0001213900-19-018184.txt : 20190916 0001213900-19-018184.hdr.sgml : 20190916 20190916172929 ACCESSION NUMBER: 0001213900-19-018184 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 75 CONFORMED PERIOD OF REPORT: 20190331 FILED AS OF DATE: 20190916 DATE AS OF CHANGE: 20190916 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NF Energy Saving Corp CENTRAL INDEX KEY: 0001213660 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED METAL PRODUCTS [3490] IRS NUMBER: 020563302 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-34890 FILM NUMBER: 191095480 BUSINESS ADDRESS: STREET 1: 3105, TOWER C, 390 QINGNIAN AVENUE STREET 2: HEPING DISTRICT, CITY: SHENYANG, STATE: F4 ZIP: 110015 BUSINESS PHONE: (8624) 8563-1159 MAIL ADDRESS: STREET 1: 3105, TOWER C, 390 QINGNIAN AVENUE STREET 2: HEPING DISTRICT, CITY: SHENYANG, STATE: F4 ZIP: 110015 FORMER COMPANY: FORMER CONFORMED NAME: NF Energy Saving CORP of America DATE OF NAME CHANGE: 20070509 FORMER COMPANY: FORMER CONFORMED NAME: Diagnostic CORP of America DATE OF NAME CHANGE: 20041115 FORMER COMPANY: FORMER CONFORMED NAME: Global Broadcast Group, Inc. DATE OF NAME CHANGE: 20041104 10-Q 1 f10q0319_nfenergysaving.htm QUARTERLY REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ____________

Commission File Number: 000-50155

NF ENERGY SAVING CORPORATION
(Exact name of registrant as specified in its charter)

Delaware		02-0563302
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3106, Tower C, 390 Qingnian Avenue, Heping District
Shenyang, P. R. China		110015
(Address of Principal Executive Offices)		(Zip Code)

(8624) 8563-1159
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common stock, $0.001 par value		BIMI		The NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such fi ling requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such fi les). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of March 31, 2019, the registrant had 8,073,289 shares of common stock, par value $.001 per share, issued and outstanding.

TABLE OF CONTENTS

		Page
PART I	FINANCIAN INFORMATION
Item 1	Financial Statements	1
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4	Controls and Procedures	23
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	24
Item 1A	Risk Factors	24
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3	Defaults Upon Senior Securities	24
Item 4	Mine Safety Disclosures	24
Item 5	Other Information.	24
Item 6	Exhibits.	24
Signatures		25

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2019			2018
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	301,799		$	17,860
Restricted cash		183,444			179,496
Accounts receivable, net		618,333			1,274,980
Retention receivable, net		31,297			65,529
Amount due from related parties		1,179,295			-
Inventories		1,168,472			937,966
Prepayments and other receivables		169,215			131,442

Total current assets		3,651,855			2,607,273

NON-CURRENT ASSETS
Property, plant and equipment, net		18,102,063			17,958,136
Land use right, net		2,497,582			2,460,668
Construction in progress		-			24,722

Total non-current assets		20,599,645			20,443,526

TOTAL ASSETS	$	24,251,500		$	23,050,799

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term bank borrowings	$	5,940,447		$	5,816,961
Accounts payable, trade		2,766,527			2,782,182
Accounts payable, trade-related parties		414,994			416,547
Amount due to related parties		2,007,513			918,033
Taxes payable		1,064,176			1,086,589
Other payables and accrued liabilities		2,394,712			2,045,066

Total current liabilities		14,588,369			13,065,378

TOTAL LIABILITIES		14,588,369			13,065,378

COMMITMENTS AND CONTINGENCIES

EQUITY
Common stock, $0.001 par value; 50,000,000 shares authorized; 7,573,289 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively		7,573			7,573
Additional paid-in capital		12,555,325			12,555,325
Statutory reserves		2,227,634			2,227,634
Accumulated deficit		(7,010,696	)		(6,443,102	)
Accumulated other comprehensive income		2,020,229			1,788,302
Total NF Energy Saving Corporation’s equity		9,800,065			10,135,732

NONCONTROLLING INTERESTS		(136,934	)		(150,311	)

Total equity		9,663,131			9,985,421

Total liabilities and equity	$	24,251,500		$	23,050,799

The accompanying notes are an integral part of the condensed consolidated financial statements

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

	For the Three Months Ended March 31,
	2019			2018

REVENUES
Products	$	557,239		$	91,796
Services		21,473			55,283
Total revenues, net		578,712			147,079

COST OF REVENUES
Cost of products		419,541			78,531
Cost of services		11,135			37,111
Total cost of revenues		430,676			115,642

GROSS PROFIT		148,036			31,437

OPERATING EXPENSES:
Sales and marketing		37,873			8,940
General and administrative		483,643			439,190
Total operating expenses		521,516			448,130

INCOME (LOSS) FROM OPERATIONS		(373,480	)		(416,693	)

OTHER INCOME (EXPENSE)
Interest income		151			330
Interest expense		(118,719	)		(88,676	)
Other income (expense)		(50,400	)		-
Total other income (expense), net		(168,968	)		(88,346	)

INCOME (LOSSES) BEFORE INCOME TAXES		(542,448	)		(505,039	)

PROVISION FOR INCOME TAXES		-			-

NET INCOME (LOSS)		(542,448	)		(505,039	)
Less: net income attributable to noncontrolling interest		25,146			(5,340	)
NET INCOME(LOSS) ATTRIBUTABLE TO NF ENERGY SAVING CORPORATION	$	(567,594	)		(499,699	)

COMPREHENSIVE INCOME(LOSS)
NET INCOME(LOSS)	$	(542,448	)		(505,039	)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment		231,928			1,006,744
Total comprehensive income(loss)		(310,520	)		501,705
Less:comprehensive income(loss) attributable to non-controlling interests		13,377			5,612
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NF ENERGY SAVING CORPORATION	$	(323,897	)	$	496,093

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
Basic and diluted		7,573,289			7,184,400

EARNINGS (LOSSES) PER SHARE
Basic and diluted	$	(0.07	)	$	(0.07	)

The accompanying notes are an integral part of the condensed consolidated financial statements

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Three Months Ended March 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(542,448	)	$	(505,039	)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization		252,125			249,047
Write off property, plant and equipment		-			-
Allowance for doubtful accounts		16,344			-
Change in operating assets and liabilities
Accounts and retention receivable		705,703			2,007,657
Inventories		(205,366	)		(912,536	)
Prepayments and other receivables		(39,276	)		(78,476	)
Accounts payable, trade		(84,945	)		(31,063	)
Other payables and accrued liabilities		311,165			258,282
Taxes payable		(45,390	)		-
Net cash provided by operating activities		367,912			987,872

CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by (used in) investing activities		-			-

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of share from placement		-			500,000
Amount financed to related parties		(105,060	)		(431,682	)
Proceeds from short-term bank borrowings		5,928,772			6,292,645
Repayment on short-term bank borrowings		(5,928,772	)		(7,393,858	)

Net cash used in financing activities		(105,060	)		(1,032,895	)

EFFECT OF EXCHANGE RATE ON CASH		25,035			10,943

INCREASE (DECREASE) IN CASH		287,887			(34,080	)

CASH, CASH EQUIVALENTS, RESTRICTED CASH, beginning of period		197,356			282,154

CASH, CASH EQUIVALENTS, RESTRICTED CASH, end of period	$	485,243		$	248,074

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax	$	-		$	-
Cash paid for interest expense, net of capitalized interest	$	88,264		$	88,676

The accompanying notes are an integral part of the condensed consolidated financial statements

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

ORGANIZATION AND BUSINESS BACKGROUND

NF Energy Saving Corporation (the “Company” or “NFEC”) was incorporated in the State of Delaware in the name of Galli Process, Inc. on October 31, 2000. On February 7, 2002, the Company changed its name to “Global Broadcast Group, Inc.” On November 12, 2004, the Company changed its name to “Diagnostic Corporation of America.” On March 15, 2007, the Company changed its name to “NF Energy Saving Corporation of America.” On August 24, 2009, the Company further changed its name to “NF Energy Saving Corporation.” Since March 7, 2012, the common stock is traded on the Nasdaq Capital Market.

On January 1, 2019, the Company transferred its 100% equity interest in Liaoning Nengfa Weiye Energy Technology Co. Ltd. to NF Energy Equipment Limited (“NF Equipment”). NF Equipment, a Hong Kong limited liability company is 100% owned by NF Energy Investment Corporation (“NF Investment”), a wholly-owned subsidiary of the Company. NF Investment is a British Virgin Island limited liability company. Other than its equity interest in NF Equipment, NF Investment does not own any assets or conduct any operations.

The Company, through its subsidiaries, mainly operates in the energy technology business in the People’s Republic of China (the “PRC”). The Company specializes in the provision of energy saving technology consulting, optimization design services, energy saving reconstruction of pipeline networks and contractual energy management services to China’s electric power, petrochemical, coal, metallurgy, construction, and municipal infrastructure development industries. The Company also engages in the manufacturing and sales of the energy-saving flow control equipment. .

Description of subsidiaries

Name	Place of incorporation and kind of legal entity	Principal activities and place of operation	Effective interest held

NF Energy Saving Investment Limited	British Virgin Island, a limited liability company	Investment holding	100%

NF Energy Equipment Limited	Hong Kong, a limited liability company	Investment holding	100%

Liaoning Nengfa Weiye Energy Technology Co., Ltd. (“Nengfa Energy”)	The PRC, a limited liability company	Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC	100%
Liaoning Nengfa Tiefa Import & Export Co., Ltd. (“Nengfa Tiefa Import & Export”)	The PRC, a limited liability company	Development and production of hi-tech and automatic-intelligence valve products	57%

NFEC and its subsidiaries are hereinafter referred to as (the “Company”).

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

GOING CONCERN UNCERTAINTIES

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had an accumulated deficit of $7,010,696 and negative working capital of $10,936,514 as of March 31, 2019, and incurred a net loss of $567,594 for the three months ended March 31, 2019 In addition, the Company continues to generate operating losses and has limited cash flow from its operations. Management believes these factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months.

