Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Document Information Line Items | |
Entity Registrant Name | RETO ECO-SOLUTIONS, INC. |
Trading Symbol | RETO |
Document Type | 20-F |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 28,965,034 |
Amendment Flag | false |
Entity Central Index Key | 0001687277 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Dec. 31, 2021 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | true |
Entity Shell Company | false |
Entity Ex Transition Period | true |
ICFR Auditor Attestation Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Entity File Number | 001-38307 |
Entity Incorporation, State or Country Code | D8 |
Entity Address, Address Line One | c/o Beijing REIT Technology Development Co., Ltd. |
Entity Address, Address Line Two | X-702, Runfengdeshangyuan, 60 Anli Road |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | BeijingPeople’s Republic of China |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 100101 |
Title of 12(b) Security | Common shares, $0.001 par value per share |
Security Exchange Name | NASDAQ |
Entity Interactive Data Current | Yes |
Document Accounting Standard | U.S. GAAP |
Auditor Firm ID | 6781 |
Auditor Name | YCM CPA, Inc |
Auditor Location | Irvine, California |
Document Shell Company Report | false |
Business Contact | |
Document Information Line Items | |
Entity Address, Address Line One | c/o Beijing REIT Technology Development Co., Ltd. |
Entity Address, Address Line Two | X-702, Runfengdeshangyuan, 60 Anli Road |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | BeijingPeople’s Republic of China |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 100101 |
Contact Personnel Name | Hengfang Li |
City Area Code | (+86) |
Local Phone Number | 10-64827328 |
Contact Personnel Email Address | Email: ir@retoeco.com |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 457,495 | $ 1,058,138 |
Accounts receivable, net – third parties | 441,703 | 2,856,105 |
Accounts receivable, net - related party | 93,589 | 199,999 |
Advances to suppliers, net – third parties | 281,600 | 987,756 |
Advances to suppliers, net - related party | 3,842,620 | 4,034,124 |
Inventories, net | 463,731 | 420,017 |
Prepayments and other current assets | 389,864 | 1,297,344 |
Receivable from disposition - current | 7,059,559 | |
Prepayment for construction of properties | 1,073,100 | |
Current assets held for sale associated with discontinued operation | 1,352,927 | |
Total Current Assets | 13,030,161 | 13,279,510 |
Property, plant and equipment, net | 9,707,602 | 11,384,447 |
Intangible assets, net | 4,111,029 | 1,531,512 |
Long-term investment in equity investee | 2,758,228 | 2,836,050 |
Right-of-use assets | 278,269 | 364,226 |
Goodwill | 1,075,778 | |
Non-current assets held for sale associated with discontinued operation | 28,578,328 | |
Total Assets | 30,961,067 | 57,974,073 |
Current Liabilities: | ||
Short term loans | 2,353,500 | 6,478,088 |
Long term bank loans - current portion | 613,055 | |
Convertible debt | 1,645,000 | |
Advances from customers | 2,061,203 | 3,253,527 |
Advances from customers-related party | 2,177 | |
Deferred revenue | 30,660 | |
Deferred grants - current | 269,061 | |
Accounts payable | 2,121,313 | 502,043 |
Accounts payable - related party | 10,199 | 153,344 |
Accrued and other liabilities | 3,103,056 | 913,352 |
Loans from third-parties | 1,593,977 | 766,500 |
Taxes payable | 2,599,770 | 2,493,685 |
Due to related parties | 472,439 | 1,019,469 |
Operating lease liabilities, current | 155,857 | 114,161 |
Deferred tax liability | 370,856 | |
Current liabilities held for sale associated with discontinued operation | 6,654,725 | |
Total Current Liabilities | 16,756,231 | 22,994,786 |
Deferred grants - noncurrent | 490,560 | |
Operating lease liabilities - noncurrent | 120,558 | 241,606 |
Noncurrent liabilities held for sale associated with discontinued operation | 6,285,300 | |
Total Liabilities | 16,876,789 | 30,012,252 |
Commitments and Contingencies | ||
Stockholders’ Equity: | ||
Common Share, $0.001 par value, 200,000,000 shares authorized, 28,965,034 shares and 24,135,000 shares issued and outstanding as of December 31, 2021 and 2020, respectively | 28,966 | 24,135 |
Additional paid-in capital | 46,776,170 | 43,709,127 |
Statutory reserve | 1,230,387 | 2,386,119 |
Accumulated deficit | (33,347,984) | (17,245,453) |
Accumulated other comprehensive loss | (1,135,386) | (1,598,819) |
Total ReTo Eco-Solutions Inc. Shareholders’ Equity | 13,552,153 | 27,275,109 |
Noncontrolling interest | 532,125 | 686,712 |
Total Equity | 14,084,278 | 27,961,821 |
Total Liabilities and Equity | $ 30,961,067 | $ 57,974,073 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 28,965,034 | 24,135,000 |
Common stock, shares outstanding | 28,965,034 | 24,135,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Revenues – third party customers | $ 3,318,294 | $ 8,110,401 | $ 16,935,384 |
Revenues – related parties | 281,784 | 228,814 | 83,972 |
Total Revenues | 3,600,078 | 8,339,215 | 17,019,356 |
Cost of revenues – third party customers | 3,039,296 | 6,193,505 | 11,724,160 |
Cost of revenues – related parties | 175,053 | 148,034 | 54,598 |
Total cost of revenues | 3,214,349 | 6,341,539 | 11,778,758 |
Gross Profit | 385,729 | 1,997,676 | 5,240,598 |
Operating Expenses: | |||
Selling expenses | 826,242 | 1,085,602 | 951,532 |
General and administrative expenses | 4,619,058 | 3,971,496 | 3,277,357 |
Bad debt expenses | 2,250,334 | 909,931 | 4,636,443 |
Impairment of fixed assets | 4,344,133 | 2,267,485 | 674,501 |
Research and development expenses | 346,951 | 334,904 | 438,371 |
Total Operating Expenses | 12,386,718 | 8,569,418 | 9,978,204 |
Loss from Operations | (12,000,989) | (6,571,742) | (4,737,606) |
Other Income (Expenses): | |||
Interest expense | (103,340) | (857,551) | (691,833) |
Interest income | 1,898 | (64) | 4,262 |
Other income (expenses), net | (26,991) | 480,054 | 284,298 |
Loss from disposal of REIT Changjiang | (6,293,149) | ||
Gain from disposal of Gu’an REIT | 2,231,270 | ||
Share of losses in equity method investments | (142,673) | ||
Change in fair value convertible debt | (1,908,830) | ||
Total Other Income (Expenses), net | (8,473,085) | 1,853,709 | (403,273) |
Loss before provision for income taxes | (20,474,074) | (4,718,033) | (5,140,879) |
Provision for income taxes | 3,469 | 569,974 | 411,054 |
Net loss from continuing operations | (20,477,543) | (5,288,007) | (5,551,933) |
Net loss from discontinued operations, net of taxes | (1,596,390) | (7,612,601) | (9,545,316) |
Net Loss | (22,073,933) | (12,900,608) | (15,097,249) |
Less: net loss attributable to noncontrolling interest | (969,107) | (1,126,845) | (294,635) |
Net loss attributable to ReTo Eco-Solutions, Inc. | (21,104,826) | (11,773,763) | (14,802,614) |
Comprehensive Loss: | |||
Net Loss | (22,073,933) | (12,900,608) | (15,097,249) |
Other Comprehensive income (loss): | |||
Foreign currency translation adjustments | 493,769 | 1,923,316 | (576,743) |
Comprehensive Loss | (21,580,164) | (10,977,292) | (15,673,992) |
Less: comprehensive loss attributable to noncontrolling interest | (938,771) | (1,132,148) | (449,125) |
Comprehensive loss attributable to ReTo Eco-Solutions, Inc. | (20,641,393) | (9,845,144) | (15,224,867) |
Net loss attributable to ReTo Eco-Solutions, Inc. | |||
Continuing operations | (19,508,436) | (4,161,162) | (5,257,298) |
Discontinued operations | (1,596,390) | (7,612,601) | (9,545,316) |
Total | $ (21,104,826) | $ (11,773,763) | $ (14,802,614) |
Basic And Diluted Loss Per Share Attributable To Reto Eco-Solutions, Inc. | |||
Continuing operations (in Dollars per share) | $ (0.75) | $ (0.17) | $ (0.23) |
Discontinued operations (in Dollars per share) | (0.06) | (0.32) | (0.42) |
Total (in Dollars per share) | $ (0.81) | $ (0.49) | $ (0.65) |
Weighted average number of shares | |||
Basic and diluted (in Shares) | 26,160,750 | 24,124,884 | 22,888,219 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Common Stock | Additional paid-in Capital | Statutory Reserve | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Non controlling Interest | Total |
Balance at Dec. 31, 2019 | $ 23,160 | $ 42,725,852 | $ 2,632,797 | $ (5,718,368) | $ (3,527,438) | $ 1,818,860 | $ 37,954,863 |
Balance (in Shares) at Dec. 31, 2019 | 23,160,000 | ||||||
Net loss | (11,773,763) | (1,126,845) | (12,900,608) | ||||
Issuance of common shares for services | $ 685 | 650,065 | 650,750 | ||||
Issuance of common shares for services (in Shares) | 685,000 | ||||||
Issuance of common shares for services | $ 290 | 333,210 | 333,500 | ||||
Issuance of common shares for services (in Shares) | 290,000 | ||||||
Change in statutory reserve related to disposal of Gu’an REIT | (575,695) | 575,695 | |||||
Appropriation to statutory reserve | 329,017 | (329,017) | |||||
Foreign currency translation adjustments | 1,928,619 | (5,303) | 1,923,316 | ||||
Balance at Dec. 31, 2020 | $ 24,135 | 43,709,127 | 2,386,119 | (17,245,453) | (1,598,819) | 686,712 | 27,961,821 |
Balance (in Shares) at Dec. 31, 2020 | 24,135,000 | ||||||
Net loss | (21,104,826) | (969,107) | (22,073,933) | ||||
Common shares issued for conversion of debt | $ 3,756 | 3,926,244 | 3,930,000 | ||||
Common shares issued for conversion of debt (in Shares) | 3,755,034 | ||||||
Issuance of common shares for services | $ 1,075 | 1,413,562 | 1,414,637 | ||||
Issuance of common shares for services (in Shares) | 1,075,000 | ||||||
Appropriation to statutory reserve | 32,671 | (32,671) | |||||
Change in capital related to disposal of REIT Changjiang | (3,846,563) | 3,846,563 | |||||
Change statutory related to disposal of REIT Changjiang | (1,188,403) | 1,188,403 | |||||
Change in noncontroling interest related to acquisition subsidiaries of REIT Mingde | 784,184 | 784,184 | |||||
Share to be issued | 1,573,800 | 1,573,800 | |||||
Foreign currency translation adjustments | 463,433 | 30,336 | 493,769 | ||||
Balance at Dec. 31, 2021 | $ 28,966 | $ 46,776,170 | $ 1,230,387 | $ (33,347,984) | $ (1,135,386) | $ 532,125 | $ 14,084,278 |
Balance (in Shares) at Dec. 31, 2021 | 28,965,034 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (22,073,933) | $ (12,900,608) | $ (15,097,249) |
Less: net loss from discontinued operations | 1,596,390 | 7,612,601 | 9,545,316 |
Net loss from continuing operations | (20,477,543) | (5,288,007) | (5,551,933) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Loss from disposal of property and equipment | 4,466 | 88,312 | 5,044 |
Deferred tax provision (benefit) | 366,365 | 492,241 | |
Depreciation and amortization | 875,695 | 869,725 | 832,691 |
Change in fair value in convertible debt | 1,908,830 | ||
Accrued interest for convertible debt | 132,516 | ||
Impairment of fixed assets | 4,344,133 | 2,267,485 | 674,501 |
Stock-based compensation | 1,906,762 | 772,125 | 168,000 |
Change in bad debt allowances | 2,250,334 | 909,931 | 4,636,443 |
Change in inventory reserve | (119,995) | 123,280 | |
(Gain) loss from disposal of subsidiary | 6,293,149 | (2,231,270) | |
Shares of losses in equity method investments | 142,673 | ||
Amortization of operating lease right-of-use assets | 121,778 | 159,181 | 216,656 |
Changes in operating assets: | |||
Accounts receivable | 614,765 | 3,591,628 | (3,823,183) |
Accounts receivable - related party | 109,761 | 284,487 | (24,783) |
Advances to suppliers | 905,758 | 2,621,196 | (903,758) |
Advances to suppliers - related party | 282,773 | (3,810,445) | 151,052 |
Inventories | 167,336 | (58,308) | (21,835) |
Prepayments and other current assets | (128,130) | (742,853) | 775,626 |
Changes in operating liabilities: | |||
Advances from customers | (1,436,799) | 423,517 | 564,313 |
Advances from customers from related party | (2,201) | 2,056 | |
Deferred revenue | (31,000) | 25,051 | 3,910 |
Deferred grants | (230,197) | 463,360 | |
Accounts payable | 1,163,509 | (477,341) | 253,794 |
Accounts payable - related party | (144,969) | (1,352,618) | 942,176 |
Accrued and other liabilities | 997,686 | 1,088,452 | (1,771,331) |
Taxes payable | 76,419 | 698,905 | 247,686 |
Lease liability | (131,769) | (186,891) | (243,595) |
Net cash provided by (used in) operating activities from continuing operations | (37,895) | 240,958 | (2,376,285) |
Net cash provided by (used in) operating activities from discontinued operations | (2,726,347) | 6,990 | 2,463,119 |
Net cash provided by operating activities | (2,764,242) | 247,948 | 86,834 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from disposal of subsidiaries | 2,649,463 | 3,843,734 | |
Addition of property and equipment | (17,686) | (64,758) | (274,421) |
Investment in equity method investment | (2,649,840) | (28,960) | |
Prepayment on CIP | (2,552,958) | (283,098) | |
Advance payment from buyer associated with the discontinued operation of Gu’an REIT | 1,404,560 | ||
Net cash from acquisition subsidiaries of REIT Mingde | 21,339 | ||
Net cash provided by investing activities from continuing operations | 100,158 | 1,129,136 | 818,081 |
Net cash used in investing activities from discontinued operations | (1,843,757) | (184,735) | (891,716) |
Net cash provided by (used in) investing activities | (1,743,599) | 944,401 | (73,635) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from short-term bank loans | 2,325,000 | 11,012,040 | 8,977,600 |
Proceeds from long-term bank loans | 724,000 | ||
Repayment of short-term bank loans | (5,774,926) | (13,097,915) | (9,412,000) |
Repayment of long-term bank loans | (1,394,854) | (144,937) | |
Proceeds from third-party loans | 799,674 | 724,000 | |
Gross Proceeds from issuance of convertible debt | 3,666,171 | ||
Proceeds from related party loans | 483,510 | 669,089 | 795,200 |
Repayment to related party loans | (788,937) | (707,924) | (41,627) |
Net cash (used in) provided by financing activities from continuing operations | (684,362) | (1,545,647) | 1,043,173 |
Net cash (used in) provided by financing activities from discontinued operations | 4,732,509 | 367,808 | (1,590,656) |
Net cash (used in) financing activities | 4,048,147 | (1,177,839) | (547,483) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH | (203,651) | 120,615 | (43,167) |
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | (663,345) | 135,125 | (577,451) |
CASH AND RESTRICTED CASH, BEGINNING OF YEAR | 1,120,840 | 985,715 | 1,563,166 |
CASH AND RESTRICTED CASH, END OF YEAR | 457,495 | 1,120,840 | 985,715 |
Less: cash and cash equivalents, restricted cash of discontinued operations at end of period | 62,702 | 145,784 | |
Cash and cash equivalents, restricted cash of continued operation, at end of period | 457,495 | 1,058,138 | 839,931 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Interest paid | 990,580 | 1,505,452 | 1,557,186 |
Income tax paid | 3,268 | 128,522 | |
Non-Cash Investing Activities | |||
Right-of-assets obtained in exchange for operating lease obligations | 132,336 | 402,778 | 726,512 |
ROU assets offset with operating lease obligations due to lease cancellation | 64,230 | 410,614 | |
Addition to fixed assets through accounts payable | 206,486 | ||
Transfer from construction in progress to fixed assets | 283,098 | ||
Addition to account receivable from disposal of REIT Changjiang | 4,666,938 | ||
Non-Cash Financing Activities | |||
Common shares issued for conversion of debt | 3,930,000 | ||
Share to be issued for acquisition of REIT Mingde | $ 1,573,800 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Nature of Business [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS ReTo Eco-Solutions, Inc. (“ReTo”) is a business company established under the laws of the British Virgin Islands on August 7, 2015 as a holding company to develop business opportunities in the People’s Republic of China (the “PRC” or “China”). ReTo and its subdiaires are collectively referred to as the Company. ReTo, through its subsidiaries, is engaged in (i) manufacture and distribution of eco-friendly construction materials and equipment used for the production of these eco-friendly construction materials and related consultation and technological services; (ii) consultation, design, project implementation and construction of urban ecological protection projects; (iii) roadside assistance services; and (iv) software development services. As of December 31, 2021, the accompanying consolidated financial statements of the Company reflected the principal activities of the entities listed below. All inter-company balances and transactions have been eliminated upon consolidation. Name of the Entity Place of Ownership Percentage ReTo Eco-Solutions, Inc. British Virgin Islands Parent REIT Holdings (China) Limited (“REIT Holdings”) Hong Kong, China 100 % Beijing REIT Technology Development Co., Ltd. (“Beijing REIT”) Beijing, China 100 % Gu’an REIT Machinery Manufacturing Co., Ltd. (“Gu’an REIT”) (1) Gu’an, China - % REIT MingSheng Environment Protection Construction Materials (Changjiang) Co., Ltd. (“REIT Changjiang”) (2) Changjiang, China - % Beijing REIT Ecological Engineering Technology Co., Ltd. Beijing, China 100 % Hainan REIT Construction Engineering Co., Ltd. (“REIT Construction”) Haikou, China 100 % REIT New Materials Xinyi Co., Ltd. (“Xinyi REIT”) Xinyi, China 70 % Nanjing Dingxuan Environmental Protection Technology Development Co., Ltd. (“Dingxuan”) Nanjing, China 100 % REIT Q GREEN Machines Private Ltd (“REIT India”) India 51 % REIT Ecological Technology Co., Ltd. (“REIT Yancheng”) Yancheng, China 100 % Datong Ruisheng Environmental Engineering Co., Ltd. (“Datong Ruisheng”) Datong, China 100 % Guangling REIT Ecological Cultural Tourism Co., Ltd. Datong, China 100 % REIT (Xiong’an, Hebei) Eco Technology Co., Ltd. Xiong’an, China 100 % REIT Technology Development Co., Ltd (“REIT Technology”) Haikou, China 100 % Hainan REIT Mingde Investment Holding Co., Ltd(“REIT Mingde”) Haikou, China 100 % Yangpu Fangyuyuan United Logistics Co., Ltd. Haikou, China 100 % Hainan Kunneng Direct Supply Chain Management Co., Ltd. Haikou, China 51 % Hainan Yile IoT Technology Co., Ltd (“Hainan Yile IoT”) Haikou, China 61.6 % Hainan Yile IoV Technology Research Institute Co., Ltd, (“Yile Vehicles”) Haikou, China 90 % (1) On January 2, 2020, Beijing REIT sold its 100% equity interests in Gu’an REIT to Hebei Huishitong Technology Inc. After the transaction, the Company no longer owns any equity interest in Gu’an REIT as of the date of this report. (See Note 4—Discontinued operations.) (2) On November 12, 2021, the Company sold its 100% equity interests in REIT Changjiang to Zhixin Group (Hong Kong) Co., Ltd. and Xiamen Zhixin Building Materials Co., Ltd. After the transaction, the Company no longer owns any equity interest in REIT Changjiang as of the date of this report. (See Note 4—Discontinued operations.) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Discontinued operations On January 2, 2020, the Company discontinued the machinery and equipment manufacturing business under Gu’an REIT. A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. In the consolidated statements of operations and comprehensive loss, results from discontinued operations are reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. In order to present the financial effects of the continuing operations and discontinued operations, revenue and expenses arising from intra-group transactions are eliminated except for those revenue and expenses that are expected to continue after the disposal of the discontinued operations. On November 12, 2021, the Company discontinued the solid waste processing business under REIT Changjiang. A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. In the consolidated statements of operations and comprehensive loss, results from discontinued operations are reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. In order to present the financial effects of the continuing operations and discontinued operations, revenue and expenses arising from intra-group transactions are eliminated except for those revenue and expenses that are expected to continue after the disposal of the discontinued operations. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, inventories, advances to suppliers, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, revenue recognition under the input method, and realization of deferred tax assets. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand and cash deposited in major third-party payment processing platform such as Alipay. In addition, highly liquid investments which have original maturities of three months or less when purchased are classified as cash equivalents. The Company maintains most of the bank accounts in the PRC. On May 1, 2015, the PRC’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in the PRC are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company’s accounts, as its aggregate deposits are much higher than the compensation limit, which is RMB500,000 for one bank. Accounts Receivable, net Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually grants credit to customers with good credit standing with a maximum of 180 days and determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. Based on the assessment of customers’ credit and ongoing relationships, the Company’s payment terms typically range from 90 days to 1 year. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As affected by the ongoing COVID-19 pandemic, the Company’s accounts receivable collection was negatively affected. Based on subsequent collection analysis, the Company accrued increased bad debt reserve for the outstanding accounts receivable as of December 31, 2021. As a result, allowance for uncollectible balances amounted to $904,052 and $6,888,710 as of December 31, 2021 and 2020, respectively. Inventories Inventories are stated at the lower of cost or net realizable value. Costs include the cost of raw materials, freight, direct labor and related production overhead. The cost of inventories is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company evaluates inventories on a quarterly basis for its net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and future demand of each type of inventories. The Company recorded an inventory reserve of $12,116 and $130,516 from its continuing operations as of December 31, 2021 and 2020, respectively. Advances to Suppliers, net Advances to suppliers consist of balances paid to suppliers for services and materials that have not been provided or received. Advances to suppliers for service and material are short-term in nature. Advances to Suppliers are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. In addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful accounts by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances. Allowance for uncollectible balances from the continuing operations amounted to $965,843 and $1,112,373 as of December 31, 2021 and 2020, respectively. Property, Plant and Equipment Property and equipment are stated at cost. