Zhuo Zhang should compensate Bangruisi for the price difference and Bangruisi would enjoy the same favorable terms. The contract also states that Yuebiao Li and Zhuo Zhang were obligated to pay for certain penalty if the net income of Jinzheng did not reach $2,310,643 (RMB 15,000,000) and $4,621,286 (RMB 30,000,000) for the year of 2015 and 2016, respectively. If the Company did not generate sufficient net income to meet the net income requirement in 2015, it would be allowed to make up for the deficiency in 2016. In events of default, Bangruisi could choose one of the following settlements: (1) demand penalty at a daily rate of 1‰ of the unpaid portion, or (2) convert the defaulted amount to contributed capital and have 40% of the Company’s equity interest. The Company made full repayment of the principal and accrued interest in January 2016 and the 1% equity interest was returned. Consequently, the agreement was fully terminated and the Company was not subject to any further obligations. On June 30, 2015, the Company borrowed a ten-month non-interest bearing loan of $462,129 (RMB 3,000,000) from Runtai and made payment of $308,086 (RMB 2,000,000) in the same year. The remaining balance was repaid in March 2016. On July 9, 2015, the Company borrowed a one-year loan of $154,043 (RMB 1,000,000) with an annual interest rate of 7.275% from Bank of China, Yantai Changjiang Road Branch and made full payment in advance on November 9, 2015. On November 10, 2015, the Company borrowed a non-interest bearing loan of $154,043 (RMB 1,000,000) from a third party individual for working capital purposes and made full payment in the same quarter. On November 10, 2015, the Company entered into a one-year loan agreement with Bank of China, Yantai Bonded Port Areas Branch to borrow $770,214 (RMB 5,000,000) with an annual interest rate of 5.665%. The loan was jointly guaranteed by Runtai, Yuebiao Li and his wife, Xiaojun Chen, husband of Zhuo Zhang, and Yue Zhang and fully repaid on October 25, 2016. On the same day, the Company entered into another loan agreement with the same bank to borrow approximately $1,151,941 (RMB 8,000,000) for working capital purposes. The loan was due on October 24, 2017 with a floating interest at the prime rate issued by National Inter-Bank Borrowing Center on the initial drawdown date plus 135.50 points. The loan was guaranteed by parties listed above and Xiaojun Chen and Yue Zhang each had a house pledged for the loan. The agreement also specified that the Company should use the land use rights of the parcel of land of 32,442 square meters which was transferred from Aotesai as pledge once the transfer procedure was completed. See Note 10 for the details on the land use rights. The Company fully repaid the loan on October 26, 2017. On November 1, 2017, the Company entered into a loan agreement with the same bank to borrow approximately $1,229,559 (RMB 8,000,000) due on November 1, 2018 for working capital purposes. The loan bears an annual interest rate of 5.873% payable quarterly in arrears and is guaranteed by the parties listed above and pledged with an apartment owned by Yue Zhang. On January 5, 2016, the Company borrowed approximately $61,908 (RMB 400,000) from a third party individual for working capital purposes with zero interest and fully repaid on January 6, 2016. On January 13, 2016, the Company borrowed approximately $3,077,000 (RMB 20,000,000) from Yantai Xiangyu Logistics Co., Ltd. with zero interest for six months, approximately $2,538,525 (RMB 16,500,000) of which was used to repay the borrowing from Bangruisi and the remaining was used for operating purpose. Subsequently from April 2, 2016 to June 1, 2016, the Company borrowed a total of approximately $3,077,000 (RMB 20,000,000) from three third party individuals with zero interest for three months to make repayments to Yantai Xiangyu Logistics Co., Ltd. On June 6, 2016, the Company entered into a series of debt conversion agreements with the three individuals, pursuant to which the total borrowings were converted to 724,000 shares of the Company’s common shares at $4.25 per share. On March 21 and March 25, 2016, the Company borrowed $768,470 (RMB 4,990,000) and $1,530 (RMB 10,000), respectively, from a third party individual, for three months without interest. This loan was converted to 275,000 shares of the Company’s common shares at $2.8 per share on June 6, 2016. On June 7, 2016, the Company entered into a loan agreement with Yantai Yongxiang Asset Management Ltd., pursuant to which the Company borrowed approximately $1,494,216 (RMB 9,700,000) at a daily interest rate of 0.025%. The Company received the fund on July 20, 2016 and repaid the principal along with interest on July 22, 2016. On July 6, 2016, the Company entered into a loan agreement with Daqing Yahualong Lubricating Oil Selling Ltd., pursuant to which the Company borrowed approximately $307,700 (RMB 2,000,000) at annual interest rate of 5% with a term of three months for working capital purposes. On September 5, 2016, the Company repaid approximately $60,210 (RMB 400,000) and agreed with the creditor to extend the loan for another three months at the same interest rate. On November 22, 2016 and December 13, 2016, the Company repaid approximately $96,964 (RMB 600,000) and $75,263 (RMB 500,000), respectively. On January 6, 2017, the Company reached another extension agreement with the creditor to extend the remaining balance of RMB 500,000 for another three months with the same interest rate. The principal of RMB 500,000 along with interest was repaid on April 12, 2017. On July 13, 2016, the Company entered into a loan agreement with Yantai Branch, China Everbright Bank to borrow approximately $215,990 (RMB 1,500,000) for working capital purposes. The loan was due on January 12, 2017 with a fixed annual interest rate of 6.525%. The loan was guaranteed by Yuebiao Li, Yanhui Li, wife of Yuebiao Li, and Zhuo Zhang. On January 4, 2017, the loan was fully repaid. On the same day, the Company entered into another loan agreement with the same bank to borrow approximately $215,990 (RMB 1,500,000) for working capital purposes. The loan was due on July 3, 2017 with a fixed annual interest rate of 6.525% and guaranteed by Yuebiao Li, Yanhui Li, wife of Yuebiao Li, and Zhuo Zhang. The principal along with interest was repaid on July 3, 2017. On July 19, 2016, the Company obtained a line of credit of approximately $3,080,857 (RMB 20,000,000) from Huaxia Bank Co., Ltd. Yantai Xingfu Branch. The line of credit starts from July 19, 2016 and ends on June 30, 2017. The borrowings under the line of credit are guaranteed by Runtai, Yuebiao Li and his wife, Zhuo Zhang and her husband. In addition, the Company pledged certain property and equipment with original book value of approximately $2,955,467 (RMB 19,186,003) for the line of credit. On July 26, 2016, the Company entered into a loan agreement under the line of credit, pursuant to which the Company borrowed approximately $1,439,926 (RMB 10,000,000) at an annual interest rate of 5.655% from July 26, 2016 to June 28, 2017. The loan was fully repaid on June 28, 2017. On the same day, the Company entered in another loan agreement with the same bank to borrow approximately $1,536,948 (RMB10,000,000) at an annual interest rate of 5.655% for the period from June 28, 2017 to June 28, 2018. The loan is guaranteed by the parties listed above and pledged by the Company with certain inventories with original cost of approximately $3,110,863 (RMB 20,240,449). On August 29, 2017, the Company entered into a loan agreement with Yantai Branch, Bank of Qingdao to borrow approximately $1,536,948 (RMB10,000,000) for working capital purposes. The loan is due on August 28, 2018 with a fixed annual interest rate of 5.655%. The loan is guaranteed by Yantai Financing Guarantee Co., Ltd., Yuebiao Li and his wife, and Zhuo Zhang. The land use rights transferred from Yantai Aotesai Energy Ltd. were pledged to obtain the guarantee provided by Yantai Financing Guarantee Co., Ltd. On September 28, 2017, the Company entered into a loan agreement to borrow approximately $4,610,845 (RMB 30,000,000) from Industrial and Commercial Bank of China, Yantai Economic Development Zone Branch, for the period from September 28, 2017 to September 25, 2018. The loan bears an annual interest rate of 5.003% and is pledged with a certificate of deposit in the amount of $5,100,000 using the funds from IPO by Newater HK. The amount of the certificate of deposit was included in restricted cash, current portion in the consolidated balance sheets. On November 8, 2017, the Company entered into two loan agreements with Volkswagen Finance (China) Co., Ltd. (“Volkswagen Loans”) in connection with acquisition of vehicles with net book value of $55,822 (RMB 363,200), which were pledged to secure the loans. The loans bear an effective interest rate of 9.090% per annum and are due in 24 months. The loans obtained pursuant to the agreements totaled $30,738 (RMB 200,000). For the year ended December 31, 2017, the Company repaid in the total amount of $1,556 (RMB 10,131). As of December 31, 2017, current portion of the Volkswagen Loans totaled $18,131, which has been included in the balance of short term loans in the accompanying consolidated balance sheet, and long term portion totaled $11,050. On December 21, 2017, the Company entered into four loan agreements, each with a term of 12 months and an effective interest rate of 17.049% per annum with eCapital (China) Leasing Co., Ltd. (“eCapital Loans”) in connection with acquisition of vehicles with net book value of $183,195 (RMB 1,191,941), which were pledged to secure the loan. Pursuant to the loan agreements, the Company borrowed a total amount of $192,580 (RMB1,253,000), with monthly repayment payable in arrears. For the year ended December 31, 2017, repayment of $104,314 (RMB 678,708) was made. As of December 31, 2017, the outstanding balance for eCapital Loans totaled $88,266 (RMB 574,292). Total amount of $223,318 of the Volkswagen Loans and eCapital Loans were used for purchase of passenger vehicles in the amount of $206,000 plus value-added tax of $17,318 during the year ended December 31, 2017. The interest expenses for the years ended December 31, 2017, 2016 and 2015 were $242,707, $155,553, and $164,613, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 13 – RELATED PARTY TRANSACTIONS The Company had transactions with the following related parties in the years ended December 31, 2017, 2016 and 2015: Name of Related Party Nature of Relationship Yuebiao Li Principal shareholder, Chairman of the Board and Chief Executive Officer (“CEO”) Zhuo Zhang Principal shareholder, Director, Chief Financial Officer (“CFO”) Yue Zhang Principal shareholder, Zhuo Zhang’s sister Xiaojun Chen Husband of Zhuo Zhang Heilongjiang Binteer Environmental Protection Equipment Manufacturing Co., Ltd. (“Heilongjiang Binteer”) Established by Yuebiao Li, and then Mr. Li transferred his 60% equity interest to his brother, Yuefeng Li in May 2014. Yuefeng Li then transferred his 60% equity interest to a third party individual for zero consideration in March 2016. Heilongjiang Binteer continues to be significantly influenced by the Company because the Company was its primary vendor and customer in the years ended December 31, 2016 and 2015. Daqing Wanjieyuan Water Treatment Equipment Sales Co., Ltd. (“Daqing Wanjieyuan”) Controlled by Yuebiao Li Mojie Technology (Beijing) Co., Ltd. (“Mojie”) Established and controlled by Yuebiao Li and Zhuo Zhang. All of the equity interest was transferred to a third party in July 2015 but continues to be significantly influenced by the Company because the Company was its primary vendor in the years ended December 31, 2016 and 2015. Yantai Jinna Commerce Co., Ltd. (“Jinna”) Significantly influenced by Yue Zhang, principal shareholder and sister of Zhuo Zhang. Shandong Jinmo Recycled Water Resource Co., Ltd. (“Jinmo”) A subsidiary that was incorporated on March 19, 2015 and disposed of to a third party on December 8, 2016 for consideration of RMB 220,000 (approximately $31,678). After the transfer, the Company continues to have significant influence on Jinmo as Ping Yu, vice-chief executive officer of Jinzheng, serves as the legal representative of Jinmo. Revenues from related parties and accounts receivable from related parties, net The Company primarily provides products such as membranes, components and water purification equipment to Heilongjiang Binteer, Mojie, Daqing Wanjieyuan and Jinna. For the years ended December 31, 2016 and 2015, the Company generated net related party revenues from Heilongjiang Binteer, Mojie, Daqing Wanjieyuan and Jinna in the amount of $294,666 and $3,659,421, respectively. The Company had no revenues from related parties in the year ended December 31, 2017. The net accounts receivable from related parties amounted to $0 and $1,060,977 as of December 31, 2017 and 2016, respectively. Net revenues from related parties consisted of the following: For the Years Ended December 31, 2017 2016 2015 Heilongjiang Binteer $ - $ 290,007 $ 1,213,905 Mojie - 3,268 2,437,283 Jinna - 1,391 - Daqing Wanjieyuan - - 8,233 Total $ - $ 294,666 $ 3,659,421 During the period from January 1, 2016 to December 7, 2016, Jinzheng sold equipment of $1,063,137 to Jinmo. The equipment sales were made prior to the disposal of Jinmo, recorded as intercompany sales and eliminated on consolidated statements of income and comprehensive income for the year ended December 31, 2016. The receivables in connection with the sales were outstanding as of December 31, 2016 and fully collected as of December 31, 2017. Accounts receivable from related parties consisted of the following: December 31, December 31, Jinmo $ - $ 1,063,137 Accounts receivable from related parties - 1,063,137 Less: allowance for doubtful accounts - (2,160 ) Accounts receivable from related parties, net $ - $ 1,060,977 The movement of allowance for doubtful accounts for accounts receivable from related parties consisted of the following: December 31, December 31, Allowance for doubtful accounts, beginning balance $ - $ 2,311 Increase - - Decrease - - Effects of foreign exchange rate - (151 ) Allowance for doubtful