The continuation of the Company as a going concern through the next twelve months is dependent upon (1) the continued financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due, and (2) further implement management’s business plan to extend its operations and generate sufficient revenues to meet its obligations. While the Company believes in the viability of its strategy to increase sales volume and in its ability to raise additional funds, there can be neither any assurance to that effect, nor any assurance that the Company will be successful in securing sufficient funds to sustain its operations.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

●

Basis of presentation and consolidation

These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and reflected the activities of NFEC and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

The unaudited interim condensed consolidated financial information as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K/A for the fiscal year ended December 31, 2018 previously filed with the SEC on September 6, 2019.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of March 31, 2019 and its unaudited condensed consolidated results of operations for the three months ended March 31, 2019 and 2018, and its unaudited condensed consolidated cash flows for the three months ended March, 2019 and 2018, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future periods.

●

Use of estimates

In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates.

●

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

●

Cash and cash equivalents

Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.

●

Restricted cash

Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in restricted cash account on the Company’s unaudited interim condensed consolidated balance sheet. The Company’s restricted cash balance is related to a contract performance guarantee bond. The balance of restricted cash was $183,444 and $179,496 as of March 31, 2019 and December 2018, respectively.

●

Accounts receivable and allowance for doubtful accounts

Accounts receivable are recorded at the invoiced amount, do not bear interest and are due within contractual payment terms, generally 30 to 90 days from shipment. Credit is granted based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days are reviewed individually for collectability. At the end of each period, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For those receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2019 and December 31, 2018, the allowance for doubtful accounts was $11,579,977 and $11,327,271, respectively.

●

Retention receivable and allowance for doubtful accounts

Retention receivable is the amount withheld by a customer based upon 5-10% of the contract value, until a product warranty expires. The warranty period is usually 12 months. As of March 31, 2019 and December 31, 2018, the allowance for doubtful accounts was $962,381 and $942,376, respectively.

●

Inventories

Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a weighted average method. Costs include material, labor and manufacturing overhead costs. The Company reviews historical sales activity quarterly to determine excess, slow moving items and potentially obsolete items and also evaluates the impact of any anticipated changes in future demand. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand. As of March 31, 2019 and December 31, 2018, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.

●

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

	Expected useful lives	Residual value
Building	10 – 30 years	5%
Plant and machinery	5 – 14 years	4 ~ 5%
Furniture, fixture and equipment	5 years	4 ~ 13%

Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

●

Land use right

All lands in the PRC are owned by the PRC government. Under applicable law, the PRC government, may sell the right to use the land for a specified period of time. Thus, the Company’s land purchases in the PRC are considered to be leaseholds and are stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreement on a straight-line basis, which is 50 years and will expire in 2059.

●

Construction in progress

Construction in progress is stated at cost, which includes acquisition of land use rights, cost of construction, purchases of plant and equipment and other direct costs attributable to the construction of a manufacturing facility in Yinzhou District Industrial Park, Tieling City, Liaoning Province, PRC. Construction in progress is not depreciated until such time as the assets are completed and put into operational use. No capitalized interest is incurred during the period of construction.

●

Impairment of long-lived assets

In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

●

Revenue recognition

On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605, Revenue Recognition. The adoption had no material impact on the Company’s consolidated financial statements and there was no adjustment to the beginning retained earnings on January 1, 2018.

Under ASC 606, revenue is recognized when control of the promised goods and services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods and services, net of value-added tax. The Company determines revenue recognition through the following steps:

Identify the contract with a customer;

Identify the performance obligations in the contract;

Determine the transaction price;

Allocate the transaction price to the performance obligations in the contract; and

Recognize revenue when (or as) the entity satisfies a performance obligation.

●

Cost of revenue

Cost of revenue consists primarily of material costs, direct labor, depreciation, and manufacturing overhead, which are directly attributable to the manufacture of products and the rendering of services or projects. Shipping and handling costs, associated with the distribution of finished products to customers, are borne by the customers.

●

Comprehensive income

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying condensed consolidated statement of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

●

Income taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the three months ended March 31, 2019 and 2018, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2019, the Company did not have any significant unrecognized uncertain tax positions.

The Company conducts the majority of its businesses in the PRC and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority.

●

Product warranty

Under the terms of the contracts, the Company offers its customers with a free product warranty on a case-by-case basis, depending upon the type of customers, nature and size of the infrastructure projects. Under such arrangements, a portion of the project contract balance (usually 5-10% of contract value) is withheld by customers from 12 to 24 months, until the product warranty has expired. The Company has not experienced any material returns or claims where it was under obligation to honor this standard warranty provision. As of March 31, 2019 and December 31, 2018, the Company reported a net reserve of $31,297 and $65,529 as retention receivable for the receivables withheld by its customers for product warranty, respectively.

●

Net loss per share

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

●

Foreign currencies translation

The reporting currency of the Company is the United States Dollar ("US$"). The Company's subsidiaries in the PRC maintain their books and records in their local currency, the Renminbi Yuan ("RMB"), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective period:

	March 31, 2019		March 31, 2018
Period-end RMB:US$1 exchange rate		6.7335		6,2802
Three month end average RMB:US$1 exchange rate		6.7468		6.3566

●

Retirement plan costs

Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying consolidated statements of operation as the related employee service is provided.

●

Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

●

Segment reporting

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the three months ended March 31, 2019 and 2018, the Company operates in one reportable operating segment in the PRC.

●

Fair value of financial instruments

The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and convertible promissory notes): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of its obligation under finance lease and short-term bank borrowing approximate the carrying amount.

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

●

Recent accounting pronouncements

In January 2017, the Financial Accounting Standard Board (“FASB”) issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company's adoption date of ASC 606. The Company does not believe that the adoption of ASU 2018-07 will have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits when evaluating disclosure requirements. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on the Company’s financial statements and footnote disclosures.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

ACCOUNTS RECEIVABLE

The majority of the Company’s sales are on open credit terms and in accordance with terms specified in the contracts governing the relevant transactions. The Company evaluates the need of an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible. If actual collections experience changes, revisions to the allowance may be required. Based upon the aforementioned criteria, the Company reported a bad debt expense of $16,344 and $0 for its doubtful accounts for the three months ended March 31, 2019 and 2018.

	March 31, 2019			December 31, 2018
Accounts receivable, cost	$	12,198,310		$	12,602,251
Less: allowance for doubtful accounts		(11,579,977	)		(11,327,271	)
Accounts receivable, net	$	618,333		$	1,274,980

RETENTION RECEIVABLE

As of March 31, 2019 and December 31, 2018, the Company reported its retention receivable as follow:

	March 31, 2019			December 31, 2018
Retention receivable, cost	$	993,678		$	1,007,905
Less: allowance for doubtful accounts		(962,381	)		(942,376	)
Retention receivable, net	$	31,297		$	65,529

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

INVENTORIES

Inventories consisted of the following:

	March 31, 2019		December 31, 2018
Raw materials	$	446,399	$	519,341
Work-in-process		129,202		322,132
Finished goods		592,871		96,493
	$	1,168,472	$	937,966

For the three months ended March 31, 2019 and 2018, no allowance for obsolete inventories was recorded by the Company.

Finished goods are expected to be delivered to the customer in the next twelve months.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	March 31, 2019			December 31, 2018
Building	$	20,075,648		$	19,658,330
Plant and machinery		6,075,721			5,949,422
Furniture, fixture and equipment		25,291			24,765
		26,176,660			25,632,517
Less: accumulated depreciation		(8,074,597	)		(7,674,381	)
Property, plant and equipment, net	$	18,102,063		$	17,958,136

Depreciation expense for the three months ended March 31, 2019 and 2018 were $236,833 and $232,816.

LAND USE RIGHT

Land use right consisted of the following:

	March 31, 2019			December 31, 2018
Land use right, at cost	$	3,064,518		$	3,000,815
Less: accumulated amortization		(566,936	)		(540,147	)
	$	2,497,582		$	2,460,668

Amortization expenses for the three months ended March 31, 2019 and 2018 were $15,292 and $16,231, respectively.

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

The estimated amortization expense on the land use right in the next five years and thereafter is as follows:

Year ending December 31:
2019	$	45,878
2020		61,170
2021		61,170
2022		61,170
2023		61,170
Thereafter		2,207,024

Total:	$	2,497,582

SHORT-TERM BANK BORROWINGS

Short-term bank borrowings consist of the following:

	March 31, 2019		December 31, 2018
Equivalent to RMB 40,000,000 with a fixed interest rate at 6.09%, monthly payable, due March 18, 2019, which is guaranteed by its related parties and used buildings and land use rights as collateral.		-		5,816,961
Equivalent to RMB 40,000,000 with a fixed interest rate at 8.5%, monthly payable, due March 18, 2020, which is guaranteed by its related parties and used buildings and land use rights as collateral.		5,940,447		-
Total short-term bank borrowings	$	5,940,447	$	5,816,961

For the three months ended March 31, 2019 and 2018, the Company reported interest expenses of $89,976 and $88,676, respectively.

10.

RELATED PARTIES AND RELATED PARTIES TRANSACTIONS

Accounts payable, trade-related parts

As of March 31, 2019 and December 31, 2018, the Company reported trade payables of $414,994 and $416,547, respectively, due to Liaoning Bainianye New Energy Utilization Co., Ltd., (“Bainianye New Energy”), a company directly controlled by Ms. Li Hua Wang (the Company’s former CFO) and Mr. Gang Li (the Company’s former Chief Executive Officer and one of the Company’s current directors). The trade payable is unsecured, interest-free and has no fixed repayment term. During the three months ended March 31, 2019, the Company did not have inventory purchase transaction with Bainianye New Energy.