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows: Useful life Property and buildings 30–50 years Machinery equipment 5–15 years Transportation vehicles 5–10 years Office and electronic equipment 3–5 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. Construction-in-Progress (“CIP”) Construction-in-progress represents property and buildings under construction and consists of construction expenditures, equipment procurement, and other direct costs attributable to the construction. Construction-in-progress is not depreciated. Upon completion and ready for intended use, construction-in-progress is reclassified to the appropriate category within property, plant and equipment. Intangible Assets Intangible assets consist primarily of land use rights and software. Under the PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company. The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use rights are sometimes referred to informally as “ownership”. Land use rights are stated at cost less accumulated amortization. Intangible assets are amortized using the straight-line method with the following estimated useful lives: Items Useful life Land use rights 45-49 years Software 10 years Impairment of Long-lived Assets The Company reviews long-lived assets, including definitive-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. During the year ended December 31, 2019, the Company disposed of approximately $0.2 million of outdated and fully depreciated equipment and machinery. Given the Company’s net loss position in fiscal 2021, 2020 and 2019, the Company further assessed that the expected future cash flow generated from its machinery, equipment, and other long-lived assets would not recover their carrying value and as a result, the Company recorded an impairment of approximately $4.3 million, $2.3 million and $0.7 million on these fixed assets for the year ended December 31, 2021, 2020 and 2019, respectively, based on the fair value assessment provided by the third party valuation firm using the significant unobservable inputs. Long-term investment in Equity Investee The Company’s long-term investments include equity method investments and equity investments without readily determinable fair values. Investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC 323, Investments-Equity Method and Joint Ventures (“ASC 323”). Under the equity method, the Company initially records its investment at cost and the difference between the cost of the equity investee and the amount of the underlying equity in the net assets of the equity investee is accounted for as if the investee were a consolidated subsidiary. The share of earnings or losses of the investee are recognized in the consolidated statements of comprehensive loss. Equity method adjustments include the Company’s proportionate share of investee income or loss, adjustments to recognize certain differences between the Company’s carrying value and its equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. The Company assesses its equity investment for other-than-temporary impairment by considering factors as well as all relevant and available information including, but not limited to, current economic and market conditions, the operating performance of the investees including current earnings trends, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and cash burn rate and other company-specific information. Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the consolidated statements of comprehensive loss equal to the amount by which the carrying value exceeds the fair value of the investment. Prior to the adoption of ASU 2016-01 on January 1, 2019, these investments were accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment. As of December 31, 2019, the Company’s long term investment in equity investee balance consisted of (i) its $28,720 or 40% ownership interest in Inner Mongolia REIT Zhengbei Environment Technology Co. Ltd. (“REIT Zhengbei”) and (ii) nominal amount or 28.75% ownership interest in Yunnan Litu Ruima Biotechnology Co., Ltd (“Litu Ruima”). Both REIT Zhengbei and Litu Ruima were incorporated in 2019. The Company accounted for the above-mentioned investments using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over these equity investees. Since both REIT Zhengbei and Litu Ruima As of December 31, 2021 and 2020, the Company’s long term investment in equity investee balance represents its $2,758,228 and $2,836,050 or 41.67% equity investment in Shexian Ruibo Environmental Science and Technology Co., Ltd. (“Shexian Ruibo”). On September 7, 2020, the Company acquired such equity interest from an original shareholder of Shexian Ruibo. Shexian Ruibo manufactures and sells eco-friendly construction materials in the PRC. The Company accounted for the investments using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over the equity investee. Under the equity method, the Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the earnings or loss of the investee after the date of investment. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. For the year ended December 31, 2021 and 2020, the investment loss from Shexian Ruibo was $142,673 and nil The Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value. As of December 31, 2021 and 2020, the Company did not recognize any impairment on its equity investment. Leases The Company adopted ASU No. 2016-02—Leases (Topic 842) on January 1, 2019 using the modified retrospective transition method permitted under ASU No. 2018-11. This transition approach provides a method for recording existing leases only at the date of adoption and does not require previously reported balances to be adjusted. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. The standard did not materially impact our consolidated net earnings and cash flows. Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 - Quoted prices in active markets for identical assets and liabilities. ● Level 2 - Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The Company considers the recorded value of its financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, advance to suppliers, accounts payable, accrued and other liabilities, advances from customers, deferred revenue, taxes payable and due to related parties to approximate the fair value of the respective assets and liabilities at December 31, 2021 and 2020, based upon the short-term nature of the assets and liabilities. The Company believes that the carrying amount of the short-term and long-term borrowings approximates fair value at December 31, 2021 and 2020 based on the terms of the borrowings and current market rates as the rates of the borrowings are reflective of the current market rates. The Company elected the fair value option to account for its convertible debentures. The Company engaged an independent valuation firm to perform the valuation. The fair value of the convertible loans included in short term debts as of December 31, 2021 was $1,645,000 calculated using the binomial tree model. The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion. Refer to Note 14 for additional information. As the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a change in these inputs could result in a significant change in the fair value measurement. The following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2021: December 31, 2021 Opening balance $ - New convertible loans issued 3,533,654 Accrued interest 132,516 Loss on change in fair value of convertible loan 1,908,830 Conversion of convertible loans (3,930,000 ) Total $ 1,645,000 Revenue Recognition The Company adopted ASC Topic 606 Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018 using the modified retrospective approach. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company’s customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company’s revenues are primarily derived from the following sources: ● Revenue from machinery and equipment sales The Company recognizes revenue when the machinery and equipment is delivered and control is transferred. The Company generally provide a warranty for a period of 12 months after the customers receive the equipment. The Company determines that such product warranty is not a separated performance obligation because the nature of warranty is to provide assurance that a product will function as expected and in accordance with customer’s specification and the Company has not sold the warranty separately. From its past experience, the Company has not experienced any material warranty costs and, therefore, the Company does not believe an accrual for warranty cost is necessary for the years ended December 31, 2021, 2020 and 2019. ● Revenue from construction materials sales The Company recognizes revenue, net of sales taxes and estimated sales returns, when the construction materials are shipped to, delivered to or picked up by customers and control is transferred. ● Revenue from municipal construction projects The Company provides municipal construction services, also known as sponge city projects. The Company recognizes revenue associated with these contracts over time as service is performed and the transfer of control occurs, based on a percentage-of-completion method using cost-to-cost input methods as a measure of progress. When the percentage-of-completion method is used, the Company estimates the costs to complete individual contracts and records as revenue that portion of the total contract price that is considered complete based on the relationship of costs incurred to date to total anticipated costs (the cost-to-cost approach). Under the cost-to-cost approach, the use of estimated costs to complete each contract is a significant variable in the process of determining recognized revenue, requires judgment and can change throughout the duration of a contract due to contract modifications and other factors impacting job completion. The costs of earned revenue include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools and repairs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. ● Revenue from technological consulting and other services The Company recognizes revenue when technological consulting and other services are rendered and accepted by the customers. Contract assets and liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contact assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing of when an order is placed and when shipment or delivery occurs. As of December 31, 2021 and 2020, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. Disaggregation of Revenues The Company disaggregates its revenue from contracts by products and services, as we believe it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the years ended December 31, 2021, 2020 and 2019 is disclosed in Note 22. Shipping and Handling Shipping and handling costs are expensed as incurred and are included in operating expenses, as a part of selling, and general and administrative expenses, in the Company’s consolidated statements of income and comprehensive income. Shipping and handling costs associated with the Company’s continuing operations were $367,873, $216,301 and $194,492 for the years ended December 31, 2021, 2020 and 2019, respectively. Government grants Government grants represent cash subsidies received from PRC government or related institutions. Cash subsidies which have no defined rules and regulations to govern the criteria necessary for companies to enjoy the benefits are recognized as other income, net when received. Specific subsidies that local government has provided for a specific purpose, such as research and development are recorded as other non-current liabilities when received and recognized as other income or reduction of related expense when the specific performance is meet. As of December 31, 2020, the Company received related grants of $490,560 for a specific research and development project to be conducted during the period from 2021 to 2022. The Company recorded such grants as deferred grants on its consolidated balance sheet. As of December 31, 2021, the remaining balance was $269,061. Stock-based compensation The Company accounts for share-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”). In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or an equity award. All the Company’s share-based awards were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values. The Company has elected to recognize share-based compensation using the straight-line method for all share-based awards granted with graded vesting based on service conditions. The Company uses the accelerated method for all awards granted with graded vesting. The Company accounts for forfeitures as they occur in accordance with ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting. The Company, with the assistance of an independent third-party valuation firm, determined the fair value of the stock options granted to employees. The binomial option pricing model and Black-Scholes Model were applied in determining the estimated fair value of the options granted to employees and non-employees. Income Taxes The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. To the extent applicable, the Company records interest and penalties as a general and administrative expense. The Company’s subsidiaries in China and Hong Kong are subject to the income tax laws of the PRC and Hong Kong. No significant taxable income was generated outside the PRC for the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, the tax years ended December 31, 2017 through December 31, 2021 for the Company’s PRC subsidiaries remain open for statutory examination by PRC tax authorities. Value Added Tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, starting from April 1, 2019, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable net of payments in the accompanying consolidated financial statements. All of the VAT returns of the Company have been and remain subject to examination by the tax authorities for five years from the date of filing. Earnings (Loss) per Share The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended December 31, 2021, 2020 and 2019, the Company had no dilutive security outstanding that could potentially dilute EPS in the future. Foreign Currency Translation The Company’s principal country of operations is the PRC. The financial position and results of its operations located in PRC are determined using RMB, the local currency, as the functional currency. ReTo, REIT US and REIT Holdings use U.S. Dollars as their functional currency, while REIT India uses Indian rupee as the functional currency. The Company’s financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translatio |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Nature of Business [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN As reflected in the Company’s consolidated financial statements for the year ended December 31, 2021, the Company’s revenue decreased by approximately $4.7 million, or 57%, from approximately $8.3 million in the year ended December 31, 2020 to approximately $3.6 million in the year ended December 31, 2021, its gross profit from continued operation decreased by approximately $1.6 million, or 81%, from approximately $2.0 million in the year ended December 31, 2020 to approximately $0.4 million for the year ended December 31, 2021, and its gross margin for the year ended December 31, 2021 decreased to 11% from 24.0% for the last year. These decreases were mainly attributable to increasing raw material costs for manufacturing and decreasing sales of the Company’s construction materials, due to the Company’s failure to obtain bids for new municipal construction projects. In addition, for the year ended December 31, 2021 and 2020, the Company incurred significant impairment losses on bad debt expenses on uncollectible accounts receivable and advance payments due to changes in market conditions of its customers and suppliers. As a result, for the year ended December 31, 2021 and 2020, the Company reported a net loss of approximately $22.1 million and $12.9 million, respectively. As of December 31, 2021, the Company had a working capital deficit of approximately $3.7 million. In addition, the Company had large bank borrowings as of December 31, 2021 and some of the bank loans will mature and need to be repaid within the next 12 months. If the Company cannot renew existing loans or borrow additional loans from banks, the Company’s working capital may be further negatively impacted. Furthermore, in January 2020, the Company discontinued its machinery and equipment manufacturing business under Gu’an REIT (see Note 4), which may negatively impact the Company’s ability to fulfill customer orders if outsourcing of such manufacturing activities to third-party suppliers cannot meet the expectation or higher purchase costs may shrink the Company’s profitability in this business sector. The outbreak and spread of the COVID-19 throughout China and worldwide has caused significant volatility in the PRC and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the PRC and international economies. Based on the assessment of the current economic environment, customer demand, and sales trend, and the negative impact from COVID-19 outbreak and spread, there is an uncertainty that the Company’s revenue and operating cash flows may be significantly lower than expected for the next 12 months. As of December 31, 2021, the Company had cash of approximately $0.5 million. In addition, the Company had outstanding accounts receivable of approximately $0.5 million (including accounts receivable from third-party customers of $0.4 million and accounts receivable from related party customers of approximately $0.1 million), of which approximately $0.4 million, or 30%, had been subsequently collected between January and April 2022, and became available for use as working capital. As of December 31, 2021, the Company had outstanding bank loans of approximately $2.4 million from a PRC bank. On March 10, 2022, the Company entered into a securities purchase agreement with an accredited investor for the issuance of a Convertible Promissory Note (the “Note”) in the aggregate principal amount of $3,105,000 with a maturity date of twelve months after the payment of the purchase price for the Note, which will be converted into Company’s common shares. The Note carries an original issue discount of $90,000. In addition, the Company paid $15,000 to the investor to cover legal fees, accounting fees, due diligence etc. Management expects that it would be able to renew all of its existing bank loans upon their maturity based on past experience and the Company’s good credit history. Currently, the Company is working to improve its liquidity and capital source mainly through cash flow from its operations, renewal of bank borrowings, and borrowing from related parties. In order to fully implement its business plan and sustain continued growth, the Company may also seek equity financing from outside investors. At the present time, however, the Company does not have commitments of funds from any potential investors. No assurance can be given that additional financing, if required, would be available on favorable terms or at all. Based on above reasons, there is a substantial doubt about the Company’s ability to continue as a going concern for the next 12 months from the issuance of the consolidated financial statements. |
Discontinued Operation
Discontinued Operation | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operation [Abstract] | |
DISCONTINUED OPERATION | NOTE 4 – DISCONTINUED OPERATION The Company’s subsidiary Gu’an REIT was primarily engaged in manufacturing and distribution of machinery and equipment used for environmental-friendly construction materials production. On January 2, 2020, Beijing REIT signed a share transfer agreement with a third party - Hebei Huishitong Techonology Inc. (“Huishitong”) to sell 100% ownership interest in Gu’an REIT to Huishitong for a cash consideration of RMB39.9 million (approximately $5.7 million). As of December 31, 2019, the Company received RMB9.7 million (approximately $1.5 million) from Huishitong as an acquisition deposit. In 2020, the Company received an additional RMB26.6 million (approximately $4.1 million). In 2021, the Company received the remaining RMB3.6 million (approximately $0.6 million). The Company recorded a gain from the disposition of $2,231,270 for the year ended December 31, 2020. The Company’s subsidiary REIT Changjiang was primarily engaged in solid waste processing business. On November 12, 2021, the Company signed a share transfer agreement with Zhixin Group (Hong Kong) Co., Ltd. and Xiamen Zhixin Building Materials Co., Ltd. (collectively, “Zhixin”) to sell 100% ownership interest in REIT Changjiang to Zhixin for a cash consideration of RMB60.0 million (approximately $9.4 million). As of December 31, 2021, the Company received RMB15 million (approximately $2.1 million) from Zhixin. The Company recorded a loss from the disposition of $6,335,508 for the year ended December 31, 2021. The discontinued operation represents a strategic shift that has a major effect on the Company’s operations and financial results, which trigger discontinued operations accounting in accordance with ASC 205-20-45. The assets and liabilities related to the discontinued operations are classified as assets/liabilities held for sale as of December 31, 2021 and 2020, while results of operations related to the discontinued operations for the years ended December 31, 2021, 2020 and 2019, were reported as income (loss) from discontinued operations. The results of discontinued operations of Gu’an REIT for years ended December 31, 2021, 2020 and 2019 are as follows: For the Years Ended December 31, 2021 2020 2019 Revenue $ - $ - 5,303,071 Cost of revenues - - 4,475,590 Gross profit - - 827,481 Operating expenses - - 3,582,359 Loss from discontinued operations - - (2,754,878 ) Other income, net - - 10,762 Loss before tax - - (2,744,116 ) Income tax provision - - 57,015 Net loss from discontinued operations $ - $ - (2,801,131 ) The results of discontinued operations of REIT Changjiang for years ended December 31, 2021, 2020 and 2019 are as follows: For the Years Ended December 31, 2021 2020 2019 Revenue $ 886,571 $ 1,395,285 12,532,371 Cost of revenues 1,657,799 2,235,598 10,412,399 Gross loss (771,228 ) (840,313 ) 2,119,972 Operating expenses 829,049 6,036,039 7,716,269 Loss from discontinued operations (1,600,277 ) (6,876,352 ) (5,596,297 ) Other income (expense), net 4,375 (736,249 ) (552,037 ) Loss before tax (1,595,902 ) (7,612,601 ) (6,148,334 ) Income tax provision 488 - 595,851 Net loss from discontinued operations $ (1,596,390 ) $ (7,612,601 ) (6,744,185 ) Assets and liabilities of the discontinued operations of REIT Changjiang: As of December 31, 2021 2020 Cash $ - $ 62,702 Accounts receivable, net - 364,399 Accounts receivable-related party - 2,075 Advance to suppliers, net - 583,911 Prepaid expenses and other current assets - 29,650 Inventories - 310,190 Total current assets held for sale - 1,352,927 Property and equipment, net - 23,692,505 Intangible assets, net - 4,873,547 Right of use assets - 12,276 Total assets held for sale $ - $ 29,931,255 Short term bank loans, net $ - $ 183,960 Long term bank loans-current portion - 2,299,500 Advances from customers - 469,394 Deferred revenue - 478,637 Accounts payable - 356,234 Taxes payable - 152,920 Accrued liabilities and other payables - 2,957,292 Related parties balance - (254,936 ) Lease liability-current - 11,724 Total Current Liabilities held for sale - 6,654,725 Long term bank loans - 6,285,300 Total Liabilities held for sale $ - $ 13,414,041 |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2021 | |
Asset Acquisition [Abstract] | |
