Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 10, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CHINA RECYCLING ENERGY CORP | |
Entity Central Index Key | 0000721693 | |
Trading Symbol | CREG | |
Amendment Flag | true | |
Amendment Description | In response to a comment letter received from the Securities and Exchange Commission (the ''SEC''), dated December 4, 2018, China Recycling Energy Corporation (the ''Company,'' ''we,'' ''us'' or ''our'') is filing this Amendment No. 1 on Form 10-Q/A to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, originally filed with the SEC on November 14, 2016 (the ''Original Form 10-Q'') for the following purposes: reevaluate the leases for Erdos TCH as a result of a supplemental agreement effective on May 1, 2016, wherein Erdos TCH cancelled monthly minimum lease payments from Erdos, charged Erdos based on actual electricity sold at RMB 0.30 / Kwh, and concluded the lease payments that depend on a factor directly related to the future use of the leased property were contingent rentals and, accordingly, were excluded from minimum lease payments in their entirety. The Company therefore wrote off the net investment receivables of these leases on May 1, 2016. This Form 10-Q/A should be read in conjunction with the Company's periodic filings made with the SEC subsequent to the filing date of the Original Form 10-Q, including any amendments to those filings, as well as any Current Reports, filed on Form 8-K subsequent to the date of the Original Form 10-Q. In addition, in accordance with applicable rules and regulations promulgated by the SEC, the Company's Chief Executive Officer and Chief Financial Officer are providing currently dated certifications in connection with this Form 10-Q/A. The certifications are filed as Exhibits 31.3, 31.4, 32.3 and 32.4. Because this Form 10-Q/A sets forth the Original Form 10-Q in its entirety, it includes both items that have been changed as a result of the amended disclosures and items that are unchanged from the Original Form 10-Q. Other than the revision of the disclosures as discussed above, this Form 10-Q/A speaks as of the original filing date of the Original Form 10-Q and has not been updated to reflect other events occurring subsequent to the original filing date. This includes forward-looking statements and all other sections of this Form 10-Q/A that were not directly impacted by this amendment, which should be read in their historical context. | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q/A | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2016 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 8,310,198 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash and equivalents | $ 40,680,516 | $ 41,749,388 |
Restricted cash | 1,130,344 | |
Accounts receivable | 25,723,889 | 15,399,778 |
Current portion of investment in sales-type leases, net | 6,973,954 | 6,679,019 |
Interest receivable on sales type leases | 3,094,017 | 555,451 |
Prepaid expenses | 1,215,873 | 1,179,778 |
Other receivables | 387,477 | 553,886 |
Total current assets | 78,075,726 | 67,247,644 |
NON-CURRENT ASSETS | ||
Investment in sales-type leases, net | 52,512,266 | 133,079,634 |
Long term investment | 623,881 | 950,470 |
Long term deposit | 63,953 | 57,033 |
Property and equipment, net | 13,575 | 17,724 |
Construction in progress | 89,003,252 | 115,522,068 |
Total non-current assets | 142,216,927 | 249,626,929 |
TOTAL ASSETS | 220,292,653 | 316,874,573 |
CURRENT LIABILITIES | ||
Accounts payable | 1,591,091 | 427,732 |
Notes payable - bank acceptances | 1,130,344 | |
Taxes payable | 854,429 | 1,058,417 |
Accrued liabilities and other payables | 2,850,652 | 3,199,395 |
Due to related parties | 44,059 | 44,059 |
Deferred tax liability, net | 1,103,309 | 1,538,105 |
Loans payable - current | 748,750 | 6,159,911 |
Interest payable on entrusted loans | 211,626 | 268,801 |
Current portion of entrusted loan payable | 49,417,473 | 43,119,379 |
Total current liabilities | 56,821,389 | 56,946,143 |
NONCURRENT LIABILITIES | ||
Deferred tax liability, net | 2,578,984 | 10,771,348 |
Refundable deposit from customers for systems leasing | 1,063,224 | 1,555,378 |
Loans payable | 18,187,138 | |
Entrusted loan payable | 299,500 | 15,707,773 |
Total noncurrent liabilities | 3,941,708 | 46,221,637 |
Total liabilities | 60,763,097 | 103,167,780 |
CONTINGENCIES AND COMMITMENTS | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 100,000,000 shares authorized, 8,310,198 and 8,310,159 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively | 8,310 | 8,310 |
Additional paid in capital | 111,789,166 | 111,789,166 |
Statutory reserve | 14,210,589 | 13,823,789 |
Accumulated other comprehensive income | (2,589,793) | 3,210,315 |
Retained earnings | 36,130,249 | 84,661,602 |
Total Company stockholders' equity | 159,548,521 | 213,493,182 |
Noncontrolling interest | (18,965) | 213,611 |
Total equity | 159,529,556 | 213,706,793 |
TOTAL LIABILITIES AND EQUITY | $ 220,292,653 | $ 316,874,573 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Balance Sheets [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 8,310,198 | 8,310,159 |
Common stock, shares outstanding | 8,310,198 | 8,310,159 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue | ||||
Sales of systems | $ 24,296,220 | |||
Contingent rental income | 1,683,723 | 1,240 | 2,791,444 | 274,676 |
Total revenue | 1,683,723 | 1,240 | 2,791,444 | 24,570,896 |
Cost of sales | ||||
Cost of systems and contingent rental income | 2,719 | 21,323,089 | ||
Gross profit (loss) | 1,683,723 | (1,479) | 2,791,444 | 3,247,807 |
Interest income on sales-type leases | 1,682,428 | 5,167,974 | 9,879,962 | 17,989,599 |
Total operating income | 3,366,151 | 5,166,495 | 12,671,406 | 21,237,406 |
Operating expenses | ||||
General and administrative | 1,431,719 | 543,078 | 3,064,746 | 1,776,101 |
Impairment loss on net investment receivable | (1,184,209) | 57,168,035 | ||
Income (loss) from operations | 3,118,641 | 4,623,417 | (47,561,375) | 19,461,305 |
Non-operating income (expenses) | ||||
Interest income | 35,288 | 53,082 | 98,790 | 106,898 |
Interest expense | (1,658,033) | (590,740) | (5,040,022) | (2,393,424) |
Loss on sale of construction in progress of Xuzhou Zhongtai | (2,822,679) | |||
Loss on systems repurchase from Yida | (417,952) | |||
Gain on systems repurchase from Jitie and Datong | 4,561,430 | |||
Other income | 202,782 | (29,412) | 279,200 | 18,399 |
Total non-operating income (expenses), net | (1,419,963) | (567,070) | (7,902,663) | 2,293,303 |
Income (loss) before income tax | 1,698,678 | 4,056,347 | (55,464,038) | 21,754,608 |
Income tax expense (benefit) | 88,926 | 796,663 | (7,092,359) | 3,096,126 |
Income (loss) before noncontrolling interest | 1,609,752 | 3,259,684 | (48,371,679) | 18,658,482 |
Less: loss attributable to noncontrolling interest | (79,921) | (6,907) | (227,126) | (23,024) |
Net income (loss) attributable to China Recycling Energy Corporation | 1,689,673 | 3,266,591 | (48,144,553) | 18,681,506 |
Other comprehensive items | ||||
Foreign currency translation loss attributable to China Recycling Energy Corporation | (2,096,212) | (8,713,755) | (5,800,108) | (8,494,720) |
Foreign currency translation loss attributable to noncontrolling interest | (27,005) | (9,290) | (5,450) | (9,103) |
Comprehensive income (loss) attributable to China Recycling Energy Corporation | (406,539) | (5,447,164) | (53,944,661) | 10,186,786 |
Comprehensive loss attributable to noncontrolling interest | $ (106,926) | $ (16,196) | $ (232,576) | $ (32,127) |
Basic and diluted weighted average shares outstanding | 8,310,198 | 8,308,404 | 8,310,198 | 8,308,019 |
Basic and diluted earnings (loss) per share | $ 0.2 | $ 0.39 | $ (5.79) | $ 2.25 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Income (Loss) including noncontrolling interest | $ (48,371,679) | $ 18,658,482 |
Adjustments to reconcile income including noncontrolling interest to net cash provided by operating activities: | ||
Impairment loss on net investment receivable | 57,168,035 | |
Depreciation and amortization | 3,667 | 23,948 |
Investment income | 300,957 | (151,989) |
Changes in deferred tax | (8,303,783) | (1,370,648) |
Loss on sale of construction in progress of Xuzhou Zhongtai | 2,765,716 | |
Changes in assets and liabilities: | ||
Interest receivable on sales type leases | (2,600,856) | 377,892 |
Collection of principal on sales type leases | 19,264,234 | 49,096,376 |
Prepaid expenses | (68,773) | (362,400) |
Accounts receivable | (10,106,830) | 16,186 |
Other receivables | (344,004) | (1,229,488) |
Construction in progress | 20,612,058 | (13,921,409) |
Accounts payable | 1,066,424 | 1,668,863 |
Taxes payable | (175,134) | (1,366,659) |
Interest payable on entrusted loan | (49,858) | (25,702) |
Accrued liabilities and other payables | (727,410) | 307,088 |
Net cash provided by operating activities | 30,432,764 | 51,720,540 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Changes of restricted cash | 1,101,308 | |
Acquisition of property and equipment | (20,017) | |
Net cash provided by (used in) investing activities | 1,101,308 | (20,017) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from loans | 6,478,992 | |
Repayment of loans | (30,473,533) | (36,565,810) |
Long term payable | (2,380,090) | |
Repayment of notes payable | (990,277) | |
Advance from related parties | 3,239 | |
Net cash used in financing activities | (31,463,810) | (32,463,669) |
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND EQUIVALENTS | (1,139,134) | (1,933,210) |
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS | (1,068,872) | 17,303,644 |
CASH AND EQUIVALENTS, BEGINNING OF PERIOD | 41,749,388 | 35,871,030 |
CASH AND EQUIVALENTS, END OF PERIOD | 40,680,516 | 53,174,674 |
Supplemental cash flow data: | ||
Income tax paid | 1,148,757 | 4,586,391 |
Interest paid | $ 7,888,466 | $ 13,383,971 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2016 | |
Organization and Description of Business [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS China Recycling Energy Corporation (the “Company” or “CREG”) was incorporated on May 8, 1980 as Boulder Brewing Company under the laws of the State of Colorado. On September 6, 2001, the Company changed its state of incorporation to the State of Nevada. In 2004, the Company changed its name from Boulder Brewing Company to China Digital Wireless, Inc. and on March 8, 2007, again changed its name from China Digital Wireless, Inc. to its current name, China Recycling Energy Corporation. The Company, through its subsidiaries, provides energy saving solutions and services, including selling and leasing energy saving systems and equipment to customers, project investment, investment management, economic information consulting, technical services, financial leasing, purchase of financial leasing assets, disposal and repair of financial leasing assets, consulting and ensuring of financial leasing transactions in the Peoples Republic of China (“PRC”). Erdos TCH – Joint Venture On April 14, 2009, the Company formed a joint venture (the “JV”) with Erdos Metallurgy Co., Ltd. (“Erdos”) to recycle waste heat from Erdos’ metal refining plants to generate power and steam to be sold back to Erdos. The name of the JV was Inner Mongolia Erdos TCH Energy Saving Development Co., Ltd. with a term of 20 years. Total investment for the project was estimated at $79 million (RMB 500 million) with an initial investment of $17.55 million (RMB 120 million). Erdos contributed 7% of the total investment of the project, and Xi’an TCH Energy Technology Co., Ltd. (“Xi’an TCH”) contributed 93%. According to the parties’ agreement on profit distribution, Xi’an TCH and Erdos will receive 80% and 20%, respectively, of the profit from the JV until Xi’an TCH receives the complete return of its investment. Xi’an TCH and Erdos will then receive 60% and 40%, respectively, of the profit from the JV. On June 15, 2013, Xi’an TCH and Erdos entered into a share transfer agreement, pursuant to which Erdos transferred and sold its 7% ownership interest in the JV to Xi’an TCH for $1.29 million (RMB 8 million), plus certain accumulated profits as described below. Xi’an TCH paid the $1.29 million in July 2013 and, as a result, became the sole stockholder of the JV. In addition, Xi’an TCH paid Erdos accumulated profits from inception up to June 30, 2013 in accordance with a supplementary agreement entered on August 6, 2013. In August 2013, Xi’an TCH paid 20% of the accumulated profit (calculated under PRC GAAP) of $226,000 to Erdos. The JV currently has two power generation systems in Phase I with a total of 18MW power capacity, and three power generation systems in Phase II with a total of 27MW power capacity. On April 28, 2016, Erdos TCH and Erdos entered a supplemental agreement, effective on May 1, 2016, Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / Kwh. The selling price of each Kwh will be determined annually based on market condition.The Company evaluated the modified terms for payments based on actual electricity sold as minimum lease payments as defined in ASC 840-10-25-4, since lease payments that depend on a factor directly related to the future use of the leased property are contingent rentals and, accordingly, are excluded from minimum lease payments in their entirety. The Company wrote off the net investment receivables of these leases at the lease modification date. Pucheng Biomass Power Generation Projects On June 29, 2010, Xi’an TCH entered into a Biomass Power Generation (“BMPG”) Project Lease Agreement with PuchengXinHeng Yuan Biomass Power Generation Co., Ltd. (“Pucheng”), a limited liability company incorporated in China. Under this lease agreement, Xi’an TCH leased a set of 12MW BMPG systems to Pucheng at a minimum of $279,400 (RMB 1,900,000) per month for a term of 15 years. On September 11, 2013, Xi’an TCH entered into a BMPG Asset Transfer Agreement (the “Pucheng Transfer Agreement”) with Pucheng. The Pucheng Transfer Agreement provided for the sale by Pucheng to Xi’an TCH of a set of 12MW BMPG systems with completion of system transformation for a purchase price of RMB 100 million ($16.48 million) in the form of 8,766,547 shares of common stock of the Company at the price of $1.87 per share. These shares were issued to Pucheng on October 29, 2013. Also on September 11, 2013, Xi’an TCH entered into a BMPG Project Lease Agreement with Pucheng (the “Pucheng Lease”). Under the Pucheng Lease, Xi’an TCH leases this same set of 12MW BMPG system to Pucheng, and combined this lease with the lease for the 12MW BMPG station of Pucheng Phase I project, under a single lease to Pucheng for RMB 3.8 million ($0.63 million) per month (the “Pucheng Phase II Project”). The term for the combined lease is from September 2013 to June 2025. The lease agreement for the 12MW station from Pucheng Phase I project terminated upon the effective date of the Pucheng Lease. The ownership of two 12 MW BMPG systems will be transferred to Pucheng at no additional charge when the Pucheng Lease expires. Shenqiu Yuneng Biomass Power Generation Projects On May 25, 2011, Xi’an TCH entered into a Letter of Intent with ShenqiuYuNeng Thermal Power Co., Ltd. (“Shenqiu”) to reconstruct and transform a Thermal Power Generation System owned by Shenqiu into a 75T/H BMPG System for $3.57 million (RMB 22.5 million). The project commenced in June 2011 and was completed in the third quarter of 2011. On September 28, 2011, Xi’an TCH entered into a BMPG Asset Transfer Agreement with Shenqiu (the “Shenqiu Transfer Agreement”). Pursuant to the Shenqiu Transfer Agreement, Shenqiu sold Xi’an TCH a set of 12 MW BMPG systems (after Xi’an TCH converted the system for BMPG purposes). As consideration for the BMPG systems, Xi’an TCH agreed to pay Shenqiu $10,937,500 (RMB 70 million) in cash in three installments within six months upon the transfer of ownership of the systems. By the end of 2012, all of the consideration was paid. On September 28, 2011, Xi’an TCH and Shenqiu also entered into a BMPG Project Lease Agreement (the “2011 Shenqiu Lease”). Under the 2011 Shenqiu Lease, Xi’an TCH agreed to lease a set of 12MW BMPG systems to Shenqiu at a monthly rental rate of $286,000 (RMB 1,800,000) for 11 years. Upon expiration of the 2011 Shenqiu Lease, ownership of this system will be transferred from Xi’an TCH to Shenqiu at no additional cost. In connection with the 2011 Shenqiu Lease, Shenqiu paid one month’s rent as a security deposit to Xi’an TCH, in addition to providing personal guarantees. On October 8, 2012, Xi’an TCH entered into a Letter of Intent for technical reformation of Shenqiu Project Phase II with Shenqiu for technical reformation to enlarge the capacity of the Shenqiu Project Phase I (the “Shenqiu Phase II Project”). The technical reformation involved the construction of another 12MW BMPG system. After the reformation, the generation capacity of the power plant increased to 24MW. The project commenced on October 25, 2012 and was completed during the first quarter of 2013. The total cost of the project was $11.1 million (RMB 68 million). On March 30, 2013, Xi’an TCH and Shenqiu entered into a BMPG Project Lease Agreement (the “2013 Shenqiu Lease”). Under the 2013 Shenqiu Lease, Xi’an TCH agreed to lease the second set of 12MW BMPG systems to Shenqiu for $239,000 (RMB 1.5 million) per month for 9.5 years. When the 2013 Shenqiu Lease expires, ownership of this system will be transferred from Xi’an TCH to Shenqiu at no additional cost. Shanxi Datong Coal Group Power Generation Projects In February 2011, Xi’an TCH entered into an agreement with Shanxi Datong Coal Group Steel Co., Ltd. (“Shanxi Datong”) to recycle gas and steam from groups of blast-furnaces and converters at Shanxi Datong’s metal refining plants to generate power and pursuant to which Xi’an TCH agreed to install two 3MW Blast Furnace Power Recovery Turbine (the “BPRT”) systems and, one 15MW Waste Gas Power Generation (“WGPG”) system with a total of 21MW power capacity for an estimated total investment of $28.6 million (RMB 180 million). In June 2013, the two 3MW BPRT power generation systems were completed. The lease term is 30 years, during which time Shanxi Datong will pay a service fee to Xi’an TCH. The service fee was based on an average of 8,000 electricity-generating hours per year and $0.05 (RMB 0.33) per kilowatt hour (“kWh”) for the first five years from the completion of each power generation station. For each of the leases, at the 6th, 11th and 21st year anniversary of the date of the lease, the rates will change to RMB 0.3 kWh, 0.27 kWh and 0.25 kWh, respectively. In May 2012, Shanxi Datong and Tianjin Construction Materials Group (Holding) Co., Ltd. were restructured and renamed as Datong Coal Mine Tianjian Iron & Steel Co., Ltd. (“Datong”). On June 10, 2013, Xi’an TCH and Shanxi Datong entered into a supplemental agreement relating to the minimum service fee. The minimum service fee per month for the first five years was $0.19 million (RMB 1.2 million), $0.18 million (RMB 1.1 million) for the second five years, $0.16 million (RMB 1.0 million) for the following 10 years and $0.15 million (RMB 0.9 million) for the last 10 years. After 30 years, the units will be transferred to Datong at no additional charge. On May 26, 2015, the 15MW WGPG system was completed. Due to the change of its strategic plan, Datong notified Xi’an TCH that it would not be able to fulfill its obligations under the Cooperative Agreement and requested to repurchase the two 3MW BPRT systems and one 15MW WGPG system (the “Systems”) from Xi’an TCH and terminate the Cooperative Agreement. On May 29, 2015, Xi’an TCH entered into a Repurchase Agreement for the Recycling Economy Project with Datong. Under the Repurchase Agreement, Datong agreed to repurchase the Systems from Xi’an TCH and pay outstanding energy saving service fees of RMB 1.2 million ($193,548) to Xi’an TCH within five business days from the execution of the Repurchase Agreement. The Systems were transferred to Datong for a total price of RMB 250 million ($40.32 million) with RMB 100 million for two BPRT systems and RMB 150 million for one WGPG system. As of June 30, 2015, Xi’an TCH received payment in full and the systems were transferred. The outstanding balance of net investment receivable at the date of transfer was $13.37 million. The Company recorded a $2.98 million gain from two BPRT systems as non-operating income and a $3.02 million gain from the WGPG system as gross profit from the sale . Jitie Power Generation Projects In May 2013, Xi’an TCH signed a contract with Sinosteel Jilin Ferroalloys Co., Ltd. (“Jitie”) to build furnace gas WHPG systems for electricity generation from recycled heat and steam from groups of ferroalloy furnaces and electric furnaces (the “Jitie Project”). According to the contract, Xi’an TCH installed a 7.5 MW and a 3 MW turbine power generation system with a total of 10.5 MW power capacity for an estimated total investment of $9.71 million (RMB 60 million). The lease term is 24 years. During the term of this lease, Jitie will pay a service fee to Xi’an TCH based on the actual generating capacity with a minimum service fee per month of $300,000 (RMB 1.8 million). Xi’an TCH is responsible for the systems operation and will own the power generation systems. In December 2013, the Jitie Project was completed and began operations. On June 18, 2015, Xi’an TCH entered into a WHPG system Repurchase Agreement with Jitie. Under the Repurchase Agreement, Jitie repurchased the Jitie Project from Xi’an TCH and paid outstanding energy saving service fees of RMB 1.8 million ($294,599) to Xi’an TCH within five business days from the execution of the Repurchase Agreement on June 18, 2015. The Jitie Project was transferred to Jitie for a total price of RMB 90 million ($14.73 million). In July 2015, Xi’an TCH received payment in full and the systems were transferred. The outstanding balance of net investment receivable on the date of the transfer was $13.10 million. The Company recorded a $1.62 million gain from this transaction. Yida Coke Oven Gas Power Generation Projects On June 28, 2014, Xi’an TCH entered into an Asset Transfer Agreement (the “Transfer Agreement”) with Qitaihe City BoliYida Coal Selection Co., Ltd. (“Yida”), a limited liability company incorporated in China. The Transfer Agreement provided for the sale to Xi’an TCH of a 15 MW coke oven gas power generation station, which had been converted from a 15 MW coal gangue power generation station from Yida. As consideration for the Transfer Asset, Xi’an TCH was to pay to Yida RMB 115 million ($18.69 million) in the form of the common stock shares of the Company at the average closing price per share of the Stock for the 10 trading days prior to the closing date of the transaction ($2.27 per share). The exchange rate between the US Dollar and Chinese RMB in connection with the stock issuance is the rate equal to the middle rate published by the People’s Bank of China on the closing date of the assets transfer. Accordingly, the Company issued 8,233,779 shares (the “Shares”) for the Yida 15 MW coke oven gas power generation station, the fair value of 8,233,779 shares was $14.49 million based on the stock price at agreement date ($1.76 per share), and was the cost of the power generation station. On June 28, 2014, Xi’an TCH also entered into a Coke Oven Gas Power Generation Project Lease Agreement (the “Lease Agreement”) with Yida. Under the Lease Agreement, Xi’an TCH leased the Transfer Asset to Yida for RMB 3 million ($0.49 million) per month, and the term of the lease is from June 28, 2014 to June 27, 2029. Yida provided an RMB 3 million ($0.49 million) security deposit (without interest) for the lease. Xi’an TCH will transfer the Transfer Asset back to Yida at no cost at the end of the lease term. On June 22, 2016, Xi’an TCH entered into a Coal Oven Gas Power Generation Project Repurchase Agreement (the “Repurchase Agreement”) with Yida. Under the Repurchase Agreement, Xi’an TCH agreed to transfer to Yida all the project assets for consideration of RMB 112,000,000 ($16.89 million) (the “Transfer Price”) with Yida’s retention of ownership of the Shares. Yida agreed to make the following payments: (i) the outstanding monthly leasing fees for April and May 2016 in total of RMB 6,000,000 ($0.90 million) to Xi’an TCH within 5 business days from the execution of the Repurchase Agreement; (ii) a payment of RMB 50,000,000 ($7.54 million) of the Transfer Price to Xi’an TCH within 5 business days from the execution of the Repurchase Agreement; and (iii) a payment of the remaining RMB 62,000,000 ($9.35 million) of the Transfer Price to Xi’an TCH within 15 business days from the execution of the Repurchase Agreement. Under the Repurchase Agreement, ownership of the project assets will be transferred from Xi’an TCH to Yida within 3 business days after Xi’an TCH receives the full Transfer Price