Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
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 | 43,398,885 |
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, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
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, Tower A, 60 Anli Road |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 100101 |
Title of 12(b) Security | Common shares, $0.001 par value per share |
Security Exchange Name | NASDAQ |
Entity Interactive Data Current | Yes |
Document Accounting Standard | U.S. GAAP |
Auditor Name | YCM CPA, Inc |
Auditor Firm ID | 6781 |
Auditor Location | Irvine, California |
Document Shell Company Report | false |
Business Contact | |
Document Information Line Items | |
Entity Address, Address Line One | c/o Beijing REIT Technology Development Co., Ltd |
Entity Address, Address Line Two | X-702, Tower A, 60 Anli Road |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 100101 |
Contact Personnel Name | Hengfang Li |
City Area Code | (+86) |
Local Phone Number | 10-64827328 |
Contact Personnel Email Address | Email: ir@retoeco.com |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 113,895 | $ 457,495 |
Accounts receivable, net | 2,150,450 | 441,703 |
Accounts receivable, net - related party | 83,736 | 93,589 |
Advances to suppliers, net | 453,894 | 281,600 |
Advances to suppliers, net - related party | 3,787,036 | 3,842,620 |
Inventories, net | 337,798 | 463,731 |
Prepayments and other current assets | 402,151 | 389,864 |
Due from related parties | 208,225 | |
Receivable from disposition - current | 7,059,559 | |
Total Current Assets | 7,537,185 | 13,030,161 |
Property, plant and equipment, net | 8,722,435 | 9,707,602 |
Intangible assets, net | 4,869,654 | 4,111,029 |
Long-term investment in equity investee | 2,503,944 | 2,758,228 |
Right-of-use assets | 424,999 | 278,269 |
Goodwill | 1,075,778 | |
Total Assets | 24,058,217 | 30,961,067 |
Current Liabilities: | ||
Short-term loans | 1,319,490 | 2,353,500 |
Convertible debt | 3,922,686 | 1,645,000 |
Advances from customers | 2,551,216 | 2,061,203 |
Due to a minority shareholder | 725,000 | |
Deferred grants - current | 18,563 | 269,061 |
Accounts payable | 2,624,701 | 2,121,313 |
Accounts payable - related party | 10,199 | |
Accrued and other liabilities | 2,717,432 | 3,103,056 |
Loans from third parties | 1,106,233 | 1,593,977 |
Taxes payable | 2,077,088 | 2,599,770 |
Due to related parties | 472,439 | |
Operating lease liabilities, current | 277,036 | 155,857 |
Deferred tax liability | 325,593 | 370,856 |
Total Current Liabilities | 17,665,038 | 16,756,231 |
Loans from third parties-noncurrent | 1,160,000 | |
Operating lease liabilities - noncurrent | 158,650 | 120,558 |
Total Liabilities | 18,983,688 | 16,876,789 |
Commitments and Contingencies | ||
Shareholders’ Equity: | ||
Common Share, $0.001 par value, 200,000,000 shares authorized, 43,398,885 shares and 28,965,034 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 43,400 | 28,966 |
Additional paid-in capital | 53,331,093 | 46,776,170 |
Statutory reserve | 1,066,554 | 1,230,387 |
Accumulated deficit | (47,813,206) | (33,347,984) |
Accumulated other comprehensive loss | (2,388,890) | (1,135,386) |
Total Shareholders’ Equity Attributable to ReTo Eco-Solutions Inc. | 4,238,951 | 13,552,153 |
Noncontrolling interest | 835,578 | 532,125 |
Total Shareholders’ Equity | 5,074,529 | 14,084,278 |
Total Liabilities and Shareholders’ Equity | $ 24,058,217 | $ 30,961,067 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common share, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common share, shares authorized | 200,000,000 | 200,000,000 |
Common share, shares issued | 43,398,885 | 28,965,034 |
Common share, shares outstanding | 43,398,885 | 28,965,034 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Revenues | $ 6,168,798 | $ 3,318,294 | $ 8,110,401 |
Revenues – related parties | 304,875 | 281,784 | 228,814 |
Total Revenues | 6,473,673 | 3,600,078 | 8,339,215 |
Cost of revenues | 5,195,159 | 3,039,296 | 6,193,505 |
Cost of revenues – related parties | 471,849 | 175,053 | 148,034 |
Total cost of revenues | 5,667,008 | 3,214,349 | 6,341,539 |
Gross Profit | 806,665 | 385,729 | 1,997,676 |
Operating Expenses: | |||
Selling expenses | 3,774,666 | 826,242 | 1,085,602 |
General and administrative expenses | 8,592,966 | 4,619,058 | 3,971,496 |
Bad debt expenses | 1,710,839 | 2,250,334 | 909,931 |
Impairment of long-lived assets | 4,344,133 | 2,267,485 | |
Impairment of goodwill | 1,018,870 | ||
Research and development expenses | 960,598 | 346,951 | 334,904 |
Total Operating Expenses | 16,057,939 | 12,386,718 | 8,569,418 |
Loss from Operations | (15,251,274) | (12,000,989) | (6,571,742) |
Other Income (Expenses): | |||
Interest expense | (321,686) | (103,340) | (857,551) |
Interest income | 3,234 | 1,898 | (64) |
Other income (expenses), net | 177,753 | (26,991) | 480,054 |
Loss from disposal of REIT Changjiang | (6,293,149) | ||
Gain from dissolution of subsidiaries | 508,345 | ||
Gain from disposal of Gu’an REIT | 2,231,270 | ||
Share of losses in equity method investments | (46,209) | (142,673) | |
Change in fair value convertible debt | (467,383) | (1,908,830) | |
Total Other Income (Expenses), net | (145,946) | (8,473,085) | 1,853,709 |
Loss before provision for income taxes | (15,397,220) | (20,474,074) | (4,718,033) |
Income taxes provision (benefit) | (17,562) | 3,469 | 569,974 |
Net loss from continuing operations | (15,379,658) | (20,477,543) | (5,288,007) |
Net loss from discontinued operations, net of taxes | (1,596,390) | (7,612,601) | |
Net Loss | (15,379,658) | (22,073,933) | (12,900,608) |
Less: net loss attributable to noncontrolling interest | (750,603) | (969,107) | (1,126,845) |
Net loss attributable to ReTo Eco-Solutions, Inc. | (14,629,055) | (21,104,826) | (11,773,763) |
Comprehensive Loss: | |||
Net Loss | (15,379,658) | (22,073,933) | (12,900,608) |
Other Comprehensive income (loss): | |||
Foreign currency translation adjustments | (1,183,819) | 493,769 | 1,923,316 |
Comprehensive Loss | (16,563,477) | (21,580,164) | (10,977,292) |
Less: comprehensive loss attributable to noncontrolling interest | (680,918) | (938,771) | (1,132,148) |
Comprehensive loss attributable to ReTo Eco-Solutions, Inc. | (15,882,559) | (20,641,393) | (9,845,144) |
Net loss attributable to ReTo Eco-Solutions, Inc. | |||
Continuing operations | (14,629,055) | (19,508,436) | (4,161,162) |
Discontinued operations | (1,596,390) | (7,612,601) | |
Total | $ (14,629,055) | $ (21,104,826) | $ (11,773,763) |
Basic and Diluted Loss Per Share Attributable to ReTo Eco-Solutions, Inc. | |||
Continuing operations (in Dollars per share) | $ (0.38) | $ (0.75) | $ (0.17) |
Discontinued operations (in Dollars per share) | (0.06) | (0.32) | |
Total (in Dollars per share) | $ (0.38) | $ (0.81) | $ (0.49) |
Weighted average number of shares | |||
Basic (in Shares) | 38,800,974 | 26,160,750 | 24,124,884 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parentheticals) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Diluted | 38,800,974 | 26,160,750 | 24,124,884 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders’ Equity - USD ($) | Common Shares | Additional paid-in Capital | Statutory Reserve | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Noncontrolling 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 | ||||||
Change in statutory reserve related to disposal of Gu’an REIT | (1,188,403) | 1,188,403 | |||||
Change in non-controlling interest related to acquisition subsidiaries of REIT Mingde | 784,184 | 784,184 | |||||
Share to be issued | 1,573,800 | 1,573,800 | |||||
Appropriation to statutory reserve | 32,671 | (32,671) | |||||
Change in capital related to disposal of REIT Changjiang | (3,846,563) | 3,846,563 | |||||
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 | ||||||
Net loss | (14,629,055) | (750,603) | (15,379,658) | ||||
Conversion of convertible debt | $ 1,359 | 1,797,955 | 1,799,314 | ||||
Conversion of convertible debt (in Shares) | 1,358,851 | ||||||
Issuance of common shares for acquisition of REIT Mingde | $ 2,580 | (2,580) | |||||
Issuance of common shares for acquisition of REIT Mingde (in Shares) | 2,580,000 | ||||||
Issuance of common shares in private placements | $ 5,970 | 3,576,030 | 3,582,000 | ||||
Issuance of common shares in private placements (in Shares) | 5,970,000 | ||||||
Issuance of common shares for services | $ 500 | 734,500 | 735,000 | ||||
Issuance of common shares for services (in Shares) | 500,000 | ||||||
Share-based compensation | $ 4,025 | 3,292,450 | 3,296,475 | ||||
Share-based compensation (in Shares) | 4,025,000 | ||||||
Appropriation to statutory reserve | 22,782 | (22,782) | |||||
Shareholders’ contribution | 815,814 | 815,814 | |||||
Purchase of 30% noncontrolling interest in Xinyi REIT | (2,843,432) | 168,632 | (2,674,800) | ||||
Change in equity related to dissolution of Dingxuan and REIT Xong’an | (186,615) | 186,615 | (75) | (75) | |||
Foreign currency translation adjustments | (1,253,504) | 69,685 | (1,183,819) | ||||
Balance at Dec. 31, 2022 | $ 43,400 | $ 53,331,093 | $ 1,066,554 | $ (47,813,206) | $ (2,388,890) | $ 835,578 | $ 5,074,529 |
Balance (in Shares) at Dec. 31, 2022 | 43,398,885 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders’ Equity (Parentheticals) | 12 Months Ended |
Dec. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | |
Purchase of noncontrolling interest percentage | 30% |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (15,379,658) | $ (22,073,933) | $ (12,900,608) |
Less: net loss from discontinued operations | 1,596,390 | 7,612,601 | |
Net loss from continuing operations | (15,379,658) | (20,477,543) | (5,288,007) |
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 | |
Deferred tax provision (benefit) | (17,562) | 366,365 | |
Depreciation and amortization | 621,805 | 875,695 | 869,725 |
Change in fair value in convertible debt | 467,383 | 1,908,830 | |
Convertible debt issuance cost | 415,500 | ||
Accrued interest for convertible debt | 194,117 | 132,516 | |
Impairment of long-lived assets | 4,344,133 | 2,267,485 | |
Stock-based compensation | 4,031,475 | 1,906,762 | 772,125 |
Change in bad debt allowances | 1,690,004 | 2,250,334 | 909,931 |
Change in inventory reserve | 20,835 | (119,995) | 123,280 |
Impairment of good will | 1,018,870 | ||
(Gain) loss from disposal of subsidiary | 6,293,149 | (2,231,270) | |
Gain from dissolution of a subsidiary | (508,345) | ||
Shares of losses in equity method investments | 46,209 | 142,673 | |
Amortization of operating lease right-of-use assets | 271,185 | 121,778 | 159,181 |
Changes in operating assets: | |||
Accounts receivable | (2,745,026) | 614,765 | 3,591,628 |
Accounts receivable - related party | 2,824 | 109,761 | 284,487 |
Advances to suppliers | 255,613 | 905,758 | 2,621,196 |
Advances to suppliers - related party | (241,714) | 282,773 | (3,810,445) |
Inventories | 108,188 | 167,336 | (58,308) |
Prepayments and other current assets | (134,711) | (128,130) | (742,853) |
Changes in operating liabilities: | |||
Advances from customers | 662,391 | (1,436,799) | 423,517 |
Advances from customers - related party | (2,201) | 2,056 | |
Deferred revenue | (254,828) | (31,000) | 25,051 |
Deferred grants | 19,024 | (230,197) | 463,360 |
Accounts payable | 680,770 | 1,163,509 | (477,341) |
Accounts payable - related party | (9,659) | (144,969) | (1,352,618) |
Accrued and other liabilities | (240,979) | 997,686 | 1,088,452 |
Taxes payable | (641,431) | 76,419 | 698,905 |
Operating lease liability | (294,115) | (131,769) | (186,891) |
Net cash (used in) provided by operating activities from continuing operations | (9,961,835) | (37,895) | 240,958 |
Net cash provided by (used in) operating activities from discontinued operations | (2,726,347) | 6,990 | |
Net cash provided by (used in) operating activities | (9,961,835) | (2,764,242) | 247,948 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from disposal of subsidiaries | 5,696,215 | 2,649,463 | 3,843,734 |
Addition of property and equipment | (149,547) | (17,686) | (64,758) |
Addition of intangible assets | (1,303,965) | ||
Investment in equity method investment | (2,649,840) | ||
Prepayment on CIP | (2,552,958) | ||
Net cash from acquisition of REIT Mingde | 21,339 | ||
Net cash provided by investing activities from continuing operations | 4,242,703 | 100,158 | 1,129,136 |
Net cash used in investing activities from discontinued operations | (1,843,757) | (184,735) | |
Net cash provided by (used in) investing activities | 4,242,703 | (1,743,599) | 944,401 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from short-term bank loans | 668,700 | 2,325,000 | 11,012,040 |
Repayment of short-term bank loans | (1,545,450) | (5,774,926) | (13,097,915) |
Repayment of long-term bank loans | (1,394,854) | (144,937) | |
Proceeds received from share issuance | 3,582,000 | ||
Proceeds from third-party loans | 1,768,340 | 799,674 | 724,000 |
Repayment of third-party loans | (955,498) | ||
Shareholder contribution | 815,814 | ||
Proceeds from issuance of convertible debt | 3,000,000 | 3,666,171 | |
Payments to non-controlling shareholders | (1,931,800) | ||
Proceeds from related party loans | 667,487 | 483,510 | 669,089 |
Repayment of related party loans | (1,313,778) | (788,937) | (707,924) |
Net cash provided by (used in) financing activities from continuing operations | 4,755,815 | (684,362) | (1,545,647) |
Net cash provided by financing activities from discontinued operations | 4,732,509 | 367,808 | |
Net cash provided by (used in) financing activities | 4,755,815 | 4,048,147 | (1,177,839) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 619,717 | (203,651) | 120,615 |
NET INCREASE (DECREASE) IN CASH | (343,600) | (663,345) | 135,125 |
CASH, BEGINNING OF YEAR | 457,495 | 1,120,840 | 985,715 |
CASH, END OF YEAR | 113,895 | 457,495 | 1,120,840 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Interest paid | 321,686 | 990,580 | 1,505,452 |
Income tax paid | 3,268 | ||
Non-Cash Investing Activities | |||
Right-of-use assets obtained in exchange for operating lease obligations | 493,731 | 132,336 | 402,778 |
Right-of-use assets offset with operating lease obligations due to lease cancellation | 50,545 | 64,230 | 410,614 |
Purchase of 30% noncontrolling interest in Xinyi REIT through payable to non-controlling shareholders | 743,000 | ||
Addition to account receivable from disposal of REIT Changjiang | 4,666,938 | ||
Common shares issued for conversion of debt | 1,799,314 | 3,930,000 | |
Withdrawal of capital by original minority shareholder in Xinyi REIT | 2,843,432 | ||
Share to be issued for acquisition of REIT Mingde | 1,573,800 | ||