Amount Due to related parties

As of March 31, 2019, the total amount due to related parties was $2,007,513 mainly included:

Amount due to Mr. Gang Li (the Company’s former Chief Executive Officer and one of current directors) of $1,387,958 totally including:

1.1

a $712,854 loan from Mr. Gang Li with annually interest rate of 8.5% and due on demand. For the three months ended March 31, 2019 and 2018, the Company reported interest expenses of $9,609 and $0, respectively;

1.2

a $668,300 loan from Mr. Gang Li with annual interest rate of 14.4% and due on February 1, 2019. For the three months ended March 31, 2019 and 2018, the Company reported interest expenses of $13,837 and $0, respectively;

1.3

$6,804 due to Mr. Gang Li that is free of interest and due on demand.

Amount due to Ms. Li Hua Wang (the Company’s former Chief Financial Officer) of $265,045, which is free of interest and due on demand;

Amount due to Mr. Haibo Gong (Import & Export Company’s executive director) of $74,966,including:

3.1

a $69,429 loan from Mr. Haibo Gong with annual interest rate of 18% and due on demand. For the three months ended March 31, 2019, the Company reported interest expenses of $4,611;

3.2

a $5,537 payable to Mr. Haibo Gong that is free of interest and due on demand;

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Amount due to Mr. Yongquan Bi, the current Chief Executive Officer (“CEO”) and Chairman of the Company, of $92,000 which is free ofinterest and due on demand;

$4,682 due to Mr. Yongjian Zhang, one of the Company’s directors, which is free of interest and due on demand; and

$182,862 due to Bainianye New Energy of which is free of interest and due on demand;

As of December 31, 2018, the total amount due to related parties mainly was $918,033 included:

Amount due to Ms. Li Hua Wang (the Company’s former Chief Financial Officer) of $606,194, which is free from interest and due on demand;

Amount due to Mr. Haibo Gong (Import & Export Company’s executive director) of $162,423 totally including:

2.1

amount to $158,513 loan from Mr. Haibo Gong with annual interest rate of 18% and due on demand. For the three months ended March 31, 2018, the company reported interest expenses amount to $2,995;

2.2

amount to $3,910 due to Mr. Haibo Gong that free from interest and due on demand;

Amount due to Liaoning Bainianye New Energy Utilization Co., Ltd., directly controlled by Ms. Li Hua Wang (the Company’s former Chief Financial Officer) and Mr. Gang Li (the Company’s former Chief Executive Officer and one of the Company’s current directors), of $174,256 which free from interest and due on demand;

Amount due from related parties

As of March 31, 2019 and December 31, 2018, the Company reported amount due from related parties of $1,179,295 and $0, respectively.

As of March 31, 2019, the total amount due from related parties included $1,179,295 due from Nengfa Weiye Tieling Valve Joint Stock Co., Ltd. (“Tieling Joint Stock”), the noncontrolling interest of Nengfa Tiefa Import & Export. All amount due from related parties was free from interest and due on demand.

11.

OTHER PAYABLES AND ACCRUED LIABILITIES

Other payables and accrued liabilities consisted of the following:

	March 31, 2019		December 31, 2018

Customer deposits	$	322,206	$	356,799
Accrued operating expenses		697,068		705,479
Payables with disputes		1,195,046		879,780
Other payables		180,392		103,008
	$	2,394,712	$	2,045,066

As of March 31, 2019 and December 31, 2018, the Company reported $1,195,046 and $879,780 as payables with disputes which included mainly a dispute payable of approximately $870,000 occurred in 2018 and a dispute payable of approximately $190,000 occurred in 2019.

On August 1, 2018, one of NF Energy’s suppliers filed a lawsuit against NF Energy for unpaid outstanding payable of approximately RMB 6 million or $870,000. Until the date of this report, both parties have not reached any agreement or settlement.

On April 22, 2019, one of NF Energy’s suppliers filed a lawsuit against NF Energy for unpaid outstanding payable of RMB 1,278,181.8. On May 24, 2019, the parties entered into a court-supervised settlement where NF Energy agreed to pay the supplier approximately RMB 1.26 million or $190,000 in total.

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

12.

STOCKHOLDERS’ EQUITY

The Company is authorized to issue 50,000,000 shares of common stock, $0.001 par value, and as of March 31, 2019 and December 31, 2018, it had 7,573,289 shares and 7,573,289 shares outstanding, respectively.

On March 12, 2018, the Company issued 500,000 shares of its common stock, at the price of $1.00 per share for aggregate consideration of $500,000, to Mr. Yongquan Bi, our Chairman and Chief Executive Officer.

13.

NET LOSS PER SHARE

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. The dilutive effect of potential common shares outstanding is included in diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2019 and 2018:

	For the three months ended March 31,
	2019			2018
Net loss attributable to common shareholders	$	(567,594	)	$	(499,699	)

Weighted average common shares outstanding – Basic and diluted		7,573,289			7,184,400

Net loss per share – Basic and diluted	$	(0.07	)	$	(0.07	)

14.

STATUTORY RESERVES

Under the PRC Law, the Company’s subsidiaries are required to make appropriations to the statutory reserve based on after-tax net earnings and determined in accordance with generally accepted accounting principles of the People’s Republic of China (the “PRC GAAP”). Appropriation to the statutory reserve should be at least 10% of the after-tax net income until the reserve is equal to 50% of the registered capital. The statutory reserve is established for the purpose of providing employee facilities and other collective benefits to the employees and is non-distributable other than in liquidation.

15.

CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

(a)

Major customers

For the three months ended March 31, 2019, two customers who represented more than 10% of the Company’s revenues and its outstanding accounts receivable as of the balance sheet date is presented as follow:

	For the three months ended March 31, 2019					As of March 31, 2019
Customers	Revenues		Percentage of revenues			Accounts receivable
Customer A	$	88,737		15	%	$	-
Customer B		336,668		58	%		-
	$	425,505		73	%	$	-

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

For the three months ended March 31, 2018, the customers that accounted for 10% or more of the Company’s revenues and its outstanding accounts receivable balances as at balance sheet date, are presented as follows:

	For the three months ended March 31, 2018					As of March 31, 2018
Customers	Revenues		Percentage of revenues			Accounts receivable
Customer C	$	37,664		26	%	$	-
Customer D		25,211		17	%		29,856
Customer E		26,432		18	%		22,810
Customer F		22,232		15	%		1,655
	$	111,539		76	%	$	54,321

During the three months ended March 31, 2019, the two main customers are located outside of the PRC which contributed significant increase of revenues in the three months ended March 31, 2019. During the three months ended March 31, 2018, all customers are located in the PRC.

(c)

Credit risk

Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

(d)

Interest rate risk

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

The Company’s interest-rate risk arises from short-term bank borrowings. The Company manages interest rate risk by varying the issuance and maturity dates of variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As of March 31, 2019 and December 31, 2018, short-term bank borrowings were at fixed rates.

(e)

Exchange rate risk

The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in RMB and a significant portion of the assets and liabilities are denominated in RMB. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and RMB. If RMB depreciates against US$, the value of RMB revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.

(f)

Economic and political risks

The Company's operations are conducted in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

The Company's operations in the PRC are subject to special considerations. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

NF ENERGY SAVING CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

16.

SUBSEQUENT EVENTS

At April 11, 2019, the Company entered into a stock purchase agreement (the “Agreement”) with Lasting Wisdom Holdings Limited, a company organized under the laws of the British Virgin Islands, Pukung Limited, a company organized under the laws of Hong Kong, Beijing Xin Rong Xin Industrial Development Co., Ltd., a company organized under the laws of the PRC, Boqi Zhengji Pharmacy Chain Co., Ltd. a company organized under the laws of the PRC (“Boqi Pharmacy”) and several additional individual sellers listed in the Agreement whereby the Company will purchase 100% of equity interests of Lasting Wisdom Holdings Limited (the “Shares”). In accordance with the Agreement, the total purchase price for the Shares is RMB 40 million plus 1.5 million shares of the Company’s common stock. The purchase price is subject to post-closing adjustments (contingent on fair market value of the acquired companies). On May 14, 2019, the Company issued 500,000 shares of its common stock to the shareholders of Lasting Wisdom Holdings Limited as security deposit and the closing of this acquisition is depending on the result of the final evaluation of the target company. As the date of this report, the acquisition is not finished yet. The Company plans to raise RMB 40,000,000 from private placement transactions in equity to pay off the cash portion of the purchase price.

On April 22, 2019, one of NF Energy’s suppliers filed a lawsuit against NF Energy for an outstanding payable of RMB 1,278,181.8. On May 24, 2019, the parties entered into a court-supervised settlement where NF Energy agreed to pay the supplier RMB 1.26 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those financial statements appearing elsewhere in this Report.

Certain statements in this Report constitute forward-looking statements. These forward-looking statements include statements, which involve risks and uncertainties, regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategy, (c) anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the negative of these words or other variations on these words or comparable terminology. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.

The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

As used herein the terms “we”, “us”, “our,” “NFEC” and the “Company” means, NF Energy Saving Corporation, a Delaware corporation and its wholly-owned subsidiaries.

OVERVIEW

In the last few years, NFEC was dedicated to energy efficiency enhancement in two fields: (1) manufacturing large diameter energy efficient intelligent flow control systems for thermal and nuclear power generation plants, major national and regional water supply projects and municipal water, gas and heat supply pipeline networks; and (2) energy saving technology consulting, optimization design services, energy saving reconstruction of pipeline networks and contractual energy management services for China’s electric power, petrochemical, coal, metallurgy, construction, and municipal infrastructure industries.

NFEC has received many awards and honors from China’s regulators, professional associations and international organizations, including the ISO 9001:2008 certification from Det Norske Veritas Management System, the Liaoning Provincial Government’s Award of Innovative Enterprise with Best Investment Return Potentials, the Special Industrial Contribution Award of the ESCO Committee of China Energy Conservation Association, and the “Contract-abiding and credit enterprise” Award by the Liaoning State Local administrative bureau for industry and commerce. NFEC was awarded of “Hi-tech enterprise” by Liaoning Technology bureau in 2013.

