Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | May 15, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | SORL Auto Parts, Inc. | ||
Entity Central Index Key | 0000714284 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | DE | ||
Entity File Number | 000-11991 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Voluntary Filers | No | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Public Float | $ 28,000,000 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 19,304,921 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 13,374,261 | $ 73,588,229 |
Accounts receivable, net, including $35,115,219 and $261,889 from related parties as of December 31, 2019 and 2018, respectively | 184,237,058 | 150,047,797 |
Bank acceptance notes from customers | 61,169,072 | 62,052,225 |
Inventories, net | 223,484,077 | 204,285,427 |
Prepayments, current, including $1,059,410 and $3,670,573 to related party as of December 31, 2019 and 2018, respectively | 7,594,813 | 7,776,591 |
Restricted cash, current | 15,218,669 | 19,307,003 |
Advances to related parties | 81,039,825 | 79,739,417 |
Deposits on loan agreements, current | 5,017,058 | |
Short-term investment | 5,017,058 | |
Other current assets, net | 11,336,907 | 15,697,448 |
Total Current Assets | 607,488,798 | 612,494,137 |
Property, plant and equipment, net | 127,008,307 | 96,053,386 |
Land use rights, net | 36,452,834 | 21,124,455 |
Intangible assets, net | 53,529 | 220,232 |
Deposits on loan agreements, non-current | 4,873,713 | 10,199,324 |
Prepayments, non-current | 18,623,348 | 31,575,238 |
Other assets, non-current | 1,634,636 | 563,542 |
Restricted cash, non-current | 16,914,653 | 18,067,374 |
Deferred tax assets | 4,671,526 | 4,073,838 |
Total Non-current Assets | 210,232,546 | 181,877,389 |
Total Assets | 817,721,344 | 794,371,526 |
Current Liabilities | ||
Accounts payable and bank acceptance notes to vendors, including $14,296,017 and $23,805,200 due to related parties as of December 31, 2019 and 2018, respectively | 205,550,817 | 236,433,718 |
Deposits received from customers | 46,066,180 | 51,529,795 |
Short term bank loans | 230,992,771 | 217,940,471 |
Current portion of long term loans | 27,194,179 | 21,141,029 |
Income tax payable, current | 4,565,436 | 3,421,486 |
Accrued expenses | 26,085,441 | 24,045,902 |
Due to related party | 9,495,120 | 5,959,752 |
Deposit received from related party | 1,125,085 | |
Deferred income | 795,059 | 1,453,282 |
Other current liabilities | 4,440,914 | 3,288,344 |
Total Current Liabilities | 556,311,002 | 565,213,779 |
Long term loans, less current portion and net of unamortized debt issuance costs | 22,357,145 | 14,429,404 |
Operating lease liabilities, non-current | 696,730 | |
Income tax payable, non-current | 8,377,468 | 9,259,307 |
Total Non-current Liabilities | 31,431,343 | 23,688,711 |
Total Liabilities | 587,742,345 | 588,902,490 |
Equity | ||
Preferred stock - no par value; 1,000,000 authorized; none issued and outstanding as of December 31, 2019 and 2018 | ||
Common stock - $0.002 par value; 50,000,000 authorized, 19,304,921 issued and outstanding as of December 31, 2019 and 2018 | 38,609 | 38,609 |
Additional paid-in capital | (28,582,654) | (28,582,654) |
Reserves | 22,621,044 | 20,007,007 |
Accumulated other comprehensive income | 3,228,196 | 6,655,803 |
Retained earnings | 201,335,272 | 178,535,378 |
Total SORL Auto Parts, Inc. Stockholders' Equity | 198,640,467 | 176,654,143 |
Noncontrolling Interest In Subsidiaries | 31,338,532 | 28,814,893 |
Total Equity | 229,978,999 | 205,469,036 |
Total Liabilities and Equity | $ 817,721,344 | $ 794,371,526 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net, related parties | $ 35,115,219 | $ 261,889 |
Prepayments, related party | 1,059,410 | 3,670,573 |
Accounts payable and bank acceptance notes to vendors, related parties | $ 14,296,017 | $ 23,805,200 |
Preferred stock, par value per share | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value per share | $ 0.002 | $ 0.002 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 19,304,921 | 19,304,921 |
Common stock, shares outstanding | 19,304,921 | 19,304,921 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Sales | $ 540,188,479 | $ 468,049,906 |
Include: sales to related parties | 94,451,495 | 30,273,960 |
Cost of sales | 400,042,610 | 345,534,015 |
Gross profit | 140,145,869 | 122,515,891 |
Expenses: | ||
Selling and distribution expenses | 60,821,163 | 55,158,703 |
General and administrative expenses | 35,178,114 | 26,939,370 |
Research and development expenses | 21,433,016 | 16,366,393 |
Total operating expenses | 117,432,293 | 98,464,466 |
Other operating income, net | 11,227,075 | 10,122,416 |
Income from operations | 33,940,651 | 34,173,841 |
Interest income | 5,333,657 | 6,052,416 |
Government grants | 5,475,513 | 4,307,609 |
Other income | 389,006 | 260,448 |
Interest expenses | (11,637,764) | (13,570,956) |
Other income (expenses) | (1,420,198) | 43,219 |
Income before income taxes provision | 32,080,865 | 31,266,577 |
Provision for income taxes | 3,762,450 | 15,814,600 |
Net income | 28,318,415 | 15,451,977 |
Net income attributable to noncontrolling interest in subsidiaries | 2,904,484 | 2,716,278 |
Net income attributable to common stockholders | 25,413,931 | 12,735,699 |
Comprehensive income: | ||
Net income | 28,318,415 | 15,451,977 |
Foreign currency translation adjustments | (3,808,452) | (10,274,872) |
Comprehensive income | 24,509,963 | 5,177,105 |
Comprehensive income attributable to noncontrolling interest in subsidiaries | 2,523,639 | 1,688,791 |
Comprehensive income attributable to common stockholders | $ 21,986,324 | $ 3,488,314 |
Weighted average common share - basic | 19,304,921 | 19,304,921 |
Weighted average common share - diluted | 19,304,921 | 19,304,921 |
EPS - basic | $ 1.32 | $ 0.66 |
EPS - diluted | $ 1.32 | $ 0.66 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows From Operating Activities | ||
Net income | $ 28,318,415 | $ 15,451,977 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Allowance for doubtful accounts | 6,162,390 | 1,159,061 |
Depreciation and amortization | 14,487,918 | 11,838,692 |
Deferred income tax | (671,151) | (37,588) |
Gain on disposal of property and equipment | (24,130) | (40,779) |
Amortization of debt issuance costs | 536,624 | 1,168,449 |
Changes in assets and liabilities: | ||
Accounts receivable | (42,615,736) | (23,258,262) |
Bank acceptance notes from customers | 7,124,614 | 120,433,497 |
Other currents assets | (148,336) | (10,884,355) |
Inventories, net | (22,761,161) | (97,808,381) |
Prepayments | (235,500) | 942,352 |
Other assets | (577,381) | |
Accounts payable and bank acceptance notes to vendors | (28,588,617) | 121,285,932 |
Income tax payable | 282,702 | 9,534,690 |
Deposits received from customers | (4,681,077) | 10,765,839 |
Deferred income | (641,832) | 493,752 |
Other current liabilities and accrued expenses | 3,290,288 | 692,584 |
Net Cash Flows Provided By (Used in) Operating Activities | (40,164,589) | 161,160,079 |
Cash Flows From Investing Activities | ||
Refund of deposit on loan agreements | 5,073,567 | |
Acquisition of property, equipment, plant and land use rights | (49,126,545) | (55,376,169) |
Acquisition of intangible asset | (225,640) | |
Advances to related parties | (13,234,445) | (211,733,387) |
Repayment of advances to related parties | 14,488,316 | 129,577,381 |
Cash paid for short-term investment | (5,073,567) | |
Proceeds from disposal of property and equipment | 42,545 | |
Net Cash Flows Used In Investing Activities | (47,830,129) | (137,757,815) |
Cash Flows From Financing Activities | ||
Proceeds from short term bank loans | 346,973,835 | 527,380,963 |
Repayment of short term bank loans | (330,204,576) | (426,390,447) |
Proceeds from related parties | 3,672,811 | 9,669,326 |
Proceeds from long term loans | 28,991,810 | |
Repayment of long term loans | (23,395,555) | (24,859,848) |
Payment of debt issuance costs | (108,222) | |
Deposit paid on loan agreements | (3,479,017) | |
Deposit received from related party | 1,125,085 | |
Net Cash Flows Provided By Financing Activities | 23,576,171 | 85,799,994 |
Effects on changes in foreign exchange rate | (1,036,476) | (2,837,828) |
Net change in cash, cash equivalents and restricted cash | (65,455,023) | 106,364,430 |
Cash, cash equivalents, and restricted cash - beginning of the year | 110,962,606 | 4,598,176 |
Cash, cash equivalents, and restricted cash - end of the year | 45,507,583 | 110,962,606 |
Supplemental Cash Flow Disclosures: | ||
Interest paid | 12,800,635 | 11,653,031 |
Income taxes paid | 4,033,461 | 6,343,206 |
Non-cash Investing and Financing Transactions | ||
Liabilities assumed in connection with acquisition of property, plant and equipment and land use rights | 1,432,726 | 703,698 |
Land use rights transferred from prepayments | 16,045,807 | 7,733,989 |
Proceeds from long term loans in the form of bank acceptance notes | 7,069,236 | |
Repayments from related party in the form of bank acceptance notes | 70,818,463 | |
Repayments to related party in the form of bank acceptance notes | 5,097,556 | |
Deposits on loan agreements deducted from proceeds from long term loans | $ 1,413,847 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Reconciliation of cash, cash equivalents, and restricted cash) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets | ||
Cash and cash equivalents | $ 13,374,261 | $ 73,588,229 |
Restricted cash, current | 15,218,669 | 19,307,003 |
Restricted cash, non-current | 16,914,653 | 18,067,374 |
Total cash, cash equivalents, and restricted cash | $ 45,507,583 | $ 110,962,606 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid-in Capital | Reserves | Retained Earnings | Accumulated Other Comprehensive Income | Total SORL Auto Parts, Inc. Stockholders’ Equity | Noncontrolling Interest | Total |
Balance at Dec. 31, 2017 | $ 38,609 | $ (28,582,654) | $ 17,562,357 | $ 168,244,329 | $ 15,903,188 | $ 173,165,829 | $ 27,126,102 | $ 200,291,931 |
Balance, shares at Dec. 31, 2017 | 19,304,921 | |||||||
Net income | 12,735,699 | 12,735,699 | 2,716,278 | 15,451,977 | ||||
Foreign currency translation adjustment | (9,247,385) | (9,247,385) | (1,027,487) | (10,274,872) | ||||
Transfer to reserve | 2,444,650 | (2,444,650) | ||||||
Balance at Dec. 31, 2018 | $ 38,609 | (28,582,654) | 20,007,007 | 178,535,378 | 6,655,803 | 176,654,143 | 28,814,893 | 205,469,036 |
Balance, shares at Dec. 31, 2018 | 19,304,921 | |||||||
Net income | 25,413,931 | 25,413,931 | 2,904,484 | 28,318,415 | ||||
Foreign currency translation adjustment | (3,427,607) | (3,427,607) | (380,845) | (3,808,452) | ||||
Transfer to reserve | 2,614,037 | (2,614,037) | ||||||
Balance at Dec. 31, 2019 | $ 38,609 | $ (28,582,654) | $ 22,621,044 | $ 201,335,272 | $ 3,228,196 | $ 198,640,467 | $ 31,338,532 | $ 229,978,999 |
Balance, shares at Dec. 31, 2019 | 19,304,921 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS SORL Auto Parts, Inc. (together with its subsidiaries, "we," "us," "our" or the "Company" or "SORL"), a Delaware corporation incorporated on March 24, 1982, is principally engaged in the manufacture and distribution of vehicle brake systems and other key safety-related components, through its 90% ownership of Ruili Group Ruian Auto Parts Co., Ltd. (the "Joint Venture" or "Ruian"). The Company distributes products both in China and internationally under SORL trademarks. The Company's product range includes 140 categories and over 2,000 different specifications. The Joint Venture was formed in the People's Republic of China ("PRC" or "China") as a Sino-Foreign joint venture on January 17, 2004, pursuant to the terms of a Joint Venture Agreement between the Ruili Group Co., Ltd. (the "Ruili Group"), a related party under common control, and Fairford Holdings Limited ("Fairford"), a wholly owned subsidiary of the Company. The Ruili Group was, incorporated in China in 1987 and specializes in the development, production and sale of various kinds of automotive parts. Fairford and the Ruili Group contributed 90% and 10%, respectively, of the paid-in capital of the Joint Venture. On November 11, 2009, the Company, through its wholly owned subsidiary, Fairford, entered into a joint venture agreement with MGR Hong Kong Limited ("MGR"), a Hong Kong-based global auto parts distribution specialist firm and an unaffiliated Taiwanese investor. The joint venture was named SORL International Holding, Ltd. ("SIH") based in Hong Kong. SORL held a 60% interest in the joint venture, MGR held a 30% interest, and the Taiwanese investor held a 10% interest. SIH was primarily devoted to expanding SORL's international sales network in Asia-Pacific and creating a larger footprint in Europe, the Middle East and Africa with a target to create a truly global distribution network. In December 2015, due to poor financial performance of SIH, Fairfold sold all of its interest in SIH to the Taiwanese investor. After this transaction, SIH ceased to be a distributor of SORL in the international market. On April 26, 2019, the Company announced its receipt of a preliminary non-binding proposal letter, dated April 25, 2019, from Mr. Xiao Ping Zhang, the Chairman and Chief Executive Officer of the Company, Ms. Shu Ping Chi and Mr. Xiao Feng Zhang, directors of the Company and Ruili Group Co., Ltd. (together, the "Consortium"), to acquire all of the outstanding shares of common stock of the Company not already owned by the Consortium (the "Going Private" transaction). On November 29, 2019, the Company entered into an agreement and plan of merger (the "Merger Agreement"), with Ruili International Inc. ("Parent"), a Delaware corporation, and Ruili International Merger Sub Inc. ("Merger Sub"), a Delaware corporation and a wholly-owned subsidiary of Parent. Parent was formed by Mr. Xiao Ping Zhang solely for the purpose of entering into the Merger Agreement and consummating the Going Private transaction. Pursuant to the Merger Agreement, subject to the terms and conditions thereof, at the effective time, Merger Sub will be merged with and into the Company (the "Merger"), with the Company being the surviving corporation, and each share of common stock of the Company issued and outstanding immediately prior to the effective time of the Merger will be automatically cancelled and converted into the right to receive $4.72 in cash. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. ACCOUNTING METHOD The Company uses the accrual method of accounting for financial statement and tax return purposes. b. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of SORL Auto Parts, Inc. and its majority owned subsidiaries. All inter-company balances and transactions have been eliminated in the consolidation. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated statements of income and comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. The portion of the income or loss applicable to non-controlling interests in subsidiary undertakings is reflected in the consolidated statements of income and comprehensive income. c. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management 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. Management makes its best estimate of the outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject to change. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our consolidated financial statements as of and for the year ended December 31, 2019. Actual results could differ from those estimates. d. FAIR VALUE OF FINANCIAL INSTRUMENTS For certain of the Company's financial instruments, including cash and cash equivalents, current restricted cash, accounts receivables, current prepayments, bank acceptance notes from customers, inventories, current deposits on loan agreements, short-term investment, other current assets, accounts payable and bank acceptance notes to vendors, accrued expenses, short term bank loans, current portion of long term loans, deposits received from customers, deferred income, current income tax payable and other current liabilities, the carrying amounts approximate fair values due to their short maturities. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature. e. RELATED PARTY TRANSACTIONS A related party is generally defined as (i) any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. f. FINANCIAL RISK FACTORS AND FINANCIAL RISK MANAGEMENT The Company is exposed to the following risk factors: i) Credit risks - Financial instruments that potentially subject the Company to concentrations of credit risk are cash and cash equivalents and accounts receivable arising from its normal business activities. The Company places its cash and cash equivalents in what it believes to be credit-worthy financial institutions. The Company has policies in place to ensure that sales of products are made to customers with an appropriate credit history. The Company performs ongoing credit evaluations with respect to the financial condition of its creditors, but does not require collateral. In order to determine the value of the Company's accounts receivable, the Company records a provision for doubtful accounts to cover probable credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collection of outstanding accounts receivable. The Company has a concentration of credit risk due to geographic sales as a majority of its products are marketed and sold in the PRC. ii) Liquidity risks - Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and ability to close out market positions. iii) Interest rate risk - The interest rate of short term bank borrowings obtained in 2019 ranged from 3.25% to 5.44% and the term ranged from approximately one month to one year. The Company also obtained long term loans from non-financial institutions for effective interest rates ranging from 4.31% to 8.50%. The Company's income and cash flows are substantially independent of changes in market interest rates. g. CASH AND CASH EQUIVALENTS The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. h. RESTRICTED CASH Restricted cash, current consists of bank deposits used to pledge bank acceptance notes, deposits for obtaining letters of credit from a local bank, and deposits guaranteed for construction projects. Restricted cash, non-current consists of non-current portion of deposits guaranteed for construction projects and some bank deposits used to pledge for bank acceptance notes. i. INVENTORIES Inventories are stated at the lower of cost or net realizable value, with cost computed on a weighted-average basis. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. j. SHORT-TERM INVESTMENT Short-term investment consists of investment in wealth management product issued by a financial institution with the contractual maturity of one year. The wealth management product is secured with a fixed interest rate. Interest income is included in the consolidated statement of income and comprehensive income. k. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The initial cost of the asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is calculated using the straight-line method over the estimated useful life of the respective assets as follows: Category Estimated Useful Life (Years) Buildings 10-20 Machinery and equipment 5-10 Electronic equipment 3-5 Motor vehicles 3-10 Leasehold improvements The lesser of remaining lease term or 10 Significant improvements are capitalized when it is probable that the expenditure resulted in an increase in the future economic benefits expected to be obtained from the use of the asset beyond its originally assessed standard of performance. When improvements are made to real property and those improvements are permanently affixed to the property, the title to those improvements automatically transfers to the owner of the property. The lessee's interest in the improvements is not a direct ownership interest but rather it is an intangible right to use and benefit from the improvements during the term of the lease. Routine repairs and maintenance are expensed when incurred. Gains and losses on disposal of fixed assets are recognized in the income statement based on the net disposal proceeds less the carrying amount of the assets. l. LAND USE RIGHTS According to the law of China, the government owns all the land in China. Companies or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. Land use rights are being amortized using the straight-line method over the estimated useful life of 40 years. m. IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets, such as property, plant and equipment and other non-current assets, including intangible assets, are reviewed periodically for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. n. ACCOUNTS RECEIVABLES AND ALLOWANCE FOR BAD DEBTS The Company presents accounts receivables, net of allowances for doubtful accounts and returns, to ensure accounts receivable are not overstated due to being uncollectible. The allowances are calculated based on a detailed review of certain individual customer accounts, historical collectability rates, a general provision based on aging and an estimation of the overall economic conditions affecting the Company's customer base. The Company reviews a customer's credit history before extending credit. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company will write off the uncollectible receivables once any customers are bankrupt or there is a remote possibility that the Company will collect the outstanding balance. The write-off must be reported to the local tax authorities and the Company must receive official approval from them. To date, the Company has not written off any account receivables. o. BANK ACCEPTANCE NOTES FROM CUSTOMERS Bank acceptance notes from customers, generally due within six months and with specific payment terms and definitive due dates, are comprised of the notes issued by some customers to pay certain outstanding receivable balances to the Company, and the notes issued by the customers of related parties and transferred to the Company as loans from related parties or repayments from related parties. Bank acceptance notes do not bear interest. As of December 31, 2019 and 2018, notes receivables in the amount of $57,471,267 and $58,458,890, respectively, were pledged to endorsing banks to issue bank acceptance notes or short term bank loans. The banks charge discount fees if the Company chooses to discount the notes receivables for cash before the maturity of the notes. The Company incurred discount fees of $977,600 and $1,463,837 for the years ended December 31, 2019 and 2018, respectively, which were included in interest expenses. p. REVENUE RECOGNITION The Company has adopted Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers" ("ASC 606") effective January 1, 2018. Under ASC 606, the Company recognizes revenue when a customer obtains control of promised goods, in an amount that reflects the consideration which the Company expects to receive in exchange for the goods. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods it transfers to the customer. See Note 13 for details on revenues from contracts with customers. q. INCOME TAXES The Company accounts for income taxes under the provision of FASB ASC 740-10, Income Taxes r. FOREIGN CURRENCY TRANSLATION The Company maintains its books and accounting records in RMB, the currency of the PRC, The Company's functional currency is also RMB. The Company has adopted FASB ASC 830-30 in translating financial statement amounts from RMB to the Company's reporting currency, U.S. dollars ("US$"). All assets and liabilities are translated at the current rate. The stockholders' equity accounts are translated at appropriate historical rate. Revenue and expenses are translated at average exchange rates during the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of stockholders' equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. s. EMPLOYEES' BENEFITS Mandatory contributions are made to government's health, retirement benefit and unemployment schemes at the statutory rates in force during the period, based on gross salary payments. The cost of these payments is charged to the statement of income in the same period as the related salary costs. t. RESEARCH AND DEVELOPMENT EXPENSES Research and development costs are expensed as incurred. Research and development expenses were $21,433,016 for the year ended December 31, 2019, as compared with $16,366,393 for the year ended December 31, 2018. u. SHIPPING AND HANDLING COSTS Shipping and handling cost are classified as selling expenses and are expensed as incurred. Shipping and handling costs were $11,664,236 and $11,358,223 for the years ended December 31, 2019 and 2018, respectively. v. ADVERTISING COSTS Advertising costs are classified as selling expenses and are expensed as incurred. Advertising costs were $755,947 and $737,530 for the years ended December 31, 2019 and 2018, respectively. w. WARRANTY CLAIMS The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties were based on, among other things, historical experience, product changes, material expenses, and service and transportation expenses arising from the manufactured product. Estimates will be adjusted on the basis of actual claims and circumstances. Warranty claims were $4,060,908 and $3,113,913 for the years ended December 31, 2019 and 2018, respectively. x. PURCHASE DISCOUNTS Purchase discounts represent discounts received from vendors for purchasing raw materials and are netted in the cost of goods sold, if applicable. y. LEASE COMMITMENTS On January 1, 2019, the Company has adopted Accounting Standard Update (ASU) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01, collectively ASC Topic 842), using the modified retrospective method. The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Right-of-use (ROU) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at the lease commencement date. We have elected not to recognize ROU assets and lease liabilities for short-term leases for all classes of underlying assets. Short-term leases are leases with terms greater than 1 month, but less than 12 months. See cc. – RECENTLY ISSUED FINANCIAL STANDARDS for more details. z. COST OF SALES Cost of sales consists primarily of materials costs, applicable local government levies, freight charges, purchasing and receiving costs, inspection costs, employee compensation, depreciation and related costs, which are directly attributable to production. Write-down of inventories to lower of cost or market and write-down of potentially obsolete or slow-moving inventories are also recorded in cost of sales, if any. aa. GOVERNMENT GRANTS Government grants include cash subsidies as well as other subsidies received from the PRC government by the Joint Venture. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local business. Government grants are recognized when received and all the conditions specified in the grant have been met. Capital grants received in advance of the acquisition of equipment are recorded initially in deferred income and then offset against the cost of the related equipment upon acquisition. bb. SEGMENT REPORTING ASC Topic 280 requires use of the "management approach" model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. During the years ended December 31, 2019 and 2018, the Company operated in two reportable business segments: (1) commercial vehicles brake systems (2) passenger vehicles brake systems. cc. RECENTLY ISSUED FINANCIAL STANDARDS On January 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01, collectively ASC Topic 842), using the modified retrospective method. The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, previously reported financial information has not been restated to reflect the application of the new standard to the comparative periods presented. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which among other things, allows the Company to carry forward certain historical conclusions reached under ASC Topic 840 regarding lease identification, classification, and the accounting treatment of initial direct costs. The Company elected not to record assets and liabilities on its consolidated balance sheet for new or existing lease arrangements with terms of 12 months or less. The Company recognizes lease expenses for such leases on a straight-line basis over the lease term. In addition, the Company elected the land easement transition practical expedient and did not reassess whether an existing or expired land easement is a lease or contains a lease if it has not historically been accounted for as a lease. The primary impact of applying ASC Topic 842 is the initial recognition of $1.6 million of lease liabilities and corresponding right-of-use assets of $1.3 million on the Company's consolidated balance sheet as of January 1, 2019, for leases classified as operating leases under ASC Topic 840, as well as enhanced disclosure of the Company's leasing arrangements. There is no cumulative effect to retained earnings or other components of equity recognized as of January 1, 2019 and the adoption of this standard did not impact the consolidated statement of income and comprehensive income or consolidated statement of cash flows of the Company. The Company does not have finance lease arrangements as of December 31, 2019. See Note 17 for further discussion. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which eliminates the probable recognition threshold for credit impairments. The new guidance broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually to include forecasted information, as well as past events and current conditions. There is no specified method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. The Company does not expect a material impact on net assets and the consolidated statement of income and comprehensive income as a result of adopting the new standard. On December 18, 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12") as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards. ASU 2019-12 removes certain exceptions from Topic 740, Income Taxes, including (i) the exception to the incremental approach for intra period tax allocation; (ii) the exception to accounting for basis differences when there are ownership changes in foreign investments; and (iii) the exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 also simplifies GAAP in several other areas of Topic 740 such as (i) franchise taxes and other taxes partially based on income; (ii) transactions with a government that result in a step up in the tax basis of goodwill; (iii) separate financial statements of entities not subject to tax; and (iv) enacted changes in tax laws in interim periods. ASU 2019-12 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2019-12 on its consolidated financial statements and related disclosures. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 3 - RELATED PARTY TRANSACTIONS Related parties with whom the Company conducted business consist of the following: Name of Related Party Nature of Relationship Xiao Ping Zhang Principal shareholder, Chairman of the Board and Chief Executive Officer Shu Ping Chi Shareholder, member of the Board, wife of Xiao Ping Zhang Xiao Feng Zhang Shareholder, member of the Board, brother of Xiao Ping Zhang Ruili Group Co., Ltd. ("Ruili Group") 10% shareholder of Joint Venture and is collectively controlled by Xiao Ping Zhang, Shu Ping Chi, and Xiao Feng Zhang Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. ("Guangzhou Kormee") Controlled by Ruili Group Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. ("Ruian Kormee" and formerly known as "Ruian Kormee Automobile Braking Co., Ltd.") Wholly controlled by Guangzhou Kormee Changchun Kormee Auto Electric Co., Ltd. ("Changchun Kormee") Wholly controlled by Guangzhou Kormee Shanghai Dachao Electric Technology Co., Ltd. ("Shanghai Dachao") Ruili Group holds 66% of the equity interests in Shanghai Dachao Ruili MeiLian Air Management Systems (LangFang) Co., Ltd. ("Ruili Meilian") Controlled by Ruili Group Wenzhou Lichuang Automobile Parts Co., Ltd. ("Wenzhou Lichuang") Controlled by Ruili Group Ningbo Ruili Equipment Co., Ltd. ("Ningbo Ruili") Controlled by Ruili Group Shanghai Ruili Real Estate Development Co., Ltd. ("Shanghai Ruili") Wholly owned by Ruili Group Kunshan Yuetu Real Estate Development Co., Ltd. ("Kunshan Yuetu") Collectively owned by Ruili Group and Shu Ping Chi Shanghai Tabouk Auto Components Co., Ltd. ("Shanghai Tabouk") Collectively owned by Xiao Feng Zhang and Xiao Ping Zhang Hangzhou Ruili Property Development Co., Ltd. Collectively owned by Ruili Group and Xiao Ping Zhang Hangzhou Hangcheng Friction Material Co., Ltd. ("Hangzhou Hangcheng") Controlled by Ruili Group Hangzhou Ruili Binkang Real Estate Development Co., Ltd. Controlled by Hangzhou Ruili Property Development Co., Ltd. SHNS Precision Die Casting (Yangzhou) Co., Ltd. ("SHNS Precision") Controlled by Ruili Group Ruili Commercial Vehicle Co., Ltd. ("Ruili Commercial Vehicle") Collectively owned by Ruili Group and Jinrui Yu, the COO of the Company Jia Rui Zhang Daughter of Xiao Ping Zhang The Company continues to purchase primarily packaging materials from Ruili Group. In addition, the Company purchases automotive components from other related parties, including Guangzhou Kormee, Ruian Kormee, Ruili Meilian, Shanghai Dachao, Wenzhou Lichuang, Hangzhou Hangcheng, Changchun Kormee, SHNS Precision, and molds from Ningbo Ruili used in its production. The Company sells certain automotive products to the Ruili Group. The Company also sells parts to Guangzhou Kormee, Ruian Kormee, Shanghai Tabouk, Ruili Meilian, Changchun Kormee, SHNS Precision and Ruili Commercial Vehicle. The following related party transactions occurred for the years ended December 31, 2019 and 2018: For the Years Ended December 31, 2019 2018 PURCHASES FROM: Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. $ 13,224,103 $ 6,279,500 Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. 4,649,266 3,371,361 Shanghai Dachao Electric Technology Co., Ltd. 808,831 720,489 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,899,865 8,438,181 Ruili Group Co., Ltd. 12,369,112 7,909,463 Changchun Kormee Auto Electric Co., Ltd. 15,376 20,045 Ningbo Ruili Equipment Co., Ltd. 8,021,011 4,093,773 Hangzhou Hangcheng Friction Material Co., Ltd. 362,758 1,056,860 Wenzhou Lichuang Auto Parts Co., Ltd. 18,117,833 15,933,012 SHNS Precision Die Casting (Yangzhou) Co., Ltd. 99,576 — Total Purchases $ 59,567,731 $ 47,822,684 SALES TO: Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. $ 15,277,603 $ 10,020,480 Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. 382,492 61,172 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,238,079 1,315,649 Ruili Group Co., Ltd. 16,316,774 17,140,343 Changchun Kormee Auto Electric Co., Ltd. 35,421 59,525 Shanghai Tabouk Auto Components Co., Ltd. 1,098,571 1,676,791 SHNS Precision Die Casting (Yangzhou) Co., Ltd. 25,882 — Ruili Commercial Vehicle Co., Ltd. 60,076,673 — Total Sales $ 94,451,495 $ 30,273,960 As of December 31, 2019 2018 DEPOSIT RECEIVED FROM RELATED PARTY Ruili Group Co., Ltd. $ 1,125,085 $ — Total $ 1,125,085 $ — ADVANCES TO RELATED PARTIES Ruili Group Co., Ltd. $ 67,952,784 $ 79,739,417 Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. 13,087,041 — Total $ 81,039,825 $ 79,739,417 ACCOUNTS RECEIVABLE FROM RELATED PARTIES Ruili Commercial Vehicle Co., Ltd. $ 34,041,890 $ — SHNS Precision Die Casting (Yangzhou) Co., Ltd. 836,586 — Shanghai Tabouk Auto Components Co., Ltd. $ 236,743 $ 261,889 Total $ 35,115,219 $ 261,889 PREPAYMENT TO RELATED PARTY Ningbo Ruili Equipment Co., Ltd. $ 1,059,410 $ 3,670,573 Total $ 1,059,410 $ 3,670,573 ACCOUNTS PAYABLE TO RELATED PARTIES Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. $ — $ 7,877,485 Shanghai Dachao Electric Technology Co., Ltd. 284,833 56,883 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,965,349 5,628,155 Wenzhou Lichuang Auto Parts Co., Ltd. 11,890,537 9,898,777 Changchun Kormee Auto Electric Co., Ltd. 9,057 9,206 Hangzhou Hangcheng Friction Material Co., Ltd. 146,241 334,694 Total $ 14,296,017 $ 23,805,200 DUE TO RELATED PARTY Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. $ 9,495,120 $ 5,959,752 Total $ 9,495,120 $ 5,959,752 For the year ended December 31, 2019, the Company obtained net proceeds of $3,672,811 from a related party. In the same period, Ruili Group repaid the Company a net amount of $14,488,316, and the Company advanced Guangzhou Kormee net proceeds of $13,234,445. During the year ended December 31, 2018, the Company obtained net proceeds of $9,669,326 in cash from related parties. Repayments in bank acceptance notes to related parties totaled $5,097,556. In the same period, the Company provided Ruili Group net proceeds of $146,944,697, and received repayment in the form of bank acceptance notes amounted to $70,818,463. The Company also advanced Shanghai Ruili and Kunshan Yuetu amounts of $49,561,855 and $15,226,835, respectively, and collected cash repayment from them in the amounts of $112,857,719 and $16,719,662, respectively. In May 2018, the Company received repayments from Shanghai Ruili and Kunshan Yuetu in full. The interests received from these two related parties amount to $741,254 for the year ended December 31, 2018. The Company has received a deposit of $1,125,085 from Ruili Group during the year ended December 31, 2019 in relation to the Going Private transaction. The Company provided a guarantee for the credit line granted to Ruili Group by the China Merchants Bank RMB 40,000,000 (approximately $5,828,185) for a period of 12 months starting on October 24, 2016. The credit line was renewed on October 19, 2017 for 6 months. On April 13, 2018, Ruili Group and the bank reached another extension agreement and the guarantee was provided by the Company until April 12, 2019. The Company provided a guarantee for the credit line granted to Ruili Group by Bank of Ningbo in a maximum amount of RMB 210,000,000 (approximately $30,597,972) for the period from July 20, 2018 to July 20, 2028. The Company provided a guarantee for the credit line granted to Ruili Group by China Guangfa Bank in a maximum amount of RMB 71,000,000 (approximately $10,345,029) for the period from February 12, 2019 to January 16, 2020. The Company provided a guarantee for the credit line granted to Ruili Group and SHNS Precision by Minsheng Bank in a maximum amount of RMB 500,000,000 (approximately $72,730,446) for the period from June 6, 2019 to June 6, 2020. The Company provided a guarantee for the credit line granted to Ruili Group by Bank of Ningbo in a maximum amount of RMB 210,000,000 (approximately $30,102,348) for the period from July 20, 2018 to July 20, 2028. The Company provided a guarantee for the credit line granted to Ruili Group by China Zheshang Bank in a maximum amount of RMB 13,200,000 (approximately $1,892,147) for the period from April 16, 2019 to April 15, 2020. The Company provided a guarantee for the credit line granted to Ruili Group by Zhejiang Zheyin Finance Leasing Co., Ltd. in an amount of RMB 220,000,000 (approximately $31,535,793) for the period from August 16, 2018 to August 15, 2021. The Company has short term bank loans guaranteed or pledged by related parties. See Note 10 for more details. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 4 - ACCOUNTS RECEIVABLE, NET Accounts receivable, net consisted of the following: December 31, December 31, 2019 2018 Accounts receivable $ 203,389,497 $ 163,903,305 Less: allowance for doubtful accounts (19,152,439 ) (13,855,508 ) Accounts receivable, net $ 184,237,058 $ 150,047,797 The changes in the allowance for doubtful accounts for the years ended December 31, 2019 and 2018 were summarized as follows: December 31, December 31, 2019 2018 Beginning balance $ 13,855,508 $ 13,927,156 Add: Increase to allowance 5,583,551 610,610 Effects on changes in foreign exchange rate (286,620 ) (682,258 ) Ending balance $ 19,152,439 $ 13,855,508 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 5 - INVENTORIES On December 31, 2019 and 2018, inventories consisted of the following: December 31, December 31, 2019 2018 Raw Materials $ 39,149,211 $ 53,821,973 Work in process 118,626,278 89,516,949 Finished Goods 69,252,451 62,674,252 Less: Write-down of inventories (3,543,863 ) (1,727,747 ) Total Inventory $ 223,484,077 $ 204,285,427 The Company reversed write-down of potentially obsolete or slow-moving inventories of $611,243 and recorded lower of cost or market adjustment of $2,476,116 for the year ended December 31, 2019. The Company recorded write-down of potentially obsolete or slow-moving inventories of $808,789 and lower of cost or market adjustment of $918,958 for the year ended December 31, 2018. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 6 - PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consisted of the following, on December 31, 2019 and 2018: December 31, December 31, 2019 2018 Machinery $ 147,982,336 $ 130,912,861 Molds 1,254,081 1,274,729 Office equipment 5,634,012 3,566,772 Vehicles 7,076,319 5,956,822 Buildings 20,276,295 20,610,137 Construction in progress 31,671,650 8,641,271 Leasehold improvements 455,989 463,497 Sub-Total 214,350,682 171,426,089 Less: Accumulated depreciation (87,342,375 ) (75,372,703 ) Property, plant and equipment, net $ 127,008,307 $ 96,053,386 Depreciation expense charged to operations was $13,490,370 and $11,198,717 for the years ended December 31, 2019 and 2018, respectively. |