and the outstanding monthly leasing fees. As of June 30, 2016, Xi’an TCH had received the outstanding monthly leasing fees for April and May 2016 in the amount of $0.90 million and the first payment of the Transfer Price in the amount of $7.54 million. On July 11, 2016, the Company received the second payment of the Transfer Price in the amount of $9.35 million. The Company recorded a $0.42 million loss from this transaction. The Fund Management Company On June 25, 2013, Xi’an TCH and HongyuanHuifu Venture Capital Co. Ltd. (“HongyuanHuifu”) jointly established Hongyuan Recycling Energy Investment Management Beijing Co., Ltd. (the “Fund Management Company”) with registered capital of RMB 10 million. Xi’an TCH made an initial capital contribution of RMB 4 million ($650,000) and has a 40% ownership interest in the Fund Management Company. With respect to the Fund Management Company, voting rights and dividend rights are allocated 80% and 20% between HongyuanHuifu and Xi’an TCH, respectively. The Fund Management Company serves as the general partner of Beijing Hongyuan Recycling Energy Investment Center, LLP (the “HYREF Fund”), a limited liability partnership established on July 18, 2013 in Beijing. The Fund Management Company made an initial capital contribution of RMB 5 million ($830,000) to the HYREF Fund. An initial total amount of RMB 460 million ($75 million) has been fully subscribed by all partners for the HYREF Fund. The HYREF Fund has three limited partners: (1) China Orient Asset Management Co., Ltd., which made an initial capital contribution of RMB 280 million ($46.67 million) to the HYREF Fund and is a preferred limited partner; (2) HongyuanHuifu, which made an initial capital contribution of RMB 100 million ($16.67 million) to the HYREF Fund and is an ordinary limited partner; and (3) the Company’s wholly-owned subsidiary, Xi’an TCH, which made an initial capital contribution of RMB 75 million ($12.5 million) to the HYREF Fund and is a secondary limited partner. The term of the HYREF Fund’s partnership is six years from the date of its establishment, expiring on July 18, 2019. The term is three years from the date of contribution for the preferred limited partner, or four years from the date of contribution for the ordinary limited partner. The total size of the HYREF Fund is RMB 460 million ($76.66 million). The HYREF Fund was formed for the purpose of investing in Xi’an Zhonghong New Energy Technology Co., Ltd., a 90% owned subsidiary of Xi’an TCH, for the construction of two coke dry quenching (“CDQ”) WHPG stations with Jiangsu Tianyu Energy and Chemical Group Co., Ltd. (“Tianyu”) and one CDQ WHPG station with Boxing County Chengli Gas Supply Co., Ltd. (“Chengli”) . Chengli Waste Heat Power Generation Projects On July 19, 2013, Xi’an TCH formed a new company “Xi’an Zhonghong New Energy Technology Co., Ltd.” (“Zhonghong”) with registered capital of RMB 30 million ($4.85 million). Xi’an TCH paid RMB 27 million ($4.37 million) and owns 90% of Zhonghong. Zhonghong is engaged to provide energy saving solution and services, including constructing, selling and leasing energy saving systems and equipment to customers. On July 24, 2013, Zhonghong entered into a Cooperative Agreement of CDQ and CDQ WHPG Project with Boxing County Chengli Gas Supply Co., Ltd. (“Chengli”). The parties entered into a supplement agreement on July 26, 2013. Pursuant to these agreements, Zhonghong will design, build and maintain a 25 MW CDQ system and a CDQ WHPG system to supply power to Chengli, and Chengli will pay energy saving fees (the “Chengli Project”). Chengli will contract the operation of the system to a third party contractor that is mutually agreed to by Zhonghong. In addition, Chengli will provide the land for the CDQ system and CDQ WHPG system at no cost to Zhonghong. The term of the Agreements is for 20 years. The first 800 million watt hours generated by the Chengli Project will be charged at RMB 0.42 ($0.068) per kilowatt hour (excluding tax); thereafter, the energy saving fee will be RMB 0.20 ($0.036) per kilowatt hour (excluding tax). The operating time shall be based upon an average 8,000 hours annually. If the operating time is less than 8,000 hours per year due to a reason attributable to Chengli, then time charged shall be 8,000 hours a year, and if it is less than 8,000 hours due to a reason attributable to Zhonghong, then it shall be charged at actual operating hours. The construction of the Chengli Project was completed in the second quarter of 2015 and the project is currently under commissioning tests which the Company expects to complete in the first quarter of 2017. When operations begin, Chengli shall ensure its coking production line works properly and that working hours for the CDQ system are at least 8,000 hours per year, and Zhonghong shall ensure that working hours and the CDQ WHPG system will be at least 7,200 hours per year. On July 22, 2013, Zhonghong entered into an Engineering, Procurement and Construction (“EPC”) General Contractor Agreement for the Boxing County Chengli Gas Supply Co., Ltd. CDQ Power Generation Project (the “Huaxin Project”) with Xi’an Huaxin New Energy Co., Ltd. (“Huaxin”). Zhonghong, as the owner of the Huaxin Project, contracted EPC services for a CDQ system and a 25 MW CDQ WHPG system for Chengli to Huaxin. Huaxin shall provide construction, equipment procurement, transportation, installation and adjustment, test run, construction engineering management and other necessary services to complete the Huaxin Project and ensure the CDQ system and CDQ WHPG system for Chengli meet the inspection and acceptance requirements and work normally. The Huaxin Project is a turn-key project where Huaxin is responsible for monitoring the quality, safety, duration and cost of the project. The total contract price is RMB 200 million ($33.34 million), which includes all the materials, equipment, labor, transportation, electricity, water, waste disposal, machinery and safety costs. Tianyu Waste Heat Power Generation Project On July 19, 2013, Zhonghong entered into a Cooperative Agreement (the “Tianyu Agreement”) for Energy Management of CDQ and CDQ WHPG Project with Jiangsu Tianyu Energy and Chemical Group Co., Ltd. (“Tianyu”). Pursuant to the Tianyu Agreement, Zhonghong will design, build, operate and maintain two sets of 25 MW CDQ systems and CDQ WHPG systems for two subsidiaries of Tianyu – Xuzhou Tian’an Chemical Co., Ltd. (“Xuzhou Tian’an”) and Xuzhou Huayu Coking Co., Ltd (“Xuzhou Huayu”) – to be located at Xuzhou Tian’an and Xuzhou Huayu’s respective locations (the “Tianyu Project”). Upon completion of the Tianyu Project, Zhonghong will charge Tianyu an energy saving service fee of RMB 0.534 ($0.087) per kilowatt hour (excluding tax). The operating time will be based upon an average 8,000 hours annually for each of Xuzhou Tian’an and Xuzhou Huayu. If the operating time is less than 8,000 hours per year due to a reason attributable to Tianyu, then time charged will be 8,000 hours a year. The term of the Tianyu Agreement is 20 years. The construction of the Xuzhou Tian’an Project is anticipated to be completed in the first quarter of 2017. Xuzhou Tian’an will provide the land for the CDQ and CDQ WHPG systems for free. Xuzhou Tian’an also guarantees that it will purchase all of the power generated by the CDQ WHPG systems. The Xuzhou Huayu Project is currently on hold due to a conflict between Xuzhou Huayu Coking Co., Ltd and local residents on certain pollution-related issues. Xuzhou Huayu Coking Co., Ltd is working actively to resolve the conflict, and we will resume construction as soon as the possible; however, if the conflict cannot be resolved, either Xuzhou Huayu Coking Co., Ltd or the local residents will be forced to relocate. A relocation of Xuzhou Huayu Coking Co., Ltd would likely impact the Xuzhou Huayu Project. On July 22, 2013, Zhonghong entered into an EPC General Contractor Agreement for the Tianyu Project with Xi’an Huaxin New Energy Co., Ltd. (“Huaxin”). Zhonghong, as the owner of the Tianyu Project, contracted EPC services for two CDQ systems and two 25 MW CDQ WHPG systems for Tianyu to Huaxin. Huaxin shall provide construction, equipment procurement, transportation, installation and adjustment, test run, construction engineering management and other necessary services to complete the Tianyu Project and ensure the CDQ and CDQ WHPG systems for Tianyu meet the inspection and acceptance requirements and work normally. The Tianyu Project is a turn-key project where Huaxin is responsible for monitoring the quality, safety, duration and cost of the project. The total contract price is RMB 400 million ($66.68 million), which includes all the materials, equipment, labor, transportation, electricity, water, waste disposal, machinery and safety costs. Zhongtai Waste Heat Power Generation Energy Management Cooperative Agreement On December 6, 2013, Xi’an entered into a CDQ and WHPG Energy Management Cooperative Agreement (the “Zhongtai Agreement”) with Xuzhou Zhongtai Energy Technology Co., Ltd. (“Zhongtai”), a limited liability company incorporated in Jiangsu Province, China. Pursuant to the Zhongtai Agreement, Xi’an TCH will design, build and maintain a 150 ton per hour CDQ system and a 25 MW CDQ WHPG system and sell the power to Zhongtai, and Xi’an TCH will also build a furnace to generate steam from the waste heat of the smoke pipeline and sell the steam to Zhongtai. The construction period of the Project is expected to be 18 months from the date when conditions are ready for construction to begin. Zhongtai will start to pay an energy saving service fee from the date when the WHPG station passes the required 72-hour test run. The payment term is 20 years. For the first 10 years, Zhongtai shall pay an energy saving service fee at RMB 0.534 ($0.089) per kilowatt hour (including value added tax) for the power generated from the system. For the second 10 years, Zhongtai shall pay an energy saving service fee at RMB 0.402 ($0.067) per kilowatt hour (including value added tax). During the term of the contract the energy saving service fee shall be adjusted at the same percentage as the change of local grid electricity price. Zhongtai shall also pay an energy saving service fee for the steam supplied by Xi’an TCH at RMB 100 ($16.67) per ton (including value added tax). Zhongtai and its parent company will provide guarantees to ensure Zhongtai will fulfill its obligations under the Agreement. Upon the completion of the term, Xi’an TCH will transfer the systems to Zhongtai at RMB 1 ($0.16). Zhongtai shall provide waste heat to the systems for no less than 8,000 hours per year and waste gas volume no less than 150,000 Nm3 per hour with a temperature no less than 950°C. If these requirements are not met, the term of the Agreement will be extended accordingly. If Zhongtai wants to terminate the Zhongtai Agreement early, it shall provide Xi’an TCH a 60 day notice and pay the termination fee and compensation for the damages to Xi’an TCH according to the following formula: (1) if it is less than five years into the term when Zhongtai requests termination, Zhongtai shall pay: Xi’an TCH’s total investment amount plus Xi’an TCH’s annual investment return times five years minus the years in which the system has already operated); or 2) if it is more than five years into the term when Zhongtai requests the termination, Zhongtai shall pay: Xi’an TCH’s total investment amount minus total amortization cost (the amortization period is 10 years). In March 2016, Xi’an TCH entered into a Transfer Agreement of CDQ and a CDQ WHPG system with Zhongtai and Xi’an Huaxin (the “Transfer Agreement”). Under the Transfer Agreement, Xi’an TCH agreed to transfer to Zhongtai all of the assets associated with the CDQ Waste Heat Power Generation Project (the “Project”), which is under construction pursuant to the Zhongtai Agreement. Xi’an Huaxin will continue to construct and complete the Project and Xi’an TCH agreed to transfer all its rights and obligation under the “EPC” Contract to Zhongtai. As consideration for the transfer of the Project, Zhongtai agreed to pay to Xi’an TCH an aggregate transfer price of RMB 167,360,000 ($25.77 million) including payments of: (i) RMB 152,360,000 ($23.46 million) for the construction of the Project; and (ii) RMB 15,000,000 ($2.31 million) as payment for partial loan interest accrued during the construction period. Those amounts have been, or will be, paid by Zhongtai to Xi’an TCH according to the following schedule: (a) RMB 50,000,000 ($7.70 million) was paid within 20 business days after the Transfer Agreement was signed; (b) RMB 30,000,000 ($4.62 million) will be paid within 20 business days after the Project is completed, but no later than July 30, 2016 ; and (c) RMB 87,360,000 ($13.45 million) will be paid no later than July 30, 2017. Xuzhou Taifa Special Steel Technology Co., Ltd. (“Xuzhou Taifa”) has guaranteed the payments from Zhongtai to Xi’an TCH. The ownership of the Project was conditionally transferred to Zhongtai following the initial payment of RMB 50,000,000 ($7.70 million) by Zhongtai to Xi’an TCH and the full ownership of the Project will be officially transferred to Zhongtai after it completes all payments pursuant to the Transfer Agreement. As of September 30, 2016, Xi’an TCH had received the first payment of $7.70 million. As of the date of this report, the Company has not yet received the second payment of $4.62 million due to adverse market conditions. The Company recorded a $2.82 million loss from this transaction. Rongfeng CDQ Power Generation Energy Management Cooperative Agreement On December 12, 2013, Xi’an TCH entered into a CDQ Power Generation Energy Management Cooperative Agreement with Tangshan Rongfeng Iron & Steel Co., Ltd. (the “Rongfeng Agreement”), a limited liability company incorporated in Hebei Province, China. Pursuant to the Rongfeng Agreement, Xi’an TCH will design, build and maintain a CDQ and a CDQ WHPG system and sell the power to Rongfeng. The construction period of the Project is expected to be 18 months after the Agreement takes effect and from the date when conditions are ready for construction to begin. Rongfeng will start to pay an energy saving service fee from the date when the WHPG station passes the required 72-hour test run. The payment term is 20 years. For the first 10 years, Rongfeng shall pay an energy saving service fee at RMB 0.582 ($0.095) per kilowatt hour (including tax) for the power generated from the system. For the second 10 years, Rongfeng shall pay an energy saving service fee at RMB 0.432 ($0.071) per kWh (including tax). During the term of the contract the energy saving service fee shall be adjusted at the same percentage as the change of local grid electricity price. Rongfeng and its parent company will provide guarantees to ensure Rongfeng will fulfill its obligations under the Rongfeng Agreement. Upon the completion of the term, Xi’an TCH will transfer the systems to Rongfeng at RMB 1. Rongfeng shall provide waste heat to the systems for no less than 8,000 hours per year with a temperature no less than 950°C. If these requirements are not met, the term of the Agreement will be extended accordingly. If Rongfeng wants to terminate the Agreement early, it shall provide Xi’an TCH a 60 day notice and pay the termination fee and compensation for the damages to Xi’an TCH according to the following formula: 1) if it is less than five years (including five years) into the term when Rongfeng requests termination, Rongfeng shall pay: Xi’an TCH’s total investment amount plus Xi’an TCH’s average annual investment return times (five years minus the years of which the system has already operated); 2) if it is more than five years into the term when Rongfeng requests the termination, Rongfeng shall pay: Xi’an TCH’s total investment amount minus total amortization cost (the amortization period is 10 years). On November 16, 2015, Xi’an TCH entered into a Transfer Agreement of CDQ and a CDQ WHPG system with Rongfeng and Xi’an Huaxin New Energy Co., Ltd., a limited liability company incorporated in China (“Xi’an Huaxin”). The Transfer Agreement provided for the sale to Rongfeng of the CDQ Waste Heat Power Generation Project (the “Project”) from Xi’an TCH. Additionally, Xi’an TCH would transfer to Rongfeng the Engineering, Procurement and Construction (“EPC”) Contract for the CDQ Waste Heat Power Generation Project which Xi’an TCH had entered into with Xi’an Huaxin in connection with the Project. As consideration for the transfer of the Project, Rongfeng is to pay to Xi’an TCH an aggregate purchase price of RMB 165,200, 000 ($25.45 million), whereby (a) RMB 65,200,000 ($10.05 million) was to be paid by Rongfeng to Xi’an TCH within 20 business days after signing the Transfer Agreement, (b) RMB 50,000,000 ($7.70 million) is to be paid by Rongfeng to Xi’an TCH within 20 business days after the Project is completed, but no later than March 31, 2016 and (c) RMB 50,000,000 ($7.70 million) will be paid by Rongfeng to Xi’an TCH no later than September 30, 2016. Mr. Cheng Li, the largest stockholder of Rongfeng, has personally guaranteed the payments. The ownership of the Project was conditionally transferred to Rongfeng within 3 business days following the initial payment of RMB 65,200,000 ($10.05 million) by Rongfeng to Xi’an TCH and the full ownership of the Project will be officially transferred to Rongfeng after it completes the entire payment pursuant to the Transfer Agreement. As of December 31, 2015, Xi’an TCH had received the firs |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited financial statements included herein were prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) that are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) were omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s 2015 audited financial statements included in the Company’s Annual Report on Form 10-K. The results for the nine months ended September 30, 2016 are not necessarily indicative of the results expected for the full year ending December 31, 2016. Basis of Consolidation The consolidated financial statements include the accounts of CREG and its subsidiaries, Shanghai Yinghua Financial Leasing Co., Ltd. (“Yinghua”) and Sifang Holdings, its wholly owned subsidiaries, Huahong New Energy Technology Co., Ltd. (“Huahong”) and Shanghai TCH, Shanghai TCH’s wholly-owned subsidiary, Xi’an TCH Energy Tech Co., Ltd. (“Xi’an TCH”) and Xi’an TCH’s subsidiaries, Erdos TCH Energy Saving Development Co., Ltd (“Erdos TCH”), 100% owned by Xi’an TCH (See note 1), Zhonghong, 90% owned by Xi’an TCH, and Zhongxun, 100% owned by Xi’an TCH. Substantially all of the Company’s revenues are derived from the operations of Shanghai TCH and its subsidiaries, which represent substantially all of the Company’s consolidated assets and liabilities as of September 30, 2016 and December 31, 2015, respectively. All significant inter-company accounts and transactions were eliminated in consolidation. Use of Estimates In preparing these consolidated financial statements in accordance with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets as well as revenues and expenses during the period reported. Actual results may differ from these estimates. Revenue Recognition Sales-type Leasing and Related Revenue Recognition The Company constructs and leases waste energy recycling power generating projects to its customers. The Company typically transfers ownership of the waste energy recycling power generating projects to its customers at the end of the lease. The investment in these projects is recorded as investment in sales-type leases in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 840 , “Lease ,” Contingent Rental Income The Company records income from actual electricity usage in addition to minimum lease payments of each project as contingent rental income in the period contingent rental income is earned. Contingent rent is not part of minimum lease payments. Cash and Equivalents Cash and equivalents includes cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. Accounts Receivable As of September 30, 2016, the Company had accounts receivable of $25,723,889 (mainly from sale of CDQ and a CDQ WHPG system to Rongfeng and sale of CDQ and a CDQ WHPG system to Zhongtai) . As of December 31, 2015, the Company had accounts receivable of $15,399,778 (mainly from sale of CDQ and a CDQ WHPG system to Rongfeng), respectively. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method over the estimated lives as follows: Building 20 years Vehicles 2 - 5 years Office and Other Equipment 2 - 5 years Software 2 - 3 years Impairment of Long-lived Assets In accordance with FASB ASC Topic 360, “Property, Plant, and Equipment Notes Payable – Banker’s Acceptances The Company endorses banker’s acceptances that are issued from a bank to vendors as payment for its obligations. Most of the banker’s acceptances have maturity dates of less than six months following their issuance. Cost of Sales Cost of sales consists primarily of the direct material of the power generating system and expenses incurred directly for project construction for sales-type leasing and sales tax and additions for contingent rental income. Noncontrolling Interests The Company follows FASB ASC Topic 810, “Consolidation,” The net income (loss) attributed to NCIs was separately designated in the accompanying statements of income and comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, other receivables, accounts payable, accrued liabilities and short-term debts, the carrying amounts approximate their fair values due to their short maturities. Receivables on sales-type leases are based on interest rates implicit in the lease. FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” “Financial Instruments,” ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to FV measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” “Derivatives and Hedging.” The following are the considerations with respect to disclosures of FV of long-term debt obligations: As of September 30, 2016, the Company’s long-term debt obligations consisted of the Zhonghong entrusted loan of $49.72 million. As of December 31, 2015, the Company’s long-term debt obligations consisted of the following: (i) various long-term bank loans and Zhongrong International Trust Co., Ltd. (“ZRIT”) trust loan payable of $18.19 million, and (ii) Zhonghong entrusted loan of $58.83 million. FV measurements and approximations for certain financial instruments are based on what a reporting entity would likely have to pay to transfer the financial obligation to an entity with a comparable credit rating. The Company’s bank loans and trust loans payable are privately held (i.e., nonpublic) debt; therefore, pricing inputs are not observable. For this reason, the Company classified bank loans and trust loans payable as a Level 3 FV measurement in the valuation hierarchy. For the Company’s long-term bank loans, ZRIT trust loan and Zhonghong entrusted loans noted above, the Company believes the carrying amounts approximate their FV. Based on the Company’s understanding of the credit markets, the Company’s business is in a sector (energy-saving green) that is supported by the PRC government and the lending bank, the Company believes it could have obtained similar loans on similar terms and interest rates. In addition, in connection with the FV measurement, the Company considered nonperformance risk (including credit risk) relating to the debt obligations, including the following: (i) the Company is considered a low credit risk customer to the lending bank and its creditors; (ii) the Company has a good history of making timely payments and have never defaulted on any loans; and (iii) the Company has a stable and continuous cash inflow from collections from its sales-type lease of energy saving projects. As of September 30, 2016 and December 31, 2015, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at FV. Stock-Based Compensation The Company accounts for its stock-based compensation in accordance with FASB ASC Topic 718 “Compensation—Stock Compensation,” Equity.” Basic and Diluted Earnings per Share The Company presents net income (loss) per share (“EPS”) in accordance with FASB ASC Topic 260, “Earning Per Share.” The following table presents a reconciliation of basic and diluted EPS for the nine and three months ended September 30, 2016 and 2015: Nine Months Ended Three Months Ended 2016 2015 2016 2015 Net income $ (48,144,553 ) $ 18,681,506 $ 1,689,673 $ 3,266,591 Weighted average shares outstanding – basic 8,310,198 8,308,019 8,310,198 8,308,404 Effect of dilutive securities: Options granted - - - - Weighted average shares outstanding – diluted 8,310,198 8,308,019 8,310,198 8,308,404 Earnings (loss) per share – basic $ (5.79 ) $ 2.25 $ 0.20 $ 0.39 Earnings (loss) per share – diluted $ (5.79 ) $ 2.25 $ 0.20 $ 0.39 Foreign Currency Translation and Comprehensive Income (Loss) The Company’s functional currency is the Renminbi (“RMB”). For financial reporting purposes, RMB were translated into United States Dollars (“USD” or “$”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income.” Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date. The Company uses FASB ASC Topic 220, “Comprehensive Income.” Segment Reporting FASB ASC Topic 280, “Segment Reporting,” New Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842). The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its Consolidated Financial Statements. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Restricted Cash