In 2019, we decided to shift our focus so that our business will be mainly engaged in the sale of medicines and other health-related commodities through the development of a marketing network. We intend to focus on sales of prescription drugs, explore new retail opportunities (in addition to the acquisition of Boqi Pharmacy), and enter new rural areas. Through the expansion of pharmacy stores, acquisitions of businesses in the medical industry and franchise development, we intend to continue to build core competencies such as specialized services. We are committed to the pharmaceutical retail industry and to transforming the company into a technology-driven health service platform. We also intend to continue to actively explore domestic and international financing opportunities.

GOING CONCERN

As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had an accumulated deficit of $7,010,696 and negative working capital of $10,936,514 as of March 31, 2019, and incurred a net loss of $567,594 for the three month ended March 31, 2019. In addition, the Company continues to generate operating losses and has limited cash flow from its operations. Management believes these factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months.

The continuation of the Company as a going concern through the next twelve months is dependent upon (1) the continued financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due, and (2) further implement management’s business plan to extend its operations and generate sufficient revenues to meet its obligations. While the Company believes in the viability of its strategy to increase sales volume and in its ability to raise additional funds, there can be neither no assurances to that effect, nor no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

REVENUES

Revenues were $578,712 for the three months ended March 31, 2019, as compared to $147,079 for the corresponding period in 2018, an increase of$431,633, or 293.47%. The increase in total revenue was due to the Company’s sales to the overseas market in the three months ended March 31, 2019 compared to the same period of 2018 when the Company had no revenues from foreign customers.

Product Revenues

Product revenues are derived principally from the sale of self-manufactured products relating to energy- saving flow control equipment. Product revenues were $557,239, or 96.29% of total revenues, for the three months ended March 31, 2019, as compared to $91,796, or 62.41% of total revenues, for the corresponding period in 2018. Product revenues increased by $465,443 or 507.04%, as compared to the three months ended March 31, 2018. The increase in product revenue was due to sales to a new foreign customer.

Service Revenues

Service revenues are derived principally from energy-saving technical services and product collaboration processing services. Service revenues were $21,473, or 3.71% of total revenues for the three months ended March 31, 2019, as compared to $55,283, or 37.59% of total revenues for the corresponding period in 2018. Service revenues decreased by $33,810, or 61.16% as compared to the same period in 2018. The decrease in service revenue was primarily due to reduced demand in the PRC for such service.

COSTS AND EXPENSES

Cost of Revenues

Cost of revenues consists primarily of material costs, direct labor, depreciation, and manufacturing overhead, which are directly attributable to the manufacturing of products and the rendering of services. Total cost of revenues was $430,676 for the three months ended March 31, 2019, as compared to $115,642 for the corresponding three months in 2018, an increase of $315,034, or approximately 272.42%. The increase in cost of revenues was primarily due to the increase in total revenues.

The overall gross profit for the Company was $148,036 and $31,437, or 25.58% and 21.37%, of total revenues, for the three months ended March 31, 2019 and 2018, respectively.

Cost of Products Revenues

Total cost of products was $419,541 for the three months ended March 31, 2019, as compared to $78,531 for the corresponding period in 2018, an increase of $341,010, or approximately 434.24%. This increase is primarily due to the increase in product revenue.

The gross profit of the products revenues for the Company was $137,698 and $13,265, or 24.71% and 14.45%, of total revenues, for the three months ended March 31, 2019 and 2018, respectively.

Cost of Services Revenues

The cost of services revenues was $11,135 for the three months ended March 31, 2019, as compared to $37,111 for the corresponding period in 2018, a decrease of $25,976 or approximately 70.00%. This decrease is primarily due to the decrease in the service revenue.

The gross profit of the services revenues for the Company was $10,338 and $18,172, or 48.14% and 32.87%, of total revenues, for the three months ended March 31, 2019 and 2018, respectively.

Operating Expenses

Total operating expenses were $521,516 for the three months ended March 31, 2019, as compared to $448,130 for the corresponding period in 2018, an increase of $73,386, or approximately 16.38%. The increase in operating expenses is primarily due to the increase in the general and administrative expenses outlined below and in the selling and marketing expenses derived from the subsidiaries, respectively.

Selling and Marketing Expenses

Selling and marketing expenses were $37,873 for the three months ended March 31, 2019, as compared to $8,940 for the corresponding period in 2018, an increase of $28,933, or 323.64%. This increase is primarily due to the marketing expenses relating to foreign sales.

General and Administrative Expenses

General and administrative expenses were $483,643 for the three months ended March 31, 2019, as compared to $439,190 for the corresponding period in 2018, an increase of $44,453 or 10.12%. The increase in general and administrative expenses is primarily due to the increase of expenses related to Company’s efforts to improve day-to-day compliance with regulatory requirements following the transition the Company is going through.

LOSS FROM OPERATIONS

As a result of the factors mentioned above, loss from operations was $373,480 for the three months ended March 31, 2019, as compared to $416,693 for the corresponding three-month period in 2018, a decrease of $43,213 or 10.37%. This decrease is primarily due to the increase in gross profit related to product revenues.

OTHER EXPENSE

Other expense for the three months ended March 31, 2019 was $168,968, as compared to $88,346 for the corresponding period in 2018, an increase of $80,622 or 91.26%. This increase is primarily due to the increase in interest expense, litigation costs and impairment of construction in progress.

As a result, loss before income taxes was $542,448 for the three months ended March 31, 2019, as compared to a loss before income taxes of $505,039 for the corresponding three- month period in 2018, an increase of $37,409 or 7.41%.

INCOMEN TAX EXPENSE

No income tax expenses were provided for the three months ended March 31, 2019 and 2018.

NET LOSS

As a result of the factors mentioned above, the Company incurred a net loss for the three months ended March 31, 2019 of $542,448, as compared to net loss of $505,039 for the corresponding three-month period in 2018, an increase of $37,409 or 7.41%. This increase is primarily due to the increase in the operation expenses for the three months ended March 31, 2019.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

For the three months ended March 31, 2019, net cash provided by operating activities was $367,912. The Company reported net loss of $542,448. Except for the adjustments of non-cash items of depreciation and amortization of $252,125 and allowance for doubtful accounts of $16,344 increased our cash-based net income, net operating cash inflow result from the factors: 1) a decrease in accounts and retention receivable of $705,703, , 2) an increase in other payables and accrued liabilities of $311,165. Cash inflow was mainly offset by: 1) an increase in inventories by $205,366, 2) an increase in prepayments and other receivables of $39,276, 3) a decrease in accounts payable of $84,945, and 4) a decrease of $45,390 of tax payables.

For the three months ended March 31, 2018, net cash used in operating activities was $987,872. The Company reported net loss of $505,039. Except for the adjustments of non-cash items of depreciation and amortization of $249,047, net operating cash inflow result from the factors: 1) a decrease in accounts and retention receivable by $2,007,657 and an increase in other payable and accrued liabilities by $258,282.Cash inflow was mainly offset by: 1) an increase in inventories by $912,536, 2) an increase in prepayment and other receivable by $78,476, 3) a decrease in the accounts payable by $31,063.

We have followed ASC 230-10-45-28 and choose to provide information about major classes of cash flow items by the indirect method. In the statement of cash flows, we have reported the same amount for net cash flow from operating activities indirectly by adjusting net income to reconcile it to net cash flow from operating activities. The reconciliation has separately reported all major classes of reconciling items, for example, changes during the period in accounts receivables pertaining to operating activities, in inventory, and in payables pertaining to operating activities.

The Company is highly aware the risk of default, and as a result, we actively monitor accounts receivable with aging above 1 year and those that account significant to the total accounts receivable, thus there is no significant credit risk. The Company will consider an allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. The Company provided significant amount of allowance of doubtful accounts and retention receivable in the year end of 2018, considering the overdue aging, payment history, customers’ financial condition and the efforts and estimates of the Company’s management.

We offer 12 months of product warranty on a case-by-case basis without charge, depending upon the type of customers, nature and size of the infrastructure projects. Under such arrangements, a portion of the project contract balance (usually 5-10% of contract value) is withheld by a customer from 12 to 24 months, until the product warranty has expired.

Investing Activities

For the three months ended March 31, 2019 and 2018, net cash used in investing activities was $0.

On April 11, 2019, we entered into an Agreement with LASTING WISDOM HOLDINGS LIMITED, a company organized under the laws of the British Virgin Islands, PUKUNG LIMITED, a company organized under the laws of Hong Kong, BEIJING XIN RONG XIN INDUSTRIAL DEVELOPMENT CO., LTD., a company organized under the laws of the PRC, Boqi Pharmacy and several additional individual sellers. The rationale of the Agreement is for our company to purchase the pharmacy business of Boqi Pharmacy, as part of our expansion and shift of focus from the energy sector to the pharmacy business. The aggregate purchase price for the shares of Boqi Pharmacy’s parent consists of cash consideration of RMB 40,000,000 and up to 1,500,000 shares of our common stock. The purchase price is subject to post-closing adjustments (contingent on fair market value of the acquired companies). This transaction is anticipated to close during the third or fourth quarter of 2019. The Company plans to raise RMB 40,000,000 in equity to fund the acquisition cost.

Financing Activities

For the three months ended March 31, 2019, net cash used in financing activities was $105,060, including repayments of $5,928,772 and $105,060 for our short-term bank borrowing and financial funding from our related parties which was partially offset by proceeds of $5,928,772 from a short-term bank borrowing.

For the three months ended March 31, 2018, net cash used in financing activities was $1,032,895, including repayments of $7,393,858 and $431,682 for short-term bank borrowing and financial funding from our related parties which was partially offset by proceeds of $6,292,645 on a short-term bank borrowing and $500,000 from the issuance of new shares.

INFLATION

We believe that the relatively moderate rate of inflation over the past few years has not had a significant impact on our results of operations.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any material off-balance sheet arrangements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Use of Estimates

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an on-going basis, we evaluate our estimates and judgments, including those related to revenue, receivable, inventory, and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are recorded in the period in which they become known.