accounts, ending balance $ - $ 2,160 Materials supplied by related party and accounts payable to related party The Company also purchased materials from Heilongjiang Binteer amounting to $556,692 and $2,971,017 for the years ended December 31, 2016 and 2015, respectively. The materials purchased include membrane column, membrane filter, and other components of water treatment equipment. There was no purchase from related parties in the year ended December 31, 2017. For the year ended December 31, 2016, the total purchase from Heilongjiang Binteer represented cost of revenues from related party for 2016. For the year ended December 31, 2015, total purchase from Heilongjiang Binteer of $2,971,017 and the purchase of $13,951 from 2014, totaling 2,984,968, constituted the cost of revenues from related party for 2015. The balance of accounts payable to related party was $0 as of December 31, 2017 and 2016. Due from related parties Due from related parties consisted of the following: December 31, December 31, Yue Zhang $ - $ 683 Jinmo - 2,880 Total $ - $ 3,563 On January 29, 2015, the Company entered into a car leasing agreement with Yuebiao Li, pursuant to which the Company would lease Yuebiao Li’s personal car from February 1, 2015 to January 31, 2018 under a monthly rent of approximately $2,400 (RMB 15,000). The Company paid $28,898 (RMB 180,000) for twelve months’ use during 2015 and the balance of $2,311 (RMB 15,000) due from Yuebiao Li as of December 31, 2015 was expensed during 2016 with the use of the car. The agreement was terminated at the end of the year ended December 31, 2016. From time to time, the Company advances to Yue Zhang, principal shareholder of the Company and Zhuo Zhang’s sister, in connection with the Company’s daily operations. The advances are in immaterial amount each time and reflected as due from Yue Zhang before invoices are issued by the Company’s service providers. For the year ended December 31, 2016, the Company advanced $240,492 to Yue Zhang and $239,809 has been used in ordinary course of business. The balance due from Yue Zhang was $0 and $683 as of December 31, 2017 and 2016, respectively. The balance due from Jinmo represents non-secured short-term loan obtained from the Company, which bears no interest and was due on demand. The balance was paid off during 2017. Due to related parties Due to related parties consisted of the following: December 31, December 31, Zhuo Zhang $ - $ 1,084 Yuebiao Li - 713,915 Total $ - $ 714,999 The balance of due to related parties represents expenses incurred by related parties in the ordinary course of business, expense related parties paid on behalf of the Company as well as the loans the Company obtained from related parties for working capital purposes. The loans owed to the related parties are interest free, unsecured and repayable on demand. On August 31, 2015, Zhuo Zhang and Xiaojun Chen, on behalf of the Company, entered into a non-interest-bearing car loan agreement with Ping’an Bank, pursuant to which a loan of $25,834 (RMB167,708) was provided for car purchase. The loan was guaranteed and pledged by the Company. The loan was fully repaid on August 17, 2016. In September 2015, Zhuo Zhang deposited $267,510 (RMB 1,736,596) in the bank on behalf of the Company, as pledge for bank acceptance notes issued by the Company. The deposits was used to settle the liabilities when the bank acceptance notes was due on March 26, 2016. The amount was repaid to Zhuo Zhang during the year ended December 31, 2016. On November 28, 2016, Yantai Guotai Investment Limited Company (“Yantai Guotai”), Yuebiao Li, and Jinzheng entered into a borrowing agreement, pursuant to which (1) Yuebiao Li personally borrowed approximately $719,963 (RMB 5,000,000) from Yantai Guotai at annual interest rate of 10% for one year, and (2) Jinzheng received and used the principal as zero-interest borrowing from Yuebiao Li, due on demand. The principal was received and used by Jinzheng and recorded as a loan from Yuebiao Li as of December 31, 2016. During the year ended December 31, 2017, repayments to Yuebiao Li totaled $739,973 (RMB 5,000,000). On November 30 and December 28, 2016, respectively, the Company paid approximately $5,040 (RMB 35,000) and $2,160 (RMB 15,000) to purchase a trademark from Daqing Wanjieyuan. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
INCOME TAXES | Note 14 – INCOME TAXES British Virgin Islands (“BVI”) Under the current laws of BVI, Newater Technology is not subject to tax on income or capital gain. In addition, payments of dividends by the Company to their shareholders are not subject to withholding tax in the BVI. Hong Kong The Company’s subsidiary, Newater HK, is incorporated in Hong Kong and has no operating profit or tax liabilities during the period. Newater HK is subject to tax at 16.5% on the assessable profits arising in or derived from Hong Kong. PRC Jinzheng and Jinmo were incorporated in the PRC and are subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. On March 16, 2007, the National People’s Congress enacted a new enterprise income tax law, which took effect on January 1, 2008. The law applies a uniform 25% enterprise income tax rate to both foreign invested enterprises and domestic enterprises. In the fourth quarter of 2015, Jinzheng was granted with the “High-Tech Enterprise” designation and is qualified for a preferential tax rate of 15% for the years ended December 31, 2016 and 2017. In the years ended December 31, 2016 and 2015, Jinmo was recognized as small low-profit enterprise and received a preferential income tax of 10% for years then ended. The provision for income taxes consists of the following: For the Years Ended 2017 2016 2015 Current $ 788,815 $ 680,756 $ 554,082 Deferred (312,997 ) (132,319 ) (101,232 ) Total $ 475,818 $ 548,437 $ 452,850 The reconciliations of the statutory income tax rate and the Company’s effective income tax rate are as follows: For the Years Ended 2017 2016 2015 HK statutory income tax rate 16.50 % 16.50 % 16.50 % Valuation allowance recognized with respect to the loss in the HK company (16.50 )% (16.50 )% (16.50 )% PRC statutory income tax rate 25.00 % 25.00 % 25.00 % Effect of income tax exemptions and reliefs (10.00 )% (11.63 )% (0.23 )% Effect of additional deduction allowed for R&D expense (2.74 )% - - Effect of expenses not deductible for tax purposes 0.81 % 0.05 % 7.79 % Others 2.45 % 4.97 % (0.18 )% Total 15.52 % 18.39 % 32.38 % Accounting for Uncertainty in Income Taxes The tax authority of the PRC government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings. Therefore, the Company’s PRC entities’ tax filings results are subject to change. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s PRC entities’ tax filings, which may lead to additional tax liabilities. ASC 740 requires recognition and measurement of uncertain income tax positions using a “more-likely-than-not” approach. The management evaluated the Company’s tax positions and concluded that no provision for uncertainty in income taxes was necessary as of December 31, 2017 and 2016. |
Statutory Reserves
Statutory Reserves | 12 Months Ended |
Dec. 31, 2017 | |
Statutory Reserves [Abstract] | |
STATUTORY RESERVES | Note 15 – STATUTORY RESERVES According to the Company Law in the PRC, companies are required to set aside 10% of their after-tax profit to general reserves each year, based on the PRC accounting standards, until the cumulative total of such reserves reaches 50% of the registered capital. These general reserves are not distributable as cash dividends to equity owners. The Company had appropriated $705,698 and $382,802 to statutory reserves as of December 31, 2017 and 2016, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity [Abstract] | |
STOCKHOLDERS' EQUITY | Note 16 – STOCKHOLDERS’ EQUITY The stockholders’ equity structures as of December 31, 2015 was presented after giving retroactive effect to the reorganization of the Company that was completed in the first quarter of 2016. On September 30, 2015, Newater Technology was incorporated in the British Virgin Islands. On the same day, the Company issued 10,000 common shares at $0.001 per share to its incorporator with cash proceeds of $10. On March 27, 2016, the Company issued 73,000 common shares at $0.65 per share to the incorporator with total cash proceeds of $47,450. On March 27, 2016, a total of 8,117,000 shares were issued at $0.65 per share, to six individuals and seven companies with total cash proceeds of $5,276,050 received, among which $4,418,425 was distributed to the former owners of Jinzheng to acquire 100% of its equity interest. On June 6, 2016, the Company converted loans of $3,077,000, owed to three third party individuals, to 724,000 common shares at $4.25 per shares. On the same day, the Company converted a loan of $770,000, owed to another third party individual, to 275,000 common shares at $2.80 per share. As a result, the Company had 9,199,000 common shares outstanding with par value of $0.001 per share before the initial public offering. Also See Note 12 for more details. On August 2, 2017, the Company completed its initial public offering on the NASDAQ Capital Market under the symbol of “NEWA”. The Company offered 1,400,000 common shares at $5 per share. Net proceeds raised by the Company from the initial public offering amounted to $6,145,325 after deducting underwriting discounts and commissions and other offering expenses. Out of the $6.1 million net proceeds, $500,000 was deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during an escrow period of two years following the closing date of August 2, 2017 and was presented as restricted cash, non-current, on the accompanying consolidated balance sheets. On August 3, 2017, the Company sold additional 210,000 common shares at $5 per share. Net proceeds raised by the Company amounted to $966,000 after deducting underwriting discounts. As a result, the Company raised a total of $7,111,325 from issuance of common shares in the year ended December 31, 2017. As of the filing date, there was a total number of 10,809,000 shares outstanding. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | Note 17 – EARNINGS PER SHARE The following table presents a reconciliation of basic and diluted net income per share for the years ended December 31, 2017, 2016 and 2015: For the Years Ended 2017 2016 2015 Net income available to common shareholders for basic and diluted net income per common share $ 2,590,931 $ 2,433,720 $ 945,577 Weighted average common shares outstanding – basic 9,864,479 8,767,738 8,200,000 Effect of dilutive securities: Warrants issued to third party - - 960,087 Weighted average common shares outstanding – diluted 9,864,479 8,767,738 9,160,087 Net income per common share – basic $ 0.26 $ 0.28 $ 0.12 Net income per common share – diluted $ 0.26 $ 0.28 $ 0.10 On February 2, 2015, the Company entered into a one-year loan contract with Bangruisi, pursuant to which Bangruisi lent $2,310,643 (RMB 15,000,000) with an annual interest rate of 10% to the Company, and would have the right to convert all or part of the loan into contributed capital of Jinzheng at a price of $2,310,643 (RMB 15,000,000) for 20% equity interest within two years from inception of the loan and the right would not expire in case of early repayment. Furthermore, the Company granted Bangruisi a transferable option to acquire a maximum of 5% of the Company’s equity interest by a consideration of $770,214 (RMB 5,000,000). Those terms constitute warrants with exercise price of $1.19 and $1.88, respectively. Those warrants and options were cancelled subsequently when the loan was paid in full. Also see Note 12 for more details. |
Concentrations of Credit Risk a
Concentrations of Credit Risk and Major Customers and Suppliers | 12 Months Ended |
Dec. 31, 2017 | |
Concentrations of Credit Risk and Major Customers and Suppliers [Abstract] | |
CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS | Note 18 – CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS Customers For the years ended December 31, 2017, 2016 and 2015, customers accounting for 10% or more of the Company’s revenue were as follows: For the Years Ended Customer 2017 2016 2015 Beijing Hezhong Qingyuan Environmental Protection Science and Technology Co., Ltd. (“Hezhong Qingyuan”) 35.19 % 12.63 % * % Government of Jiangshan Town, Laixi District, Qingdao City, Shandong Province, PRC (“Jiangshan Town”) 31.70 % * % * % Beijing Aritime Intelligent Control Co., Ltd. (“Beijing Aritime”) 13.34 % * % * % Nanjing Blue Sky Environmental Protection Science and Technology Co., Ltd. (“Blue Sky”) * % 32.19 % * % Dalian Yihe Electric Power Installation Co., Ltd. (“Dalian Yihe”) * % 20.93 % * % Mojie * % * % 34.93 % Heilongjiang Binteer * % * % 17.40 % * Less than 10% Jiangshan Town and Blue Sky, accounted for 47.40% and 11.76% of the total current outstanding accounts receivable as of December 31, 2017, respectively. Blue Sky and Dalate Sino German Environmental Protection Science and Technology Co., Ltd., a wholly owned subsidiary of Hezhong Qingyuan accounted for 12.52% and 46.96% of the Company’s total outstanding accounts receivable as of December 31, 2016, respectively. Suppliers For the years ended December 31, 2017, 2016 and 2015, suppliers accounting for 10% or more of the Company’s purchase were as follows: For the Years Ended December 31, Supplier 2017 2016 2015 Dalian Huarui Heavy Industry Group Limited by Share Ltd. (“Dalian Huarui”) 43.35 % 53.96 % * % Heilongjiang Binteer * % * % 45.31 % Dalian Huarui and Qingdao Longde Water Affair Engineering Co., Ltd. accounted for 50.56% and 18.44% of the total accounts payable and bank acceptance notes to vendors as of December 31, 2017, respectively. Dalian Huarui accounted for 21.03% of the total advances to suppliers as of December 31, 2016. |
Segmental and Revenue Analysis
Segmental and Revenue Analysis | 12 Months Ended |
Dec. 31, 2017 | |
Segmental and Revenue Analysis [Abstract] | |