ACQUISITION | NOTE 5 – ACQUISITION On December 27, 2021, the Company entered into an acquisition agreement to acquire 100% equity interest in REIT Mingde and its subsidiaries from two unrelated parties for a consideration of $1,569,000 (or RMB 10 million). REIT Mingde, through its subsidiaries, is primarily engaged in providing roadside assistance services and software development services. The acquisition was completed on December 28, 2021 (the “acquisition date”). The Company believes the acquisition will expand the Company’s technology application in the transportation market. The operating results of REIT Mingde and its subsidiaries, which have been included in the Company’s consolidated financial statements since December 31, 2021, was insignificant. In lieu of cash consideration of RMB 10 million, the Company issued an aggregate of 2,580,000 common shares to the sellers, based on a price of $0.61 per share and the exchange rate of USD to RMB of 6.39 on February 22, 2022. The acquisition was accounted for as business combinations in accordance with ASC 805. The purchase price was RMB 10 million in cash. Acquisition-related costs incurred for the acquisitions are not material. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed for the acquired entities at the acquisition date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged by the Company: Amount Cash acquired $ 21,601 Other current assets 271,258 Total current assets 292,859 Property and equipment 7,731 Intangible assets, net 2,581,119 Goodwill 1,075,778 Total assets 3,957,487 Current liabilities 1,233,447 Deferred tax liability 370,856 Total liabilities 1,604,303 Non-controlling interest 784,184 Total consideration $ 1,569,000 Goodwill is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets, and comprise (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition. None of the goodwill is expected to be deductible for income tax purposes. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Receivable, Net [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 6 – ACCOUNTS RECEIVABLE, NET Accounts receivable consisted of the following: December 31, 2021 December 31, 2020 Trade accounts receivable from third-part customers $ 1,345,755 9,744,815 Less: allowances for doubtful accounts (904,052 ) (6,888,710 ) Total accounts receivable from third-party customers, net 441,703 2,856,105 Add: accounts receivable, net, related parties 93,589 199,999 Accounts receivable, net $ 535,292 3,056,104 Due to a change in market conditions as affected by the COVID-19 outbreak and spread, the Company’s collection efforts did not result in a favorable outcome as compared to prior years. Out of the Company’s accounts receivable balance from third party customers as of December 31, 2021, approximately $0.4 million, or 30% has been collected as of the date of this report and the remaining balance is expected to be substantially collected from customers before December 31, 2022. Allowance for doubtful accounts movement is as follows: December 31, 2021 December 31, 2020 Beginning balance $ 6,888,710 7,473,319 Bad debt provision 1,949,778 56,116 Write off (7,722,231 ) (1,130,710 ) Reduction due to divestitures (299,544 ) - Foreign exchange translation 87,339 489,985 Ending balance $ 904,052 6,888,710 Below is the aging schedule of accounts receivable as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Accounts Receivable Aging: Less than 3 months $ 294,481 2,305,868 From 4 to 6 months 197,465 667,018 From 7 to 9 months 28,134 318,357 From 10 to 12 months 107,317 88,056 Over 1 year 811,947 6,565,515 Bad debt reserve (904,052 ) (6,888,710 ) Accounts Receivable, net $ 535,292 3,056,104 |
Advances to Suppliers, Net
Advances to Suppliers, Net | 12 Months Ended |
Dec. 31, 2021 | |
Advances to Suppliers, Net [Abstract] | |
ADVANCES TO SUPPLIERS, NET | NOTE 7 – ADVANCES TO SUPPLIERS, NET Advances to suppliers include prepayments for raw materials used for production of construction materials for the Company’s construction projects, which consisted of the following: December 31, 2021 December 31, 2020 Raw material prepayments for equipment production $ 751,409 1,203,450 Land reclamation prepayments 472,640 469,460 Advances to construction subcontractors 23,394 427,219 Total: 1,247,443 2,100,129 Less: allowances for doubtful accounts (965,843 ) (1,112,373 ) Advances to suppliers, net, third parties $ 281,600 987,756 Our suppliers generally require refundable prepayments from us before delivery of goods or service. It usually takes 3 to 6 months for the suppliers to deliver raw material for our equipment production and takes up to 6 to 12 months for the suppliers to deliver the construction materials. The prepayment is necessary to secure the supply in the market or secure a favorable price. Out of the Company’s net advance to suppliers balance as of December 31, 2021, approximately $281,600 million, or 100 % has been realized as of the date of this report and the remaining balance is expected to be substantially realized before December 31, 2022. The changes of allowance for doubtful accounts for the years ended December 31, 2021 and 2020 are as follow: December 31, 2021 December 31, 2020 Beginning balance $ 1,112,374 439,738 Bad debt provision 259,861 636,625 Write off (428,553 ) - Foreign exchange translation 22,161 36,010 Ending balance $ 965,843 1,112,373 |
Inventories, Net
Inventories, Net | 12 Months Ended |
Dec. 31, 2021 | |
Inventories, Net [Abstract] | |
INVENTORIES, NET | NOTE 8 – INVENTORIES, NET Inventories, net, consisted of the following: December 31, 2021 December 31, 2020 Raw materials $ 135,049 128,833 Finished goods 340,798 421,700 Subtotal 475,847 550,533 Less: Inventory allowance (12,116 ) (130,516 ) Inventories, net $ 463,731 420,017 Inventories include raw material and finished goods. Finished goods include direct material costs, direct labor costs and manufacturing overhead. For the years ended December31, 2021, 2020 and 2019, the Company provided an inventory allowance (reversion) of $(119,995), 123,280 and Nil |
Prepayments and Other Current A
Prepayments and Other Current Assets | 12 Months Ended |
Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |
PREPAYMENTS AND OTHER CURRENT ASSETS | NOTE 9 – PREPAYMENTS AND OTHER CURRENT ASSETS The Company’s prepaid expenses and other current assets are as follows: December 31, 2021 December 31, 2020 Other receivable, net (1) $ 351,844 805,219 Prepaid expense - 492,125 Value added tax receivable 38,020 - Total $ 389,864 1,297,344 (1) Other receivables mainly consisted of advances to employees for business development purposes and prepaid employee insurance and welfare benefit which will be subsequently deducted from the employee’s payroll. |
Lease
Lease | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASE | NOTE 10 – LEASE The Company has several operating leases for manufacturing facilities and offices. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Rent expense for the years ended December 31, 2021, 2020 and 2019 was $283,168, $122,699 and $167,252, respectively. The Company’s operating leases primarily include leases for office space and manufacturing facilities. The current portion of operating lease liabilities and the non-current portion of operating lease liabilities are presented on the consolidated balance sheet. Total lease expense amounted to $283,168, which included $23,786 of interest, $176,049 of amortization expense of ROU assets and short-term lease expense of $83,333. Total cash paid for operating leases amounted to $195,521 for the year ended December 31, 2021. Supplemental balance sheet information related to operating leases is as follows: December 31, 2021 Right-of-use assets $ 278,269 Operating lease liabilities - current $ 155,857 Operating lease liabilities - non-current 120,558 Total operating lease liabilities $ 276,415 The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2021: Remaining lease term and discount rate: Weighted average remaining lease term (years) 1.4 Weighted average discount rate 7.42 % The following is a schedule of maturities of lease liabilities as of December 31, 2021: 2022 $ 168,307 2023 119,463 2024 - Total lease payments 287,770 Less: imputed interest 11,355 Present value of lease liabilities $ 276,415 |
Prepayment for Construction of
Prepayment for Construction of Properties | 12 Months Ended |
Dec. 31, 2021 | |
Prepayment for Construction of Properties [Abstract] | |
PREPAYMENT FOR CONSTRUCTION OF PROPERTIES | NOTE 11 – PREPAYMENT FOR CONSTRUCTION OF PROPERTIES During the year ended December 31, 2018, the Company made prepayments of $3,661,800 (RMB 25.5 million) to a subcontractor for the intended construction of manufacturing facilities for its newly established subsidiary REIT Yancheng. In 2019, based on current market conditions and the Company’s financial performance, the Company intends to terminate the contract with the subcontractor and request the full refund of the prepayment. The Company expects to receive a full refund from this subcontractor, as a result, the balance has been reclassified as current assets as of December 31, 2019. As of December 31, 2020, the remaining balance was $1,073,100, which was received in 2021. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment, Net [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 12 – PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following: December 31, 2021 December 31, 2020 Property and buildings $ 15,469,040 14,743,005 Machinery and equipment 1,594,701 1,547,258 Transportation vehicles 744,885 806,782 Office and electronic equipment 155,685 97,166 Subtotal 17,964,310 17,194,211 Construction in progress (“CIP”) 2,584,252 (308,732 ) Less: accumulated depreciation (3,255,669 ) (2,386,346 ) Impairment of fixed assets (7,585,291 ) (3,114,686 ) Property, plant and equipment, net $ 9,707,602 11,384,447 During the year ended December 31, 2019, the Company disposed of approximately $0.2 million of outdated and fully depreciated equipment and machinery. In addition, given the Company’s net loss position, the Company further assessed that the expected future cash flows may not cover the carrying value of the Company’s fixed asset equipment and machinery. As a result, the Company recorded an impairment of approximately $4.3 million, $2.3 million and $0.7 million on its fixed assets for the year ended December 31, 2021, 2020 and 2019. As of December 31, 2021 and 2020, the Company’s properties with an aggregate carrying value of approximately $0.2 million (RMB 1.1 million) and $1.2 million (RMB 8.6 million) have been used as collateral for the Company’s short-term loans (see Note 15). Depreciation expense was $838,583, $835,054 and $802,996 for the years ended December 31, 2021, 2020 and 2019, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2021 | |
Intangible Assets, Net [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 13 – INTANGIBLE ASSETS, NET Intangible assets, net consisted of the following: December 31, 2021 December 31, 2020 Land use rights $ 1,730,978 1,691,262 Software 29,472 28,796 Others 2,472,376 - Patent 124,277 - Total 4,357,104 1,720,058 Less: accumulated amortization (246,075 ) (188,546 ) Intangible assets, net $ 4,111,029 1,531,512 As of December 31, 2021 and 2020, land use rights of 74,278 and 74,278 square meters with a carrying value of approximately $1.5 million and $1.5 million, respectively, was pledged to the bank as collateral for the Company’s long-term bank loan (see Note 16). Amortization expense was $37,112, $34,671 and $29,695 for the years ended December 31, 2021, 2020 and 2019, respectively. Estimated future amortization expense is as follows: Twelve months ending December 31, Amortization 2022 $ 297,232 2023 297,232 2024 297,232 2025 297,232 2026 297,232 2027 and Thereafter 2,624,866 $ 4,111,029 |
Convertible Loans
Convertible Loans | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE LOANS | NOTE 14 – CONVERTIBLE LOANS March Debenture On March 1, 2021, the Company entered into a securities purchase agreement with an accredited investor (the “Debenture Holder”) for the issuance of a Convertible Debenture (the “March Debenture”) in the aggregate principal amount of up to $2,300,000 with a maturity date of twelve months after the issuance thereof, provided that in case of an event of default, the March Debenture may become at the Debenture Holder’s election immediately due and payable. In addition, the Company paid to an affiliate of the March Debenture Holder a fee equal to 3.5% of the amount of the Debenture and a one-time due diligence and structuring fee of $10,000 at the closing. The Debenture Holder may convert the March Debenture in its sole discretion to Company’s common shares at any time at the lower of $2.50 or 95% of the average of the two lowest daily VWAPs during the ten consecutive trading days immediately preceding the conversion date, provided that the conversion price may not be less than $0.50 (the “March Debenture Floor Price”). The Debenture Holder may not convert any portion of a Debenture if such conversion would result in the Debenture Holder beneficially owning more than 4.99% of Company’s then issued and common shares, provided that such limitation may be waived by the Debenture Holder with a 65 days’ notice. Any time after the issuance of the March Debenture that the daily VWAP is less than the March Debenture Floor Price for a period of 10 consecutive trading days (each such occurrence, a “March Debenture Triggering Event”) and only for so long as such conditions exist after a March Debenture Triggering Event, the Company shall make monthly payments beginning on the 30 th The Company has elected to recognize the March Debenture at fair value and therefore there was no further evaluation of embedded features for bifurcation. The March Debenture was fully converted into 2,369,501 common shares of the Company for the year ended December 31, 2021. July Debenture On July 6, 2021, the Company entered into another securities purchase with the Debenture Holder for the issuance of a Convertible Debenture (the “July Debenture”) in the aggregate principal amount of up to $2,500,000 with a maturity date of twelve months after the issuance thereof, provided that in case of an event of default, the July Debenture may become at the Debenture Holder’s election immediately due and payable. In addition, the Company paid to an affiliate of the Debenture Holder a fee equal to 3.5% of the amount of the July Debenture and a one-time due diligence and structuring fee of $5,000 at the closing. The Debenture Holder may convert the July Debenture in its sole discretion to Company’s common shares at any time at the lower of $1.50 or 95% of the average of the two lowest daily VWAPs during the ten consecutive trading days immediately preceding the conversion date, provided that the conversion price may not be less than $0.50 (the “July Debenture Floor Price”). The Debenture Holder may not convert any portion of the July Debenture if such conversion would result in the Debenture Holder beneficially owning more than 4.99% of Company’s then issued and common shares, provided that such limitation may be waived by the Debenture Holder with a 65 days’ notice. Any time after the issuance of the July Debenture that the daily VWAP is less than the July Debenture Floor Price for a period of 10 consecutive trading days (each such occurrence, a “July Debenture Triggering Event”) and only for so long as such conditions exist after a July Debenture Triggering Event, the Company shall make monthly payments beginning on the 30th day after the date of the July Debenture Triggering Event. Each monthly payment shall be in an amount equal to the sum of (i) the principal amount outstanding as of the date of the July Debenture Triggering Event divided by the number of such monthly payments until maturity, (ii) a redemption premium of 20% of such principal amount and (iii) accrued and unpaid interest hereunder as of each payment date. The principal balance of $1,130,000 of the July Debenture was converted into 1,385,533 common shares of the Company for the year ended December 31, 2021, and the remaining principal balance was $1,370,000. The fair value was $1,645,000 for the remaining balance. For the year ended December 31, 2021, due to change in fair value of convertible debentures, the Company recorded an unrealized loss of $1,908,830 in other expense. Interest expense recognized for these convertible debentures for the year ended December 31, 2021 were $132,516. |
Short-term Loans
Short-term Loans | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
SHORT-TERM LOANS | NOTE 15 – SHORT-TERM LOANS Short-term loans consisted of the following: December 31, 2021 December 31, 2020 Changjiang Li Autonomous County Rural Credit Cooperative Association(“CCCA”) (1) $ - $ 306,600 Hunyuan Rural Credit Cooperative Association (2) 784,500 766,500 Bank of Jiangsu (3) 784,500 766,500 Bank of Nanjing (4) - 1,533,000 Huaxia Bank (5) 784,500 3,105,488 Total $ 2,353,500 $ 6,478,088 (1) In December 2019, REIT Construction entered into a bank loan agreement with CCCA to borrow approximately $0.3 million (RMB 2 million) as working capital for six months. The loan bears a fixed interest rate of 8.5% per annum and is guaranteed by REIT Changjiang. The Company has reached agreement with HHMC to extend the loan to December 31, 2021 subsequently. The loan was fully repaid on September 15, 2021. (2) On December 10, 2020, Datong Ruisheng entered into a bank loan agreement with Hunyuan Rural Credit Cooperative Association to borrow approximately $0.8 million (RMB5 million) as working capital loan for a term from December 10, 2020 to December 8, 2021. The loan bears a fixed interest rate of 6.109% per annum. The loan is guaranteed by Beijing REIT. The Company fully repaid the loan in December 2021. Subsequent to the repayment, the Company signed another bank loan agreement with Hunyuan Rural Credit Cooperative Association to borrow $0.8 million (RMB5 million) on December 6, 2021 for a year with a fixed interest rate of 7.3590%. (3) On March 18, 2020, Xinyi REIT entered into a new line of credit agreement with Bank of Jiangsu. The agreement allows Xinyi REIT to obtain loans up to RMB5 million for use as working capital between March 18, 2020 and March 15, 2021. Pursuant to the line of credit agreement, Xinyi REIT entered into four loans in total of approximately $0.7 million (RMB5 million), each at an annual interest rate of 4.55% with Bank of Jiangsu. The loan is guaranteed by Mr. Huizhen Hou and Mr. Dapeng Zhou. Meanwhile, Xinyi REIT also pledged land use right of 74,254.61 square meters with carrying value of RMB 9.9 million (approximately $1.9 million) as collateral to safeguard the loan. The loans were renewed with new mature dates in September 2021. On September 3, 2021, Xinyi REIT entered into a new line of credit agreement with Bank of Jiangsu. The agreement allows Xinyi REIT to obtain loans up to RMB5 million for use as working capital between September 3, 2021 and August 26, 2022. The Company signed another bank loan agreement with Bank of Jiangsu to borrow $0.8 million (RMB5 million) on September 3, 2021 for a year with a monthly interest rate of 4.55%. (4) In January and March 2020, Beijing REIT entered into two loan agreements with Nanjing Bank to borrow approximately $1.4 million (RMB10 million). The loans had a term of 12 months and bore a fixed interest rate of 5.22% per annum. The loans were guaranteed by Financing Guaranty and the CEO and principal shareholders of the Company. The two loans were renewed in November and December 2020 with new mature dates of November 25, 2021 and December 2, 2021. The loans were fully repaid in November and December 2021. On November 19, 2021, Beijing REIT entered into another loan agreement with Nanjing Bank to borrow approximately $0.8 million (RMB5 million). The loan had a term of 12 months and bore a fixed interest rate of 5.655% per annum. The loan was guaranteed by Financing Guaranty and the CEO and principal shareholders of the Company. For the years ended December 31, 2021, 2020 and 2019, interest expense on all short-term loans amounted to $ 372,881, $473,845 and $609,097, respectively. |
Long Term Bank Loans
Long Term Bank Loans | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
LONG TERM BANK LOANS | NOTE 16 – LONG TERM BANK LOANS December 31, 2021 December 31, 2020 Long-term loans Dongfang Credit Cooperative Association (1) - 613,055 Subtotal - 613,055 Less: current portion of long-term loans - (613,055 ) Total $ - - (1) In March 2019, REIT Construction entered into a bank loan agreement with Dongfang Credit Cooperative Association to borrow approximately $0.7 million (RMB 5 million) as working capital for two years. The loan bore a fixed interest rate of 9.72% per annum. REIT Construction was required to repay RMB 2 million on March 26, 2020 and RMB 3 million on March 26, 2021. The loan was guaranteed by the Company’s Chief Executive Officer and his wife. The Company had repaid $143,600 (RMB 1 million) before September 24, 2020. On September 24, 2020, REIT Construction obtained approval from Dongfang Credit Cooperative Association and amended the repayment schedule to defer the repayment terms of the other $143,600 (RMB 1 million) in fiscal year 2020 and the loan was repaid in August 2021. For the years ended December 31, 2021, 2020 and 2019, interest on the Company’s long-term bank loans amounted to nil, $90,074 and $ $52,389, respectively. |
Loans from Third Parties
Loans from Third Parties | 12 Months Ended |
Dec. 31, 2021 | |
Loans From Third Parties [Abstract] | |
LOANS FROM THIRD PARTIES | NOTE 17 – LOANS FROM THIRD PARTIES Loans from third parties December 31, 2021 December 31, 2020 Sanya Guohong Municipal Projects Construction Co., Ltd. $ 627,600 $ 766,500 Changshu Tongjiang Engineering Co., Ltd. 219,660 - Zhang Miao 156,900 - Pen Jing 156,900 - Chen Guo 66,399 - Chai Guirong 313,800 - Hainan Boxinda Science Technology Partnership 52,718 - Total $ 1,593,977 $ 766,500 On May 9, 2021, Beijing REIT obtained a working capital loan of $766,500 from Sanya Guohong Municipal Projects Construction Co., Ltd. The loan was from May 9, 2021 to May 8, 2022 and interest-free. After partial repayment, the loan balance was $627,600 as of December 31, 2021. On July 29, 2021, Beijing REIT obtained a working capital loan of $219,660 from Changshu Tongjiang Engineering Co., Ltd. The loan is from July 29, 2021 to July 28, 2022 and interest-free. On February 8, 2021, Beijing REIT obtained a working capital loan of $156,900 from Zhang Miao. The loan is from February 8, 2021 to February 7, 2022 and interest-free. On August 1, 2021, Hainan Yile IoT obtained a working capital loan of $156,900 from Pen Jing. The loan is from August 1, 2021 to January 31, 2022 and bears an annual interest of 1%. On October 21, 2021, Hainan Yile IoT obtained a working capital loan of $66,399 from Chen Guo. The loan is from October 21, 2020 to January 20, 2022 and bears an annual interest of 1%. On August 2, 2021, Hainan Yile IoT obtained a working capital loan of $313,800 from Chai Guirong. The loan is due on demand and bears an annual interest of 1%. On July 4, 2021, Yile Vehicles obtained a working capital loan of $52,718 from Hainan Boxinda Science Technology Partnership. The loan is from July 4, 2021 to July 3, 2022 and interest-free. |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