Land Use Rights, Net
Land Use Rights, Net | 12 Months Ended |
Dec. 31, 2019 | |
Land Use Rights [Abstract] | |
LAND USE RIGHTS, NET | NOTE 7 - LAND USE RIGHTS, NET December 31, December 31, 2019 2018 Cost $ 38,416,678 $ 22,283,776 Less: Accumulated amortization (1,963,844 ) (1,159,321 ) Land use rights, net $ 36,452,834 $ 21,124,455 According to the law of China, the government owns all the land in China. Companies and individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. In September 2017, the Company entered into an agreement with the Ministry of Land and Resources, Ruian, to purchase the land use rights for the land located at the intersection of Xianghe Road and North Wansong Road, Binhai New District, Ruian City, Zhejiang Province, China with a total area of 17,029 square meters (the "Wansong Land"). The Company prepaid the amount of RMB 51.81 million (approximately $7.93 million) as full payment. The Company obtained the title to the land use rights in April 2018. In December 2017, the Company entered into an agreement with the Ministry of Land and Resources, Ruian, to purchase the land use rights for the land located at the intersection of Fengjin Road and Wenhua Road, Binhai New District, Ruian City, Zhejiang Province, China. As of December 31, 2018, the purchase price of RMB 72.02 million (approximately $11.13 million) was fully paid and the payments were included in prepayments, non-current in the consolidated balance sheets. During the year ended December 31, 2019, the Company paid related deed tax of RMB 2.33 million (approximately $330,000). The Company obtained the title to the land use rights in September 2019. The total prepayments of RMB 74.35 million (approximately $11.46 million) were transferred to the land use right during the year ended December 31, 2019. In April 2018, the Company entered into an agreement with the Ministry of Land and Resources, Ruian, to purchase the land use rights for the land located at the intersection of Tengda Road and Wanghai Road, Economic Development District, Ruian City, Zhejiang Province, China. Prepayment of RMB 38.68 million (approximately $5.85 million) and refundable deposit of RMB 3.87 million (approximately $585,000) were made during the year ended December 31, 2018. The prepayment and deposit were included in prepayment, non-current in the consolidated balance sheet as of December 31, 2018. During the year ended December 31, 2019, the Company paid related deed tax of RMB 2.04 million (approximately $292,000). The Company obtained the title to the land use rights in July 2019. The prepayments in total of RMB 40.72 million (approximately $6.15 million) was transferred to the land use right during the year ended December 31, 2019. The refundable deposit of RMB 3.87 million (approximately $585,000) was included in other assets, non-current on the accompanying consolidated balance sheet as of December 31, 2019. In December 2019, the Company entered into an agreement with the Ministry of Land and Resources, Ruian, to purchase the land use rights for the land located at Kaifaqu Avenue, Ruian Economic Development District, Ruian City, Zhejiang Province, China. Prepayment of RMB 5.95 million (approximately $853,000) was made during the year ended December 31, 2019. As of the filing date, the title to the land use rights has not been transferred to the Company. Amortization expenses were $832,575 and $636,717 for the years ended December 31, 2019 and 2018, respectively. The following table summarizes the future amortization associated with the land use rights: Amount For the years ending December 31, 2020 $ 1,030,506 2021 1,030,506 2022 1,030,506 2023 1,030,506 2024 1,030,506 Thereafter 31,300,304 Total $ 36,452,834 |
Prepayments
Prepayments | 12 Months Ended |
Dec. 31, 2019 | |
Prepayments [Abstract] | |
PREPAYMENTS | NOTE 8 - PREPAYMENTS Prepayments consisted of the following as of December 31, 2019 and 2018: December 31, December 31, 2019 2018 Raw material suppliers $ 7,594,813 $ 7,776,591 Equipment and land use rights purchases 18,623,348 31,575,238 Total prepayments $ 26,218,161 $ 39,351,829 As of December 31, 2019, prepayments to raw material suppliers totaled $7,594,813, including prepayments to Ningbo Ruili, a related party under common control, in the amount of $1,059,410. As of December 31, 2018, prepayments to raw material suppliers totaled $7,776,591, including prepayments to Ningbo Ruili in the amount of $3,670,573. Also see Note 3 for details. As of December 31, 2019 and 2018, the Company has prepayments of RMB 5.95 million (approximately $853,000) and RMB 100.16 million (approximately $15.42 million), respectively, for the land use rights as described in Note 7. |
Deferred Tax Assets and Deferre
Deferred Tax Assets and Deferred Tax Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Components of Deferred Tax Assets and Liabilities [Abstract] | |
DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES | NOTE 9 - DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES Deferred tax assets as of December 31, 2019 and 2018 comprise of the following: December 31, December 31, 2019 2018 Deferred tax assets Allowance for doubtful accounts $ 3,083,393 $ 2,205,048 Revenue (net of cost) 420,245 308,046 Unpaid accrued expenses 158,622 501,276 Warranty 1,009,266 1,059,468 Deferred tax assets 4,671,526 4,073,838 Valuation allowance ― ― Net deferred tax assets $ 4,671,526 $ 4,073,838 Deferred taxation is calculated under the liability method in respect of taxation effect arising from all timing differences, which are expected with reasonable probability to realize in the foreseeable future. The Company's subsidiary registered in the PRC is subject to income taxes within the PRC at the applicable tax rate. In December 2017, the Tax Cuts and Jobs Act (the "2017 Tax Act") was enacted into law. The 2017 Tax Act includes provisions for a new tax on global intangible low-taxed income ("GILTI") effective for tax years beginning after December 31, 2017. The GILTI provision imposes a tax to U.S. companies on the foreign income in excess of a deemed return on tangible assets of controlled foreign corporations, subject to certain deductions and limitations. The Company reports the tax impact of GILTI as a period cost when incurred. Accordingly, the Company is not providing deferred taxes for basis differences expected to reverse as GILTI in the future, as applicable. See Note 15 for more details. |
Short-Term Bank Loans
Short-Term Bank Loans | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BANK LOANS | NOTE 10 - SHORT TERM BANK LOANS Bank loans represented the following as of December 31, 2019 and 2018: December 31, December 31, Secured $ 230,992,771 $ 217,940,471 Total short-term bank loan $ 230,992,771 $ 217,940,471 The Company obtained those short term loans from Bank of China, Bank of Ningbo, Agricultural Bank of China, China Minsheng Bank, Industrial Bank, Shanghai Pudong Development Bank, and China Construction Bank, respectively, to finance general working capital as well as new equipment acquisition. Interest rate for the loans outstanding during the year ended December 31, 2019 ranged from 1.35% to 5.44% per annum. The maturity dates of the loans existing as of December 31, 2019 ranged from January 2, 2020 to December 25, 2020. As of December 31, 2019 and 2018, the Company's accounts receivables of $1,834,555 and $0, respectively, were pledged as collateral under loan arrangements. The interest expenses, including discount fees, were $9,964,876 and $9,780,598 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, corporate or personal guarantees provided for those bank loans were as follows: $ 30,102,348 Pledged by Ruili Group, a related party, with its plant and land use rights $ 60,204,696 Pledged by Hangzhou Ruili Property Development Ltd., a related party, with its properties; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders $ 12,901,007 Pledged by Hangzhou Ruili Binkang Real Estate Development Co. Ltd., a related party, with its properties; Guaranteed by Hangzhou Ruili Property Development Ltd., a related party; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders $ 5,375,419 Guaranteed by Ruili Group, a related party; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders; Pledged by Ruili Group, a related party, with its properties $ 2,365,184 Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders; Pledged by Ruili Group, a related party, with its properties $ 93,173,934 Pledged by Shanghai Ruili, a related party, with its properties; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders $ 8,600,671 Pledged by Ruian Auto Parts Co., Ltd. with its property; Guaranteed by Hangzhou Ruili Property Development Ltd., a related party; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders $ 7,167,226 Pledged by the Company with a bank deposit of $7,167,226, which was included in restricted cash on the accompanying consolidated balance sheets. $ 4,156,991 Pledged by Ruili Group, a related party, with its properties $ 1,433,445 Pledged by Ruian Auto Parts Co., Ltd., with its account receivables $ 5,511,850 Guaranteed by Ruili Group, a related party; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders, and Ms. Jia Rui Zhang, the daughter of Xiao Ping Zhang |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 11 - ACCRUED EXPENSES Accrued expenses consisted of the following as of December 31, 2019 and 2018: December 31, December 31, Accrued payroll $ 14,461,232 $ 11,679,870 Accrued warranty expenses 6,728,438 7,063,122 Other accrued expenses 4,895,771 5,302,910 Total accrued expenses $ 26,085,441 $ 24,045,902 |
Long Term Loans
Long Term Loans | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
LONG TERM LOANS | NOTE 12 - LONG TERM LOANS December 31, December 31, Aggregate outstanding principal balance $ 49,714,338 $ 36,165,550 Less: unamortized debt issuance costs (163,014 ) (595,117 ) Less: current portion (27,194,179 ) (21,141,029 ) Non-current portion $ 22,357,145 $ 14,429,404 In November 2017, the Company entered into two identical but independent loan agreements with Far Eastern Horizon Co., Ltd. ("Far Eastern"), each for a term of 36 months and with an effective interest rate of 6.16% per annum, payable monthly in arrears. The total long term obligations under the two agreements amounted to RMB 200,000,000 (approximately $30,608,185), pledged by the Company's equipment in the original cost of RMB 205,690,574 (approximately $31,479,075). The Company paid debt issuance costs in cash of RMB 5,000,000 (approximately $742,324). In connection with the loan agreements, the Company paid deposits in cash for an aggregated amount of RMB 35,000,000 (approximately $5,196,271), with an annual interest of 7%. The deposits were returned to the Company in December 2019. In the same period, the Company invested the refunded deposits of RMB 35,000,000 in a fixed-income wealth management product issued by a financial institution for a contractual maturity period of one year with Far Eastern being the investment consultant of the product. The repayments of principal totaled $9,779,123 and $9,931,000 for the years ended December 31, 2019 and 2018, respectively. The Company also received interest of $363,907 and $296,600 from Far Eastern during the years ended December 31, 2019 and 2018, respectively. In November 2017, the Company entered into four independent loan agreements with COSCO Shipping Leasing Co., Ltd. ("COSCO") for a term of 36 months each. Two of the agreements were signed on November 30, 2017 with an effective interest rate of 8.50% per annum, payable monthly in arrears. The other two agreements were entered into on November 15, 2017, with an effective interest rate of 4.31% per annum, payable monthly in arrears. The total long term obligations under the four agreements amounted to RMB 235,000,000 (approximately $35,964,617), pledged by the Company's equipment in the original cost of RMB 238,333,639 (approximately $36,474,800). The Company paid debt issuance costs in cash of RMB 6,905,660 (approximately $1,025,248). The repayments of principal totaled $11,253,726 and $14,928,000 for the years ended December 31, 2019 and 2018, respectively. In July 2019, the Company entered into a loan agreement with COSCO Shipping Leasing Co., Ltd. ("COSCO") for a term of 36 months with an effective interest rate of 4.57% per annum, payable monthly in arrears. The total long term obligations under the agreement amounted to RMB 60,000,000 (approximately $8,603,630), pledged by the Company's equipment in the original cost of RMB 62,298,653 (approximately $8,808,078). The Company received RMB 50,000,000 (approximately $7,169,692), after deducting deposits of RMB 10,000,000 (approximately $1,433,938) required to maintain by COSCO, in the form of bank acceptance notes. The Company paid debt issuance costs in cash of RMB 754,717 (approximately $108,222). The repayments of principal totaled $1,724,886 for the year ended December 31, 2019. In November 2019 the Company entered into a loan agreement with Huarong Leasing Co., Ltd. for a term of 36 months with an effective rate of 5.03% per annum, payable monthly in arrears. The total long term obligations under the agreement amounted to RMB 200,000,000 (approximately $28,991,810), pledged by the Company's equipment in the original cost of RMB 245,582,893 (approximately $35,202,960). The Company received cash proceeds in the amount of RMB 200,000,000 (approximately $28,991,810). In connection with the loan agreement, the Company paid deposits in cash for an aggregated amount of RMB 24,000,000 (approximately $3,479,017), which bear no interest and will be refunded when the loan is paid off. The repayments of principal totaled $637,820 for the year ended December 31, 2019. The interest expense for long term loans was in the amount of $1,672,888 and $3,267,868 for the years ended December 31, 2019 and 2018, respectively. The following table summarizes the aggregate required repayments of principal amounts of the Company's long term loans in the succeeding five years and thereafter: Amount For the years ending December 31, 2020 $ 27,281,726 2021 11,877,494 2022 10,555,118 2023 and thereafter - Total 49,714,338 |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 12 Months Ended |
Dec. 31, 2019 | |
Revenues from Contracts with Customers [Abstract] | |
REVENUES FROM CONTRACTS WITH CUSTOMERS | NOTE 13 - REVENUES FROM CONTRACTS WITH CUSTOMERS The Company provides a variety of standard products to its customers. The Company's contracts with its customers consist of a single, distinct performance obligation or promise to transfer auto parts to the customers. Generally, the Company's performance obligations are satisfied at a point in time when the control of the products is transferred to the customs, which normally occurs upon the delivery of products at shipping point or destination depending on the terms of the contracts. Payment term with our customers are established based on industry and regional practices and vary by customers. The Company elected to treat shipping and handling activities as fulfillment activities, and the related costs are recorded as selling expenses. The Company provides assurance type warranties, which are not separate performance obligations. See Note 18 for details concerning the expected costs associated with the Company's assurance warranty obligations. In accordance with ASC 606, the Company disaggregates revenue from contracts with customers by product type. See Note 19 for information regarding revenue disaggregation by product type. Deferred revenue is recorded when consideration is received from a customer prior to transferring goods to the customer under the terms of a sales contract. As of the years ended December 31, 2019 and 2018, the Company recorded a deferred revenue liability of $46,066,180 and $51,529,795, respectively, which was presented as "Deposits received from customers" on the accompanying consolidated balance sheets. During the years ended December 31, 2019 and 2018, the Company recognized $23,244,523 and $24,659,985, respectively, of deferred revenue included in the opening balances of deposits received from customers. The amounts were included in sales on the accompanying consolidated statements of income and comprehensive income. |
Reserve
Reserve | 12 Months Ended |
Dec. 31, 2019 | |
Reserve [Abstract] | |