Revenue Recognition

Identify the contract with a customer;

Identify the performance obligations in the contract;

Determine the transaction price;

Allocate the transaction price to the performance obligations in the contract; and

Recognize revenue when (or as) the entity satisfies a performance obligation.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount, do not bear interest and are due within the contractual payment terms, generally 90 to 180 days from shipment. Credit is extended based on evaluation of a customer's financial condition, the customer’s credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 180 days are reviewed individually for collectability. At the end of each period, the Company specifically evaluates each individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivable. The Company will consider an allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law.

Account balances are charged off against the allowance for doubtful accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers.

Inventories

Property, Plant and Equipment

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which the asset becomes fully operational and after taking into account its estimated residual values:

	Expected useful lives	Residual value
Building	10 – 30 years	5%
Plant and machinery	5 – 14 years	4 ~ 5%
Furniture, fixture and equipment	5 years	4 ~ 13%

Expenditure for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

Land Use Right

All land in the PRC is owned by the PRC government. The government in the PRC, according to the relevant PRC law, may sell the right to use the land for a specified period of time. Thus, the Company’s land purchase in the PRC is considered to be leasehold land and is stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreement on a straight-line basis, which is 50 years and will expire in 2059.

Foreign Currencies Translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company is the United States Dollar ("US$"). The Company's subsidiaries in the PRC maintain their books and records in their local currency, the Renminbi Yuan ("RMB"), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Recently Issued New Accountings Standard

We do not expect adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Item 4. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation and the identification of a material weakness in internal control over financial reporting described below, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, as of March 31, 2019, and during the period prior were not effective.

Internal control over financial reporting is defined in Rule 13a-15(f) under the Exchange Act as a process designed by, or under the supervision of, the company’s principal executive officer and principal financial officer and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

●

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

●

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with management authorization; and

●

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Due to the Company’s limited resources, the Company does not have accounting personnel with extensive experience in maintaining books and records and preparing financial statements in accordance with US GAAP which could lead to untimely identification and resolution of accounting matters inherent in the Company’s financial transactions in accordance with US GAAP .This material weakness was identified by our Chief Executive Officer and Chief Financial Officer and our plans for remediation are described in our Annual Report on Form 10-K/A for the fiscal year ended December 31, 2018, which was filed with the SEC on September 6, 2019.

Management’s Remediation plan

While management believes that the Company’s financial statements previously filed in the Company’s SEC reports have been properly recorded and disclosed in accordance with US GAAP, based on the control deficiencies identified above, we have designed and plan to implement, or in some cases have already implemented, the specific remediation initiatives described below:

The Company is currently looking for an outside consultant with considerable public company reporting experience and breadth of knowledge of US GAAP to provide more training in connection with the preparation and review of its financial statements to the employees.

Changes in Internal Control over Financial Reporting

Subject to the foregoing disclosure, there were no changes in our internal control over financial reporting during the three months ended March 31, 2019 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 1A. Risk Factors

Not Applicable

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The list of Exhibits , required by Item 601 of Regulation S-K to be filed as a part of this Form 10-Q are set forth on the Exhibit Index immediately preceding such Exhibits and is incorporated herein by this reference.

Exhibit Number	Description	Incorporated by Reference to

31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer

31.2	Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial officer

32.1	Section 1350 Certification of principal executive officer

32.2	Section 1350 Certification of principal financial officer

101	XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned.

	NF ENERGY SAVING CORPORATION
	(Registrant)

Date: September 16, 2019	By:	/s/ Yongquan Bi
		Yongquan Bi
		President and Chief Executive Officer

Date: September 16, 2019	By:	/s/ Tingting Zhang
		Tingting Zhang
		President and Chief Financial Officer

EX-31.1 2 f10q0319ex31-1_nfenergy.htm CERTIFICATION

EXHIBIT 31.1

Certifications

I, Yongquan Bi, certify that:

I have reviewed this quarterly report on Form 10-Q of NF Energy Saving Corporation.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidates subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter ( the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 16, 2019

/s/ Yongquan Bi
Yongquan Bi
(Principal Executive Officer)

EX-31.2 3 f10q0319ex31-2_nfenergy.htm CERTIFICATION

EXHIBIT 31.2

Certifications

I, Tingting Zhang, certify that:

I have reviewed this Quarterly Report on Form 10-Q of NF Energy Saving Corporation.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 16, 2019

/s/ Tingting Zhang
Tingting Zhang
(Principal Financial and Accounting Officer)

EX-32.1 4 f10q0319ex32-1_nfenergy.htm CERTIFICATION

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of NF Energy Saving Corporation (the “Company”) for the period ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Yongquan Bi, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period ended March 31, 2019 ..

	NF Energy Saving Corporation

Date: September 16, 2019	By:	/s/ Yongquan Bi
		Yongquan Bi
		(Principal Executive Officer)

A signed original of this written statement required by Section 906 of the Sarbanes- Oxley Act of 2002 has been provided to NF Energy Saving Corp. (the “Company”) and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. This written statement accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission, and will not be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language contained in such filing.

EX-32.2 5 f10q0319ex32-2_nfenergy.htm CERTIFICATION

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of NF Energy Saving Corporation (the “Company”) for the period ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tingting Zhang, certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the period ended March 31, 2019.

	NF Energy Saving Corporation

Date: September 16, 2019	By:	/s/ Tingting Zhang
		Tingting Zhang
		(Principal Financial and Accounting Officer)

EX-101.INS 6 nfec-20190331.xml XBRL INSTANCE FILE 0001213660 2017-12-31 0001213660 2018-01-01 2018-12-31 0001213660 2018-12-31 0001213660 nfec:GuaranteeTypeRelatedpartyMember nfec:ShortTermLoanOneMember 2018-12-31 0001213660 nfec:GuaranteeTypeRelatedpartyMember nfec:ShortTermLoanOneMember 2018-01-01 2018-12-31 0001213660 nfec:ChairmanAndChiefExecutiveOfficerMember 2018-03-01 2018-03-12 0001213660 nfec:ChairmanAndChiefExecutiveOfficerMember 2018-03-12 0001213660 srt:ChiefFinancialOfficerMember 2018-12-31 0001213660 srt:ExecutiveOfficerMember 2018-12-31 0001213660 srt:ManagementMember 2018-12-31 0001213660 nfec:PurchaseAgreementMember us-gaap:SubsequentEventMember 2019-04-02 2019-04-11 0001213660 2019-01-01 2019-03-31 0001213660 2019-03-31 0001213660 2018-03-31 0001213660 2018-01-01 2018-03-31 0001213660 nfec:SubsidiariesThreeMember 2019-01-01 2019-03-31 0001213660 nfec:SubsidiariesTwoMember 2019-01-01 2019-03-31 0001213660 srt:SubsidiariesMember 2019-01-01 2019-03-31 0001213660 nfec:SubsidiariesOneMember 2019-01-01 2019-03-31 0001213660 srt:MinimumMember us-gaap:BuildingMember 2019-01-01 2019-03-31 0001213660 srt:MaximumMember us-gaap:BuildingMember 2019-01-01 2019-03-31 0001213660 srt:MinimumMember nfec:PlantAndMachineryMember 2019-01-01 2019-03-31 0001213660 srt:MaximumMember nfec:PlantAndMachineryMember 2019-01-01 2019-03-31 0001213660 srt:MinimumMember nfec:FurnitureFixturesAndEquipmentMember 2019-01-01 2019-03-31 0001213660 srt:MaximumMember nfec:FurnitureFixturesAndEquipmentMember 2019-01-01 2019-03-31 0001213660 nfec:FurnitureFixturesAndEquipmentMember 2019-01-01 2019-03-31 0001213660 us-gaap:BuildingMember 2019-01-01 2019-03-31 0001213660 us-gaap:UseRightsMember 2019-01-01 2019-03-31 0001213660 srt:MaximumMember 2019-03-31 0001213660 srt:MinimumMember 2019-03-31 0001213660 nfec:GuaranteeTypeRelatedpartyMember nfec:ShortTermLoanOneMember 2019-03-31 0001213660 nfec:GuaranteeTypeRelatedpartyOneMember nfec:ShortTermLoanOneMember 2019-03-31 0001213660 nfec:GuaranteeTypeRelatedpartyOneMember nfec:ShortTermLoanOneMember 2018-12-31 0001213660 nfec:GuaranteeTypeRelatedpartyOneMember nfec:ShortTermLoanOneMember 2019-01-01 2019-03-31 0001213660 srt:DirectorMember 2019-03-31 0001213660 srt:DirectorMember 2019-01-01 2019-03-31 0001213660 srt:ChiefFinancialOfficerMember 2019-03-31 0001213660 srt:ExecutiveOfficerMember 2019-03-31 0001213660 srt:ExecutiveOfficerMember 2019-01-01 2019-03-31 0001213660 srt:ChiefExecutiveOfficerMember 2019-03-31 0001213660 nfec:MrYongjianZhangMember 2019-03-31 0001213660 srt:ManagementMember 2019-03-31 0001213660 srt:ExecutiveOfficerMember 2018-01-01 2018-12-31 0001213660 nfec:NengfaWeiyeTielingValveJointStockCoLtdMember 2019-03-31 0001213660 nfec:RMBMember 2018-08-01 0001213660 2018-08-01 0001213660 nfec:RMBMember us-gaap:SubsequentEventMember 2019-04-22 0001213660 nfec:RMBMember us-gaap:SubsequentEventMember 2019-05-24 0001213660 us-gaap:SubsequentEventMember 2019-05-24 0001213660 nfec:CustomerAMember 2019-01-01 2019-03-31 0001213660 nfec:CustomerAMember 2019-03-31 0001213660 nfec:CustomerBMember 2019-01-01 2019-03-31 0001213660 nfec:CustomerBMember 2019-03-31 0001213660 nfec:CustomerCMember 2018-01-01 2018-03-31 0001213660 nfec:CustomerCMember 2018-03-31 0001213660 nfec:CustomerDMember 2018-01-01 2018-03-31 0001213660 nfec:CustomerDMember 2018-03-31 0001213660 nfec:CustomerEMember 2018-01-01 2018-03-31 0001213660 nfec:CustomerEMember 2018-03-31 0001213660 nfec:CustomerFMember 2018-01-01 2018-03-31 0001213660 nfec:CustomerFMember 2018-03-31 0001213660 nfec:CustomerTwoMember 2019-03-31 0001213660 nfec:CustomerTwoMember 2019-01-01 2019-03-31 xbrli:shares iso4217:USD iso4217:USD xbrli:shares iso4217:CNY xbrli:pure nfec:Customers

17860

301799

937966

1168472

17958136

18102063

5816961

5940447

918033

606194

162423

174256

2007513

1387958

265045

74966

92000

4682

182862

2045066 2394712

-542448

-505039

12602251

12198310

11327271

11579977

519341

446399

96493

592871

322132

129202

19658330

20075648

5949422

6075721

24765

25291

7674381

8074597

3000815

3064518

540147

566936

0.0609

0.085

356799

322206

705479 697068

103008

180392

7573289

0.73

0.76

0.15

0.58

0.26

0.17

0.18

0.15

0.10

9985421

9663131

0.001

50000000

7573289

Appropriation to the statutory reserve should be at least 10% of the after-tax net income until the reserve is equal to 50% of the registered capital.

