Current Portion Long Term Debt

12 Months Ended

Dec. 31, 2018

Current Portion Long Term Debt [Text Block]

10.	Current Portion – Long Term Debt
	Current portions of notes payable, debentures, and long-term debt consisted of the following as of December 31, 2018 and 2017:

		12/31/2018		12/31/2017
Debenture issued by 5 private placement holders underwritten by Guoyuan Securities Co., Ltd.
• Interest rate at 10% per annum due 8/28/2016	$	-	$	9,517,882
Debenture issued by 2 private placement holders underwritten by Daiwa SSC Securities Co. Ltd.
• Interest rate at 9.5% per annum due 11/8/2015		-		15,368,774
Loans from Deutsche Investitions-und Entwicklungsgesellschaft mbH (“DEG”)
• Interest rate at 5.510% per annum due 3/15/2015		-		1,875,000
• Interest rate at 5.510% per annum due 9/15/2015		-		1,875,000
• Interest rate at 5.510% per annum due 3/15/2016		-		1,875,000
	$	-	$	30,511,656

The Company began repaying principal and interest on the loan with DEG in semi-annual installments on December 15, 2012. As of December 31, 2018 and 2017, the Company had not repaid any principal nor interest. The loan was collateralized with the following terms:

(a.)	A first ranking mortgage in the amount of about USD $12,000,000 on the Company’s land and building in favor of DEG.
(b.)	A share pledge, by Mr. Si Chen (a major shareholder, and Chairman and CEO of the Company) as the sponsor of the loan, to secure approximately USD $12,000,000 of the loan. The Company defaulted on its loan with DEG; accordingly, on December 7, 2016, DEG exercised its rights to foreclose on 10,794,066 shares pledged by Mr. Si Chen. The loan remains outstanding.
(c.)	The total amount of the first ranking mortgage as indicated in the Loan Agreement (Article 12(1)(a)) and the value of the pledged shares by Mr. Si Chen (Loan Agreement (Article 12(1)(a))) should be at least USD 24,000,000 in aggregate.
(d.)	A personal guarantee by Mr. Si Chen in form and substance satisfactory to DEG.

 

As of December 31, 2018, as a result of the disposal of International Lorain Holding Inc. and its subsidiaries: Junan Hongrun Foodstuff Co., Ltd., Shandong Lorain Co., Ltd., Dongguan Lorain Co., Ltd., the Company is no longer liable for all bank loans as they have been transferred to Mr. Si Chen, the former chairman.