RESERVE | NOTE 14 - RESERVE The reserve funds were comprised of the following: December 31, December 31, Statutory surplus reserve fund $ 22,621,044 $ 20,007,007 Total $ 22,621,044 $ 20,007,007 Pursuant to the relevant laws and regulations of Sino-Foreign joint venture enterprises, the profits of the Company's subsidiary, which are based on their PRC statutory financial statements, are available for distribution in the form of cash dividends after they have satisfied all the PRC tax liabilities, provided for losses in previous years, and made appropriations to reserve funds, as determined at the discretion of the board of directors in accordance with PRC accounting standards and regulations. As stipulated by the relevant laws and regulations for enterprises operating in the PRC, Ruian is required to make annual appropriations to the statutory surplus funds. In accordance with the relevant PRC regulations and the articles of association of the respective companies, Ruian is required to allocate a certain percentage of its profits after taxation, as determined in accordance with PRC accounting standards applicable to the Company, to the statutory surplus reserve until such reserve reaches 50% of the registered capital of the Company. Net income as reported in the U.S. GAAP financial statements differs from that as reported in the PRC statutory financial statements. In accordance with the relevant laws and regulations in the PRC, the profits available for distribution are based on the statutory financial statements. If Ruian has foreign currency available after meeting its operational needs, Ruian may make its profit distributions in foreign currency to the extent foreign currency is available. Otherwise, it is necessary to obtain approval and convert such distributions at an authorized bank. The reserve fund consists of retained earnings which have been allocated to the statutory reserve fund. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 15 - INCOME TAXES United States In December 2017, the Tax Cuts and Jobs Act (the "2017 Tax Act") was enacted into law and the new legislation contains several key tax provisions that affected the Company, including, among others, a reduction of the federal corporate income tax rate to 21% effective January 1, 2018, and a recognition of the U.S. corporate income tax based on the deemed repatriation to the United States of the Company's share of previously deferred earnings of certain non-U.S. subsidiaries of the Company upon enactment of the 2017 Tax Act. The Company is required to recognize the effect of the 2017 Tax Act in the period of enactment. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118"), Income Tax Accounting Implications of the 2017 Tax Act, which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. During the year ended December 31, 2018, the Company recognized a one-time transition tax of $11,022,985 that represented management's estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company's share of previously deferred earnings of certain non-U.S. subsidiaries of the Company mandated by the U.S. Tax Reform. The Company also recognized related interest and penalty in the amount of $587,821 in the year ended December 31, 2018. During the year ended December 31, 2019, the Company made the first installment payment of $881,839 and accrued $167,415 penalty and interest for late payment. As of December 31, 2019, the total estimated transition tax liability was $10,896,381, of which $2,518,913 was included in income tax payable, current as a current liability which the Company believes will be paid within one year and the remaining balance was included in income tax payable, non-current. The actual impact of the U.S. Tax Reform on the Company may differ from management's estimates, and management may update its judgments based on future regulations or guidance issued or changes in the interpretations taken that would adjust the provisional amounts recorded. The 2017 Tax Act also created a new requirement that, for the periods beginning after January 1, 2018, certain income (referred to as global intangible low-taxed income or "GILTI") earned by foreign subsidiaries in excess of a deemed return on tangible assets of foreign corporations must be included in U.S. taxable income. The GILTI income is eligible for a deduction, which lowers the effective tax rate to 10.5% for calendar years 2018 through 2025 and 13.125% after 2025. Under U.S. GAAP, companies are allowed to make an accounting policy election to either (i) account for GILTI as a component of tax expense in the period in which a company is subject to the rules – the period cost method, or (ii) account for GILTI in a company's measurement of deferred taxes – the deferred method. The Company elected to account for GILTI in the period the tax is incurred. During the years ended December 31, 2019 and 2018, the Company accrued $539,017 and $0 GILTI tax, respectively. PRC The Joint Venture is registered in the PRC, and is therefore subject to state and local income taxes within the PRC at the applicable tax rate on the taxable income as reported in the PRC statutory financial statements in accordance with relevant income tax laws. In 2015, the Joint Venture was awarded the Chinese government's "High-Tech Enterprise" designation for a third time, which is valid for three years and it continues to be taxed at the 15% tax rate in 2015, 2016 and 2017. The Company renewed the "High-Tech Enterprise" designation in November 2018 for another three years which will expire in 2021. Therefore, the Company is taxed at 15% tax rate for the years ended December 31, 2019 and 2018. The reconciliation of the effective income tax rate of the Company to the respective statutory income tax rates in the United States and the PRC for the years ended December 31, 2019 and 2018 is as follows: Years Ended December 31, 2019 2018 US statutory income tax rate 21.00 % 21.00 % Valuation allowance recognized with respect to the loss in the US company -21.00 % -21.00 % Impact of Tax Cuts and Jobs Act 2.20 % 37.45 % China statutory income tax rate 25.00 % 25.00 % Effects of income tax exemptions and reliefs -10.00 % -10.00 % Effects of additional deduction allowed for R&D expenses -3.86 % -4.42 % Effects of expenses not deductible for tax purposes -0.81 % 2.32 % Other items -0.80 % 0.23 % Effective tax rate 11.73 % 50.58 % Income taxes are calculated on a separate entity basis. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The provisions for income taxes for the years ended December 31, 2019 and 2018, respectively, are summarized as follows: Years Ended December 31, 2019 2018 Current $ 4,433,601 $ 15,852,188 Deferred (671,151 ) (37,588 ) Total $ 3,762,450 $ 15,814,600 Accounting for Uncertainty in Income Taxes The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises complete their relevant tax filings. Therefore, the Company's PRC entities' tax filings results are subject to change. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company's PRC entities' tax filings, which may lead to additional tax liabilities. ASC 740-10 requires recognition and measurement of uncertain income tax positions using a "more-likely-than-not" approach. The management evaluated the Company's tax positions and considered that no provision for uncertainty in income taxes was necessary as of December 31, 2019 and 2018. |
Non-Controlling Interest in Sub
Non-Controlling Interest in Subsidiaries | 12 Months Ended |
Dec. 31, 2018 | |
Non-Controlling Interest in Subsidiaries [Abstract] | |
NON-CONTROLLING INTEREST IN SUBSIDIARIES | NOTE 16 - NON-CONTROLLING INTEREST IN SUBSIDIARIES Non-controlling interest in subsidiaries represents a 10% non-controlling interest, owned by Ruili Group Co., Ltd., in Ruian. Net income attributable to non-controlling interest in subsidiaries amounted to $2,904,484 and $2,716,278 for the years ended December 31, 2019 and 2018, respectively. 2019 2018 10% non-controlling interest in Ruian $ 2,904,484 $ 2,716,278 Total $ 2,904,484 $ 2,716,278 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases, Operating [Abstract] | |
OPERATING LEASES | NOTE 17 - OPERATING LEASES The Company entered into various operating lease agreements for certain of its staff dormitories, local warehouses and offices including a lease agreement with its related party and several short term lease agreements. In December 2006, Ruian entered into a lease agreement with Ruili Group Co., Ltd., a related party, for the lease of two apartment buildings for Ruian's management personnel and staff. The initial lease term was from January 2013 to December 2016. This lease was amended in 2013, with a new lease term from January 1, 2013 to December 31, 2022. The annual lease expense is RMB 2,100,000 (approximately $305,980). Balance sheet information related to operating leases is as follows: December 31, Operating lease right-of-use assets 1 $ 1,080,223 Operating lease liabilities, current 2 $ 383,493 Operating lease liabilities, non-current 696,730 Total operating lease liabilities $ 1,080,223 1 Operating lease right-of-use assets are recorded in other assets, non-current on the accompanying consolidated balance sheet. 2 The current portion of operating lease liabilities is recorded in other current liabilities on the accompanying consolidated balance sheet. On January 1, 2019, the Company adopted the provisions of ASC 842 using the modified retrospective method and elected not to apply ASC 842 to arrangements with lease terms of 12 month or less. For the year ended December 31, 2019, the Company had operating lease costs of $524,010 and short term lease costs of $1,082,930. Cash paid for amounts included in the measurement of operating lease liabilities was $611,906 for the year ended December 31, 2019. During the year ended December 31, 2019, the Company entered into a new lease agreement and the related right-of-use assets obtained in exchange for new operating lease liabilities is $284,828. During the same period, the Company has terminated a lease agreement with a gain of $146,648, and the related operating lease liability of $197,887 and right-of-use asset of $52,871 were distinguished. The operating lease expenses were $668,088 for the year ended December 31, 2018. The weighted-average remaining lease term and the weighted-average discount rate of our leases are as follows: December 31, Weighted-average remaining lease term 2.77 years Weighted-average discount rate 5.24 % The following table summarizes the maturity of our operating lease liabilities as of December 31, 2019: 2020 $ 430,973 2021 430,973 2022 301,023 2023 and thereafter - Total lease payment 1,162,969 Less imputed interest (82,746 ) Total operating lease liabilities $ 1,080,223 |
Warranty Liability
Warranty Liability | 12 Months Ended |
Dec. 31, 2019 | |
Warranty Claims [Abstract] | |
WARRANTY LIABILITY | NOTE 18 - WARRANTY LIABILITY Accrued warranty expenses are included in accrued expenses on the accompanying consolidated balance sheets. The movements of accrued warranty expenses for the year ended December 31, 2019 are as follows: Beginning balance at January 1, 2019 $ 7,063,122 Aggregate increase for new warranties issued during current year 4,060,908 Aggregate reduction for payments made and effect of exchange rate fluctuation (4,395,592 ) Ending balance at December 31, 2019 $ 6,728,438 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 19 - SEGMENT INFORMATION The Company produces brake systems and other related components for different types of commercial vehicles ("Commercial Vehicle Brake Systems"). On August 31, 2010, the Company through Ruian, executed an Asset Purchase Agreement to acquire, and purchased, a segment of the passenger vehicle auto parts business ("Passenger Vehicle Brake Systems") of Ruili Group. As a result of this acquisition, the Company's product offerings were expanded to both commercial and passenger vehicles' brake systems and other key safety-related auto parts. The Company has two operating segments: Commercial Vehicle Brake Systems and Passenger Vehicle Brake Systems. All of the Company's long-lived assets are located in the PRC. The Company and its subsidiaries do not have long-lived assets in the United States for the reporting periods. During the years ended December 31, 2019 2018 NET SALES TO EXTERNAL CUSTOMERS Commercial vehicles brake systems $ 448,727,141 $ 386,181,206 Passenger vehicles brake systems 91,461,338 81,868,700 Net sales $ 540,188,479 $ 468,049,906 INTERSEGMENT SALES Commercial vehicles brake systems $ — $ — Passenger vehicles brake systems — — Intersegment sales $ — $ — GROSS PROFIT Commercial vehicles brake systems $ 113,329,974 $ 96,475,100 Passenger vehicles brake systems 26,815,895 26,040,791 Gross profit $ 140,145,869 $ 122,515,891 Selling and distribution expenses 60,821,163 55,158,703 General and administrative expenses 35,178,114 26,939,370 Research and development expenses 21,433,016 16,366,393 Other operating income, net 11,227,075 10,122,416 Income from operations 33,940,651 34,173,841 Interest income 5,333,657 6,052,416 Government grants 5,475,513 4,307,609 Other income 389,006 260,448 Interest expenses (11,637,764 ) (13,570,956 ) Other income (expenses) (1,420,198 ) 43,219 Income before income tax expense $ 32,080,865 $ 31,266,577 CAPITAL EXPENDITURE Commercial vehicles brake systems $ 40,809,421 $ 45,877,053 Passenger vehicles brake systems 8,317,124 9,724,756 Total $ 49,126,545 $ 55,601,809 DEPRECIATION AND AMORTIZATION Commercial vehicles brake systems $ 12,035,113 $ 9,768,105 Passenger vehicles brake systems 2,452,805 2,070,587 Total $ 14,487,918 $ 11,838,692 December 31, December 31, TOTAL ASSETS Commercial vehicles brake systems $ 679,281,120 $ 655,435,946 Passenger vehicles brake systems 138,440,224 138,935,580 Total $ 817,721,344 $ 794,371,526 December 31, December 31, LONG LIVED ASSETS Commercial vehicles brake systems $ 174,640,176 $ 150,067,034 Passenger vehicles brake systems 35,592,370 31,810,355 Total $ 210,232,546 $ 181,877,389 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 20 - COMMITMENTS AND CONTINGENCIES (1) The Company purchased the Dongshan Facility from Ruili Group in 2007 and subsequently transferred the plants and land use right to Ruili Group. The Company has never obtained the land use rights certificate nor the property ownership certificate of the building for the Dongshan Facility. The Company reserved the relevant tax amount of RMB 4,560,000 (approximately $745,220). This amount was determined based on a 3% tax rate on the consideration paid for the Dongshan Facility in the transaction, which the Company considered as the most probable amount of tax liability. The Dongshan Facility was transferred back to Ruili Group on May 5, 2016. (2) The Company purchased the Development Zone Facility from Ruili Group on May 5, 2016. As of the filing date, the Company has not yet obtained the land use rights certificate or the property ownership certificate for the building of the Development Zone Facility. The Company reserved the relevant tax amount of RMB 15,030,000 (approximately $2,300,205). This amount was determined based on a 3% tax rate on the consideration paid for the Development Zone Facility, which the Company considered as the most probable amount of tax liability. (3) The following putative stockholder class action complaints have been filed against the Company and certain officers and directors thereof in connection with the Going Private transaction. The first, Richard Scarantino v. SORL Auto Parts, Inc., et al. Jose Carlos SanJuan Paz v. SORL Auto Parts, Inc., et al. Ongarov v. SORL Auto Parts, Inc., et al. Mark Patenaude v. SORL Auto Parts, Inc., et al. Sherri Gough v. SORL Auto Parts, Inc. Bruce LeBeau v. SORL Auto Parts, Inc., et al. Paz Ongarov Patenaude, Gough LeBeau Paz (4) The information of lease commitments is provided in Note 17. (5) The information of guarantees and assets pledged is provided in Note 3 and Note 10. |
Concentration
Concentration | 12 Months Ended |
Dec. 31, 2019 | |
Concertration [Abstract] | |
CONCENTRATION | NOTE 21 – CONCENTRATION Ruili Commercial Vehicle, a related party, accounted for 11.1% of the Company's total revenues for the year ended December 31, 2019 and 18.5% of the Company's total net accounts receivable as of December 31, 2019. No other customer individually accounted for more than 10% of the Company's total revenues or total net accounts receivable for the year ended December 31, 2019. There is no customer accounted for more than 10% of the Company's total revenues for the year ended December 31, 2018 or the Company's total net accounts receivable as of December 31, 2018. There is no vendor accounted for more than 10% of the Company's total purchases for the years ended December 31, 2019 and 2018 or the Company's total outstanding accounts payable as of December 31, 2019 and 2018. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 22 - SUBSEQUENT EVENTS During the subsequent period, the Company obtained short term loans for an aggregate amount of approximately $273.2 million from China Construction Bank, Agricultural Bank of China, China Zheshang Bank, Wenzhou Bank, China Citic Bank, Hangzhou Bank, Guangfa Bank and Industrial Bank. Interest rates for those loans ranged from 2.13% to 5.22% per annum. The maturity dates of the loans existing as of the filing date ranged from August 31, 2020 to May 27, 2021. The Company continuously pledged bank acceptance notes to obtain loans from China Zheshang Bank and Bank of Ningbo, its accounts receivable for loan from China Construction Bank, and its properties for loans from Guangfa Bank. In addition, the Company obtained long term loans for an aggregate amount of approximately $26.7 million from Agricultural Bank of China. Interest rates for those loans ranged from 4.55% to 4.99% per annum. The maturity dates of the loans ranged from May 30, 2023 to April 2, 2030. The Company pledged its properties for loans from Agricultural Bank of China. In the same period, the Company repaid loan principals and interest expenses in the total amount of approximately $147.8 million to Industrial Bank, China Construction Bank, China Zheshang Bank, Bank of China and Agricultural Bank of China. During the subsequent period, the Company continued to advance to Ruili Group. See Note 3 for detail arrangement between the Company and Ruili Group. On May 8, 2020, a special meeting of the stockholders was held by the Company and its stockholders voted in favor of the proposal to adopt the Merger Agreement. On May 15, 2020, the Company completed the Merger, pursuant to the terms of the Merger Agreement by and among the Company, Parent and Merger Sub. As a result of the Merger, the Company becomes a wholly owned subsidiary of Ruili International Inc., and the Company has filed a delisting application on Form 25 with the Securities and Exchange Commission to delist and deregister the Company's Common Stock as of May 15, 2020. As a result of the COVID-19 outbreak in the first quarter of 2020, the Company has experienced suspension of operations, interruption of supply chain and decline in demand by the Company's customers. The Company's businesses, results of operations, financial position and cash flows were adversely affected in the first quarter of 2020 with potential continuing impacts on subsequent periods. Because of the risks and uncertainties posed by COVID-19, which are still evolving, the extent of the business disruption and the related financial impact on subsequent periods cannot be reasonably estimated at this time. |
Additional Information - Financ
Additional Information - Financial Statement Schedule I | 12 Months Ended |
Dec. 31, 2019 | |
Additional Information-Financial Statement Schedule I [Abstract] | |
ADDITIONAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I | ADDITIONAL INFORMATION─FINANCIAL STATEMENT SCHEDULE I This financial statements schedule has been prepared in conformity with U.S. GAAP. SORL AUTO PARTS, INC. This financial statements schedule has been prepared in conformity with U.S. GAAP. The parent company financial statements have been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the only exception being that the Company accounts for its subsidiaries using the equity method. Please refer to the notes to the consolidated financial statements presented above for additional information and disclosures with respect to these financial statements. BALANCE SHEETS December 31, 2019 and 2018 December 31, December 31, ASSETS Current Assets: Cash and cash equivalents $ - $ - Other current assets 86,828 86,828 Total Current Assets 86,828 86,828 Investments in subsidiaries 210,772,664 184,632,301 TOTAL ASSETS $ 210,859,492 $ 184,719,129 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Income tax payable - current 3,177,931 2,451,499 Due to subsidiary 881,839 - Other current liability 2,921,411 2,921,411 Total Current Liabilities 6,981,181 5,372,910 Income tax payable - noncurrent 8,377,468 9,259,307 Total Non-current Liabilities Total Liabilities 15,358,649 14,632,217 Stockholders' Equity: Preferred stock - no par value; 1,000,000 authorized; none issued and outstanding as of December 31, 2019 and 2018 - - Common stock - $0.002 par value; 50,000,000 authorized, 19,304,921 issued and outstanding as of December 31, 2016 and 2015 38,609 38,609 Additional paid-in capital (28,582,654 ) (28,582,654 ) Retained earnings 224,044,888 198,630,957 Total Stockholders' Equity 195,500,843 170,086,912 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 210,859,492 $ 184,719,129 STATEMENTS OF INCOME For the Years Ended December 31, 2019 and 2018 For Years Ended 2019 2018 Investment income $ 26,140,363 $ 24,446,505 General and administrative expenses 20,000 — Provision for income taxes 706,432 11,710,806 Net income attributable to stockholders $ 25,413,931 $ 12,735,699 Weighted average common share - Basic 19,304,921 19,304,921 Weighted average common share - Diluted 19,304,921 19,304,921 EPS - Basic $ 1.32 $ 0.66 EPS - Diluted $ 1.32 $ 0.66 STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2019 and 2018 For Years Ended 2019 2018 Cash flow from operating activities: Net income $ 25,413,931 $ 12,735,699 Adjustments to reconcile net income to net cash used in operating activities : Investment in subsidiaries (26,140,363 ) (24,446,505 ) Income tax payable 726,432 11,710,806 Net cash used in operating activities - - Net change in cash and cash equivalents - - Cash and cash equivalents, beginning of the year - - Cash and cash equivalents, end of the year $ - $ - STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the Years Ended December 31, 2019 and 2018 Additional Number Common Paid-in Retained Shareholders' of Share Stock Capital Earnings Equity Balance - December 31, 2017 $ 19,304,921 38,609 (28,582,654 ) 185,895,258 157,351,213 Net income - - - 12,735,699 12,735,699 Balance - December 31, 2018 19,304,921 38,609 (28,582,654 ) 198,630,957 170,086,912 Net income - - 25,413,931 25,413,931 Balance - December 31, 2019 $ 19,304,921 38,609 (28,582,654 ) 224,044,888 195,500,843 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
ACCOUNTING METHOD | a. ACCOUNTING METHOD The Company uses the accrual method of accounting for financial statement and tax return purposes. |
PRINCIPLES OF CONSOLIDATION | b. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of SORL Auto Parts, Inc. and its majority owned subsidiaries. All inter-company balances and transactions have been eliminated in the consolidation. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated statements of income and comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. The portion of the income or loss applicable to non-controlling interests in subsidiary undertakings is reflected in the consolidated statements of income and comprehensive income. |
USE OF ESTIMATES | c. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management 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. Management makes its best estimate of the outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject to change. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our consolidated financial statements as of and for the year ended December 31, 2019. Actual results could differ from those estimates. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | d. FAIR VALUE OF FINANCIAL INSTRUMENTS For certain of the Company's financial instruments, including cash and cash equivalents, current restricted cash, accounts receivables, current prepayments, bank acceptance notes from customers, inventories, current deposits on loan agreements, short-term investment, other current assets, accounts payable and bank acceptance notes to vendors, accrued expenses, short term bank loans, current portion of long term loans, deposits received from customers, deferred income, current income tax payable and other current liabilities, the carrying amounts approximate fair values due to their short maturities. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature. |
RELATED PARTY TRANSACTIONS | e. RELATED PARTY TRANSACTIONS A related party is generally defined as (i) any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. |
FINANCIAL RISK FACTORS AND FINANCIAL RISK MANAGEMENT | f. FINANCIAL RISK FACTORS AND FINANCIAL RISK MANAGEMENT The Company is exposed to the following risk factors: i) Credit risks - Financial instruments that potentially subject the Company to concentrations of credit risk are cash and cash equivalents and accounts receivable arising from its normal business activities. The Company places its cash and cash equivalents in what it believes to be credit-worthy financial institutions. The Company has policies in place to ensure that sales of products are made to customers with an appropriate credit history. The Company performs ongoing credit evaluations with respect to the financial condition of its creditors, but does not require collateral. In order to determine the value of the Company's accounts receivable, the Company records a provision for doubtful accounts to cover probable credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collection of outstanding accounts receivable. The Company has a concentration of credit risk due to geographic sales as a majority of its products are marketed and sold in the PRC. ii) Liquidity risks - Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and ability to close out market positions. iii) Interest rate risk - The interest rate of short term bank borrowings obtained in 2019 ranged from 3.25% to 5.44% and the term ranged from approximately one month to one year. The Company also obtained long term loans from non-financial institutions for effective interest rates ranging from 4.31% to 8.50%. The Company's income and cash flows are substantially independent of changes in market interest rates. |
CASH AND CASH EQUIVALENTS | g. CASH AND CASH EQUIVALENTS The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. |
RESTRICTED CASH | h. RESTRICTED CASH Restricted cash, current consists of bank deposits used to pledge bank acceptance notes, deposits for obtaining letters of credit from a local bank, and deposits guaranteed for construction projects. Restricted cash, non-current consists of non-current portion of deposits guaranteed for construction projects and some bank deposits used to pledge for bank acceptance notes. |
INVENTORIES | i. INVENTORIES Inventories are stated at the lower of cost or net realizable value, with cost computed on a weighted-average basis. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. |
SHORT-TERM INVESTMENT | j. SHORT-TERM INVESTMENT Short-term investment consists of investment in wealth management product issued by a financial institution with the contractual maturity of one year. The wealth management product is secured with a fixed interest rate. Interest income is included in the consolidated statement of income and comprehensive income. |
PROPERTY, PLANT AND EQUIPMENT | k. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The initial cost of the asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is calculated using the straight-line method over the estimated useful life of the respective assets as follows: Category Estimated Useful Life (Years) Buildings 10-20 Machinery and equipment 5-10 Electronic equipment 3-5 Motor vehicles 3-10 Leasehold improvements The lesser of remaining lease term or 10 Significant improvements are capitalized when it is probable that the expenditure resulted in an increase in the future economic benefits expected to be obtained from the use of the asset beyond its originally assessed standard of performance. When improvements are made to real property and those improvements are permanently affixed to the property, the title to those improvements automatically transfers to the owner of the property. The lessee's interest in the improvements is not a direct ownership interest but rather it is an intangible right to use and benefit from the improvements during the term of the lease. Routine repairs and maintenance are expensed when incurred. Gains and losses on disposal of fixed assets are recognized in the income statement based on the net disposal proceeds less the carrying amount of the assets. |
LAND USE RIGHTS | l. LAND USE RIGHTS According to the law of China, the government owns all the land in China. Companies or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government. Land use rights are being amortized using the straight-line method over the estimated useful life of 40 years. |
IMPAIRMENT OF LONG-LIVED ASSETS | m. IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets, such as property, plant and equipment and other non-current assets, including intangible assets, are reviewed periodically for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. |
ACCOUNTS RECEIVABLES AND ALLOWANCE FOR BAD DEBTS | n. ACCOUNTS RECEIVABLES AND ALLOWANCE FOR BAD DEBTS The Company presents accounts receivables, net of allowances for doubtful accounts and returns, to ensure accounts receivable are not overstated due to being uncollectible. The allowances are calculated based on a detailed review of certain individual customer accounts, historical collectability rates, a general provision based on aging and an estimation of the overall economic conditions affecting the Company's customer base. The Company reviews a customer's credit history before extending credit. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company will write off the uncollectible receivables once any customers are bankrupt or there is a remote possibility that the Company will collect the outstanding balance. The write-off must be reported to the local tax authorities and the Company must receive official approval from them. To date, the Company has not written off any account receivables. |
BANK ACCEPTANCE NOTES FROM CUSTOMERS | o. BANK ACCEPTANCE NOTES FROM CUSTOMERS Bank acceptance notes from customers, generally due within six months and with specific payment terms and definitive due dates, are comprised of the notes issued by some customers to pay certain outstanding receivable balances to the Company, and the notes issued by the customers of related parties and transferred to the Company as loans from related parties or repayments from related parties. Bank acceptance notes do not bear interest. As of December 31, 2019 and 2018, notes receivables in the amount of $57,471,267 and $58,458,890, respectively, were pledged to endorsing banks to issue bank acceptance notes or short term bank loans. The banks charge discount fees if the Company chooses to discount the notes receivables for cash before the maturity of the notes. The Company incurred discount fees of $977,600 and $1,463,837 for the years ended December 31, 2019 and 2018, respectively, which were included in interest expenses. |
REVENUE RECOGNITION | p. REVENUE RECOGNITION The Company has adopted Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers" ("ASC 606") effective January 1, 2018. Under ASC 606, the Company recognizes revenue when a customer obtains control of promised goods, in an amount that reflects the consideration which the Company expects to receive in exchange for the goods. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods it transfers to the customer. See Note 13 for details on revenues from contracts with customers. |
INCOME TAXES | q. INCOME TAXES The Company accounts for income taxes under the provision of FASB ASC 740-10, Income Taxes |
FOREIGN CURRENCY TRANSLATION | r. FOREIGN CURRENCY TRANSLATION The Company maintains its books and accounting records in RMB, the currency of the PRC, The Company's functional currency is also RMB. The Company has adopted FASB ASC 830-30 in translating financial statement amounts from RMB to the Company's reporting currency, U.S. dollars ("US$"). All assets and liabilities are translated at the current rate. The stockholders' equity accounts are translated at appropriate historical rate. Revenue and expenses are translated at average exchange rates during the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of stockholders' equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. |
EMPLOYEES' BENEFITS | s. EMPLOYEES' BENEFITS Mandatory contributions are made to government's health, retirement benefit and unemployment schemes at the statutory rates in force during the period, based on gross salary payments. The cost of these payments is charged to the statement of income in the same period as the related salary costs. |
RESEARCH AND DEVELOPMENT EXPENSES | t. RESEARCH AND DEVELOPMENT EXPENSES Research and development costs are expensed as incurred. Research and development expenses were $21,433,016 for the year ended December 31, 2019, as compared with $16,366,393 for the year ended December 31, 2018. |
SHIPPING AND HANDLING COSTS | u. SHIPPING AND HANDLING COSTS Shipping and handling cost are classified as selling expenses and are expensed as incurred. Shipping and handling costs were $11,664,236 and $11,358,223 for the years ended December 31, 2019 and 2018, respectively. |
ADVERTISING COSTS | v. ADVERTISING COSTS Advertising costs are classified as selling expenses and are expensed as incurred. Advertising costs were $755,947 and $737,530 for the years ended December 31, 2019 and 2018, respectively. |
WARRANTY CLAIMS | w. WARRANTY CLAIMS The Company provides for the estimated cost of product warranties when the products are sold. Such estimates of product warranties were based on, among other things, historical experience, product changes, material expenses, and service and transportation expenses arising from the manufactured product. Estimates will be adjusted on the basis of actual claims and circumstances. Warranty claims were $4,060,908 and $3,113,913 for the years ended December 31, 2019 and 2018, respectively. |
PURCHASE DISCOUNTS | x. PURCHASE DISCOUNTS Purchase discounts represent discounts received from vendors for purchasing raw materials and are netted in the cost of goods sold, if applicable. |
LEASECOMMITMENTS | y. LEASE COMMITMENTS On January 1, 2019, the Company has adopted Accounting Standard Update (ASU) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01, collectively ASC Topic 842), using the modified retrospective method. The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Right-of-use (ROU) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at the lease commencement date. We have elected not to recognize ROU assets and lease liabilities for short-term leases for all classes of underlying assets. Short-term leases are leases with terms greater than 1 month, but less than 12 months. See cc. – RECENTLY ISSUED FINANCIAL STANDARDS for more details. |
COST OF SALES | z. COST OF SALES Cost of sales consists primarily of materials costs, applicable local government levies, freight charges, purchasing and receiving costs, inspection costs, employee compensation, depreciation and related costs, which are directly attributable to production. Write-down of inventories to lower of cost or market and write-down of potentially obsolete or slow-moving inventories are also recorded in cost of sales, if any. |
GOVERNMENT GRANTS | aa. GOVERNMENT GRANTS Government grants include cash subsidies as well as other subsidies received from the PRC government by the Joint Venture. Such subsidies are generally provided as incentives from the local government to encourage the expansion of local business. Government grants are recognized when received and all the conditions specified in the grant have been met. Capital grants received in advance of the acquisition of equipment are recorded initially in deferred income and then offset against the cost of the related equipment upon acquisition. |
SEGMENT REPORTING | bb. SEGMENT REPORTING ASC Topic 280 requires use of the "management approach" model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. During the years ended December 31, 2019 and 2018, the Company operated in two reportable business segments: (1) commercial vehicles brake systems (2) passenger vehicles brake systems. |
RECENTLY ISSUED FINANCIAL STANDARDS | cc. RECENTLY ISSUED FINANCIAL STANDARDS On January 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (as amended by ASU 2018-01, 2018-10, 2018-11, 2018-20, and 2019-01, collectively ASC Topic 842), using the modified retrospective method. The Company elected the transition method which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, previously reported financial information has not been restated to reflect the application of the new standard to the comparative periods presented. The Company elected the package of practical expedients permitted under the transition guidance within ASC 842, which among other things, allows the Company to carry forward certain historical conclusions reached under ASC Topic 840 regarding lease identification, classification, and the accounting treatment of initial direct costs. The Company elected not to record assets and liabilities on its consolidated balance sheet for new or existing lease arrangements with terms of 12 months or less. The Company recognizes lease expenses for such leases on a straight-line basis over the lease term. In addition, the Company elected the land easement transition practical expedient and did not reassess whether an existing or expired land easement is a lease or contains a lease if it has not historically been accounted for as a lease. The primary impact of applying ASC Topic 842 is the initial recognition of $1.6 million of lease liabilities and corresponding right-of-use assets of $1.3 million on the Company's consolidated balance sheet as of January 1, 2019, for leases classified as operating leases under ASC Topic 840, as well as enhanced disclosure of the Company's leasing arrangements. There is no cumulative effect to retained earnings or other components of equity recognized as of January 1, 2019 and the adoption of this standard did not impact the consolidated statement of income and comprehensive income or consolidated statement of cash flows of the Company. The Company does not have finance lease arrangements as of December 31, 2019. See Note 17 for further discussion. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which eliminates the probable recognition threshold for credit impairments. The new guidance broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually to include forecasted information, as well as past events and current conditions. There is no specified method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019. The Company does not expect a material impact on net assets and the consolidated statement of income and comprehensive income as a result of adopting the new standard. On December 18, 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12") as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards. ASU 2019-12 removes certain exceptions from Topic 740, Income Taxes, including (i) the exception to the incremental approach for intra period tax allocation; (ii) the exception to accounting for basis differences when there are ownership changes in foreign investments; and (iii) the exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 also simplifies GAAP in several other areas of Topic 740 such as (i) franchise taxes and other taxes partially based on income; (ii) transactions with a government that result in a step up in the tax basis of goodwill; (iii) separate financial statements of entities not subject to tax; and (iv) enacted changes in tax laws in interim periods. ASU 2019-12 is effective for annual reporting periods and interim periods within those years beginning after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2019-12 on its consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful life | Category Estimated Useful Life (Years) Buildings 10-20 Machinery and equipment 5-10 Electronic equipment 3-5 Motor vehicles 3-10 Leasehold improvements The lesser of remaining lease term or 10 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of nature of relationship under related party transactions | Name of Related Party Nature of Relationship Xiao Ping Zhang Principal shareholder, Chairman of the Board and Chief Executive Officer Shu Ping Chi Shareholder, member of the Board, wife of Xiao Ping Zhang Xiao Feng Zhang Shareholder, member of the Board, brother of Xiao Ping Zhang Ruili Group Co., Ltd. (“Ruili Group”) 10% shareholder of Joint Venture and is collectively controlled by Xiao Ping Zhang, Shu Ping Chi, and Xiao Feng Zhang Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. (“Guangzhou Kormee”) Controlled by Ruili Group Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. (“Ruian Kormee” and formerly known as “Ruian Kormee Automobile Braking Co., Ltd.”) Wholly controlled by Guangzhou Kormee Changchun Kormee Auto Electric Co., Ltd. (“Changchun Kormee”) Wholly controlled by Guangzhou Kormee Shanghai Dachao Electric Technology Co., Ltd. (“Shanghai Dachao”) Ruili Group holds 66% of the equity interests in Shanghai Dachao Ruili MeiLian Air Management Systems (LangFang) Co., Ltd. (“Ruili Meilian”) Controlled by Ruili Group Wenzhou Lichuang Automobile Parts Co., Ltd. (“Wenzhou Lichuang”) Controlled by Ruili Group Ningbo Ruili Equipment Co., Ltd. (“Ningbo Ruili”) Controlled by Ruili Group Shanghai Ruili Real Estate Development Co., Ltd. (“Shanghai Ruili”) Wholly owned by Ruili Group Kunshan Yuetu Real Estate Development Co., Ltd. (“Kunshan Yuetu”) Collectively owned by Ruili Group and Shu Ping Chi Shanghai Tabouk Auto Components Co., Ltd. (“Shanghai Tabouk”) Collectively owned by Xiao Feng Zhang and Xiao Ping Zhang Hangzhou Ruili Property Development Co., Ltd. Collectively owned by Ruili Group and Xiao Ping Zhang Hangzhou Hangcheng Friction Material Co., Ltd. (“Hangzhou Hangcheng”) Controlled by Ruili Group Hangzhou Ruili Binkang Real Estate Development Co., Ltd. Controlled by Hangzhou Ruili Property Development Co., Ltd. SHNS Precision Die Casting (Yangzhou) Co., Ltd. (“SHNS Precision”) Controlled by Ruili Group Ruili Commercial Vehicle Co., Ltd. (“Ruili Commercial Vehicle”) Collectively owned by Ruili Group and Jinrui Yu, the COO of the Company Jia Rui Zhang Daughter of Xiao Ping Zhang |
Schedule of related party transactions | For the Years Ended December 31, 2019 2018 PURCHASES FROM: Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. $ 13,224,103 $ 6,279,500 Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. 4,649,266 3,371,361 Shanghai Dachao Electric Technology Co., Ltd. 808,831 720,489 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,899,865 8,438,181 Ruili Group Co., Ltd. 12,369,112 7,909,463 Changchun Kormee Auto Electric Co., Ltd. 15,376 20,045 Ningbo Ruili Equipment Co., Ltd. 8,021,011 4,093,773 Hangzhou Hangcheng Friction Material Co., Ltd. 362,758 1,056,860 Wenzhou Lichuang Auto Parts Co., Ltd. 18,117,833 15,933,012 SHNS Precision Die Casting (Yangzhou) Co., Ltd. 99,576 — Total Purchases $ 59,567,731 $ 47,822,684 SALES TO: Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. $ 15,277,603 $ 10,020,480 Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. 382,492 61,172 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,238,079 1,315,649 Ruili Group Co., Ltd. 16,316,774 17,140,343 Changchun Kormee Auto Electric Co., Ltd. 35,421 59,525 Shanghai Tabouk Auto Components Co., Ltd. 1,098,571 1,676,791 SHNS Precision Die Casting (Yangzhou) Co., Ltd. 25,882 — Ruili Commercial Vehicle Co., Ltd. 60,076,673 — Total Sales $ 94,451,495 $ 30,273,960 As of December 31, 2019 2018 DEPOSIT RECEIVED FROM RELATED PARTY Ruili Group Co., Ltd. $ 1,125,085 $ — Total $ 1,125,085 $ — ADVANCES TO RELATED PARTIES Ruili Group Co., Ltd. $ 67,952,784 $ 79,739,417 Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. 13,087,041 — Total $ 81,039,825 $ 79,739,417 ACCOUNTS RECEIVABLE FROM RELATED PARTIES Ruili Commercial Vehicle Co., Ltd. $ 34,041,890 $ — SHNS Precision Die Casting (Yangzhou) Co., Ltd. 836,586 — Shanghai Tabouk Auto Components Co., Ltd. $ 236,743 $ 261,889 Total $ 35,115,219 $ 261,889 PREPAYMENT TO RELATED PARTY Ningbo Ruili Equipment Co., Ltd. $ 1,059,410 $ 3,670,573 Total $ 1,059,410 $ 3,670,573 ACCOUNTS PAYABLE TO RELATED PARTIES Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. $ — $ 7,877,485 Shanghai Dachao Electric Technology Co., Ltd. 284,833 56,883 Ruili MeiLian Air Management System (LangFang) Co., Ltd. 1,965,349 5,628,155 Wenzhou Lichuang Auto Parts Co., Ltd. 11,890,537 9,898,777 Changchun Kormee Auto Electric Co., Ltd. 9,057 9,206 Hangzhou Hangcheng Friction Material Co., Ltd. 146,241 334,694 Total $ 14,296,017 $ 23,805,200 DUE TO RELATED PARTY Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. $ 9,495,120 $ 5,959,752 Total $ 9,495,120 $ 5,959,752 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Schedule of accounts receivable, net | December 31, December 31, 2019 2018 Accounts receivable $ 203,389,497 $ 163,903,305 Less: allowance for doubtful accounts (19,152,439 ) (13,855,508 ) Accounts receivable, net $ 184,237,058 $ 150,047,797 |
Schedule of allowance for doubtful accounts | December 31, December 31, 2019 2018 Beginning balance $ 13,855,508 $ 13,927,156 Add: Increase to allowance 5,583,551 610,610 Effects on changes in foreign exchange rate (286,620 ) (682,258 ) Ending balance $ 19,152,439 $ 13,855,508 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | December 31, December 31, 2019 2018 Raw Materials $ 39,149,211 $ 53,821,973 Work in process 118,626,278 89,516,949 Finished Goods 69,252,451 62,674,252 Less: Write-down of inventories (3,543,863 ) (1,727,747 ) Total Inventory $ 223,484,077 $ 204,285,427 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | December 31, December 31, 2019 2018 Machinery $ 147,982,336 $ 130,912,861 Molds 1,254,081 1,274,729 Office equipment 5,634,012 3,566,772 Vehicles 7,076,319 5,956,822 Buildings 20,276,295 20,610,137 Construction in progress 31,671,650 8,641,271 Leasehold improvements 455,989 463,497 Sub-Total 214,350,682 171,426,089 Less: Accumulated depreciation (87,342,375 ) (75,372,703 ) Property, plant and equipment, net $ 127,008,307 $ 96,053,386 |
Land Use Rights, Net (Tables)
Land Use Rights, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Land Use Rights [Abstract] | |
Schedule of land use rights, net | December 31, December 31, 2019 2018 Cost $ 38,416,678 $ 22,283,776 Less: Accumulated amortization (1,963,844 ) (1,159,321 ) Land use rights, net $ 36,452,834 $ 21,124,455 |
Schedule of future amortization associated to land use rights | Amount For the years ending December 31, 2020 $ 1,030,506 2021 1,030,506 2022 1,030,506 2023 1,030,506 2024 1,030,506 Thereafter 31,300,304 Total $ 36,452,834 |
Prepayments (Tables)
Prepayments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepayments [Abstract] | |
Schedule of prepayments | December 31, December 31, 2019 2018 Raw material suppliers $ 7,594,813 $ 7,776,591 Equipment and land use rights purchases 18,623,348 31,575,238 Total prepayments $ 26,218,161 $ 39,351,829 |
Deferred Tax Assets and Defer_2
Deferred Tax Assets and Deferred Tax Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Components of Deferred Tax Assets and Liabilities [Abstract] | |
Schedule of deferred tax assets | December 31, December 31, 2019 2018 Deferred tax assets Allowance for doubtful accounts $ 3,083,393 $ 2,205,048 Revenue (net of cost) 420,245 308,046 Unpaid accrued expenses 158,622 501,276 Warranty 1,009,266 1,059,468 Deferred tax assets 4,671,526 4,073,838 Valuation allowance ― ― Net deferred tax assets $ 4,671,526 $ 4,073,838 |
Short-Term Bank Loans (Tables)
Short-Term Bank Loans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of bank loans | December 31, December 31, Secured $ 230,992,771 $ 217,940,471 Total short-term bank loan $ 230,992,771 $ 217,940,471 |
Schedule of personal or corporate guarantees | $ 30,102,348 Pledged by Ruili Group, a related party, with its plant and land use rights $ 60,204,696 Pledged by Hangzhou Ruili Property Development Ltd., a related party, with its properties; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders $ 12,901,007 Pledged by Hangzhou Ruili Binkang Real Estate Development Co. Ltd., a related party, with its properties; Guaranteed by Hangzhou Ruili Property Development Ltd., a related party; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders $ 5,375,419 Guaranteed by Ruili Group, a related party; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders; Pledged by Ruili Group, a related party, with its properties $ 2,365,184 Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders; Pledged by Ruili Group, a related party, with its properties $ 93,173,934 Pledged by Shanghai Ruili, a related party, with its properties; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders $ 8,600,671 Pledged by Ruian Auto Parts Co., Ltd. with its property; Guaranteed by Hangzhou Ruili Property Development Ltd., a related party; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders $ 7,167,226 Pledged by the Company with a bank deposit of $7,167,226, which was included in restricted cash on the accompanying consolidated balance sheets. $ 4,156,991 Pledged by Ruili Group, a related party, with its properties $ 1,433,445 Pledged by Ruian Auto Parts Co., Ltd., with its account receivables $ 5,511,850 Guaranteed by Ruili Group, a related party; Guaranteed by Mr. Xiao Ping Zhang and Ms. Shu Ping Chi, both the Company's principal stockholders, and Ms. Jia Rui Zhang, the daughter of Xiao Ping Zhang |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | December 31, December 31, Accrued payroll $ 14,461,232 $ 11,679,870 Accrued warranty expenses 6,728,438 7,063,122 Other accrued expenses 4,895,771 5,302,910 Total accrued expenses $ 26,085,441 $ 24,045,902 |
Long Term Loans (Tables)
Long Term Loans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long term loan | December 31, December 31, Aggregate outstanding principal balance $ 49,714,338 $ 36,165,550 Less: unamortized debt issuance costs (163,014 ) (595,117 ) Less: current portion (27,194,179 ) (21,141,029 ) Non-current portion $ 22,357,145 $ 14,429,404 |
Schedule of long term loan succeeding | Amount For the years ending December 31, 2020 $ 27,281,726 2021 11,877,494 2022 10,555,118 2023 and thereafter - Total 49,714,338 |
Reserve (Tables)
Reserve (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Reserve [Abstract] | |
Schedule of reserve funds | December 31, December 31, Statutory surplus reserve fund $ 22,621,044 $ 20,007,007 Total $ 22,621,044 $ 20,007,007 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation effective income tax rate | Years Ended December 31, 2019 2018 US statutory income tax rate 21.00 % 21.00 % Valuation allowance recognized with respect to the loss in the US company -21.00 % -21.00 % Impact of Tax Cuts and Jobs Act 2.20 % 37.45 % China statutory income tax rate 25.00 % 25.00 % Effects of income tax exemptions and reliefs -10.00 % -10.00 % Effects of additional deduction allowed for R&D expenses -3.86 % -4.42 % Effects of expenses not deductible for tax purposes -0.81 % 2.32 % Other items -0.80 % 0.23 % Effective tax rate 11.73 % 50.58 % |
Schedule of provisions for income taxes | Years Ended December 31, 2019 2018 Current $ 4,433,601 $ 15,852,188 Deferred (671,151 ) (37,588 ) Total $ 3,762,450 $ 15,814,600 |
Non-Controlling Interest in S_2
Non-Controlling Interest in Subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Non-Controlling Interest in Subsidiaries [Abstract] | |
Schedule of non-controlling interest in subsidiaries | 2019 2018 10% non-controlling interest in Ruian $ 2,904,484 $ 2,716,278 Total $ 2,904,484 $ 2,716,278 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases, Operating [Abstract] | |
Schedule of Balance sheet information related to operating leases | December 31, Operating lease right-of-use assets 1 $ 1,080,223 Operating lease liabilities, current 2 $ 383,493 Operating lease liabilities, non-current 696,730 Total operating lease liabilities $ 1,080,223 1 Operating lease right-of-use assets are recorded in other assets, non-current on the accompanying consolidated balance sheet. 2 The current portion of operating lease liabilities is recorded in other current liabilities on the accompanying consolidated balance sheet. |
Schedule of operating lease of weighted-average | December 31, Weighted-average remaining lease term 2.77 years Weighted-average discount rate 5.24 % |
Schedule of maturity of our operating lease liabilities | 2020 $ 430,973 2021 430,973 2022 301,023 2023 and thereafter - Total lease payment 1,162,969 Less imputed interest (82,746 ) Total operating lease liabilities $ 1,080,223 |
Warranty Liability (Tables)
Warranty Liability (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Warranty Claims [Abstract] | |
Schedule of accrued warranty expenses | Beginning balance at January 1, 2019 $ 7,063,122 Aggregate increase for new warranties issued during current year 4,060,908 Aggregate reduction for payments made and effect of exchange rate fluctuation (4,395,592 ) Ending balance at December 31, 2019 $ 6,728,438 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of segment Information, by segment | During the years ended December 31, 2019 2018 NET SALES TO EXTERNAL CUSTOMERS Commercial vehicles brake systems $ 448,727,141 $ 386,181,206 Passenger vehicles brake systems 91,461,338 81,868,700 Net sales $ 540,188,479 $ 468,049,906 INTERSEGMENT SALES Commercial vehicles brake systems $ — $ — Passenger vehicles brake systems — — Intersegment sales $ — $ — GROSS PROFIT Commercial vehicles brake systems $ 113,329,974 $ 96,475,100 Passenger vehicles brake systems 26,815,895 26,040,791 Gross profit $ 140,145,869 $ 122,515,891 Selling and distribution expenses 60,821,163 55,158,703 General and administrative expenses 35,178,114 26,939,370 Research and development expenses 21,433,016 16,366,393 Other operating income, net 11,227,075 10,122,416 Income from operations 33,940,651 34,173,841 Interest income 5,333,657 6,052,416 Government grants 5,475,513 4,307,609 Other income 389,006 260,448 Interest expenses (11,637,764 ) (13,570,956 ) Other income (expenses) (1,420,198 ) 43,219 Income before income tax expense $ 32,080,865 $ 31,266,577 CAPITAL EXPENDITURE Commercial vehicles brake systems $ 40,809,421 $ 45,877,053 Passenger vehicles brake systems 8,317,124 9,724,756 Total $ 49,126,545 $ 55,601,809 DEPRECIATION AND AMORTIZATION Commercial vehicles brake systems $ 12,035,113 $ 9,768,105 Passenger vehicles brake systems 2,452,805 2,070,587 Total $ 14,487,918 $ 11,838,692 December 31, December 31, TOTAL ASSETS Commercial vehicles brake systems $ 679,281,120 $ 655,435,946 Passenger vehicles brake systems 138,440,224 138,935,580 Total $ 817,721,344 $ 794,371,526 December 31, December 31, LONG LIVED ASSETS Commercial vehicles brake systems $ 174,640,176 $ 150,067,034 Passenger vehicles brake systems 35,592,370 31,810,355 Total $ 210,232,546 $ 181,877,389 |
Description of Business (Detail
Description of Business (Details) | 1 Months Ended | |||
Nov. 29, 2019 | Dec. 31, 2019 | Nov. 11, 2009 | Jan. 17, 2004 | |
Description of Business (Textual) | ||||
Ownership percentage | 10.00% | |||
Joint Venture [Member] | ||||
Description of Business (Textual) | ||||
Ownership percentage | 90.00% | |||
Investor [Member] | ||||
Description of Business (Textual) | ||||
Ownership percentage | 10.00% | |||
MGR Hong Kong Limited [Member] | ||||
Description of Business (Textual) | ||||
Ownership percentage | 30.00% | |||
SORL International Holding, Ltd [Member] | ||||
Description of Business (Textual) | ||||
Ownership percentage | 60.00% | |||
Ruili Group Co., Ltd. [Member] | ||||
Description of Business (Textual) | ||||
Ownership percentage | 10.00% | |||
Fairford [Member] | ||||
Description of Business (Textual) | ||||
Ownership percentage | 90.00% | |||
Ruili Group [Member] | ||||
Description of Business (Textual) | ||||
Merger agreement, description | The Company entered into an agreement and plan of merger (the "Merger Agreement"), with Ruili International Inc. ("Parent"), a Delaware corporation, and Ruili International Merger Sub Inc. ("Merger Sub"), a Delaware corporation and a wholly-owned subsidiary of Parent. Parent was formed by Mr. Xiao Ping Zhang solely for the purpose of entering into the Merger Agreement and consummating the Going Private transactions. Pursuant to the Merger Agreement, subject to the terms and conditions thereof, at the effective time, Merger Sub will be merged with and into the Company (the "Merger"), with the Company being the surviving corporation, and each share of common stock of the Company issued and outstanding immediately prior to the effective time of the Merger will be automatically cancelled and converted into the right to receive $4.72 in cash. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings [Member] | Minimum [Member] | |
Estimated Useful Life (Years) | 10 years |
Buildings [Member] | Maximum [Member] | |
Estimated Useful Life (Years) | 20 years |
Machinery and equipment [Member] | Minimum [Member] | |
Estimated Useful Life (Years) | 5 years |
Machinery and equipment [Member] | Maximum [Member] | |
Estimated Useful Life (Years) | 10 years |
Electronic equipment [Member] | Minimum [Member] | |
Estimated Useful Life (Years) | 3 years |
Electronic equipment [Member] | Maximum [Member] | |
Estimated Useful Life (Years) | 5 years |
Motor vehicles [Member] | Minimum [Member] | |
Estimated Useful Life (Years) | 3 years |
Motor vehicles [Member] | Maximum [Member] | |
Estimated Useful Life (Years) | 10 years |
Leasehold improvements [Member] | |
Estimated Useful Life, description | The lesser of remaining lease term or 10 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | |
Dec. 31, 2019USD ($)Segments | Dec. 31, 2018USD ($)Segments | |
Summary of Significant Accounting Policies (Textual) | ||
Notes receivable amount | $ 57,471,267 | $ 58,458,890 |
Discount fees | $ 977,600 | $ 1,463,837 |
Interest rate of long term loans | 10.00% | |
Total revenues | 10.00% | 10.00% |
Research and development expenses | $ 21,433,016 | $ 16,366,393 |
Shipping and handling costs | 11,664,236 | 11,358,223 |
Advertising costs | 755,947 | 737,530 |
Warranty claims | $ 4,060,908 | $ 3,113,913 |
Lease commitment, description | Short-term leases are leases with terms greater than 1 month, but less than 12 months. See cc. – RECENTLY ISSUED FINANCIAL STANDARDS for more details. | |
Number of business segments | Segments | 2 | 2 |
Use Rights [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Estimated useful life | 40 years | |
Lease liabilities | $ 1,600,000 | |
Right-of-use assets | $ 1,300,000 | |
Interest Rate Risk [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Short term bank, terms | The term ranged from approximately one month to one year. | |
Interest Rate Risk [Member] | Minimum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Interest rate of long term loans | 3.25% | |