Less: cash and cash equivalents, restricted cash of discontinued operations at end of period | 62,702 | ||
Cash and cash equivalents, restricted cash of continued operation, at end of period | $ 113,895 | $ 457,495 | $ 1,058,138 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parentheticals) | 12 Months Ended |
Dec. 31, 2022 | |
Statement of Cash Flows [Abstract] | |
Purchase of noncontrolling interest | 30% |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
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 subsidiaries 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, 2022, 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 Incorporation 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 % Beijing REIT Ecological Engineering Technology Co., Ltd. (“Beijing REIT Ecological”) 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 - % REIT Q GREEN Machines Private Ltd (“REIT India”) India 51 % REIT Ecological Technology Co., Ltd. (“REIT Ordos”)* 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. (“REIT Xiong’an”)** Xiong’an, China - % 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. (“Fangyuyuan”) Haikou, China 90 % 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, (“IoV Technology Research”) Haikou, China 90 % Ruishi Tongda Ecological Management Co., Ltd.** Gansu,China 70 % Honghe Ruitu Ecological Technology Co., Ltd. Yunnan,China 100 % Hainan Coconut Network Freight Co., Ltd. Haikou, China 100 % * Previously known as “REIT Yangcheng” ** Dingxuan was dissolved on August 30, 2022; REIT Xiong’an was dissolved on September 9, 2022. REIT Construction was dissolved subsequently on February 9, 2023. Ruishi Tongda Ecological Management Co., Ltd. was dissolved on March 7, 2023. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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, 2022. As a result, allowance for uncollectible balances amounted to $1,771,761 and $904,052 as of December 31, 2022 and 2021, 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 $31,527 and $12,116 from its continuing operations as of December 31, 2022 and 2021, 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 $449,517 and $965,843 as of December 31, 2022 and 2021, 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 Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets acquired less liabilities assumed of an acquired business. The Group’s goodwill at December 31, 2021 arose from its business acquisition of REIT Mingde and its subsidiaries. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually, or more frequently if certain circumstances indicate a possible impairment may exist. In accordance with ASC 350-20, Intangibles-Goodwill and Other, Goodwill, (“ASC 350-20”) the Group has assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. The Group has determined that it has one reporting unit, which is also its only reportable segment. The Group has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step test in accordance with ASC 350-20. If the Group believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing the two-step quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quoted market prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired, and the Group is not required to perform further testing. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Group must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized as an impairment loss. For the year ended December 31, 2022, due to the slow development of REIT Mingde and its subsidiaries, the Group performed the two-step test for the reporting unit. In accordance with ASC 350-20, the Group recorded an impairment loss of $1,018,870 (RMB 6,856,458) for the year ended December 31, 2022. 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. Given the Company’s net loss position in fiscal 2022, 2021 and 2020, 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 $ nil 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, 2022 and December 31, 2021, the Company’s long-term investment in equity investee balance represents its $2,503,944 and $2,758,228, 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 and the 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 years ended December 31, 2022 and 2021, the investment loss from Shexian Ruibo was $46,209 and $142,673, respectively. 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, 2022 and December 31, 2021, 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 December31, 2022 and 2021, 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 December31, 2022 and 2021 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 loans. 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, 2022 was $3,922,686 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 13 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, 2022: December 31, 2022 Opening balance $ 1,645,000 New convertible loans issued 3,415,500 Accrued interest 194,117 Loss on change in fair value of convertible loan 467,383 Conversion of convertible loans (1,799,314 ) Total $ 3,922,686 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, 2022, 2021 and 2020. ● 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, 2022 and 2021, 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, 2022, 2021 and 2020 is disclosed in Note 21. 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 $151,500, $367,873 and $216,301 for the years ended December 31, 2022, 2021 and 2020, 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, 2022 and December 31, 2021, the remaining balance was $18,563 and $269,061, respectively. 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, 2022, 2021 and 2020. As of December 31, 2022, the tax years ended December 31, 2018 through December 31, 2022 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, 2022, 2021 and 2020, 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 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, 2022 December 31, 2021 December 31, 2020 Year-end spot rate US$1=RMB 6.8972 US$1=RMB 6.3726 US$1=RMB 6.5250 Average rate US$1=RMB 6.7290 US$1=RMB 6.4508 US$1 |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2022 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN As reflected in the Company’s consolidated financial statements for the year ended December 31, 2022, the Company’s revenue increased by approximately $2.9 million, or 80%, from approximately $3.6 million in the year ended December 31, 2021 to approximately $6.5 million in the year ended December 31, 2022, its gross profit from continued operation increased by approximately $0.4 million, or 109%, from approximately $0.4 million in the year ended December 31, 2021 to approximately $0.8 million for the year ended December 31, 2022, and its gross margin for the year ended December 31, 2022 increased to 13% from 11% for the last year. For the years ended December 31, 2022 and 2021, 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 years ended December 31, 2022 and 2021, the Company reported a net loss of approximately $15.4 million and $22.1 million, respectively. As of December 31, 2022, the Company had a working capital deficit of approximately $10.1 million. In addition, the Company had large bank borrowings as of December 31, 2022 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. As of December 31, 2022, the Company had cash of approximately $0.1 million. In addition, the Company had outstanding accounts receivable of approximately $2.2 million (including accounts receivable from third-party customers of $2.1 million and accounts receivable from related party customers of approximately $0.1 million), of which approximately $0.3 million, or 7.7%, had been subsequently collected between January and April 2022, and became available for use as working capital. As of December 31, 2022, the Company had outstanding bank loans of approximately $1.3 million from a PRC bank. 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, 2022 | |
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. During the year ended December 31, 2022, the Company further received RMB38.5 million (approximately $5.7 million) from Zhixin. The remaining balance amounted to $1,067,945. Allowance for uncollectible balances from the operations amounted to $1,067,945 as of December 31, 2022, respectively. 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 results of operations related to the discontinued operations for the years ended December 31, 2021 and 2020 were reported as loss from discontinued operations. The results of discontinued operations of REIT Changjiang for years ended December 31, 2022, 2021 and 2020 are as follows: For the Years Ended December 31, 2022 2021 2020 Revenue $ - $ 886,571 1,395,285 Cost of revenues - 1,657,799 2,235,598 Gross loss - (771,228 ) (840,313 ) Operating expenses - 829,049 6,036,039 Loss from discontinued operations - (1,600,277 ) (6,876,352 ) Other income (expense), net - 4,375 (736,249 ) Loss before tax - (1,595,902 ) (7,612,601 ) Income tax provision - 488 - Net loss from discontinued operations $ - $ (1,596,390 ) (7,612,601 ) |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2022 | |
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. For the year ended December 31, 2022, the Company fully impaired the goodwill related to the acquisition of REIT Mingde and its subsidiaries. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Receivable, Net [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 6 – ACCOUNTS RECEIVABLE, NET Accounts receivable consisted of the following: December 31, 2022 December 31, 2021 Trade accounts receivable from third-part customers $ 3,922,211 $ 1,345,755 Less: allowances for doubtful accounts (1,771,761 ) (904,052 ) Total accounts receivable from third-party customers, net 2,150,450 441,703 Add: accounts receivable, net, related parties 83,736 93,589 Accounts receivable, net $ 2,234,186 $ 535,292 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, 2022, approximately $0.3 million, or 7.7% has been collected and the remaining balance is expected to be substantially collected from customers before December 31, 2023. Allowance for doubtful accounts movement is as follows: December 31, 2022 December 31, 2021 Beginning balance $ 904,052 $ 6,888,710 Bad debt provision 981,811 1,949,778 Write off (22,290 ) (7,722,231 ) Reduction due to divestitures - (299,544 ) Foreign exchange translation (91,812 ) 87,339 Ending balance $ 1,771,761 $ 904,052 Below is the aging schedule of accounts receivable as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Accounts Receivable Aging: Less than 3 months $ 462,575 $ 294,481 From 4 to 6 months 1,262,588 197,465 From 7 to 9 months 1,440,668 28,134 From 10 to 12 months 86,712 107,317 Over 1 year 753,404 811,947 Bad debt reserve (1,771,761 ) (904,052 ) Accounts Receivable, net $ 2,234,186 $ 535,292 |
Advances to Suppliers, Net
Advances to Suppliers, Net | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 December 31, 2021 Raw material prepayments for equipment production $ 466,619 $ 751,409 Land reclamation prepayments 436,792 472,640 Advances to construction subcontractors - 23,394 Total: 903,411 1,247,443 Less: allowances for doubtful accounts (449,517 ) (965,843 ) Advances to suppliers, net, third parties $ 453,894 $ 281,600 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. The changes of allowance for doubtful accounts for the years ended December 31, 2022 and 2021 are as follow: December 31, 2022 December 31, 2021 Beginning balance $ 965,843 $ 1,112,374 Bad debt provision (454,072 ) 259,861 Write off - (428,553 ) Foreign exchange translation (62,254 ) 22,161 Ending balance $ 449,517 $ 965,843 |
Inventories, Net
Inventories, Net | 12 Months Ended |
Dec. 31, 2022 | |
Inventories, Net [Abstract] | |
INVENTORIES, NET | NOTE 8 – INVENTORIES, NET Inventories, net, consisted of the following: December 31, 2022 December 31, 2021 Raw materials $ 148,145 $ 135,049 Finished goods 221,180 340,798 Subtotal 369,325 475,847 Less: Inventory allowance (31,527 ) (12,116 ) Inventories, net $ 337,798 $ 463,731 Inventories include raw material and finished goods. Finished goods include direct material costs, direct labor costs and manufacturing overhead. For the years ended December31, 2022, 2021 and 2020, the Company provided an inventory allowance (reversion) of $20,835, $(119,995) and $123,280, respectively. |
Prepayments and Other Current A
Prepayments and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepayments and Other Current Assets [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, 2022 December 31, 2021 Other receivable, net (1) $ 334,246 $ 351,844 Value added tax receivable 67,905 38,020 Total $ 402,151 $ 389,864 (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, 2022 | |
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, 2022, 2021 and 2020 was $421,585, $283,168 and $122,699, 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 $306,824, which included $35,154 of interest, $271,185 of amortization expense of ROU assets and short-term lease expense of $114,761. Total cash paid for operating leases amounted to $294,115 for the year ended December 31, 2022. Supplemental balance sheet information related to operating leases is as follows: December 31, 2022 Right-of-use assets $ 424,999 Operating lease liabilities – current $ 277,036 Operating lease liabilities - non-current 158,650 Total operating lease liabilities $ 435,686 The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2022: Remaining lease term and discount rate: Weighted average remaining lease term (years) 1.73 Weighted average discount rate 7.42 % The following is a schedule of maturities of lease liabilities as of December 31, 2022: 2023 $ 295,403 2024 164,903 Total lease payments 460,306 Less: imputed interest 24,620 Present value of lease liabilities $ 435,686 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment, Net [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 11 – PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consisted of the following: December 31, 2022 December 31, 2021 Property and buildings $ 16,676,800 $ 15,469,040 Machinery and equipment 1,481,983 1,594,700 Transportation vehicles 774,619 744,885 Office and electronic equipment 159,069 155,685 Leasehold improvement 43,519 - Subtotal 19,135,990 17,964,310 Construction in progress (“CIP”) - 2,584,252 Less: accumulated depreciation (3,413,535 ) (3,255,669 ) Impairment of fixed assets (7,000,020 ) (7,585,291 ) Property, plant and equipment, net $ 8,722,435 $ 9,707,602 Given the Company’s net loss position, the Company 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 $ nil As of December 31, 2021, the Company’s properties with an aggregate carrying value of approximately $0.2 million (RMB 1.1 million) have been used as collateral for the Company’s short-term loans (see Note 14). Depreciation expense was $414,841, $835,054 and $802,996 for the years ended December 31, 2022, 2021 and 2020, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 12 – INTANGIBLE ASSETS, NET Intangible assets, net consisted of the following: December 31, 2022 December 31, 2021 Land use rights $ 1,599,693 $ 1,730,978 Software 1,299,612 29,472 Others 2,284,860 2,472,376 Patent 114,851 124,277 Total 5,299,016 4,357,104 Less: accumulated amortization (429,362 ) (246,075 ) Intangible assets, net $ 4,869,654 $ 4,111,029 As of December 31, 2022 and 2021, land use rights of 74,278 and 74,278 square meters with a carrying value of approximately $1.4 million and $1.5 million, respectively, was pledged to the bank as collateral for the Company’s Short-term bank loan (see Note 14). Amortization expense was $206,964, $34,671 and $29,695 for the years ended December 31, 2022, 2021 and 2020, respectively. Estimated future amortization expense is as follows: Twelve months ending December 31, Amortization expense 2023 $ 160,446 2024 160,446 2025 160,446 2026 160,446 2027 160,446 2028 and Thereafter 4,067,424 $ 4,869,654 |