Restricted Cash | 9 Months Ended |
Sep. 30, 2016 | |
Restricted Cash [Abstract] | |
RESTRICTED CASH | 3. RESTRICTED CASH Restricted cash is held by the banks as collateral to issue bank acceptances and bank loans. The Company endorses bank acceptances to vendors as payment of its obligations. Most of the bank acceptances have maturities of less than six months. As of September 30, 2016 and December 31, 2015, the Company had restricted cash of $0 and $1.13 million. |
Investment in Sales-Type Leases
Investment in Sales-Type Leases, Net | 9 Months Ended |
Sep. 30, 2016 | |
Investment in Sales-Type Leases, Net [Abstract] | |
INVESTMENT IN SALES-TYPE LEASES, NET | 4. INVESTMENT IN SALES-TYPE LEASES, NET Under sales-type leases, Xi’an TCH leases the following systems: (i) BMPG systems to Pucheng Phase I and II (15 and 11 year terms, respectively); (ii) BMPG systems to Shenqiu Phase I (11-year term); and (iii) Shenqiu Phase II (9.5-year term). In addition, as of September 30, 2016, Erdos TCH leased power and steam generating systems from waste heat from metal refining to Erdos (five systems) for a term of twenty years. The components of the net investment in sales-type leases as of September 30, 2016 and December 31, 2015 are as follows: 2016 2015 Total future minimum lease payments receivable $ 100,646,920 $ 387,612,418 Less: executory cost (5,654,150 ) (93,054,738 ) Less: unearned interest income (35,506,550 ) (154,799,027 ) Investment in sales-type leases, net 59,486,220 139,758,653 Current portion 6,973,954 6,679,019 Noncurrent portion $ 52,512,266 $ 133,079,634 As of September 30, 2016, the future minimum rentals to be received on non-cancelable sales-type leases by years are as follows: 2017 $ 18,074,815 2018 12,758,693 2019 12,758,693 2020 12,758,693 2021 12,758,693 Thereafter 31,537,333 Total $ 100,646,920 |
Prepaid Expenses
Prepaid Expenses | 9 Months Ended |
Sep. 30, 2016 | |
Prepaid Expenses [Abstract] | |
PREPAID EXPENSES | 5. PREPAID EXPENSES Prepaid expenses mainly consisted of prepayment for office rental and decorations, taxes, and consulting fees for the Company’s HYREF fund completed in July 2013. Before the HYREF Fund released the money to Zhonghong, Xi’an TCH paid 2% of the funds raised for Zhonghong, i.e. RMB 9.2 million ($1.5 million) to the Fund Management Company as a consulting fee and it shall pay such 2% on the amount of funds actually contributed as an annual management fee on every 365-day anniversary thereafter until Zhonghong fully repays the loan, and the HYREF Fund no longer has an ownership interest in Zhonghong. The Company had $1.15 million and $0.83 million prepaid consulting expense as of September 30, 2016 and December 31, 2015, respectively. During the third quarter of 2016, the Company prepaid RMB 9.2 million ($1.38 million) consulting fee. The Company had $0 and $0.30 million prepaid tax as of September 30, 2016 and December 31, 2015. |
Other Receivables
Other Receivables | 9 Months Ended |
Sep. 30, 2016 | |
Other Receivables [Abstract] | |
OTHER RECEIVABLES | 6. OTHER RECEIVABLES As of September 30, 2016, other receivables mainly consisted of (i) advance to third parties of $0.35 million, bearing no interest, payable upon demand; (ii) advances to employees of $0.03 million, bearing no interest, payable upon demand. As of December 31, 2015, other receivables mainly consisted of advance to third party of $0.05 million, bearing no interest, payable upon demand; advance to employees of $0.04 million, bearing no interest, payable upon demand; and maintenance cost and tax receivable of $0.47 million. |
Long Term Investment
Long Term Investment | 9 Months Ended |
Sep. 30, 2016 | |
Long Term Investment [Abstract] | |
LONG TERM INVESTMENT | 7. LONG TERM INVESTMENT On June 25, 2013, Xi’an TCH with HongyuanHuifu Venture Capital Co. Ltd (“HongyuanHuifu”) jointly established Hongyuan Recycling Energy Investment Management Beijing Co., Ltd (the “Fund Management Company”) with registered capital of RMB 10 million ($1.6 million), to manage a fund that will be used for financing CDQ WHPG projects. Xi’an TCH made an initial capital contribution of RMB 4 million ($0.65 million) and has a 40% ownership interest in the Fund Management Company. Voting rights and dividend rights are allocated between HongyuanHuifu and Xi’an TCH at 80% and 20%, respectively. The Company accounted for this investment using the equity method. The Company recorded $154,570 and $48,595 equity based investment income during the nine and three months ended September 30, 2016; however, it was eliminated with the financial fee of Zhonghong for the Statement of Income as 100% of Fund Management Company’s revenue is from Zhonghong’s financial fee and Zhonghong is 91.7% owned by Xi’an TCH (see Note 12). Xi’an TCH paid a $1.6 million one-time commission (recorded as other expense) to the Fund Management Company during 2013 for initiating and completing the Fund financing for the Company. On July 18, 2013, the HYREF Fund was established as a limited liability partnership in Beijing. Pursuant to the Partnership Agreement, the HYREF Fund has a general partner, the Fund Management Company, which made an initial capital contribution of RMB 5 million ($0.83 million) to the HYREF Fund. The HYREF Fund has three limited partners: (1) China Orient Asset Management Co., Ltd., which made an initial capital contribution of RMB 280 million ($46.67 million) and is a preferred limited partner, (2) HongyuanHuifu, which made an initial capital contribution of RMB 100 million ($16.67 million) and is an ordinary limited partner and (3) the Company’s wholly-owned subsidiary, Xian TCH, which made an initial capital contribution of RMB 75 million ($12.5 million) and is a secondary limited partner. The term of the HYREF Fund’s partnership is six years from the date of its establishment, July 18, 2013. The term for the preferred limited partner is three years from the date of its contribution and for the ordinary limited partner is four years from the date of its contribution. Unless otherwise approved by the general partner (the Fund Management Company), upon the expiration of their respective terms, each partner shall exit from the partnership automatically . The total size of the HYREF Fund is RMB 460 million ($75.0 million), and the purpose of the HYREF Fund is to invest in Zhonghong for constructing 3 new CDQ WHPG projects. Xi’an TCH owns 16.3% of the HYREF Fund. The Company accounted for this investment using the cost method. The Company netted off the investment of RMB 75 million ($12.2 million) by Xi’an TCH with the entrusted loan payable of the HYREF Fund by Xi’an TCH in the amount of $49.72 million. |
Construction in Progress
Construction in Progress | 9 Months Ended |
Sep. 30, 2016 | |
Construction in Progress [Abstract] | |
CONSTRUCTION IN PROGRESS | 8. CONSTRUCTION IN PROGRESS Construction in progress was for constructing power generation systems. As of September 30, 2016 and December 31, 2015, the Company’s construction in progress included: 2016 2015 Xuzhou Zhongtai - 28,100,201 Xuzhou Huayu 29,633,538 29,752,270 Xuzhou Tian’an 28,469,454 26,909,193 Boxing County Chengli 30,900,260 30,760,404 Total $ 89,003,252 $ 115,522,068 As of September 30, 2016, the Company was committed to pay an additional (1) $7.49 million for Xuzhou Huayu project, (2) $8.65 million for Xuzhou Tian’an project, and (3) $5.40 million for Boxing County Chengli project. |
Taxes Payable
Taxes Payable | 9 Months Ended |
Sep. 30, 2016 | |
Taxes Payable [Abstract] | |
TAXES PAYABLE | 9. TAXES PAYABLE Taxes payable consisted of the following as of September 30, 2016 and December 31, 2015: 2016 2015 Income $ 165,396 $ 405,431 Business - 249,141 VAT 638,899 369,595 Other 50,134 34,250 Total $ 854,429 $ 1,058,417 |
Accrued Liabilities and Other P
Accrued Liabilities and Other Payables | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Liabilities and Other Payables [Abstract] | |
ACCRUED LIABILITIES AND OTHER PAYABLES | 10. ACCRUED LIABILITIES AND OTHER PAYABLES Accrued liabilities and other payables consisted of the following as of September 30, 2016 and December 31, 2015: 2016 2015 Employee training, labor union expenditure and social insurance payable $ 729,244 $ 749,930 Consulting, auditing, and legal expenses 1,841,927 1,342,395 Accrued payroll and welfare 271,522 278,819 Accrued interest expense 1,182 682,949 Other 6,777 145,302 Total $ 2,850,652 $ 3,199,395 |
Deferred Tax Liability, Net
Deferred Tax Liability, Net | 9 Months Ended |
Sep. 30, 2016 | |
Deferred Tax Liability, Net [Abstract] | |
DEFERRED TAX LIABILITY, NET | 11. DEFERRED TAX LIABILITY, NET Deferred tax asset resulted from accrued employee social insurance that can be deducted for tax purposes in the future, and the difference between tax and accounting basis of cost of fixed assets which was capitalized for tax purposes and expensed as part of cost of systems in accordance with US GAAP. Deferred tax liability arose from the difference between tax and accounting basis of net investment in sales-type leases. As of September 30, 2016 and December 31, 2015, deferred tax liability consisted of the following: 2016 2015 Deferred tax asset — current (accrual of employee social insurance) $ 159,431 $ 98,372 Deferred tax liability — current (net investment in sales-type leases) (1,262,740 ) (1,636,477 ) Deferred tax liability, net of deferred tax asset – current $ (1,103,309 ) $ (1,538,105 ) Deferred tax asset — noncurrent (depreciation of fixed assets) $ 10,549,083 $ 22,498,560 Deferred tax liability — noncurrent (net investment in sales-type leases) (13,128,067 ) (33,269,908 ) Deferred tax liability, net of deferred tax asset – noncurrent $ (2,578,984 ) $ (10,771,348 ) |
Loans Payable
Loans Payable | 9 Months Ended |
Sep. 30, 2016 | |
Loans Payable [Abstract] | |
LOANS PAYABLE | 12. LOANS PAYABLE Entrusted Loan Payable The HYREF Fund (Beijing Hongyuan Recycling Energy Investment Center, LLP) established in July 2013 with total fund size of RMB 460 million ($75.0 million) invests in Xi’an Zhonghong for Zhonghong’s three new CDQ WHPG projects. The HYREF Fund invested RMB 3 million ($0.5 million) as an equity investment and RMB 457 million ($74.5 million) as a debt investment in Xi’an Zhonghong; in return for such investments, the HYREF Fund will receive an interest payment from Zhonghong for the HYREF Fund’s debt investment. The RMB 457 million ($74.5 million) was released to Zhonghong through an entrusted bank, which is also the supervising bank for the use of the loan. The loan was deposited to a bank account at the Supervising Bank (the Industrial Bank Xi’an Branch) and is jointly supervised by Zhonghong and the Fund Management Company. Project spending shall be verified by the Fund Management Company to confirm that it is in accordance with the project schedule before the funds are released. All the operating accounts of Zhonghong have been opened with the branches of the Supervising Bank and the Supervising Bank has the right to monitor all bank accounts opened by Zhonghong. The entrusted bank will charge 0.1% of loan amount as service fee and will not take any lending risk. The loan was collateralized by the accounts receivable and the fixed assets of Shenqiu Phase I and II power generation systems, the accounts receivable and fixed assets of Zhonghong’s three CDQ WHPG systems, and a 27 million RMB capital contribution made by Xi’an TCH. Repayment of the loan (principal and interest) was also jointly and severally guaranteed by Xi’an TCH and the Chairman and CEO of the Company. In the fourth quarter of 2015, three power stations of Erdos TCH were pledged to Industrial Bank as an additional guarantee for the loan lent to Zhonghong’s three CDQ WHPG systems. The loan agreement provides that Zhonghong shall also maintain a certain capital level in its account with the Supervising Bank to make sure it has sufficient funds to make interest payments when they are due: ● During the first three years from the first release of the loan, the balance in its account shall be no less than RMB 7.14 million ($1.19 million) on the 20th day of the second month of each quarter and no less than RMB 14.28 million ($2.38 million) on the 14th day of the last month of each quarter; ● During the fourth year from the first release of the loan, the balance in its account shall be no less than RMB 1.92 million ($0.32 million) on the 20th day of the second month of each quarter and no less than RMB 3.85 million ($0.64 million) on the 14th day of the last month of each quarter; and ● During the fifth year from the first release of the loan, the balance in its account shall be no less than RMB 96,300 ($16,050) on the 20th day of the second month of each quarter and no less than RMB 192,500 ($32,080) on the 14th day of the last month of each quarter. The term of this loan is for 60 months from July 31, 2013 to July 30, 2018. On August 6, 2016, Zhonghong shall repay principal in the amount of RMB 280 million ($42.22 million); on August 6, 2017, it shall repay principal of RMB 100 million ($16.27 million) and on July 30, 2018, it shall repay the remainder of RMB 77 million ($12.52 million). The interest rate is 12.5% per year. During the term, Zhonghong shall maintain a minimal funding level and capital level in its designated account with the Supervising Bank to make sure it has sufficient funds to make principal payments when they are due. Notwithstanding the requirement, there is a verbal agreement from the HYREF Fund that for the purpose of the efficient utilization of working capital, Zhonghong does not have to maintain a minimum funding level in its designated account with the Supervising Bank. As of September 30, 2016, the entrusted loan payable had an outstanding balance of $60.95 million, of which, $11.23 million was from the investment of Xi’an TCH; accordingly, the Company netted off the loan payable of $11.23 million with the long-term investment to the HYREF Fund made by Xi’an TCH. For the nine months ended September 30, 2016, the Company recorded interest expense of $3.67 million on this loan and capitalized $2.67 million interest to construction in progress. For the nine months ended September 30, 2015, the Company recorded interest expense of $369,681 and on this loan and capitalized $6.64 million interest to construction in progress. Bank Loan – Bank of Xi’an On June 26, 2015, Xi’an TCH entered into a loan agreement with Bank of Xi’an, whereby Bank of Xi’an agreed to loan $6.29 million (RMB 40 million) to Xi’an TCH for one year with maturity on June 25, 2016. The monthly interest rate of the loan is 0.595%. Under the terms of the loan, Xi’an TCH is required to make monthly interest payments and the principal is to be repaid at maturity. The loan is guaranteed by a third party guarantee company and the Chairman and CEO of the Company. The Company paid a third party $149,341 (RMB 950,000) as a re-guarantee service fee. As of September 30, 2016, this loan was paid in full. Bank Loan – Bank of Chongqing On April 11, 2014, Xi’an TCH entered into a loan agreement with Bank of Chongqing - Xi’an Branch, whereby Bank of Chongqing agreed to loan $8.13 million (RMB 50 million) to Xi’an TCH for three years with maturity on April 10, 2017. The annual interest rate of the loan is 9.225%. Under the terms of the loan, Xi’an TCH was required to make monthly interest payments and, to make a principal payment of $0.81 million (RMB 5 million) on the 24 th Trust Loan - Zhongrong International Trust - Xuzhou Zhongtai and Tangshan Rongfeng On February 17, 2014, Xi’an TCH entered into a trust loan agreement with Zhongrong International Trust Co., Ltd (“ZRIT”), for Xi’an TCH to borrow RMB 150 million ($24.5 million) for the CDQ system and the CDQ WHPG Project with Xuzhou Zhongtai Energy Technology Co., Ltd. (the “Zhongtai Project”). ZRIT set up a Zhongrong-Green Recycling Energy Collective Capital Trust Plan No. 1 (the “Trust Plan No. 1”) to raise money and loan the proceeds to Xi’an TCH for the Zhongtai Project (the “Zhongtai Loan”). The Zhongtai Loan was secured by the pledge of CDQ equipment and power generation system of the Zhongtai Project, by personal guarantee of the Chairman and CEO of the Company, and by a corporate guarantee of Xuzhou Zhongtai Energy Technology Co., Ltd. and its affiliated companies. As of September 30, 2016, this loan was paid in full. On February 17, 2014, Xi’an TCH entered into another trust loan agreement with ZRIT, for Xi’an TCH to borrow RMB 135 million ($22.1 million) for the CDQ system and the CDQ WHPG Project with Tangshan Rongfeng Iron & Steel Co., Ltd. (the “Rongfeng Project”). ZRIT will set up a Zhongrong-Green Recycling Energy Collective Capital Trust Plan No. 2 (the “Trust Plan No. 2”) to raise money and loan the proceeds to Xi’an TCH for the Rongfeng Project (the “Rongfeng Loan”). The Rongfeng Loan is secured by the pledge of CDQ equipment and power generation system of the Rongfeng Project, by a personal guarantee of the Chairman and CEO of the Company, and by a corporate guarantee of Tangshan Rongfeng Iron & Steel Co., Ltd. and its parent company. On December 21, 2015, Xi’an TCH paid in full the loan for the Rongfeng Project upon the transfer of the CDQ and a CDQ WHPG system to Rongfeng. Summary As of September 30, 2016, the future minimum repayment of all the loans including the entrusted loan to be made by years is as follows: 2017 $ 50,166,223 2018 299,500 Total $ 50,465,723 |
Long Term Payable - Financing A
Long Term Payable - Financing Agreement For Sale Lease-Back Transaction | 9 Months Ended |
Sep. 30, 2016 | |
Long Term Payable - Financing Agreement For Sale Lease - Back Transaction / Refundable Deposit From Customers For Systems Leasing [Abstract] | |
LONG TERM PAYABLE - FINANCING AGREEMENT FOR SALE LEASE-BACK TRANSACTION | 13. LONG TERM PAYABLE – FINANCING AGREEMENT FOR SALE LEASE-BACK TRANSACTION On June 28, 2011, Xi’an TCH entered into a Financing Agreement (the “Cinda Agreement”) with Cinda Financial, an affiliate of China Cinda (HK) Asset Management Co., Ltd, a company organized under the laws of the Hong Kong Special Administrative Region of China (“Cinda HK”). Under the Cinda Agreement, Xi’an TCH transferred its ownership of (i) a set of 7MW steam turbine WHPG systems and (ii) four furnaces and ancillary apparatus ((i) and (ii) collectively, the “Assets”) to Cinda Financial for $6.72 million (RMB 42.50 million), and Cinda Financial leased the Assets to Xi’an TCH for five years for $8.15 million (RMB 51.54 million) based on the transfer cost and benchmark interest rate for five year loans by People’s Bank of China (“PBOC”) (then 6.65%) plus 15% of that rate (7.6475%). The interest rate will increase if the five-year benchmark interest rate of PBOC increases but will remain the same if the benchmark rate decreases in the future. Xi’an TCH shall make pro rata quarterly payments to Cinda Financial for the leasing fees. Upon the completion of the lease term and full payment of all leasing fees and other fees, Xi’an TCH exercised its option to pay $676 (RMB 4,250) to acquire the Assets from Cinda Financial. The quarterly minimum leasing payment to Cinda Financial is $412,855 (RMB 2.59 million). In addition to the leasing fees and payment to acquire the Assets, Xi’an TCH prepaid a one-time non-refundable leasing service charge of $405,696 (RMB 2.55 million) and a refundable security deposit of $338,079 (RMB 2.13 million) to Cinda Financial. The prepaid leasing service fee is to be: amortized over five years. For the nine months ended September 30, 2016 and 2015, $0 was amortized, respectively. In accordance with ASC 840-10-25-4, because we retain substantially all of the benefits and risks relating to the property, this transaction was a financing and was recorded as such. As of December 31, 2014, the prepaid leasing service fee was fully amortized as a result of the Early Repayment Agreement entered by Xi’an TCH and Cinda Financial on December 22, 2014. Under the Repayment Agreement, Xi’an TCH paid the principal and interest in the amount of RMB 2.55 million ($0.42 million) in the first quarter of 2015 as well as the remaining principal of RMB 12.14 million ($1.97 million) before March 28, 2015 (the “Total Repayment Price”). Cinda Financial returned the deposit of RMB 2,125,000 ($0.35 million) to Xi’an TCH within three days after Xi’an TCH paid the Total Repayment Price. Upon the effective date of the Repayment Agreement, the Financial Leasing Agreement was terminated. The Company made repayment in full during the first quarter of 2015. |
Refundable Deposit From Custome
Refundable Deposit From Customers For Systems Leasing | 9 Months Ended |
Sep. 30, 2016 | |
Long Term Payable - Financing Agreement For Sale Lease - Back Transaction / Refundable Deposit From Customers For Systems Leasing [Abstract] | |
REFUNDABLE DEPOSIT FROM CUSTOMERS FOR SYSTEMS LEASING | 14. REFUNDABLE DEPOSIT FROM CUSTOMERS FOR SYSTEMS LEASING The refundable deposit was mainly for Pucheng, Shenqiu and Yida systems. As of September 30, 2016 and December 31, 2015, the balance of refundable deposit from customers for systems leasing was $1,063,224 for Pucheng and Shengqiu systems, and $1,555,378 for Pucheng, Shenqiu and Yida systems, respectively. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 15. RELATED PARTY TRANSACTIONS On March 1, 2014, Xi’an TCH entered a loan agreement with a major stockholder and the Company’s Chairman and CEO, pursuant to which the Chairman and CEO of the Company will loan the Company, from time to time, up to RMB 80 million ($13 million) for the Company’s operating needs. The loans bear no interest, have a one-year term, and the Company can repay the principal in installments. As of September 30, 2016, the Company had borrowed $0 from the Chairman and CEO of the Company, but had $44,059 in advances from the Company’s management, which bear no interest, and are payable upon demand. As of December 31, 2015, the Company had borrowed $0 from the Chairman and CEO of the Company, but had $44,059 in advances from the Company’s management, which bear no interest, and are payable upon demand. During the nine months ended September 30, 2016, the Company recognized RMB 21.79 million ($3.27 million) interest income for the sales-type lease of Pucheng BMPG systems from Pucheng Xin Heng Yuan Biomass Power Generation Corporation, whose major stockholder became a stockholder of CREG through the issuance of the Company’s common stock to this stockholder in consideration for the transfer of the old system to CREG for BMPG system transformation. During the nine months ended September 30, 2016, prior to repurchase date, the Company recognized RMB 13.83 million ($2.09 million) interest income for the sales-type lease of Yida WGPG system from Qitaihe City Boli Yida Coal Selection Co., Ltd., whose major stockholder became a stockholder of CREG through the issuance of the Company’s common stock to this stockholder in consideration for the transfer of the old system to CREG for WGPG system transformation. |
Noncontrolling Interest
Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2016 | |
Noncontrolling Interest [Abstract] | |
NONCONTROLLING INTEREST | 16. NONCONTROLLING INTEREST On July 15, 2013, Xi’an TCH and HYREF Fund jointly established Xi’an Zhonghong New Energy Technology (“Zhonghong”) with registered capital of RMB 30 million ($4.88 million), to manage new projects. Xi’an TCH paid RMB 27 million ($4.37 million). Xi’an TCH owns 90% of Zhonghong while HYREF Fund owns 10% of Zhonghong as non-controlling interest of Zhonghong. In addition, the HYREF Fund was 16.3% owned by Xi’an TCH and 1.1% owned by the Fund Management Company, and the Fund Management Company was 40% owned by Xi’an TCH as described in Note 7, which resulted in an additional indirect ownership of Xi’an TCH in Zhonghong of 1.7%; accordingly, the ultimate non-controlling interest (HYREF Fund) in Zhonghong became 8.3%. During the nine months ended September 30, 2016 and 2015, the Company had losses of $227,126 and $23,024 that were attributable to the noncontrolling interest, respectively. During the three months ended September 30, 2016 and 2015, the Company had losses of $79,921 and $6,907 that were attributable to noncontrolling interest, respectively. |
Income Tax