TAXES | NOTE 18 – TAXES (a) Corporate income taxes The Company is subject to income taxes on an entity basis on income arising in or derived from the location in which each entity is domiciled. ReTo was incorporated in the British Virgin Islands and is exempt from paying income tax. REIT Holdings is registered in Hong Kong as a holding company. The Company’s operating subsidiaries were all incorporated in the PRC and are subject to PRC income tax, which is computed according to the relevant laws and regulations in the PRC. Under the Enterprise Income Tax Law of PRC, the corporate income tax rate applicable to all companies, including both domestic and foreign-invested companies, is 25%. However, Beijing REIT is recognized as a High-New Technology Enterprise by PRC government and subject to a favorable income tax rate of 15%. The following table reconciles income tax expense by statutory rate to the Company’s actual income tax expense: For the Years Ended December 31, 2021 2020 2019 Income tax expense computed based on PRC statutory income tax rate $ (5,118,519 ) $ (1,179,508 ) $ (1,285,220 ) Effect of favorable income tax rate in certain entity in PRC 889,716 (164,071 ) 255,213 Non-PRC entities not subject to PRC tax (1) 1,564,644 401,488 262,045 Research & Development (“R&D”) tax credit (2) (260,213 ) (251,178 ) (328,778 ) Non-deductible expenses - permanent difference (3) 588,191 826,034 730,909 Change in valuation allowance 2,339,650 937,209 776,885 Effective tax rate 3,469 569,974 411,054 (1) Represents the tax losses incurred from operations outside of China. (2) According to PRC tax regulations, 175% of current year R&D expense approved by the local tax authority may be deducted from tax income. (3) Represents expenses incurred by the Company that were not deductible for PRC income tax. The breakdown of the Company’s income (loss) before income tax provision is as follows: For the Years Ended December 31, 2021 2020 2019 Loss before income tax expense from China (13,889,029 ) (3,280,706 ) $ (4,221,025 ) Loss before income tax expense from outside of China (6,585,045 ) (1,437,326 ) (919,854 ) Total loss before income tax provision (20,474,074 ) (4,718,032 ) $ (5,140,879 ) Loss before income tax expense from outside of China represents the losses incurred in ReTo, REIT Holdings, REIT India and REIT US, which are mainly holding companies incorporated outside of China. The income tax provision (benefit) for the years ended December 31, 2021, 2020 and 2019 was as follows: For the Years ended December 31, 2021 2020 2019 Current 3,469 569,974 $ - Deferred - - 411,054 Total 3,469 569,974 $ 411,054 Deferred income taxes reflect the net effects of temporary difference between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes. The Company periodically evaluates the likelihood of the realization of deferred tax assets and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Due to continuous losses incurred, the Company provided full allowance on the deferred tax assets as of December 31, 2021 and 2020. Deferred tax asset December 31 2021 December 31 2020 Provision of doubtful accounts $ 323,107 $ (59,643 ) Tax loss carried forwards 4,482,385 547,220 Valuation allowance on tax losses (4,805,492 ) (487,578 ) $ - $ - (b) VAT The Company is subject to VAT for selling products in China. The applicable VAT rate is 13% for products sold in the PRC. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of the PRC, the Company pays VAT based on tax invoices issued. (c) Taxes Payable The Company’s taxes payable consists of the following: December 31, December 31, 2021 2020 VAT tax payable $ 422,678 $ 330,966 Corporate income tax payable 2,156,850 2,146,610 Land use tax and other taxes payable 20,242 16,108 Total $ 2,599,770 $ 2,493,685 As of December 31, 2021 and 2020, the Company had tax payables of approximately $2.6 million and $2.5 million, respectively, mostly related to the unpaid income tax and business tax in China. For the years ended December 31, 2021 and 2020, the Company has not received any penalty and interest charge notice from local tax authorities. Due to uncertainties associated with the status of examinations, including the protocols of finalizing audits by the relevant tax authorities, there is a high degree of uncertainty regarding the future cash outflows associated with these unpaid tax balances. The final outcome of this tax uncertainty is dependent upon various matters including tax examinations, interpretation of tax laws or expiration of the statute of limitations. The Company believes it is likely that the Company can reach an agreement with the local tax authority to fully settle its tax payables in a short term but cannot guarantee such settlement will ultimately occur. As of December 31, 2021 and 2020, the Company had accrued tax liabilities of approximately $2.6 million and $2.5 million, respectively, mostly related to the unpaid income tax and business tax in China. According to PRC taxation regulation, if tax has not been fully paid, tax authorities may impose tax and late payment penalties within three years. In practice, the local tax authority is typically more flexible and willing to provide incentives or settlements with local small and medium-size businesses to relieve their burden and to stimulate the local economy. Management has discussed with local tax authorities regarding the outstanding tax payable balance and is in the process of negotiating a settlement plan agreement. Local tax authorities have not made a determination as of December 31, 2021. Therefore, there was no interest and penalty accrued as of December 31, 2021 because the Company has not received any penalty and interest charge notice from local tax authorities. The Company believes it is likely that the Company can reach an agreement with the local tax authority to fully settle its tax liabilities within fiscal 2021 but cannot guarantee such settlement will ultimately occur. |
Commitments and Contigencies
Commitments and Contigencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTIGENCIES | NOTE 19– COMMITMENTS AND CONTIGENCIES Contingencies From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The majority of these claims and proceedings are related to, or arise from, lease disputes, commercial disputes, worker compensation complaints, default on guaranteeing third-party lease obligations, and default on loans. The Company first determines whether a loss from a claim is probable, and if it is reasonable to estimate the potential loss, the loss will be accrued. The Company discloses a range of possible losses, if a loss from a claim is probable but the amount of loss cannot be reasonably estimated. Contractual commitments As of December 31, 2021, the Company’s contractual obligations consisted of the following: Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than Operating lease commitment $ 287,770 168,307 119,463 - $ - Repayment of bank loans 2,353,500 2,353,500 - - - Total $ 2,641,270 2,521,807 119,463 - $ - |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 20– RELATED PARTY TRANSACTIONS The Company records transactions with various related parties. These related party balances as of December 31, 2021 and 2020 and transactions for the years ended December 31, 2021, 2020 and 2019 are identified as follows: (1) Related parties with transactions and related party relationships Name of Related Party Relationship to the Company Mr. Hengfang Li Chief Executive Officer and Chairman of the Board of Directors Ms. Hong Ma Wife of Mr. Hengfang Li Reto International Trading Co. Ltd The owner of the entity holds more than 5% of the Company’s outstanding common shares Q Green Techcon Private Limited Owned by the minority shareholder of REIT India Shexian Ruibo The Company owns 41.67% ownership interest in Shexian Ruibo Zhongrong Honghe Eco Construction Materials Co., Ltd An entity controlled by Ms. Hong Ma Hunyuan Baiyang Food Co., Ltd. An entity controlled by Mr. Hengfang Li Bei Qi Yin Jian Yi Le (Haikou) Smart Move Science Technology Co., Ltd. Hainan Yile IoT owns 45% ownership interest in this company Zhongtou REIT Information Service (Beijing) Co., Ltd An entity controlled by Mr. Xinyang Li and Ms. Xinran Li, children of Mr. Hengfang Li Handan Ruisheng Construction Material Technology Co., Ltd. An entity controlled by Shexian Ruibo (2) Due to related parties As of December 31, 2021 and 2020, the balance of due to related parties was as follows: December 31, 2021 December 31, 2020 Mr. Hengfang Li $ 472,439 $ 1,019,469 Mr. Hengfang Li is the Chief Executive Officer and major shareholder of the Company. Mr. Li periodically provides working capital loans to support the Company’s operations when needed. Such advances were non-interest bearing and due on demand. (3) Accounts receivable from related parties Accounts receivable from related parties consisted of the following: December 31, 2021 December 31, 2020 Accounts receivable – related party Reto International Trading Co. Ltd $ - $ 199,999 Q Green Techcon Private Limited 2,981 - Hunyuan Baiyang Food Co., Ltd. 40,088 - Bei Qi Yin Jian Yi Le (Haikou) Smart Move Science Technology Co., Ltd. 50,520 - Total accounts receivable from related party $ 93,589 $ 199,999 The Company fully collected the accounts receivable as of December 31, 2021 from related parties as of the date of this report. (4) Advance to suppliers, related party Advance to suppliers, related party, consisted of the following: December 31, 2021 December 31, 2020 Advance to supplier – related party Shexian Ruibo* $ 3,656,118 $ 3,872,110 Q Green Techcon Private Limited 174,099 162,014 Handan Ruisheng Construction Material Technology Co., Ltd. 12,403 - Total $ 3,842,620 $ 4,034,124 * The balance represents the Company’s purchase advances for eco-friendly materials and equipment supplied by Shexian Ruibo. (5) Accounts payable to related parties Accounts payables to related parties consisted of the following: December 31, 2021 December 31, 2020 Accounts payable – related part - Q Green Techcon Private Limited $ - $ - - Shexian Ruibo. - 153,344 - Zhongtou Ruitu Information Service (Beijing) Co., Ltd 10,199 Total $ 10,199 $ 153,344 (6) Sales to related parties Sales to related parties consisted of the following: For the Years Ended December 31, 2021 2020 2019 Sales to related parties Hunyuan Baiyang Food Co., Ltd. - - 83,972 Shexian Ruibo 61,177 - - Q Green Techcon Private Limited 220,607 228,814 - Total $ 281,784 $ 228,814 $ 83,972 Cost of revenue associated with the sales to these related parties amounted to $175,053, $148,034 and $54,598 for the years ended December 31, 2021, 2020, and 2019, respectively. (7) Purchases from related parties Purchases from related parties consisted of the following: For the years ended December 31, 2021 2020 2019 Purchase from a relate party Q Green Techcon Private Limited. $ 228,838 $ 1,039,152 $ - Shexian Ruibo 235,946 1,837,841 2,021,934 Total $ 464,784 $ 2,876,993 $ 2,021,934 (8) Other related party transactions On September 7, 2020, Beijing REIT entered into a share transfer agreement with the original shareholder of Shexian Ruibo for the acquisition of a 41.67% ownership interest in Shexian Ruibo for a total consideration of $3.6 million (RMB 25 million), including a cash payment of $2.8 million (RMB 18.5 million) and a non-cash contribution of six patents valued at $0.9 million (RMB 6.5 million). The cash consideration was fully paid for the year ended December 31, 2020. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | NOTE 21 EQUITY Statutory reserve The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The restricted amounts as determined pursuant to PRC statutory laws totaled $1,230,387 and $2,386,119 as of December 31, 2021 and 2020. Shares issuances The Company is a company limited by shares established under the laws of the British Virgin Islands with 200,000,000 common shares authorized at $0.001 par value. As of December 31, 2021 and 2020, 28,965,034 and 24,135,000 common shares were issued and outstanding. On September 5, 2019, the Company entered into a consulting service agreement with FirstTrust Group, Inc. (“FirstTrust”), pursuant to which FirstTrust would assist the Company with strategic initiatives over the service period from August 16, 2019 to August 15, 2020. The Company issued 400,000 common shares valued at $448,000 based on the fair market price of the Company’s common shares, at $1.12 per share on September 5, 2019. The stock-based compensation is amortized over the service period. The Company recognized stock-based compensation expenses of nil Pursuant to the Company’s 2018 Share Incentive Plan, on January 22, 2020, the Company’s board of directors approved the issuance of an aggregate of 685,000 common shares of the Company with a fair value of $650,750 based on the Company’s share price of $0.95 per share at the grant date, as stock-based compensation to its directors and executives in exchange for their services for the period from January 1, 2020 to December 31, 2021. For the years ended December 31, 2021 and 2020, the Company recognized stock-based compensation expenses of $325,375 and $325,375, respectively. In addition, on February 3, 2020, the Company’s board of directors further approved the issuance of 290,000 common shares of the Company with a fair value of $333,500 based on the Company’s share price of $1.15 per share at the grant date, to award certain employees and one officer, in exchange for their services during the period from January 1, 2020 to December 31, 2021. For the years ended December 31, 2021 and 2020, the Company recognized stock-based compensation expenses of $166,750 and $166,750, respectively. In April 2021, the Company entered into a consulting service agreement with Geniusland International Capital Ltd., (“Geniusland”) Pursuant to the agreement, Geniusland will assist the Company with strategic initiatives over the service period between January 23, 2021 to January 24, 2024. For the first year service, the Company issued 1,000,000 common shares valued at $1,330,000 based on fair market price of the Company’s common shares, at $1.33 per share on April 9, 2021. Stock-based compensation is amortized over the service period. For the year ended December 30, 2021, the Company recognized stock-based compensation expenses of $1,330,000. Number of Weighted Nonvested as of December 31, 2020 - - Granted 1,000,000 $ 1,330,000 Vested - - Nonvested as of December 31, 2021 1,000,000 $ 1,330,000 On May 11, 2021, the Company issued 75,000 common Shares to Yorkville Advisors Global LP for services rendered in connection with Company’s corporate strategy on the Nasdaq Stock Market. For the year ended December 31, 2021, the Company recognized stock-based compensation expenses of $84,637. Conversion of convertible debentures For the year ended December 31, 2021, the Company issued an aggregate of 3,755,034 common shares for conversion of convertible debentures based on the conversion price ranging from $0.97-$1.11. (see Note 14). |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 22 – SEGMENT REPORTING ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. 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. Management, including the chief operating decision maker, reviews operation results by the revenue of different products or services. Based on management’s assessment, the Company has determined that it has four operating segments as defined by ASC 280, including machinery and equipment, construction material, municipal construction projects, and technology consulting and other services. Construction material segment manufactures and sells eco-friendly construction material. Machinery and equipment segment manufactures and sells machinery and equipment used to manufacture construction material. Construction service segment generates revenue from contracting municipal construction projects. Technological consulting service segment generates revenue from providing environmental-protection related consulting services to customers. The following table presents summary information by segments for the Company’s continuing operations for the years ended December 31, 2021, 2020 and 2019, respectively: For the Year Ended December 31, 2021 Machinery and Equipment sales Construction materials sales Municipal construction projects Technological consulting and other services Total Revenues $ 1,799,741 $ 1,658,385 $ 141,952 $ - $ 3,600,078 Cost of goods sold 1,501,420 1,562,975 149,954 - 3,214,349 Gross profit 298,321 95,410 (8,002 ) - 385,729 Interest expense and charges 132,136 (121,449 ) 77,153 15,500 103,340 Depreciation and amortization 167,468 705,703 2,524 - 875,695 Capital expenditures 14,463 2,556,181 - - 2,570,644 Income tax expenses 3,469 - - - 3,469 Segment loss (12,497,629 ) (7,804,642 ) (37,782 ) (137,491 ) (20,477,543 ) Segment assets $ 12,742,545 $ 12,646,798 $ 98,625 $ 5,473,099 $ 30,961,067 For the Year Ended December 31, 2020 Machinery and Equipment sales Construction materials sales Municipal construction projects Technological consulting and other services Total Revenues $ 6,455,995 $ 1,776,525 $ 106,695 $ - $ 8,339,215 Cost of goods sold 4,429,869 1,901,060 10,610 - 6,341,539 Gross profit 2,026,126 (124,535 ) 96,085 - 1,997,676 Interest expense and charges 672,778 48,719 136,054 - 857,551 Depreciation and amortization 164,538 701,077 4,110 - 869,725 Capital expenditures 6,900 57,858 - - 64,758 Income tax expenses 569,974 - - - 569,974 Segment loss (725,938 ) (4,300,671 ) (261,398 ) - (5,288,007 ) Segment assets $ 16,389,063 41,233,143 347,917 3,950 57,974,073 For the Year Ended December 31, 2019 Machinery and Equipment sales Construction materials sales Municipal construction projects Technological consulting and other services Total Revenues $ 14,022,053 $ 2,818,317 $ 178,986 $ - $ 17,019,356 Cost of goods sold 9,415,826 2,323,157 39,775 - 11,778,758 Gross profit 4,606,227 495,160 139,211 - 5,240,598 Interest expense and charges 633,482 949 52,922 4,480 691,833 Depreciation and amortization 175,142 648,852 8,697 - 832,691 Capital expenditures 443,070 95,526 18,923 - 557,519 Income tax expenses 389,874 ) 21,180 - - 411,054 Segment profit (loss) (3,004,956 ) (1,189,802 ) (304,433 ) (1,052,742 ) (5,551,933 ) Segment assets 19,150,283 $ 51,280,426 $ 356,424 $ 8,111 $ 70,795,244 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 23 – SUBSEQUENT EVENTS On March 10, 2022, the Company entered into a securities purchase agreement with an accredited investor for the issuance of the Note in the aggregate principal amount of $3,105,000 with a maturity date of twelve months after the payment of the purchase price of the Note , which Note will be converted into Company’s common shares. The Note carries an original issue discount of $90,000. In addition, the Company paid $15,000 to the investor to cover legal fees, accounting fees, due diligence etc. On April 8, 2022, the Company signed an agreement with the minority shareholder of Xinyi REIT. Pursuant to the agreement, the Company agreed to purchase the minority shareholder’s 30% equity interest in Xinyi REIT for an aggregated consideration of RMB18 million which is payable in four installments of RMB 4 million, RMB 4 million, RMB 5 million, and RMB 5 million by the end of April, 2022, June 2022, September 2022, and December 2022, respectively. On April 22, 2022, the Company’s board of directors approved the issuance of an aggregate of 1,025,000 Common Shares to its employees for their services under the 2018 Share Incentive Plan; and also approved the issuance of an aggregate of 3,000,000 Common Shares to its employees, officers and directors for their services under the 2021 Share Incentive Plan, both of which were registered under the registration statement on Form S-8 which was filed with the SEC on April 26, 2022. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Discontinued operations | Discontinued operations On January 2, 2020, the Company discontinued the machinery and equipment manufacturing business under Gu’an REIT. A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. In the consolidated statements of operations and comprehensive loss, results from discontinued operations are reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. In order to present the financial effects of the continuing operations and discontinued operations, revenue and expenses arising from intra-group transactions are eliminated except for those revenue and expenses that are expected to continue after the disposal of the discontinued operations. On November 12, 2021, the Company discontinued the solid waste processing business under REIT Changjiang. A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. In the consolidated statements of operations and comprehensive loss, results from discontinued operations are reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. In order to present the financial effects of the continuing operations and discontinued operations, revenue and expenses arising from intra-group transactions are eliminated except for those revenue and expenses that are expected to continue after the disposal of the discontinued operations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, inventories, advances to suppliers, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, revenue recognition under the input method, and realization of deferred tax assets. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents represent cash on hand and cash deposited in major third-party payment processing platform such as Alipay. In addition, highly liquid investments which have original maturities of three months or less when purchased are classified as cash equivalents. The Company maintains most of the bank accounts in the PRC. On May 1, 2015, the PRC’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in the PRC are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company’s accounts, as its aggregate deposits are much higher than the compensation limit, which is RMB500,000 for one bank. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually grants credit to customers with good credit standing with a maximum of 180 days and determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. Based on the assessment of customers’ credit and ongoing relationships, the Company’s payment terms typically range from 90 days to 1 year. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As affected by the ongoing COVID-19 pandemic, the Company’s accounts receivable collection was negatively affected. Based on subsequent collection analysis, the Company accrued increased bad debt reserve for the outstanding accounts receivable as of December 31, 2021. As a result, allowance for uncollectible balances amounted to $904,052 and $6,888,710 as of December 31, 2021 and 2020, respectively. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Costs include the cost of raw materials, freight, direct labor and related production overhead. The cost of inventories is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company evaluates inventories on a quarterly basis for its net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and future demand of each type of inventories. The Company recorded an inventory reserve of $12,116 and $130,516 from its continuing operations as of December 31, 2021 and 2020, respectively. |
Advances to Suppliers, net | Advances to Suppliers, net Advances to suppliers consist of balances paid to suppliers for services and materials that have not been provided or received. Advances to suppliers for service and material are short-term in nature. Advances to Suppliers are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. In addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful accounts by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances. Allowance for uncollectible balances from the continuing operations amounted to $965,843 and $1,112,373 as of December 31, 2021 and 2020, respectively. |
Property, Plant and Equipment | Property, Plant and Equipment Property and equipment are stated at cost. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows: Useful life Property and buildings 30–50 years Machinery equipment 5–15 years Transportation vehicles 5–10 years Office and electronic equipment 3–5 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. |
Construction-in-Progress (“CIP”) | Construction-in-Progress (“CIP”) Construction-in-progress represents property and buildings under construction and consists of construction expenditures, equipment procurement, and other direct costs attributable to the construction. Construction-in-progress is not depreciated. Upon completion and ready for intended use, construction-in-progress is reclassified to the appropriate category within property, plant and equipment. |