SEGMENTAL AND REVENUE ANALYSIS | Note 19 – SEGMENTAL AND REVENUE ANALYSIS The Company operates in a single operating segment that includes the selling of water purifying membranes and water purification equipment (products), developing, installing and selling of water purification projects (projects) and providing water treatment service such as landfill leachate treatment and purification service (services). The net revenues consist of the following: For the Years Ended 2017 2016 2015 Products $ 4,000,940 $ 8,855,284 $ 25,010 Projects 13,343,223 3,129,771 3,293,823 Services 7,995,334 - - Net revenues 25,339,497 11,985,055 3,318,833 Products – related parties - 294,666 3,590,812 Projects – related parties - - 68,609 Net revenues from related parties - 294,666 3,659,421 Total revenues $ 25,339,497 $ 12,279,721 $ 6,978,254 All of the Company’s long-lived assets are located in the PRC. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 20 – COMMITMENTS AND CONTINGENCIES Commitments On February 28, 2015, the Company entered into a lease agreement with to lease an office space for Jinmo located in No. 508, A Building, No. 33, Changjiang Road, Yantai Economic Technical Development Area, Yantai, Shandong Province. The lease started from March 1, 2015 with a term of three years. The annual rent of $1,605 (RMB 10,000) was waived by the government of Yantai Economic Technical Development Area, Yantai, Shandong Province, as an incentive of investment. With the disposal of Jinmo in December 2016, this was no longer an operating lease for the Company. The Company leases facilities with expiration dates between June 2017 and December 2018. Rental expenses for the years ended December 31, 2017, 2016 and 2015 were $111,893, $83,945 and $63,326, respectively. The Company has future minimum lease obligations as of December 31, 2017 as follows: 2018 $ 110,651 2019 - 2020 - 2021 - 2022 - Thereafter - Total $ 110,651 Litigation In November 2017, Beijing Tiandiren Environ-Tech Company Limited brought a lawsuit against Jinzheng in Beijing Intellectual Property Court in Beijing, China, alleging that Jinzheng infringed their patent on manufacturing DTNF membrane. The plaintiff claimed total damages in the amount of approximately $153,695 (RMB 1,000,000). The Company is vigorously defending itself against the claim and has filed an application for invalidation to the patent review committee of the court and requested to adjourn the case. As of the filing date, the application for invalidation has been denied, and the trial date for this case has not been set. Management believes the liability to the Company that may arise as a result of the case is not probable and therefore no accruals have been made in the accompanying consolidated financial statements. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 21 – SUBSEQUENT EVENTS On January 9, 2018, the Company’s Board of Directors approved the strategic partnership agreement between the Company and NW Blockchain Limited (“NWBL”), a blockchain developer which is newly incorporated in 2018 and focuses on environmental protection projects. Pursuant to the agreement, NWBL will help the Company identify and develop potential customers with blockchain technology. As of the filing date, NWBL had no activities and no transactions occurred under the strategic partnership agreement. In April 2018, the Company received proceeds of a loan from Qingdao Metro Leasing Co., Ltd. in the amount of approximately $4,611,000 (RMB 30,000,000). The loan bears a nominal interest rate of 6.00% per annum and is due in 36 months. The loan is guaranteed by Yuebiao Li, his wife, Zhuo Zhang and her husband and pledged by the Company’s equipment in the original cost of approximately $6,629,000 (RMB 43,131,575). The Company paid security deposit of approximately $461,000 (RMB 3,000,000) and debt issuance costs of approximately $277,000 (RMB 1,800,000) in cash. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). This basis of accounting differs in certain material respects from that used for the preparation of the books of Jinzheng and Jinmo, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the PRC (“PRC GAAP”), the accounting standards used in the places of their domicile. The accompanying consolidated financial statements reflect necessary adjustments not recorded in the books of Jinzheng and Jinmo to present them in conformity with U.S. GAAP. The accompanying consolidated financial statements consolidate the financial statements of Newater Technology, its 100% owned subsidiary Newater HK, Newater HK’s 100% owned subsidiary Jinzheng, and Jinzheng’s 100% owned subsidiary Jinmo prior to December 2016. All significant intercompany balances and transactions have been eliminated. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated statements of income and comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. |
Foreign Currency Translation | Foreign Currency Translation The accompanying consolidated financial statements are presented in United States dollar (“$”), which is the reporting currency of the Company. The functional currency of Newater Technology and Newater HK is United States dollar. The functional currency of Jinzheng and Jinmo is Renminbi (“RMB”). For the subsidiaries whose functional currencies are RMB, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the exchange rate at the end of the period, and equity is translated at historical exchange rates. The resulting translation adjustments are included in determining other comprehensive income or loss. Transaction gains and losses are reflected in the consolidated statements of income and comprehensive income. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions of future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as operating environment changes. Significant estimates and assumptions by management include, among others, useful lives and impairment of long-lived assets, allowance for doubtful accounts, contingencies and litigation, total costs in connection with service revenues, valuation of inventories and income taxes including the valuation allowance for deferred tax assets. While the Company believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all other highly liquid instruments with original maturities of three months or less. |
Restricted Cash | Restricted Cash The current portion of restricted cash includes bank deposits used to pledge bank acceptance notes, cash deposits pledged in exchange for guarantee service provided by third party and certificate of deposit pledged for bank loan obtained from a bank. The Company entered into credit agreements with commercial banks in China (“endorsing banks”) which agree to provide credit within stipulated limits. Within the stipulated credit limits, the Company can issue bank acceptance notes to its suppliers as payments for purchases. In order to issue bank acceptance notes, the Company is generally required to make initial deposits to the endorsing banks in amounts of certain percentage of the face amount of the bank acceptance notes to be issued by the Company. The cash in such accounts is restricted for use over the terms of the bank acceptance notes, which are normally three to six months. The non-current portion of restricted cash represents cash deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during an escrow period of two years following the closing date of August 2, 2017 of the Company’s initial public offering. |
Accounts Receivable and Allowance for Bad Debts | Accounts Receivable and Allowance for Bad Debts The Company presents accounts receivables, net of allowances for doubtful accounts and returns, to ensure accounts receivable are not overstated due to being uncollectible. Accounts receivable consists principally of amounts due from trade customers. Credit is extended based on an evaluation of the customer’s financial condition and collateral is not generally required. Certain credit sales are made to industries that are subject to cyclical economic changes. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its clients to make required payments or to cover potential credit losses. Estimates are based on historical collection experience, current trends, credit policy and relationship between accounts receivable and revenues. In determining these estimates, the Company examines historical write-offs of its receivable and reviews each client’s account to identify any specific customer collection issues. |
Retentions Receivable | Retentions Receivable Retentions receivable represent the amount withheld by customers until the warranty period, usually one to two years, is over. Retentions receivable which were expected to be collected within one year of $670,877 and $708,424 were included in the balance of accounts receivable as of December 31, 2017 and 2016, respectively. Retentions receivable which were expected to be collected after one year were presented separately as other non-current asset. Retentions receivable from related parties which were expected to be collected within one year of $0 and $53,833 were included in the balance of accounts receivable from related party, net as of December 31, 2017 and 2016, respectively. |
Inventories | Inventories Inventories, consisting of raw materials, work in progress and finished goods are stated at the lower of cost or net realizable value utilizing the weighted average method. Cost includes all costs of purchase, cost of conversion and other costs incurred to bring the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to sell. The valuation of inventory requires the Company to estimate excess and slow moving inventories. The Company evaluates the recoverability of the inventory based on assumption about expected demand and market conditions. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Gains and losses on disposal of property, plant and equipment are recognized in the statement of income and comprehensive income based on the net disposal proceeds less the carrying amount of the assets. Depreciation of property, plant and equipment is calculated based on cost, less their estimated residual value, if any, using the straight-line method over their estimated useful lives. Estimated useful lives are as follows: Machinery equipment 10 years Computer software 10 years Electronic equipment 5 years Office equipment 5 years Motor vehicles 10 years Buildings 20 years Leasehold improvements The lesser of remaining lease term or 5 years Construction in progress mainly represents expenditures on the Company’s factory under construction. All direct costs relating to the acquisition or construction of the Company’s factory including interest cost are capitalized as construction in progress. Construction in progress is not depreciated until the asset is placed in service. |
Land Use Rights | Land Use Rights According to the law of China, the government owns all the land in China. Companies or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. Land use rights are being amortized using the straight-line method over the estimated useful life of 50 years. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. For the years ended December 31, 2017, 2016 and 2015, the Company did not record any impairment charges on long-lived assets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and cash equivalents, current portion of restricted cash, accounts receivable, notes receivables, inventories, deferred cost of revenue, advances to suppliers and other current assets, accounts payable and bank acceptance notes to vendors, loans due within one year, advances from customers, deferred income, income tax payables, and accrued expenses and other payables, the carrying amounts approximate their fair values due to the short maturities. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature. |
Operating Leases | Operating Leases Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of income and comprehensive income on a straight-line basis over the lease period. |
Earnings per Share | Earnings per Share Basic earnings per common share is computed by dividing net earnings attributable to common shareholders by the weighted-average number of common shares outstanding during the year. Diluted earnings per share is computed by dividing net income attributable to common stockholders by the sum of the weighted average number of common stock outstanding and dilutive potential common stock during the year. Potentially dilutive common shares consist of common stock warrants using the treasury stock method. Common equivalent shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive. |
Revenue Recognition | Revenue Recognition The Company derives its revenues from: (1) sale of products such as water purifying membranes and water purification equipment (“product revenues”); (2) sale of water purifying installation projects (“project revenues”); and (3) providing wastewater treatment services such as landfill leachate treatment and purification (“service revenues”). The Company recognizes revenue when title and risk of loss have transferred to the customer, collection of relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. Revenue consists of the invoiced value for the sales net of value-added tax (“VAT”), business tax, applicable local government levies, rebates, discounts and returns. The Company chooses its customers with scrutiny and keeps record of collection of receivable. Receivables from customers with solid credit condition and history are considered probable to be collected. There were no sales returns and allowances for the years ended December 31, 2017, 2016 and 2015. The Company does not provide unconditional right of return, pricing protection or any other concessions to its customers. Historically, warranty claims were immaterial. For product sales, transfer of title and risk of loss occur when the membranes and equipment are delivered. The following are the specific revenue recognition policies for project revenues and service revenues. Project Revenues The general contract terms of water purifying installation projects include project management, timeframe of the project, payment terms, rights and obligations of parties, acceptance criteria, and liability for breach of contract. The term of project management specifies the details such as design and manufacturing of the water-purifying equipment, site installation, trial runs and technical support and training. A general contract is normally completed within two months and does not include a general right of return. Transfer of title and risk of loss occur when the equipment is delivered and installed in accordance with the contractual terms. In instances where contractual terms include a provision for customer acceptance, revenue is recognized when either (i) the Company has previously demonstrated that the equipment meets the specified criteria based on either seller or customer-specified objective criteria or (ii) upon formal acceptance received from the customer if the equipment has not been previously demonstrated to meet customer-specified objective criteria. The Company usually provides free after-sales service under project revenues, which includes warranty, technical support and training for a period ranging from one to two years. The actual after-sales expense was immaterial for the years ended December 31, 2017, 2016 and 2015. Service Revenues Service revenues are derived from the arrangements where the Company acts as a solution provider and purifies wastewater for customers. The general contract terms of wastewater treatment service include operation management, timeframe of the service, pricing and payment terms, rights and obligations of parties, testing criteria, and liability for breach of contract. The term of pricing and payment specifies the details such as a fixed price per unit and that the ownership of materials and equipment belongs to the Company. The Company recognizes service revenues using proportional performance method. Specifically, the revenues have been recognized based on the volume of wastewater purified multiplied by negotiated contract billing rates, an output method, assuming all other revenue recognition criteria are met. The Company had service revenues in the year ended December 31, 2017 for the first time. |