25632517

26176660

2019-03-18

2020-03-18

Investment holding

Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC

Development and production of hi-tech and automatic-intelligence valve products

1.00

0.57

179496

183444

40000000 40000000

500000

1.00

500000

16344

557239 91796 419541 78531 British Virgin Island, a limited liability company Hong Kong, a limited liability company The PRC, a limited liability company The PRC, a limited liability company

252125

249047

-705703

-2007657

205366

912536

39276

78476

-84945

-31063

311165

258282

-45390

367912

987872

500000

5928772

6292645

5928772

7393858

-105060

-1032895

25035

10943

287887

-34080

88264

88676

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 26pt; padding: 0; text-indent: 0">2.</td><td style="text-align: justify; padding: 0; text-indent: 0">GOING CONCERN UNCERTAINTIES</td></tr></table>   The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.   As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had an accumulated deficit of $7,010,696 and negative working capital of $10,936,514 as of March 31, 2019, and incurred a net loss of $567,594 for the three months ended March 31, 2019 In addition, the Company continues to generate operating losses and has limited cash flow from its operations. Management believes these factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months.   The continuation of the Company as a going concern through the next twelve months is dependent upon (1) the continued financial support from its stockholders or external financing. Management believes the existing stockholders will provide the additional cash to meet with the Company’s obligations as they become due, and (2) further implement management’s business plan to extend its operations and generate sufficient revenues to meet its obligations. While the Company believes in the viability of its strategy to increase sales volume and in its ability to raise additional funds, there can be neither any assurance to that effect, nor any assurance that the Company will be successful in securing sufficient funds to sustain its operations.   These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern. 6000000 870000 1278182 NF Energy Saving Corp 0001213660 false --12-31 10-Q 2019-03-31 2019 Q1 No Non-accelerated Filer true false false false No DE 000-50155

23050799

24251500

-150311

-136934

10135732

9800065

1788302

2020229

-6443102

-7010696

2227634

12555325

7573

13065378

14588369

13065378

14588369

1086589

1064176

416547

414994

2782182

2766527

23050799

24251500

20443526

20599645

24722

2460668

2497582

131442

169215

65529

31297

1274980

618333

179496

183444

-0.07

7573289

7184400

-323897

496093

13377

5612

-310520

501705

231928

1006744

-567594

-499699

25146

-5340

-542448

-505039

-168968

-88346

-50400

118719

88676

151

330

-373480

-416693

521516

448130

483643

439190

37873

8940

148036

31437

430676

115642

11135 37111 578712 147079 21473 55283

-105060 -431682 <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 26pt; padding: 0; text-indent: 0">4.</td><td style="text-align: justify; padding: 0; text-indent: 0">ACCOUNTS RECEIVABLE</td></tr></table>   The majority of the Company's sales are on open credit terms and in accordance with terms specified in the contracts governing the relevant transactions. The Company evaluates the need of an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible. If actual collections experience changes, revisions to the allowance may be required. Based upon the aforementioned criteria, the Company reported a bad debt expense of $16,344 and $0 for its doubtful accounts for the three months ended March 31, 2019 and 2018.     <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Accounts receivable, cost</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,198,310</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,602,251</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Less: allowance for doubtful accounts</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(11,579,977</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(11,327,271</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Accounts receivable, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">618,333</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,274,980</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 26pt; padding: 0; text-indent: 0">6.</td><td style="text-align: justify; padding: 0; text-indent: 0">INVENTORIES</td></tr></table>   Inventories consisted of the following:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Raw materials</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">446,399</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">519,341</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Work-in-process</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">129,202</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">322,132</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Finished goods</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">592,871</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">96,493</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,168,472</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">937,966</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>   For the three months ended March 31, 2019 and 2018, no allowance for obsolete inventories was recorded by the Company.   Finished goods are expected to be delivered to the customer in the next twelve months.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 26pt; padding: 0; text-indent: 0">7.</td><td style="text-align: justify; padding: 0; text-indent: 0">PROPERTY, PLANT AND EQUIPMENT</td></tr></table>   Property, plant and equipment consisted of the following:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Building</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">20,075,648</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">19,658,330</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Plant and machinery</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,075,721</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5,949,422</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Furniture, fixture and equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">25,291</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">24,765</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">26,176,660</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,632,517</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Less: accumulated depreciation</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(8,074,597</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(7,674,381</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 4pt">Property, plant and equipment, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">18,102,063</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,958,136</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>   Depreciation expense for the three months ended March 31, 2019 and 2018 were $236,833 and $232,816.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 26pt; padding: 0; text-indent: 0">8.</td><td style="text-align: justify; padding: 0; text-indent: 0">LAND USE RIGHT</td></tr></table>   Land use right consisted of the following:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Land use right, at cost</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">3,064,518</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">3,000,815</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Less: accumulated amortization</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(566,936</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(540,147</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,497,582</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,460,668</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>   Amortization expenses for the three months ended March 31, 2019 and 2018 were $15,292 and $16,231, respectively.   The estimated amortization expense on the land use right in the next five years and thereafter is as follows:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify; border-bottom: Black 1.5pt solid">Year ending December 31:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify; padding-left: 0.125in">2019</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">45,878</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 0.125in">2020</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,170</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-left: 0.125in">2021</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,170</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 0.125in">2022</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,170</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-left: 0.125in">2023</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,170</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 0.125in">Thereafter</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,207,024</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 4pt">Total:</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,497,582</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 26pt; padding: 0; text-indent: 0">9.</td><td style="text-align: justify; padding: 0; text-indent: 0">SHORT-TERM BANK BORROWINGS</td></tr></table>   Short-term bank borrowings consist of the following:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify; padding-left: 10pt; text-indent: -10pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify; padding-left: 10pt; text-indent: -10pt">Equivalent to RMB 40,000,000 with a fixed interest rate at 6.09%, monthly payable, due March 18, 2019, which is guaranteed by its related parties and used buildings and land use rights as collateral.</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">5,816,961</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Equivalent to RMB 40,000,000 with a fixed interest rate at 8.5%, monthly payable, due March 18, 2020, which is guaranteed by its related parties and used buildings and land use rights as collateral.</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,940,447</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt; padding-left: 10pt; text-indent: -10pt"> Total short-term bank borrowings</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,940,447</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,816,961</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>   For the three months ended March 31, 2019 and 2018, the Company reported interest expenses of $89,976 and $88,676, respectively.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 26pt; padding: 0; text-indent: 0">11.</td><td style="text-align: justify; padding: 0; text-indent: 0">OTHER PAYABLES AND ACCRUED LIABILITIES</td></tr></table>   Other payables and accrued liabilities consisted of the following:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Customer deposits</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">322,206</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">356,799</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Accrued operating expenses</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">697,068</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">705,479</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Payables  with disputes</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,195,046</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">879,780</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Other payables</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">180,392</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">103,008</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,394,712</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,045,066</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>   As of March 31, 2019 and December 31, 2018, the Company reported $1,195,046 and $879,780 as payables with disputes which included mainly a dispute payable of approximately $870,000 occurred in 2018 and a dispute payable of approximately $190,000 occurred in 2019.   On August 1, 2018, one of NF Energy’s suppliers filed a lawsuit against NF Energy for unpaid outstanding payable of approximately RMB 6 million or $870,000. Until the date of this report, both parties has not reached any agreement or settlement.   On April 22, 2019, one of NF Energy’s suppliers filed a lawsuit against NF Energy for unpaid outstanding payable of RMB 1,278,181.8. On May 24, 2019, the parties entered into a court-supervised settlement where NF Energy agreed to pay the supplier approximately RMB 1.26 million or $190,000 in total.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 26pt; padding: 0; text-indent: 0">12.</td><td style="text-align: justify; padding: 0; text-indent: 0">STOCKHOLDERS’ EQUITY</td></tr></table>   The Company is authorized to issue 50,000,000 shares of common stock, $0.001 par value, and as of March 31, 2019 and December 31, 2018, it had 7,573,289 shares and 7,573,289 shares outstanding, respectively.   On March 12, 2018, the Company issued 500,000 shares of its common stock, at the price of $1.00 per share for aggregate consideration of $500,000, to Mr. Yongquan Bi, our Chairman and Chief Executive Officer.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 26pt; padding: 0; text-indent: 0">13.</td><td style="text-align: justify; padding: 0; text-indent: 0">NET LOSS PER SHARE</td></tr></table>   Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. The dilutive effect of potential common shares outstanding is included in diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2019 and 2018:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1.5pt solid">For the three months ended March 31,</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify; padding-bottom: 4pt">Net loss attributable to common shareholders</td><td style="width: 1%; padding-bottom: 4pt"> </td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">(567,594</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 4pt"> </td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">(499,699</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Weighted average common shares outstanding – Basic and diluted</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">7,573,289</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">7,184,400</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Net loss per share – Basic and diluted</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.07</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.07</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr></table>