Intangible Assets | Intangible Assets Intangible assets consist primarily of land use rights and software. Under the PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company. The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use rights are sometimes referred to informally as “ownership”. Land use rights are stated at cost less accumulated amortization. Intangible assets are amortized using the straight-line method with the following estimated useful lives: Items Useful life Land use rights 45-49 years Software 10 years |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company reviews long-lived assets, including definitive-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. During the year ended December 31, 2019, the Company disposed of approximately $0.2 million of outdated and fully depreciated equipment and machinery. Given the Company’s net loss position in fiscal 2021, 2020 and 2019, the Company further assessed that the expected future cash flow generated from its machinery, equipment, and other long-lived assets would not recover their carrying value and as a result, the Company recorded an impairment of approximately $4.3 million, $2.3 million and $0.7 million on these fixed assets for the year ended December 31, 2021, 2020 and 2019, respectively, based on the fair value assessment provided by the third party valuation firm using the significant unobservable inputs. |
Long-term investment in Equity Investee | Long-term investment in Equity Investee The Company’s long-term investments include equity method investments and equity investments without readily determinable fair values. Investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC 323, Investments-Equity Method and Joint Ventures (“ASC 323”). Under the equity method, the Company initially records its investment at cost and the difference between the cost of the equity investee and the amount of the underlying equity in the net assets of the equity investee is accounted for as if the investee were a consolidated subsidiary. The share of earnings or losses of the investee are recognized in the consolidated statements of comprehensive loss. Equity method adjustments include the Company’s proportionate share of investee income or loss, adjustments to recognize certain differences between the Company’s carrying value and its equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. The Company assesses its equity investment for other-than-temporary impairment by considering factors as well as all relevant and available information including, but not limited to, current economic and market conditions, the operating performance of the investees including current earnings trends, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and cash burn rate and other company-specific information. Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the consolidated statements of comprehensive loss equal to the amount by which the carrying value exceeds the fair value of the investment. Prior to the adoption of ASU 2016-01 on January 1, 2019, these investments were accounted for using the cost method of accounting, measured at cost less other-than-temporary impairment. As of December 31, 2019, the Company’s long term investment in equity investee balance consisted of (i) its $28,720 or 40% ownership interest in Inner Mongolia REIT Zhengbei Environment Technology Co. Ltd. (“REIT Zhengbei”) and (ii) nominal amount or 28.75% ownership interest in Yunnan Litu Ruima Biotechnology Co., Ltd (“Litu Ruima”). Both REIT Zhengbei and Litu Ruima were incorporated in 2019. The Company accounted for the above-mentioned investments using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over these equity investees. Since both REIT Zhengbei and Litu Ruima As of December 31, 2021 and 2020, the Company’s long term investment in equity investee balance represents its $2,758,228 and $2,836,050 or 41.67% equity investment in Shexian Ruibo Environmental Science and Technology Co., Ltd. (“Shexian Ruibo”). On September 7, 2020, the Company acquired such equity interest from an original shareholder of Shexian Ruibo. Shexian Ruibo manufactures and sells eco-friendly construction materials in the PRC. The Company accounted for the investments using equity method, because the Company has significant influence but does not own a majority equity interest or otherwise control over the equity investee. Under the equity method, the Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the earnings or loss of the investee after the date of investment. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. For the year ended December 31, 2021 and 2020, the investment loss from Shexian Ruibo was $142,673 and nil The Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value. As of December 31, 2021 and 2020, the Company did not recognize any impairment on its equity investment. |
Leases | Leases The Company adopted ASU No. 2016-02—Leases (Topic 842) on January 1, 2019 using the modified retrospective transition method permitted under ASU No. 2018-11. This transition approach provides a method for recording existing leases only at the date of adoption and does not require previously reported balances to be adjusted. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. The standard did not materially impact our consolidated net earnings and cash flows. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 - Quoted prices in active markets for identical assets and liabilities. ● Level 2 - Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The Company considers the recorded value of its financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, advance to suppliers, accounts payable, accrued and other liabilities, advances from customers, deferred revenue, taxes payable and due to related parties to approximate the fair value of the respective assets and liabilities at December 31, 2021 and 2020, based upon the short-term nature of the assets and liabilities. The Company believes that the carrying amount of the short-term and long-term borrowings approximates fair value at December 31, 2021 and 2020 based on the terms of the borrowings and current market rates as the rates of the borrowings are reflective of the current market rates. The Company elected the fair value option to account for its convertible debentures. The Company engaged an independent valuation firm to perform the valuation. The fair value of the convertible loans included in short term debts as of December 31, 2021 was $1,645,000 calculated using the binomial tree model. The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion. Refer to Note 14 for additional information. As the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a change in these inputs could result in a significant change in the fair value measurement. The following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2021: December 31, 2021 Opening balance $ - New convertible loans issued 3,533,654 Accrued interest 132,516 Loss on change in fair value of convertible loan 1,908,830 Conversion of convertible loans (3,930,000 ) Total $ 1,645,000 |
Revenue Recognition | Revenue Recognition The Company adopted ASC Topic 606 Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018 using the modified retrospective approach. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company’s customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company’s revenues are primarily derived from the following sources: ● Revenue from machinery and equipment sales The Company recognizes revenue when the machinery and equipment is delivered and control is transferred. The Company generally provide a warranty for a period of 12 months after the customers receive the equipment. The Company determines that such product warranty is not a separated performance obligation because the nature of warranty is to provide assurance that a product will function as expected and in accordance with customer’s specification and the Company has not sold the warranty separately. From its past experience, the Company has not experienced any material warranty costs and, therefore, the Company does not believe an accrual for warranty cost is necessary for the years ended December 31, 2021, 2020 and 2019. ● Revenue from construction materials sales The Company recognizes revenue, net of sales taxes and estimated sales returns, when the construction materials are shipped to, delivered to or picked up by customers and control is transferred. ● Revenue from municipal construction projects The Company provides municipal construction services, also known as sponge city projects. The Company recognizes revenue associated with these contracts over time as service is performed and the transfer of control occurs, based on a percentage-of-completion method using cost-to-cost input methods as a measure of progress. When the percentage-of-completion method is used, the Company estimates the costs to complete individual contracts and records as revenue that portion of the total contract price that is considered complete based on the relationship of costs incurred to date to total anticipated costs (the cost-to-cost approach). Under the cost-to-cost approach, the use of estimated costs to complete each contract is a significant variable in the process of determining recognized revenue, requires judgment and can change throughout the duration of a contract due to contract modifications and other factors impacting job completion. The costs of earned revenue include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools and repairs. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. ● Revenue from technological consulting and other services The Company recognizes revenue when technological consulting and other services are rendered and accepted by the customers. |
Contract assets and liabilities | Contract assets and liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contact assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing of when an order is placed and when shipment or delivery occurs. As of December 31, 2021 and 2020, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. |
Disaggregation of Revenues | Disaggregation of Revenues The Company disaggregates its revenue from contracts by products and services, as we believe it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the years ended December 31, 2021, 2020 and 2019 is disclosed in Note 22. |
Shipping and Handling | Shipping and Handling Shipping and handling costs are expensed as incurred and are included in operating expenses, as a part of selling, and general and administrative expenses, in the Company’s consolidated statements of income and comprehensive income. Shipping and handling costs associated with the Company’s continuing operations were $367,873, $216,301 and $194,492 for the years ended December 31, 2021, 2020 and 2019, respectively. |
Government grants | Government grants Government grants represent cash subsidies received from PRC government or related institutions. Cash subsidies which have no defined rules and regulations to govern the criteria necessary for companies to enjoy the benefits are recognized as other income, net when received. Specific subsidies that local government has provided for a specific purpose, such as research and development are recorded as other non-current liabilities when received and recognized as other income or reduction of related expense when the specific performance is meet. As of December 31, 2020, the Company received related grants of $490,560 for a specific research and development project to be conducted during the period from 2021 to 2022. The Company recorded such grants as deferred grants on its consolidated balance sheet. As of December 31, 2021, the remaining balance was $269,061. |
Stock-based compensation | Stock-based compensation The Company accounts for share-based compensation in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”). In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or an equity award. All the Company’s share-based awards were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values. The Company has elected to recognize share-based compensation using the straight-line method for all share-based awards granted with graded vesting based on service conditions. The Company uses the accelerated method for all awards granted with graded vesting. The Company accounts for forfeitures as they occur in accordance with ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting. The Company, with the assistance of an independent third-party valuation firm, determined the fair value of the stock options granted to employees. The binomial option pricing model and Black-Scholes Model were applied in determining the estimated fair value of the options granted to employees and non-employees. |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. To the extent applicable, the Company records interest and penalties as a general and administrative expense. The Company’s subsidiaries in China and Hong Kong are subject to the income tax laws of the PRC and Hong Kong. No significant taxable income was generated outside the PRC for the years ended December 31, 2021, 2020 and 2019. As of December 31, 2021, the tax years ended December 31, 2017 through December 31, 2021 for the Company’s PRC subsidiaries remain open for statutory examination by PRC tax authorities. |
Value Added Tax (“VAT”) | Value Added Tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, starting from April 1, 2019, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable net of payments in the accompanying consolidated financial statements. All of the VAT returns of the Company have been and remain subject to examination by the tax authorities for five years from the date of filing. |
Earnings (Loss) per Share | Earnings (Loss) per Share The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended December 31, 2021, 2020 and 2019, the Company had no dilutive security outstanding that could potentially dilute EPS in the future. |
Foreign Currency Translation | Foreign Currency Translation The Company’s principal country of operations is the PRC. The financial position and results of its operations located in PRC are determined using RMB, the local currency, as the functional currency. ReTo, REIT US and REIT Holdings use U.S. Dollars as their functional currency, while REIT India uses Indian rupee as the functional currency. The Company’s financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions are included in the results of operations. The value of RMB against US$ and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s financial condition in terms of US$ reporting. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: December 31, December 31, December 31, Year-end spot rate US$1=RMB 6.3726 US$1=RMB 6.5250 US$1=RMB 6.9618 Average rate US$1=RMB 6.4508 US$1=RMB 6.9042 US$1=RMB 6.9081 |
Risks and Uncertainties | Risks and Uncertainties The main operation of the Company is located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results. The coronavirus disease 2019 (“COVID-19”) pandemic has, and continues to have, a severe and negative impact on the PRC and the global economy. The Company’s business has been negatively impacted by the COVID-19 pandemic. From late January 2020 through March 2020, the Company had to temporarily suspend the manufacturing activities due to government restrictions. During the temporary business closure period, employees had very limited access to our manufacturing facilities and the shipping companies were not available and as a result, the Company experienced difficulty delivering the products to customers on a timely basis. In addition, due to the COVID-19 outbreak, some of the Company’s customers or suppliers experienced financial distress, delayed or defaulted on their payments, reduced the scale of their business, or suffered disruptions in their business due to the outbreak. Any increased difficulty in collecting accounts receivable, delayed raw materials supply, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations. Our production and sales activities from our continuing operations returned to normal after the spread of COVID-19 had been substantially controlled in China in late 2020. However, since 2021, there has been a resurgence of COVID-19 cases caused by new variants such as Delta and Omicron in multiple cities in China, as well as across the world. Restrictions have been re-imposed in certain cities to combat such outbreaks and emerging variants of the virus. The COVID-19 pandemic has had a significant impact on the construction sector, which is sensitive to economic cycles. The nature of the impacts and extent of the ramifications are in large part dependent upon the location of the underlying projects. Direct impacts have ranged from a slowdown of available materials and labor through to suspensions and, in some instances, deferral and suspension of entire projects. COVID-19 had an significant impact on the Company’s financial results for the years ended December 31, 2021 and 2020. The extent to which the COVID-19 pandemic may impact the Company’ future financial results will depend on future developments, such as new information on the effectiveness of the mitigation strategies, the duration, spread, severity, and recurrence of COVID-19 and any COVID-19 variants, the related travel advisories and restrictions, the overall impact of the COVID-19 pandemic on the global economy and capital markets, and the efficacy of COVID-19 vaccines, which may also take extended time to be widely and adequately distributed, all of which remain highly uncertain and unpredictable. Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its future operations, financial condition, liquidity, and results of operations. |
Reclassifications | Reclassifications In connection with the discontinued operations of a business, certain prior-year amounts have been reclassified for consistency with the current-year presentation. These reclassifications had no effect on the reported results of operations. The assets and liabilities related to the discontinued operations are classified as assets/liabilities held for sale as of December 31, 2021 and 2020, while results of operations related to the discontinued operations, including comparatives, were reported as losses from discontinued operations. Certain prior-year balance sheet accounts have been reclassified to conform to the current-year presentation. |
Concentrations and Credit Risk | Concentrations and Credit Risk A majority of the Company’s transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance. As of December 31, 2021 and 2020, $357,462 and $969,817 of the Company’s cash and cash equivalents was on deposit at financial institutions in the PRC. These deposits were insured per PRC’s new Deposit Insurance Regulation for up to RMB500,000 for one bank. In addition, as of December 31, 2021 and 2020, $52,727 and $63,603 of the Company’s cash and cash equivalents was on deposit at financial institutions in the Republic of India (“India”) which is insured under the Deposit Insurance and Credit Guarantee Corporation for up to 100,000 Indian Rupee (approximately $1,403). For the year ended December 31, 2021, one customer accounted for 11% of the Company’s total revenue. For the year ended December31, 2020 and 2019, no single customer accounted for more than 10% of the Company’s total revenue. As of December 31, 2021, one customer accounted for 15% of the Company’s consolidated accounts receivable. As of December 31, 2020 no single customer accounted for more than 10% of the Company’s consolidated accounts receivable. For the years ended December 31, 2021, 2020 and 2019, the Company purchased approximately 53%, 43% and 25% of its raw materials from one major supplier, respectively. As of December 31, 2021, one supplier accounted for 47% of the total accounts payable balance. As of December 31, 2020, two suppliers accounted for 25% and 20% of the total accounts payable balance, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 was subsequently amended by Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Accounting Standards Update 2019-04 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, and Accounting Standards Update 2019-05, Targeted Transition Relief. For public entities, ASU 2016-13 and its amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, this guidance and its amendments will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. As an emerging growth company, the Company plans to adopt this guidance effective January 1, 2023. The Company is currently evaluating the impact of its pending adoption of ASU 2016-13 on its consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU 2020-01”), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company beginning January 1, 2021. The ASU did not have a significant impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for the Group on January 1, 2022, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Group is currently evaluating the impact of the adoption of ASU 2020-06 on its consolidated financial statements. Except for the above-mentioned pronouncements, there are no recently issued accounting standards that will have a material impact on the audited consolidated financial position, statements of operations, and cash flows of the Company. |
Organization and Description _2
Organization and Description of Business (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Nature of Business [Abstract] | |
Schedule of all inter-company balances and transactions | Name of the Entity Place of Ownership Percentage ReTo Eco-Solutions, Inc. British Virgin Islands Parent REIT Holdings (China) Limited (“REIT Holdings”) Hong Kong, China 100 % Beijing REIT Technology Development Co., Ltd. (“Beijing REIT”) Beijing, China 100 % Gu’an REIT Machinery Manufacturing Co., Ltd. (“Gu’an REIT”) (1) Gu’an, China - % REIT MingSheng Environment Protection Construction Materials (Changjiang) Co., Ltd. (“REIT Changjiang”) (2) Changjiang, China - % Beijing REIT Ecological Engineering Technology Co., Ltd. Beijing, China 100 % Hainan REIT Construction Engineering Co., Ltd. (“REIT Construction”) Haikou, China 100 % REIT New Materials Xinyi Co., Ltd. (“Xinyi REIT”) Xinyi, China 70 % Nanjing Dingxuan Environmental Protection Technology Development Co., Ltd. (“Dingxuan”) Nanjing, China 100 % REIT Q GREEN Machines Private Ltd (“REIT India”) India 51 % REIT Ecological Technology Co., Ltd. (“REIT Yancheng”) Yancheng, China 100 % Datong Ruisheng Environmental Engineering Co., Ltd. (“Datong Ruisheng”) Datong, China 100 % Guangling REIT Ecological Cultural Tourism Co., Ltd. Datong, China 100 % REIT (Xiong’an, Hebei) Eco Technology Co., Ltd. Xiong’an, China 100 % REIT Technology Development Co., Ltd (“REIT Technology”) Haikou, China 100 % Hainan REIT Mingde Investment Holding Co., Ltd(“REIT Mingde”) Haikou, China 100 % Yangpu Fangyuyuan United Logistics Co., Ltd. Haikou, China 100 % Hainan Kunneng Direct Supply Chain Management Co., Ltd. Haikou, China 51 % Hainan Yile IoT Technology Co., Ltd (“Hainan Yile IoT”) Haikou, China 61.6 % Hainan Yile IoV Technology Research Institute Co., Ltd, (“Yile Vehicles”) Haikou, China 90 % |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of the assets | Useful life Property and buildings 30–50 years Machinery equipment 5–15 years Transportation vehicles 5–10 years Office and electronic equipment 3–5 years |
Schedule of intangible assets are amortized using the straight-line method with the following estimated useful lives | Items Useful life Land use rights 45-49 years Software 10 years |