Cost of Revenues and Deferred Cost of Revenue | Cost of Revenues and Deferred Cost of Revenue The Company’s cost of revenues primarily consists of (i) materials and equipment costs, (ii) compensation and related overhead expenses for personnel involved in the customization of its products, delivery, installation and maintenance and services (“compensation and overhead costs”), (iii) contractor costs, and (iii) depreciation of equipment used in operations. For product sales and project revenues, all costs associated with the sales are expensed when revenues are recognized. For service revenues, when revenue is recognized over multiple periods in accordance with the Company’s revenue recognition policies, total costs are deferred and amortized over the same period that associated service revenue is recognized. The costs incurred but not expensed yet are recognized as “Deferred cost of revenue” on the accompanying consolidated balance sheets. As of December 31, 2017 and 2016, deferred cost of revenue totaled $2,547,580 and $0, respectively. |
Government Grants | Government Grants Government grants include cash subsidies received from the PRC government by the subsidiaries of the Company. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local businesses. The government grant is recognized in the consolidated statements of income and comprehensive income when cash is received and the relevant performance criteria specified in the grant are met. In the years ended December 31, 2017, 2016 and 2015, the Company received government grants of approximately $487,000 (RMB 3,289,975), $1,721,000 (RMB 11,432,000) and $61,000 (RMB 380,000), respectively, and recognized approximately $514,000 (or RMB 3,469,975, including RMB 3,289,975 from issuance in 2017 and RMB 180,000 from issuance in 2015), $1,751,000 (or RMB 11,632,000, including RMB 11,432,000 from issuance in 2016 and RMB 200,000 from issuance in 2015), and $0 in the consolidated statements of income and comprehensive income, respectively. As of December 31, 2017 and 2016, approximately $0 and $26,000 were recorded as deferred income, respectively. The details including performance criteria are as follows: Jinzheng received the following subsidies in 2015: ● RMB 180,000 as Jinzheng’s research and development plan was chosen as one of the annual key plans of Shandong Province. (“RMB 180K Subsidy”) ● RMB 200,000 as Jinzheng successfully applied for the subsidy of production and cooperation project of Yantai City, Laishan District. (“RMB 200K Subsidy”) The above subsidies were subject to further research and development obligations and were recorded as deferred income in 2015. The research and development projects required by the RMB 200K Subsidy and RMB 180K Subsidy were completed in the years ended December 31, 2016 and 2017, respectively. Therefore the RMB 200,000 and RMB 180,000 received in 2015 were recognized in consolidated statements of income and comprehensive income in the years ended December 31, 2016 and 2017, respectively. Jinzheng received the following subsidies in 2016: ● RMB 500,000 as Jinzheng successfully applied for the subsidy of university-industry cooperation and international cooperation projects (“RMB 500K Subsidy”). The recognition requirements for the RMB 500K Subsidy include research and development projects completed with higher education institutions and collaboration with foreign companies with advanced technologies. ● RMB 1,200,000 as Jinzheng successfully applied for the subsidy of special membrane project (“RMB 1.2M Subsidy”). The recognition requirements for the RMB 1.2M Subsidy include the commencement of special membrane project in Laishan District Economic Development Area in 2016 and tax payment of certain amount in the same year. ● RMB 9,732,000 as Jinzheng successfully applied for the high technology subsidy (“RMB 9.7M Subsidy”). There is no specific requirement for the RMB 9.7M Subsidy. The requirements of the above subsidies totaling RMB 11,432,000 received in 2016 were fully fulfilled and the subsidies were recognized in consolidated statements of income and comprehensive income for the year ended December 31, 2016. Jinzheng received the following subsidies in 2017: ● RMB 300,000 as Jinzheng successfully applied for the subsidy of innovation-driven development (“RMB 300K Subsidy”). ● RMB 2,594,000 as Jinzheng successfully applied for the subsidy of special membrane project (“RMB 2.6M Subsidy”). ● RMB 200,000 as Jinzheng was chosen as one of the Provincial Industrial Design Centers in Shandong Province. ● RMB 100,000 as Jinzheng was chosen as the City DTRO Membrane Engineering Lab of Yantai City in Shandong Province. ● RMB 95,975 as Jinzheng successfully applied for the subsidy on interest expense incurred by the Company for loans obtained. The requirements of the above subsidies totaling RMB 3,289,975 received in 2017 were fully fulfilled and the subsidies were recognized as government grants in consolidated statements of income and comprehensive income for the year ended December 31, 2017. |
Research and Development | Research and Development Research and development costs are expensed as incurred. The costs primarily consist of raw materials consumed in research and development activities and salaries paid for the development and improvement of the Company’s products. Research and development costs for the years ended December 31, 2017, 2016 and 2015 were $1,355,648, $622,051 and $434,974, respectively, and are included in general and administrative expenses. |
Selling Expenses | Selling Expenses Selling expenses consist primarily of advertising, salaries, travelling and shipping and handling costs incurred during the selling activities. Advertising and transportation expenses are charged to expense as incurred. Advertising costs in the amounts of $1,519, $7,931 and $8,816 for the years ended December 31, 2017, 2016 and 2015, respectively, are included in selling expenses. Shipping and handling costs amounting to $14,178, $11,663 and $41,002 for the years ended December 31, 2017, 2016 and 2015, respectively, are included in selling expenses. |
Income Taxes | Income Taxes The Company accounts for income taxes under the provision of FASB ASC 740-10, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. |
Comprehensive Income/Loss | Comprehensive Income/Loss ASC 220 “Comprehensive Income” established standards for reporting and display of comprehensive income/loss, its components and accumulated balances. Components of comprehensive income/loss include net income/loss and foreign currency translation adjustments. As of December 31, 2017 and 2016, the only component of accumulated other comprehensive income/loss was foreign currency translation adjustments. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are cash, restricted cash, notes receivables and accounts receivable arising from its normal business activities. The Company places its cash and restricted cash in what it believes to be credit-worthy financial institutions. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its notes receivable and accounts receivable credit risk exposure beyond such allowance is limited. |
Related Parties Transactions | Related Parties Transactions A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related parties may be individuals or corporate entities. |
Segment Reporting | Segment Reporting The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker has been identified as the chief executive officer of the Company who reviews financial information of separate operating segments based on U.S. GAAP. The chief operating decision maker now reviews results analyzed by customer. This analysis is only presented at the revenue level with no allocation of direct or indirect costs. Consequently, the Company has determined that it has only one operating segment. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (ASC 606)”. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for fiscal years and interim periods within those years beginning after December 15, 2017, and early adoption is permitted for periods beginning after December 15, 2016. The Company elected to adopt the new standard effective January 1, 2018. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company elected adopting the standard using the modified retrospective method. Under this method, the Company will recognize the cumulative effect of adoption as an adjustment to its opening balance of retained earnings. The Company has identified its revenue streams and assessed each for the impacts. The Company expects the adoption of Topic 606 will not have a material impact in the timing or amount of revenue recognized, including the presentation of revenues in the Company’s consolidated statements of income and comprehensive income. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The amendments in ASU 2015-17 eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments in this ASU are effective for public business entities for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The amendments may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company adopted this amendment effective January 1, 2017. The adoption did not have an impact on our consolidated financial statements and related disclosures other than for reclassification of current deferred tax items to non-current for all periods presented. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 specifies the accounting for leases. For operating leases, ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. ASU 2016-02 is effective for publicly-traded companies for annual reporting periods, and interim periods within those years, beginning after December 15, 2018. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees may not apply a full retrospective transition approach. The Company plans to adopt the standard effective January 1, 2019. The Company anticipates this standard will have a material impact on the Company’s consolidated balance sheets. However, the Company does not expect the adoption will have a material impact on the consolidated statements of income and comprehensive income. While the Company is continuing to assess potential impacts of the standards, it’s expected that the most significant impact will be the recognition of a right-of-use asset and a lease liability for the ongoing leases. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. These amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company elected to adopt the standard effective January 1, 2018, and anticipates this standard will not have a material impact on the Company’s consolidated statements of cash flows. In January 2017, the FASB issued ASU 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments - Equity Method and Joint Ventures (Topic 323)”. This pronouncement amends the SEC’s reporting requirements for public filers in regard to new accounting pronouncements or existing pronouncements that have not yet been adopted. Companies are to provide qualitative disclosures if they have not yet implemented an accounting standards update. Companies should disclose if they are unable to estimate the impact of a specific pronouncement, and provide disclosures including a description of the effect on accounting policies that the registrant expects to apply. These provisions apply to all pronouncements that have not yet been implemented by registrants. There are additional provisions that relate to corrections to several other prior FASB pronouncements. The Company has incorporated language into other recently issued accounting pronouncement notes, where relevant for the corrections in FASB ASU 2017-03. The Company is implementing the updated SEC requirements on not yet adopted accounting pronouncements with these consolidated financial statements. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of depreciation of property, plant and equipment | Machinery equipment 10 years Computer software 10 years Electronic equipment 5 years Office equipment 5 years Motor vehicles 10 years Buildings 20 years Leasehold improvements The lesser of remaining lease term or 5 years |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable, Net [Abstract] | |
Schedule of net book value of accounts receivable | December 31, December 31, Accounts receivable $ 6,326,723 $ 2,674,134 Less: allowance for doubtful accounts (276,228 ) (36,898 ) Accounts receivable, net $ 6,050,495 $ 2,637,236 |