Income Tax | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax [Abstract] | |
INCOME TAX | 17. INCOME TAX The Company’s Chinese subsidiaries are governed by the Income Tax Law of the PRC concerning privately-run enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriate tax adjustments. Under the Chinese tax law, the tax treatment of finance and sales-type leases is similar to US GAAP. However, the local tax bureau continues to treat CREG sales-type leases as operating leases. Accordingly, the Company recorded deferred income taxes. The Company’s subsidiaries generate all of their net income from their PRC operations. Yinghua and Shanghai TCH’s effective income tax rate for 2016 and 2015 was 25%. During 2013, Xi’an TCH was re-approved for high tech enterprise status and enjoyed 15% preferential income tax rate for three years effective January 1, 2013 through December 31, 2015, and is subject to 25% income tax rate in 2016 unless the renewal of preferential income tax rate is approved by the tax authority. Huahong, Zhonghong and Erdos TCH’s effective income tax rate for 2016 and 2015 was 25%. Yinghua, Shanghai TCH, Xi’an TCH, Huahong, Zhonghong and Erdos TCH file separate income tax returns. There is no income tax for companies domiciled in the Cayman Islands. Accordingly, the Company’s consolidated financial statements do not present any income tax provisions related to Cayman Islands tax jurisdiction where Sifang Holding is domiciled. The US parent company, China Recycling Energy Corporation, is taxed in the US and, as of September 30, 2016, had net operating loss (“NOL”) carry forwards for income taxes of $14.03 million, which may be available to reduce future years’ taxable income as NOLs can be carried forward up to 20 years from the year the loss is incurred. Our management believes the realization of benefits from these losses may be uncertain due to the US parent company’s continuing operating losses. Accordingly, a 100% deferred tax asset valuation allowance was provided. The following table reconciles the US statutory rates to the Company’s effective tax rate for the nine and three months ended September 30, 2016 and 2015, respectively: Nine Months Three Months 2016 2015 2016 2015 U.S. statutory rates (34.0 )% 34.0 % 34.0 % 34.0 % Tax rate difference – current provision 8.9 % (9.3 )% (9.5 )% (9.3 )% Effective tax holiday - % (7.9 )% - % (6.4 )% Other 0.1 % (3.6 )% 5.9 % - % Prior periods income tax adjustment per income tax return filed - % - % (0.2 )% - % Valuation allowance on PRC NOL 11.9 % - % (27 )% - % Valuation allowance on US NOL 0.3 % 1.0 % 2.0 % 1.3 % Tax per financial statements (12.8 )% 14.2 % 5.2 % 19.6 % The provision for income taxes expense for the nine and three months ended September 30, 2016 and 2015 consisted of the following: Nine Months Three Months 2016 2015 2016 2015 Income tax expense – current $ 1,211,424 $ 4,466,774 $ 305,516 $ 730,828 Income tax expense (benefit) - deferred (8,303,783 ) (1,370,648 ) (216,590 ) 65,835 ) Total income tax expense (benefit) $ (7,092,359 ) $ 3,096,126 $ 88,926 $ 796,663 |
Stock-Based Compensation Plan
Stock-Based Compensation Plan | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation Plan [Abstract] | |
STOCK-BASED COMPENSATION PLAN | 18. STOCK-BASED COMPENSATION PLAN Options to Employees The Company recorded no compensation expense for stock options to employees during each of the nine and three months ended September 30, 2016 and 2015. On June 19, 2015, the stockholders of the Company approved the China Recycling Energy Corporation Omnibus Equity Plan (the “Equity Plan”) at its annual meeting. The total aggregate shares of common stock authorized for issuance during the term of the Equity Plan is limited to 12,462,605 shares (prior to the 10:1 reverse split). The Equity Plan was effective immediately upon the adoption by our Board of Directors on April 24, 2015, subject to stockholder approval, and will terminate on the earliest to occur of (i) the 10th anniversary of the Equity Plan’s effective date, or (ii) the date on which all shares available for issuance under the Equity Plan shall have been issued as fully-vested shares. No share or option grants have been made to employees under the Equity Plan as of September 30, 2016. Options to Independent Directors On March 31, 2015, the Board appointed Mr. Cangsang Huang as a member of the Company’s Board of Directors to fill a vacancy. Mr. Huang will serve until his successor has been duly elected and qualified. In connection with the appointment, the Board authorized the Company to provide Mr. Huang with (i) compensation in the amount of $2,000 per month and (ii) the grant of an option to purchase 40,000 shares of the Company’s Common Stock, par value $0.001, at an exercise price equal of $1.02 per share, which was equal to the closing price per share of the Company’s Common Stock on March 31, 2015. Such options were only valid and exercisable upon stockholder approval. The options to Mr. Huang were not voted upon at the Company’s annual stockholder’s meeting on June 19, 2015 and were cancelled automatically. However, the Company’s Omnibus Equity Plan (“Plan”) adopted by the Board on April 24, 2015 for providing equity awards to employees, directors and consultants was approved at the annual stockholder’s meeting; accordingly, the Compensation Committee of the Board of Directors approved a grant of 40,000 options (prior to the 10:1 stock split) to Mr. Huang at an exercise price of $1.02 per share under the Plan which vested immediately on the date of grant, which was on October 10, 2015. The options may be exercised within five years of the date of the grant. The following table summarizes option activity with respect to the independent directors, the number of options reflected 10:1 reverse split effective on May 25, 2016: Number of Average Exercise Price per Share Weighted Outstanding at January 1, 2015 8,000 $ 38.3 0.31 Exercisable at January 1, 2015 8,000 38.3 0.31 Granted 4,000 10.2 4.77 Exercised - - - Forfeited 8,000 - - Outstanding at December 31, 2015 4,000 10.2 4.77 Exercisable at December 31, 2015 4,000 10.2 4.77 Granted - - - Exercised - - - Forfeited - - - Outstanding at September 30, 2016 4,000 10.2 4.02 Exercisable at September 30, 2016 4,000 $ 10.2 4.02 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Contingencies [Abstract] | |
CONTINGENCIES | 19. CONTINGENCIES The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. The Company’s sales, purchases and expense transactions are denominated in RMB and all of the Company’s assets and liabilities are also denominated in RMB. The RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions. Remittances in currencies other than RMB may require certain supporting documentation in order to make the remittance. The Company sells electricity to its customers and receives commercial notes (bank acceptance) from them in lieu of payments for accounts receivable. The Company discounts the commercial notes with the bank or endorses the commercial notes to vendors for payment of their own obligations or to get cash from third parties. Most of the commercial notes have a maturity of less than six (6) months. As of June 30, 2016 and December 31, 2015, Xi’an TCH had outstanding notes receivable of $0. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 2016 | |
Commitments [Abstract] | |
COMMITMENTS | 20. COMMITMENTS Lease Commitment On March 4, 2014, Xi’an TCH’s office lease expired and Xi’an TCH renewed this lease for an additional two years; the monthly rental payment is $20,140. The lease for the office in Xi’an was renewed for an additional two years starting on March 5, 2016 with a monthly rental payment of $21,804 but payable quarterly in advance. In addition, on September 16, 2013, Xi’an TCH leased an office in Beijing for a term of two-years and three-months, expiring on December 31, 2015, with a monthly rental payment of $12,110. The lease for the office in Beijing was not renewed at expiration. For the nine months ended September 30, 2016 and 2015, the rental expense of Xi’an TCH was $183,843 and $300,923, respectively. For the three months ended September 30, 2016 and 2015, the rental expense of Xi’an TCH was $57,459 and $100,906, respectively. Future minimum annual rental payments required under operating leases as of September 30, 2016 were as below (by year): 2017 $ 256,313 2018 $ 128,156 Total $ 384,469 Construction Commitment Refer to Note 1 for additional details related to lease commitments with Chengli, Tianyu (and its subsidiaries Xuzhou Tian’an and Xuzhou Huayu), and Zhongtai and Note 8 for commitments on construction in progress. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Event [Abstract] | |
SUBSEQUENT EVENT | 21. SUBSEQUENT EVENTS Security Purchase Agreement On July 11, 2018, the Company entered into a Securities Purchase Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (the “Purchaser”), pursuant to which the Company sold and issued to the Purchaser a Convertible Promissory Note (the “Note”) in the amount of $1,070,000. The Purchaser purchased the Note with an original issue discount of $50,000, and the Company agreed to pay to the Purchaser $20,000 for fees and costs incurred by Purchaser in connection with the consummation of the Purchase Agreement. The Note was sold to the Purchaser pursuant to an exemption from registration under Regulation D, promulgated under the Securities Act of 1933, as amended. The Note bears interest at the rate of 8% per annum. All outstanding principal and accrued interest on the Note will become due and payable on July 11, 2020, subject to a potential one-year extension period during which interest would not accrue. The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay a 125% premium on any amounts outstanding under the Note. Amounts outstanding under the Note may be converted at any time, at the Lender’s option, into shares of the Company’s common stock at a conversion price of $3.00 per share, subject to certain adjustments. During the term of the Note, the Company shall not, without the prior written consent of the Purchaser, enter into or effect certain fundamental business transactions. The Purchaser has the option to redeem the Note at any time after the six month anniversary of the date when the purchase price is delivered to the Company (“Purchase Price Date”) in the amounts of up to 50% of the amount outstanding during the nine month period after Purchase Price Date or any percentage of the amount outstanding under the Note at any time after the nine month anniversary of Purchase Price Date, with such redemption amounts paid in cash or shares of the Company’s common stock, or a combination thereof, at the Company’s election. Acquisition of 18% of Xinhuan On September 30, 2018, Shanghai TCH entered into an Equity Purchase Agreement with Mr. Jihua Wang (“Seller”), pursuant to which Xi’an TCH shall acquire 20% of the outstanding equity interests (the “Acquired Interests”) of Xi’an Xinhuan Energy Co., Ltd. (“Xinhuan”). Pursuant to the Purchase Agreement, Shanghai TCH shall purchase the Acquired Interests for an aggregate purchase price of RMB 320 million ($46.72 million) (the “Purchase Price”), which shall be paid as follows: (i) in cash RMB 60 million ($8.76 million); (ii) in the form of 2.6 million shares of the Company’s common stock using a value of $1.90 per share; and (iii) in the form of 17,376,950 shares of the Company’s preferred stock using a value of $1.90 per share. The preferred shares shall have no voting rights but shall have preferential dividend rights to participate in and receive a 15% premium on a per share basis for any dividends declared and paid by the Company on its common stock. The holder of the preferred shares shall have the right to convert the preferred shares into shares of the Company’s common stock on a 1:1 basis after the six month anniversary of the issuance of the preferred shares, but the Holder may only exercise such conversion right to the extent that, after giving effect to the issuance of common stock after such conversion, the Holder would beneficially own less than 20% of the Company’s issued and outstanding common stock. The payment of the Purchase Price in the form of the 2.6 million shares of common stock and 17,376,950 shares of the Company’s preferred stock (the “Share Payment”) is contingent on the Company receiving shareholder approval at a special shareholders meeting for the Share Payment, and to create the new class of preferred shares and increase the number of authorized shares of common stock. The shares of common and preferred stock subject to the Share Payment shall be sold and issued pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. In the event that the Share Payment and other matters are not approved at a special meeting of the Company’s shareholders, the parties to the Purchase Agreement shall negotiate another form of payment for the remaining portion of the Purchase Price. The parties to the Purchase Agreement agreed to complete the transactions contemplated thereby within 60 days of the date of the Purchase Agreement or upon the approval of the shareholders of the Company, whichever comes later, and Seller agreed to various restrictions on, and covenants in relation to, its activities pending the completion of the sale of the Acquired Interests. On November 21, 2018, Shanghai TCH and Mr. Jihua Wang entered into an Agreement of Supplementary and Amendment (the “Amendment Agreement”) to that Equity Purchase Agreement, dated September 30, 2018, by and between Shanghai TCH and Mr. Jihua Wang (the “Original Agreement”). Pursuant to the Amendment Agreement, Shanghai TCH agreed to (a) purchase an 18% equity interest in Xi’an Xinhuan Energy Co., Ltd. (“Xinhuan”) instead of the 20% equity interest contemplated by the Original Agreement; (b) pay an aggregate of RMB 288 million for such equity interests (the “Purchase Price) instead of the RMB 320 million contemplated by the Original Agreement; (c) pay RMB 228 million of the Purchase Price in shares of the Company’s capital stock (the “Share Payment”) instead of the RMB 260 million contemplated by the Original Agreement; (d) complete the Share Payment using a per share value of $1.70 for both common and preferred shares instead of the $1.90 contemplated by the Original Agreement; and (e) issue to Mr. Wang 16,837,340 preferred shares as a portion of the Share Payment instead of the 17,376,950 preferred shares contemplated by the Original Agreement. On March 29, 2019, Shanghai TCH Energy Technology Co., Ltd (“Shanghai TCH”), a wholly owned subsidiary of China Recycling Energy Corporation (the “Company”) entered into a Termination Agreement (the “Termination Agreement”) of Equity Purchase Agreement and Supplementary Amendment Agreement with Mr. Jihua Wang. Shanghai TCH originally entered into an Equity Purchase Agreement dated on September 30, 2018 and Supplementary Amendment Agreement of Equity Purchase Agreement dated on November 21, 2018 with Mr. Wang (the “Original Agreements”) to purchase an 18% equity interest in Xi’an Xinhuan Energy Co., Ltd. from Mr. Wang, as disclosed in the Form 8-Ks filed on October 2, 2018 and November 26, 2018. Pursuant to the Termination Agreement, the parties agree to cancel and terminate the Original Agreement upon the effective date of the Termination Agreement. Parties agree not to pursue any breach of contract liability against each other under Original Agreements. Security Purchase Agreements On October 29, 2018, China Recycling Energy Corporation entered into Securities Purchase Agreements with certain purchasers, pursuant to which the Company will offer to the Purchasers, in a registered direct offering, an aggregate of 1,985,082 shares (the “Shares”) of the Company’s common stock. The Shares will be sold to the Purchasers at a negotiated purchase price of $1.375 per share, for aggregate gross proceeds to the Company of approximately $2.75 million, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. In a concurrent private placement, the Company is also issuing to the each of the Purchasers a warrant to purchase one (1) share of the Company’s Common Stock for each Share purchased under the Purchase Agreement, pursuant to that certain Common Stock Purchase Warrant, by and between the Company and each Purchaser, for a purchase price of $0.125 per Warrant and aggregate gross proceeds to the Company of approximately $250,000, before deducting fees to the placement agent and other estimated offering expenses payable by the Company. The Warrants will be exercisable on the date of issuance at an initial exercise price of $1.3725 per share and will expire on the five and a half year anniversary of the date of issuance. H.C. Wainwright & Co., LLC is acting as the Company’s exclusive placement agent in connection with the offerings under the Purchase Agreement and will receive an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company from the offerings, an aggregate of up to $75,000 for certain expenses and warrants to purchase our Common Stock in an amount equal to 7% of our Shares sold to the Purchasers in the offerings, or 138,956 shares of Common Stock, on substantially the same terms as the Warrants, with an initial exercise price of $1.875 per share and expiration date of October 29, 2023 (the “Placement Agent Warrants”). Repayment of HYREF loan On December 29, 2018, Xi’an Zhonghong, Xi’an TCH, Beijing Hongyuan Recycling Energy Investment Center, LLP (the “HYREF”), Guohua Ku, the Chairman and CEO of the Company, and Chonggong Bai entered into a CDQ WHPG Station Fixed Assets Transfer Agreement, pursuant to which Xi’an Zhonghong will transfer a CDQ WHPG station as the repayment of loan at RMB 188,639,400 (approximately US $27,538,598) to HYREF. Xi’an Zhonghong, Xi’an TCH, Guohua Ku and Chonggong Bai also agreed to buy back the CDQ WHPG Station when conditions under the Buy Back Agreement are met. On December 29, 2018, Xi’an TCH, Xi’an Zhonghong, HYREF, Guohua Ku, Chonggong Bai and Xi’an Hanneng Enterprises Management Consulting Co. Ltd. (“Xi’an Hanneng”) entered into a Buy Back Agreement. Pursuant to the Buy Back Agreement, Xi’an TCH, Xi’an Zhonghong, Guohua Ku and Chonggong Bai (the “Buyers”) jointly and severally agreed to buy back all outstanding capital equity of Xi’an Hanneng which was transferred to HYREF by Chonggong Bai, and a CDQ WHPG station in Boxing County which was transferred to HYREF by Xi’an Zhonghong. The buy-back price for the Xi’an Hanneng’s equity will be the higher of (i) the market price of the equity shares at the time of buy-back; or (ii) the original transfer price of the equity shares plus bank interest. HYREF may request that the Buyers buy back the equity shares of Xi’an Hanneng and/or the CDQ WHPG station if one of the following conditions is met: (i) HYREF holds the equity shares of Xi’an Hanneng until December 31, 2021; (ii) Xi’an Huaxin New Energy Co., Ltd., a subsidiary of Xi’an Hanneng is delisted from The National Equities Exchange And Quotations Co., Ltd., a Chinese over-the-counter trading system (the “NEEQ”); (iii) any of the Buyers or its affiliates has a credit problem, including not being able to issue an auditor report or standard auditor report or any control person or executive of the Buyers is involved in crimes and is under prosecution or has other material credit problems, to HYREF’s reasonable belief; (iv) if Xi’an Zhonghong fails to timely make repayment on principal or interest of the loan agreement, its supplemental agreement or extension agreement; (v) the Buyers or any party to the Debt Repayment Agreement materially breaches the Debt Repayment Agreement or its related transaction documents, including but not limited to the Share Transfer Agreement, the Pledged Assets Transfer Agreement, the Entrusted Loan Agreement and their guarantee agreements and supplemental agreements. On December 29, 2018, Xi’an TCH entered into a Share Transfer Agreement with Hongyuan Huifu Venture Capital Co. Ltd (“Hongyuan Huifu”), pursuant to which Xi’an TCH agreed to transfer its 40% ownership in Hongyuan Recycling Energy Investment Management Beijing Co., Ltd. (the “Fund Management Company”) to Hongyuan Huifu for consideration of RMB 3,453,867.31 (approximately US $504,214) (the “Fund Management Company Transfer Price”). On December 29, 2018, Xi’an TCH, Hongyuan Huifu and Fund Management Company entered into a supplemental agreement to the Share Transfer Agreement. Xi’an TCH owes the Fund Management Company RMB 18,306,666,67 (approximately US $2,672,506) in financial advisory fees, and the parties agreed that the Fund Management Company Transfer Price could be used to off-set the outstanding financial advisory fees. Upon the completion of this transaction, the Fund Management Company will owe RMB 3,453,867.31 to Hongyuan Huifu, and Xi’an TCH will owe RMB 14,852,799.36 (approximately US $2,168,291) to the Fund Management Company. On December 29, 2018, Shanghai TCH entered into a Share Transfer Agreement with Hongyuan Huifu, pursuant to which Hongyuan Huifu agreed to transfer its 10% ownership in Xi’an Zhonghong to Shanghai TCH for consideration of RMB 3 million (approximately US $437,956). On January 4, 2019, Xi’an Zhonghong, Xi’an TCH, and Mr. Chonggong Bai, a resident of China, entered into a Projects Transfer Agreement (the “Agreement”), pursuant to which Xi’an Zhonghong will transfer a CDQ WHPG station (under construction) located in Xuzhou City for Xuzhou Huayu Coking Co., Ltd. (“Xuzhou Huayu Project”) to Mr. Bai for RMB 120,000,000 (US$17,518,248) and Xi’an TCH will transfer two Biomass Power Generation Projects in Shenqiu (“Shenqiu Phase I and II Projects”) to Mr. Bai for RMB 127,066,000 (approximately US$18,549,781). Mr. Bai agreed to transfer all the equity shares of his wholly owned company, Xi’an Hanneng Enterprises Management Consulting Co. Ltd. (“Xi’an Hanneng”) to Beijing Hongyuan Recycling Energy Investment Center, LLP (the “HYREF”) as repayment for the RMB 247,066,000 (US$36,068,029) loan made by Xi’an Zhonghong to HYREE as consideration for the transfer of the Xuzhou Huayu Project and Shenqiu Phase I and II Projects. On January 22, 2019, Xi’an TCH completed the transaction contemplated in a Share Transfer Agreement (the “Fund Management Company Share Transfer Agreement”) which was entered on December 29, 2018. Pursuant to the Fund Management Company Share Transfer Agreement, Xi’an TCH transferred its 40% ownership in Hongyuan Recycling Energy Investment Management Beijing Co., Ltd. to Hongyuan Huifu Venture Capital Co. Ltd (“Hongyuan Huifu”) for consideration of RMB 3,453,867.31 (approximately US $504,214). On January 22, 2019, Shanghai TCH contemplated in a Share Transfer Agreement (the “Xi’an Zhonghong Share Transfer Agreement”) which was entered on December 29, 2018. Pursuant to the Xi’an Zhonghong Share Transfer Agreement, Hongyuan Huifu transferred its 10% ownership in Xi’an Zhonghong New Energy Technology Co., Ltd. to Shanghai TCH for consideration of RMB 3 million (approximately US $437,956). On January 22, 2019, Xi’an Zhonghong, completed the transaction contemplated in a CDQ WHPG Station Fixed Assets Transfer Agreement (the “Fixed Assets Transfer Agreement”) which was entered on December 29, 2018. Pursuant to the Fixed Assets Transfer Agreement, Xi’an Zhonghong transferred a CDQ WHPG station to Beijing Hongyuan Recycling Energy Investment Center, LLP (“HYREF”) as the repayment of a loan for RMB 188,639,400 (approximately US $27,538,598) owed to HYREF. Xi’an TCH is a secondary limited partner of HYREF. The consideration of the CDQ WHPG station is determined by the parties based upon the appraisal report issued by Zhonglian Assets Appraisal Group (Shaanxi) Co., Ltd. as of August 15, 2018. On February 15, 2019, Xi’an TCH and Xi’an Zhonghong completed the transfer of assets contemplated in a Projects Transfer Agreement (the “Agreement”) which was entered on January 4, 2019. Pursuant to the Agreement, Xi’an Zhonghong transferred a CDQ WHPG station (under construction) located in Xuzhou City for Xuzhou Huayu Coking Co., Ltd. (“Xuzhou Huayu Project”) to Mr. Chonggong Bai for RMB 120,000,000 (US$17,518,248) and Xi’an TCH transferred two Biomass Power Generation Projects in Shenqiu (“Shenqiu Phase I and II Projects”) to Mr. Bai for RMB 127,066,000 (approximately US$18,549,781). Mr. Bai agreed to transfer all the equity shares of his wholly owned company, Xi’an Hanneng to Beijing Hongyuan Recycling Energy Investment Center, LLP (the “HYREF”) as repayment by Xi’an Zhonghong for the RMB 247,066,000 (US$36,068,029) loan to HYREE as consideration for the transfer of the Xuzhou Huayu Project and Shenqiu Phase I and II Projects. Securities Purchase Agreement On January 31, 2019, the Company entered into a Securities Purchase Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (the “Purchaser”), pursuant to which the Company sold and issued to the Purchaser a Convertible Promissory Note (the “Note”) in the amount of $1,050,000. The Purchaser purchased the Note with an original issue discount of $50,000. The Note was sold to the Purchaser pursuant to an exemption from registration under Regulation D, promulgated under the Securities Act of 1933, as amended. The Note bears interest at the rate of 8% per annum. All outstanding principal and accrued interest on the Note will become due and payable on January 30, 2021, subject to a potential one-year extension period during which interest would not accrue. The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay a 125% premium on any amounts outstanding under the Note. Amounts outstanding under the Note may be converted at any time, at the Lender’s option, into shares of the Company’s common stock at a conversion price of $3.00 per share, subject to certain adjustments. On February 13, 2019, China Recycling Energy Corporation entered into a Securities Purchase Agreement (the “Agreement”) with Great Essential Investment, Ltd. a company incorporated in the British Virgin Islands (the “Purchaser”), pursuant to which the Company agreed to sell to the Purchaser in a private placement 1,600,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “ Common Stock Private Placement On February 27, 2019, the Company entered into a Securities Purchase Agreement with Iliad Research and Trading, L.P., a Utah limited partnership (the “Purchaser”), pursuant to which the Company sold and issued to the Purchaser a Convertible Promissory Note (the “Note”) in the amount of $1,050,000. The Purchaser purchased the Note with an original issue discount of $50,000. The Note was sold to the Purchaser pursuant to an exemption from registration under Regulation D, promulgated under the Securities Act of 1933, as amended. The Note bears interest at the rate of 8% per annum. All outstanding principal and accrued interest on the Note will become due and payable on February 26, 2021, subject to a potential one-year extension period during which interest would not accrue. The Company’s obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay a 125% premium on any amounts outstanding under the Note. Amounts outstanding under the Note may be converted at any time, at the Lender’s option, into shares of the Company’s common stock at a conversion price of $3.00 per share, subject to certain adjustments. |