Schedule of reconciliation of the beginning and ending balances for convertible loans | December 31, 2021 Opening balance $ - New convertible loans issued 3,533,654 Accrued interest 132,516 Loss on change in fair value of convertible loan 1,908,830 Conversion of convertible loans (3,930,000 ) Total $ 1,645,000 |
Schedule of currency exchange rates that were used in creating the consolidated financial statements | December 31, December 31, December 31, Year-end spot rate US$1=RMB 6.3726 US$1=RMB 6.5250 US$1=RMB 6.9618 Average rate US$1=RMB 6.4508 US$1=RMB 6.9042 US$1=RMB 6.9081 |
Discontinued Operation (Tables)
Discontinued Operation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operation [Abstract] | |
Schedule of discontinued operations | For the Years Ended December 31, 2021 2020 2019 Revenue $ - $ - 5,303,071 Cost of revenues - - 4,475,590 Gross profit - - 827,481 Operating expenses - - 3,582,359 Loss from discontinued operations - - (2,754,878 ) Other income, net - - 10,762 Loss before tax - - (2,744,116 ) Income tax provision - - 57,015 Net loss from discontinued operations $ - $ - (2,801,131 ) For the Years Ended December 31, 2021 2020 2019 Revenue $ 886,571 $ 1,395,285 12,532,371 Cost of revenues 1,657,799 2,235,598 10,412,399 Gross loss (771,228 ) (840,313 ) 2,119,972 Operating expenses 829,049 6,036,039 7,716,269 Loss from discontinued operations (1,600,277 ) (6,876,352 ) (5,596,297 ) Other income (expense), net 4,375 (736,249 ) (552,037 ) Loss before tax (1,595,902 ) (7,612,601 ) (6,148,334 ) Income tax provision 488 - 595,851 Net loss from discontinued operations $ (1,596,390 ) $ (7,612,601 ) (6,744,185 ) |
Schedule of assets and liabilities of the discontinued operations | As of December 31, 2021 2020 Cash $ - $ 62,702 Accounts receivable, net - 364,399 Accounts receivable-related party - 2,075 Advance to suppliers, net - 583,911 Prepaid expenses and other current assets - 29,650 Inventories - 310,190 Total current assets held for sale - 1,352,927 Property and equipment, net - 23,692,505 Intangible assets, net - 4,873,547 Right of use assets - 12,276 Total assets held for sale $ - $ 29,931,255 Short term bank loans, net $ - $ 183,960 Long term bank loans-current portion - 2,299,500 Advances from customers - 469,394 Deferred revenue - 478,637 Accounts payable - 356,234 Taxes payable - 152,920 Accrued liabilities and other payables - 2,957,292 Related parties balance - (254,936 ) Lease liability-current - 11,724 Total Current Liabilities held for sale - 6,654,725 Long term bank loans - 6,285,300 Total Liabilities held for sale $ - $ 13,414,041 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Asset Acquisition [Abstract] | |
Schedule of acquisition was accounted for as business combinations | Amount Cash acquired $ 21,601 Other current assets 271,258 Total current assets 292,859 Property and equipment 7,731 Intangible assets, net 2,581,119 Goodwill 1,075,778 Total assets 3,957,487 Current liabilities 1,233,447 Deferred tax liability 370,856 Total liabilities 1,604,303 Non-controlling interest 784,184 Total consideration $ 1,569,000 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Receivable, Net [Abstract] | |
Schedule of accounts receivable | December 31, 2021 December 31, 2020 Trade accounts receivable from third-part customers $ 1,345,755 9,744,815 Less: allowances for doubtful accounts (904,052 ) (6,888,710 ) Total accounts receivable from third-party customers, net 441,703 2,856,105 Add: accounts receivable, net, related parties 93,589 199,999 Accounts receivable, net $ 535,292 3,056,104 |
Schedule of allowance for doubtful accounts | December 31, 2021 December 31, 2020 Beginning balance $ 6,888,710 7,473,319 Bad debt provision 1,949,778 56,116 Write off (7,722,231 ) (1,130,710 ) Reduction due to divestitures (299,544 ) - Foreign exchange translation 87,339 489,985 Ending balance $ 904,052 6,888,710 |
Schedule of accounts receivable | December 31, 2021 December 31, 2020 Accounts Receivable Aging: Less than 3 months $ 294,481 2,305,868 From 4 to 6 months 197,465 667,018 From 7 to 9 months 28,134 318,357 From 10 to 12 months 107,317 88,056 Over 1 year 811,947 6,565,515 Bad debt reserve (904,052 ) (6,888,710 ) Accounts Receivable, net $ 535,292 3,056,104 |
Advances to Suppliers, Net (Tab
Advances to Suppliers, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Advances to Suppliers, Net [Abstract] | |
Schedule of advances to suppliers | December 31, 2021 December 31, 2020 Raw material prepayments for equipment production $ 751,409 1,203,450 Land reclamation prepayments 472,640 469,460 Advances to construction subcontractors 23,394 427,219 Total: 1,247,443 2,100,129 Less: allowances for doubtful accounts (965,843 ) (1,112,373 ) Advances to suppliers, net, third parties $ 281,600 987,756 |
Schedule of changes of allowance for doubtful accounts | December 31, 2021 December 31, 2020 Beginning balance $ 1,112,374 439,738 Bad debt provision 259,861 636,625 Write off (428,553 ) - Foreign exchange translation 22,161 36,010 Ending balance $ 965,843 1,112,373 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventories, Net [Abstract] | |
Schedule of inventories, net | December 31, 2021 December 31, 2020 Raw materials $ 135,049 128,833 Finished goods 340,798 421,700 Subtotal 475,847 550,533 Less: Inventory allowance (12,116 ) (130,516 ) Inventories, net $ 463,731 420,017 |
Prepayments and Other Current_2
Prepayments and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of prepaid expenses and other current assets | December 31, 2021 December 31, 2020 Other receivable, net (1) $ 351,844 805,219 Prepaid expense - 492,125 Value added tax receivable 38,020 - Total $ 389,864 1,297,344 (1) Other receivables mainly consisted of advances to employees for business development purposes and prepaid employee insurance and welfare benefit which will be subsequently deducted from the employee’s payroll. |
Lease (Tables)
Lease (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of supplemental balance sheet information related to operating leases | December 31, 2021 Right-of-use assets $ 278,269 Operating lease liabilities - current $ 155,857 Operating lease liabilities - non-current 120,558 Total operating lease liabilities $ 276,415 |
Schedule of weighted average remaining lease terms and discount rates | Remaining lease term and discount rate: Weighted average remaining lease term (years) 1.4 Weighted average discount rate 7.42 % |
Schedule of maturities of lease liabilities | 2022 $ 168,307 2023 119,463 2024 - Total lease payments 287,770 Less: imputed interest 11,355 Present value of lease liabilities $ 276,415 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of property, plant and equipment, net | December 31, 2021 December 31, 2020 Property and buildings $ 15,469,040 14,743,005 Machinery and equipment 1,594,701 1,547,258 Transportation vehicles 744,885 806,782 Office and electronic equipment 155,685 97,166 Subtotal 17,964,310 17,194,211 Construction in progress (“CIP”) 2,584,252 (308,732 ) Less: accumulated depreciation (3,255,669 ) (2,386,346 ) Impairment of fixed assets (7,585,291 ) (3,114,686 ) Property, plant and equipment, net $ 9,707,602 11,384,447 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Intangible Assets, Net [Abstract] | |
Schedule of intagible assets, net | December 31, 2021 December 31, 2020 Land use rights $ 1,730,978 1,691,262 Software 29,472 28,796 Others 2,472,376 - Patent 124,277 - Total 4,357,104 1,720,058 Less: accumulated amortization (246,075 ) (188,546 ) Intangible assets, net $ 4,111,029 1,531,512 |
Schedule of estimated future amortization expense | Twelve months ending December 31, Amortization 2022 $ 297,232 2023 297,232 2024 297,232 2025 297,232 2026 297,232 2027 and Thereafter 2,624,866 $ 4,111,029 |
Short-term Loans (Tables)
Short-term Loans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of short-term loans | December 31, 2021 December 31, 2020 Changjiang Li Autonomous County Rural Credit Cooperative Association(“CCCA”) (1) $ - $ 306,600 Hunyuan Rural Credit Cooperative Association (2) 784,500 766,500 Bank of Jiangsu (3) 784,500 766,500 Bank of Nanjing (4) - 1,533,000 Huaxia Bank (5) 784,500 3,105,488 Total $ 2,353,500 $ 6,478,088 |
Long Term Bank Loans (Tables)
Long Term Bank Loans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long term bank loan | December 31, 2021 December 31, 2020 Long-term loans Dongfang Credit Cooperative Association (1) - 613,055 Subtotal - 613,055 Less: current portion of long-term loans - (613,055 ) Total $ - - (1) In March 2019, REIT Construction entered into a bank loan agreement with Dongfang Credit Cooperative Association to borrow approximately $0.7 million (RMB 5 million) as working capital for two years. The loan bore a fixed interest rate of 9.72% per annum. REIT Construction was required to repay RMB 2 million on March 26, 2020 and RMB 3 million on March 26, 2021. The loan was guaranteed by the Company’s Chief Executive Officer and his wife. The Company had repaid $143,600 (RMB 1 million) before September 24, 2020. On September 24, 2020, REIT Construction obtained approval from Dongfang Credit Cooperative Association and amended the repayment schedule to defer the repayment terms of the other $143,600 (RMB 1 million) in fiscal year 2020 and the loan was repaid in August 2021. |
Loans from Third Parties (Table
Loans from Third Parties (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Loans From Third Parties [Abstract] | |
Schedule of loans from third parties | Loans from third parties December 31, 2021 December 31, 2020 Sanya Guohong Municipal Projects Construction Co., Ltd. $ 627,600 $ 766,500 Changshu Tongjiang Engineering Co., Ltd. 219,660 - Zhang Miao 156,900 - Pen Jing 156,900 - Chen Guo 66,399 - Chai Guirong 313,800 - Hainan Boxinda Science Technology Partnership 52,718 - Total $ 1,593,977 $ 766,500 |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciles income tax expense by statutory rate to the company’s actual income tax expense | For the Years Ended December 31, 2021 2020 2019 Income tax expense computed based on PRC statutory income tax rate $ (5,118,519 ) $ (1,179,508 ) $ (1,285,220 ) Effect of favorable income tax rate in certain entity in PRC 889,716 (164,071 ) 255,213 Non-PRC entities not subject to PRC tax (1) 1,564,644 401,488 262,045 Research & Development (“R&D”) tax credit (2) (260,213 ) (251,178 ) (328,778 ) Non-deductible expenses - permanent difference (3) 588,191 826,034 730,909 Change in valuation allowance 2,339,650 937,209 776,885 Effective tax rate 3,469 569,974 411,054 (1) Represents the tax losses incurred from operations outside of China. (2) According to PRC tax regulations, 175% of current year R&D expense approved by the local tax authority may be deducted from tax income. (3) Represents expenses incurred by the Company that were not deductible for PRC income tax. |
Schedule of income (loss) before income tax | For the Years Ended December 31, 2021 2020 2019 Loss before income tax expense from China (13,889,029 ) (3,280,706 ) $ (4,221,025 ) Loss before income tax expense from outside of China (6,585,045 ) (1,437,326 ) (919,854 ) Total loss before income tax provision (20,474,074 ) (4,718,032 ) $ (5,140,879 ) |
Schedule of income tax provision (benefit) | For the Years ended December 31, 2021 2020 2019 Current 3,469 569,974 $ - Deferred - - 411,054 Total 3,469 569,974 $ 411,054 |
Schedule of deferred tax asset | Deferred tax asset December 31 2021 December 31 2020 Provision of doubtful accounts $ 323,107 $ (59,643 ) Tax loss carried forwards 4,482,385 547,220 Valuation allowance on tax losses (4,805,492 ) (487,578 ) $ - $ - |
Schedule of taxes payable | December 31, December 31, 2021 2020 VAT tax payable $ 422,678 $ 330,966 Corporate income tax payable 2,156,850 2,146,610 Land use tax and other taxes payable 20,242 16,108 Total $ 2,599,770 $ 2,493,685 |
Commitments and Contigencies (T
Commitments and Contigencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Company’s contractual obligations | Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than Operating lease commitment $ 287,770 168,307 119,463 - $ - Repayment of bank loans 2,353,500 2,353,500 - - - Total $ 2,641,270 2,521,807 119,463 - $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of related parties with transactions and related party relationships | Name of Related Party Relationship to the Company Mr. Hengfang Li Chief Executive Officer and Chairman of the Board of Directors Ms. Hong Ma Wife of Mr. Hengfang Li Reto International Trading Co. Ltd The owner of the entity holds more than 5% of the Company’s outstanding common shares Q Green Techcon Private Limited Owned by the minority shareholder of REIT India Shexian Ruibo The Company owns 41.67% ownership interest in Shexian Ruibo Zhongrong Honghe Eco Construction Materials Co., Ltd An entity controlled by Ms. Hong Ma Hunyuan Baiyang Food Co., Ltd. An entity controlled by Mr. Hengfang Li Bei Qi Yin Jian Yi Le (Haikou) Smart Move Science Technology Co., Ltd. Hainan Yile IoT owns 45% ownership interest in this company Zhongtou REIT Information Service (Beijing) Co., Ltd An entity controlled by Mr. Xinyang Li and Ms. Xinran Li, children of Mr. Hengfang Li Handan Ruisheng Construction Material Technology Co., Ltd. An entity controlled by Shexian Ruibo |
Schedule of due to related parties | December 31, 2021 December 31, 2020 Mr. Hengfang Li $ 472,439 $ 1,019,469 |
Schedule of accounts receivable from related parties | December 31, 2021 December 31, 2020 Accounts receivable – related party Reto International Trading Co. Ltd $ - $ 199,999 Q Green Techcon Private Limited 2,981 - Hunyuan Baiyang Food Co., Ltd. 40,088 - Bei Qi Yin Jian Yi Le (Haikou) Smart Move Science Technology Co., Ltd. 50,520 - Total accounts receivable from related party $ 93,589 $ 199,999 |
Schedule of advance to suppliers, related party | December 31, 2021 December 31, 2020 Advance to supplier – related party Shexian Ruibo* $ 3,656,118 $ 3,872,110 Q Green Techcon Private Limited 174,099 162,014 Handan Ruisheng Construction Material Technology Co., Ltd. 12,403 - Total $ 3,842,620 $ 4,034,124 * The balance represents the Company’s purchase advances for eco-friendly materials and equipment supplied by Shexian Ruibo. |
Schedule of accounts payables to related parties | December 31, 2021 December 31, 2020 Accounts payable – related part - Q Green Techcon Private Limited $ - $ - - Shexian Ruibo. - 153,344 - Zhongtou Ruitu Information Service (Beijing) Co., Ltd 10,199 Total $ 10,199 $ 153,344 |
Schedule of sales to related parties | For the Years Ended December 31, 2021 2020 2019 Sales to related parties Hunyuan Baiyang Food Co., Ltd. - - 83,972 Shexian Ruibo 61,177 - - Q Green Techcon Private Limited 220,607 228,814 - Total $ 281,784 $ 228,814 $ 83,972 |
Schedule of purchases from related parties | For the years ended December 31, 2021 2020 2019 Purchase from a relate party Q Green Techcon Private Limited. $ 228,838 $ 1,039,152 $ - Shexian Ruibo 235,946 1,837,841 2,021,934 Total $ 464,784 $ 2,876,993 $ 2,021,934 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of nonvested shares | Number of Weighted Nonvested as of December 31, 2020 - - Granted 1,000,000 $ 1,330,000 Vested - - Nonvested as of December 31, 2021 1,000,000 $ 1,330,000 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of information by segment | For the Year Ended December 31, 2021 Machinery and Equipment sales Construction materials sales Municipal construction projects Technological consulting and other services Total Revenues $ 1,799,741 $ 1,658,385 $ 141,952 $ - $ 3,600,078 Cost of goods sold 1,501,420 1,562,975 149,954 - 3,214,349 Gross profit 298,321 95,410 (8,002 ) - 385,729 Interest expense and charges 132,136 (121,449 ) 77,153 15,500 103,340 Depreciation and amortization 167,468 705,703 2,524 - 875,695 Capital expenditures 14,463 2,556,181 - - 2,570,644 Income tax expenses 3,469 - - - 3,469 Segment loss (12,497,629 ) (7,804,642 ) (37,782 ) (137,491 ) (20,477,543 ) Segment assets $ 12,742,545 $ 12,646,798 $ 98,625 $ 5,473,099 $ 30,961,067 For the Year Ended December 31, 2020 Machinery and Equipment sales Construction materials sales Municipal construction projects Technological consulting and other services Total Revenues $ 6,455,995 $ 1,776,525 $ 106,695 $ - $ 8,339,215 Cost of goods sold 4,429,869 1,901,060 10,610 - 6,341,539 Gross profit 2,026,126 (124,535 ) 96,085 - 1,997,676 Interest expense and charges 672,778 48,719 136,054 - 857,551 Depreciation and amortization 164,538 701,077 4,110 - 869,725 Capital expenditures 6,900 57,858 - - 64,758 Income tax expenses 569,974 - - - 569,974 Segment loss (725,938 ) (4,300,671 ) (261,398 ) - (5,288,007 ) Segment assets $ 16,389,063 41,233,143 347,917 3,950 57,974,073 For the Year Ended December 31, 2019 Machinery and Equipment sales Construction materials sales Municipal construction projects Technological consulting and other services Total Revenues $ 14,022,053 $ 2,818,317 $ 178,986 $ - $ 17,019,356 Cost of goods sold 9,415,826 2,323,157 39,775 - 11,778,758 Gross profit 4,606,227 495,160 139,211 - 5,240,598 Interest expense and charges 633,482 949 52,922 4,480 691,833 Depreciation and amortization 175,142 648,852 8,697 - 832,691 Capital expenditures 443,070 95,526 18,923 - 557,519 Income tax expenses 389,874 ) 21,180 - - 411,054 Segment profit (loss) (3,004,956 ) (1,189,802 ) (304,433 ) (1,052,742 ) (5,551,933 ) Segment assets 19,150,283 $ 51,280,426 $ 356,424 $ 8,111 $ 70,795,244 |
Organization and Description _3
Organization and Description of Business (Details) | Nov. 12, 2021 | Jan. 02, 2020 |
Hebei Huishitong Technology Inc. [Member] | ||
Organization and Description of Business (Details) [Line Items] | ||
Owners equity interest rate | 100.00% | |
Zhixin Group (Hong Kong) Co., Ltd. [Member] | ||
Organization and Description of Business (Details) [Line Items] | ||
Owners equity interest rate | 100.00% |
Organization and Description _4
Organization and Description of Business (Details) - Schedule of all inter-company balances and transactions | 12 Months Ended | |
Dec. 31, 2021 | ||
ReTo Eco-Solutions, Inc. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | British Virgin Islands | |
Ownership Percentage | Parent | |
REIT Holdings (China) Limited (“REIT Holdings”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Hong Kong, China | |
Ownership Percentage | 100% | |
Beijing REIT Technology Development Co., Ltd. (“Beijing REIT”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Beijing, China | |
Ownership Percentage | 100% | |
Gu’an REIT Machinery Manufacturing Co., Ltd. (“Gu’an REIT”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Gu’an, China | [1] |
Ownership Percentage | -% | [1] |
REIT MingSheng Environment Protection Construction Materials (Changjiang) Co., Ltd. (“REIT Changjiang”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Changjiang, China | [2] |
Ownership Percentage | -% | [2] |
Beijing REIT Ecological Engineering Technology Co., Ltd. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Beijing, China | |
Ownership Percentage | 100% | |
Hainan REIT Construction Engineering Co., Ltd. (“REIT Construction”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 100% | |
REIT New Materials Xinyi Co., Ltd. (“Xinyi REIT”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Xinyi, China | |
Ownership Percentage | 70% | |
Nanjing Dingxuan Environmental Protection Technology Development Co., Ltd. (“Dingxuan”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Nanjing, China | |
Ownership Percentage | 100% | |
REIT Q GREEN Machines Private Ltd (“REIT India”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | India | |
Ownership Percentage | 51% | |
REIT Ecological Technology Co., Ltd. (“REIT Yancheng”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Yancheng, China | |
Ownership Percentage | 100% | |
Datong Ruisheng Environmental Engineering Co., Ltd. (“Datong Ruisheng”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Datong, China | |
Ownership Percentage | 100% | |
Guangling REIT Ecological Cultural Tourism Co., Ltd. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Datong, China | |
Ownership Percentage | 100% | |
REIT (Xiong’an, Hebei) Eco Technology Co., Ltd. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Xiong’an, China | |
Ownership Percentage | 100% | |
REIT Technology Development Co., Ltd (“REIT Technology”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 100% | |
Hainan REIT Mingde Investment Holding Co., Ltd(“REIT Mingde”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 100% | |
Yangpu Fangyuyuan United Logistics Co., Ltd. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 100% | |
Hainan Kunneng Direct Supply Chain Management Co., Ltd. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 51% | |
Hainan Yile IoT Technology Co., Ltd (“Hainan Yile IoT”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 61.6% | |
Hainan Yile IoV Technology Research Institute Co., Ltd, (“Yile Vehicles”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 90% | |
[1] | On January 2, 2020, Beijing REIT sold its 100% equity interests in Gu’an REIT to Hebei Huishitong Technology Inc. After the transaction, the Company no longer owns any equity interest in Gu’an REIT as of the date of this report. (See Note 4—Discontinued operations.) | |
[2] | On November 12, 2021, the Company sold its 100% equity interests in REIT Changjiang to Zhixin Group (Hong Kong) Co., Ltd. and Xiamen Zhixin Building Materials Co., Ltd. After the transaction, the Company no longer owns any equity interest in REIT Changjiang as of the date of this report. (See Note 4—Discontinued operations.) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||||
Dec. 31, 2021USD ($) | Dec. 31, 2021CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2021INR (₨) | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Insurance Regulation (in Yuan Renminbi) | ¥ | ¥ 500,000 | ||||
Allowances for uncollectible amounted receivable | $ 904,052 | $ 6,888,710 | |||
Inventory reserve | 12,116 | 130,516 | |||
Allowances for uncollectible amounted to suppliers | 965,843 | 1,112,373 | |||
Impairment of long-lived assets disposed | $ 200,000 | ||||
Impairment of fixed assets | 4,300,000 | 2,300,000 | 700,000 | ||
Investment loss | 142,673 | ||||
Short term debts | 1,645,000 | ||||
Shipping and handling expenses | 367,873 | 216,301 | $ 194,492 | ||
Related grants | 490,560 | ||||
Deferred grants | $ 269,061 | ||||
Value added tax percentage | 13.00% | 13.00% | |||
Cash and cash equivalents | $ 52,727 | $ 63,603 | |||
FDIC insurance limits | $ 1,403 | ₨ 100,000 | |||
Concentration risk, percentage | 11.00% | 11.00% | 10.00% | 10.00% | |
Maximum [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration risk, percentage | 25.00% | ||||
Minimum [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration risk, percentage | 20.00% | ||||
Supplier Concentration Risk [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration risk, percentage | 53.00% | 53.00% | 43.00% | 25.00% | |
Cash and Cash Equivalents [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Insurance Regulation (in Yuan Renminbi) | ¥ | ¥ 500,000 | ||||
Cash and cash equivalents | $ 357,462 | $ 969,817 | |||
Accounts Receivable [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration risk, percentage | 15.00% | 15.00% | 10.00% | ||
Accounts Payable [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Concentration risk, percentage | 47.00% | 47.00% | |||
REIT Zhengbei [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Long term investment in equity investee balance | $ 28,720 | ||||
Ownership interest, percentage | 40.00% | ||||
Litu Ruima [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Ownership interest, percentage | 28.75% | ||||