Convertible Loans
Convertible Loans | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE LOANS | NOTE 13–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. The remaining balance of $1,370,000 of the July Debenture was converted into 1,068,078 common shares of the Company during the year ended December 31, 2022. 2022 March Debenture 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. On October 13, 2022 the Company entered into a standstill agreement with the investor. Pursuant to the standstill agreement, the investor will not seek to convert any portion of the Note for a period beginning as of the date of the agreement and ending on December 10, 2022 (the “Standstill Period”). Balance of the Note shall be increased by $310,500.00 (the “Standstill Fee”) as of the date of the agreement. The fair value of the Note was $3,922,686 as of December 31, 2022. The principal balance of $100,000 of the 2022 March Debenture was converted into 290,773 common shares of the Company on December 20, 2022. Subsequently to December 31, 2022, an aggregated principal balance of $350,000 of the March Debenture was converted into 1,388,804 common shares of the Company and the Company renewed the 2022 March Debenture with the investors in 2023. For the years ended December 31, 2022 and 2021, due to change in fair value of convertible debentures, the Company recorded an unrealized loss of $467,383 and $1,908,830 in other expense, respectively. Interest expense recognized for these convertible debentures for the years ended December 31, 2022 and 2021 were $194,117 and $132,516, respectively. |
Short-term Loans
Short-term Loans | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
SHORT-TERM LOANS | NOTE 14–SHORT-TERM LOANS Short-term loans consisted of the following: December 31, December 31, Hunyuan Rural Credit Cooperative Association (1) $ 725,000 $ 784,500 Bank of Jiangsu (2) 362,500 784,500 Huaxia Bank (3) 231,990 784,500 Total $ 1,319,490 $ 2,353,500 (1) On December 6, 2021, 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 of one year. The loan bears a fixed interest rate of 7.3590% per annum. The loan is guaranteed by Beijing REIT. On December 4, 2022, the Company extended the loan to December 1, 2023. The extended loan bears a fixed interest rate of 7.05% per annum. (2) 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 RMB 5 million for use as working capital between September 3, 2021 and August 26, 2022. The Company signed a 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%. 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 9.4 million (approximately $1.4 million) as collateral to safeguard the loan. The loan was fully repaid in September 2022. The Company signed another bank loan agreement with Bank of Jiangsu to borrow $0.7 million (RMB4.5 million) on September 20, 2022 for a period of six months, with a fixed interest rate of 4.55%. The loan was fully repaid in March 2023. (3) On November 19, 2021, Beijing REIT entered into a new line of credit agreement with Huaxia Bank. The agreement allows Beijing REIT to obtain loans to approximately $0.8 million (RMB5 million) for use as working capital between November 19, 2021 and November 19, 2022 for a term of one year. The loan bears a fixed interest rate of 5.655% per annum. The loan is guaranteed by Beijing Zhongguancun Technology Financing Guarantee Co., Ltd. The Company repaid RMB3.4 million (approximately$0.5 million) in December 2022. The remaining balance was fully repaid in January 2023. For the years ended December 31, 2022, 2021 and 2020, interest expense on all short-term loans amounted to $132,921, $372,881 and $473,845, respectively. |
Long Term Loan
Long Term Loan | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG TERM LOAN | NOTE 15–LONG TERM LOAN December 31, 2022 December 31, 2021 Long-term loans Jiangsu Yuantong Municipal Projects Construction Co., Ltd. (1) $ 1,160,000 $ - Total $ 1,160,000 $ - (1) In October 11 2022 REIT Construction entered into a third-party loan agreement with Jiangsu Yuantong Municipal Projects Construction Co., Ltd to borrow approximately $1.1 million (RMB 8 million) as working capital loan for two years. The loan was from October 11, 2022 to October 10, 2024 and interest-free. For the years ended December 31, 2022, 2021 and 2020 interest on the Company’s long-term loans amounted to $ nil nil |
Loans from Third Parties
Loans from Third Parties | 12 Months Ended |
Dec. 31, 2022 | |
Loans from Third Parties [Abstract] | |
LOANS FROM THIRD PARTIES | NOTE 16–LOANS FROM THIRD PARTIES Loans from third parties December 31, 2022 December 31, 2021 Sanya Guohong Municipal Projects Construction Co., Ltd. $ - $ 627,600 Changshu Tongjiang Engineering Co., Ltd. 145,000 219,660 Zhang Miao 145,000 156,900 Pen Jing - 156,900 Chen Guo 61,363 66,399 Chai Guirong 145,000 313,800 Hainan Boxinda Science Technology Partnership 212,570 52,718 Yu Zhanfeng 246,500 - (Qinhua) Beijing Dingji Rubik’s Cube Model Technology Co. LTD 10,150 - Xinyi Xinshuo Concrete Co., LTD 72,500 - Chen Gang 68,150 - Total $ 1,106,233 $ 1,593,977 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. the loan was fully repaid as of December 31, 2022. 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. After partial repayment, the loan balance was $145,000 as of December 31, 2022. 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. After partial repayment, the loan balance was $145,000 as of December 31, 2022. Subsequently on March 15, 2023, the Company borrowed $362,500 (RMB 2.5 million) from Zhang Miao for working capital. The loan is due on demanded 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%. The loan was fully repaid as of December 31, 2022. 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%. The loan balance was $61,363 as of December 31, 2022. 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%. After partial repayment, the loan balance was $145,000 as of December 31, 2022. 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, 2023 and interest-free. The loan balance was $48,720 as of December 31, 2022. On January 30, 2022, Yile International obtained a working capital loan of $101,500 from Hainan Boxinda Science Technology Partnership. The loan is from January 30, 2022 to January 29, 2023 and interest-free. On February 17, 2022, REIT Technology obtained a working capital loan of $62,350 from Hainan Boxinda Science Technology Partnership. The loan is from February17, 2022 to February16, 2023 and interest-free. On July 29, 2022, Beijing REIT obtained three working capital loans of $246,500 from Yu Zhanfeng for four months. The loans are interest-free. The loans balance was $246,500 as of December 31, 2022.The loan was repaid $ 174,000 in March, 2023. On May 9, 2022, Beijing REIT obtained a working capital loan of $10,500 from Beijing Dingji Rubik’s Cube. The loan was due on demand and interest-free. On September 18, 2022, Beijing REIT obtained a working capital loan of $72,500 from Xinyi Xinshuo Concrete Co., LTD. The loan was from September 18, 2022 to September 17, 2022 and interest-free. On September 19, 2022, Beijing REIT obtained a working capital loan of $72,500 from Chen Gang. The loan was from September 19, 2022 to September18, 2023 and interest-free. After partial repayment, the loan balance was $68,150 as of December 31, 2022. |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
TAXES | NOTE 17–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, Hainan Yile IoT and IoV Technology Research were 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, 2022 2021 2020 Income tax benefit computed based on PRC statutory income tax rate $ (3,849,305 ) $ (5,118,519 ) $ (1,179,508 ) Effect of favorable income tax rate in certain entity in PRC 181,088 889,716 (164,071 ) Non-PRC entities not subject to PRC tax (1) 1,749,333 1,564,644 401,488 Research & Development (“R&D”) tax credit (2) (240,150 ) (260,213 ) (251,178 ) Non-deductible expenses - permanent difference (3) 171,393 588,191 826,034 Change in valuation allowance 1,970,079 2,339,650 937,209 Effective tax (benefit) expense $ (17,562 ) $ 3,469 $ 569,974 (1) Represents the tax losses incurred from operations outside of China. (2) According to PRC tax regulations, 200% 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, 2022 2021 2020 Loss before income tax expense from China $ (9,398,680 ) $ (13,889,029 ) $ (3,280,706 ) Loss before income tax expense from outside of China (5,998,540 ) (6,585,045 ) (1,437,326 ) Total loss before income tax provision $ (15,397,220 ) $ (20,474,074 ) $ (4,718,032 ) 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, 2022, 2021 and 2020 was as follows: For the Years ended December 31, 2022 2021 2020 Current $ - $ 3,469 $ 569,974 Deferred (17,562 ) - - Total $ (17,562 ) $ 3,469 $ 569,974 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, 2022 and 2021. Deferred tax asset December 31 2022 December 31 2021 Provision of doubtful accounts $ 531,902 $ 323,107 Tax loss carried forwards 5,443,492 4,482,385 Valuation allowance on tax losses (5,975,394 ) (4,805,492 ) $ - $ - (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, 2022 2021 VAT tax payable $ 359,391 $ 422,678 Corporate income tax payable 1,702,591 2,156,850 Land use tax and other taxes payable 15,106 20,242 Total $ 2,077,088 $ 2,599,770 As of December 31, 2022 and 2021, the Company had tax payables of approximately $2.1 million and $2.6 million, respectively, mostly related to the unpaid income tax and business tax in China. For the years ended December 31, 2022 and 2021, 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. |
Commitments and Contigencies
Commitments and Contigencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTIGENCIES | NOTE 18–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, 2022, the Company’s contractual obligations consisted of the following: Contractual Obligations Total Less than 1-3 years 3-5 years More than 5 years Operating lease commitment $ 460,306 $ 295,403 $ 164,903 $ - $ - Repayment of bank loans 1,319,490 1,319,490 - - - Total $ 1,779,796 $ 1,614,893 $ 164,903 $ - $ - |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 19–RELATED PARTY TRANSACTIONS The Company records transactions with various related parties. These related party balances as of December 31, 2022 and 2021 and transactions for the years ended December 31, 2022, 2021 and 2020 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 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, 2022 and 2021, the balance of due to related parties was as follows: December 31, 2022 December 31, 2021 Mr. Hengfang Li $ 208,225 $ 472,439 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, 2022 December 31, 2021 Accounts receivable from– related parties Q Green Techcon Private Limited $ - $ 2,981 Hunyuan Baiyang Food Co., Ltd. 37,048 40,088 Bei Qi Yin Jian Yi Le (Haikou) Smart Move Science Technology Co., Ltd. 46,688 50,520 Total accounts receivable from related party $ 83,736 $ 93,589 The Company fully collected the accounts receivable as of December 31, 2022 from related parties as of the date herein. (4) Advance to suppliers, related party Advance to suppliers, related party, consisted of the following: December 31, 2022 December 31, 2021 Advance to supplier – related party Shexian Ruibo* $ 3,769,138 $ 3,656,118 Q Green Techcon Private Limited 15,310 174,099 Handan Ruisheng Construction Material Technology Co., Ltd. 2,588 12,403 Total $ 3,787,036 $ 3,842,620 * 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, 2022 December 31, 2021 Accounts payable – related part - Zhongtou Ruitu Information Service (Beijing) Co., Ltd $ - $ 10,199 Total $ - $ 10,199 (6) Sales to related parties Sales to related parties consisted of the following: For the Years Ended December 31, 2022 2021 2020 Sales to related parties Changjiang Zhongrong Hengde Environmental Protection Co., LTD $ 215,693 $ - $ - Shexian Ruibo 82,453 61,177 - Q Green Techcon Private Limited 6,729 220,607 228,814 Total $ 304,875 $ 281,784 $ 228,814 Cost of revenue associated with the sales to these related parties amounted to $471,849, $175,053 and $148,034 for the years ended December 31, 2022, 2021, and 2020, respectively. (7) Purchases from related parties Purchases from related parties consisted of the following: For the years ended December 31, 2022 2021 2020 Purchase from a relate party Q Green Techcon Private Limited. $ 266,544 $ 228,838 $ 1,039,152 Shexian Ruibo 1,141,377 235,946 1,837,841 Total $ 1,407,921 $ 464,784 $ 2,876,993 |
Shareholders_ Equity