Restatement
Restatement | 9 Months Ended |
Sep. 30, 2016 | |
Restatement [Abstract] | |
RESTATEMENT | 22. RESTATEMENT On April 28, 2016, Erdos TCH and Erdos entered a supplemental agreement, effective on May 1, 2016, Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / Kwh. The Company evaluated the modified terms for payments based on actual electricity sold as minimum lease payments as defined in ASC 840-10-25-4, since lease payments that depend on a factor directly related to the future use of the leased property are contingent rentals and are excluded from minimum lease payments in their entirety; accordingly, the Company wrote off the net investment receivables of these leases at lease modification date. The consolidated financial statements for the nine and three months ended September 30, 2016 and as of September 30, 2016 were restated to reflect the above determination. The following table presents the effects of the restatement on the accompanying consolidated balance sheet at September 30, 2016: As Previously Restated Net Accounts receivable 25,062,146 25,723,889 661,743 Current portion of investment in sales-type leases, net 6,948,365 6,973,954 25,589 Interest receivable on sales-type leases 3,320,420 3,094,017 (226,403 ) Other receivables 873,448 387,477 (485,971 ) Investment in sales-type leases, net 109,728,463 52,512,266 (57,216,197 ) Total assets 277,533,892 220,292,653 (57,241,239 ) Deferred tax liability, net (current) 1,089,690 1,103,309 13,619 Deferred tax liability, net (non-current) 8,811,021 2,578,984 (6,232,037 ) Total liabilities 66,981,515 60,763,097 (6,218,418 ) Statutory reserve 14,448,084 14,210,589 (237,495 ) Accumulated other comprehensive income (2,689,316 ) (2,589,793 ) 99,523 Retained earnings 87,015,098 36,130,249 (50,884,849 ) Total company stockholders’ equity 210,571,342 159,548,521 (51,022,821 ) Total liabilities and equity 277,533,892 220,292,653 (57,241,239 ) The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the nine months ended September 30, 2016: As Previously Reported Restated Net Adjustment Contingent rental income - 2,791,444 2,791,444 Cost of sales - - - Gross profit - 2,791,444 2,791,444 Interest income on sales-type leases 10,945,411 9,879,962 (1,065,449 ) Total operating income 10,945,411 12,671,406 1,725,995 General and administrative expenses 1,153,894 3,064,746 1,910,852 Impairment loss of net investment receivable 57,168,035 57,168,035 Income (loss) from operations 9,791,517 (47,561,375 ) (57,352,892 ) Income (loss) before income tax 1,888,854 (55,464,038 ) (57,352,892 ) Income tax benefit (861,811 ) (7,092,359 ) (6,230,548 ) Net income (loss) attributable to China Recycling Energy Corporation 2,977,791 (48,144,553 ) (51,122,344 ) Foreign currency translation gain (loss) (5,899,631 ) (5,800,108 ) 99,523 Comprehensive loss attributable to China Recycling Energy Corporation (2,921,840 ) (53,944,661 ) (51,022,821 ) The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the three months ended September 30, 2016: As Previously Reported Restated Net Adjustment Contingent rental income - 1,683,723 1,683,723 Cost of Sales - - - Gross profit - 1,683,723 1,683,723 Interest income on sales-type leases 2,286,948 1,682,428 (604,520 ) Total operating income 2,286,948 3,366,151 1,079,203 General and administrative expense 299,110 1,431,719 1,132,609 Impairment loss of net investment receivable (1,184,209 ) (1,184,209 ) Income from operations 1,987,838 3,118,641 1,130,803 Income before income tax 567,875 1,698,678 1,130,803 Income tax expense (benefit) 110,957 88,926 (22,031 ) Net income attributable to China Recycling Energy Corporation 536,839 1,689,673 1,152,834 Foreign currency translation loss (1,400,319 ) (2,096,212 ) (695,893 ) Comprehensive income (loss) attributable to China Recycling Energy Corporation (863,480 ) (406,539 ) 456,941 The following table presents the effects of the restatement on the accompanying consolidated statement of cash flows for the nine months ended September 30, 2016: As Previously Restated Net Income including noncontrolling interest 2,750,665 (48,371,679 ) (51,122,344 ) Impairment loss of net investment receivable - 57,168,035 57,168,035 Changes in deferred tax (2,073,235 ) (8,303,783 ) (6,230,548 ) Interest receivable on sales type leases (2,785,713 ) (2,600,856 ) 184,857 Net cash provided by operating activities 30,432,764 30,432,764 - |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited financial statements included herein were prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) that are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) were omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s 2015 audited financial statements included in the Company’s Annual Report on Form 10-K. The results for the nine months ended September 30, 2016 are not necessarily indicative of the results expected for the full year ending December 31, 2016. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of CREG and its subsidiaries, Shanghai Yinghua Financial Leasing Co., Ltd. (“Yinghua”) and Sifang Holdings, its wholly owned subsidiaries, Huahong New Energy Technology Co., Ltd. (“Huahong”) and Shanghai TCH, Shanghai TCH’s wholly-owned subsidiary, Xi’an TCH Energy Tech Co., Ltd. (“Xi’an TCH”) and Xi’an TCH’s subsidiaries, Erdos TCH Energy Saving Development Co., Ltd (“Erdos TCH”), 100% owned by Xi’an TCH (See note 1), Zhonghong, 90% owned by Xi’an TCH, and Zhongxun, 100% owned by Xi’an TCH. Substantially all of the Company’s revenues are derived from the operations of Shanghai TCH and its subsidiaries, which represent substantially all of the Company’s consolidated assets and liabilities as of September 30, 2016 and December 31, 2015, respectively. All significant inter-company accounts and transactions were eliminated in consolidation. |
Use of Estimates | Use of Estimates In preparing these consolidated financial statements in accordance with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets as well as revenues and expenses during the period reported. Actual results may differ from these estimates. |
Revenue Recognition | Revenue Recognition Sales-type Leasing and Related Revenue Recognition The Company constructs and leases waste energy recycling power generating projects to its customers. The Company typically transfers ownership of the waste energy recycling power generating projects to its customers at the end of the lease. The investment in these projects is recorded as investment in sales-type leases in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 840 , “Lease ,” |
Contingent rental income | Contingent Rental Income The Company records income from actual electricity usage in addition to minimum lease payments of each project as contingent rental income in the period contingent rental income is earned. Contingent rent is not part of minimum lease payments. |
Cash and Equivalents | Cash and Equivalents Cash and equivalents includes cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. |
Accounts Receivable | Accounts Receivable As of September 30, 2016, the Company had accounts receivable of $25,723,889 (mainly from sale of CDQ and a CDQ WHPG system to Rongfeng and sale of CDQ and a CDQ WHPG system to Zhongtai) . As of December 31, 2015, the Company had accounts receivable of $15,399,778 (mainly from sale of CDQ and a CDQ WHPG system to Rongfeng), respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method over the estimated lives as follows: Building 20 years Vehicles 2 - 5 years Office and Other Equipment 2 - 5 years Software 2 - 3 years |
Impairment of Long-life Assets | Impairment of Long-lived Assets In accordance with FASB ASC Topic 360, “Property, Plant, and Equipment |
Notes Payable - Banker's Acceptances | Notes Payable – Banker’s Acceptances The Company endorses banker’s acceptances that are issued from a bank to vendors as payment for its obligations. Most of the banker’s acceptances have maturity dates of less than six months following their issuance. |
Cost of sales | Cost of Sales Cost of sales consists primarily of the direct material of the power generating system and expenses incurred directly for project construction for sales-type leasing and sales tax and additions for contingent rental income. |
Noncontrolling Interests | Noncontrolling Interests The Company follows FASB ASC Topic 810, “Consolidation,” The net income (loss) attributed to NCIs was separately designated in the accompanying statements of income and comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, other receivables, accounts payable, accrued liabilities and short-term debts, the carrying amounts approximate their fair values due to their short maturities. Receivables on sales-type leases are based on interest rates implicit in the lease. FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” “Financial Instruments,” ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to FV measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” “Derivatives and Hedging.” The following are the considerations with respect to disclosures of FV of long-term debt obligations: As of September 30, 2016, the Company’s long-term debt obligations consisted of the Zhonghong entrusted loan of $49.72 million. As of December 31, 2015, the Company’s long-term debt obligations consisted of the following: (i) various long-term bank loans and Zhongrong International Trust Co., Ltd. (“ZRIT”) trust loan payable of $18.19 million, and (ii) Zhonghong entrusted loan of $58.83 million. FV measurements and approximations for certain financial instruments are based on what a reporting entity would likely have to pay to transfer the financial obligation to an entity with a comparable credit rating. The Company’s bank loans and trust loans payable are privately held (i.e., nonpublic) debt; therefore, pricing inputs are not observable. For this reason, the Company classified bank loans and trust loans payable as a Level 3 FV measurement in the valuation hierarchy. For the Company’s long-term bank loans, ZRIT trust loan and Zhonghong entrusted loans noted above, the Company believes the carrying amounts approximate their FV. Based on the Company’s understanding of the credit markets, the Company’s business is in a sector (energy-saving green) that is supported by the PRC government and the lending bank, the Company believes it could have obtained similar loans on similar terms and interest rates. In addition, in connection with the FV measurement, the Company considered nonperformance risk (including credit risk) relating to the debt obligations, including the following: (i) the Company is considered a low credit risk customer to the lending bank and its creditors; (ii) the Company has a good history of making timely payments and have never defaulted on any loans; and (iii) the Company has a stable and continuous cash inflow from collections from its sales-type lease of energy saving projects. As of September 30, 2016 and December 31, 2015, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at FV. |
Stock Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation in accordance with FASB ASC Topic 718 “Compensation—Stock Compensation,” Equity.” |
Basic and diluted earnings per share | Basic and Diluted Earnings per Share The Company presents net income (loss) per share (“EPS”) in accordance with FASB ASC Topic 260, “Earning Per Share.” The following table presents a reconciliation of basic and diluted EPS for the nine and three months ended September 30, 2016 and 2015: Nine Months Ended Three Months Ended 2016 2015 2016 2015 Net income $ (48,144,553 ) $ 18,681,506 $ 1,689,673 $ 3,266,591 Weighted average shares outstanding – basic 8,310,198 8,308,019 8,310,198 8,308,404 Effect of dilutive securities: Options granted - - - - Weighted average shares outstanding – diluted 8,310,198 8,308,019 8,310,198 8,308,404 Earnings (loss) per share – basic $ (5.79 ) $ 2.25 $ 0.20 $ 0.39 Earnings (loss) per share – diluted $ (5.79 ) $ 2.25 $ 0.20 $ 0.39 |
Foreign Currency Translation and Comprehensive Income (Loss) | Foreign Currency Translation and Comprehensive Income (Loss) The Company’s functional currency is the Renminbi (“RMB”). For financial reporting purposes, RMB were translated into United States Dollars (“USD” or “$”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated other comprehensive income.” Gains and losses resulting from foreign currency transactions are included in income. There was no significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date. The Company uses FASB ASC Topic 220, “Comprehensive Income.” |
Segment Reporting | Segment Reporting FASB ASC Topic 280, “Segment Reporting,” |
New Accounting Pronouncements | New Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842). The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its Consolidated Financial Statements. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of property and equipment estimated lives | Building 20 years Vehicles 2 - 5 years Office and Other Equipment 2 - 5 years Software 2 - 3 years |
Schedule of reconciliation of basic and diluted earnings per share | Nine Months Ended Three Months Ended 2016 2015 2016 2015 Net income $ (48,144,553 ) $ 18,681,506 $ 1,689,673 $ 3,266,591 Weighted average shares outstanding – basic 8,310,198 8,308,019 8,310,198 8,308,404 Effect of dilutive securities: Options granted - - - - Weighted average shares outstanding – diluted 8,310,198 8,308,019 8,310,198 8,308,404 Earnings (loss) per share – basic $ (5.79 ) $ 2.25 $ 0.20 $ 0.39 Earnings (loss) per share – diluted $ (5.79 ) $ 2.25 $ 0.20 $ 0.39 |
Investment in Sales-Type Leas_2
Investment in Sales-Type Leases, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investment in Sales-Type Leases, Net [Abstract] | |
Schedule of components of net investment in sales-type leases | 2016 2015 Total future minimum lease payments receivable $ 100,646,920 $ 387,612,418 Less: executory cost (5,654,150 ) (93,054,738 ) Less: unearned interest income (35,506,550 ) (154,799,027 ) Investment in sales-type leases, net 59,486,220 139,758,653 Current portion 6,973,954 6,679,019 Noncurrent portion $ 52,512,266 $ 133,079,634 |
Schedule of future minimum rentals to be received on non-cancelable sales-type leases by years | 2017 $ 18,074,815 2018 12,758,693 2019 12,758,693 2020 12,758,693 2021 12,758,693 Thereafter 31,537,333 Total $ 100,646,920 |
Construction in Progress (Table
Construction in Progress (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Construction in Progress [Abstract] | |
Schedule of construction in progress | 2016 2015 Xuzhou Zhongtai - 28,100,201 Xuzhou Huayu 29,633,538 29,752,270 Xuzhou Tian’an 28,469,454 26,909,193 Boxing County Chengli 30,900,260 30,760,404 Total $ 89,003,252 $ 115,522,068 |
Taxes Payable (Tables)
Taxes Payable (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Taxes Payable [Abstract] | |
Schedule of taxes payable | 2016 2015 Income $ 165,396 $ 405,431 Business - 249,141 VAT 638,899 369,595 Other 50,134 34,250 Total $ 854,429 $ 1,058,417 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Payables (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Liabilities and Other Payables [Abstract] | |
Schedule of accrued liabilities and other payables | 2016 2015 Employee training, labor union expenditure and social insurance payable $ 729,244 $ 749,930 Consulting, auditing, and legal expenses 1,841,927 1,342,395 Accrued payroll and welfare 271,522 278,819 Accrued interest expense 1,182 682,949 Other 6,777 145,302 Total $ 2,850,652 $ 3,199,395 |
Deferred Tax Liability, Net (Ta
Deferred Tax Liability, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Deferred Tax Liability, Net [Abstract] | |
Schedule of deferred tax liability | 2016 2015 Deferred tax asset — current (accrual of employee social insurance) $ 159,431 $ 98,372 Deferred tax liability — current (net investment in sales-type leases) (1,262,740 ) (1,636,477 ) Deferred tax liability, net of deferred tax asset – current $ (1,103,309 ) $ (1,538,105 ) Deferred tax asset — noncurrent (depreciation of fixed assets) $ 10,549,083 $ 22,498,560 Deferred tax liability — noncurrent (net investment in sales-type leases) (13,128,067 ) (33,269,908 ) Deferred tax liability, net of deferred tax asset – noncurrent $ (2,578,984 ) $ (10,771,348 ) |
Loans Payable (Tables)
Loans Payable (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Loans Payable [Abstract] | |
Schedule of future minimum payment to be made by years | 2017 $ 50,166,223 2018 299,500 Total $ 50,465,723 |
Income Tax (Tables)
Income Tax (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax [Abstract] | |
Schedule of reconciliation of U.S. statutory rates to effective tax rate | Nine Months Three Months 2016 2015 2016 2015 U.S. statutory rates (34.0 )% 34.0 % 34.0 % 34.0 % Tax rate difference – current provision 8.9 % (9.3 )% (9.5 )% (9.3 )% Effective tax holiday - % (7.9 )% - % (6.4 )% Other 0.1 % (3.6 )% 5.9 % - % Prior periods income tax adjustment per income tax return filed - % - % (0.2 )% - % Valuation allowance on PRC NOL 11.9 % - % (27 )% - % Valuation allowance on US NOL 0.3 % 1.0 % 2.0 % 1.3 % Tax per financial statements (12.8 )% 14.2 % 5.2 % 19.6 % |
Schedule of provision for income tax expenses | Nine Months Three Months 2016 2015 2016 2015 Income tax expense – current $ 1,211,424 $ 4,466,774 $ 305,516 $ 730,828 Income tax expense (benefit) - deferred (8,303,783 ) (1,370,648 ) (216,590 ) 65,835 ) Total income tax expense (benefit) $ (7,092,359 ) $ 3,096,126 $ 88,926 $ 796,663 |
Stock-Based Compensation Plan (
Stock-Based Compensation Plan (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation Plan [Abstract] | |
Schedule of option activity | Number of Average Exercise Price per Share Weighted Outstanding at January 1, 2015 8,000 $ 38.3 0.31 Exercisable at January 1, 2015 8,000 38.3 0.31 Granted 4,000 10.2 4.77 Exercised - - - Forfeited 8,000 - - Outstanding at December 31, 2015 4,000 10.2 4.77 Exercisable at December 31, 2015 4,000 10.2 4.77 Granted - - - Exercised - - - Forfeited - - - Outstanding at September 30, 2016 4,000 10.2 4.02 Exercisable at September 30, 2016 4,000 $ 10.2 4.02 |
Commitments (Tables)
Commitments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments [Abstract] | |
Schedule of future minimum rental payments required under operating leases | 2017 $ 256,313 2018 $ 128,156 Total $ 384,469 |
Restatement (Tables)
Restatement (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restatement [Abstract] | |
Schedule of restatement on consolidated balance sheet | As Previously Restated Net Accounts receivable 25,062,146 25,723,889 661,743 Current portion of investment in sales-type leases, net 6,948,365 6,973,954 25,589 Interest receivable on sales-type leases 3,320,420 3,094,017 (226,403 ) Other receivables 873,448 387,477 (485,971 ) Investment in sales-type leases, net 109,728,463 52,512,266 (57,216,197 ) Total assets 277,533,892 220,292,653 (57,241,239 ) Deferred tax liability, net (current) 1,089,690 1,103,309 13,619 Deferred tax liability, net (non-current) 8,811,021 2,578,984 (6,232,037 ) Total liabilities 66,981,515 60,763,097 (6,218,418 ) Statutory reserve 14,448,084 14,210,589 (237,495 ) Accumulated other comprehensive income (2,689,316 ) (2,589,793 ) 99,523 Retained earnings 87,015,098 36,130,249 (50,884,849 ) Total company stockholders’ equity 210,571,342 159,548,521 (51,022,821 ) Total liabilities and equity 277,533,892 220,292,653 (57,241,239 ) |
Schedule of restatement on consolidated statement of income and comprehensive income | The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the nine months ended September 30, 2016: As Previously Reported Restated Net Adjustment Contingent rental income - 2,791,444 2,791,444 Cost of sales - - - Gross profit - 2,791,444 2,791,444 Interest income on sales-type leases 10,945,411 9,879,962 (1,065,449 ) Total operating income 10,945,411 12,671,406 1,725,995 General and administrative expenses 1,153,894 3,064,746 1,910,852 Impairment loss of net investment receivable 57,168,035 57,168,035 Income (loss) from operations 9,791,517 (47,561,375 ) (57,352,892 ) Income (loss) before income tax 1,888,854 (55,464,038 ) (57,352,892 ) Income tax benefit (861,811 ) (7,092,359 ) (6,230,548 ) Net income (loss) attributable to China Recycling Energy Corporation 2,977,791 (48,144,553 ) (51,122,344 ) Foreign currency translation gain (loss) (5,899,631 ) (5,800,108 ) 99,523 Comprehensive loss attributable to China Recycling Energy Corporation (2,921,840 ) (53,944,661 ) (51,022,821 ) The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the three months ended September 30, 2016: As Previously Reported Restated Net Adjustment Contingent rental income - 1,683,723 1,683,723 Cost of Sales - - - Gross profit - 1,683,723 1,683,723 Interest income on sales-type leases 2,286,948 1,682,428 (604,520 ) Total operating income 2,286,948 3,366,151 1,079,203 General and administrative expense 299,110 1,431,719 1,132,609 Impairment loss of net investment receivable (1,184,209 ) (1,184,209 ) Income from operations 1,987,838 3,118,641 1,130,803 Income before income tax 567,875 1,698,678 1,130,803 Income tax expense (benefit) 110,957 88,926 (22,031 ) Net income attributable to China Recycling Energy Corporation 536,839 1,689,673 1,152,834 Foreign currency translation loss (1,400,319 ) (2,096,212 ) (695,893 ) Comprehensive income (loss) attributable to China Recycling Energy Corporation (863,480 ) (406,539 ) 456,941 |
Schedule of restatement on consolidated statement of cash flows | As Previously Restated Net Income including noncontrolling interest 2,750,665 (48,371,679 ) (51,122,344 ) Impairment loss of net investment receivable - 57,168,035 57,168,035 Changes in deferred tax (2,073,235 ) (8,303,783 ) (6,230,548 ) Interest receivable on sales type leases (2,785,713 ) (2,600,856 ) 184,857 Net cash provided by operating activities 30,432,764 30,432,764 - |
Organization and Description _2