Schedule movement of allowance for doubtful accounts | December 31, December 31, Allowance for doubtful accounts, beginning balance $ 36,898 $ 39,473 Increase 231,926 - Decrease - - Effects of foreign exchange rate 7,404 (2,575 ) Allowance for doubtful accounts, ending balance $ 276,228 $ 36,898 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
Schedule of inventories | December 31, December 31, Raw materials $ 2,833,317 $ 1,707,610 Work in progress 7,446,080 3,132,624 Finished goods - - 10,279,397 4,840,234 Less: write-down of inventories - - Inventories $ 10,279,397 $ 4,840,234 |
Advances to Suppliers and Oth32
Advances to Suppliers and Other Current Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Advances to Suppliers and Other Current Assets, Net [Abstract] | |
Schedule of advances to suppliers and other current assets | December 31, December 31, Other current assets VAT-input $ 651,056 $ - Others 393,581 610,216 Total other current assets 1,044,637 610,216 Advances to suppliers 1,840,873 1,991,343 Total 2,885,510 2,601,559 Less: allowance for doubtful accounts - (73,148 ) Advances to suppliers and other current assets, net $ 2,885,510 $ 2,528,411 |
Property, Plant and Equipment33
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of property and equipment | December 31, December 31, Machinery equipment $ 1,143,605 $ 941,333 Electronic equipment 117,220 69,037 Office equipment 81,248 62,542 Motor vehicles 932,877 194,961 Buildings 106,038 89,661 Computer software 81,939 23,825 Construction in progress 8,350,135 - Leasehold improvements 80,053 50,011 Total property, plant and equipment 10,893,115 1,431,370 Less: accumulated depreciation (443,649 ) (231,759 ) Property, plant and equipment, net $ 10,449,466 $ 1,199,611 |
Land Use Rights, Net (Tables)
Land Use Rights, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Land Use Rights, Net [Abstract] | |
Schedule of land use rights | December 31, December 31, Cost $ 2,311,611 $ 2,163,815 Less: accumulated amortization (68,428 ) (20,813 ) Land use rights, net $ 2,243,183 $ 2,143,002 |
Deferred Tax Assets (Tables)
Deferred Tax Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Tax Assets [Abstract] | |
Schedule of the deferred tax assets | December 31, December 31, Deferred tax assets, non-current Unpaid accrued expenses $ 52,474 $ 57,221 Allowance for doubtful accounts 41,434 5,859 Expense cut-off - 10,972 Others 424,343 106,951 Deferred tax assets 518,251 181,003 Less: valuation allowance - - Deferred tax assets, non-current $ 518,251 $ 181,003 |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Loans [Abstract] | |
Summary of loans | Guarantees and Pledges December 31, December 31, Bank of Qingdao, Yantai Branch Yantai Financing Guarantee Co., Ltd.; $ 1,536,948 $ - Industrial and Commercial Bank of China, Yantai Economic Development Zone Branch Pledged by the Company with certificate of deposit of $5,100,000 4,610,845 - Bank of China, Yantai Bonded Port Areas Branch Yantai Runtai Medical Co., Ltd. (“Runtai”); - 1,151,941 Bank of China, Yantai Bonded Port Areas Branch Runtai; 1,229,559 - Yantai Branch, China Everbright Bank Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company and his wife; - 215,990 Huaxia Bank Co., Ltd., Yantai Xingfu Branch Runtai; - 1,439,926 Huaxia Bank Co., Ltd.; Yantai Xingfu Branch Runtai; 1,536,948 - Daqing Yahualong Lubricating Oil Selling Ltd. - 71,996 eCapital (China) Leasing Co., Ltd. 88,266 - Total short term loans 9,002,566 - Volkswagen Finance (China) Co., Ltd. 29,181 - Total loans 9,031,747 2,879,853 Less: short term loans and current portion of long term loans 9,020,697 - Long term loans - due over one year $ 11,050 $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of net revenues from related parties | For the Years Ended December 31, 2017 2016 2015 Heilongjiang Binteer $ - $ 290,007 $ 1,213,905 Mojie - 3,268 2,437,283 Jinna - 1,391 - Daqing Wanjieyuan - - 8,233 Total $ - $ 294,666 $ 3,659,421 |
Schedule of accounts receivable from related parties | December 31, December 31, Jinmo $ - $ 1,063,137 Accounts receivable from related parties - 1,063,137 Less: allowance for doubtful accounts - (2,160 ) Accounts receivable from related parties, net $ - $ 1,060,977 |
Schedule of allowance for doubtful accounts for accounts receivable from related parties | December 31, December 31, Allowance for doubtful accounts, beginning balance $ - $ 2,311 Increase - - Decrease - - Effects of foreign exchange rate - (151 ) Allowance for doubtful accounts, ending balance $ - $ 2,160 |
Schedule of due from related parties | December 31, December 31, Yue Zhang $ - $ 683 Jinmo - 2,880 Total $ - $ 3,563 |
Schedule of due to related parties | December 31, December 31, Zhuo Zhang $ - $ 1,084 Yuebiao Li - 713,915 Total $ - $ 714,999 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Schedule of provision for income taxes | For the Years Ended 2017 2016 2015 Current $ 788,815 $ 680,756 $ 554,082 Deferred (312,997 ) (132,319 ) (101,232 ) Total $ 475,818 $ 548,437 $ 452,850 |
Schedule of reconciliations statutory income tax rate | For the Years Ended 2017 2016 2015 HK statutory income tax rate 16.50 % 16.50 % 16.50 % Valuation allowance recognized with respect to the loss in the HK company (16.50 )% (16.50 )% (16.50 )% PRC statutory income tax rate 25.00 % 25.00 % 25.00 % Effect of income tax exemptions and reliefs (10.00 )% (11.63 )% (0.23 )% Effect of additional deduction allowed for R&D expense (2.74 )% - - Effect of expenses not deductible for tax purposes 0.81 % 0.05 % 7.79 % Others 2.45 % 4.97 % (0.18 )% Total 15.52 % 18.39 % 32.38 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of basic and diluted net income per share | For the Years Ended 2017 2016 2015 Net income available to common shareholders for basic and diluted net income per common share $ 2,590,931 $ 2,433,720 $ 945,577 Weighted average common shares outstanding – basic 9,864,479 8,767,738 8,200,000 Effect of dilutive securities: Warrants issued to third party - - 960,087 Weighted average common shares outstanding – diluted 9,864,479 8,767,738 9,160,087 Net income per common share – basic $ 0.26 $ 0.28 $ 0.12 Net income per common share – diluted $ 0.26 $ 0.28 $ 0.10 |
Concentrations of Credit Risk40
Concentrations of Credit Risk and Major Customers and Suppliers (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Customers [Member] | |
Concentration Risk [Line Items] | |
Schedules of concentrations of credit risk | For the Years Ended Customer 2017 2016 2015 Beijing Hezhong Qingyuan Environmental Protection Science and Technology Co., Ltd. (“Hezhong Qingyuan”) 35.19 % 12.63 % * % Government of Jiangshan Town, Laixi District, Qingdao City, Shandong Province, PRC (“Jiangshan Town”) 31.70 % * % * % Beijing Aritime Intelligent Control Co., Ltd. (“Beijing Aritime”) 13.34 % * % * % Nanjing Blue Sky Environmental Protection Science and Technology Co., Ltd. (“Blue Sky”) * % 32.19 % * % Dalian Yihe Electric Power Installation Co., Ltd. (“Dalian Yihe”) * % 20.93 % * % Mojie * % * % 34.93 % Heilongjiang Binteer * % * % 17.40 % * Less than 10% |
Suppliers [Member] | |
Concentration Risk [Line Items] | |
Schedules of concentrations of credit risk | For the Years Ended December 31, Supplier 2017 2016 2015 Dalian Huarui Heavy Industry Group Limited by Share Ltd. (“Dalian Huarui”) 43.35 % 53.96 % * % Heilongjiang Binteer * % * % 45.31 % |
Segmental and Revenue Analysis
Segmental and Revenue Analysis (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segmental and Revenue Analysis [Abstract] | |
Schedule of segmental and revenue analysis | For the Years Ended 2017 2016 2015 Products $ 4,000,940 $ 8,855,284 $ 25,010 Projects 13,343,223 3,129,771 3,293,823 Services 7,995,334 - - Net revenues 25,339,497 11,985,055 3,318,833 Products – related parties - 294,666 3,590,812 Projects – related parties - - 68,609 Net revenues from related parties - 294,666 3,659,421 Total revenues $ 25,339,497 $ 12,279,721 $ 6,978,254 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Schedule of future minimum lease obligations | 2018 $ 110,651 2019 - 2020 - 2021 - 2022 - Thereafter - Total $ 110,651 |
Organization (Details)
Organization (Details) | Dec. 08, 2016USD ($) | Dec. 08, 2016CNY (¥) | Feb. 05, 2016 | Jan. 25, 2016 |
Jinzheng [Member] | ||||
Organization (Textual) | ||||
Equity interest percentage | 100.00% | 100.00% | ||
Beijing Hezhong Qingyuan Environmental Protection Science and Technology Co., Ltd. [Member] | ||||
Organization (Textual) | ||||
Equity interest percentage | 100.00% | 100.00% | ||
Consideration transaction | $ 31,678 | ¥ 220,000 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Machinery equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 10 years |
Electronic Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 5 years |
Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 5 years |
Motor vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 10 years |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 20 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 5 years |
Computer Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment, useful life | 10 years |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | ||||||||||||
Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2017CNY (¥) | Aug. 03, 2017$ / shares | Aug. 02, 2017USD ($) | Dec. 31, 2016CNY (¥) | Mar. 27, 2016 | Dec. 31, 2015CNY (¥) | Feb. 02, 2015$ / shares | |
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Ownership percentage | 100.00% | 100.00% | |||||||||||
Share price | $ / shares | $ 1.88 | ||||||||||||
Accounts receivable | $ 6,050,495 | $ 2,637,236 | |||||||||||
Related parties | $ 0 | 53,833 | |||||||||||
Land use rights estimated useful life | 50 years | 50 years | |||||||||||
Government grants recognized | $ 48,700 | 1,721,000 | $ 61,000 | ¥ 3,289,975 | ¥ 11,432,000 | ¥ 380,000 | |||||||
Other income | 1,751,000 | ¥ 11,632,000 | ¥ 11,432,000 | ¥ 200,000 | |||||||||
Deferred income | 0 | 26,000 | |||||||||||
Other comprehensive income | $ 0 | ||||||||||||
Subsidiary description | (i) any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. | (i) any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. | |||||||||||
Research and development | $ 1,355,648 | 622,051 | 434,974 | ||||||||||
Advertising costs | 1,519 | 7,931 | 8,816 | ||||||||||
Shipping and handling costs | 14,178 | 11,663 | $ 41,002 | ||||||||||
Deferred cost of revenue | 2,547,580 | ||||||||||||
IPO [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Share price | $ / shares | $ 5 | ||||||||||||
Escrow deposit | $ 500,000 | ||||||||||||
Newater Hk [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Ownership percentage | 100.00% | 100.00% | |||||||||||
Deferred income | ¥ | 180 | ||||||||||||
Jinzheng [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Ownership percentage | 100.00% | 100.00% | 100.00% | 20.00% | |||||||||
Government grants recognized | ¥ | ¥ 3,289,975 | ||||||||||||
Other comprehensive income | $ 180,000 | ¥ 200,000 | |||||||||||
Subsidiary description | ● RMB 300,000 as Jinzheng successfully applied for the subsidy of innovation-driven development (“RMB 300K Subsidy”). ● RMB 2,594,000 as Jinzheng successfully applied for the subsidy of special membrane project (“RMB 2.6M Subsidy”). ● RMB 200,000 as Jinzheng was chosen as one of the Provincial Industrial Design Centers in Shandong Province. ● RMB 100,000 as Jinzheng was chosen as the City DTRO Membrane Engineering Labor of Yantai City in Shandong Province. ● RMB 95,975 as Jinzheng successfully applied for the subsidy on interest expense incurred by the Company for loans obtained. | ● RMB 300,000 as Jinzheng successfully applied for the subsidy of innovation-driven development (“RMB 300K Subsidy”). ● RMB 2,594,000 as Jinzheng successfully applied for the subsidy of special membrane project (“RMB 2.6M Subsidy”). ● RMB 200,000 as Jinzheng was chosen as one of the Provincial Industrial Design Centers in Shandong Province. ● RMB 100,000 as Jinzheng was chosen as the City DTRO Membrane Engineering Labor of Yantai City in Shandong Province. ● RMB 95,975 as Jinzheng successfully applied for the subsidy on interest expense incurred by the Company for loans obtained. | ● RMB 500,000 as Jinzheng successfully applied for the subsidy of university-industry cooperation and international cooperation projects (“RMB 500K Subsidy”). The recognition requirements for the RMB 500K Subsidy include research and development projects completed with higher education institutions and collaboration with foreign companies with advanced technologies. ● RMB 1,200,000 as Jinzheng successfully applied for the subsidy of special membrane project (“RMB 1.2M Subsidy”). The recognition requirements for the RMB 1.2M Subsidy include the commencement of special membrane project in Laishan District Economic Development Area in 2016 and tax payment of certain amount in the same year. ● RMB 9,732,000 as Jinzheng successfully applied for the high technology subsidy (“RMB 9.7M Subsidy”). There is no specific requirement for the RMB 9.7M Subsidy. | ● RMB 500,000 as Jinzheng successfully applied for the subsidy of university-industry cooperation and international cooperation projects (“RMB 500K Subsidy”). The recognition requirements for the RMB 500K Subsidy include research and development projects completed with higher education institutions and collaboration with foreign companies with advanced technologies. ● RMB 1,200,000 as Jinzheng successfully applied for the subsidy of special membrane project (“RMB 1.2M Subsidy”). The recognition requirements for the RMB 1.2M Subsidy include the commencement of special membrane project in Laishan District Economic Development Area in 2016 and tax payment of certain amount in the same year. ● RMB 9,732,000 as Jinzheng successfully applied for the high technology subsidy (“RMB 9.7M Subsidy”). There is no specific requirement for the RMB 9.7M Subsidy. | ● RMB 180,000 as Jinzheng’s research and development plan was chosen as one of the annual key plans of Shandong Province. (“RMB 180K Subsidy”) ● RMB 200,000 as Jinzheng successfully applied for the subsidy of production and cooperation project of Yantai City, Laishan District. (“RMB 200K Subsidy”) | ● RMB 180,000 as Jinzheng’s research and development plan was chosen as one of the annual key plans of Shandong Province. (“RMB 180K Subsidy”) ● RMB 200,000 as Jinzheng successfully applied for the subsidy of production and cooperation project of Yantai City, Laishan District. (“RMB 200K Subsidy”) | |||||||