Shareholders’ Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 20 SHAREHOLDERS’ 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 $1,066,554 and $1,230,387 as of December 31, 2022 and 2021. 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, 2022 and 2021, 43,398,885 and 28,965,034 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 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, 2022, 2021 and 2020, the Company recognized stock-based compensation expenses of $ nil 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, 2022, 2021 and 2020, the Company recognized stock-based compensation expenses of $ nil 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 years ended December 31, 2022 and 2021, the Company recognized stock-based compensation expenses of $ nil In January 2022, the Company revised the consulting service agreement with Geniusland International Capital Ltd., (“Geniusland”). Pursuant to the new agreement, the service will cease on March 28, 2022. For the service provided between December 29, 2021 to March 28, 2022. The Company issued 500,000 common shares valued at $735,000 based on fair market price of the Company’s common shares, at $1.47 per share on January 3, 2022. Share-based compensation is amortized over the service period. For the year ended December31, 2022, the Company recognized share-based compensation expenses of $735,000. Number of shares Weighted average grant date value Nonvested as of December 31, 2021 $ 1,000,000 $ 1,330,000 Granted 500,000 735,000 Vested 1,500,000 2,065,000 Nonvested as of December 31, 2021 $ - $ - 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. 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. 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. 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. The Company issued an aggregate of 4,025,000 shares between May 9, 2022 and June 4, 2022 and recognized share-based compensation expenses of $3,296,475 related to the issuance. On May 25, 2022, the Company issued 5,970,000 Common Shares to Hainan Tashanshi Digital Information Co. Ltd. at $0.60 per share for aggregate gross proceeds of $3,582,000. On March 8, 2023, the Company’s board of directors approved the issuance of an aggregate of 5,000,000 Common Shares to its employees, officers and directors for their services under the 2022 Share Incentive Plan On February 27, 2023, the Company entered into a consulting service agreement with Express Transportation Ltd. (“ETL”). Pursuant to the agreement, ETL has agreed to provide feasibility, analysis and risk management services on investment project in mainland China in exchange for 2,000,000 Common Shares, which were issued on March 8, 2023. On February 27, 2023, the Company entered into a consulting service agreement with Maxleed Investment Holding Ltd. (“MIHL”). Pursuant to the agreement, MIHL has agreed to provide strategy, due diligence, business expansion and optimization services in exchange for 2,000,000 Common Shares, which were issued on March 8, 2023. Conversion of convertible debentures For the year ended December 31, 2022, the Company issued an aggregate of 1,358,851 common shares for conversion of convertible debentures based on the conversion price ranging from $0.24-$0.34. (see Note 13). 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 13). Purchase of non-controlling interest in Xinyi REIT 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. The Company has paid RMB 13 million (approximately $1.9 million) as of December 31, 2022. As of December 31, 2022, the balance amounted to RMB 5 million (approximately $0.7 million). The Company further paid RMB 3 million (approximately $0.4 million) in 2023. approximately $0.3million Non-controlling shareholder contribution On April 6, 2022, Hainan Shi Yuan Tong Da Ye Feng Private Equity Partnership (Limited Partnership) signed an investment agreement with REIT Mingde to invest RMB 5 million (approximately $0.8 million) into REIT Mingde ’s subsidiary Fangyuyuan in exchange for 10% equity interest. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 21–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, 2022, 2021 and 2020, respectively: For the Year Ended December 31, 2022 Machinery Construction Municipal Technological Total Revenues $ 4,298,649 $ 805,576 $ 527,101 $ 842,347 $ 6,473,673 Cost of goods sold 3,931,147 904,679 485,656 345,526 5,667,008 Gross profit 367,502 (99,103 ) 41,445 496,821 806,665 Interest expense and charges 138,365 63,880 510 118,931 321,686 Interest income (31,710 ) 55 72 34,817 3,234 Depreciation and amortization 130,059 341,935 (15,506 ) 165,317 621,805 Capital expenditures 1,790 8,436 (26,522 ) 165,843 149,547 Income tax benefit - - - (17,562 ) (17,562 ) Segment loss (10,537,321 ) (1,425,875 ) (510,366 ) (2,906,095 ) (15,379,658 ) Segment assets $ 8,427,875 $ 11,425,531 $ (2,531 ) $ 4,207,527 $ 24,058,217 For the Year Ended December 31, 2021 Machinery Construction Municipal Technological 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 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 22–SUBSEQUENT EVENTS On March 13, 2023, REIT New Materials Xinyi Co., Ltd. and Weiying Zhou were named as defendants in a lawsuit. The complaint demanded for a repayment of a loan of RMB550,000 and the related interest calculated based on the PRC’s one year borrowing benchmark rate. The Company filed a response to dispute the allegations and intended to defend itself vigorously in this matter. On March 23, 2023, REIT New Materials Xinyi Co., Ltd. was named as defendants in a lawsuit. The complaint demanded for a repayment of a loan of RMB25,607. On April 11, 2023, REIT New Materials Xinyi Co., Ltd. was named as defendants in a lawsuit. The complaint demanded for payment of transportation fee of RMB700,000. The Company disputed the allegations and intends to defend itself vigorously in these matters. In addition, the Company is regularly subject to claims and litigation. The outcomes of our legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. The Company evaluates, on a regular basis, developments in its legal proceedings and other contingencies that could affect the amount of liability, including amounts in excess of any previous accruals and reasonably possible losses disclosed, and make adjustments and changes to the accruals and disclosures as appropriate. For the matters the Company discloses that does not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is immaterial, and the Company may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies. Until the final resolution of such matters, if any of the Company’s estimates and assumptions change or prove to have been incorrect, the Company may experience losses in excess of the amounts recorded, which could have a material effect on the Company’s business, consolidated financial position, results of operations, or cash flows. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
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, 2022. As a result, allowance for uncollectible balances amounted to $1,771,761 and $904,052 as of December 31, 2022 and 2021, 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 $31,527 and $12,116 from its continuing operations as of December 31, 2022 and 2021, 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 $449,517 and $965,843 as of December 31, 2022 and 2021, 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 |
Goodwill | Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets acquired less liabilities assumed of an acquired business. The Group’s goodwill at December 31, 2021 arose from its business acquisition of REIT Mingde and its subsidiaries. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually, or more frequently if certain circumstances indicate a possible impairment may exist. In accordance with ASC 350-20, Intangibles-Goodwill and Other, Goodwill, (“ASC 350-20”) the Group has assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. The Group has determined that it has one reporting unit, which is also its only reportable segment. The Group has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step test in accordance with ASC 350-20. If the Group believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing the two-step quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quoted market prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired, and the Group is not required to perform further testing. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Group must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized as an impairment loss. For the year ended December 31, 2022, due to the slow development of REIT Mingde and its subsidiaries, the Group performed the two-step test for the reporting unit. In accordance with ASC 350-20, the Group recorded an impairment loss of $1,018,870 (RMB 6,856,458) for the year ended December 31, 2022. |
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. Given the Company’s net loss position in fiscal 2022, 2021 and 2020, 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 $ nil |
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, 2022 and December 31, 2021, the Company’s long-term investment in equity investee balance represents its $2,503,944 and $2,758,228, 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 and the 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 years ended December 31, 2022 and 2021, the investment loss from Shexian Ruibo was $46,209 and $142,673, respectively. 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, 2022 and December 31, 2021, 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 December31, 2022 and 2021, 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 December31, 2022 and 2021 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 loans. 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, 2022 was $3,922,686 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 13 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, 2022: December 31, 2022 Opening balance $ 1,645,000 New convertible loans issued 3,415,500 Accrued interest 194,117 Loss on change in fair value of convertible loan 467,383 Conversion of convertible loans (1,799,314 ) Total $ 3,922,686 |
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, 2022, 2021 and 2020. ● 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, 2022 and 2021, 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, 2022, 2021 and 2020 is disclosed in Note 21. |
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 $151,500, $367,873 and $216,301 for the years ended December 31, 2022, 2021 and 2020, 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, 2022 and December 31, 2021, the remaining balance was $18,563 and $269,061, respectively. |
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, 2022, 2021 and 2020. As of December 31, 2022, the tax years ended December 31, 2018 through December 31, 2022 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, 2022, 2021 and 2020, 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, 2022 December 31, 2021 December 31, 2020 Year-end spot rate US$1=RMB 6.8972 US$1=RMB 6.3726 US$1=RMB 6.5250 Average rate US$1=RMB 6.7290 US$1=RMB 6.4508 US$1=RMB 6.9042 |
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 its 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 its results of operations. The Company’s production and sales activities from its 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 a significant impact on the Company’s financial results for the years ended December 31, 2022 and 2021. On December 7, 2022, China announced 10 new rules that constitute a relaxation of almost all of its stringent COVID-19 pandemic control measures. Shortly after their announcement, additional mobility restrictions issued by local governments were also scrapped. While such measures effectively reopened business within China, COVID-19’s continued existence may have significant and still not well-understood impacts on our industry. The extent of the impact on the Company’s future financial results will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, 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 if the current situation continues. |
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, 2022 and 2021, 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, 2022 and 2021, $97,554 and $357,462 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, 2022 and 2021, $11,631 and $52,727 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, 2022, one customer accounted for 21% of the Company’s total revenue. For the year ended December 31, 2021, one customer accounted for 11% of the Company’s total revenue. For the year ended December31, 2020, no single customer accounted for more than 10% of the Company’s total revenue. As of December 31, 2022, three customers accounted for 24% ,18% and 11% of the Company’s consolidated accounts receivable, respectively. As of December 31, 2021, one customer accounted for 15% of the Company’s consolidated accounts receivable. For the years ended December 31, 2022, 2021 and 2020, the Company purchased approximately 19%, 53% and 43% of its raw materials from one major suppliers, respectively. As of December 31, 2022, two suppliers accounted for 35% and 26% of the total accounts payable balance, respectively. As of December 31, 2021, one supplier accounted for 47% of the total accounts payable balance. |
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 adopted this guidance effective January 1, 2023. The adoption did not have significant impact on the Company’s 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 adoption did not impact the Company’s financial position. 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 became effective for the Company on January 1, 2022. The ASU did not have a significant impact on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, “‘Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Company does not expect the adoption of ASU 2021-04 will have a material effect on the consolidated financial statements. In November 2021, the FASB issued Accounting Standards Update No 2021-10, Government Assistance (Topic 832) — Disclosures by Business Entities about Government Assistance (“ASU 2021-10”). ASU 2021-10 requires additional disclosures regarding the nature of government assistance, the related accounting policy used to account for assistance, the affected line items and applicable amounts within the consolidated financial position and results of operations, and significant terms and conditions related to the assistance. Government assistance within the scope of ASC 832 includes assistance that is administered by domestic, foreign, local, state, national governments, as well as departments, independent agencies and intergovernmental organizations. The updated guidance increases transparency of government assistance including, 1) the type of assistance, 2) the entity’s accounting for assistance, and 3) the effect of assistance on the entity’s financial statements. The new standard is effective for fiscal years beginning after December 15, 2021. The adoption of this guidance did not have a material impact on the Company’s 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, 2022 | |
Organization and Nature of Business [Abstract] | |