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 26pt; padding: 0; text-indent: 0">15.</td><td style="text-align: justify; padding: 0; text-indent: 0">CONCENTRATIONS OF RISK</td></tr></table>   The Company is exposed to the following concentrations of risk:   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 27pt; text-align: left">(a)</td><td style="text-align: justify">Major customers</td> </tr></table>   For the three months ended March 31, 2019, two customers who represented more than 10% of the Company’s revenues and its outstanding accounts receivable as of the balance sheet date is presented as follow:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">For the three months ended March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">As of March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; border-bottom: Black 1.5pt solid">Customers</td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Revenues</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Percentage of revenues</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Accounts receivable</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Customer A</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">88,737</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">15</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Customer B</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">　336,668  </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">58</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">　-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">425,505</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">73</td><td style="padding-bottom: 4pt; text-align: left">%</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>      For the three months ended March 31, 2018, the customers that accounted for 10% or more of the Company’s revenues and its outstanding accounts receivable balances as at balance sheet date, are presented as follows:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1.5pt solid">For the three months ended March 31, 2018</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">As of March 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; border-bottom: Black 1.5pt solid">Customers</td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Revenues</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Percentage of revenues</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Accounts receivable</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Customer C</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">37,664</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">26</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Customer D</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,211</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">29,856</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Customer E</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">26,432</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">18</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">22,810</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Customer F</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">　22,232 </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,655 </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">111,539</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">76</td><td style="padding-bottom: 4pt; text-align: left">%</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">54,321</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>    During the three months ended March 31, 2019, the two main customers are located outside of the PRC which contributed significant increase of revenues in the three months ended March 31, 2019  . During the three months ended March 31, 2018, all customers are located in the PRC.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 27pt; text-align: left">(c)</td><td style="text-align: justify">Credit risk</td> </tr></table>   Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 27pt; padding: 0; text-indent: 0">(d)</td><td style="text-align: justify; padding: 0; text-indent: 0">Interest rate risk</td></tr></table>   As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.   The Company’s interest-rate risk arises from short-term bank borrowings. The Company manages interest rate risk by varying the issuance and maturity dates of variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As   of March 31, 2019 and December 31, 2018, short-term bank borrowings were at fixed rates.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 27pt; text-align: left">(e)</td><td style="text-align: justify">Exchange rate risk</td> </tr></table>   The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in RMB and a significant portion of the assets and liabilities are denominated in RMB. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and RMB. If RMB depreciates against US$, the value of RMB revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 27pt; text-align: left">(f)</td><td style="text-align: justify">Economic and political risks</td> </tr></table>   The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.   The Company’s operations in the PRC are subject to special considerations. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Basis of presentation and consolidation</td></tr></table>   These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and reflected the activities of NFEC and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.   The unaudited interim condensed consolidated financial information as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K/A for the fiscal year ended December 31, 2018 previously filed with the SEC on September 6, 2019.   In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of March 31, 2019 and its unaudited condensed consolidated results of operations for the three months ended March 31, 2019 and 2018, and its unaudited condensed consolidated cash flows for the three months ended March, 2019 and 2018, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future periods.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Cash and cash equivalents</td></tr></table>   Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Restricted cash</td></tr></table>   Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in restricted cash account on the Company’s unaudited interim condensed consolidated balance sheet. The Company’s restricted cash balance is related to a contract performance guarantee bond. The balance of restricted cash was $183,444 and $179,496 as of March 31, 2019 and December 2018, respectively.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Inventories</td></tr></table>   Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a weighted average method. Costs include material, labor and manufacturing overhead costs. The Company reviews historical sales activity quarterly to determine excess, slow moving items and potentially obsolete items and also evaluates the impact of any anticipated changes in future demand. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand. As of March 31, 2019 and December 31, 2018, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Land use right</td></tr></table>   All lands in the PRC are owned by the PRC government. Under applicable law, the PRC government, may sell the right to use the land for a specified period of time. Thus, the Company’s land purchases in the PRC are considered to be leaseholds and are   stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreement on a straight-line basis, which is 50 years and will expire in 2059. <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Construction in progress</td></tr></table>   Construction in progress is stated at cost, which includes acquisition of land use rights, cost of construction, purchases of plant and equipment and other direct costs attributable to the construction of a manufacturing facility in Yinzhou District Industrial Park, Tieling City, Liaoning Province, PRC. Construction in progress is not depreciated until such time as the assets are completed and put into operational use. No capitalized interest is incurred during the period of construction.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Revenue recognition</td></tr></table>   On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605, Revenue Recognition. The adoption had no material impact on the Company’s consolidated financial statements and there was no adjustment to the beginning retained earnings on January 1, 2018.   Under ASC 606, revenue is recognized when control of the promised goods and services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods and services, net of value-added tax. The Company determines revenue recognition through the following steps:   <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Identify the contract with a customer;</td> </tr></table>   <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Identify the performance obligations in the contract;</td> </tr></table>   <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Determine the transaction price;</td> </tr></table>   <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Allocate the transaction price to the performance obligations in the contract; and</td> </tr></table>   <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Recognize revenue when (or as) the entity satisfies a performance obligation.</td></tr></table>

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Income taxes</td></tr></table>   Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.   ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.   For the three months ended March 31, 2019 and 2018, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2019, the Company did not have any significant unrecognized uncertain tax positions.   The Company conducts the majority of its businesses in the PRC and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Foreign currencies translation</td></tr></table>   Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.   The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the PRC maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.   In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.   Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective period:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify; padding-bottom: 4pt">Period-end RMB:US$1 exchange rate</td><td style="width: 1%; padding-bottom: 4pt"> </td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">6.7335</td><td style="width: 1%; padding-bottom: 4pt; text-align: left"> </td><td style="width: 1%; padding-bottom: 4pt"> </td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">6,2802</td><td style="width: 1%; padding-bottom: 4pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">Three month end average RMB:US$1 exchange rate</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">6.7468</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">6.3566</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Retirement plan costs</td></tr></table>   Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying consolidated statements of operation as the related employee service is provided.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Segment reporting</td></tr></table>   ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the three months ended March 31, 2019 and 2018, the Company operates in one reportable operating segment in the PRC.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Fair value of financial instruments</td></tr></table>   The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and convertible promissory notes): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.   Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of its obligation under finance lease and short-term bank borrowing approximate the carrying amount.   The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 28pt; text-align: justify; padding: 0; text-indent: 0"></td> <td style="text-align: justify; padding: 0; text-indent: 0">Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 28pt; text-align: justify; padding: 0; text-indent: 0"></td> <td style="text-align: justify; padding: 0; text-indent: 0">Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 28pt; text-align: justify; padding: 0; text-indent: 0"></td> <td style="text-align: justify; padding: 0; text-indent: 0">Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.</td></tr></table>

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0; padding: 0; text-indent: 0"></td><td style="width: 27pt; padding: 0; text-indent: 0">●</td><td style="text-align: justify; padding: 0; text-indent: 0">Recent accounting pronouncements</td></tr></table>   In January 2017, the Financial Accounting Standard Board (“FASB”) issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.   In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company’s adoption date of ASC 606. The Company does not believe that the adoption of ASU 2018-07 will have a material impact on the Company’s consolidated financial statements.   In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits when evaluating disclosure requirements. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on the Company’s financial statements and footnote disclosures.   Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="width: 23%; border-bottom: Black 1.5pt solid; padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Name</td> <td style="width: 1%; padding: 0; text-align: center; text-indent: 0"> </td> <td style="width: 24%; border-bottom: Black 1.5pt solid; padding: 0; text-align: center; text-indent: 0">Place of incorporation and kind of legal entity</td> <td style="width: 1%; padding: 0; text-align: center; text-indent: 0"> </td> <td style="width: 39%; border-bottom: Black 1.5pt solid; padding: 0; text-align: center; text-indent: 0">Principal activities and place of operation</td> <td style="width: 1%; padding: 0; text-align: center; text-indent: 0"> </td> <td style="width: 10%; border-bottom: Black 1.5pt solid; padding: 0; text-align: center; text-indent: 0; vertical-align: bottom">Effective interest held</td></tr> <tr style="vertical-align: top"> <td style="padding: 0 0 0 10pt; text-align: justify; text-indent: -10pt"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: center; text-indent: 0; vertical-align: bottom"> </td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255)"> <td style="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">NF Energy Saving Investment Limited</td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0">British Virgin Island, a limited liability company</td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0">Investment holding</td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: center; text-indent: 0; vertical-align: bottom">100%</td></tr> <tr style="vertical-align: top; background-color: White"> <td style="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: center; text-indent: 0; vertical-align: bottom"> </td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255)"> <td style="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">NF Energy Equipment Limited</td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0">Hong Kong, a limited liability company</td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0">Investment holding</td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: center; text-indent: 0; vertical-align: bottom">100%</td></tr> <tr style="vertical-align: top; background-color: White"> <td style="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: center; text-indent: 0; vertical-align: bottom"> </td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255)"> <td style="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Liaoning Nengfa Weiye Energy Technology Co., Ltd. (“Nengfa Energy”)</td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0">The PRC, a limited liability company</td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0">Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC</td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: center; text-indent: 0; vertical-align: bottom">100%</td></tr> <tr style="vertical-align: top; background-color: White"> <td style="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: center; text-indent: 0; vertical-align: bottom"> </td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255)"> <td style="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Liaoning Nengfa Tiefa Import & Export Co., Ltd. (“Nengfa Tiefa Import & Export”)</td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0">The PRC, a limited liability company</td> <td style="padding: 0; text-align: left; text-indent: 0"> </td> <td style="padding: 0; text-align: left; text-indent: 0">Development and production of hi-tech and automatic-intelligence valve products</td> <td style="padding: 0; text-align: justify; text-indent: 0"> </td> <td style="padding: 0; text-align: center; text-indent: 0; vertical-align: bottom">57%</td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Raw materials</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">446,399</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">519,341</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Work-in-process</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">129,202</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">322,132</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Finished goods</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">592,871</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">96,493</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,168,472</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">937,966</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify; padding-left: 10pt; text-indent: -10pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify; padding-left: 10pt; text-indent: -10pt">Equivalent to RMB 40,000,000 with a fixed interest rate at 6.09%, monthly payable, due March 18, 2019, which is guaranteed by its related parties and used buildings and land use rights as collateral.</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">5,816,961</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 10pt; text-indent: -10pt">Equivalent to RMB 40,000,000 with a fixed interest rate at 8.5%, monthly payable, due March 18, 2020, which is guaranteed by its related parties and used buildings and land use rights as collateral.</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,940,447</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt; padding-left: 10pt; text-indent: -10pt"> Total short-term bank borrowings</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,940,447</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,816,961</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Customer deposits</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">322,206</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">356,799</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Accrued operating expenses</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">697,068</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">705,479</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Payables  with disputes</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,195,046</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">879,780</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Other payables</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">180,392</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">103,008</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,394,712</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,045,066</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1.5pt solid">For the three months ended March 31,</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify; padding-bottom: 4pt">Net loss attributable to common shareholders</td><td style="width: 1%; padding-bottom: 4pt"> </td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">(567,594</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 4pt"> </td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">(499,699</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Weighted average common shares outstanding – Basic and diluted</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">7,573,289</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">7,184,400</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Net loss per share – Basic and diluted</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.07</td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(0.07</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr> </table>