Research and development | ¥ | ¥ 200,000 | ||||||||||||
Shandong Jinmo Recycled Water Resource Co., Ltd. [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Ownership percentage | 100.00% | 100.00% |
Disposal (Details)
Disposal (Details) | Dec. 08, 2016USD ($) | Dec. 08, 2016CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Disposal (Textual) | |||||
Income tax provisions | $ 475,818 | $ 548,437 | $ 452,850 | ||
Shandong Jinmo Recycled Water Resource Co., Ltd. [Member] | |||||
Disposal (Textual) | |||||
Sale of assets and liabilities transaction | $ 31,678 | ¥ 220,000 | |||
Gain on sale of transaction | 789 | ||||
Income tax provisions | $ 14,511 | $ 21,799 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Cash (Textual) | ||
Restricted cash, current portion | $ 6,753,685 | $ 1,439,926 |
Restricted cash, non-current portion | 500,000 | |
Held as security | $ 500,000 | |
Redistrict cash indemnification obligations description | Potential indemnification obligations arising during an escrow period of two years following the closing date on August 2, 2017. |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Receivable, Net [Abstract] | |||
Accounts receivable | $ 6,326,723 | $ 2,674,134 | |
Less: allowance for doubtful accounts | (276,228) | (36,898) | $ (39,473) |
Accounts receivable, net | $ 6,050,495 | $ 2,637,236 |
Accounts Receivable, Net (Det49
Accounts Receivable, Net (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts, beginning balance | $ 36,898 | $ 39,473 |
Increase | ||
Decrease | ||
Allowance for doubtful accounts, ending balance | 276,228 | 36,898 |
Accounts Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts, beginning balance | 36,898 | 39,473 |
Increase | 231,926 | |
Decrease | ||
Effects of foreign exchange rate | 7,404 | (2,575) |
Allowance for doubtful accounts, ending balance | $ 276,228 | $ 36,898 |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Inventories [Abstract] | ||
Raw materials | $ 2,833,317 | $ 1,707,610 |
Work in progress | 7,446,080 | 3,132,624 |
Finished goods | ||
Inventory, gross | 10,279,397 | 4,840,234 |
Less: write-down of inventories | ||
Inventories | $ 10,279,397 | $ 4,840,234 |
Advances to Suppliers and Oth51
Advances to Suppliers and Other Current Assets, Net (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Other current assets | ||
VAT-input | $ 651,056 | |
Others | 393,581 | 610,216 |
Total other current assets | 1,044,637 | 610,216 |
Advances to suppliers | 1,840,873 | 1,991,343 |
Total | 2,885,510 | 2,601,559 |
Less: allowance for doubtful accounts | (73,148) | |
Advances to suppliers and other current assets, net | $ 2,885,510 | $ 2,528,411 |
Advances to Suppliers and Oth52
Advances to Suppliers and Other Current Assets, Net (Details Textual) | Feb. 22, 2018USD ($) | Aug. 22, 2017 | Aug. 10, 2016USD ($) | Sep. 29, 2016 | Feb. 22, 2018CNY (¥) | Aug. 10, 2016CNY (¥) |
Advances To Suppliers And Other Current Assets Net Textual [Abstract] | ||||||
Annual interest percentage, description | The loan was fully repaid along with interest. | The loan bears annual interest of 5% and due in six months. | The loan was fully repaid along with interest. | |||
Subsequent event [Member] | ||||||
Advances To Suppliers And Other Current Assets Net Textual [Abstract] | ||||||
Annual interest percentage, description | The loan bears an annual interest rate of 10% and was due in six months. | |||||
Yantai Yezhan Economic and Trade Ltd., Co. [Member] | ||||||
Advances To Suppliers And Other Current Assets Net Textual [Abstract] | ||||||
Advance to related party | $ 307,700 | ¥ 2,000,000 | ||||
Yantai Yezhan Economic and Trade Ltd., Co. [Member] | Subsequent event [Member] | ||||||
Advances To Suppliers And Other Current Assets Net Textual [Abstract] | ||||||
Advance to related party | $ 1,236,490 | ¥ 8,500,000 |
Property, Plant and Equipment53
Property, Plant and Equipment, Net (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 10,893,115 | $ 1,431,370 |
Less: accumulated depreciation | (443,649) | (231,759) |
Property, plant and equipment, net | 10,449,466 | 1,199,611 |
Machinery equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 1,143,605 | 941,333 |
Electronic equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 117,220 | 69,037 |
Office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 81,248 | 62,542 |
Motor vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 932,877 | 194,961 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 106,038 | 89,661 |
Computer software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 81,939 | 23,825 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 8,350,135 | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 80,053 | $ 50,011 |
Property, Plant and Equipment54
Property, Plant and Equipment, Net (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment Net (Textual) | |||
Depreciation expense | $ 188,995 | $ 165,906 | $ 86,396 |
Liabilities assumed in connection with purchase of property, plant and equipment | $ 7,445,478 |
Land Use Rights, Net (Details)
Land Use Rights, Net (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Land Use Rights, Net [Abstract] | ||
Cost | $ 2,311,611 | $ 2,163,815 |
Less: accumulated amortization | (68,428) | (20,813) |
Land use rights, net | $ 2,243,183 | $ 2,143,002 |
Land Use Rights, Net (Details T
Land Use Rights, Net (Details Textual) | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Jul. 19, 2016USD ($)m² | Jul. 19, 2016CNY (¥)m² | |
Land Use Rights, Net (Textual) | |||||
Amortization expense | $ | $ 44,498 | $ 21,756 | $ 0 | ||
Area of land | m² | 32,442 | 32,442 | |||
Laishan district economic development area | $ 2,248,829 | ¥ 14,598,725 |
Deferred Tax Assets (Details)
Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets, non-current | ||
Unpaid accrued expenses | $ 52,474 | $ 57,221 |
Allowance for doubtful accounts | 41,434 | 5,859 |
Expense cut-off | 10,972 | |
Others | 424,343 | 106,951 |
Deferred tax assets | 518,251 | 181,003 |
Less: valuation allowance | ||
Deferred tax assets, non-current | $ 518,251 | $ 181,003 |
Loans (Details)
Loans (Details) | 1 Months Ended | 12 Months Ended | |||||||
Dec. 21, 2017USD ($) | Nov. 08, 2017 | Dec. 31, 2017USD ($) | Dec. 21, 2017CNY (¥) | Jan. 04, 2017USD ($) | Jan. 04, 2017CNY (¥) | Dec. 31, 2016USD ($) | Jul. 13, 2016USD ($) | Jul. 13, 2016CNY (¥) | |
Short-term Debt [Line Items] | |||||||||
Total short term loans | $ 9,020,697 | $ 2,879,853 | |||||||
Total loans | 9,031,747 | 2,879,853 | |||||||
Less: short term loans and current portion of long term loan | 9,020,697 | ||||||||
Long term loan - due in one year | $ 11,050 | ||||||||
Bank of Qingdao, Yantai Branch [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Description of Guarantees and Pledges | Yantai Financing Guarantee Co., Ltd.; Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company, and his wife; Zhuo Zhang, principal shareholder, Director and Chief Financial Officer of the Company. | ||||||||
Total short term loans | $ 1,536,948 | ||||||||
Industrial and Commercial Bank of China, Yantai Economic Development Zone Branch [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Total short term loans | |||||||||
Bank of China, Yantai Bonded Port Areas Branch [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Description of Guarantees and Pledges | Yantai Runtai Medical Co., Ltd. (“Runtai”);Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company, and his wife; Zhuo Zhang, principal shareholder, Director and Chief Financial Officer of the Company, and her husband; Yue Zhang, principal shareholder, sister of Zhuo Zhang who is principal shareholder, Director and Chief Financial Officer of the Company; Xiaojun Chen and Yuezhang each pledged an apartment for this loan. | ||||||||
Total short term loans | 1,151,941 | ||||||||
Bank of China, Yantai Bonded Port Areas Branch [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Description of Guarantees and Pledges | Runtai;Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company, and his wife; Pledged with an apartment owned by Yue Zhang, principal shareholder, sister of Zhuo Zhang. | ||||||||
Total short term loans | $ 1,229,559 | ||||||||
Yantai Branch, China Everbright Bank [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Description of Guarantees and Pledges | Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company and his wife;Zhuo Zhang, principal shareholder, Director and Chief Financial Officer of the Company. | ||||||||
Total short term loans | $ 215,990 | ¥ 1,500,000 | 215,990 | $ 215,990 | ¥ 1,500,000 | ||||
Huaxia Bank Co., Ltd., Yantai Xingfu Branch [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Description of Guarantees and Pledges | Runtai;Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company, and his wife; Zhuo Zhang, principal shareholder, Director and Chief Financial Officer of the Company, and her husband; Pledged by the Company's property and equipment | ||||||||
Total short term loans | 1,439,926 | ||||||||
Huaxia Bank Co., Ltd.; Yantai Xingfu Branch [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Description of Guarantees and Pledges | Runtai;Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company, and his wife; Zhuo Zhang, principal shareholder, Director and Chief Financial Officer of the Company, and her husband; Pledged by the Company's inventories | ||||||||
Total short term loans | $ 1,536,948 | ||||||||
Daqing Yahualong Lubricating Oil Selling Ltd. [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Total short term loans | 71,996 | ||||||||
eCapital (China) Leasing Co., Ltd.[Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Description of Guarantees and Pledges | The loan is pledged with some passenger vehicles with net book value of $183,195 (RMB 1,191,941) owned by the Company, with monthly repayment payable in arrears. | ||||||||
Total short term loans | $ 192,580 | 88,266 | ¥ 1,253,000 | ||||||
Volkswagen Finance (China) Co., Ltd.[Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Description of Guarantees and Pledges | The loans obtained pursuant to the agreements totaled $30,738 (RMB 200,000), pledged with some passenger vehicles with net book value of $55,822 (RMB 363,200) owned by the Company. | ||||||||
Total short term loans | $ 29,181 |
Loans (Details Textual)
Loans (Details Textual) | Jan. 06, 2017CNY (¥) | Jan. 04, 2017USD ($) | Dec. 13, 2016USD ($) | Dec. 13, 2016CNY (¥) | Nov. 22, 2016USD ($) | Nov. 22, 2016CNY (¥) | Sep. 05, 2016USD ($) | Sep. 05, 2016CNY (¥) | Jul. 19, 2016USD ($) | Jul. 13, 2016USD ($) | Jul. 06, 2016USD ($) | Jun. 06, 2016shares | Jan. 13, 2016USD ($) | Jan. 13, 2016CNY (¥) | Jan. 05, 2016USD ($) | Nov. 10, 2015USD ($) | Nov. 10, 2015CNY (¥) | Feb. 02, 2015USD ($) | Feb. 02, 2015CNY (¥) | Dec. 21, 2017USD ($) | Nov. 08, 2017 | Aug. 29, 2017USD ($) | Jun. 28, 2017 | Oct. 25, 2016USD ($) | Jan. 31, 2016USD ($) | Jan. 31, 2016CNY (¥) | Jun. 30, 2015USD ($) | Jun. 30, 2015CNY (¥) | Jun. 01, 2016USD ($) | Jun. 01, 2016CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | Dec. 21, 2017CNY (¥) | Nov. 01, 2017USD ($) | Nov. 01, 2017CNY (¥) | Sep. 28, 2017USD ($) | Sep. 28, 2017CNY (¥) | Aug. 29, 2017CNY (¥) | Apr. 12, 2017CNY (¥) | Jan. 04, 2017CNY (¥) | Oct. 25, 2016CNY (¥) | Jul. 20, 2016USD ($) | Jul. 20, 2016CNY (¥) | Jul. 19, 2016CNY (¥) | Jul. 13, 2016CNY (¥) | Jul. 06, 2016CNY (¥) | Mar. 27, 2016 | Mar. 25, 2016USD ($) | Mar. 25, 2016CNY (¥) | Mar. 21, 2016USD ($) | Mar. 21, 2016CNY (¥) | Jan. 13, 2016CNY (¥) | Jan. 05, 2016CNY (¥) | Nov. 10, 2015CNY (¥) | Jul. 09, 2015USD ($) | Jul. 09, 2015CNY (¥) | Feb. 02, 2015CNY (¥) |
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 9,020,697 | $ 2,879,853 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contributed capital | 198,917 | $ 2,212,796 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership percentage | 100.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-interest bearing loan | $ 154,043 | ¥ 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan repayments | $ 3,283,830 | 8,142,563 | 642,178 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan repayment date | Jan. 6, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pledging deposit amount | $ 3,110,863 | ¥ 20,240,449 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expenses | (242,707) | (155,553) | (164,613) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long term loan - due in one year | 11,050 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Daqing Yahualong Lubricating Oil Selling Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | 71,996 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan repayments | $ 75,263 | ¥ 500,000 | $ 96,964 | ¥ 600,000 | $ 60,210 | ¥ 400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowings during the period | ¥ | ¥ 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan repayment date | Apr. 12, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal interest | ¥ | ¥ 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Huaxia Bank Co., Ltd., Yantai Xingfu Branch [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of credit, description | The Company obtained a line of credit of approximately $3,080,857 (RMB 20,000,000) from Huaxia Bank Co., Ltd. Yantai Xingfu Branch. The line of credit starts from July 19, 2016 and ends on June 30, 2017. The borrowings under the line of credit are guaranteed by Runtai, Yuebiao Li and his wife, Zhuo Zhang and her husband. In addition, the Company pledged certain property and equipment with original book value of approximately $2,955,467 (RMB 19,186,003) for the line of credit. On July 26, 2016, the Company entered into a loan agreement under the line of credit, pursuant to which the Company borrowed approximately $1,439,926 (RMB 10,000,000) at an annual interest rate of 5.655% from July 26, 2016 to June 28, 2017. The loan was fully repaid on June 28, 2017. On the same day, the Company entered in another loan agreement with the same bank to borrow approximately $1,536,948 (RMB10,000,000) at an annual interest rate of 5.655% for the period from June 28, 2017 to June 28, 2018. The loan is guaranteed by the parties listed above and pledged by the Company with certain inventories with original cost of approximately $3,110,863 (RMB 20,240,449). | The Company entered into a loan agreement under the line of credit, pursuant to which the Company borrowed approximately $1,439,926 (RMB 10,000,000) at an annual interest rate of 5.655% from July 26, 2016 to June 28, 2017. The loan was fully repaid on June 28, 2017. On the same day, the Company entered in another loan agreement with the same bank to borrow approximately $1,536,948 (RMB10,000,000) at an annual interest rate of 5.655% for the period from June 28, 2017 to June 28, 2018. The loan is guaranteed by the parties listed above and pledged with certain inventories with original book value of approximately $3,110,863 (RMB 20,240,449). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | 1,439,926 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan, description | Runtai;Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company, and his wife; Zhuo Zhang, principal shareholder, Director and Chief Financial Officer of the Company, and her husband; Pledged by the Company's property and equipment | Runtai;Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company, and his wife; Zhuo Zhang, principal shareholder, Director and Chief Financial Officer of the Company, and her husband; Pledged by the Company's property and equipment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of credit amount | $ 3,080,857 | ¥ 20,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of credit start date | Jul. 19, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of credit facility end date | Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yantai Branch, China Everbright Bank [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 215,990 | $ 215,990 | 215,990 | ¥ 1,500,000 | ¥ 1,500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 6.525% | 6.525% | 6.525% | 6.525% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan, description | Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company and his wife;Zhuo Zhang, principal shareholder, Director and Chief Financial Officer of the Company. | Yuebiao Li, principal shareholder, Chairman of the Board and Chief Executive Officer of the Company and his wife;Zhuo Zhang, principal shareholder, Director and Chief Financial Officer of the Company. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan repayment date | Jul. 3, 2017 | Jan. 12, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yantai Branch, Bank of Qingdao [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan repayment date | Aug. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Industrial and Commercial Bank of China, Yantai Economic Development Zone Branch [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 5.003% | 5.003% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pledging deposit amount | $ 5,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
eCapital (China) Leasing Co., Ltd.[Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 192,580 | $ 88,266 | ¥ 1,253,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 17.049% | 17.049% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan repayments | 104,314 | ¥ 678,708 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan, description | The loan is pledged with some passenger vehicles with net book value of $183,195 (RMB 1,191,941) owned by the Company, with monthly repayment payable in arrears. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowings during the period | 88,266 | 574,292 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Volkswagen Finance (China) Co., Ltd.[Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | 29,181 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 9.09% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan repayments | 1,556 | 10,131 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan, description | The loans obtained pursuant to the agreements totaled $30,738 (RMB 200,000), pledged with some passenger vehicles with net book value of $55,822 (RMB 363,200) owned by the Company. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowings during the period | 29,181 | ¥ 189,869 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third party debt conversion [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 1,530 | ¥ 10,000 | $ 768,470 | ¥ 4,990,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued upon debt conversion | shares | 275,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion rate per share | 2.80% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loans [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 61,908 | $ 1,151,941 | ¥ 8,000,000 | ¥ 400,000 | $ 154,043 | ¥ 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 7.275% | 7.275% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan, description | The loan was due on October 24, 2017 with a floating interest at the prime rate issued by National Inter-Bank Borrowing Center on the initial drawdown date plus 135.50 points. The loan is guaranteed by parties listed above and Xiaojun Chen and Yue Zhang each had a house pledged for the loan. The agreement also specified that the Company should use the land use rights of the parcel of land of 32,442 square meters which was transferred from Aotesai as pledge once the transfer procedure was completed. See Note 10 for the details on the land use rights. The Company fully repaid the loan on October 26, 2017. On November 1, 2017, the Company entered into a loan agreement with the same bank to borrow approximately $1,229,559 (RMB 8,000,000) due on November 1, 2018 for working capital purposes. The loan bears an annual interest rate of 5.873% payable quarterly in arrears and is guaranteed by the parties listed above and pledged with an apartment owned by Yue Zhang. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loans [Member] | Daqing Yahualong Lubricating Oil Selling Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 307,700 | ¥ 2,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 5.00% | 5.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loans [Member] | Yantai Branch, China Everbright Bank [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 5.655% | 5.655% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loans [Member] | Industrial and Commercial Bank of China, Yantai Economic Development Zone Branch [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 1,536,948 | $ 4,610,845 | $ 4,610,845 | ¥ 30,000,000 | ¥ 10,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan, description | Pledged by the Company with certificate of deposit of $5,100,000. | Pledged by the Company with certificate of deposit of $5,100,000. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Board and Chief Executive Officer [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 1.00% | 1.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bejjing Bangruisi Investment Co., Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 2,310,643 | ¥ 15,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement description | (1) demand penalty at a daily rate of 1‰ of the unpaid portion, or (2) convert the defaulted amount to contributed capital and have 40% of the Company's equity interest. | (1) demand penalty at a daily rate of 1‰ of the unpaid portion, or (2) convert the defaulted amount to contributed capital and have 40% of the Company's equity interest. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan repayments | $ 2,538,525 | ¥ 16,500,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity interest by a consideration | $ 2,310,643 | ¥ 15,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jinzheng [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership percentage | 20.00% | 100.00% | 100.00% | 20.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase price | $ 2,310,643 | ¥ 15,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Penalty net income | $ 4,621,286 | ¥ 30,000,000 | $ 2,310,643 | ¥ 15,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yuebiao Li Zhuo Zhang [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 5.00% | 5.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase price | $ 1,540,428 | ¥ 10,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Runtai [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-interest bearing loan | $ 462,129 | ¥ 3,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term loan repayments | $ 308,086 | ¥ 2,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yantai Bonded Port Areas [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 770,214 | ¥ 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 5.665% | 5.665% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity interest by a consideration | $ 770,214 | ¥ 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yantai Xiangyu Logistics Co., Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 3,077,000 | ¥ 20,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued upon debt conversion | shares | 724,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowings during the period | $ 20,000,000 | ¥ 3,077,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion rate per share | 4.25% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yantai Yongxiang Asset Management Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 1,494,216 | ¥ 9,700,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 0.025% | 0.025% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xiaojun Chen and Yue Zhang [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short Term Loans (Textual) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short term borrowed amount | $ 1,229,559 | ¥ 8,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate | 5.873% | 5.873% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Net revenues from related parties | $ 294,666 | $ 3,659,421 | |
Heilongjiang Binteer [Member] | |||
Related Party Transaction [Line Items] | |||
Net revenues from related parties | 290,007 | 1,213,905 | |
Mojie [Member] | |||
Related Party Transaction [Line Items] | |||
Net revenues from related parties | 3,268 | 2,437,283 | |
Jinna [Member] | |||
Related Party Transaction [Line Items] | |||
Net revenues from related parties | 1,391 | ||
Daqing Wanjieyuan [Member] | |||
Related Party Transaction [Line Items] | |||
Net revenues from related parties | $ 8,233 |
Related Party Transactions (D61
Related Party Transactions (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Accounts receivable from related parties | $ 1,063,137 | |
Less: allowance for doubtful accounts | (2,160) | |
Accounts receivable from related parties, net | 1,060,977 | |
Jinmo [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts receivable from related parties | $ 1,063,137 |
Related Party Transactions (D62
Related Party Transactions (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | ||
Allowance for doubtful accounts, beginning balance | $ 36,898 | $ 39,473 |
Increase | ||
Decrease | ||
Allowance for doubtful accounts, ending balance | 276,228 | 36,898 |
Related Parties [Member] | ||
Related Party Transaction [Line Items] | ||
Allowance for doubtful accounts, beginning balance | 2,311 | |
Increase | ||
Decrease | ||
Effects of foreign exchange rate | (151) | |
Allowance for doubtful accounts, ending balance |
Related Party Transactions (D63
Related Party Transactions (Details 3) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Due from related parties | $ 3,563 | |
Yue Zhang [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 683 | |
Jinmo [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related parties | $ 2,880 |
Related Party Transactions (D64
Related Party Transactions (Details 4) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 714,999 | |
Yuebiao Li Zhuo Zhang [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 1,084 | |
Yuebiao Li [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 713,915 |
Related Party Transactions (D65
Related Party Transactions (Details Textual) | 1 Months Ended | 2 Months Ended | 11 Months Ended | 12 Months Ended | |||||||||||||||
Nov. 30, 2016USD ($) | Nov. 30, 2016CNY (¥) | Nov. 28, 2016USD ($) | Nov. 28, 2016CNY (¥) | Aug. 31, 2015USD ($) | Aug. 31, 2015CNY (¥) | Jan. 31, 2015USD ($) | Jan. 31, 2015CNY (¥) | Dec. 31, 2014USD ($) | Dec. 28, 2016USD ($) | Dec. 28, 2016CNY (¥) | Dec. 07, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | Sep. 30, 2015USD ($) | Sep. 30, 2015CNY (¥) | |
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | 0 | 0 | |||||||||||||||||
Net related party revenues | $ 294,666 | $ 3,659,421 | |||||||||||||||||
Net related party accounts receivable | 1,060,977 | ||||||||||||||||||
Cost of revenues from related party, Heilongjiang Binteer | 556,692 | 2,984,968 | |||||||||||||||||
Accounts payable to related party | $ 0 | 0 | |||||||||||||||||
Monthly rent | $ 2,400 | ¥ 15,000 | |||||||||||||||||
Balance due from related party | 2,311 | ¥ 15,000 | |||||||||||||||||
Yuebiao Li [Member] | |||||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | Principal shareholder, Chairman of the Board and Chief Executive Officer ("CEO") | Principal shareholder, Chairman of the Board and Chief Executive Officer ("CEO") | |||||||||||||||||
Balance due from related party | 28,898 | ¥ 180,000 | |||||||||||||||||
Borrowing amount of related party | $ 719,963 | ¥ 5,000,000 | |||||||||||||||||
Annual interest rate | 10.00% | 10.00% | |||||||||||||||||
Repayments of related party debt | $ 739,973 | ¥ 5,000,000 | |||||||||||||||||
Yuebiao Li Zhuo Zhang [Member] | |||||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | Principal shareholder, Director, Chief Financial Officer ("CFO") | Principal shareholder, Director, Chief Financial Officer ("CFO") | |||||||||||||||||
Borrowing amount of related party | $ 25,834 | ¥ 167,708 | |||||||||||||||||
Deposit amount | $ 267,510 | ¥ 1,736,596 | |||||||||||||||||
Yue Zhang [Member] | |||||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | Principal shareholder, Zhuo Zhang's sister | Principal shareholder, Zhuo Zhang's sister | |||||||||||||||||