Schedule of all inter-company balances and transactions | Name of the Entity Place of Incorporation 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 % Beijing REIT Ecological Engineering Technology Co., Ltd. (“Beijing REIT Ecological”) 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 - % REIT Q GREEN Machines Private Ltd (“REIT India”) India 51 % REIT Ecological Technology Co., Ltd. (“REIT Ordos”)* 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. (“REIT Xiong’an”)** Xiong’an, China - % 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. (“Fangyuyuan”) Haikou, China 90 % 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, (“IoV Technology Research”) Haikou, China 90 % Ruishi Tongda Ecological Management Co., Ltd.** Gansu,China 70 % Honghe Ruitu Ecological Technology Co., Ltd. Yunnan,China 100 % Hainan Coconut Network Freight Co., Ltd. Haikou, China 100 % * Previously known as “REIT Yangcheng” ** Dingxuan was dissolved on August 30, 2022; REIT Xiong’an was dissolved on September 9, 2022. REIT Construction was dissolved subsequently on February 9, 2023. Ruishi Tongda Ecological Management Co., Ltd. was dissolved on March 7, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 Opening balance $ 1,645,000 New convertible loans issued 3,415,500 Accrued interest 194,117 Loss on change in fair value of convertible loan 467,383 Conversion of convertible loans (1,799,314 ) Total $ 3,922,686 |
Schedule of currency exchange rates that were used in creating the consolidated financial statements | December 31, 2022 December 31, 2021 December 31, 2020 Year-end spot rate US$1=RMB 6.8972 US$1=RMB 6.3726 US$1=RMB 6.5250 Average rate US$1=RMB 6.7290 US$1=RMB 6.4508 US$1=RMB 6.9042 |
Discontinued Operation (Tables)
Discontinued Operation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operation [Abstract] | |
Schedule of discontinued operations | For the Years Ended December 31, 2022 2021 2020 Revenue $ - $ 886,571 1,395,285 Cost of revenues - 1,657,799 2,235,598 Gross loss - (771,228 ) (840,313 ) Operating expenses - 829,049 6,036,039 Loss from discontinued operations - (1,600,277 ) (6,876,352 ) Other income (expense), net - 4,375 (736,249 ) Loss before tax - (1,595,902 ) (7,612,601 ) Income tax provision - 488 - Net loss from discontinued operations $ - $ (1,596,390 ) (7,612,601 ) |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 | |
Accounts Receivable, Net [Abstract] | |
Schedule of accounts receivable | December 31, 2022 December 31, 2021 Trade accounts receivable from third-part customers $ 3,922,211 $ 1,345,755 Less: allowances for doubtful accounts (1,771,761 ) (904,052 ) Total accounts receivable from third-party customers, net 2,150,450 441,703 Add: accounts receivable, net, related parties 83,736 93,589 Accounts receivable, net $ 2,234,186 $ 535,292 |
Schedule of allowance for doubtful accounts | December 31, 2022 December 31, 2021 Beginning balance $ 904,052 $ 6,888,710 Bad debt provision 981,811 1,949,778 Write off (22,290 ) (7,722,231 ) Reduction due to divestitures - (299,544 ) Foreign exchange translation (91,812 ) 87,339 Ending balance $ 1,771,761 $ 904,052 |
Schedule of accounts receivable | December 31, 2022 December 31, 2021 Accounts Receivable Aging: Less than 3 months $ 462,575 $ 294,481 From 4 to 6 months 1,262,588 197,465 From 7 to 9 months 1,440,668 28,134 From 10 to 12 months 86,712 107,317 Over 1 year 753,404 811,947 Bad debt reserve (1,771,761 ) (904,052 ) Accounts Receivable, net $ 2,234,186 $ 535,292 |
Advances to Suppliers, Net (Tab
Advances to Suppliers, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Advances to Suppliers, Net [Abstract] | |
Schedule of advances to suppliers | December 31, 2022 December 31, 2021 Raw material prepayments for equipment production $ 466,619 $ 751,409 Land reclamation prepayments 436,792 472,640 Advances to construction subcontractors - 23,394 Total: 903,411 1,247,443 Less: allowances for doubtful accounts (449,517 ) (965,843 ) Advances to suppliers, net, third parties $ 453,894 $ 281,600 |
Schedule of changes of allowance for doubtful accounts | December 31, 2022 December 31, 2021 Beginning balance $ 965,843 $ 1,112,374 Bad debt provision (454,072 ) 259,861 Write off - (428,553 ) Foreign exchange translation (62,254 ) 22,161 Ending balance $ 449,517 $ 965,843 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventories, Net [Abstract] | |
Schedule of inventories, net | December 31, 2022 December 31, 2021 Raw materials $ 148,145 $ 135,049 Finished goods 221,180 340,798 Subtotal 369,325 475,847 Less: Inventory allowance (31,527 ) (12,116 ) Inventories, net $ 337,798 $ 463,731 |
Prepayments and Other Current_2
Prepayments and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepayments and Other Current Assets [Abstract] | |
Schedule of prepaid expenses and other current assets | December 31, 2022 December 31, 2021 Other receivable, net (1) $ 334,246 $ 351,844 Value added tax receivable 67,905 38,020 Total $ 402,151 $ 389,864 (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, 2022 | |
Leases [Abstract] | |
Schedule of supplemental balance sheet information related to operating leases | December 31, 2022 Right-of-use assets $ 424,999 Operating lease liabilities – current $ 277,036 Operating lease liabilities - non-current 158,650 Total operating lease liabilities $ 435,686 |
Schedule of weighted average remaining lease terms and discount rates | Remaining lease term and discount rate: Weighted average remaining lease term (years) 1.73 Weighted average discount rate 7.42 % |
Schedule of maturities of lease liabilities | 2023 $ 295,403 2024 164,903 Total lease payments 460,306 Less: imputed interest 24,620 Present value of lease liabilities $ 435,686 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of property, plant and equipment, net | December 31, 2022 December 31, 2021 Property and buildings $ 16,676,800 $ 15,469,040 Machinery and equipment 1,481,983 1,594,700 Transportation vehicles 774,619 744,885 Office and electronic equipment 159,069 155,685 Leasehold improvement 43,519 - Subtotal 19,135,990 17,964,310 Construction in progress (“CIP”) - 2,584,252 Less: accumulated depreciation (3,413,535 ) (3,255,669 ) Impairment of fixed assets (7,000,020 ) (7,585,291 ) Property, plant and equipment, net $ 8,722,435 $ 9,707,602 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net [Abstract] | |
Schedule of intagible assets, net | December 31, 2022 December 31, 2021 Land use rights $ 1,599,693 $ 1,730,978 Software 1,299,612 29,472 Others 2,284,860 2,472,376 Patent 114,851 124,277 Total 5,299,016 4,357,104 Less: accumulated amortization (429,362 ) (246,075 ) Intangible assets, net $ 4,869,654 $ 4,111,029 |
Schedule of estimated future amortization expense | Twelve months ending December 31, Amortization expense 2023 $ 160,446 2024 160,446 2025 160,446 2026 160,446 2027 160,446 2028 and Thereafter 4,067,424 $ 4,869,654 |
Short-term Loans (Tables)
Short-term Loans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of short-term loans | December 31, December 31, Hunyuan Rural Credit Cooperative Association (1) $ 725,000 $ 784,500 Bank of Jiangsu (2) 362,500 784,500 Huaxia Bank (3) 231,990 784,500 Total $ 1,319,490 $ 2,353,500 (1) On December 6, 2021, 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 of one year. The loan bears a fixed interest rate of 7.3590% per annum. The loan is guaranteed by Beijing REIT. On December 4, 2022, the Company extended the loan to December 1, 2023. The extended loan bears a fixed interest rate of 7.05% per annum. (2) 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 RMB 5 million for use as working capital between September 3, 2021 and August 26, 2022. The Company signed a 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%. 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 9.4 million (approximately $1.4 million) as collateral to safeguard the loan. The loan was fully repaid in September 2022. The Company signed another bank loan agreement with Bank of Jiangsu to borrow $0.7 million (RMB4.5 million) on September 20, 2022 for a period of six months, with a fixed interest rate of 4.55%. The loan was fully repaid in March 2023. (3) On November 19, 2021, Beijing REIT entered into a new line of credit agreement with Huaxia Bank. The agreement allows Beijing REIT to obtain loans to approximately $0.8 million (RMB5 million) for use as working capital between November 19, 2021 and November 19, 2022 for a term of one year. The loan bears a fixed interest rate of 5.655% per annum. The loan is guaranteed by Beijing Zhongguancun Technology Financing Guarantee Co., Ltd. The Company repaid RMB3.4 million (approximately$0.5 million) in December 2022. The remaining balance was fully repaid in January 2023. |
Long Term Loan (Tables)
Long Term Loan (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long term bank loan | December 31, 2022 December 31, 2021 Long-term loans Jiangsu Yuantong Municipal Projects Construction Co., Ltd. (1) $ 1,160,000 $ - Total $ 1,160,000 $ - (1) In October 11 2022 REIT Construction entered into a third-party loan agreement with Jiangsu Yuantong Municipal Projects Construction Co., Ltd to borrow approximately $1.1 million (RMB 8 million) as working capital loan for two years. The loan was from October 11, 2022 to October 10, 2024 and interest-free. |
Loans from Third Parties (Table
Loans from Third Parties (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Loans from Third Parties [Abstract] | |
Schedule of loans from third parties | Loans from third parties December 31, 2022 December 31, 2021 Sanya Guohong Municipal Projects Construction Co., Ltd. $ - $ 627,600 Changshu Tongjiang Engineering Co., Ltd. 145,000 219,660 Zhang Miao 145,000 156,900 Pen Jing - 156,900 Chen Guo 61,363 66,399 Chai Guirong 145,000 313,800 Hainan Boxinda Science Technology Partnership 212,570 52,718 Yu Zhanfeng 246,500 - (Qinhua) Beijing Dingji Rubik’s Cube Model Technology Co. LTD 10,150 - Xinyi Xinshuo Concrete Co., LTD 72,500 - Chen Gang 68,150 - Total $ 1,106,233 $ 1,593,977 |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2022 2021 2020 Income tax benefit computed based on PRC statutory income tax rate $ (3,849,305 ) $ (5,118,519 ) $ (1,179,508 ) Effect of favorable income tax rate in certain entity in PRC 181,088 889,716 (164,071 ) Non-PRC entities not subject to PRC tax (1) 1,749,333 1,564,644 401,488 Research & Development (“R&D”) tax credit (2) (240,150 ) (260,213 ) (251,178 ) Non-deductible expenses - permanent difference (3) 171,393 588,191 826,034 Change in valuation allowance 1,970,079 2,339,650 937,209 Effective tax (benefit) expense $ (17,562 ) $ 3,469 $ 569,974 (1) Represents the tax losses incurred from operations outside of China. (2) According to PRC tax regulations, 200% 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, 2022 2021 2020 Loss before income tax expense from China $ (9,398,680 ) $ (13,889,029 ) $ (3,280,706 ) Loss before income tax expense from outside of China (5,998,540 ) (6,585,045 ) (1,437,326 ) Total loss before income tax provision $ (15,397,220 ) $ (20,474,074 ) $ (4,718,032 ) |
Schedule of income tax provision (benefit) | For the Years ended December 31, 2022 2021 2020 Current $ - $ 3,469 $ 569,974 Deferred (17,562 ) - - Total $ (17,562 ) $ 3,469 $ 569,974 |
Schedule of deferred tax asset | Deferred tax asset December 31 2022 December 31 2021 Provision of doubtful accounts $ 531,902 $ 323,107 Tax loss carried forwards 5,443,492 4,482,385 Valuation allowance on tax losses (5,975,394 ) (4,805,492 ) $ - $ - |
Schedule of taxes payable | December 31, December 31, 2022 2021 VAT tax payable $ 359,391 $ 422,678 Corporate income tax payable 1,702,591 2,156,850 Land use tax and other taxes payable 15,106 20,242 Total $ 2,077,088 $ 2,599,770 |
Commitments and Contigencies (T
Commitments and Contigencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Company’s contractual obligations | Contractual Obligations Total Less than 1-3 years 3-5 years More than 5 years Operating lease commitment $ 460,306 $ 295,403 $ 164,903 $ - $ - Repayment of bank loans 1,319,490 1,319,490 - - - Total $ 1,779,796 $ 1,614,893 $ 164,903 $ - $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 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, 2022 December 31, 2021 Mr. Hengfang Li $ 208,225 $ 472,439 |
Schedule of accounts receivable from related parties | December 31, 2022 December 31, 2021 Accounts receivable from– related parties Q Green Techcon Private Limited $ - $ 2,981 Hunyuan Baiyang Food Co., Ltd. 37,048 40,088 Bei Qi Yin Jian Yi Le (Haikou) Smart Move Science Technology Co., Ltd. 46,688 50,520 Total accounts receivable from related party $ 83,736 $ 93,589 |
Schedule of advance to suppliers, related party | December 31, 2022 December 31, 2021 Advance to supplier – related party Shexian Ruibo* $ 3,769,138 $ 3,656,118 Q Green Techcon Private Limited 15,310 174,099 Handan Ruisheng Construction Material Technology Co., Ltd. 2,588 12,403 Total $ 3,787,036 $ 3,842,620 * 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, 2022 December 31, 2021 Accounts payable – related part - Zhongtou Ruitu Information Service (Beijing) Co., Ltd $ - $ 10,199 Total $ - $ 10,199 |
Schedule of sales to related parties | For the Years Ended December 31, 2022 2021 2020 Sales to related parties Changjiang Zhongrong Hengde Environmental Protection Co., LTD $ 215,693 $ - $ - Shexian Ruibo 82,453 61,177 - Q Green Techcon Private Limited 6,729 220,607 228,814 Total $ 304,875 $ 281,784 $ 228,814 |
Schedule of purchases from related parties | For the years ended December 31, 2022 2021 2020 Purchase from a relate party Q Green Techcon Private Limited. $ 266,544 $ 228,838 $ 1,039,152 Shexian Ruibo 1,141,377 235,946 1,837,841 Total $ 1,407,921 $ 464,784 $ 2,876,993 |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of nonvested shares | Number of shares Weighted average grant date value Nonvested as of December 31, 2021 $ 1,000,000 $ 1,330,000 Granted 500,000 735,000 Vested 1,500,000 2,065,000 Nonvested as of December 31, 2021 $ - $ - |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of information by segment | For the Year Ended December 31, 2022 Machinery Construction Municipal Technological Total Revenues $ 4,298,649 $ 805,576 $ 527,101 $ 842,347 $ 6,473,673 Cost of goods sold 3,931,147 904,679 485,656 345,526 5,667,008 Gross profit 367,502 (99,103 ) 41,445 496,821 806,665 Interest expense and charges 138,365 63,880 510 118,931 321,686 Interest income (31,710 ) 55 72 34,817 3,234 Depreciation and amortization 130,059 341,935 (15,506 ) 165,317 621,805 Capital expenditures 1,790 8,436 (26,522 ) 165,843 149,547 Income tax benefit - - - (17,562 ) (17,562 ) Segment loss (10,537,321 ) (1,425,875 ) (510,366 ) (2,906,095 ) (15,379,658 ) Segment assets $ 8,427,875 $ 11,425,531 $ (2,531 ) $ 4,207,527 $ 24,058,217 For the Year Ended December 31, 2021 Machinery Construction Municipal Technological 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 |