Organization and Description of Business (Details) | Jul. 11, 2016USD ($) | Jun. 22, 2016USD ($) | Jun. 22, 2016CNY (¥) | Feb. 11, 2015USD ($) | Dec. 12, 2013 | Dec. 06, 2013 | Sep. 11, 2013USD ($)$ / sharesshares | Sep. 11, 2013CNY (¥) | Jun. 10, 2013USD ($) | Jun. 10, 2013CNY (¥) | Oct. 08, 2012USD ($)MW | Oct. 08, 2012CNY (¥)MW | Apr. 14, 2009CNY (¥) | May 31, 2016USD ($) | May 31, 2016CNY (¥) | May 25, 2016 | Apr. 30, 2016USD ($) | Apr. 30, 2016CNY (¥) | Mar. 31, 2016USD ($) | Mar. 31, 2016CNY (¥) | Dec. 31, 2015USD ($)$ / shares | Nov. 16, 2015USD ($) | Nov. 16, 2015CNY (¥) | Jun. 18, 2015 | May 29, 2015USD ($) | May 29, 2015CNY (¥) | Mar. 26, 2014USD ($) | Mar. 26, 2014CNY (¥) | Mar. 24, 2014USD ($) | Jul. 31, 2013USD ($) | Jul. 24, 2013 | Jul. 19, 2013USD ($) | Jul. 19, 2013CNY (¥) | Jul. 18, 2013USD ($) | Jun. 30, 2013 | Jun. 25, 2013USD ($) | Jun. 15, 2013USD ($) | May 31, 2013USD ($)MW | May 31, 2013CNY (¥)MW | Sep. 28, 2011USD ($)MW | Sep. 28, 2011CNY (¥)MW | Feb. 28, 2011CNY (¥)MW | Jun. 29, 2010USD ($)MW | Jun. 29, 2010CNY (¥)MW | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Sep. 30, 2016USD ($)$ / sharesMW | Sep. 30, 2016CNY (¥)MW | Sep. 30, 2015USD ($) | Sep. 30, 2016CNY (¥) | May 29, 2015CNY (¥) | Jun. 28, 2014USD ($)$ / sharesshares | Jun. 28, 2014CNY (¥)shares | Mar. 24, 2014CNY (¥) | Sep. 11, 2013CNY (¥)shares | Aug. 31, 2013USD ($) | Jul. 22, 2013USD ($) | Jul. 22, 2013CNY (¥) | Jul. 19, 2013CNY (¥) | Jul. 18, 2013CNY (¥) | Jun. 25, 2013CNY (¥) | May 31, 2013CNY (¥) | Oct. 08, 2012CNY (¥) | May 25, 2011USD ($) | May 25, 2011CNY (¥) | Feb. 28, 2011USD ($) | Feb. 28, 2011CNY (¥) | Apr. 14, 2009USD ($) | Apr. 14, 2009CNY (¥) |
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction cost | $ 2,719 | $ 21,323,089 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Contract Price For Materials Equipment | $ 40,320,000 | ¥ 250,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Security deposit | $ 338,079 | ¥ 2,130,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Investment Income Receivable | 13,370,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share price | $ / shares | $ 1.37 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of lease term | (i) BMPG systems to Pucheng Phase I and II (15 and 11 year terms, respectively); (ii) BMPG systems to Shenqiu Phase I (11-year term); and (iii) Shenqiu Phase II (9.5-year term). In addition, as of September 30, 2016, Erdos TCH leased power and steam generating systems from waste heat from metal refining to Erdos (five systems) for a term of 20 years. | (i) BMPG systems to Pucheng Phase I and II (15 and 11 year terms, respectively); (ii) BMPG systems to Shenqiu Phase I (11-year term); and (iii) Shenqiu Phase II (9.5-year term). In addition, as of September 30, 2016, Erdos TCH leased power and steam generating systems from waste heat from metal refining to Erdos (five systems) for a term of 20 years. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments to Xian TCH | $ 25,770,000 | ¥ 167,360,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business combination, Contingent consideration arrangements, Description | (a) RMB 50,000,000 ($7.70 million) should be paid by Zhongtai to Xian TCH within 20 business days after the Transfer Agreement is signed, (b) RMB 30,000,000 ($4.62 million) will be paid by Zhongtai to Xian TCH within 20 business days after the Project is completed, but no later than July 30, 2016 and (c) RMB 87,360,000 ($13.45 million) will be paid by Zhongtai to Xian TCH no later than July 30, 2017. | (a) RMB 50,000,000 ($7.70 million) should be paid by Zhongtai to Xian TCH within 20 business days after the Transfer Agreement is signed, (b) RMB 30,000,000 ($4.62 million) will be paid by Zhongtai to Xian TCH within 20 business days after the Project is completed, but no later than July 30, 2016 and (c) RMB 87,360,000 ($13.45 million) will be paid by Zhongtai to Xian TCH no later than July 30, 2017. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First payment received | $ 7,700,000 | ¥ 50,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse stock split | Options reflected 10:1 reverse split | 1-for-10 reverse stock split | 1-for-10 reverse stock split | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rongfeng [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term contract for purchase of electric power, Description | Rongfeng will start to pay an energy saving service fee from the date when the WHPG station passes the required 72 hour test run. The payment term is 20 years. For the first 10 years, Rongfeng shall pay an energy saving service fee at RMB 0.582 ($0.095) per kilowatt hour (including tax) for the power generated from the system. For the second 10 years, Rongfeng shall pay an energy saving service fee at RMB 0.432 ($0.071) per kWh (including tax). During the term of the contract the energy saving service fee shall be adjusted at the same percentage as the change of local grid electricity price. Rongfeng and its parent company will provide guarantees to ensure Rongfeng will fulfill its obligations under the Rongfeng Agreement. Upon the completion of the term, Xi'an TCH will transfer the systems to Rongfeng at RMB 1. Rongfeng shall provide waste heat to the systems for no less than 8,000 hours per year with a temperature no less than 950°C. If these requirements are not met, the term of the Agreement will be extended accordingly. If Rongfeng wants to terminate the Agreement early, it shall provide Xi'an TCH a 60 day notice and pay the termination fee and compensation for the damages to Xi'an TCH according to the following formula: 1) if it is less than five years (including five years) into the term when Rongfeng requests termination, Rongfeng shall pay: Xi'an TCH's total investment amount plus Xi'an TCH's average annual investment return times (five years minus the years of which the system has already operated); 2) if it is more than five years into the term when Rongfeng requests the termination, Rongfeng shall pay: Xi'an TCH's total investment amount minus total amortization cost (the amortization period is 10 years). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Zhongtai [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term contract for purchase of electric power, Description | The construction period of the Project is expected to be 18 months from the date when conditions are ready for construction to begin. Zhongtai will start to pay an energy saving service fee from the date when the WHPG station passes the required 72 hour test run. The payment term is 20 years. For the first 10 years, Zhongtai shall pay an energy saving service fee at RMB 0.534 ($0.089) per kilowatt hour (including value added tax) for the power generated from the system. For the second 10 years, Zhongtai shall pay an energy saving service fee at RMB 0.402 ($0.067) per kilowatt hour (including value added tax). During the term of the contract the energy saving service fee shall be adjusted at the same percentage as the change of local grid electricity price. Zhongtai shall also pay an energy saving service fee for the steam supplied by Xi'an TCH at RMB 100 ($16.67) per ton (including value added tax). Zhongtai and its parent company will provide guarantees to ensure Zhongtai will fulfill its obligations under the Agreement. Upon the completion of the term, Xi'an TCH will transfer the systems to Zhongtai at RMB 1 ($0.16). Zhongtai shall provide waste heat to the systems for no less than 8,000 hours per year and waste gas volume no less than 150,000 Nm3 per hour with a temperature no less than 950°C. If these requirements are not met, the term of the Agreement will be extended accordingly. If Zhongtai wants to terminate the Zhongtai Agreement early, it shall provide Xi'an TCH a 60 day notice and pay the termination fee and compensation for the damages to Xi'an TCH according to the following formula: 1) if it is less than five years into the term when Zhongtai requests termination, Zhongtai shall pay: Xi'an TCH's total investment amount plus Xi'an TCH's annual investment return times five years minus the years in which the system has already operated); or 2) if it is more than five years into the term when Zhongtai requests the termination, Zhongtai shall pay: Xi'an TCH's total investment amount minus total amortization cost (the amortization period is 10 years). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Baoliyuan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term contract for purchase of electric power, Description | <div>Baoliyuan agreed to pay an energy saving fee from the date when the WHPG station passed the required 72 hour test run. The payment term was twenty years and Baoliyuan agreed to pay an energy saving fee at RMB 0.7 ($0.114) per kilowatt hour (including tax) for the power generated from the system, from which Xian TCH shall take 92.86% and Baoliyuan was to take 7.14% as parties to share the energy saving benefits. During the term of the contract the energy saving fee was to be adjusted at the same percentage as the change of local grid electricity price. Baoliyuan was to provide guarantees to ensure it would fulfill its obligations under the Agreement. Upon the completion of the term, Xian TCH was to transfer the systems to Baoliyuan at RMB 1.</div> | <div>Baoliyuan agreed to pay an energy saving fee from the date when the WHPG station passed the required 72 hour test run. The payment term was twenty years and Baoliyuan agreed to pay an energy saving fee at RMB 0.7 ($0.114) per kilowatt hour (including tax) for the power generated from the system, from which Xian TCH shall take 92.86% and Baoliyuan was to take 7.14% as parties to share the energy saving benefits. During the term of the contract the energy saving fee was to be adjusted at the same percentage as the change of local grid electricity price. Baoliyuan was to provide guarantees to ensure it would fulfill its obligations under the Agreement. Upon the completion of the term, Xian TCH was to transfer the systems to Baoliyuan at RMB 1.</div> | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Baoliyuan [Member] | Payment Period One [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed monthly fee for waste water treatment system | $ 171,010 | ¥ 1,050,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Baoliyuan [Member] | Payment Period Two [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed monthly fee for waste water treatment system | $ 153,094 | ¥ 940,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BPRT Systems [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Contract Price For Materials Equipment | ¥ | 100,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WGPG Systems [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Contract Price For Materials Equipment | 3,020,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase price for Power Generation Systems | $ 24,540,000 | ¥ 150,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Biomass Power Generation Asset Transfer Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase price for Power Generation Systems | $ 16,480,000 | ¥ 100,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Issuable For Power Generation Systems | shares | 8,766,547 | 8,766,547 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Issuable Per Share For Power Generation Systems | $ / shares | $ 1.87 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease amount per month | $ 630,000 | ¥ 3,800,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Biomass Power Generation Project Lease Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing fees | $ 279,400 | ¥ 1,900,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease period | 15 years | 15 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian Zhonghong New Energy Technology Co., Ltd [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 4,850,000 | ¥ 30,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contribution percentage in total investment | 90.00% | 90.00% | 90.00% | 90.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Energy Saving Solution And Services Cost | $ 4,370,000 | ¥ 27,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Boxing County Chengli Gas Supply Co Ltd [Member] | EPC General Contractor Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Contract Price For Materials Equipment | $ 33,340,000 | ¥ 200,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shenqiu Project [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 12 | 12 | 12 | 12 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing fees | $ 286,000 | ¥ 1,800,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease period | 11 years | 11 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cost of project | $ 11,100,000 | ¥ 68,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consideration of thermal power generation project | $ 3,570,000 | ¥ 22,500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consideration of power generation project | $ 10,937,500 | ¥ 70,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shanxi Datong Coal Group Steel Co Ltd [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 21 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term contract for purchase of electric power, Description | The service fee was based on an average of 8,000 electricity-generating hours per year and $0.05 (RMB 0.33) per kilowatt hour (kWh) for the first five years from the completion of each power generation station. For each of the leases, at the 6th, 11th and 21st year anniversary of the date of the lease, the rates will change to RMB 0.3 kWh, 0.27 kWh and 0.25 kWh, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Power generation servicing fee, Description | On May 29, 2015, Xi'an TCH entered into a Repurchase Agreement for the Recycling Economy Project with Datong. Under the Repurchase Agreement, Datong agreed to repurchase the Systems from Xi'an TCH and pay outstanding energy saving service fees of RMB 1.2 million ($193,548) to Xi'an TCH within five working days from the execution of the Repurchase Agreement. The Systems were transferred to Datong for a total price of RMB 250 million ($40.32 million) with RMB 100 million for two BPRT systems and RMB 150 million for one WGPG system. As of June 30, 2015, Xi'an TCH received payment in full and the systems were transferred. The outstanding balance of net investment receivable at the date of transfer was $13.37 million. The Company recorded a $2.98 million gain from two BPRT systems as non-operating income and a $3.02 million gain from the WGPG system as gross profit from the sale. | On May 29, 2015, Xi'an TCH entered into a Repurchase Agreement for the Recycling Economy Project with Datong. Under the Repurchase Agreement, Datong agreed to repurchase the Systems from Xi'an TCH and pay outstanding energy saving service fees of RMB 1.2 million ($193,548) to Xi'an TCH within five working days from the execution of the Repurchase Agreement. The Systems were transferred to Datong for a total price of RMB 250 million ($40.32 million) with RMB 100 million for two BPRT systems and RMB 150 million for one WGPG system. As of June 30, 2015, Xi'an TCH received payment in full and the systems were transferred. The outstanding balance of net investment receivable at the date of transfer was $13.37 million. The Company recorded a $2.98 million gain from two BPRT systems as non-operating income and a $3.02 million gain from the WGPG system as gross profit from the sale. | Due to the change of its strategic plan, Datong notified Xi'an TCH that it would not be able to fulfill its obligations under the Cooperative Agreement and requested to repurchase the two 3MW BPRT systems and one 15MW WGPG system (the "Systems") from Xi'an TCH and terminate the Cooperative Agreement. On May 29, 2015, Xi'an TCH entered into a Repurchase Agreement for the Recycling Economy Project with Datong. Under the Repurchase Agreement, Datong agreed to repurchase the Systems from Xi'an TCH and pay outstanding energy saving service fees of RMB 1.2 million ($193,548) to Xi'an TCH within five business days from the execution of the Repurchase Agreement. The Systems were transferred to Datong for a total price of RMB 250 million ($40.32 million) with RMB 100 million for two BPRT systems and RMB 150 million for one WGPG system. As of June 30, 2015, Xi'an TCH received payment in full and the systems were transferred. The outstanding balance of net investment receivable at the date of transfer was $13.37 million. The Company recorded a $2.98 million gain from two BPRT systems as non-operating income and a $3.02 million gain from the WGPG system as gross profit from the sale. | Due to the change of its strategic plan, Datong notified Xi'an TCH that it would not be able to fulfill its obligations under the Cooperative Agreement and requested to repurchase the two 3MW BPRT systems and one 15MW WGPG system (the "Systems") from Xi'an TCH and terminate the Cooperative Agreement. On May 29, 2015, Xi'an TCH entered into a Repurchase Agreement for the Recycling Economy Project with Datong. Under the Repurchase Agreement, Datong agreed to repurchase the Systems from Xi'an TCH and pay outstanding energy saving service fees of RMB 1.2 million ($193,548) to Xi'an TCH within five business days from the execution of the Repurchase Agreement. The Systems were transferred to Datong for a total price of RMB 250 million ($40.32 million) with RMB 100 million for two BPRT systems and RMB 150 million for one WGPG system. As of June 30, 2015, Xi'an TCH received payment in full and the systems were transferred. The outstanding balance of net investment receivable at the date of transfer was $13.37 million. The Company recorded a $2.98 million gain from two BPRT systems as non-operating income and a $3.02 million gain from the WGPG system as gross profit from the sale. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recycling economy project, Description | Due to the change of its strategic plan, Datong notified Xi'an TCH that it would not be able to fulfill its obligations under the Cooperative Agreement and requested to repurchase the two 3MW BPRT systems and one 15MW WGPG system (the "Systems") from Xi'an TCH and terminate the Cooperative Agreement. On May 29, 2015, Xi'an TCH entered into a Repurchase Agreement for the Recycling Economy Project with Datong. Under the Repurchase Agreement, Datong agreed to repurchase the Systems from Xi'an TCH and pay outstanding energy saving service fees of RMB 1.2 million ($193,548) to Xi'an TCH within five business days from the execution of the Repurchase Agreement. The Systems were transferred to Datong for a total price of RMB 250 million ($40.32 million) with RMB 100 million for two BPRT systems and RMB 150 million for one WGPG system. As of June 30, 2015, Xi'an TCH received payment in full and the systems were transferred. The outstanding balance of net investment receivable at the date of transfer was $13.37 million. The Company recorded a $2.98 million gain from two BPRT systems as non-operating income and a $3.02 million gain from the WGPG system as gross profit from the sale. | Due to the change of its strategic plan, Datong notified Xi'an TCH that it would not be able to fulfill its obligations under the Cooperative Agreement and requested to repurchase the two 3MW BPRT systems and one 15MW WGPG system (the "Systems") from Xi'an TCH and terminate the Cooperative Agreement. On May 29, 2015, Xi'an TCH entered into a Repurchase Agreement for the Recycling Economy Project with Datong. Under the Repurchase Agreement, Datong agreed to repurchase the Systems from Xi'an TCH and pay outstanding energy saving service fees of RMB 1.2 million ($193,548) to Xi'an TCH within five business days from the execution of the Repurchase Agreement. The Systems were transferred to Datong for a total price of RMB 250 million ($40.32 million) with RMB 100 million for two BPRT systems and RMB 150 million for one WGPG system. As of June 30, 2015, Xi'an TCH received payment in full and the systems were transferred. The outstanding balance of net investment receivable at the date of transfer was $13.37 million. The Company recorded a $2.98 million gain from two BPRT systems as non-operating income and a $3.02 million gain from the WGPG system as gross profit from the sale. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hongyuan Huifu [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 80.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chengli Waste Heat Power Generation Projects [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term contract for purchase of electric power, Description | The term of the Agreements is for 20 years. The first 800 million watt hours generated by the Chengli Project will be charged at RMB 0.42 ($0.068) per kilowatt hour (excluding tax); thereafter, the energy saving fee will be RMB 0.20 ($0.036) per kilowatt hour (excluding tax). The operating time shall be based upon an average 8,000 hours annually. If the operating time is less than 8,000 hours per year due to a reason attributable to Chengli, then time charged shall be 8,000 hours a year, and if it is less than 8,000 hours due to a reason attributable to Zhonghong, then it shall be charged at actual operating hours. The construction of the Chengli Project was completed in the second quarter of 2015 and the project is currently under commissioning tests which the Company expects to complete in the first quarter of 2017. When operations begin, Chengli shall ensure its coking production line works properly and that working hours for the CDQ system are at least 8,000 hours per year, and Zhonghong shall ensure that working hours and the CDQ WHPG system will be at least 7,200 hours per year. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tianyu Waste Heat Power Generation Project [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Contract Price For Materials Equipment | $ 66,680,000 | ¥ 400,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term contract for purchase of electric power, Description | Upon completion of the Tianyu Project, Zhonghong will charge Tianyu an energy saving service fee of RMB 0.534 ($0.087) per kilowatt hour (excluding tax). The operating time will be based upon an average 8,000 hours annually for each of Xuzhou Tian'an and Xuzhou Huayu. If the operating time is less than 8,000 hours per year due to a reason attributable to Tianyu, then time charged will be 8,000 hours a year. The term of the Tianyu Agreement is 20 years. The construction of the Tianyu Project is anticipated to be completed between the end of 2015 and the middle of 2016. Tianyu will provide the land for the CDQ and CDQ WHPG systems for free. Tianyu also guarantees that it will purchase all of the power generated by the CDQ WHPG systems. | Upon completion of the Tianyu Project, Zhonghong will charge Tianyu an energy saving service fee of RMB 0.534 ($0.087) per kilowatt hour (excluding tax). The operating time will be based upon an average 8,000 hours annually for each of Xuzhou Tian'an and Xuzhou Huayu. If the operating time is less than 8,000 hours per year due to a reason attributable to Tianyu, then time charged will be 8,000 hours a year. The term of the Tianyu Agreement is 20 years. The construction of the Tianyu Project is anticipated to be completed between the end of 2015 and the middle of 2016. Tianyu will provide the land for the CDQ and CDQ WHPG systems for free. Tianyu also guarantees that it will purchase all of the power generated by the CDQ WHPG systems. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Coal Oven Gas Power Generation Project Repurchase Agreement [Member] | Xian TCH Limited Partners [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payment of transfer price | $ 7,540,000 | 50,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments for partial loan | 900,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing fees | 9,350,000 | ¥ 62,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease amount per month | $ 900,000 | ¥ 6,000,000 | $ 900,000 | ¥ 6,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments to Xian TCH | $ 16,890,000 | ¥ 112,000,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss from transaction | 420,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First payment received | $ 7,540,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Second payment received | $ 9,350,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Biomass Power Generation System [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 12 | 12 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Erdos Metallurgy Company Limited [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction cost | ¥ 8,000,000 | $ 1,290,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 1,290,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Term of joint ventures | 20 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment cost | $ 79,000,000 | ¥ 500,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Erdos Metallurgy Company Limited [Member] | Phase One [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 8 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Erdos Metallurgy Company Limited [Member] | Phase Two [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 27 | 27 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Erdos Metallurgy Company Limited [Member] | Initial Investment [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment cost | $ 17,550,000 | ¥ 120,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Erdos TCH [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contribution percentage in total investment | 7.00% | 7.00% | 7.