Shexian Ruibo [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Long term investment in equity investee balance | $ 2,758,228 | $ 2,836,050 | |||
Ownership interest, percentage | 41.67% | 41.67% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets | 12 Months Ended |
Dec. 31, 2021 | |
Property and buildings [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Property and equipment, useful life | 30 years |
Property and buildings [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Property and equipment, useful life | 50 years |
Machinery equipment [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Property and equipment, useful life | 5 years |
Machinery equipment [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Property and equipment, useful life | 15 years |
Transportation vehicles [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Property and equipment, useful life | 5 years |
Transportation vehicles [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Property and equipment, useful life | 10 years |
Office and electronic equipment [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Property and equipment, useful life | 3 years |
Office and electronic equipment [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
Property and equipment, useful life | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets are amortized using the straight-line method with the following estimated useful lives | 12 Months Ended |
Dec. 31, 2021 | |
Land Use Rights [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets are amortized using the straight-line method with the following estimated useful lives [Line Items] | |
Intangible assets estimated useful lives | 45 years |
Land Use Rights [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets are amortized using the straight-line method with the following estimated useful lives [Line Items] | |
Intangible assets estimated useful lives | 49 years |
Software [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets are amortized using the straight-line method with the following estimated useful lives [Line Items] | |
Intangible assets estimated useful lives | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of reconciliation of the beginning and ending balances for convertible loans | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of reconciliation of the beginning and ending balances for convertible loans [Abstract] | |
Opening balance | |
New convertible loans issued | 3,533,654 |
Accrued interest | 132,516 |
Loss on change in fair value of convertible loan | 1,908,830 |
Conversion of convertible loans | (3,930,000) |
Total | $ 1,645,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of currency exchange rates that were used in creating the consolidated financial statements | Dec. 31, 2021USD ($) | Dec. 31, 2021CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) |
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||||||
Year-end spot rate | $ | $ 1 | $ 1 | $ 1 | |||
Average rate | $ | $ 1 | $ 1 | $ 1 | |||
China, Yuan Renminbi | ||||||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||||||
Year-end spot rate | ¥ | ¥ 6.3726 | ¥ 6.525 | ¥ 6.9618 | |||
Average rate | ¥ | ¥ 6.4508 | ¥ 6.9042 | ¥ 6.9081 |
Going Concern (Details)
Going Concern (Details) - USD ($) | Mar. 10, 2022 | Mar. 10, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Going Concern (Details) [Line Items] | ||||
Description of going concern | the Company’s revenue decreased by approximately $4.7 million, or 57%, from approximately $8.3 million in the year ended December 31, 2020 to approximately $3.6 million in the year ended December 31, 2021, its gross profit from continued operation decreased by approximately $1.6 million, or 81%, from approximately $2.0 million in the year ended December 31, 2020 to approximately $0.4 million for the year ended December 31, 2021, and its gross margin for the year ended December 31, 2021 decreased to 11% from 24.0% for the last year. | |||
Net loss | $ 22,100,000 | $ 12,900,000 | ||
Working capital deficit | 3,700,000 | |||
Cash | 500,000 | |||
Amount of accounts receivable outstanding | 500,000 | |||
Accounts receivable from third parties | 400,000 | |||
Accounts receivable from related party | 100,000 | |||
Amount of accounts receivable collected back | $ 400,000 | |||
Percentage of accounts receivable collected back | 30.00% | |||
Amount of bank loans outstanding | $ 2,400,000 | |||
Original issue | 90,000 | |||
Legal fees | $ 15,000 | |||
Subsequent Event [Member] | ||||
Going Concern (Details) [Line Items] | ||||
Issuance of debt payment method | the Company entered into a securities purchase agreement with an accredited investor for the issuance of a Convertible Promissory Note (the “Note”) in the aggregate principal amount of $3,105,000 with a maturity date of twelve months after the payment of the purchase price for the Note, which will be converted into Company’s common shares. | |||
Legal fees | $ 15,000 |
Discontinued Operation (Details
Discontinued Operation (Details) ¥ in Millions | Nov. 12, 2021USD ($) | Nov. 12, 2021CNY (¥) | Jan. 02, 2020 | Dec. 31, 2021USD ($) | Dec. 31, 2021CNY (¥) |
Discontinued Operation [Abstract] | |||||
Ownership interest in reit, description | Beijing REIT signed a share transfer agreement with a third party - Hebei Huishitong Techonology Inc. (“Huishitong”) to sell 100% ownership interest in Gu’an REIT to Huishitong for a cash consideration of RMB39.9 million (approximately $5.7 million). As of December 31, 2019, the Company received RMB9.7 million (approximately $1.5 million) from Huishitong as an acquisition deposit. In 2020, the Company received an additional RMB26.6 million (approximately $4.1 million). In 2021, the Company received the remaining RMB3.6 million (approximately $0.6 million). The Company recorded a gain from the disposition of $2,231,270 for the year ended December 31, 2020. | ||||
Ownership interest percentage | 100.00% | 100.00% | |||
Cash consideration | $ 9,400,000 | ¥ 60 | |||
Cash received | $ 2,100,000 | ¥ 15 | |||
Loss of disposition | $ 6,335,508 |
Discontinued Operation (Detai_2
Discontinued Operation (Details) - Schedule of discontinued operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Gu’an REIT [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | $ 5,303,071 | ||
Cost of revenues | 4,475,590 | ||
Gross profit | 827,481 | ||
Operating expenses | 3,582,359 | ||
Loss from discontinued operations | (2,754,878) | ||
Other income, net | 10,762 | ||
Loss before tax | (2,744,116) | ||
Income tax provision | 57,015 | ||
Net loss from discontinued operations | (2,801,131) | ||
REIT Changjiang [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | 886,571 | 1,395,285 | 12,532,371 |
Cost of revenues | 1,657,799 | 2,235,598 | 10,412,399 |
Gross loss | (771,228) | (840,313) | 2,119,972 |
Operating expenses | 829,049 | 6,036,039 | 7,716,269 |
Loss from discontinued operations | (1,600,277) | (6,876,352) | (5,596,297) |
Other income (expense), net | 4,375 | (736,249) | (552,037) |
Loss before tax | (1,595,902) | (7,612,601) | (6,148,334) |
Income tax provision | 488 | 595,851 | |
Net loss from discontinued operations | $ (1,596,390) | $ (7,612,601) | $ (6,744,185) |
Discontinued Operation (Detai_3
Discontinued Operation (Details) - Schedule of assets and liabilities of the discontinued operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of assets and liabilities of the discontinued operations [Abstract] | ||
Cash | $ 62,702 | |
Accounts receivable, net | 364,399 | |
Accounts receivable-related party | 2,075 | |
Advance to suppliers, net | 583,911 | |
Prepaid expenses and other current assets | 29,650 | |
Inventories | 310,190 | |
Total current assets held for sale | 1,352,927 | |
Property and equipment, net | 23,692,505 | |
Intangible assets, net | 4,873,547 | |
Right of use assets | 12,276 | |
Total assets held for sale | 29,931,255 | |
Short term bank loans, net | 183,960 | |
Long term bank loans-current portion | 2,299,500 | |
Advances from customers | 469,394 | |
Deferred revenue | 478,637 | |
Accounts payable | 356,234 | |
Taxes payable | 152,920 | |
Accrued liabilities and other payables | 2,957,292 | |
Related parties balance | (254,936) | |
Lease liability-current | 11,724 | |
Total Current Liabilities held for sale | 6,654,725 | |
Long term bank loans | 6,285,300 | |
Total Liabilities held for sale | $ 13,414,041 |
Acquisition (Details)
Acquisition (Details) | Dec. 27, 2021USD ($) | Dec. 27, 2021CNY (¥) | Feb. 22, 2022CNY (¥) | Dec. 31, 2021CNY (¥) | Feb. 22, 2022$ / sharesshares |
Acquisition (Details) [Line Items] | |||||
Equity interest | 100.00% | 100.00% | |||
Unrelated parties | $ 1,569,000 | ¥ 10,000,000 | |||
Subsequent Event [Member] | |||||
Acquisition (Details) [Line Items] | |||||
Cash consideration | ¥ 10,000,000 | ||||
Common shares (in Shares) | shares | 2,580,000 | ||||
Price per share (in Dollars per share) | $ / shares | $ 0.61 | ||||
Exchange rate | ¥ 6.39 | ||||
Series of Individually Immaterial Asset Acquisitions [Member] | |||||
Acquisition (Details) [Line Items] | |||||
Purchase price | ¥ 10,000,000 |
Acquisition (Details) - Schedul
Acquisition (Details) - Schedule of acquisition was accounted for as business combinations | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of acquisition was accounted for as business combinations [Abstract] | |
Cash acquired | $ 21,601 |
Other current assets | 271,258 |
Total current assets | 292,859 |
Property and equipment | 7,731 |
Intangible assets, net | 2,581,119 |
Goodwill | 1,075,778 |
Total assets | 3,957,487 |
Current liabilities | 1,233,447 |
Deferred tax liability | 370,856 |
Total liabilities | 1,604,303 |
Non-controlling interest | 784,184 |
Total consideration | $ 1,569,000 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Receivable, Net [Abstract] | |
Accounts receivable balance from third party customers, description | the Company’s accounts receivable balance from third party customers as of December 31, 2021, approximately $0.4 million, or 30% has been collected as of the date of this report and the remaining balance is expected to be substantially collected from customers before December 31, 2022. |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details) - Schedule of accounts receivable - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of accounts receivable [Abstract] | ||
Trade accounts receivable from third-part customers | $ 1,345,755 | $ 9,744,815 |
Less: allowances for doubtful accounts | (904,052) | (6,888,710) |
Total accounts receivable from third-party customers, net | 441,703 | 2,856,105 |
Add: accounts receivable, net, related parties | 93,589 | 199,999 |
Accounts receivable, net | $ 535,292 | $ 3,056,104 |
Accounts Receivable, Net (Det_3
Accounts Receivable, Net (Details) - Schedule of allowance for doubtful accounts - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of allowance for doubtful accounts [Abstract] | ||
Beginning balance | $ 6,888,710 | $ 7,473,319 |
Bad debt provision | 1,949,778 | 56,116 |
Write off | (7,722,231) | (1,130,710) |
Reduction due to divestitures | (299,544) | |
Foreign exchange translation | 87,339 | 489,985 |
Ending balance | $ 904,052 | $ 6,888,710 |
Accounts Receivable, Net (Det_4
Accounts Receivable, Net (Details) - Schedule of accounts receivable - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | $ 535,292 | $ 3,056,104 |
Bad debt reserve | (904,052) | (6,888,710) |
Less than 3 months [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | 294,481 | 2,305,868 |
From 4 to 6 months [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | 197,465 | 667,018 |
From 7 to 9 months [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | 28,134 | 318,357 |
From 10 to 12 months [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | 107,317 | 88,056 |
Over 1 year [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | $ 811,947 | $ 6,565,515 |
Advances to Suppliers, Net (Det
Advances to Suppliers, Net (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Advances to Suppliers, Net [Abstract] | |
Construction material, description | It usually takes 3 to 6 months for the suppliers to deliver raw material for our equipment production and takes up to 6 to 12 months for the suppliers to deliver the construction materials. |
Description of advance to suppliers balance | of the Company’s net advance to suppliers balance as of December 31, 2021, approximately $281,600 million, or 100 % has been realized as of the date of this report and the remaining balance is expected to be substantially realized before December 31, 2022. |
Advances to Suppliers, Net (D_2
Advances to Suppliers, Net (Details) - Schedule of advances to suppliers - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of advances to suppliers [Abstract] | ||
Raw material prepayments for equipment production | $ 751,409 | $ 1,203,450 |
Land reclamation prepayments | 472,640 | 469,460 |
Advances to construction subcontractors | 23,394 | 427,219 |
Total: | 1,247,443 | 2,100,129 |
Less: allowances for doubtful accounts | (965,843) | (1,112,373) |
Advances to suppliers, net, third parties | $ 281,600 | $ 987,756 |
Advances to Suppliers, Net (D_3
Advances to Suppliers, Net (Details) - Schedule of changes of allowance for doubtful accounts - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of changes of allowance for doubtful accounts [Abstract] | ||
Beginning balance | $ 1,112,374 | $ 439,738 |
Bad debt provision | 259,861 | 636,625 |
Write off | (428,553) | |
Foreign exchange translation | 22,161 | 36,010 |
Ending balance | $ 965,843 | $ 1,112,373 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Inventories, Net [Abstract] | |||
Inventory allowance | $ 119,995 | $ 123,280 |
Inventories, Net (Details) - Sc
Inventories, Net (Details) - Schedule of inventories, net - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of inventories, net [Abstract] | ||
Raw materials | $ 135,049 | $ 128,833 |
Finished goods | 340,798 | 421,700 |
Subtotal | 475,847 | 550,533 |
Less: Inventory allowance | (12,116) | (130,516) |
Inventories, net | $ 463,731 | $ 420,017 |
Prepayments and Other Current_3
Prepayments and Other Current Assets (Details) - Schedule of prepaid expenses and other current assets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of prepaid expenses and other current assets [Abstract] | |||
Other receivable, net | [1] | $ 351,844 | $ 805,219 |
Prepaid expense | 492,125 | ||
Value added tax receivable | 38,020 | ||
Total | $ 389,864 | $ 1,297,344 | |
[1] | Other receivables mainly consisted of advances to employees for business development purposes and prepaid employee insurance and welfare benefit which will be subsequently deducted from the employee’s payroll. |
Lease (Details)
Lease (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Rental expenses | $ 283,168 | $ 122,699 | $ 167,252 |
Lease expense | 283,168 | ||
Interest expense | 23,786 | ||
Amortization expense | 176,049 | ||
Short-term lease expense | 83,333 | ||
Cash paid for operating leases | $ 195,521 |
Lease (Details) - Schedule of s
Lease (Details) - Schedule of supplemental balance sheet information related to operating leases | Dec. 31, 2021USD ($) |
Schedule of supplemental balance sheet information related to operating leases [Abstract] | |
Right-of-use assets | $ 278,269 |
Operating lease liabilities - current | 155,857 |
Operating lease liabilities - non-current | 120,558 |
Total operating lease liabilities | $ 276,415 |
Lease (Details) - Schedule of w
Lease (Details) - Schedule of weighted average remaining lease terms and discount rates | Dec. 31, 2021 |
Remaining lease term and discount rate: | |
Weighted average remaining lease term (years) | 1 year 4 months 24 days |
Weighted average discount rate | 7.42% |
Lease (Details) - Schedule of m
Lease (Details) - Schedule of maturities of lease liabilities | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of maturities of lease liabilities [Abstract] | |
2022 | $ 168,307 |
2023 | 119,463 |
2024 | |
Total lease payments | 287,770 |
Less: imputed interest | 11,355 |
Present value of lease liabilities | $ 276,415 |
Prepayment for Construction o_2
Prepayment for Construction of Properties (Details) ¥ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020USD ($) | |
Prepayment for Construction of Properties [Abstract] | |||
Prepayments to subcontractor | $ 3,661,800 | ¥ 25.5 | |
Remaining balance | $ 1,073,100 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |||
Disposed depreciated equipment | $ 200,000 | ||
Recorded an impairment | $ 4,300,000 | $ 2,300,000 | 700,000 |
Plant construction expenditure description | As of December 31, 2021 and 2020, the Company’s properties with an aggregate carrying value of approximately $0.2 million (RMB 1.1 million) and $1.2 million (RMB 8.6 million) have been used as collateral for the Company’s short-term loans (see Note 15). | ||
Depreciation expense | $ 838,583 | $ 835,054 | $ 802,996 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 17,964,310 | $ 17,194,211 |
Construction in progress (“CIP”) | 2,584,252 | (308,732) |
Less: accumulated depreciation | (3,255,669) | (2,386,346) |
Impairment of fixed assets | (7,585,291) | (3,114,686) |
Property, plant and equipment, net | 9,707,602 | 11,384,447 |
Property and buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 15,469,040 | 14,743,005 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 1,594,701 | 1,547,258 |
Transportation vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 744,885 | 806,782 |
Office and electronic equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 155,685 | $ 97,166 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)m² | Dec. 31, 2020USD ($)m² | Dec. 31, 2019USD ($) | |
Intangible Assets, Net [Abstract] | |||
Land use right (in Square Meters) | m² | 74,278 | 74,278 | |
Long-term bank loan | $ 1,500,000 | $ 1,500,000 | |
Amortization expense | $ 37,112 | $ 34,671 | $ 29,695 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of intangible assets, net - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | $ 4,357,104 | $ 1,720,058 |
Less: accumulated amortization | (246,075) | (188,546) |
Intangible assets, net | 4,111,029 | 1,531,512 |
Land use rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | 1,730,978 | 1,691,262 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | 29,472 | 28,796 |
Others [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | 2,472,376 | |
Patent [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | $ 124,277 |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details) - Schedule of estimated future amortization expense | Dec. 31, 2021USD ($) |
Schedule of estimated future amortization expense [Abstract] | |
2022 | $ 297,232 |
2023 | 297,232 |
2024 | 297,232 |
2025 | 297,232 |
2026 | 297,232 |
2027 and Thereafter | 2,624,866 |
Estimated future amortization expense | $ 4,111,029 |
Convertible Loans (Details)
Convertible Loans (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Jul. 06, 2021 | Mar. 01, 2021 | Dec. 31, 2020 | |
Convertible Loans (Details) [Line Items] | ||||
Principal amount | $ 613,055 | |||
Unrealized loss expense | 1,908,830 | |||
Interest expense | $ 132,516 | |||
March Debenture [Member] | ||||
Convertible Loans (Details) [Line Items] | ||||
Principal amount | $ 2,300,000 | |||
Debenture holder a fee percentage | 3.50% | |||
Structuring fee | $ 10,000 | |||
Common shares (in Dollars per share) | $ 2.5 | |||
Average rate | 95.00% | |||
Conversion price (in Dollars per share) | $ 0.5 | |||
Debenture holder beneficially | 4.99% | |||
Principal amount percentage | 20.00% | |||
Converted common shares (in Shares) | 2,369,501 | |||
July Debenture [Member] | ||||
Convertible Loans (Details) [Line Items] | ||||
Principal amount | $ 1,130,000 | $ 2,500,000 | ||
Debenture holder a fee percentage | 3.50% | |||
Structuring fee | $ 5,000 | |||
Common shares (in Dollars per share) | $ 1.5 | |||
Average rate | 95.00% | |||
Conversion price (in Dollars per share) | $ 0.5 | |||
Debenture holder beneficially | 4.99% | |||
Principal amount percentage | 20.00% | |||
Converted common shares (in Shares) | 1,385,533 | |||
Principal amount of remaining balance | $ 1,370,000 | |||
Fair value | $ 1,645,000 |
Short-term Loans (Details)
Short-term Loans (Details) ¥ in Millions | 12 Months Ended | ||||||||||||||||
Dec. 31, 2021USD ($)m² | Dec. 31, 2020USD ($)m² | Dec. 31, 2019USD ($) | Dec. 31, 2021CNY (¥)m² | Dec. 06, 2021USD ($) | Dec. 06, 2021CNY (¥) | Sep. 03, 2021USD ($) | Sep. 03, 2021CNY (¥) | Dec. 10, 2020USD ($) | Dec. 10, 2020CNY (¥) | Mar. 31, 2020USD ($) | Mar. 31, 2020CNY (¥) | Mar. 18, 2020USD ($)m² | Mar. 18, 2020CNY (¥)m² | Jan. 31, 2020USD ($) | Jan. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
Short-term Loans (Details) [Line Items] | |||||||||||||||||
Short term borrow | $ | $ 2,353,500 | $ 6,478,088 | |||||||||||||||
Fixed interest rate percentage | 5.655% | 5.655% | |||||||||||||||
Land use right (in Square Meters) | m² | 74,278 | 74,278 | 74,278 | ||||||||||||||
Borrowings | $ 800,000 | ¥ 5 | |||||||||||||||
Interest expense on all short-term bank loans | $ | $ 372,881 | $ 473,845 | $ 609,097 | ||||||||||||||
Changjiang Li Autonomous County Rural Credit Cooperative Association [Member] | |||||||||||||||||
Short-term Loans (Details) [Line Items] | |||||||||||||||||
Short term borrow | $ 300,000 | ¥ 2 | |||||||||||||||
Fixed interest rate percentage | 8.50% | 8.50% | |||||||||||||||
Hunyuan Rural Credit Cooperative Association [Member] | |||||||||||||||||
Short-term Loans (Details) [Line Items] | |||||||||||||||||
Short term borrow | $ 800,000 | ¥ 5 | $ 800,000 | ¥ 5 | |||||||||||||
Fixed interest rate percentage | 7.359% | 7.359% | 6.109% | 6.109% | |||||||||||||
Bank of Jiangsu [Member] | |||||||||||||||||
Short-term Loans (Details) [Line Items] | |||||||||||||||||
Short term borrow | $ 800,000 | ¥ 5 | ¥ 5 | ||||||||||||||
Line of credit | $ 700,000 | ¥ 5 | |||||||||||||||
Annual interest rate | 4.55% | 4.55% | |||||||||||||||
Monthly interest rate | 4.55% | 4.55% | |||||||||||||||
Nanjing Bank [Member] | |||||||||||||||||
Short-term Loans (Details) [Line Items] | |||||||||||||||||
Short term borrow | $ 1,400,000 | ¥ 10 | $ 1,400,000 | ¥ 10 | |||||||||||||
Fixed interest rate percentage | 5.22% | 5.22% | 5.22% | 5.22% | |||||||||||||
Xinyi REIT [Member] | |||||||||||||||||
Short-term Loans (Details) [Line Items] | |||||||||||||||||
Line of credit | ¥ | ¥ 5 | ||||||||||||||||
Land use right (in Square Meters) | m² | 74,254.61 | 74,254.61 | |||||||||||||||
Land use rights carrying value | $ 1,900,000 | ¥ 9.9 |
Short-term Loans (Details) - Sc
Short-term Loans (Details) - Schedule of short-term loans - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Short-Term Debt [Line Items] | |||
Total short-term loans | $ 2,353,500 | $ 6,478,088 | |
Changjiang Li Autonomous County Rural Credit Cooperative Association(“CCCA”) [Member] | |||
Short-Term Debt [Line Items] | |||
Total short-term loans | [1] | 306,600 | |
Hunyuan Rural Credit Cooperative Association [Member] | |||
Short-Term Debt [Line Items] | |||
Total short-term loans | [2] | 784,500 | 766,500 |
Bank of Jiangsu [Member] | |||
Short-Term Debt [Line Items] | |||
Total short-term loans | [3] | 784,500 | 766,500 |
Bank of Nanjing [Member] | |||
Short-Term Debt [Line Items] | |||
Total short-term loans | 1,533,000 | ||
Huaxia Bank [Member] | |||
Short-Term Debt [Line Items] | |||
Total short-term loans | [4] | $ 784,500 | $ 3,105,488 |
[1] | In December 2019, REIT Construction entered into a bank loan agreement with CCCA to borrow approximately $0.3 million (RMB 2 million) as working capital for six months. The loan bears a fixed interest rate of 8.5% per annum and is guaranteed by REIT Changjiang. The Company has reached agreement with HHMC to extend the loan to December 31, 2021 subsequently. The loan was fully repaid on September 15, 2021. | ||