Organization and Description _3
Organization and Description of Business (Details) - Schedule of all inter-company balances and transactions | 12 Months Ended | |
Dec. 31, 2022 | ||
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% | |
Beijing REIT Ecological Engineering Technology Co., Ltd. (“Beijing REIT Ecological”) [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 | [1] |
Ownership Percentage | 100% | [1] |
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 | [1] |
Ownership Percentage | [1] | |
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 Ordos”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Yancheng, China | [2] |
Ownership Percentage | 100% | [2] |
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. (“REIT Xiong’an”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Xiong’an, China | |
Ownership Percentage | ||
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. (“Fangyuyuan”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 90% | |
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, (“IoV Technology Research”) [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 90% | |
Ruishi Tongda Ecological Management Co., Ltd. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Gansu,China | [1],[2] |
Ownership Percentage | 70% | [1],[2] |
Honghe Ruitu Ecological Technology Co., Ltd. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Yunnan,China | |
Ownership Percentage | 100% | |
Hainan Coconut Network Freight Co., Ltd. [Member] | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||
Place of Incorporation | Haikou, China | |
Ownership Percentage | 100% | |
[1] Dingxuan was dissolved on August 30, 2022; REIT Xiong’an was dissolved on September 9, 2022. REIT Construction was dissolved subsequently on February 9, 2023. Ruishi Tongda Ecological Management Co., Ltd. was dissolved on March 7, 2023. Previously known as “REIT Yangcheng” |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 1 Months Ended | 12 Months Ended | ||||
Apr. 02, 2022 | May 31, 2015 CNY (¥) | Dec. 31, 2022 USD ($) shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Insurance regulation (in Yuan Renminbi) | ¥ | ¥ 500,000 | |||||
Allowances for uncollectible amounted receivable | $ 1,771,761 | $ 904,052 | ||||
Inventory reserve | 31,527 | 12,116 | ||||
Allowances for uncollectible amounted to suppliers | 449,517 | 965,843 | ||||
Impairment loss | 1,018,870 | ¥ 6,856,458 | ||||
Impairment of fixed assets | $ 4,300,000 | $ 2,300,000 | ||||
Anticipated Investment Income as Component of Premium Deficiency on Short-Duration Contracts, Policy [Policy Text Block] | 41.67% | |||||
Investment loss | 46,209 | $ 142,673 | ||||
Short term debts | 3,922,686 | |||||
Shipping and handling expenses | 151,500 | 367,873 | 216,301 | |||
Related grants | $ 490,560 | |||||
Deferred grants | 18,563 | 269,061 | ||||
Value added tax percentage | 13% | |||||
Cash and cash equivalents | $ 11,631 | $ 52,727 | ||||
FDIC insurance limits (in Shares) | shares | 100,000 | 100,000 | ||||
FDIC insurance limits | $ 1,403 | |||||
Concentration risk, percentage | 10% | |||||
One Customer [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Concentration risk, percentage | 21% | 21% | 11% | |||
Accounts receivable percentage | 24% | 24% | ||||
Two Customer [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Accounts receivable percentage | 18% | 18% | ||||
Three customer [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Concentration risk, percentage | 11% | 11% | ||||
One Suppliers [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Concentration risk, percentage | 35% | 35% | ||||
Two Suppliers [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Concentration risk, percentage | 26% | 26% | ||||
Supplier Concentration Risk [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Concentration risk, percentage | 19% | 19% | 53% | 43% | ||
Cash and Cash Equivalents [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Insurance regulation (in Yuan Renminbi) | ¥ | ¥ 500,000 | |||||
Cash and cash equivalents | $ 97,554 | $ 357,462 | ||||
Accounts Receivable [Member] | One Customer [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Concentration risk, percentage | 15% | |||||
Accounts Payable [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Concentration risk, percentage | 47% | |||||
Shexian Ruibo [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Long term investment in equity investee balance | $ 2,503,944 | $ 2,758,228 | ||||
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, 2022 | |
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, 2022 | |
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] | |
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] | |
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] | |
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, 2022 USD ($) | |
Schedule of reconciliation of the beginning and ending balances for convertible loans [Abstract] | |
Opening balance | $ 1,645,000 |
New convertible loans issued | 3,415,500 |
Accrued interest | 194,117 |
Loss on change in fair value of convertible loan | 467,383 |
Conversion of convertible loans | (1,799,314) |
Total | $ 3,922,686 |
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, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 CNY (¥) |
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 | ¥ | ¥ 6.8972 | ¥ 6.3726 | ¥ 6.525 | |||
Average rate | ¥ | ¥ 6.729 | ¥ 6.4508 | ¥ 6.9042 |
Going Concern (Details)
Going Concern (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Apr. 30, 2022 | |
Going Concern [Abstract] | |||
Revenue | $ 2.9 | $ 3.6 | |
Revenue percentage | 80% | 6.50% | |
Gross Profit | $ 0.4 | $ 0.4 | |
Gross profit from continued operation percentage | 109% | ||
Gross margin | $ 0.8 | ||
Impairment losses percentage | 13% | 11% | |
Net loss | $ 15.4 | $ 22.1 | |
Working capital deficit | 10.1 | ||
Cash | 0.1 | ||
Amount of accounts receivable outstanding | 2.2 | ||
Accounts receivable from third parties | 2.1 | ||
Accounts receivable from related party | 0.1 | ||
Amount of accounts receivable collected back | 0.3 | ||
Percentage of accounts receivable collected back | 7.70% | ||
Amount of bank loans outstanding | $ 1.3 |
Discontinued Operation (Details
Discontinued Operation (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | |||||||||||||
Nov. 12, 2021 USD ($) | Nov. 12, 2021 CNY (¥) | Jan. 02, 2020 USD ($) | Jan. 02, 2020 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 CNY (¥) | Dec. 31, 2019 USD ($) | Dec. 31, 2019 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 27, 2021 | |
Discontinued Operation (Details) [Line Items] | |||||||||||||||
Ownership interest percentage | 100% | 100% | 100% | ||||||||||||
Cash consideration | $ 9,400,000 | ¥ 60 | $ 5,700,000 | ¥ 39.9 | |||||||||||
Acquisition deposit received amount | $ 1,500,000 | ¥ 9.7 | |||||||||||||
Additional amount received | $ 4,100,000 | ¥ 26.6 | |||||||||||||
Remaining amount received | $ 600,000 | ¥ 3.6 | |||||||||||||
Ownership interest percentage | 100% | 100% | |||||||||||||
Cash received | $ 2,100,000 | ¥ 15 | |||||||||||||
Loss of disposition | $ 6,335,508 | ||||||||||||||
Remainingbalance amount | $ 1,067,945 | ||||||||||||||
Allowance for uncollectible balance | 1,067,945 | ||||||||||||||
Beijing REIT [Member] | |||||||||||||||
Discontinued Operation (Details) [Line Items] | |||||||||||||||
Gain from the disposition | $ 2,231,270 | ||||||||||||||
Zhixin [Member] | |||||||||||||||
Discontinued Operation (Details) [Line Items] | |||||||||||||||
Cash received | $ 5,700,000 | ¥ 38.5 |
Discontinued Operation (Detai_2
Discontinued Operation (Details) - Schedule of discontinued operations - REIT Changjiang [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | $ 886,571 | $ 1,395,285 | |
Cost of revenues | 1,657,799 | 2,235,598 | |
Gross loss | (771,228) | (840,313) | |
Operating expenses | 829,049 | 6,036,039 | |
Loss from discontinued operations | (1,600,277) | (6,876,352) | |
Other income (expense), net | 4,375 | (736,249) | |
Loss before tax | (1,595,902) | (7,612,601) | |
Income tax provision | 488 | ||
Net loss from discontinued operations | $ (1,596,390) | $ (7,612,601) |
Acquisition (Details)
Acquisition (Details) | 1 Months Ended | ||||
Dec. 27, 2021 USD ($) | Dec. 27, 2021 CNY (¥) | Feb. 22, 2022 CNY (¥) | Dec. 31, 2022 CNY (¥) | Feb. 22, 2022 $ / shares shares | |
Asset Acquisition [Abstract] | |||||
Equity interest | 100% | 100% | |||
Unrelated parties | $ 1,569,000 | ¥ 10,000,000 | |||
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 | ||||
Cash | ¥ 10,000,000 |
Acquisition (Details) - Schedul
Acquisition (Details) - Schedule of acquisition was accounted for as business combinations | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
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) - Accounts Receivable [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Accounts Receivable, Net (Details) [Line Items] | |
Accounts receivable | $ 0.3 |
Accounts receivable percentage | 7.70% |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details) - Schedule of accounts receivable - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of accounts receivable [Abstract] | ||
Trade accounts receivable from third-part customers | $ 3,922,211 | $ 1,345,755 |
Less: allowances for doubtful accounts | (1,771,761) | (904,052) |
Total accounts receivable from third-party customers, net | 2,150,450 | 441,703 |
Add: accounts receivable, net, related parties | 83,736 | 93,589 |
Accounts receivable, net | $ 2,234,186 | $ 535,292 |
Accounts Receivable, Net (Det_3
Accounts Receivable, Net (Details) - Schedule of allowance for doubtful accounts - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of allowance for doubtful accounts [Abstract] | ||
Beginning balance | $ 904,052 | $ 6,888,710 |
Bad debt provision | 981,811 | 1,949,778 |
Write off | (22,290) | (7,722,231) |
Reduction due to divestitures | (299,544) | |
Foreign exchange translation | (91,812) | 87,339 |
Ending balance | $ 1,771,761 | $ 904,052 |
Accounts Receivable, Net (Det_4
Accounts Receivable, Net (Details) - Schedule of accounts receivable - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | $ 2,234,186 | $ 535,292 |
Bad debt reserve | (1,771,761) | (904,052) |
Less than 3 months [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | 462,575 | 294,481 |
From 4 to 6 months [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | 1,262,588 | 197,465 |
From 7 to 9 months [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | 1,440,668 | 28,134 |
From 10 to 12 months [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | 86,712 | 107,317 |
Over 1 year [Member] | ||
Accounts Receivable, Noncurrent, Past Due [Line Items] | ||
Accounts Receivable, net | $ 753,404 | $ 811,947 |
Advances to Suppliers, Net (Det
Advances to Suppliers, Net (Details) | 12 Months Ended |
Dec. 31, 2022 | |
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. |
Advances to Suppliers, Net (D_2
Advances to Suppliers, Net (Details) - Schedule of advances to suppliers - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Advances to Suppliers [Abstract] | ||
Raw material prepayments for equipment production | $ 466,619 | $ 751,409 |
Land reclamation prepayments | 436,792 | 472,640 |
Advances to construction subcontractors | 23,394 | |
Total: | 903,411 | 1,247,443 |
Less: allowances for doubtful accounts | (449,517) | (965,843) |
Advances to suppliers, net, third parties | $ 453,894 | $ 281,600 |
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, 2022 | Dec. 31, 2021 | |
Schedule of Changes of Allowance for Doubtful Accounts [Abstract] | ||
Beginning balance | $ 965,843 | $ 1,112,374 |
Bad debt provision | (454,072) | 259,861 |
Write off | (428,553) | |
Foreign exchange translation | (62,254) | 22,161 |
Ending balance | $ 449,517 | $ 965,843 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Inventories, Net [Abstract] | |||
Inventory allowance | $ 20,835 | $ 119,995 | $ 123,280 |
Inventories, Net (Details) - Sc
Inventories, Net (Details) - Schedule of inventories, net - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of inventories, net [Abstract] | ||
Raw materials | $ 148,145 | $ 135,049 |
Finished goods | 221,180 | 340,798 |
Subtotal | 369,325 | 475,847 |
Less: Inventory allowance | (31,527) | (12,116) |
Inventories, net | $ 337,798 | $ 463,731 |
Prepayments and Other Current_3
Prepayments and Other Current Assets (Details) - Schedule of prepaid expenses and other current assets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Prepaid Expenses and Other Current Assets [Abstract] | |||
Other receivable, net | $ 334,246 | $ 351,844 | [1] |
Value added tax receivable | 67,905 | 38,020 | |
Total | $ 402,151 | $ 389,864 | |
[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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Rental expenses | $ 421,585 | $ 283,168 | $ 122,699 |
Lease expense | 306,824 | ||
Interest expense | 35,154 | ||
Amortization expense | 271,185 | ||
Short-term lease expense | 114,761 | ||
Cash paid for operating leases | $ 294,115 |
Lease (Details) - Schedule of s
Lease (Details) - Schedule of supplemental balance sheet information related to operating leases | Dec. 31, 2022 USD ($) |
Schedule of supplemental balance sheet information related to operating leases [Abstract] | |
Right-of-use assets | $ 424,999 |
Operating lease liabilities – current | 277,036 |
Operating lease liabilities - non-current | 158,650 |
Total operating lease liabilities | $ 435,686 |
Lease (Details) - Schedule of w
Lease (Details) - Schedule of weighted average remaining lease terms and discount rates | Dec. 31, 2022 |
Remaining lease term and discount rate: | |
Weighted average remaining lease term (years) | 1 year 8 months 23 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, 2022 USD ($) | |
Schedule of maturities of lease liabilities [Abstract] | |
2023 | $ 295,403 |
2024 | 164,903 |
Total lease payments | 460,306 |
Less: imputed interest | 24,620 |
Present value of lease liabilities | $ 435,686 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) ¥ in Millions | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 USD ($) | |
Property, Plant and Equipment, Net [Abstract] | ||||
Recorded an impairment | $ 4,300,000 | $ 2,300,000 | ||
Properties aggregate carrying value | 200,000 | ¥ 1.1 | ||
Depreciation expense | $ 414,841 | $ 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, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 19,135,990 | $ 17,964,310 |
Construction in progress (“CIP”) | 2,584,252 | |