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated profit | $ 226,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term contract for purchase of electric power, Description | On April 28, 2016, Erdos TCH and Erdos entered a supplemental agreement, effective on May 1, 2016, Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / Kwh. The selling price of each Kwh will be determined annually based on market condition. | On April 28, 2016, Erdos TCH and Erdos entered a supplemental agreement, effective on May 1, 2016, Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / Kwh. The selling price of each Kwh will be determined annually based on market condition. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Erdos TCH [Member] | Initial Investment [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 20.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Erdos TCH [Member] | After Return Of Initial Investment [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 40.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment cost | ¥ | ¥ 3,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contribution percentage in total investment | 93.00% | 93.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 20.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Energy Saving Solution And Services Cost | $ 193,548 | ¥ 1,200,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of accumulated profit | 20.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minority interest decrease from redemptions | $ 1,290,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments to Xian TCH | $ 25,450,000 | ¥ 165,200,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business combination, Contingent consideration arrangements, Description | Whereby (a) RMB 65,200,000 ($10.05 million) was to be paid by Rongfeng to Xi'an TCH within 20 business days after signing the Transfer Agreement, (b) RMB 50,000,000 ($7.70 million) is to be paid by Rongfeng to Xi'an TCH within 20 business days after the Project is completed, but no later than March 31, 2016 and (c) RMB 50,000,000 ($7.70 million) will be paid by Rongfeng to Xi'an TCH no later than September 30, 2016. | Whereby (a) RMB 65,200,000 ($10.05 million) was to be paid by Rongfeng to Xi'an TCH within 20 business days after signing the Transfer Agreement, (b) RMB 50,000,000 ($7.70 million) is to be paid by Rongfeng to Xi'an TCH within 20 business days after the Project is completed, but no later than March 31, 2016 and (c) RMB 50,000,000 ($7.70 million) will be paid by Rongfeng to Xi'an TCH no later than September 30, 2016. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss from transaction | $ 3,780,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First payment received | $ 10,050,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Second payment received | $ 7,700,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third payment | $ 7,700,000 | 7,700,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH [Member] | Zhongtai Waste Heat Power Generation Energy Management Cooperative Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Construction cost | ¥ | 152,360,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments for partial loan | ¥ | ¥ 15,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Initial payments to Xi an TCH | $ 7,700,000 | ¥ 50,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Waste heat power generation energy management cooperative agreement, Description | Zhongtai agreed to pay to Xi'an TCH an aggregate transfer price of RMB 167,360,000 ($25.77 million) including payments of: (i) RMB 152,360,000 ($23.46 million) for the construction of the Project; and (ii) RMB 15,000,000 ($2.31 million) as payment for partial loan interest accrued during the construction period. Those amounts have been, or will be, paid by Zhongtai to Xi'an TCH according to the following schedule: (a) RMB 50,000,000 ($7.70 million) was paid within 20 business days after the Transfer Agreement was signed; (b) RMB 30,000,000 ($4.62 million) will be paid within 20 business days after the Project is completed, but no later than July 30, 2016; and (c) RMB 87,360,000 ($13.45 million) will be paid no later than July 30, 2017. | Zhongtai agreed to pay to Xi'an TCH an aggregate transfer price of RMB 167,360,000 ($25.77 million) including payments of: (i) RMB 152,360,000 ($23.46 million) for the construction of the Project; and (ii) RMB 15,000,000 ($2.31 million) as payment for partial loan interest accrued during the construction period. Those amounts have been, or will be, paid by Zhongtai to Xi'an TCH according to the following schedule: (a) RMB 50,000,000 ($7.70 million) was paid within 20 business days after the Transfer Agreement was signed; (b) RMB 30,000,000 ($4.62 million) will be paid within 20 business days after the Project is completed, but no later than July 30, 2016; and (c) RMB 87,360,000 ($13.45 million) will be paid no later than July 30, 2017. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments to Xian TCH | $ 25,770,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss from transaction | 2,820,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First payment received | 7,700,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Second payment received | $ 4,620,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH [Member] | Shanxi Datong Coal Group Steel Co Ltd [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment cost | $ 28,600,000 | ¥ 180,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease period | 30 years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH [Member] | Sinosteel Jilin Ferroalloys Co Ltd Jitie [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum service fee | $ 300,000 | ¥ 1,800,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH [Member] | Hongyuan Huifu [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered capital | ¥ | ¥ 4,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH [Member] | Qitaihe City Boli Yida Coal Selection Co Ltd Yida [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment cost | $ 18,690,000 | ¥ 115,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Issuable For Power Generation Systems | shares | 8,233,779 | 8,233,779 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price per share | $ / shares | $ 1.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Security deposit | ¥ | ¥ 3,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Value Issuable For Power Generation Systems | $ 14,490,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share price | $ / shares | $ 2.27 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH [Member] | Initial Investment [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 80.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH [Member] | After Return Of Initial Investment [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit distribution percentage | 60.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH [Member] | Biomass Power Generation System [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leasing fees | $ 239,000 | ¥ 1,500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease period | 9 years 6 months | 9 years 6 months | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH And Shanxi Datong [Member] | First Five Years [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum service fee | $ 190,000 | ¥ 1,200,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH And Shanxi Datong [Member] | Second Five Years [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum service fee | 180,000 | ¥ 1,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH And Shanxi Datong [Member] | Minimum Ten Years [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum service fee | 160,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xian TCH And Shanxi Datong [Member] | Maximum Ten Years [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum service fee | $ 150,000 | ¥ 900,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HYREF Fund [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 830,000 | $ 830,000 | ¥ 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subscribed amount of initial capital contribution | $ 75,000,000 | 460,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total fund capital contribution | $ 76,660,000 | 460,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Partnership expiration | Jul. 18, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HYREF Fund [Member] | China Orient Asset Management Co., Ltd [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subscribed amount of initial capital contribution | $ 46,670,000 | 280,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HYREF Fund [Member] | Xian TCH Limited Partners [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subscribed amount of initial capital contribution | 12,500,000 | 75,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
HYREF Fund [Member] | Hongyuan Huifu [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subscribed amount of initial capital contribution | $ 16,670,000 | ¥ 100,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hongyuan Recycling Energy Investment Management Beijing Co Ltd [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered capital | ¥ | ¥ 10,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership percentage | 40.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xiant Chenergy Tech Coltd [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 5,695,502 | ¥ 35,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment cost | $ 490,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership percentage | 100.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xiant Chenergy Tech Coltd [Member] | Sinosteel Jilin Ferroalloys Co Ltd Jitie [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capacity of plant | MW | 79 | 79 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment cost | $ 9,710,000 | ¥ 60,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease period | 24 years | 24 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xiant Chenergy Tech Coltd [Member] | Sinosteel Jilin Ferroalloys Co Ltd Jitie [Member] | WHPG system Repurchase Agreement [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease agreement term, Description | Under the Repurchase Agreement, Jitie repurchased the Jitie Project from Xi'an TCH and paid outstanding energy saving service fees of RMB 1.8 million ($294,599) to Xi'an TCH within five business days from the execution of the Repurchase Agreement on June 18, 2015. The Jitie Project was transferred to Jitie for a total price of RMB 90 million ($14.73 million). In July 2015, Xi'an TCH received payment in full and the systems were transferred. The outstanding balance of net investment receivable on the date of the transfer was $13.10 million. The Company recorded a $1.62 million gain from this transaction. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xiant Chenergy Tech Coltd [Member] | Hongyuan Huifu [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 650,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Xiant Chenergy Tech Coltd [Member] | Qitaihe City Boli Yida Coal Selection Co Ltd Yida [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Security deposit | $ 490,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Yinghua [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Description of Business (Textual) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered capital | $ 30,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ownership percentage | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 20 years |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Office and Other Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Office and Other Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of reconciliation of basic and diluted earnings per share | ||||
Net income | $ 1,689,673 | $ 3,266,591 | $ (48,144,553) | $ 18,681,506 |
Weighted average shares outstanding - basic | 8,310,198 | 8,308,404 | 8,310,198 | 8,308,019 |
Effect of dilutive securities: | ||||
Options granted | ||||
Weighted average shares outstanding - diluted | 8,310,198 | 8,308,404 | 8,310,198 | 8,308,019 |
Earnings per share - basic | $ 0.20 | $ 0.39 | $ (5.79) | $ 2.25 |
Earnings per share - diluted | $ 0.20 | $ 0.39 | $ (5.79) | $ 2.25 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Summary of Significant Accounting Policies (Textual) | ||
Accounts receivable | $ 25,723,889 | $ 15,399,778 |
Bank loans payable [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Sale leaseback transaction, amount due under financing arrangement | 18,190,000 | |
Xian Tch [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Equity method investment, ownership percentage | 100.00% | |
Erdos TCH [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Equity method investment, ownership percentage | 100.00% | |
Zhonghong [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Equity method investment, ownership percentage | 90.00% | |
Long term loans from bank | $ 58,830,000 | |
Sale leaseback transaction, amount due under financing arrangement | $ 49,720,000 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Restricted Cash (Textual) | ||
Restricted cash | $ 1,130,344 | |
Bank acceptance maturity period | 6 months | 6 months |
Investment in Sales-Type Leas_3
Investment in Sales-Type Leases, Net (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Investment in Sales-Type Leases, Net [Abstract] | ||
Total future minimum lease payments receivable | $ 100,646,920 | $ 387,612,418 |
Less: executory cost | (5,654,150) | (93,054,738) |
Less: unearned interest income | (35,506,550) | (154,799,027) |
Investment in sales-type leases, net | 59,486,220 | 139,758,653 |
Current portion | 6,973,954 | 6,679,019 |
Noncurrent portion | $ 52,512,266 | $ 133,079,634 |
Investment in Sales-Type Leas_4
Investment in Sales-Type Leases, Net (Details 1) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Investment in Sales-Type Leases, Net [Abstract] | ||
2017 | $ 18,074,815 | |
2018 | 12,758,693 | |
2019 | 12,758,693 | |
2020 | 12,758,693 | |
2021 | 12,758,693 | |
Thereafter | 31,537,333 | |
Total | $ 100,646,920 | $ 387,612,418 |
Investment in Sales-Type Leas_5
Investment in Sales-Type Leases, Net (Details Textual) | 9 Months Ended |
Sep. 30, 2016 | |
Investment In Sales Type Leases Net (Textual) | |
Sale leaseback transaction lease, Terms | Under sales-type leases, Xi'an TCH leases the following systems: (i) BMPG systems to Pucheng Phase I and II (15 and 11 year terms, respectively); (ii) BMPG systems to Shenqiu Phase I (11-year term); and (iii) Shenqiu Phase II (9.5-year term). |
Prepaid Expenses (Details)
Prepaid Expenses (Details) $ in Thousands, ¥ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016USD ($) | Jun. 30, 2016CNY (¥) | Sep. 30, 2016USD ($) | Sep. 30, 2016CNY (¥) | Dec. 31, 2015USD ($) | |
Prepaid Expenses (Textual) | |||||
Percentage of funds raised | 2.00% | 2.00% | |||
Consulting fees | $ 1,380 | ¥ 9.2 | $ 1,500 | ¥ 9.2 | |
Percentage of funds actually contributed | 2.00% | 2.00% | |||
Prepaid consulting expenses | $ 1,150 | $ 830 | |||
Prepaid taxes | $ 0 | $ 300 |
Other Receivables (Details)
Other Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Other Receivables (Textual) | ||
Advance to third party | $ 350 | $ 50 |
Advance to employees | $ 30 | 40 |
Maintenance cost and tax receivable | $ 470 |
Long Term Investment (Details)
Long Term Investment (Details) ¥ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 25, 2013USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2013USD ($) | Jul. 18, 2013USD ($) | Jul. 18, 2013CNY (¥) | Jun. 25, 2013CNY (¥) | |
Xi'an TCH Limited Partner [Member] | |||||||
Long Term Investment (Textual) | |||||||
Original Investment By Subsidiary | $ 650,000 | ¥ 4 | |||||
Profit distribution percentage | 20.00% | ||||||
One Time Commission To Fund Management | $ 1,600,000 | ||||||
Percentage Of Owned Fund | 16.30% | 16.30% | |||||
Equity based investment income | $ 48,595 | $ 154,570 | |||||
Equity interest percentage | 91.70% | ||||||
Xi'an TCH Limited Partner [Member] | Ownership Interest [Member] | |||||||
Long Term Investment (Textual) | |||||||
Profit distribution percentage | 40.00% | ||||||
Xi'an TCH Limited Partner [Member] | HYREF Fund [Member] | |||||||
Long Term Investment (Textual) | |||||||
Subscribed Amount Of Initial Capital Contribution | $ 16,670,000 | ¥ 100 | |||||
Cost Method Investments | 12,200,000 | 75 | |||||
China Orient Asset Management Co., Ltd [Member] | HYREF Fund [Member] | |||||||
Long Term Investment (Textual) | |||||||
Subscribed Amount Of Initial Capital Contribution | 12,500,000 | 75 | |||||
Hongyuan Recycling Energy Investment Management Co.Ltd [Member] | |||||||
Long Term Investment (Textual) | |||||||
Registered Capital | $ 1,600,000 | ¥ 10 | |||||
Hongyuan Huifu [Member] | |||||||
Long Term Investment (Textual) | |||||||
Profit distribution percentage | 80.00% | ||||||
Investment cost | 830,000 | 5 | |||||
Hongyuan Huifu [Member] | HYREF Fund [Member] | |||||||
Long Term Investment (Textual) | |||||||
Original Investment By Subsidiary | 46,670,000 | 280 | |||||
Zhonghong [Member] | |||||||
Long Term Investment (Textual) | |||||||
Total Fund Capital Contribution | $ 75,000,000 | ¥ 460 | |||||
Equity interest percentage | 90.00% | ||||||
Zhonghong [Member] | Revenue | |||||||
Long Term Investment (Textual) | |||||||
Management Company Revenue | 100.00% |
Construction in Progress (Detai
Construction in Progress (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of construction in Progress [Line Items] | ||
Construction in progress | $ 89,003,252 | $ 115,522,068 |
Xuzhou Zhongtai [Member] | ||
Schedule of construction in Progress [Line Items] | ||
Construction in progress | 28,100,201 | |
Xuzhou Huayu [Member] | ||
Schedule of construction in Progress [Line Items] | ||
Construction in progress | 29,633,538 | 29,752,270 |
Xuzhou Tian'an [Member] | ||
Schedule of construction in Progress [Line Items] | ||
Construction in progress | 28,469,454 | 26,909,193 |
Boxing County Chengli [Member] | ||
Schedule of construction in Progress [Line Items] | ||
Construction in progress | $ 30,900,260 | $ 30,760,404 |
Construction in Progress (Det_2
Construction in Progress (Details Textual) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Xuzhou Huayu project [Member] | |
Construction In Progress (Textual) | |
Additional construction in progress | $ 7,490 |
Xuzhou Tian'an project [Member] | |
Construction In Progress (Textual) | |
Additional construction in progress | 8,650 |
Boxing County Chengli [Member] | |
Construction In Progress (Textual) | |
Additional construction in progress | $ 5,400 |
Taxes Payable (Details)
Taxes Payable (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Taxes Payable [Line Items] | ||
Taxes payable | $ 854,429 | $ 1,058,417 |
Income [Member] | ||
Taxes Payable [Line Items] | ||
Taxes payable | 165,396 | 405,431 |
Business [Member] | ||
Taxes Payable [Line Items] | ||
Taxes payable | 249,141 | |
VAT [Member] | ||
Taxes Payable [Line Items] | ||
Taxes payable | 638,899 | 369,595 |
Other [Member] | ||
Taxes Payable [Line Items] | ||
Taxes payable | $ 50,134 | $ 34,250 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Payables (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued liabilities and other payables | $ 2,850,652 | $ 3,199,395 |
Employee training, labor union expenditure and social insurance payable [Member] | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued liabilities and other payables | 729,244 | 749,930 |
Consulting, auditing, and legal expenses [Member] | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued liabilities and other payables | 1,841,927 | 1,342,395 |
Accrued payroll and welfare [Member] | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued liabilities and other payables | 271,522 | 278,819 |
Accrued interest expense [Member] | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued liabilities and other payables | 1,182 | 682,949 |
Other [Member] | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued liabilities and other payables | $ 6,777 | $ 145,302 |
Deferred Tax Liability, Net (De
Deferred Tax Liability, Net (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Summary of deferred tax liability | ||
Deferred tax asset - current (accrual of employee social insurance) | $ 159,431 | $ 98,372 |
Deferred tax liability - current (net investment in sales-type leases) | (1,262,740) | (1,636,477) |
Deferred tax liability, net of deferred tax asset - current | (1,103,309) | (1,538,105) |
Deferred tax asset - noncurrent (depreciation of fixed assets) | 10,549,083 | 22,498,560 |
Deferred tax liability - noncurrent (net investment in sales-type leases) | (13,128,067) | (33,269,908) |
Deferred tax liability, net of deferred tax asset - noncurrent | $ (2,578,984) | $ (10,771,348) |
Loans Payable (Details)
Loans Payable (Details) - Bank Loans and Entrusted Loan [Member] | Sep. 30, 2016USD ($) |
Future Minimum Repayment [Abstract] | |
2017 | $ 50,166,223 |
2018 | 299,500 |
Total | $ 50,465,723 |
Loans Payable (Details Textual)
Loans Payable (Details Textual) ¥ in Millions | Aug. 05, 2016USD ($) | Aug. 05, 2016CNY (¥) | Jul. 31, 2013CNY (¥) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016CNY (¥) | Jul. 31, 2013USD ($) | Jul. 31, 2013CNY (¥) |
Loans Payable (Textual) | ||||||||
Percentage of service fee on loan | 0.10% | |||||||
Debt amount paid | $ 7,540,000 | ¥ 50 | ||||||
Remaining debt amount | $ 34,680,000 | ¥ 230 | ||||||
Xi'an Tch Limited Partner [Member] | ||||||||
Loans Payable (Textual) | ||||||||
Capitalized interest to construction in progress | ¥ | ¥ 27 | |||||||
Loan payable outstanding balance | $ 11,230,000 | |||||||
Entrusted loan [Member] | ||||||||
Loans Payable (Textual) | ||||||||
Debt investments | $ 74,500,000 | ¥ 457 | ||||||
Description of loan payable 1 | During the first three years from the first release of the loan, the balance in its account shall be no less than RMB 7.14 million ($1.19 million) on the 20th day of the second month of each quarter and no less than RMB 14.28 million ($2.38 million) on the 14th day of the last month of each quarter | |||||||
Description of loan payable 2 | During the fourth year from the first release of the loan, the balance in its account shall be no less than RMB 1.92 million ($0.32 million) on the 20th day of the second month of each quarter and no less than RMB 3.85 million ($0.64 million) on the 14th day of the last month of each quarter | |||||||
Description of loan payable 3 | During the fifth year from the first release of the loan, the balance in its account shall be no less than RMB 96,300 ($16,050) on the 20th day of the second month of each quarter and no less than RMB 192,500 ($32,080) on the 14th day of the last month of each quarter | |||||||
Long term debt maturities repayments of principal in third year | $ 42,220,000 | 280 | ||||||
Long term debt maturities repayments of principal in fourth year | 16,270,000 | 100 | ||||||
Long term debt maturities repayments of principal in fifth year | $ 12,520,000 | ¥ 77 | ||||||
Interest rate | 12.50% | 12.50% | ||||||
Interest expense | $ 3,670,000 | $ 369,681 | ||||||
Capitalized interest to construction in progress | 2,670,000 | $ 6,640,000 | ||||||
Loan payable outstanding balance | 60,950,000 | |||||||
Entrusted loan [Member] | Xi'an Tch Limited Partner [Member] | ||||||||
Loans Payable (Textual) | ||||||||
Loan payable | $ 11,230,000 | |||||||
Zhonghong [Member] | ||||||||
Loans Payable (Textual) | ||||||||
Debt investments | 74,500,000 | 457 | ||||||
Total fund capital contribution | 75,000,000 | 460 | ||||||
HYREF Fund [Member] | ||||||||
Loans Payable (Textual) | ||||||||
Equity investments | $ 500,000 | ¥ 3 |
Loans Payable (Details Textual
Loans Payable (Details Textual 1) | 1 Months Ended | 9 Months Ended | |||
Jun. 26, 2015USD ($) | Jun. 26, 2015CNY (¥) | Sep. 30, 2016USD ($) | Sep. 30, 2016CNY (¥) | Jun. 26, 2015CNY (¥) | |
Loans Payable (Textual) | |||||
Re-guarantee service fee | $ 405,696 | ¥ 2,550,000 | |||
Bank of Xi'an [Member] | |||||
Loans Payable (Textual) | |||||
Bank loans payable issued | $ 6,290,000 | ¥ 40,000,000 | |||
Debt instrument maturity date | Jun. 25, 2016 | Jun. 25, 2016 | |||
Interest rate | 0.595% | 0.595% | |||
Re-guarantee service fee | $ 149,341 | ¥ 950,000 |
Loans Payable (Details Textua_2
Loans Payable (Details Textual 2) | Apr. 11, 2014USD ($) | Apr. 11, 2014CNY (¥) | Sep. 30, 2016USD ($) | Sep. 30, 2016CNY (¥) | Apr. 11, 2014CNY (¥) |
Loans Payable (Textual) | |||||
Re-guarantee service fee | $ 405,696 | ¥ 2,550,000 | |||
Bank of Chongqing [Member] | |||||
Loans Payable (Textual) | |||||
Bank loans payable issued | $ 8,130,000 | ¥ 50,000,000 | |||