Total revenues | 4.31% | |
Interest Rate Risk [Member] | Maximum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Interest rate of long term loans | 5.44% | |
Total revenues | 8.50% |
Related Party Transactions (Det
Related Party Transactions (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Xiao Ping Zhang [Member] | |
Nature of Relationship | Principal shareholder, Chairman of the Board and Chief Executive Officer |
Shu Ping Chi [Member] | |
Nature of Relationship | Shareholder, member of the Board, wife of Xiao Ping Zhang |
Xiao Feng Zhang [Member] | |
Nature of Relationship | Shareholder, member of the Board, brother of Xiao Ping Zhang |
Ruili Group [Member] | |
Nature of Relationship | 10% shareholder of Joint Venture and is collectively controlled by Xiao Ping Zhang, Shu Ping Chi, and Xiao Feng Zhang |
Guangzhou Kormee [Member] | |
Nature of Relationship | Controlled by Ruili Group |
Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. [Member] | |
Nature of Relationship | Wholly controlled by Guangzhou Kormee |
Shanghai Dachao Electric Technology Co., Ltd [Member] | |
Nature of Relationship | Ruili Group holds 66% of the equity interests in Shanghai Dachao |
Ruili MeiLian Air Management Systems (LangFang) Co., Ltd. (“Ruili Meilian”) [Member] | |
Nature of Relationship | Controlled by Ruili Group |
Wenzhou Lichuang [Member] | |
Nature of Relationship | Controlled by Ruili Group |
Ningbo Ruili Equipment Co., Ltd. [Member] | |
Nature of Relationship | Controlled by Ruili Group |
Shanghai Ruili Real Estate Development Co., Ltd. [Member] | |
Nature of Relationship | Wholly owned by Ruili Group |
Kunshan Yuetu Real Estate Development Co., Ltd. [Member] | |
Nature of Relationship | Collectively owned by Ruili Group and Shu Ping Chi |
Shanghai Tabouk Auto Components Co., Ltd [Member] | |
Nature of Relationship | Collectively owned by Xiao Feng Zhang and Xiao Ping Zhang |
Hangzhou Ruili [Member] | |
Nature of Relationship | Collectively owned by Ruili Group and Xiao Ping Zhang |
Changchun Kormee Auto Electric Co., Ltd [Member] | |
Nature of Relationship | Wholly controlled by Guangzhou Kormee |
Hangzhou Hangcheng [Member] | |
Nature of Relationship | Controlled by Ruili Group |
Hangzhou Ruili Binkang Real Estate Development Co. Ltd [Member] | |
Nature of Relationship | Controlled by Hangzhou Ruili Property Development Co., Ltd. |
SHNS Precision Die Casting (Yangzhou) Co. Ltd. [Member] | |
Nature of Relationship | Controlled by Ruili Group |
Ruili Commercial Vehicle Co., Ltd. [Member] | |
Nature of Relationship | Collectively owned by Ruili Group and Jinrui Yu, the COO of the Company |
Jia Rui Zhang [Member] | |
Nature of Relationship | Daughter of Xiao Ping Zhang |
Related Party Transactions (D_2
Related Party Transactions (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
PURCHASES FROM | $ 59,567,731 | $ 47,822,684 |
SALES TO | 94,451,495 | 30,273,960 |
Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 13,224,103 | 6,279,500 |
SALES TO | 15,277,603 | 10,020,480 |
Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 4,649,266 | 3,371,361 |
SALES TO | 382,492 | 61,172 |
Shanghai Dachao Electric Technology Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 808,831 | 720,489 |
Ruili MeiLian Air Management System (LangFang) Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 1,899,865 | 8,438,181 |
SALES TO | 1,238,079 | 1,315,649 |
Ruili Group Co., Ltd. | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 12,369,112 | 7,909,463 |
SALES TO | 16,316,774 | 17,140,343 |
Ningbo Ruili Equipment Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 8,021,011 | 4,093,773 |
Hangzhou Hangcheng Friction Material Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 362,758 | 1,056,860 |
Wenzhou Lichuang Auto Parts Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 18,117,833 | 15,933,012 |
Shanghai Tabouk Auto Components Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
SALES TO | 1,098,571 | 1,676,791 |
Changchun Kormee Auto Electric Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 15,376 | 20,045 |
SALES TO | 35,421 | 59,525 |
SHNS Precision Die Casting (Yangzhou) Co. Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
PURCHASES FROM | 99,576 | |
SALES TO | 25,882 | |
Ruili Commercial Vehicle Co., Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
SALES TO | $ 60,076,673 |
Related Party Transactions (D_3
Related Party Transactions (Details 2) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
DEPOSIT RECEIVED FROM RELATED PARTY | $ 1,125,085 | |
Ruili Group Co., Ltd. [Member] | ||
DEPOSIT RECEIVED FROM RELATED PARTY | $ 1,125,085 |
Related Party Transactions (D_4
Related Party Transactions (Details 3) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ADVANCES TO RELATED PARTIES | $ 81,039,825 | $ 79,739,417 |
Ruili Group Co., Ltd. [Member] | ||
ADVANCES TO RELATED PARTIES | 67,952,784 | 79,739,417 |
Guangzhou Ruili Kormee Automotive Electronic Control Technology Co Ltd [Member] | ||
ADVANCES TO RELATED PARTIES | $ 13,087,041 |
Related Party Transactions (D_5
Related Party Transactions (Details 4) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ACCOUNTS RECEIVABLE FROM RELATED PARTIES | $ 35,115,219 | $ 261,889 |
Shanghai Tabouk Auto Components Co., Ltd [Member] | ||
ACCOUNTS RECEIVABLE FROM RELATED PARTIES | 236,743 | 261,889 |
Ruili Commercial Vehicle Co., Ltd [Member] | ||
ACCOUNTS RECEIVABLE FROM RELATED PARTIES | 34,041,890 | |
SHNS Precision Die Casting (Yangzhou) Co. Ltd. [Member] | ||
ACCOUNTS RECEIVABLE FROM RELATED PARTIES | $ 836,586 |
Related Party Transactions (D_6
Related Party Transactions (Details 5) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
PREPAYMENT TO RELATED PARTY | $ 1,059,410 | $ 3,670,573 |
Ningbo Ruili Equipment Co., Ltd. [Member] | ||
PREPAYMENT TO RELATED PARTY | $ 1,059,410 | $ 3,670,573 |
Related Party Transactions (D_7
Related Party Transactions (Details 6) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ACCOUNTS PAYABLE TO RELATED PARTIES | $ 14,296,017 | $ 23,805,200 |
Guangzhou Ruili Kormee Automotive Electronic Control Technology Co., Ltd. [Member] | ||
ACCOUNTS PAYABLE TO RELATED PARTIES | 7,877,485 | |
Shanghai Dachao Electric Technology Co., Ltd. [Member] | ||
ACCOUNTS PAYABLE TO RELATED PARTIES | 284,833 | 56,883 |
Ruili MeiLian Air Management System (LangFang) Co., Ltd. [Member] | ||
ACCOUNTS PAYABLE TO RELATED PARTIES | 1,965,349 | 5,628,155 |
Wenzhou Lichuang Auto Parts Co., Ltd. | ||
ACCOUNTS PAYABLE TO RELATED PARTIES | 11,890,537 | 9,898,777 |
Changchun Kormee Auto Electric Co., Ltd. [Member] | ||
ACCOUNTS PAYABLE TO RELATED PARTIES | 9,057 | 9,206 |
Hangzhou Hangcheng Friction Material Co., Ltd. [Member] | ||
ACCOUNTS PAYABLE TO RELATED PARTIES | $ 146,241 | $ 334,694 |
Related Party Transactions (D_8
Related Party Transactions (Details 7) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
DUE TO RELATED PARTY | $ 9,495,120 | $ 5,959,752 |
Wenzhou Ruili Kormee Automotive Electronics Co., Ltd. [Member] | ||
DUE TO RELATED PARTY | $ 9,495,120 | $ 5,959,752 |
Related Party Transactions (D_9
Related Party Transactions (Details Textual) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019CNY (¥) | |
Related Party Transactions (Textual) | |||
Repayments in bank acceptance notes to related parties | $ 5,097,556 | ||
Collected cash repayment from related parties | $ 3,672,811 | $ 9,669,326 | |
Interests received from related parties | 741,254 | ||
Interest rate | 5.22% | ||
Ruili Group [Member] | |||
Related Party Transactions (Textual) | |||
Security deposit | $ 1,125,085 | ||
Bank acceptance notes | 70,818,463 | ||
Collected cash repayment from related parties | 14,488,316 | ||
Interests received from related parties | 3,692,324 | 2,361,866 | |
Net proceeds advanced | 146,944,697 | ||
Guangzhou Kormee [Member] | |||
Related Party Transactions (Textual) | |||
Net proceeds advanced | 13,234,445 | ||
Shanghai Ruili [Member] | |||
Related Party Transactions (Textual) | |||
Collected cash repayment from related parties | 112,857,719 | ||
Net proceeds advanced | 49,561,855 | ||
kunshan Yuetu [Member] | |||
Related Party Transactions (Textual) | |||
Collected cash repayment from related parties | 16,719,662 | ||
Net proceeds advanced | $ 15,226,835 | ||
Wenzhou Lichuang [Member] | |||
Related Party Transactions (Textual) | |||
Bank deposits | 72,730,446 | ||
Wenzhou Lichuang [Member] | RMB [Member] | |||
Related Party Transactions (Textual) | |||
Bank deposits | ¥ | ¥ 500,000,000 | ||
China Guangfa Bank [Member] | Ruili Group Co., Ltd. [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | 10,345,029 | ||
China Guangfa Bank [Member] | Ruili Group Co., Ltd. [Member] | RMB [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | ¥ | 71,000,000 | ||
China Merchants Bank [Member] | Ruili Group Co., Ltd. [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | 5,828,185 | ||
Credit line granted | 30,597,972 | ||
China Merchants Bank [Member] | Ruili Group Co., Ltd. [Member] | RMB [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | ¥ | 40,000,000 | ||
Credit line granted | ¥ | 210,000,000 | ||
Bank of Ningbo [Member] | Ruili Group Co., Ltd. [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | 30,102,348 | ||
Bank of Ningbo [Member] | Ruili Group Co., Ltd. [Member] | RMB [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | ¥ | 210,000,000 | ||
China Zheshang Bank [Member] | Ruili Group Co., Ltd. [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | 1,892,147 | ||
China Zheshang Bank [Member] | Ruili Group Co., Ltd. [Member] | RMB [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | ¥ | 13,200,000 | ||
China Zheshang Bank [Member] | Ruili Group Co., Ltd. [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | $ 31,535,793 | ||
China Zheshang Bank [Member] | Ruili Group Co., Ltd. [Member] | RMB [Member] | |||
Related Party Transactions (Textual) | |||
Guarantee amount | ¥ | ¥ 220,000,000 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Accounts receivable | $ 203,389,497 | $ 163,903,305 |
Less: allowance for doubtful accounts | (19,152,439) | (13,855,508) |
Accounts receivable, net | $ 184,237,058 | $ 150,047,797 |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Beginning balance | $ 13,855,508 | $ 13,927,156 |
Add: Increase to allowance | 5,583,551 | 610,610 |
Effects on changes in foreign exchange rate | (286,620) | (682,258) |
Ending balance | $ 19,152,439 | $ 13,855,508 |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 39,149,211 | $ 53,821,973 |
Work in process | 118,626,278 | 89,516,949 |
Finished Goods | 69,252,451 | 62,674,252 |
Less: Write-down of inventories | (3,543,863) | (1,727,747) |
Total Inventory | $ 223,484,077 | $ 204,285,427 |
Inventories (Details Textual)
Inventories (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Inventories (Textual) | ||
Write-down of inventories | $ 611,243 | |
Lower of cost or market adjustment | 2,476,116 | $ 918,958 |
Slow-moving inventories | $ 808,789 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Sub-Total | $ 214,350,682 | $ 171,426,089 |
Less: Accumulated depreciation | (87,342,375) | (75,372,703) |
Property, plant and equipment, net | 127,008,307 | 96,053,386 |
Machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-Total | 147,982,336 | 130,912,861 |
Molds [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-Total | 1,254,081 | 1,274,729 |
Office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-Total | 5,634,012 | 3,566,772 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-Total | 7,076,319 | 5,956,822 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-Total | 20,276,295 | 20,610,137 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-Total | 31,671,650 | 8,641,271 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Sub-Total | $ 455,989 | $ 463,497 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment, Net (Details Textual) | ||
Depreciation | $ 13,490,370 | $ 11,198,717 |
Land Use Rights, Net (Details)
Land Use Rights, Net (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Land Use Rights [Abstract] | ||
Cost | $ 38,416,678 | $ 22,283,776 |
Less: Accumulated amortization | (1,963,844) | (1,159,321) |
Land use rights, net | $ 36,452,834 | $ 21,124,455 |
Land Use Rights, Net (Details 1
Land Use Rights, Net (Details 1) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Land Use Rights [Abstract] | ||
2020 | $ 1,030,506 | |
2021 | 1,030,506 | |
2022 | 1,030,506 | |
2023 | 1,030,506 | |
2024 | 1,030,506 | |
Thereafter | 31,300,304 | |
Total | $ 36,452,834 | $ 21,124,455 |
Land Use Rights, Net (Details T
Land Use Rights, Net (Details Textual) | 12 Months Ended | ||||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Sep. 30, 2017m² | |
Land Use Rights [Line Items] | |||||||
Amortization expense, land use rights | $ 832,575 | $ 636,717 | |||||
Payments to acquire intangible assets | 225,640 | ||||||
Ruian [Member] | |||||||
Land Use Rights [Line Items] | |||||||
Payments to acquire intangible assets | 853,000 | $ 7,930,000 | |||||
Use Rights [Member] | |||||||
Land Use Rights [Line Items] | |||||||
Payments to acquire intangible assets | 11,130,000 | ||||||
Purchase price of land use rights | 292,000 | ||||||
Refundable deposit | 585,000 | 585,000 | |||||
Related deed tax | 330,000 | ||||||
Prepayments to intangible assets | 11,460,000 | ||||||
RMB [Member] | Development Zone Facility [Member] | |||||||
Land Use Rights [Line Items] | |||||||
Payments to acquire intangible assets | ¥ | ¥ 5,950,000 | ¥ 51,810,000 | |||||
RMB [Member] | Use Rights [Member] | |||||||
Land Use Rights [Line Items] | |||||||
Payments to acquire intangible assets | ¥ | 72,020,000 | ||||||
Purchase price of land use rights | ¥ | 20,400,000 | ||||||
Refundable deposit | ¥ | 3,870,000 | ¥ 3,870,000 | |||||
Related deed tax | ¥ | 23,300,000 | ||||||
Prepayments to intangible assets | ¥ | 74,350,000 | ||||||
Intersection Tengda Road [Member] | |||||||
Land Use Rights [Line Items] | |||||||
Purchase price of land use rights | $ 5,850,000 | ||||||
Prepayments to intangible assets | $ 6,150,000 | ||||||
Intersection Tengda Road [Member] | RMB [Member] | |||||||
Land Use Rights [Line Items] | |||||||
Purchase price of land use rights | ¥ | ¥ 38,680,000 | ||||||
Prepayments to intangible assets | ¥ | ¥ 40,720,000 | ||||||
Wansong Land [Member] | |||||||
Land Use Rights [Line Items] | |||||||
Area of Land | m² | 17,029 |
Prepayments (Details)
Prepayments (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Prepayments [Abstract] | ||
Raw material suppliers | $ 7,594,813 | $ 7,776,591 |
Equipment and land use rights purchases | 18,623,348 | 31,575,238 |
Total prepayments | $ 26,218,161 | $ 39,351,829 |
Prepayments (Details Textual)
Prepayments (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Prepayments (Textual) | ||
Prepayments to raw material suppliers | $ 7,594,813 | $ 7,776,591 |
Prepayments to related party under common control | 1,059,410 | 3,670,573 |
Prepayments to purchase land use rights | 853,000 | 15,420,000 |
RMB [Member] | ||
Prepayments (Textual) | ||
Prepayments to purchase land use rights | $ 5,950,000 | $ 100,160,000 |
Deferred Tax Assets and Defer_3
Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Allowance for doubtful accounts | $ 3,083,393 | $ 2,205,048 |
Revenue (net of cost) | 420,245 | 308,046 |
Unpaid accrued expenses | 158,622 | 501,276 |
Warranty | 1,009,266 | 1,059,468 |
Deferred tax assets | 4,671,526 | 4,073,838 |
Valuation allowance | ||
Net deferred tax assets | $ 4,671,526 | $ 4,073,838 |
Short-Term Bank Loans (Details)
Short-Term Bank Loans (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total short-term bank loan | $ 230,992,771 | $ 217,940,471 |
Secured [Member] | ||
Total short-term bank loan | $ 230,992,771 | $ 217,940,471 |
Short-Term Bank Loans (Details
Short-Term Bank Loans (Details 1) | Dec. 31, 2019USD ($) |
Pledged by Ruili Group, a related party [Member] | |
Corporate or personal guarantees | $ 30,102,348 |
Pledged by Hangzhou Ruili Group,Property Development Ltd., a related party [Member] | |
Corporate or personal guarantees | 60,204,696 |
Pledged by Hangzhou Ruili Binkang Real Estate Development Co. Ltd., a related party [Member] | |
Corporate or personal guarantees | 12,901,007 |
Guaranteed by Ruili Group, a related party with its properties [Member] | |
Corporate or personal guarantees | 5,375,419 |
Pledged by Ruili Group, a related party with its properties [Member] | |
Corporate or personal guarantees | 2,365,184 |
Pledged by Shanghai Ruili, a related party [Member] | |
Corporate or personal guarantees | 93,173,934 |
Pledged by Ruian Auto Parts Co., Ltd. with its property; Guaranteed by Hangzhou Ruili Property Development Ltd., a related party [Member] | |
Corporate or personal guarantees | 8,600,671 |
Pledged by the Company with a bank deposit [Member] | |
Corporate or personal guarantees | 7,167,226 |
Pledged by Ruili Group, a related party with its properties [Member] | |
Corporate or personal guarantees | 4,156,991 |
Pledged by Ruian Auto Parts Co., Ltd., with its account receivables [Member] | |
Corporate or personal guarantees | 1,433,445 |
Guaranteed by Ruili Group, a related party [Member] | |
Corporate or personal guarantees | $ 5,511,850 |
Short-Term Bank Loans (Detail_2
Short-Term Bank Loans (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Short-term Debt [Line Items] | ||
Accounts receivable pledged as collateral | $ 1,834,555 | $ 0 |
Minimum [Member] | ||
Short-term Debt [Line Items] | ||
Interest rate for the loans outstanding percentage | 2.13% | |
Maximum [Member] | ||
Short-term Debt [Line Items] | ||
Interest rate for the loans outstanding percentage | 5.22% | |
Notes Payable to Banks [Member] | ||
Short-term Debt [Line Items] | ||
Interest expenses | $ 9,964,876 | $ 9,780,598 |
Maturity dates of loans | The maturity dates of the loans existing as of December 31, 2019 ranged from January 2, 2020 to December 25, 2020. | |
Notes Payable to Banks [Member] | Minimum [Member] | ||
Short-term Debt [Line Items] | ||
Interest rate for the loans outstanding percentage | 1.35% | |
Notes Payable to Banks [Member] | Maximum [Member] | ||
Short-term Debt [Line Items] | ||
Interest rate for the loans outstanding percentage | 5.44% |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 14,461,232 | $ 11,679,870 |
Accrued warranty expenses | 6,728,438 | 7,063,122 |
Other accrued expenses | 4,895,771 | 5,302,910 |
Total accrued expenses | $ 26,085,441 | $ 24,045,902 |
Long Term Loans (Details)
Long Term Loans (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Aggregate outstanding principal balance | $ 49,714,338 | $ 36,165,550 |
Less: unamortized debt issuance costs | (163,014) | (595,117) |
Less: current portion | (27,194,179) | (21,141,029) |
Non-current portion | $ 22,357,145 | $ 14,429,404 |
Long Term Loans (Details 1)
Long Term Loans (Details 1) | Dec. 31, 2019USD ($) |
For the years ending December 31, | |
2020 | $ 27,281,726 |
2021 | 11,877,494 |
2022 | 10,555,118 |
2023 and thereafter | |
Total | $ 49,714,338 |
Long Term Loans (Details Textua
Long Term Loans (Details Textual) | 1 Months Ended | 12 Months Ended | |||||||||||||
Nov. 30, 2019USD ($) | Nov. 30, 2019CNY (¥) | Jul. 19, 2019CNY (¥) | Nov. 30, 2017USD ($) | Nov. 30, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Nov. 30, 2019CNY (¥) | Jul. 31, 2019USD ($) | Jul. 31, 2019CNY (¥) | Jul. 19, 2019USD ($) | Jul. 19, 2019CNY (¥) | Nov. 30, 2017CNY (¥) | Nov. 15, 2017 | |
Long Term Loans (Textual) | |||||||||||||||
Payments of debt issuance cost | $ 108,222 | ||||||||||||||
Amortization of debt issuance costs | $ 536,624 | 1,168,449 | |||||||||||||