Less: accumulated depreciation | (3,413,535) | (3,255,669) |
Impairment of fixed assets | (7,000,020) | (7,585,291) |
Property, plant and equipment, net | 8,722,435 | 9,707,602 |
Property and buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 16,676,800 | 15,469,040 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 1,481,983 | 1,594,700 |
Transportation vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 774,619 | 744,885 |
Office and electronic equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 159,069 | 155,685 |
Leasehold improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 43,519 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) m² | Dec. 31, 2021 USD ($) m² | Dec. 31, 2020 USD ($) | |
Intangible Assets, Net [Abstract] | |||
Land use right (in Square Meters) | m² | 74,278 | 74,278 | |
Long-term bank loan | $ 1,400,000 | $ 1,500,000 | |
Amortization expense | $ 206,964 | $ 34,671 | $ 29,695 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of intangible assets, net - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | $ 5,299,016 | $ 4,357,104 |
Less: accumulated amortization | (429,362) | (246,075) |
Intangible assets, net | 4,869,654 | 4,111,029 |
Land use rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | 1,599,693 | 1,730,978 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | 1,299,612 | 29,472 |
Others [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | 2,284,860 | 2,472,376 |
Patent [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, gross | $ 114,851 | $ 124,277 |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details) - Schedule of estimated future amortization expense | Dec. 31, 2022 USD ($) |
Schedule of estimated future amortization expense [Abstract] | |
2023 | $ 160,446 |
2024 | 160,446 |
2025 | 160,446 |
2026 | 160,446 |
2027 | 160,446 |
2028 and Thereafter | 4,067,424 |
Amortization expense | $ 4,869,654 |
Convertible Loans (Details)
Convertible Loans (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Mar. 10, 2022 | Dec. 20, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 22, 2022 | Jul. 06, 2021 | Mar. 01, 2021 | |
Convertible Loans (Details) [Line Items] | |||||||
Principal amount | $ 100,000 | $ 350,000 | |||||
Common shares (in Dollars per share) | $ 0.61 | ||||||
Converted common shares (in Shares) | 290,773 | 1,068,078 | |||||
Discount issued | $ 90,000 | ||||||
Legal fees | 15,000 | ||||||
Standstill fee | $ 310,500 | ||||||
Fair value | 3,922,686 | ||||||
Unrealized loss expense | 467,383 | $ 1,908,830 | |||||
Interest expense | $ 194,117 | $ 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% | ||||||
Conversion price (in Dollars per share) | $ 0.5 | ||||||
Debenture holder beneficially | 4.99% | ||||||
Principal amount percentage | 20% | ||||||
Converted common shares (in Shares) | 1,388,804 | 2,369,501 | |||||
July Debenture [Member] | |||||||
Convertible Loans (Details) [Line Items] | |||||||
Principal amount | $ 1,370,000 | $ 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% | ||||||
Conversion price (in Dollars per share) | $ 0.5 | ||||||
Debenture holder beneficially | 4.99% | ||||||
Principal amount percentage | 20% | ||||||
Converted common shares (in Shares) | 1,385,533 | ||||||
2022 March Debenture [Member] | |||||||
Convertible Loans (Details) [Line Items] | |||||||
Principal amount | $ 3,105,000 |
Short-term Loans (Details)
Short-term Loans (Details) ¥ in Millions | 12 Months Ended | |||||||||||
Dec. 31, 2022 USD ($) m² | Dec. 31, 2022 CNY (¥) m² | Dec. 31, 2021 USD ($) m² | Dec. 31, 2020 USD ($) | Sep. 20, 2022 USD ($) | Sep. 20, 2022 CNY (¥) | Dec. 06, 2021 USD ($) | Dec. 06, 2021 CNY (¥) | Nov. 19, 2021 USD ($) | Nov. 19, 2021 CNY (¥) | Sep. 03, 2021 USD ($) m² | Sep. 03, 2021 CNY (¥) m² | |
Short-term Loans (Details) [Line Items] | ||||||||||||
Fixed interest rate percentage | 4.55% | 4.55% | 7.05% | 7.05% | 5.655% | 5.655% | ||||||
Land use right (in Square Meters) | 74,278 | 74,278 | 74,278 | |||||||||
Repaid amount | $ 500,000 | ¥ 3.4 | ||||||||||
Interest expense on all short-term bank loans | $ | $ 132,921 | $ 372,881 | $ 473,845 | |||||||||
Changjiang Li Autonomous County Rural Credit Cooperative Association [Member] | ||||||||||||
Short-term Loans (Details) [Line Items] | ||||||||||||
Short term borrow | $ 800,000 | ¥ 5 | ||||||||||
Hunyuan Rural Credit Cooperative Association [Member] | ||||||||||||
Short-term Loans (Details) [Line Items] | ||||||||||||
Short term borrow | $ 700,000 | ¥ 4.5 | ||||||||||
Fixed interest rate percentage | 7.359% | 7.359% | ||||||||||
Xinyi REIT [Member] | ||||||||||||
Short-term Loans (Details) [Line Items] | ||||||||||||
Short term borrow | ¥ | ¥ 5 | |||||||||||
Bank of Jiangsu [Member] | ||||||||||||
Short-term Loans (Details) [Line Items] | ||||||||||||
Short term borrow | $ 800,000 | ¥ 5 | ||||||||||
Monthly interest rate | 4.55% | 4.55% | ||||||||||
Beijing REIT [Member] | ||||||||||||
Short-term Loans (Details) [Line Items] | ||||||||||||
Short term borrow | $ 800,000 | ¥ 5 | ||||||||||
Xinyi REIT [Member] | ||||||||||||
Short-term Loans (Details) [Line Items] | ||||||||||||
Land use right (in Square Meters) | 74,254.61 | 74,254.61 | ||||||||||
Land use rights carrying value | $ 1,400,000 | ¥ 9.4 |
Short-term Loans (Details) - Sc
Short-term Loans (Details) - Schedule of short-term loans - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | |||
Total short-term loans | $ 1,319,490 | $ 2,353,500 | |
Hunyuan Rural Credit Cooperative Association [Member] | |||
Short-Term Debt [Line Items] | |||
Total short-term loans | [1] | 725,000 | 784,500 |
Bank of Jiangsu [Member] | |||
Short-Term Debt [Line Items] | |||
Total short-term loans | [2] | 362,500 | 784,500 |
Huaxia Bank [Member] | |||
Short-Term Debt [Line Items] | |||
Total short-term loans | [3] | $ 231,990 | $ 784,500 |
[1] On December 6, 2021, 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 of one year. The loan bears a fixed interest rate of 7.3590% per annum. The loan is guaranteed by Beijing REIT. On December 4, 2022, the Company extended the loan to December 1, 2023. The extended loan bears a fixed interest rate of 7.05% per annum. 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 RMB 5 million for use as working capital between September 3, 2021 and August 26, 2022. The Company signed a 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%. 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 9.4 million (approximately $1.4 million) as collateral to safeguard the loan. The loan was fully repaid in September 2022. The Company signed another bank loan agreement with Bank of Jiangsu to borrow $0.7 million (RMB4.5 million) on September 20, 2022 for a period of six months, with a fixed interest rate of 4.55%. The loan was fully repaid in March 2023. On November 19, 2021, Beijing REIT entered into a new line of credit agreement with Huaxia Bank. The agreement allows Beijing REIT to obtain loans to approximately $0.8 million (RMB5 million) for use as working capital between November 19, 2021 and November 19, 2022 for a term of one year. The loan bears a fixed interest rate of 5.655% per annum. The loan is guaranteed by Beijing Zhongguancun Technology Financing Guarantee Co., Ltd. The Company repaid RMB3.4 million (approximately$0.5 million) in December 2022. The remaining balance was fully repaid in January 2023. |
Long Term Loan (Details)
Long Term Loan (Details) ¥ in Millions | 12 Months Ended | ||||
Oct. 11, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Oct. 11, 2022 CNY (¥) | |
Long Term Loan (Details) [Line Items] | |||||
Total interest on long-term bank loans | $ 90,074 | ||||
REIT Construction [Member] | |||||
Long Term Loan (Details) [Line Items] | |||||
Line of credit facility borrowing | $ 1,100,000 | ¥ 8 | |||
Long term debt, description | The loan was from October 11, 2022 to October 10, 2024 and interest-free. |
Long Term Loan (Details) - Sche
Long Term Loan (Details) - Schedule of long term bank loan - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | |
Long-term loans | |||
Jiangsu Yuantong Municipal Projects Construction Co., Ltd | [1] | $ 1,160,000 | |
Total | $ 1,160,000 | ||
[1]In October 11 2022 REIT Construction entered into a third-party loan agreement with Jiangsu Yuantong Municipal Projects Construction Co., Ltd to borrow approximately $1.1 million (RMB 8 million) as working capital loan for two years. The loan was from October 11, 2022 to October 10, 2024 and interest-free. |
Loans from Third Parties (Detai
Loans from Third Parties (Details) ¥ in Millions | 12 Months Ended | |||||||||||||||
Dec. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) | Sep. 19, 2022 USD ($) | Sep. 18, 2022 USD ($) | Jul. 29, 2022 USD ($) | May 09, 2022 USD ($) | Feb. 17, 2022 USD ($) | Jan. 30, 2022 USD ($) | Oct. 21, 2021 USD ($) | Aug. 02, 2021 USD ($) | Aug. 01, 2021 USD ($) | Jul. 29, 2021 USD ($) | Jul. 04, 2021 USD ($) | May 09, 2021 USD ($) | Feb. 08, 2021 USD ($) | Feb. 08, 2021 CNY (¥) | |
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | $ 101,500 | |||||||||||||||
Loan balance | $ 145,000 | |||||||||||||||
Borrowed amount | 362,500 | ¥ 2.5 | ||||||||||||||
Repayment loan | $ 68,150 | |||||||||||||||
Sanya Guohong Municipal Projects Construction Co., Ltd. [Member] | ||||||||||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | $ 766,500 | |||||||||||||||
Changshu Tongjiang Engineering Co., Ltd [Member] | ||||||||||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | $ 219,660 | |||||||||||||||
Loan balance | 145,000 | |||||||||||||||
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% | |||||||||||||||
Chen Guo [Member] | ||||||||||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | $ 66,399 | |||||||||||||||
Loan balance | 61,363 | |||||||||||||||
Annual interest | 1% | |||||||||||||||
Chai Guirong [Member] | ||||||||||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | $ 313,800 | |||||||||||||||
Loan balance | 145,000 | |||||||||||||||
Annual interest | 1% | |||||||||||||||
Chen Gang [Member] | ||||||||||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | $ 72,500 | |||||||||||||||
Hainan Boxinda Science Technology Partnership [Member] | ||||||||||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | 48,720 | $ 52,718 | ||||||||||||||
REIT Technology [Member] | ||||||||||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | $ 62,350 | |||||||||||||||
Beijing REIT [Member] | ||||||||||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | $ 72,500 | $ 246,500 | $ 10,500 | |||||||||||||
Loans payable | $ 174,000 | |||||||||||||||
Yu Zhanfeng [Member] | ||||||||||||||||
Loans from Third Parties (Details) [Line Items] | ||||||||||||||||
Working capital loan | $ 246,500 |
Loans from Third Parties (Det_2
Loans from Third Parties (Details) - Schedule of loans from third parties - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | $ 1,106,233 | $ 1,593,977 |
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 | |
Changshu Tongjiang Engineering Co., Ltd. [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 145,000 | 219,660 |
Zhang Miao [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 145,000 | 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 | 61,363 | 66,399 |
Chai Guirong [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 145,000 | 313,800 |
Hainan Boxinda Science Technology Partnership | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 212,570 | 52,718 |
Yu Zhanfeng [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 246,500 | |
(Qinhua) Beijing Dingji Rubik’s Cube Model Technology Co. LTD [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 10,150 | |
Xinyi Xinshuo Concrete Co., LTD [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | 72,500 | |
Chen Gang [Member] | ||
Loans from Third Parties (Details) - Schedule of loans from third parties [Line Items] | ||
Loans from third parties | $ 68,150 |
Taxes (Details)
Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Taxes (Details) [Line Items] | ||
Corporate income tax rate | 25% | |
R&D expense approved by local tax authority deducted from tax income | 200% | |
Value added tax, description | The applicable VAT rate is 13% for products sold in the PRC. | |
Tax payables (in Dollars) | $ 2.1 | $ 2.6 |
Beijing REIT [Member] | ||
Taxes (Details) [Line Items] | ||
Favorable income tax rate | 15% |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Schedule Of Reconciles Income Tax Expense By Statutory Rate To The Company SActual Income Tax Expense [Abstract] | ||||
Income tax benefit computed based on PRC statutory income tax rate | $ (3,849,305) | $ (5,118,519) | $ (1,179,508) | |
Effect of favorable income tax rate in certain entity in PRC | 181,088 | 889,716 | (164,071) | |
Non-PRC entities not subject to PRC tax | [1] | 1,749,333 | 1,564,644 | 401,488 |
Research & Development (“R&D”) tax credit | [2] | (240,150) | (260,213) | (251,178) |
Non-deductible expenses - permanent difference | [3] | 171,393 | 588,191 | 826,034 |
Change in valuation allowance | 1,970,079 | 2,339,650 | 937,209 | |
Effective tax (benefit) expense | $ (17,562) | $ 3,469 | $ 569,974 | |
[1] Represents the tax losses incurred from operations outside of China. According to PRC tax regulations, 200% of current year R&D expense approved by the local tax authority may be deducted from tax income. 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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Income Loss Before Income Tax [Abstract] | |||
Loss before income tax expense from China | $ (9,398,680) | $ (13,889,029) | $ (3,280,706) |
Loss before income tax expense from outside of China | (5,998,540) | (6,585,045) | (1,437,326) |
Total loss before income tax provision | $ (15,397,220) | $ (20,474,074) | $ (4,718,032) |
Taxes (Details) - Schedule of_2
Taxes (Details) - Schedule of income tax provision (benefit) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Income Tax Provision Benefit [Abstract] | |||
Current | $ 3,469 | $ 569,974 | |
Deferred | (17,562) | ||
Total | $ (17,562) | $ 3,469 | $ 569,974 |
Taxes (Details) - Schedule of d
Taxes (Details) - Schedule of deferred tax asset - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule Of Deferred Tax Asset [Abstract] | ||
Provision of doubtful accounts | $ 531,902 | $ 323,107 |
Tax loss carried forwards | 5,443,492 | 4,482,385 |
Valuation allowance on tax losses | (5,975,394) | (4,805,492) |
Deferred tax assets, net |
Taxes (Details) - Schedule of t
Taxes (Details) - Schedule of taxes payable - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule Of Taxes Payable [Abstract] | ||
VAT tax payable | $ 359,391 | $ 422,678 |
Corporate income tax payable | 1,702,591 | 2,156,850 |