Debt instrument maturity term | 3 years | 3 years | |||
Debt instrument maturity date | Apr. 10, 2017 | Apr. 10, 2017 | |||
Interest rate | 9.225% | 9.225% | |||
Monthly interest payments to make a principal payment | $ 810,000 | ¥ 5,000,000 | |||
Remaining loans receivable | 7,320,000 | 45,000,000 | |||
Re-guarantee service fee | $ 155,280 | ¥ 950,000 | |||
Loan outstanding balance | $ 750,000 |
Loans Payable (Details Textua_3
Loans Payable (Details Textual 3) ¥ in Millions | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Feb. 17, 2014USD ($) | Feb. 17, 2014CNY (¥) | |
Zhongrong International Trust Co., Ltd [Member] | Zhongtai [Member] | |||
Loans Payable (Textual) | |||
Bank loans payable issued | $ 24,500,000 | ¥ 150 | |
Capitalized interest to construction in progress | $ 0 | ||
Zhongrong International Trust Co., Ltd Two [Member] | Rongfeng [Member] | |||
Loans Payable (Textual) | |||
Bank loans payable issued | $ 22,100,000 | ¥ 135 |
Long Term Payable - Financing_2
Long Term Payable - Financing Agreement For Sale Lease-Back Transaction (Details) | 9 Months Ended | |||||||
Sep. 30, 2016USD ($) | Sep. 30, 2016CNY (¥) | Sep. 30, 2015USD ($) | Sep. 30, 2016CNY (¥) | Mar. 31, 2015USD ($) | Mar. 31, 2015CNY (¥) | Dec. 31, 2014USD ($) | Dec. 31, 2014CNY (¥) | |
Long Term Payable- Financing Agreement for Sale Lease-Back Transaction [Textual] | ||||||||
One-time non-refundable leasing service charge | $ 405,696 | ¥ 2,550,000 | ||||||
TCH paid principal and interest | 338,079 | ¥ 2,130,000 | ||||||
Amortized leasing service fee | $ 0 | $ 0 | ||||||
Interest rate increase term | 5 years | 5 years | ||||||
Cinda Financial Leasing Co., Ltd [Member] | ||||||||
Long Term Payable- Financing Agreement for Sale Lease-Back Transaction [Textual] | ||||||||
Transferred ownership | $ 6,720,000 | ¥ 42,500,000 | ||||||
Benchmark interest rate of transfer cost | 15.00% | 15.00% | ||||||
National base interest rate used to reset floating interest rate | 6.65% | 6.65% | ||||||
Interest rate | 7.6475% | 7.6475% | ||||||
Cinda financial leased assets based on transfer cost | $ 8,150,000 | ¥ 51,540,000 | ||||||
Leasing fees and other fees | 676 | ¥ 4,250 | ||||||
Quarterly minimum leasing payment | $ 412,855 | ¥ 2,590,000 | ||||||
TCH paid principal and interest | $ 350,000 | ¥ 2,125,000 | ||||||
Payment of the principal and interest amount | $ 420,000 | ¥ 2,550,000 | ||||||
Remaining principal amount | $ 1,970,000 | ¥ 12,140,000 |
Refundable Deposit From Custo_2
Refundable Deposit From Customers For Systems Leasing (Details) ¥ in Thousands | Sep. 30, 2016USD ($) | Sep. 30, 2016CNY (¥) | Dec. 31, 2015USD ($) |
Refundable Deposit from Customers for Systems Leasing [Textual] | |||
TCH paid principal and interest | $ 338,079 | ¥ 2,130 | |
Pucheng, Shenqiu and Yida systems [Member] | |||
Refundable Deposit from Customers for Systems Leasing [Textual] | |||
TCH paid principal and interest | $ 1,063,224 | $ 1,555,378 |
Related Party Transactions (Det
Related Party Transactions (Details) ¥ in Thousands | 9 Months Ended | ||||
Sep. 30, 2016USD ($) | Sep. 30, 2016CNY (¥) | Dec. 31, 2015USD ($) | Mar. 01, 2014USD ($) | Mar. 01, 2014CNY (¥) | |
Related Party Transactions(Textual) | |||||
Advance to related party | $ 44,059 | $ 44,059 | |||
Long-term debt gross | 0 | $ 0 | |||
Loan Agreement [Member] | |||||
Related Party Transactions(Textual) | |||||
Debt instrument borrowing capacity amount | $ 13,000,000 | ¥ 80,000 | |||
Pucheng Xin Heng Yuan Biomass Power Generation Corporation [Member] | |||||
Related Party Transactions(Textual) | |||||
Interest income | 3,270,000 | ¥ 21,790 | |||
Qitaihe City Boli Yida Coal Selection Co., Ltd. [Member] | |||||
Related Party Transactions(Textual) | |||||
Interest income | $ 2,090,000 | ¥ 13,830 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) ¥ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015 | Jul. 15, 2013USD ($) | Jul. 15, 2013CNY (¥) | |
Noncontrolling Interest (Textual) | |||||||
Net losses attributable to noncontrolling interest | $ 79,921 | $ 6,907 | $ 227,126 | $ 23,024 | |||
Xi'an TCH [Member] | |||||||
Noncontrolling Interest (Textual) | |||||||
Capital | $ 4,880,000 | ¥ 30 | |||||
Equity investments | $ 4,370,000 | ¥ 27 | |||||
Equity method investment, ownership percentage | 90.00% | 90.00% | |||||
Indirect ownership, description | The HYREF Fund was 16.3% owned by Xi'an TCH and 1.1% owned by the Fund Management Company, and the Fund Management Company was 40% owned by Xi'an TCH as described in Note 7, which resulted in an additional indirect ownership of Xi'an TCH in Zhonghong of 1.7%. | ||||||
Investment Center [Member] | |||||||
Noncontrolling Interest (Textual) | |||||||
Equity method investment, ownership percentage | 10.00% | 10.00% | |||||
Noncontrolling interest, ownership percentage | 8.30% | 8.30% |
Income Tax (Details)
Income Tax (Details) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of reconciliation of U.S. statutory rates to effective tax rate | ||||
U.S. statutory rates | 34.00% | 34.00% | (34.00%) | 34.00% |
Tax rate difference - current provision | (9.50%) | (9.30%) | 8.90% | (9.30%) |
Effective tax holiday | 0.00% | (6.40%) | 0.00% | (7.90%) |
Other | 5.90% | 0.00% | 0.10% | (3.60%) |
Prior periods income tax adjustment per income tax return filed | (0.20%) | 0.00% | 0.00% | 0.00% |
Valuation allowance on PRC NOL | (27.00%) | 0.00% | 11.90% | 0.00% |
Valuation allowance on US NOL | 2.00% | 1.30% | 0.30% | 1.00% |
Tax per financial statements | 5.20% | 19.60% | (12.80%) | 14.20% |
Income Tax (Details 1)
Income Tax (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of provision for income tax expenses | ||||
Income tax expense - current | $ 305,516 | $ 730,828 | $ 1,211,424 | $ 4,466,774 |
Income tax expense (benefit) - deferred | (216,590) | 65,835 | (8,303,783) | (1,370,648) |
Total income tax expense (benefit) | $ 88,926 | $ 796,663 | $ (7,092,359) | $ 3,096,126 |
Income Tax (Details Textual)
Income Tax (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2013 | |
Income Taxes [Line Items] | |||||
Effective income tax rate | 5.20% | 19.60% | (12.80%) | 14.20% | |
Net operating losses | $ 14,700 | ||||
Deferred tax asset valuation allowance | 100.00% | ||||
Operating income loss carryforwards, Period | 20 years | ||||
Shanghai TCH [Member] | |||||
Income Taxes [Line Items] | |||||
Effective income tax rate | 25.00% | 25.00% | |||
Xi'an TCH [Member] | |||||
Income Taxes [Line Items] | |||||
Effective income tax rate | 25.00% | 15.00% | |||
Erdos TCH Zhonghong Huahong [Member] | |||||
Income Taxes [Line Items] | |||||
Effective income tax rate | 25.00% | 25.00% |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plan (Details) - Independent directors compensation plan [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Number of Shares | ||
Beginning Balance, Outstanding | 4,000 | 8,000 |
Beginning Balance, Exercisable | 4,000 | 8,000 |
Granted | 4,000 | |
Exercised | ||
Forfeited | 8,000 | |
Ending Balance, Outstanding | 4,000 | 4,000 |
Ending Balance, Exercisable | 4,000 | 4,000 |
Average Exercise Price per Share | ||
Beginning Balance, Outstanding | $ 10.2 | $ 38.3 |
Beginning Balance, Exercisable | 10.2 | 38.3 |
Granted | 10.2 | |
Exercised | ||
Forfeited | ||
Ending Balance, Outstanding | 10.2 | 10.2 |
Ending Balance, Exercisable | $ 10.2 | $ 10.2 |
Weighted Average Remaining Contractual Term in Years | ||
Outstanding | 4 years 9 months 7 days | 3 months 22 days |
Exercisable | 4 years 9 months 7 days | 3 months 22 days |
Granted | 0 years | 4 years 9 months 7 days |
Exercised | 0 years | 0 years |
Forfeited | 0 years | 0 years |
Outstanding | 4 years 7 days | 4 years 9 months 7 days |
Exercisable | 4 years 7 days | 4 years 9 months 7 days |
Stock-Based Compensation Plan_3
Stock-Based Compensation Plan (Details Textual) - USD ($) | 1 Months Ended | 9 Months Ended | |||
May 25, 2016 | Jun. 19, 2015 | Mar. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Common stock, par value | $ 0.001 | $ 0.001 | |||
Reverse stock split | Options reflected 10:1 reverse split | 1-for-10 reverse stock split | |||
Outstanding notes receivable | $ 0 | $ 0 | |||
Mr. Huang [Member] | |||||
Reverse stock split | Prior to the 10:1 reverse split. | ||||
Net number of share options granted | 40,000 | ||||
Independent directors compensation plan [Member] | |||||
Share based payment award, grants | 40,000 | ||||
Common stock, par value | $ 0.001 | ||||
Compensation per month | $ 2,000 | ||||
Closing price of stock | $ 1.02 | ||||
Equity Plan [Member] | |||||
Share based payment award, grants | 12,462,605 | ||||
Reverse stock split | Prior to the 10:1 reverse split. |
Contingencies (Details Textual)
Contingencies (Details Textual) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Xi'an TCH [Member] | ||
Contingencies (Textual) | ||
Outstanding notes receivable | $ 0 | $ 0 |
Commitments (Details)
Commitments (Details) | Sep. 30, 2016USD ($) |
Schedule of future minimum annual rental payments | |
2017 | $ 256,313 |
2018 | 128,156 |
Total | $ 384,469 |
Commitments (Details Textual)
Commitments (Details Textual) - USD ($) | Mar. 04, 2014 | Mar. 05, 2016 | Sep. 16, 2013 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Commitments [Abstract] | |||||||
Operating lease term | 2 years | 2 years | 2 years 3 months | ||||
Operating lease expiry date | Dec. 31, 2015 | ||||||
Monthly rental payment | $ 20,140 | $ 21,804 | $ 12,110 | ||||
Rental expense | $ 57,459 | $ 100,906 | $ 183,843 | $ 300,923 |
Subsequent Event (Details)
Subsequent Event (Details) | Jul. 11, 2018USD ($)$ / shares | Feb. 15, 2019USD ($) | Feb. 15, 2019CNY (¥) | Jan. 22, 2019USD ($) | Jan. 22, 2019CNY (¥) | Jan. 04, 2019USD ($) | Jan. 04, 2019CNY (¥) | Dec. 29, 2018USD ($) | Dec. 29, 2018CNY (¥) | Nov. 21, 2018 | Oct. 29, 2018USD ($)$ / sharesshares | Sep. 30, 2018USD ($)shares | Sep. 30, 2018CNY (¥)shares | Mar. 31, 2016USD ($) | Mar. 31, 2016CNY (¥) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Subsequent Events (Textual) | |||||||||||||||||
Original issue discount | $ 0 | $ 0 | |||||||||||||||
Consideration fee | $ 7,700,000 | ¥ 50,000,000 | |||||||||||||||
Subsequent Event [Member] | HYREF Fund [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Repayment of loan | $ 27,538,598 | ¥ 188,639,400 | |||||||||||||||
Subsequent Event [Member] | Xi'an Tch Limited Partner [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Repayment of loan | 40 | ||||||||||||||||
Financial Advisory Fees Description | 0 | ||||||||||||||||
Consideration fee | $ 504,214 | ¥ 3,453,867.31 | |||||||||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Convertible promissory note amount | $ 1,070,000 | ||||||||||||||||
Original issue discount | 50,000 | ||||||||||||||||
Payment of purchaser fees and costs | $ 20,000 | ||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||
Conversion price | $ / shares | $ 3 | ||||||||||||||||
Percentage of outstanding purchase price | 50.00% | ||||||||||||||||
Subsequent event, description | All outstanding principal and accrued interest on the Note will become due and payable on July 11, 2020, subject to a potential one-year extension period during which interest would not accrue. The Company's obligations under the Note may be prepaid at any time, provided that in such circumstance the Company would pay a 125% premium on any amounts outstanding under the Note. | ||||||||||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | H.C. Wainwright & Co., LLC [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Common stock, gross proceeds | $ 75,000 | ||||||||||||||||
Shares, Issued | shares | 138,956 | ||||||||||||||||
Warrants esercise price | $ / shares | $ 1.875 | ||||||||||||||||
Warrants and rights outstanding, maturity date | Oct. 29, 2023 | ||||||||||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | Common Stock [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Common stock, gross proceeds | $ 2,750,000 | ||||||||||||||||
Shares, Issued | shares | 1,985,082 | ||||||||||||||||
Shares Issued, Price Per Share | $ / shares | $ 1.375 | ||||||||||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | Warrant [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Shares Issued, Price Per Share | $ / shares | $ 1.3725 | ||||||||||||||||
Warrants, gross proceeds | $ 250,000 | ||||||||||||||||
Warrants esercise price | $ / shares | $ 0.125 | ||||||||||||||||
Warrant term | 5 years | ||||||||||||||||
Equity Purchase Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Interest rate | 20.00% | 20.00% | |||||||||||||||
Subsequent event, description | Acquired Interests for an aggregate purchase price of RMB 320 million ($46.72 million) (the ''Purchase Price''), which shall be paid as follows: (i) in cash RMB 60 million ($8.76 million); (ii) in the form of 2.6 million shares of the Company's common stock using a value of $1.90 per share; and (iii) in the form of 17,376,950 shares of the Company's preferred stock using a value of $1.90 per share. The preferred shares shall have no voting rights but shall have preferential dividend rights to participate in and receive a 15% premium on a per share basis for any dividends declared and paid by the Company on its common stock. The holder of the preferred shares shall have the right to convert the preferred shares into shares of the Company's common stock on a 1:1 basis after the six month anniversary of the issuance of the preferred shares, but the Holder may only exercise such conversion right to the extent that, after giving effect to the issuance of common stock after such conversion, the Holder would beneficially own less than 20% of the Company's issued and outstanding common stock. | Acquired Interests for an aggregate purchase price of RMB 320 million ($46.72 million) (the ''Purchase Price''), which shall be paid as follows: (i) in cash RMB 60 million ($8.76 million); (ii) in the form of 2.6 million shares of the Company's common stock using a value of $1.90 per share; and (iii) in the form of 17,376,950 shares of the Company's preferred stock using a value of $1.90 per share. The preferred shares shall have no voting rights but shall have preferential dividend rights to participate in and receive a 15% premium on a per share basis for any dividends declared and paid by the Company on its common stock. The holder of the preferred shares shall have the right to convert the preferred shares into shares of the Company's common stock on a 1:1 basis after the six month anniversary of the issuance of the preferred shares, but the Holder may only exercise such conversion right to the extent that, after giving effect to the issuance of common stock after such conversion, the Holder would beneficially own less than 20% of the Company's issued and outstanding common stock. | |||||||||||||||
Acquired interests | $ 46,720,000 | ¥ 320,000,000 | |||||||||||||||
Equity Purchase Agreement [Member] | Subsequent Event [Member] | Common Stock [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Payment for purchase price form of shares | shares | 2,600,000 | 2,600,000 | |||||||||||||||
Equity Purchase Agreement [Member] | Subsequent Event [Member] | Preferred Stock [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Payment for purchase price form of shares | shares | 17,376,950 | 17,376,950 | |||||||||||||||
Amendment Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Subsequent event, description | (a) purchase an 18% equity interest in Xi'an Xinhuan Energy Co., Ltd. (''Xinhuan'') instead of the 20% equity interest contemplated by the Original Agreement; (b) pay an aggregate of RMB 288 million for such equity interests (the ''Purchase Price) instead of the RMB 320 million contemplated by the Original Agreement; (c) pay RMB 228 million of the Purchase Price in shares of the Company's capital stock (the ''Share Payment'') instead of the RMB 260 million contemplated by the Original Agreement; (d) complete the Share Payment using a per share value of $1.70 for both common and preferred shares instead of the $1.90 contemplated by the Original Agreement; and (e) issue to Mr. Wang 16,837,340 preferred shares as a portion of the Share Payment instead of the 17,376,950 preferred shares contemplated by the Original Agreement. | ||||||||||||||||
Projects Transfer Agreement [Member] | Subsequent Event [Member] | HYREF Fund [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Debt payments | $ 36,068,029 | ¥ 247,066,000 | $ 36,068,029 | ¥ 247,066,000 | |||||||||||||
Projects Transfer Agreement [Member] | Subsequent Event [Member] | Hongyuan Huifu [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Debt payments | 18,549,781 | 127,066,000 | 18,549,781 | 127,066,000 | |||||||||||||
Projects Transfer Agreement [Member] | Subsequent Event [Member] | Shenqiu Phase I And Ii Projects [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Debt payments | $ 17,518,248 | ¥ 120,000,000 | $ 17,518,248 | ¥ 120,000,000 | |||||||||||||
Fund Management Company Share Transfer Agreement [Member] | Subsequent Event [Member] | Hongyuan Huifu [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Ownership Percentage | 40.00% | 40.00% | |||||||||||||||
Debt payments | $ 504,214 | ¥ 3,453,867 | |||||||||||||||
Xian Zhonghong Share Transfer Agreement [Member] | Subsequent Event [Member] | Hongyuan Huifu [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Ownership Percentage | 10.00% | 10.00% | |||||||||||||||
Debt payments | $ 437,956 | ¥ 3,000,000 | |||||||||||||||
Fixed Assets Transfer Agreement [Member] | Subsequent Event [Member] | HYREF Fund [Member] | |||||||||||||||||
Subsequent Events (Textual) | |||||||||||||||||
Debt payments | $ 27,538,598 | ¥ 188,639,400 |
Restatement (Details)
Restatement (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Change in Accounting Estimate [Line Items] | ||
Accounts receivable | $ 25,723,889 | $ 15,399,778 |
Current portion of investment in sales-type leases, net | 6,973,954 | 6,679,019 |
Interest receivable on sales-type leases | 3,094,017 | 555,451 |
Other receivables | 387,477 | 553,886 |
Investment in sales-type leases, net | 52,512,266 | 133,079,634 |
Property and equipment, net | 13,575 | 17,724 |
Total assets | 220,292,653 | 316,874,573 |
Deferred tax liability, net (current) | 1,103,309 | 1,538,105 |
Deferred tax liability, net (non-current) | 2,578,984 | 10,771,348 |
Total liabilities | 60,763,097 | 103,167,780 |
Statutory reserve | 14,210,589 | 13,823,789 |
Accumulated other comprehensive income | (2,589,793) | 3,210,315 |
Retained earnings | 36,130,249 | 84,661,602 |
Total company stockholders' equity | 159,548,521 | 213,493,182 |
Total liabilities and equity | 220,292,653 | $ 316,874,573 |
As Previously Reported [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Accounts receivable | 25,062,146 | |
Current portion of investment in sales-type leases, net | 6,948,365 | |
Interest receivable on sales-type leases | 3,320,420 | |
Other receivables | 873,448 | |
Investment in sales-type leases, net | 109,728,463 | |
Total assets | 277,533,892 | |
Deferred tax liability, net (current) | 1,089,690 | |
Deferred tax liability, net (non-current) | 8,811,021 | |
Total liabilities | 66,981,515 | |
Statutory reserve | 14,448,084 | |
Accumulated other comprehensive income | (2,689,316) | |
Retained earnings | 87,015,098 | |
Total company stockholders' equity | 210,571,342 | |
Total liabilities and equity | 277,533,892 | |
Net Adjustment [Member] | ||
Change in Accounting Estimate [Line Items] | ||
Accounts receivable | 661,743 | |
Current portion of investment in sales-type leases, net | 25,589 | |
Interest receivable on sales-type leases | (226,403) | |
Other receivables | (485,971) | |
Investment in sales-type leases, net | (57,216,197) | |
Total assets | (57,241,239) | |
Deferred tax liability, net (current) | 13,619 | |
Deferred tax liability, net (non-current) | (6,232,037) | |
Total liabilities | (6,218,418) | |
Statutory reserve | (237,495) | |
Accumulated other comprehensive income | 99,523 | |
Retained earnings | (50,884,849) | |
Total company stockholders' equity | (51,022,821) | |
Total liabilities and equity | $ (57,241,239) |
Restatement (Details 1)
Restatement (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Change in Accounting Estimate [Line Items] | ||||
Contingent rental income | $ 1,683,723 | $ 1,240 | $ 2,791,444 | $ 274,676 |
Cost of sales | ||||
Gross profit | 1,683,723 | (1,479) | 2,791,444 | 3,247,807 |
Interest income on sales-type leases | 1,682,428 | 5,167,974 | 9,879,962 | 17,989,599 |
Total operating income | 3,366,151 | 5,166,495 | 12,671,406 | 21,237,406 |
General and administrative expenses | 1,431,719 | 543,078 | 3,064,746 | 1,776,101 |
Impairment loss on net investment receivable | 1,184,209 | (57,168,035) | ||
Income from operations | 3,118,641 | 4,623,417 | (47,561,375) | 19,461,305 |
Income (loss) from operations | (1,419,963) | (567,070) | (7,902,663) | 2,293,303 |
Income (loss) before income tax | 1,698,678 | 4,056,347 | (55,464,038) | 21,754,608 |
Income tax expense (benefit) | 88,926 | 796,663 | (7,092,359) | 3,096,126 |
Net income (loss )attributable to China Recycling Energy Corporation | 1,689,673 | 3,266,591 | (48,144,553) | 18,681,506 |
Foreign currency translation gain (loss) | (2,096,212) | (8,713,755) | (5,800,108) | (8,494,720) |
Comprehensive income (loss) attributable to China Recycling Energy Corporation | (406,539) | $ (5,447,164) | (53,944,661) | $ 10,186,786 |
As Previously Reported [Member] | ||||
Change in Accounting Estimate [Line Items] | ||||
Contingent rental income | ||||
Cost of sales | ||||
Gross profit | ||||
Interest income on sales-type leases | 2,286,948 | 10,945,411 | ||
Total operating income | 2,286,948 | 10,945,411 | ||
General and administrative expenses | 299,110 | 1,153,894 | ||
Impairment loss on net investment receivable | ||||
Income from operations | 1,987,838,000 | |||
Income (loss) from operations | 9,791,517 | |||
Income (loss) before income tax | 567,875 | 1,888,854 | ||
Income tax expense (benefit) | 110,957 | (861,811) | ||
Net income (loss )attributable to China Recycling Energy Corporation | 536,839 | 2,977,791 | ||
Foreign currency translation gain (loss) | (1,400,319) | (5,899,631) | ||
Comprehensive income (loss) attributable to China Recycling Energy Corporation | (863,480) | (2,921,840) | ||
Net Adjustment [Member] | ||||
Change in Accounting Estimate [Line Items] | ||||
Contingent rental income | 1,683,723 | 1,100,962 | ||
Cost of sales | 0 | (7,204) | ||
Gross profit | 1,683,723 | 1,108,166 | ||
Interest income on sales-type leases | (604,520) | (1,065,449) | ||
Total operating income | 1,079,203 | 1,725,995 | ||
General and administrative expenses | 1,132,609 | 1,910,852 | ||
Impairment loss on net investment receivable | (1,184,209) | 57,168,035 | ||
Income from operations | 1,130,803,000 | |||
Income (loss) from operations | (57,352,892) | |||
Income (loss) before income tax | 1,130,803 | (57,352,892) | ||
Income tax expense (benefit) | (22,031) | (6,230,548) | ||
Net income (loss )attributable to China Recycling Energy Corporation | 1,152,834 | (51,122,344) | ||
Foreign currency translation gain (loss) | (695,893) | 99,523 | ||
Comprehensive income (loss) attributable to China Recycling Energy Corporation | $ 456,941 | $ (51,022,821) |
Restatement (Details 2)
Restatement (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Change in Accounting Estimate [Line Items] | ||||
Income (Loss) including noncontrolling interest | $ 1,609,752 | $ 3,259,684 | $ (48,371,679) | $ 18,658,482 |
Impairment loss on net investment receivable | 1,184,209 | (57,168,035) | ||
Depreciation and amortization | 3,667 | 23,948 | ||
Changes in deferred tax | (216,590) | $ 65,835 | (8,303,783) | (1,370,648) |
Interest receivable on sales-type leases | 2,600,856 | (377,892) | ||
Accounts receivable | (10,106,830) | 16,186 | ||
Net cash provided by operating activities | 30,432,764 | $ 51,720,540 | ||
Previously Reported [Member] | ||||
Change in Accounting Estimate [Line Items] | ||||
Income (Loss) including noncontrolling interest | 2,750,665 | |||
Impairment loss on net investment receivable | ||||
Changes in deferred tax | (2,073,235) | |||
Interest receivable on sales-type leases | (2,785,713) | |||
Net cash provided by operating activities | 30,432,764 | |||
Restatement Adjustment [Member] | ||||
Change in Accounting Estimate [Line Items] | ||||
Income (Loss) including noncontrolling interest | (51,122,344) | |||
Impairment loss on net investment receivable | $ (1,184,209) | 57,168,035 | ||
Changes in deferred tax | (6,230,548) | |||
Interest receivable on sales-type leases | 184,857 | |||
Net cash provided by operating activities |
Restatement (Details Textual)
Restatement (Details Textual) | 1 Months Ended |
Apr. 28, 2016 | |
Change in Accounting Estimate [Line Items] | |
Description of supplemental agreement | Erdos TCH and Erdos entered a supplemental agreement, effective on May 1, 2016, Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / Kwh. |