Balance due from related party | $ 0 | 683 | |||||||||||||||||
Advance to related party | 240,492 | ||||||||||||||||||
Advance expenses paid by related party | 239,809 | ||||||||||||||||||
Xiaojun Chen [Member] | |||||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | Husband of Zhuo Zhang | Husband of Zhuo Zhang | |||||||||||||||||
Borrowing amount of related party | $ 25,834 | ¥ 167,708 | |||||||||||||||||
Heilongjiang Binteer [Member] | |||||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | Established by Yuebiao Li, and then Mr. Li transferred his 60% equity interest to his brother, Yuefeng Li in May 2014. Yuefeng Li then transferred his 60% equity interest to a third party individual for zero consideration in March 2016. Heilongjiang Binteer continues to be significantly influenced by the Company because the Company was its primary vendor and customer in the years ended December 31, 2016 and 2015. | Established by Yuebiao Li, and then Mr. Li transferred his 60% equity interest to his brother, Yuefeng Li in May 2014. Yuefeng Li then transferred his 60% equity interest to a third party individual for zero consideration in March 2016. Heilongjiang Binteer continues to be significantly influenced by the Company because the Company was its primary vendor and customer in the years ended December 31, 2016 and 2015. | |||||||||||||||||
Net related party revenues | 290,007 | 1,213,905 | |||||||||||||||||
Amount of materials purchased | $ 13,951 | $ 0 | 556,692 | 2,971,017 | |||||||||||||||
Cost of revenues from related party, Heilongjiang Binteer | $ 2,984,968 | 2,971,017 | |||||||||||||||||
Daqing Wanjieyuan [Member] | |||||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | Controlled by Yuebiao Li | Controlled by Yuebiao Li | |||||||||||||||||
Net related party revenues | 8,233 | ||||||||||||||||||
Purchased trademark from related party | $ 5,040 | ¥ 35,000 | $ 2,160 | ¥ 15,000 | |||||||||||||||
Mojie [Member] | |||||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | Established and controlled by Yuebiao Li and Zhuo Zhang. All of the equity interest was transferred to a third party in July 2015 but continues to be significantly influenced by the Company because the Company was its primary vendor in the years ended December 31, 2016 and 2015. | Established and controlled by Yuebiao Li and Zhuo Zhang. All of the equity interest was transferred to a third party in July 2015 but continues to be significantly influenced by the Company because the Company was its primary vendor in the years ended December 31, 2016 and 2015. | |||||||||||||||||
Net related party revenues | 3,268 | 2,437,283 | |||||||||||||||||
Jinna [Member] | |||||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | Significantly influenced by Yue Zhang, principal shareholder and sister of Zhuo Zhang | Significantly influenced by Yue Zhang, principal shareholder and sister of Zhuo Zhang | |||||||||||||||||
Net related party revenues | $ 1,391 | ||||||||||||||||||
Jinmo [Member] | |||||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||||
Nature of Relationship | A subsidiary that was incorporated on March 19, 2015 and disposed of to a third party on December 8, 2016 for consideration of RMB 220,000 (approximately $31,678). After the transfer, the Company continues to have significant influence on Jinmo as Ping Yu, vice-chief executive officer of Jinzheng, serves as the legal representative of Jinmo. | A subsidiary that was incorporated on March 19, 2015 and disposed of to a third party on December 8, 2016 for consideration of RMB 220,000 (approximately $31,678). After the transfer, the Company continues to have significant influence on Jinmo as Ping Yu, vice-chief executive officer of Jinzheng, serves as the legal representative of Jinmo. | |||||||||||||||||
Proceeds from sale of equipment | $ 1,063,137 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | |||
Current | $ 788,815 | $ 680,756 | $ 554,082 |
Deferred | (312,997) | (132,319) | (101,232) |
Total | $ 475,818 | $ 548,437 | $ 452,850 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | |||
HK statutory income tax rate | 16.50% | 16.50% | 16.50% |
Valuation allowance recognized with respect to the loss in the HK company | (16.50%) | (16.50%) | (16.50%) |
PRC statutory income tax rate | 25.00% | 25.00% | 25.00% |
Effect of income tax exemptions and reliefs | (10.00%) | (11.63%) | (0.23%) |
Effect of additional deduction allowed for R&D expense | (2.74%) | ||
Effect of expenses not deductible for tax purposes | 0.81% | 0.05% | 7.79% |
Others | 2.45% | 4.97% | (0.18%) |
Total | 15.52% | 18.39% | 32.38% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes (Textual) | |||
HK tax rate | 16.50% | 16.50% | 16.50% |
Enterprise income tax rate | 25.00% | ||
Preferential tax rate | 15.00% | 15.00% | 15.00% |
Low-profit preferential income tax | 10.00% | 10.00% |
Statutory Reserves (Details)
Statutory Reserves (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory Reserves (Textual) | ||
Statutory reserves, description | The Company Law in the PRC, companies are required to set aside 10% of their after-tax profit to general reserves each year, based on the PRC accounting standards, until the cumulative total of such reserves reaches 50% of the registered capital. | |
Statutory reserves | $ 705,698 | $ 382,802 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Aug. 03, 2017 | Aug. 02, 2017 | Jun. 06, 2016 | Mar. 27, 2016 | Sep. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 02, 2015 |
Stockholders' Equity (Textual) | ||||||||
Issuance of common shares for cash | $ 7,111,325 | $ 5,323,026 | ||||||
Common share price per share | $ 1.88 | |||||||
Capital distribution in connection with acquisition of a subsidiary | $ (4,418,425) | |||||||
Ownership percentage | 100.00% | |||||||
Common stock, par value | $ 4.25 | $ 0.001 | $ 0.001 | |||||
Common stock, shares outstanding | 10,809,000 | 9,199,000 | ||||||
Jinzheng [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Capital distribution in connection with acquisition of a subsidiary | $ 4,418,425 | |||||||
Ownership percentage | 100.00% | 100.00% | 20.00% | |||||
Initial public offering [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Issuance of common shares for cash, Shares | 210,000 | 1,400,000 | ||||||
Issuance of common shares for cash | $ 966,000 | $ 6,145,325 | ||||||
Common share price per share | $ 5 | |||||||
Common stock, par value | $ 5 | $ 0.001 | ||||||
Common stock, shares outstanding | 9,199,000 | |||||||
Escrow deposit | $ 500,000 | |||||||
Initial potential amount non cash | 500,000 | |||||||
Amount of net proceeds | $ 6,100,000 | |||||||
Description of escrow account | The $6.1 million net proceeds, $500,000 was deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during an escrow period of two years following the closing date of August 2, 2017 and was presented as restricted cash, non-current, on the accompanying consolidated balance sheets. | |||||||
Six individuals and seven companies [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Issuance of common shares for cash, Shares | 8,117,000 | |||||||
Issuance of common shares for cash | $ 5,276,050 | |||||||
Three third party individuals [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Debt converted amount | $ 3,077,000 | |||||||
Debt converted shares | 724,000 | |||||||
Another third party individual [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Debt converted amount | $ 770,000 | |||||||
Debt converted shares | 275,000 | |||||||
Common stock, par value | $ 2.80 | |||||||
Incorporator [Member] | ||||||||
Stockholders' Equity (Textual) | ||||||||
Issuance of common shares for cash, Shares | 73,000 | 1,000 | ||||||
Issuance of common shares for cash | $ 47,450 | $ 10 | ||||||
Common stock, par value | $ 0.65 | $ 0.001 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||
Net income available to common shareholders for basic and diluted net income per common share | $ 2,590,931 | $ 2,433,720 | $ 945,577 |
Weighted average common shares outstanding - basic | 9,864,479 | 8,767,738 | 8,200,000 |
Effect of dilutive securities: | |||
Warrants Issued To Third Party | 960,087 | ||
Weighted average common shares outstanding - diluted | 9,864,479 | 8,767,738 | 9,160,087 |
Net income per common share - basic | $ 0.26 | $ 0.28 | $ 0.12 |
Net income per common share - diluted | $ 0.26 | $ 0.28 | $ 0.10 |
Earnings Per Share (Details Tex
Earnings Per Share (Details Textual) | Feb. 02, 2015USD ($) | Feb. 02, 2015CNY (¥) | Dec. 31, 2017$ / shares | Dec. 31, 2016$ / shares | Feb. 02, 2015CNY (¥) |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Warrants exercise price | $ 1.19 | $ 1.88 | |||
Bejjing Bangruisi Investment Co., Ltd. [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Loan borrowed amount | $ 2,310,643 | ¥ 15,000,000 | |||
Annual interest rate | 10.00% | 10.00% | |||
Percentage of equity interest | 5.00% | 5.00% | |||
Consideration of equity interest | $ 770,214 | ¥ 5,000,000 | |||
Jinzheng [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Convert to loan contributed capital | $ 2,310,643 | ¥ 15,000,000 | |||
Percentage of equity interest | 20.00% | 20.00% |
Concentrations of Credit Risk73
Concentrations of Credit Risk and Major Customers and Suppliers (Details) | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Concentration Risk [Line Items] | ||||||
Concentrations of credit risk, percentage | 10.00% | 10.00% | 10.00% | |||
Hezhong Qingyuan [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentrations of credit risk, percentage | 35.19% | 12.63% | [1] | |||
Jiangshan Town [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentrations of credit risk, percentage | 31.70% | [1] | [1] | |||
Beijing Aritime [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentrations of credit risk, percentage | 13.34% | [1] | [1] | |||
Blue Sky [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentrations of credit risk, percentage | [1] | 32.19% | [1] | |||
Dalian Yihe [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentrations of credit risk, percentage | [1] | 20.93% | [1] | |||
Mojie [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentrations of credit risk, percentage | [1] | [1] | 34.93% | |||
Heilongjiang Binteer [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Concentrations of credit risk, percentage | [1] | [1] | 17.40% | |||
[1] | Less than 10% |
Concentrations of Credit Risk74
Concentrations of Credit Risk and Major Customers and Suppliers (Details 1) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 10.00% | 10.00% | 10.00% |
Dalian Huarui [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 43.35% | 53.96% | |
Heilongjiang Binteer [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 45.31% |
Concentrations of Credit Risk75
Concentrations of Credit Risk and Major Customers and Suppliers (Details Textual) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 10.00% | 10.00% | 10.00% |
Customer [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 10.00% | 10.00% | 10.00% |
Suppliers [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 10.00% | 10.00% | 10.00% |
Accounts receivable [Member] | Jiangshan Town [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 47.40% | ||
Accounts receivable [Member] | Blue Sky [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 11.76% | 12.52% | |
Accounts receivable [Member] | Dalate Sino German Environmental Protection Science and Technology Co., Ltd [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 46.96% | ||
Accounts payable [Member] | Dalian Huarui [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 50.56% | 21.03% | |
Accounts payable [Member] | Qingdao Longde Water Affair Engineering Co., Ltd. [Member] | |||
Concentration Risk [Line Items] | |||
Concentrations of credit risk, percentage | 18.44% |
Segmental and Revenue Analysi76
Segmental and Revenue Analysis (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Net revenues | $ 25,339,497 | $ 11,985,055 | $ 3,318,833 |
Net revenues from related parties | 294,666 | 3,659,421 | |
Total revenues | 25,339,497 | 12,279,721 | 6,978,254 |
Products [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 4,000,940 | 8,855,284 | 25,010 |
Projects [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 13,343,223 | 3,129,771 | 3,293,823 |
Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues | 7,995,334 | ||
Products - related parties [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues from related parties | 294,666 | 3,590,812 | |
Projects - related parties [Member] | |||
Segment Reporting Information [Line Items] | |||
Net revenues from related parties | $ 68,609 |
Commitments and Contingencies77
Commitments and Contingencies (Details) | Dec. 31, 2017USD ($) |
Commitments and Contingencies [Abstract] | |
2,018 | $ 110,651 |
2,019 | |
2,020 | |
2,021 | |
2,022 | |
Thereafter | |
Total | $ 110,651 |
Commitments and Contingencies78
Commitments and Contingencies (Details Textual) | Feb. 28, 2015USD ($) | Feb. 28, 2015CNY (¥) | Nov. 30, 2017USD ($) | Nov. 30, 2017CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Commitments and Contingencies (Textual) | |||||||
Annual rent | $ 1,605 | ¥ 10,000 | |||||
Rent expense | $ 111,893 | $ 83,945 | $ 63,326 | ||||
Lease agreement, description | The lease started from March 1, 2015 with a term of three years. | The lease started from March 1, 2015 with a term of three years. | |||||
Plaintiff claimed total damages | $ 153,695 | ¥ 1,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2018USD ($) | Apr. 30, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Apr. 30, 2018CNY (¥) | |
Subsequent Events (Textual) | ||||||
Proceeds from related party | $ 2,558,661 | $ 478,969 | ||||
Subsequent Event [Member] | ||||||
Subsequent Events (Textual) | ||||||
Nominal interest rate | 6.00% | 6.00% | ||||
Equipment original costs | $ 6,629,000 | ¥ 43,131,575 | ||||
Security deposit | 461,000 | 3,000,000 | ||||
Debt issuance costs | 277,000 | ¥ 1,800,000 | ||||
Qingdao Metro Leasing Co., Ltd. [Member] | Subsequent Event [Member] | ||||||
Subsequent Events (Textual) | ||||||
Proceeds from related party | $ 4,611,000 | ¥ 30,000,000 |