[2] | On December 10, 2020, Datong Ruisheng entered into a bank loan agreement with Hunyuan Rural Credit Cooperative Association to borrow approximately $0.8 million (RMB5 million) as working capital loan for a term from December 10, 2020 to December 8, 2021. The loan bears a fixed interest rate of 6.109% per annum. The loan is guaranteed by Beijing REIT. The Company fully repaid the loan in December 2021. Subsequent to the repayment, the Company signed another bank loan agreement with Hunyuan Rural Credit Cooperative Association to borrow $0.8 million (RMB5 million) on December 6, 2021 for a year with a fixed interest rate of 7.3590%. | ||
[3] | On March 18, 2020, Xinyi REIT entered into a new line of credit agreement with Bank of Jiangsu. The agreement allows Xinyi REIT to obtain loans up to RMB5 million for use as working capital between March 18, 2020 and March 15, 2021. Pursuant to the line of credit agreement, Xinyi REIT entered into four loans in total of approximately $0.7 million (RMB5 million), each at an annual interest rate of 4.55% with Bank of Jiangsu. The loan is guaranteed by Mr. Huizhen Hou and Mr. Dapeng Zhou. Meanwhile, Xinyi REIT also pledged land use right of 74,254.61 square meters with carrying value of RMB 9.9 million (approximately $1.9 million) as collateral to safeguard the loan. The loans were renewed with new mature dates in September 2021. On September 3, 2021, Xinyi REIT entered into a new line of credit agreement with Bank of Jiangsu. The agreement allows Xinyi REIT to obtain loans up to RMB5 million for use as working capital between September 3, 2021 and August 26, 2022. The Company signed another bank loan agreement with Bank of Jiangsu to borrow $0.8 million (RMB5 million) on September 3, 2021 for a year with a monthly interest rate of 4.55%. | ||
[4] | In January and March 2020, Beijing REIT entered into two loan agreements with Nanjing Bank to borrow approximately $1.4 million (RMB10 million). The loans had a term of 12 months and bore a fixed interest rate of 5.22% per annum. The loans were guaranteed by Financing Guaranty and the CEO and principal shareholders of the Company. The two loans were renewed in November and December 2020 with new mature dates of November 25, 2021 and December 2, 2021. The loans were fully repaid in November and December 2021 |
Long Term Bank Loans (Details)
Long Term Bank Loans (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2019CNY (¥) | |
Long Term Bank Loans (Details) [Line Items] | ||||
Total interest on long-term bank loans | $ 90,074 | $ 52,389 | ||
REIT Construction [Member] | ||||
Long Term Bank Loans (Details) [Line Items] | ||||
Line of credit facility borrowing | $ 700,000 | ¥ 5 | ||
Long term debt, description | The loan bore a fixed interest rate of 9.72% per annum. REIT Construction was required to repay RMB 2 million on March 26, 2020 and RMB 3 million on March 26, 2021. The loan was guaranteed by the Company’s Chief Executive Officer and his wife. The Company had repaid $143,600 (RMB 1 million) before September 24, 2020. On September 24, 2020, REIT Construction obtained approval from Dongfang Credit Cooperative Association and amended the repayment schedule to defer the repayment terms of the other $143,600 (RMB 1 million) in fiscal year 2020 and the loan was repaid in August 2021. |
Long Term Bank Loans (Details)
Long Term Bank Loans (Details) - Schedule of long term bank loan - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Long-term loans | |||
Dongfang Credit Cooperative Association | [1] | $ 613,055 | |
Subtotal | 613,055 | ||
Less: current portion of long-term loans | (613,055) | ||
Total | |||
[1] | In March 2019, REIT Construction entered into a bank loan agreement with Dongfang Credit Cooperative Association to borrow approximately $0.7 million (RMB 5 million) as working capital for two years. The loan bore a fixed interest rate of 9.72% per annum. REIT Construction was required to repay RMB 2 million on March 26, 2020 and RMB 3 million on March 26, 2021. The loan was guaranteed by the Company’s Chief Executive Officer and his wife. The Company had repaid $143,600 (RMB 1 million) before September 24, 2020. On September 24, 2020, REIT Construction obtained approval from Dongfang Credit Cooperative Association and amended the repayment schedule to defer the repayment terms of the other $143,600 (RMB 1 million) in fiscal year 2020 and the loan was repaid in August 2021. |
Loans from Third Parties (Detai
Loans from Third Parties (Details) - USD ($) | 12 Months Ended | |||||||
Dec. 31, 2021 | Oct. 21, 2021 | Aug. 02, 2021 | Aug. 01, 2021 | Jul. 29, 2021 | Jul. 04, 2021 | May 09, 2021 | Feb. 08, 2021 | |
Loans from Third Parties (Details) [Line Items] | ||||||||
Repayment of loan | $ 627,600 | |||||||
Sanya Guohong Municipal Projects Construction Co., Ltd. [Member] | ||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||
Working capital loan | $ 766,500 | |||||||
Changshu Tongjiang Engineering Co [Member] | ||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||
Working capital loan | $ 219,660 | |||||||
Zhang Miao [Member] | ||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||
Working capital loan | $ 156,900 | |||||||
Pen Jing [Member] | ||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||
Working capital loan | $ 156,900 | |||||||
Annual interest | 1.00% | |||||||
Chen Guo [Member] | ||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||
Working capital loan | $ 66,399 | |||||||
Annual interest | 1.00% | |||||||
Chai Guirong [Member] | ||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||
Working capital loan | $ 313,800 | |||||||
Annual interest | 1.00% | |||||||
Hainan Boxinda Science Technology Partnership [Member] | ||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||
Working capital loan | $ 52,718 |
Loans from Third Parties (Det_2
Loans from Third Parties (Details) - Schedule of loans from third parties - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | $ 1,593,977 | $ 766,500 |
Sanya Guohong Municipal Projects Construction Co., Ltd.[Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 627,600 | 766,500 |
Changshu Tongjiang Engineering Co., Ltd. [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 219,660 | |
Zhang Miao [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 156,900 | |
Pen Jing [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 156,900 | |
Chen Guo [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 66,399 | |
Chai Guirong [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 313,800 | |
Hainan Boxinda Science Technology Partnership [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | $ 52,718 |
Taxes (Details)
Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Taxes (Details) [Line Items] | ||
Corporate income tax rate | 25.00% | |
R&D expense approved by local tax authority deducted from tax income | 175.00% | |
Value added tax, description | The applicable VAT rate is 13% for products sold in the PRC. | |
Tax payables | $ 2.6 | $ 2.5 |
Accrued tax liabilities | $ 2.6 | $ 2.5 |
Beijing REIT [Member] | ||
Taxes (Details) [Line Items] | ||
Favorable income tax rate | 15.00% |
Taxes (Details) - Schedule of r
Taxes (Details) - Schedule of reconciles income tax expense by statutory rate to the company’s actual income tax expense - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Schedule of reconciles income tax expense by statutory rate to the company’s actual income tax expense [Abstract] | ||||
Income tax expense computed based on PRC statutory income tax rate | $ (5,118,519) | $ (1,179,508) | $ (1,285,220) | |
Effect of favorable income tax rate in certain entity in PRC | 889,716 | (164,071) | 255,213 | |
Non-PRC entities not subject to PRC tax | [1] | 1,564,644 | 401,488 | 262,045 |
Research & Development (“R&D”) tax credit | [2] | (260,213) | (251,178) | (328,778) |
Non-deductible expenses - permanent difference | [3] | 588,191 | 826,034 | 730,909 |
Change in valuation allowance | 2,339,650 | 937,209 | 776,885 | |
Effective tax rate | $ 3,469 | $ 569,974 | $ 411,054 | |
[1] | Represents the tax losses incurred from operations outside of China. | |||
[2] | According to PRC tax regulations, 175% of current year R&D expense approved by the local tax authority may be deducted from tax income. | |||
[3] | Represents expenses incurred by the Company that were not deductible for PRC income tax. |
Taxes (Details) - Schedule of i
Taxes (Details) - Schedule of income (loss) before income tax - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of income (loss) before income tax [Abstract] | |||
Loss before income tax expense from China | $ (13,889,029) | $ (3,280,706) | $ (4,221,025) |
Loss before income tax expense from outside of China | (6,585,045) | (1,437,326) | (919,854) |
Total loss before income tax provision | $ (20,474,074) | $ (4,718,032) | $ (5,140,879) |
Taxes (Details) - Schedule of_2
Taxes (Details) - Schedule of income tax provision (benefit) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of income tax provision (benefit) [Abstract] | |||
Current | $ 3,469 | $ 569,974 | |
Deferred | 411,054 | ||
Total | $ 3,469 | $ 569,974 | $ 411,054 |
Taxes (Details) - Schedule of d
Taxes (Details) - Schedule of deferred tax asset - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of deferred tax asset [Abstract] | ||
Provision of doubtful accounts | $ 323,107 | $ (59,643) |
Tax loss carried forwards | 4,482,385 | 547,220 |
Valuation allowance on tax losses | (4,805,492) | (487,578) |
Deferred tax assets, net |
Taxes (Details) - Schedule of t
Taxes (Details) - Schedule of taxes payable - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of taxes payable [Abstract] | ||
VAT tax payable | $ 422,678 | $ 330,966 |
Corporate income tax payable | 2,156,850 | 2,146,610 |
Land use tax and other taxes payable | 20,242 | 16,108 |
Total | $ 2,599,770 | $ 2,493,685 |
Commitments and Contigencies (D
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations | Dec. 31, 2021USD ($) |
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations [Line Items] | |
Operating lease commitment | $ 287,770 |
Repayment of bank loans | 2,353,500 |
Total | 2,641,270 |
Less than 1 year [Member] | |
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations [Line Items] | |
Operating lease commitment | 168,307 |
Repayment of bank loans | 2,353,500 |
Total | 2,521,807 |
1-3 years [Member] | |
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations [Line Items] | |
Operating lease commitment | 119,463 |
Repayment of bank loans | |
Total | 119,463 |
3-5 years [Member] | |
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations [Line Items] | |
Operating lease commitment | |
Repayment of bank loans | |
Total | |
More than 5 years [Member] | |
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations [Line Items] | |
Operating lease commitment | |
Repayment of bank loans | |
Total |
Related Party Transactions (Det
Related Party Transactions (Details) ¥ in Millions | Sep. 07, 2020USD ($) | Sep. 07, 2020CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Related Party Transactions (Details) [Line Items] | |||||
Cost of revenue related parties | $ 175,053 | $ 148,034 | $ 54,598 | ||
Shexian Ruibo [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Percentage of interest rate of related party | 41.67% | 41.67% | |||
Total consideration of acquisition | $ 3,600,000 | ¥ 25 | |||
Acquisition cash payment | $ 2,800,000 | ¥ 18.5 | |||
Number of patents | 6 | 6 | |||
Non-cash contribution | $ 900,000 | ¥ 6.5 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships | 12 Months Ended |
Dec. 31, 2021 | |
Mr. Hengfang Li [Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | Chief Executive Officer and Chairman of the Board of Directors |
Ms. Hong Ma [Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | Wife of Mr. Hengfang Li |
Reto International Trading Co. Ltd [Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | The owner of the entity holds more than 5% of the Company’s outstanding common shares |
Q Green Techcon Private Limited [Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | Owned by the minority shareholder of REIT India |
Shexian Ruibo [Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | The Company owns 41.67% ownership interest in Shexian Ruibo |
Zhongrong Honghe Eco Construction Materials Co., Ltd [Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | An entity controlled by Ms. Hong Ma |
Hunyuan Baiyang Food Co., Ltd. [Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | An entity controlled by Mr. Hengfang Li |
Bei Qi Yin Jian Yi Le (Haikou) Smart Move Science Technology Co., Ltd. [Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | Hainan Yile IoT owns 45% ownership interest in this company |
Zhongtou REIT Information Service (Beijing) Co., Ltd [Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | An entity controlled by Mr. Xinyang Li and Ms. Xinran Li, children of Mr. Hengfang Li |
Handan Ruisheng Construction Material Technology Co., Ltd. [ Member] | |
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships [Line Items] | |
Name of related party | An entity controlled by Shexian Ruibo |
Related Party Transactions (D_3
Related Party Transactions (Details) - Schedule of due to related parties - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Mr. Hengfang Li [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 472,439 | $ 1,019,469 |
Related Party Transactions (D_4
Related Party Transactions (Details) - Schedule of accounts receivable from related parties - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts receivable – related party | ||
Total accounts receivable from related party | $ 93,589 | $ 199,999 |
Reto International Trading Co. Ltd [Member] | ||
Accounts receivable – related party | ||
Total accounts receivable from related party | 199,999 | |
Q Green Techcon Private Limited [Member] | ||
Accounts receivable – related party | ||
Total accounts receivable from related party | 2,981 | |
Hunyuan Baiyang Food Co., Ltd. [Member] | ||
Accounts receivable – related party | ||
Total accounts receivable from related party | 40,088 | |
Bei Qi Yin Jian Yi Le (Haikou) Smart Move Science Technology Co., Ltd. [Member] | ||
Accounts receivable – related party | ||
Total accounts receivable from related party | $ 50,520 |
Related Party Transactions (D_5
Related Party Transactions (Details) - Schedule of advance to suppliers, related party - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Advance to supplier – related party | |||
Total | $ 3,842,620 | $ 4,034,124 | |
Shexian Ruibo [Member] | |||
Advance to supplier – related party | |||
Total | [1] | 3,656,118 | 3,872,110 |
Q Green Techcon Private Limited [Member] | |||
Advance to supplier – related party | |||
Total | 174,099 | 162,014 | |
Handan Ruisheng Construction Material Technology Co., Ltd. [ Member] | |||
Advance to supplier – related party | |||
Total | $ 12,403 | ||
[1] | The balance represents the Company’s purchase advances for eco-friendly materials and equipment supplied by Shexian Ruibo. |
Related Party Transactions (D_6
Related Party Transactions (Details) - Schedule of accounts payables to related parties - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts payable – related part | ||
Total | $ 10,199 | $ 153,344 |
Q Green Techcon Private Limited [Member] | ||
Accounts payable – related part | ||
Total | ||
Shexian Ruibo. [Member] | ||
Accounts payable – related part | ||
Total | $ 153,344 | |
Zhongtou Ruitu Information Service (Beijing) Co., Ltd [Member] | ||
Accounts payable – related part | ||
Total | $ 10,199 |
Related Party Transactions (D_7
Related Party Transactions (Details) - Schedule of sales to related parties - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Sales to related parties | |||
Total | $ 281,784 | $ 228,814 | $ 83,972 |
Hunyuan Baiyang Food Co., Ltd. [Member] | |||
Sales to related parties | |||
Total | 83,972 | ||
Shexian Ruibo [Member] | |||
Sales to related parties | |||
Total | 61,177 | ||
Q Green Techcon Private Limited [Member] | |||
Sales to related parties | |||
Total | $ 220,607 | $ 228,814 |
Related Party Transactions (D_8
Related Party Transactions (Details) - Schedule of purchases from related parties - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Purchase from a relate party | |||
Total | $ 464,784 | $ 2,876,993 | $ 2,021,934 |
Q Green Techcon Private Limited. [Member] | |||
Purchase from a relate party | |||
Total | 228,838 | 1,039,152 | |
Shexian Ruibo [Member] | |||
Purchase from a relate party | |||
Total | $ 235,946 | $ 1,837,841 | $ 2,021,934 |
Equity (Details)
Equity (Details) - USD ($) | Apr. 09, 2021 | Feb. 03, 2020 | Sep. 05, 2019 | Jan. 22, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | May 11, 2021 |
Equity (Details) [Line Items] | ||||||||
Appropriations to the statutory surplus reserve, description | Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. | |||||||
Statutory reserve | $ 1,230,387 | $ 2,386,119 | ||||||
Common stock, shares authorized (in Shares) | 200,000,000 | 200,000,000 | ||||||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | ||||||
Common stock, shares issued (in Shares) | 28,965,034 | 24,135,000 | ||||||
Common stock, shares outstanding (in Shares) | 28,965,034 | 24,135,000 | ||||||
Company issued (in Shares) | 3,755,034 | |||||||
Common shares of value issued | $ 1,573,800 | |||||||
Common stock issuance of amount | 1,414,637 | $ 650,750 | ||||||
2018 Incentive Plan [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Recognized stock-based compensation expense | $ 325,375 | 325,375 | ||||||
Common stock issuance of shares (in Shares) | 685,000 | |||||||
Common stock issuance of amount | $ 650,750 | |||||||
Share price, per share (in Dollars per share) | $ 0.95 | |||||||
Minimum [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Conversion price ranging (in Dollars per share) | $ 0.97 | |||||||
Maximum [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Conversion price ranging (in Dollars per share) | $ 1.11 | |||||||
Consulting Service Agreement [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Company issued (in Shares) | 400,000 | |||||||
Common shares of value issued | $ 448,000 | |||||||
Common share price (in Dollars per share) | $ 1.12 | |||||||
Recognized stock-based compensation expense | 280,000 | $ 168,000 | ||||||
Geniusland International Capital Ltd [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Common stock, par value (in Dollars per share) | $ 1.33 | |||||||
Company issued (in Shares) | 1,000,000 | |||||||
Common shares of value issued | $ 1,330,000 | |||||||
Recognized stock-based compensation expense | 1,330,000 | |||||||
Yorkville Advisors Global LP [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Company issued (in Shares) | 75,000 | |||||||
Recognized stock-based compensation expense | 84,637 | |||||||
Board of Directors [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Recognized stock-based compensation expense | 166,750 | 166,750 | ||||||
Common stock issuance of shares (in Shares) | 290,000 | |||||||
Common stock issuance of amount | $ 333,500 | |||||||
Share price, per share (in Dollars per share) | $ 1.15 | |||||||
PRC [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Statutory reserve | $ 1,230,387 | $ 2,386,119 |
Equity (Details) - Schedule of
Equity (Details) - Schedule of nonvested shares | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Schedule of nonvested shares [Abstract] | |
Number of shares nonvested, beginning balance | shares | |
Weighted average grant date value nonvested, beginning balance | $ / shares | |
Number of shares, granted | shares | 1,000,000 |
Weighted average grant date value, granted | $ / shares | $ 1,330,000 |
Number of shares, vested | shares | |
Weighted average grant date value, vested | $ / shares | |
Number of shares nonvested, ending balance | shares | 1,000,000 |
Weighted average grant date value nonvested, ending balance | $ / shares | $ 1,330,000 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of information by segment - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 3,600,078 | $ 8,339,215 | $ 17,019,356 |
Cost of goods sold | 3,214,349 | 6,341,539 | 11,778,758 |
Gross profit | 385,729 | 1,997,676 | 5,240,598 |
Interest expense and charges | 103,340 | 857,551 | 691,833 |
Depreciation and amortization | 875,695 | 869,725 | 832,691 |
Capital expenditures | 2,570,644 | 64,758 | 557,519 |
Income tax expenses | 3,469 | 569,974 | 411,054 |
Segment profit (loss) | (20,477,543) | (5,288,007) | (5,551,933) |
Segment assets | 30,961,067 | 57,974,073 | 70,795,244 |
Machinery and Equipment sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,799,741 | 6,455,995 | 14,022,053 |
Cost of goods sold | 1,501,420 | 4,429,869 | 9,415,826 |
Gross profit | 298,321 | 2,026,126 | 4,606,227 |
Interest expense and charges | 132,136 | 672,778 | 633,482 |
Depreciation and amortization | 167,468 | 164,538 | 175,142 |
Capital expenditures | 14,463 | 6,900 | 443,070 |
Income tax expenses | 3,469 | 569,974 | 389,874 |
Segment profit (loss) | (12,497,629) | (725,938) | (3,004,956) |
Segment assets | 12,742,545 | 16,389,063 | 19,150,283 |
Construction materials sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,658,385 | 1,776,525 | 2,818,317 |
Cost of goods sold | 1,562,975 | 1,901,060 | 2,323,157 |
Gross profit | 95,410 | (124,535) | 495,160 |
Interest expense and charges | (121,449) | 48,719 | 949 |
Depreciation and amortization | 705,703 | 701,077 | 648,852 |
Capital expenditures | 2,556,181 | 57,858 | 95,526 |
Income tax expenses | 21,180 | ||
Segment profit (loss) | (7,804,642) | (4,300,671) | (1,189,802) |
Segment assets | 12,646,798 | 41,233,143 | 51,280,426 |
Municipal construction projects [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 141,952 | 106,695 | 178,986 |
Cost of goods sold | 149,954 | 10,610 | 39,775 |
Gross profit | (8,002) | 96,085 | 139,211 |
Interest expense and charges | 77,153 | 136,054 | 52,922 |
Depreciation and amortization | 2,524 | 4,110 | 8,697 |
Capital expenditures | 18,923 | ||
Income tax expenses | |||
Segment profit (loss) | (37,782) | (261,398) | (304,433) |
Segment assets | 98,625 | 347,917 | 356,424 |
Technological consulting and other services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | |||
Cost of goods sold | |||
Gross profit | |||
Interest expense and charges | 15,500 | 4,480 | |
Depreciation and amortization | |||
Capital expenditures | |||
Income tax expenses | |||
Segment profit (loss) | (137,491) | (1,052,742) | |
Segment assets | $ 5,473,099 | $ 3,950 | $ 8,111 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] ¥ in Millions | Apr. 22, 2022shares | Apr. 08, 2022CNY (¥) | Mar. 10, 2022USD ($) | Dec. 31, 2022CNY (¥) | Sep. 30, 2022CNY (¥) | Jun. 30, 2022CNY (¥) | Apr. 30, 2022CNY (¥) |
Subsequent Events (Details) [Line Items] | |||||||
Aggregate principal amount (in Dollars) | $ 3,105,000 | ||||||
Original issue discount (in Dollars) | 90,000 | ||||||
Legal fees (in Dollars) | $ 15,000 | ||||||
Consideration | ¥ | ¥ 18 | ||||||
Payable in installments consideration | ¥ | ¥ 5 | ¥ 5 | ¥ 4 | ¥ 4 | |||
2021 Share Incentive Plan [Member] | |||||||
Subsequent Events (Details) [Line Items] | |||||||
Issuance of an aggregate of common shares to its employees (in Shares) | shares | 3,000,000 | ||||||
Board of Directors [Member] | 2018 Share Incentive Plan [Member] | |||||||
Subsequent Events (Details) [Line Items] | |||||||
Issuance of an aggregate of common shares to its employees (in Shares) | shares | 1,025,000 | ||||||
Series of Individually Immaterial Business Acquisitions [Member] | |||||||
Subsequent Events (Details) [Line Items] | |||||||
Equity interest | 30.00% |