Land use tax and other taxes payable | 15,106 | 20,242 |
Total | $ 2,077,088 | $ 2,599,770 |
Commitments and Contigencies (D
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations | Dec. 31, 2022 USD ($) |
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations [Line Items] | |
Operating lease commitment | $ 460,306 |
Repayment of bank loans | 1,319,490 |
Total | 1,779,796 |
Less than 1 year [Member] | |
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations [Line Items] | |
Operating lease commitment | 295,403 |
Repayment of bank loans | 1,319,490 |
Total | 1,614,893 |
1-3 years [Member] | |
Commitments and Contigencies (Details) - Schedule of Company’s contractual obligations [Line Items] | |
Operating lease commitment | 164,903 |
Repayment of bank loans | |
Total | 164,903 |
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) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |||
Cost of revenue related parties | $ 471,849 | $ 175,053 | $ 148,034 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of related parties with transactions and related party relationships | 12 Months Ended |
Dec. 31, 2022 | |
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 |
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, 2022 | Dec. 31, 2021 |
Mr. Hengfang Li [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 208,225 | $ 472,439 |
Related Party Transactions (D_4
Related Party Transactions (Details) - Schedule of accounts receivable from related parties - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts receivable from– related parties | ||
Total accounts receivable from related party | $ 83,736 | $ 93,589 |
Q Green Techcon Private Limited [Member] | ||
Accounts receivable from– related parties | ||
Total accounts receivable from related party | 2,981 | |
Hunyuan Baiyang Food Co., Ltd. [Member] | ||
Accounts receivable from– related parties | ||
Total accounts receivable from related party | 37,048 | 40,088 |
Bei Qi Yin Jian Yi Le (Haikou) Smart Move Science Technology Co., Ltd. [Member] | ||
Accounts receivable from– related parties | ||
Total accounts receivable from related party | $ 46,688 | $ 50,520 |
Related Party Transactions (D_5
Related Party Transactions (Details) - Schedule of advance to suppliers, related party - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | |
Advance to supplier – related party | |||
Total | $ 3,787,036 | $ 3,842,620 | |
Shexian Ruibo [Member] | |||
Advance to supplier – related party | |||
Total | [1] | 3,769,138 | 3,656,118 |
Q Green Techcon Private Limited [Member] | |||
Advance to supplier – related party | |||
Total | 15,310 | 174,099 | |
Handan Ruisheng Construction Material Technology Co., Ltd. [ Member] | |||
Advance to supplier – related party | |||
Total | $ 2,588 | $ 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, 2022 | Dec. 31, 2021 |
Accounts payable – related part | ||
Total | $ 10,199 | |
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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Sales to related parties | |||
Total | $ 304,875 | $ 281,784 | $ 228,814 |
Hunyuan Baiyang Food Co., Ltd. [Member] | |||
Sales to related parties | |||
Total | 215,693 | ||
Shexian Ruibo [Member] | |||
Sales to related parties | |||
Total | 82,453 | 61,177 | |
Q Green Techcon Private Limited [Member] | |||
Sales to related parties | |||
Total | $ 6,729 | $ 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, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Purchase from a relate party | |||
Total | $ 1,407,921 | $ 464,784 | $ 2,876,993 |
Q Green Techcon Private Limited. [Member] | |||
Purchase from a relate party | |||
Total | 266,544 | 228,838 | 1,039,152 |
Shexian Ruibo [Member] | |||
Purchase from a relate party | |||
Total | $ 1,141,377 | $ 235,946 | $ 1,837,841 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Millions | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||
May 25, 2022 USD ($) $ / shares shares | Apr. 08, 2022 CNY (¥) | Jan. 03, 2022 USD ($) $ / shares shares | Dec. 28, 2021 USD ($) | Dec. 27, 2021 USD ($) | Dec. 27, 2021 CNY (¥) | Apr. 09, 2021 USD ($) shares | Feb. 03, 2020 USD ($) $ / shares shares | Sep. 05, 2019 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) | Sep. 30, 2022 CNY (¥) | Jun. 30, 2022 CNY (¥) | Apr. 30, 2022 CNY (¥) | Jan. 22, 2020 USD ($) $ / shares shares | Jun. 24, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) shares | Dec. 31, 2019 USD ($) | Mar. 08, 2023 shares | Feb. 27, 2023 shares | Dec. 31, 2022 CNY (¥) shares | Jun. 04, 2022 shares | Apr. 22, 2022 shares | Apr. 06, 2022 USD ($) | Apr. 06, 2022 CNY (¥) | Feb. 22, 2022 $ / shares shares | Feb. 22, 2022 ¥ / shares shares | May 11, 2021 shares | Jan. 02, 2020 | |
Shareholders’ 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. | 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. | |||||||||||||||||||||||||||||
Common stock, shares authorized (in Shares) | shares | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||||||||||||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||
Common stock, shares outstanding (in Shares) | shares | 43,398,885 | 28,965,034 | 43,398,885 | ||||||||||||||||||||||||||||
Common stock, shares issued (in Shares) | shares | 43,398,885 | 28,965,034 | 43,398,885 | ||||||||||||||||||||||||||||
Common shares issued (in Shares) | shares | 5,970,000 | 500,000 | 2,580,000 | 2,580,000 | |||||||||||||||||||||||||||
Common shares of value issued | $ | $ 1,573,800 | ||||||||||||||||||||||||||||||
Common share price (in Dollars per share) | $ / shares | $ 0.61 | ||||||||||||||||||||||||||||||
Recognized stock-based compensation expense | $ | $ 3,296,475 | 1,330,000 | |||||||||||||||||||||||||||||
Common stock issuance of amount | $ | 735,000 | $ 1,414,637 | $ 650,750 | ||||||||||||||||||||||||||||
Recognized stock-based compensation expense | $ | $ 735,000 | ||||||||||||||||||||||||||||||
Equity percentage of ownership | 100% | 100% | 100% | ||||||||||||||||||||||||||||
Consideration amount | ¥ 18 | $ 10,000,000 | $ 1,569,000 | ¥ 10 | ¥ 5 | ¥ 5 | ¥ 4 | ¥ 4 | |||||||||||||||||||||||
Aggregate common shares (in Shares) | shares | 1,358,851 | 3,755,034 | 1,358,851 | 4,025,000 | |||||||||||||||||||||||||||
Price per share (in Dollars per share) | $ / shares | $ 0.6 | ||||||||||||||||||||||||||||||
Paid amount | $ 1,900,000 | ¥ 13 | |||||||||||||||||||||||||||||
Balance amount | 700,000 | ¥ 5 | |||||||||||||||||||||||||||||
Company payments | $ 400,000 | 3 | |||||||||||||||||||||||||||||
Remaining balance | ¥ | ¥ 2 | ||||||||||||||||||||||||||||||
Investment cost | $ 800,000 | ¥ 5 | |||||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Common stock, par value | (per share) | $ 1.47 | $ 0.61 | ¥ 6.39 | ||||||||||||||||||||||||||||
Common shares of value issued | $ | $ 735,000 | ||||||||||||||||||||||||||||||
Common stock issuance of shares (in Shares) | shares | 500,000 | 500,000 | 1,075,000 | 685,000 | |||||||||||||||||||||||||||
Common stock issuance of amount | $ | $ 500 | $ 1,075 | $ 685 | ||||||||||||||||||||||||||||
2018 Incentive Plan [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Recognized stock-based compensation expense | $ | $ 325,375 | 325,375 | |||||||||||||||||||||||||||||
Common stock issuance of shares (in Shares) | shares | 685,000 | ||||||||||||||||||||||||||||||
Common stock issuance of amount | $ | $ 650,750 | ||||||||||||||||||||||||||||||
Share price, per share (in Dollars per share) | $ / shares | $ 0.95 | ||||||||||||||||||||||||||||||
2021 Share Incentive Plan [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Aggregate common shares (in Shares) | shares | 3,000,000 | ||||||||||||||||||||||||||||||
2022 Share Incentive Plan [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Aggregate common shares (in Shares) | shares | 5,000,000 | ||||||||||||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Conversion price ranging (in Dollars per share) | $ / shares | $ 0.24 | $ 0.97 | |||||||||||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Conversion price ranging (in Dollars per share) | $ / shares | $ 0.34 | $ 1.11 | |||||||||||||||||||||||||||||
Consulting Service Agreement [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Common shares issued (in Shares) | shares | 400,000 | ||||||||||||||||||||||||||||||
Common shares of value issued | $ | $ 448,000 | ||||||||||||||||||||||||||||||
Common share price (in Dollars per share) | $ / shares | $ 1.12 | ||||||||||||||||||||||||||||||
Recognized stock-based compensation expense | $ | 280,000 | ||||||||||||||||||||||||||||||
Hainan Tashanshi Digital Information Co. Ltd. [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Aggregate gross proceeds | $ | $ 3,582,000 | ||||||||||||||||||||||||||||||
Express Transportation Ltd. [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Common shares issued (in Shares) | shares | 2,000,000 | ||||||||||||||||||||||||||||||
Maxleed Investment Holding Ltd. [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Common shares issued (in Shares) | shares | 2,000,000 | ||||||||||||||||||||||||||||||
Xinyi REIT [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Equity percentage of ownership | 30% | ||||||||||||||||||||||||||||||
Beijing REIT [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Remaining balance | $ | $ 0 | ||||||||||||||||||||||||||||||
Fangyuyuan [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Equity percentage of ownership | 10% | 10% | |||||||||||||||||||||||||||||
Geniusland International Capital Ltd [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Common stock, shares issued (in Shares) | shares | 1.33 | ||||||||||||||||||||||||||||||
Common shares issued (in Shares) | shares | 1,000,000 | ||||||||||||||||||||||||||||||
Common shares of value issued | $ | $ 1,330,000 | ||||||||||||||||||||||||||||||
Yorkville Advisors Global LP [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Common shares issued (in Shares) | shares | 75,000 | ||||||||||||||||||||||||||||||
Recognized stock-based compensation expense | $ | 84,637 | ||||||||||||||||||||||||||||||
Board of Directors [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Recognized stock-based compensation expense | $ | 166,750 | $ 166,750 | |||||||||||||||||||||||||||||
Common stock issuance of shares (in Shares) | shares | 290,000 | ||||||||||||||||||||||||||||||
Common stock issuance of amount | $ | $ 333,500 | ||||||||||||||||||||||||||||||
Share price, per share (in Dollars per share) | $ / shares | $ 1.15 | ||||||||||||||||||||||||||||||
Board of Directors [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Aggregate common shares (in Shares) | shares | 1,025,000 | ||||||||||||||||||||||||||||||
PRC [Member] | |||||||||||||||||||||||||||||||
Shareholders’ Equity (Details) [Line Items] | |||||||||||||||||||||||||||||||
Restricted Amount | $ | $ 1,066,554 | $ 1,230,387 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) - Schedule of nonvested shares | 12 Months Ended |
Dec. 31, 2022 shares | |
Shareholders’ Equity (Details) - Schedule of nonvested shares [Line Items] | |
Number of shares Nonvested, beginning balance | 1,000,000 |
Weighted average grant date value Nonvested, beginning balance | 1,330,000 |
Number of shares, Granted | 500,000 |
Weighted average Grant date value, granted | 735,000 |
Number of shares, Vested | 1,500,000 |
Weighted average Grant date value, vested | 2,065,000 |
Number of shares Nonvested, ending balance | |
Weighted average grant date value Nonvested, ending balance |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of information by segment - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 6,473,673 | $ 3,600,078 | $ 8,339,215 |
Cost of goods sold | 5,667,008 | 3,214,349 | 6,341,539 |
Gross profit | 806,665 | 385,729 | 1,997,676 |
Interest expense and charges | 321,686 | 103,340 | 857,551 |
Interest income | 3,234 | ||
Depreciation and amortization | 621,805 | 875,695 | 869,725 |
Capital expenditures | 149,547 | 2,570,644 | 64,758 |
Income tax benefit | (17,562) | 3,469 | 569,974 |
Segment loss | (15,379,658) | (20,477,543) | (5,288,007) |
Segment assets | 24,058,217 | 30,961,067 | 57,974,073 |
Machinery and Equipment sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 4,298,649 | 1,799,741 | 6,455,995 |
Cost of goods sold | 3,931,147 | 1,501,420 | 4,429,869 |
Gross profit | 367,502 | 298,321 | 2,026,126 |
Interest expense and charges | 138,365 | 132,136 | 672,778 |
Interest income | (31,710) | ||
Depreciation and amortization | 130,059 | 167,468 | 164,538 |
Capital expenditures | 1,790 | 14,463 | 6,900 |
Income tax benefit | 3,469 | 569,974 | |
Segment loss | (10,537,321) | (12,497,629) | (725,938) |
Segment assets | 8,427,875 | 12,742,545 | 16,389,063 |
Construction materials sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 805,576 | 1,658,385 | 1,776,525 |
Cost of goods sold | 904,679 | 1,562,975 | 1,901,060 |
Gross profit | (99,103) | 95,410 | (124,535) |
Interest expense and charges | 63,880 | (121,449) | 48,719 |
Interest income | 55 | ||
Depreciation and amortization | 341,935 | 705,703 | 701,077 |
Capital expenditures | 8,436 | 2,556,181 | 57,858 |
Income tax benefit | |||
Segment loss | (1,425,875) | (7,804,642) | (4,300,671) |
Segment assets | 11,425,531 | 12,646,798 | 41,233,143 |
Municipal construction projects [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 527,101 | 141,952 | 106,695 |
Cost of goods sold | 485,656 | 149,954 | 10,610 |
Gross profit | 41,445 | (8,002) | 96,085 |
Interest expense and charges | 510 | 77,153 | 136,054 |
Interest income | 72 | ||
Depreciation and amortization | (15,506) | 2,524 | 4,110 |
Capital expenditures | (26,522) | ||
Income tax benefit | |||
Segment loss | (510,366) | (37,782) | (261,398) |
Segment assets | (2,531) | 98,625 | 347,917 |
Technological consulting and other services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 842,347 | ||
Cost of goods sold | 345,526 | ||
Gross profit | 496,821 | ||
Interest expense and charges | 118,931 | 15,500 | |
Interest income | 34,817 | ||
Depreciation and amortization | 165,317 | ||
Capital expenditures | 165,843 | ||
Income tax benefit | (17,562) | ||
Segment loss | (2,906,095) | (137,491) | |
Segment assets | $ 4,207,527 | $ 5,473,099 | $ 3,950 |
Subsequent Events (Details)
Subsequent Events (Details) - CNY (¥) | 1 Months Ended | ||
Apr. 11, 2023 | Mar. 13, 2023 | Mar. 23, 2023 | |
Subsequent Events (Details) [Line Items] | |||
Repayment of a loan | ¥ 550,000 | ||
Subsequent Event [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Payment of transportation fee | ¥ 700,000 | ||
REIT New Materials Xinyi Co., Ltd. [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Repayment of a loan | ¥ 25,607 |