COSCO Shipping Leasing Co Ltd [Member] | |||||||||||||||
Long Term Loans (Textual) | |||||||||||||||
Debt instrument term | 36 months | 36 months | 36 months | ||||||||||||
Debt instrument interest rate percentage | 8.50% | 4.57% | 4.57% | 8.50% | 4.31% | ||||||||||
Total long term obligations | $ 35,964,617 | $ 1,433,938 | $ 8,603,630 | ||||||||||||
Pledged by the Company's equipment in the original cost | 36,474,800 | $ 8,808,078 | |||||||||||||
Payments of debt issuance cost | $ 1,025,248 | ||||||||||||||
Deducted loan agreement | $ 7,169,692 | ||||||||||||||
COSCO Shipping Leasing Co Ltd [Member] | RMB [Member] | |||||||||||||||
Long Term Loans (Textual) | |||||||||||||||
Total long term obligations | ¥ | ¥ 10,000,000 | ¥ 60,000,000 | ¥ 235,000,000 | ||||||||||||
Pledged by the Company's equipment in the original cost | ¥ | ¥ 62,298,653 | ¥ 238,333,639 | |||||||||||||
Payments of debt issuance cost | ¥ | ¥ 754,717 | ¥ 6,905,660 | |||||||||||||
Deducted loan agreement | ¥ | ¥ 50,000,000 | ||||||||||||||
Far Eastern Horizon Co Ltd [Member] | |||||||||||||||
Long Term Loans (Textual) | |||||||||||||||
Debt instrument term | 36 months | 36 months | |||||||||||||
Debt instrument interest rate percentage | 6.16% | 7.00% | 6.16% | ||||||||||||
Total long term obligations | $ 30,608,185 | ||||||||||||||
Pledged by the Company's equipment in the original cost | 31,479,075 | ||||||||||||||
Inerest receivable | $ 363,907 | 296,600 | |||||||||||||
Payments of debt issuance cost | $ 742,324 | 9,779,123 | 9,931,000 | ||||||||||||
Paid deposits in cash for aggregated amount | 5,196,271 | ||||||||||||||
Far Eastern Horizon Co Ltd [Member] | RMB [Member] | |||||||||||||||
Long Term Loans (Textual) | |||||||||||||||
Total long term obligations | ¥ | ¥ 200,000,000 | ||||||||||||||
Pledged by the Company's equipment in the original cost | ¥ | ¥ 205,690,574 | ||||||||||||||
Payments of debt issuance cost | ¥ | ¥ 5,000,000 | ||||||||||||||
Paid deposits in cash for aggregated amount | ¥ | ¥ 35,000,000 | ||||||||||||||
Refunded deposits | 35,000,000 | ||||||||||||||
COSCO Shipping Leasing Co Ltd one [Member] | |||||||||||||||
Long Term Loans (Textual) | |||||||||||||||
Payments of debt issuance cost | 1,724,886 | ||||||||||||||
Huarong Leasing Co Ltd [Member] | |||||||||||||||
Long Term Loans (Textual) | |||||||||||||||
Debt instrument term | 36 months | 36 months | |||||||||||||
Debt instrument interest rate percentage | 5.03% | 5.03% | |||||||||||||
Total long term obligations | $ 28,991,810 | ||||||||||||||
Pledged by the Company's equipment in the original cost | 35,202,960 | ||||||||||||||
Interest expense | 1,672,888 | $ 3,267,868 | |||||||||||||
Payments of debt issuance cost | $ 637,820 | ||||||||||||||
Paid deposits in cash for aggregated amount | 3,479,017 | ||||||||||||||
Cash proceeds of long term loan | $ 28,991,810 | ||||||||||||||
Huarong Leasing Co Ltd [Member] | RMB [Member] | |||||||||||||||
Long Term Loans (Textual) | |||||||||||||||
Total long term obligations | ¥ | ¥ 200,000,000 | ||||||||||||||
Pledged by the Company's equipment in the original cost | ¥ | ¥ 245,582,893 | ||||||||||||||
Paid deposits in cash for aggregated amount | ¥ | ¥ 24,000,000 | ||||||||||||||
Cash proceeds of long term loan | ¥ | ¥ 200,000,000 |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Revenues from Contracts with Customers (Textual) | ||
Deferred revenue liability | $ 46,066,180 | $ 51,529,795 |
Deferred revenue | $ 23,244,523 | $ 24,659,985 |
Reserve (Details)
Reserve (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Reserve [Abstract] | ||
Statutory surplus reserve fund | $ 22,621,044 | $ 20,007,007 |
Total | $ 22,621,044 | $ 20,007,007 |
Reserve (Details Textual)
Reserve (Details Textual) | 12 Months Ended |
Dec. 31, 2019 | |
Reserve [Abstract] | |
Registered capita | 50.00% |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
US statutory income tax rate | 21.00% | 21.00% |
Valuation allowance recognized with respect to the loss in the US company | (21.00%) | (21.00%) |
Impact of Tax Cuts and Jobs Act | 0.0220 | 0.3745 |
China statutory income tax rate | 25.00% | 25.00% |
Effects of income tax exemptions and reliefs | (10.00%) | (10.00%) |
Effects of additional deduction allowed for R&D expenses | (3.86%) | (4.42%) |
Effects of expenses not deductible for tax purposes | (0.81%) | 2.32% |
Other items | (0.80%) | 0.23% |
Effective tax rate | 11.73% | 50.58% |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 4,433,601 | $ 15,852,188 |
Deferred | (671,151) | (37,588) |
Total | $ 3,762,450 | $ 15,814,600 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes (Textual) | |||
High-Tech enterprise income tax rate | 15.00% | 15.00% | 15.00% |
Federal corporate income tax rate | 21.00% | ||
Recognized related interest and penalty amount | $ 587,821 | ||
Recognized additional interest and penalty | $ 167,415 | ||
Company recognized a one-time transition tax | 11,022,985 | ||
Taxes payable as current liability | $ 10,896,381 | 2,518,913 | |
Effective tax rate, description | The GILTI income is eligible for a deduction, which lowers the effective tax rate to 10.5% for calendar years 2018 through 2025 and 13.125% after 2025. Under U.S. GAAP, companies are allowed to make an accounting policy election to either (i) account for GILTI as a component of tax expense in the period in which a company is subject to the rules – the period cost method, or (ii) account for GILTI in a company's measurement of deferred taxes – the deferred method. | ||
Installment payment | $ 881,839 | ||
Global intangible low-taxed income | $ 539,017 | $ 0 |
Non-Controlling Interest in S_3
Non-Controlling Interest in Subsidiaries (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total | $ 2,904,484 | $ 2,716,278 |
10% non-controlling interest in Ruian [Member] | ||
Total | $ 2,904,484 | $ 2,716,278 |
Non-Controlling Interest in S_4
Non-Controlling Interest in Subsidiaries (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Non-Controlling Interest in Subsidiaries (Textual) | ||
Total | $ 2,904,484 | $ 2,716,278 |
Ruian [Member] | ||
Non-Controlling Interest in Subsidiaries (Textual) | ||
Non-controlling interest, percenatge | 10.00% |
Operating Leases (Details)
Operating Leases (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases, Operating [Abstract] | |||
Operating lease right of use assets | [1] | $ 1,080,223 | |
Operating lease liabilities, current | [2] | 383,493 | |
Operating lease liabilities, non-current | 696,730 | ||
Total operating lease liabilities | $ 1,080,223 | ||
[1] | Operating lease right-of-use assets are recorded in other assets, non-current on the accompanying consolidated balance sheet. | ||
[2] | The current portion of operating lease liabilities is recorded in other current liabilities on the accompanying consolidated balance sheets. |
Operating Leases (Details 1)
Operating Leases (Details 1) | Dec. 31, 2019 |
Leases, Operating [Abstract] | |
Weighted-average remaining lease term | 2 years 9 months 7 days |
Weighted-average discount rate | 5.24% |
Operating Leases (Details 2)
Operating Leases (Details 2) | Dec. 31, 2019USD ($) |
Leases, Operating [Abstract] | |
2020 | $ 430,973 |
2021 | 430,973 |
2022 | 301,023 |
2023 and thereafter | |
Total lease payment | 1,162,969 |
Less imputed interest | (82,746) |
Total operating lease liabilities | $ 1,080,223 |
Operating Leases (Details Textu
Operating Leases (Details Textual) | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2006USD ($) | Dec. 31, 2006CNY (¥) | ||
Operating Leased Assets [Line Items] | |||||
Lease expenses | $ 668,088 | ||||
Operating lease costs | $ 524,010 | ||||
Operating lease right of use assets | [1] | 1,080,223 | |||
Operating lease liabilities | 611,906 | ||||
Short-term lease costs | 1,082,930 | ||||
Gain of terminated lease | 146,648 | ||||
Gain of operating lease liabiliy | 197,887 | ||||
Gain on right of used assets | $ 52,871 | ||||
Building [Member] | Ruian [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Annual lease expense | $ 305,980 | ||||
Building [Member] | Ruian [Member] | RMB [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Annual lease expense | ¥ | ¥ 2,100,000 | ||||
[1] | Operating lease right-of-use assets are recorded in other assets, non-current on the accompanying consolidated balance sheet. |
Warranty Liability (Details)
Warranty Liability (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Warranty Claims [Abstract] | |
Beginning balance at January 1, 2019 | $ 7,063,122 |
Aggregate increase for new warranties issued during current year | 4,060,908 |
Aggregate reduction for payments made and effect of exchange rate fluctuation | (4,395,592) |
Ending balance at December 31, 2019 | $ 6,728,438 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
NET SALES TO EXTERNAL CUSTOMERS | ||
Net sales | $ 540,188,479 | $ 468,049,906 |
INTERSEGMENT SALES | ||
Intersegment sales | ||
GROSS PROFIT | ||
Gross profit | 140,145,869 | 122,515,891 |
Selling and distribution expenses | 60,821,163 | 55,158,703 |
General and administrative expenses | 35,178,114 | 26,939,370 |
Research and development expenses | 21,433,016 | 16,366,393 |
Other operating income, net | 11,227,075 | 10,122,416 |
Income from operations | 33,940,651 | 34,173,841 |
Interest income | 5,333,657 | 6,052,416 |
Government grants | 5,475,513 | 4,307,609 |
Other income | 389,006 | 260,448 |
Interest expenses | (11,637,764) | (13,570,956) |
Other income (expenses) | (1,420,198) | 43,219 |
Income before income tax expense | 32,080,865 | 31,266,577 |
CAPITAL EXPENDITURE | ||
Total | 49,126,545 | 55,601,809 |
DEPRECIATION AND AMORTIZATION | ||
Total | 14,487,918 | 11,838,692 |
TOTAL ASSETS | ||
Total assets | 817,721,344 | 794,371,526 |
LONG LIVED ASSETS | ||
Long lived assets | 210,232,546 | 181,877,389 |
Commercial vehicles brake systems [Member] | ||
NET SALES TO EXTERNAL CUSTOMERS | ||
Net sales | 448,727,141 | 386,181,206 |
INTERSEGMENT SALES | ||
Intersegment sales | ||
GROSS PROFIT | ||
Gross profit | 113,329,974 | 96,475,100 |
CAPITAL EXPENDITURE | ||
Total | 40,809,421 | 45,877,053 |
DEPRECIATION AND AMORTIZATION | ||
Total | 12,035,113 | 9,768,105 |
TOTAL ASSETS | ||
Total assets | 679,281,120 | 655,435,946 |
LONG LIVED ASSETS | ||
Long lived assets | 174,640,176 | 150,067,034 |
Passenger vehicles brake systems [Member] | ||
NET SALES TO EXTERNAL CUSTOMERS | ||
Net sales | 91,461,338 | 81,868,700 |
INTERSEGMENT SALES | ||
Intersegment sales | ||
GROSS PROFIT | ||
Gross profit | 26,815,895 | 26,040,791 |
CAPITAL EXPENDITURE | ||
Total | 8,317,124 | 9,724,756 |
DEPRECIATION AND AMORTIZATION | ||
Total | 2,452,805 | 2,070,587 |
TOTAL ASSETS | ||
Total assets | 138,440,224 | 138,935,580 |
LONG LIVED ASSETS | ||
Long lived assets | $ 35,592,370 | $ 31,810,355 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 31, 2019 | May 05, 2016 |
Dongshan Facility [Member] | ||
Relevant tax amount reserved | $ 745,220 | |
Tax rate, land use right | 3.00% | |
Dongshan Facility [Member] | Commercial Vehicles Brake Systems [Member] [Default Label] | ||
Relevant tax amount reserved | $ 4,560,000 | |
Development Zone Facility [Member] | ||
Relevant tax amount reserved | $ 2,300,205 | |
Tax rate, land use right | 3.00% | |
Development Zone Facility [Member] | Commercial Vehicles Brake Systems [Member] [Default Label] | ||
Relevant tax amount reserved | $ 15,030,000 |
Concentration (Details)
Concentration (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Concertration (Textual) | ||
Total net accounts receivable | 10.00% | 10.00% |
Total revenues | 10.00% | 10.00% |
Ruili Commercial Vehicle Co., Ltd [Member] | ||
Concertration (Textual) | ||
Total revenues | 11.10% | |
Ruili Commercial Vehicle Co., Ltd. [Member] | ||
Concertration (Textual) | ||
Total net accounts receivable | 18.50% |
Subsequent Events (Details)
Subsequent Events (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Repaid loan principals and interest expenses | $ 147,800,000 |
Short term loans total amount | $ 273,200,000 |
Maturity dates, description | The maturity dates of the loans existing as of the filing date ranged from August 31, 2020 to May 27, 2021. |
Agricultural Bank of China [Member] | |
Short term loans total amount | $ 26,700,000 |
Maturity dates, description | The maturity dates of the loans ranged from May 30, 2023 to April 2, 2030. |
Minimum [Member] | |
Interest rate | 2.13% |
Minimum [Member] | Agricultural Bank of China [Member] | |
Interest rate | 4.55% |
Maximum [Member] | |
Interest rate | 5.22% |
Maximum [Member] | Agricultural Bank of China [Member] | |
Interest rate | 4.99% |
Additional Information-Financia
Additional Information-Financial Statement Schedule I (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||||
Cash and cash equivalents | $ 13,374,261 | $ 73,588,229 | ||
Other current assets | 11,336,907 | 15,697,448 | ||
Total Current Assets | 607,488,798 | 612,494,137 | ||
TOTAL ASSETS | 817,721,344 | 794,371,526 | ||
Current Liabilities | ||||
Income tax payable -current | 4,565,436 | 3,421,486 | ||
Other current liabilities | 4,440,914 | 3,288,344 | ||
Total Current Liabilities | 556,311,002 | 565,213,779 | ||
Income tax payable - noncurrent | 8,377,468 | 9,259,307 | ||
Total Non-current Liabilities | 31,431,343 | 23,688,711 | ||
Total Liabilities | 587,742,345 | 588,902,490 | ||
Stockholders' Equity: | ||||
Preferred stock - no par value; 1,000,000 authorized; none issued and outstanding as of December 31, 2019 and 2018 | ||||
Common stock - $0.002 par value; 50,000,000 authorized, 19,304,921 issued and outstanding as of December 31, 2019 and 2018 | 38,609 | 38,609 | ||
Additional paid-in capital | (28,582,654) | (28,582,654) | ||
Retained earnings | 201,335,272 | 178,535,378 | ||
Total Stockholders' Equity | 229,978,999 | 205,469,036 | $ 200,291,931 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 817,721,344 | 794,371,526 | ||
Parent Company [Member] | ||||
Current Assets | ||||
Cash and cash equivalents | ||||
Other current assets | 86,828 | 86,828 | ||
Total Current Assets | 86,828 | 86,828 | ||
Investments in subsidiaries | 210,772,664 | 184,632,301 | ||
TOTAL ASSETS | 210,859,492 | 184,719,129 | ||
Current Liabilities | ||||
Income tax payable -current | 3,177,931 | 2,451,499 | ||
Due to subsidiary | 881,839 | |||
Other current liabilities | 2,921,411 | 2,921,411 | ||
Total Current Liabilities | 6,981,181 | 5,372,910 | ||
Income tax payable - noncurrent | 8,377,468 | 9,259,307 | ||
Total Liabilities | 15,358,649 | 14,632,217 | ||
Stockholders' Equity: | ||||
Preferred stock - no par value; 1,000,000 authorized; none issued and outstanding as of December 31, 2019 and 2018 | ||||
Common stock - $0.002 par value; 50,000,000 authorized, 19,304,921 issued and outstanding as of December 31, 2019 and 2018 | 38,609 | 38,609 | ||
Additional paid-in capital | (28,582,654) | (28,582,654) | ||
Retained earnings | 224,044,888 | 198,630,957 | ||
Total Stockholders' Equity | 195,500,843 | 170,086,912 | $ 170,086,912 | $ 157,351,213 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 210,859,492 | $ 184,719,129 |
Additional Information-Financ_2
Additional Information-Financial Statement Schedule I (Details Textual) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Additional Information-Financial Statement Schedule I (Textual) | ||
Preferred stock, par value | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.002 | $ 0.002 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 19,304,921 | 19,304,921 |
Common stock, shares outstanding | 19,304,921 | 19,304,921 |
Parent [Member] | ||
Additional Information-Financial Statement Schedule I (Textual) | ||
Preferred stock, par value | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.002 | $ 0.002 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 19,304,921 | 19,304,921 |
Common stock, shares outstanding | 19,304,921 | 19,304,921 |
Additional Information-Financ_3
Additional Information-Financial Statement Schedule I (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investment income | $ 5,333,657 | $ 6,052,416 |
General and administrative expenses | 35,178,114 | 26,939,370 |
Provision for income taxes | 3,762,450 | 15,814,600 |
Net income attributable to common stockholders | $ 25,413,931 | $ 12,735,699 |
Weighted average common share - Basic | 19,304,921 | 19,304,921 |
Weighted average common share - Diluted | 19,304,921 | 19,304,921 |
EPS - Basic | $ 1.32 | $ 0.66 |
EPS - Diluted | $ 1.32 | $ 0.66 |
Parent Company [Member] | ||
Investment income | $ 26,140,363 | $ 24,446,505 |
General and administrative expenses | 20,000 | |
Provision for income taxes | 706,432 | 11,710,806 |
Net income attributable to common stockholders | $ 25,413,931 | $ 12,735,699 |
Weighted average common share - Basic | 19,304,921 | 19,304,921 |
Weighted average common share - Diluted | 19,304,921 | 19,304,921 |
EPS - Basic | $ 1.32 | $ 0.66 |
EPS - Diluted | $ 1.32 | $ 0.66 |
Additional Information-Financ_4
Additional Information-Financial Statement Schedule I (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flow from operating activities: | |||
Net income | $ 28,318,415 | $ 15,451,977 | |
Adjustments to reconcile net income to net cash used in operating activities : | |||
Investment in subsidiaries | (5,333,657) | (6,052,416) | |
Net cash used in operating activities | (40,164,589) | 161,160,079 | |
Cash and cash equivalents, beginning of the year | 73,588,229 | ||
Cash and cash equivalents, end of the year | 13,374,261 | 73,588,229 | |
Parent Company [Member] | |||
Cash flow from operating activities: | |||
Net income | 25,413,931 | 12,735,699 | $ 12,735,699 |
Adjustments to reconcile net income to net cash used in operating activities : | |||
Investment in subsidiaries | (26,140,363) | (24,446,505) | |
Income tax payable | 726,432 | 11,710,806 | |
Net cash used in operating activities | |||
Net change in cash, cash equivalents, and restricted cash | |||
Cash and cash equivalents, beginning of the year | |||
Cash and cash equivalents, end of the year |
Additional Information-Financ_5
Additional Information-Financial Statement Schedule I (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Balance | $ 205,469,036 | $ 200,291,931 | |
Net income | 28,318,415 | 15,451,977 | |
Balance | 229,978,999 | 205,469,036 | $ 200,291,931 |
Parent Company [Member] | |||
Balance | 170,086,912 | 170,086,912 | 157,351,213 |
Net income | 25,413,931 | 12,735,699 | 12,735,699 |
Balance | 195,500,843 | 170,086,912 | 170,086,912 |
Common Stock [Member] | |||
Balance | $ 38,609 | $ 38,609 | |
Balance, shares | 19,304,921 | 19,304,921 | |
Balance | $ 38,609 | $ 38,609 | $ 38,609 |
Balance, shares | 19,304,921 | 19,304,921 | 19,304,921 |
Common Stock [Member] | Parent Company [Member] | |||
Balance | $ 38,609 | $ 38,609 | $ 38,609 |
Balance, shares | 19,304,921 | 19,304,921 | 19,304,921 |
Net income | |||
Balance | $ 38,609 | $ 38,609 | $ 38,609 |
Balance, shares | 19,304,921 | 19,304,921 | 19,304,921 |
Additional Paid-in Capital [Member] | |||
Balance | $ (28,582,654) | $ (28,582,654) | |
Balance | (28,582,654) | (28,582,654) | $ (28,582,654) |
Additional Paid-in Capital [Member] | Parent Company [Member] | |||
Balance | (28,582,654) | (28,582,654) | (28,582,654) |
Net income | |||
Balance | (28,582,654) | (28,582,654) | (28,582,654) |
Retained Earnings [Member] | |||
Balance | 178,535,378 | 168,244,329 | |
Balance | 201,335,272 | 178,535,378 | 168,244,329 |
Retained Earnings [Member] | Parent Company [Member] | |||
Balance | 224,044,888 | 198,630,957 | 185,895,258 |
Net income | 25,413,931 | 25,413,931 | 12,735,699 |
Balance | $ 224,044,888 | $ 224,044,888 | $ 198,630,957 |