7010696

10936514

P10Y

P30Y

P5Y

P14Y

P5Y

0.04 0.05 0.04 0.13 0.05

6.7335

6.2802

6.7468 6.3566

P50Y

2059 0.10 0.05 0.50 P12M 65529 31297   942376 962381 1007905 993678

236833

232816

45878

61170

2207024

15292

16231

89976

88676

1.1 a $712,854 loan from Mr. Gang Li with annually interest rate of 8.5% and due on demand. For the three months ended March 31, 2019 and 2018, the Company reported interest expenses of $9,609 and $0, respectively; 1.3 $6,804 due to Mr. Gang Li that is free of interest and due on demand.

3.1 a $69,429 loan from Mr. Haibo Gong with annual interest rate of 18% and due on demand. For the three months ended March 31, 2019, the Company reported interest expenses of $4,611; 3.2 a $5,537 payable to Mr. Haibo Gong that is free of interest and due on demand;

2.1 amount to $158,513 loan from Mr. Haibo Gong with annual interest rate of 18% and due on demand. For the three months ended March 31, 2018, the company reported interest expenses amount to $2,995; 2.2 amount to $3,910 due to Mr. Haibo Gong that free from interest and due on demand;

1179295

2607273

3651855

879780 1195046 870000 190000 1260000 190000 425505 111539 88737 336668 37664 25211 26432 22232 54321 29856 22810 1655 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Accounts receivable, cost</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,198,310</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,602,251</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Less: allowance for doubtful accounts</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(11,579,977</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(11,327,271</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Accounts receivable, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">618,333</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,274,980</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Retention receivable, cost</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">993,678</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,007,905</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Less: allowance for doubtful accounts</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(962,381</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(942,376</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Retention receivable, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">31,297</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">65,529</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Building</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">20,075,648</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">19,658,330</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Plant and machinery</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,075,721</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5,949,422</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Furniture, fixture and equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">25,291</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">24,765</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">26,176,660</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,632,517</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Less: accumulated depreciation</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(8,074,597</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(7,674,381</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 4pt">Property, plant and equipment, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">18,102,063</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,958,136</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify; border-bottom: Black 1.5pt solid">Year ending December 31:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify; padding-left: 0.125in">2019</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">45,878</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 0.125in">2020</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,170</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-left: 0.125in">2021</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,170</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-left: 0.125in">2022</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,170</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-left: 0.125in">2023</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">61,170</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 0.125in">Thereafter</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,207,024</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 4pt">Total:</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,497,582</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center">For the three months ended March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">As of March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; border-bottom: Black 1.5pt solid">Customers</td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Revenues</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Percentage of revenues</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center">Accounts receivable</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Customer A</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">88,737</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">15</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Customer B</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">　336,668  </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">58</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">　-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">425,505</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">73</td><td style="padding-bottom: 4pt; text-align: left">%</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1.5pt solid">For the three months ended March 31, 2018</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">As of March 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; border-bottom: Black 1.5pt solid">Customers</td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Revenues</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Percentage of revenues</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Accounts receivable</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Customer C</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">37,664</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">26</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Customer D</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">25,211</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">29,856</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Customer E</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">26,432</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">18</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">22,810</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Customer F</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">　22,232 </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">15</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,655 </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">111,539</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">76</td><td style="padding-bottom: 4pt; text-align: left">%</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">54,321</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table> 2 8073289 The Company transferred its 100% equity interest in Liaoning Nengfa Weiye Energy Technology Co. Ltd. to NF Energy Equipment Limited (“NF Equipment”). NF Equipment, a Hong Kong limited liability company is 100% owned by NF Energy Investment Corporation (“NF Investment”), a wholly-owned subsidiary of the Company. NF Investment is a British Virgin Island limited liability company. 1278181.8 The Company entered into a stock purchase agreement (the “Agreement”) with Lasting Wisdom Holdings Limited, a company organized under the laws of the British Virgin Islands, Pukung Limited, a company organized under the laws of Hong Kong, Beijing Xin Rong Xin Industrial Development Co., Ltd., a company organized under the laws of the PRC, Boqi Zhengji Pharmacy Chain Co., Ltd. a company organized under the laws of the PRC (“Boqi Pharmacy”) and several additional individual sellers listed in the Agreement whereby the Company will purchase 100% of equity interests of Lasting Wisdom Holdings Limited (the “Shares”). In accordance with the Agreement, the total purchase price for the Shares is RMB 40 million plus 1.5 million shares of the Company’s common stock. The purchase price is subject to post-closing adjustments (contingent on fair market value of the acquired companies). On May 14, 2019, the Company issued 500,000 shares of its common stock to the shareholders of Lasting Wisdom Holdings Limited as security deposit and the closing of this acquisition is depending on the result of the final evaluation of the target company. As the date of this report, the acquisition is not finished yet. The Company plans to raise RMB 40,000,000 from private placement transactions in equity to pay off the cash portion of the purchase price.

282154

197356

485243

248074

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 26pt">3.</td><td style="text-align: justify">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	</td></tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Basis of presentation and consolidation</td></tr></table>   These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and reflected the activities of NFEC and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.   The unaudited interim condensed consolidated financial information as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K/A for the fiscal year ended December 31, 2018 previously filed with the SEC on September 6, 2019.   In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of March 31, 2019 and its unaudited condensed consolidated results of operations for the three months ended March 31, 2019 and 2018, and its unaudited condensed consolidated cash flows for the three months ended March, 2019 and 2018, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future periods.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Use of estimates</td></tr></table>   In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Reclassification</td></tr></table>   Certain prior period amounts have been reclassified to conform to the current period presentation.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Cash and cash equivalents</td></tr></table>   Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Restricted cash</td></tr></table>   Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded in restricted cash account on the Company’s unaudited interim condensed consolidated balance sheet. The Company’s restricted cash balance is related to a contract performance guarantee bond. The balance of restricted cash was $183,444 and $179,496 as of March 31, 2019 and December 2018, respectively.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Accounts receivable and allowance for doubtful accounts</td></tr></table>   Accounts receivable are recorded at the invoiced amount, do not bear interest and are due within contractual payment terms, generally 30 to 90 days from shipment. Credit is granted based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days are reviewed individually for collectability. At the end of each period, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For those receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2019 and December 31, 2018, the allowance for doubtful accounts was $11,579,977 and $11,327,271, respectively.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Retention receivable and allowance for doubtful accounts  </td></tr></table>   Retention receivable is the amount withheld by a customer based upon 5-10% of the contract value, until a product warranty expires. The warranty period is usually 12 months. As of March 31, 2019 and December 31, 2018, the allowance for doubtful accounts was $962,381 and $942,376, respectively.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Inventories</td></tr></table>   Inventories are stated at the lower of cost or market value (net realizable value), cost being determined on a weighted average method. Costs include material, labor and manufacturing overhead costs. The Company reviews historical sales activity quarterly to determine excess, slow moving items and potentially obsolete items and also evaluates the impact of any anticipated changes in future demand. The Company provides inventory allowances based on excess and obsolete inventories determined principally by customer demand. As of March 31, 2019 and December 31, 2018, the Company did not record an allowance for obsolete inventories, nor have there been any write-offs.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Property, plant and equipment</td></tr></table>   Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 77%; padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify; padding-bottom: 1.5pt"> </td> <td style="width: 2%; padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify; padding-bottom: 1.5pt"> </td> <td style="width: 10%; border-bottom: Black 1.5pt solid; padding-right: -1.4pt; padding-left: 1.4pt; text-align: center">Expected useful lives</td> <td style="width: 1%; padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify; padding-bottom: 1.5pt"> </td> <td style="width: 10%; border-bottom: Black 1.5pt solid; padding-right: 1.4pt; padding-left: 1.4pt; text-align: center">Residual value</td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255)"> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify">Building</td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify"> </td> <td style="padding-right: -1.4pt; padding-left: 1.4pt; text-align: center; white-space: nowrap">10 – 30 years</td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify; white-space: nowrap"> </td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: center; white-space: nowrap">5%</td></tr> <tr style="vertical-align: top; background-color: White"> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify">Plant and machinery</td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify"> </td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: center">5 – 14 years</td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify"> </td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: center">4 ~ 5%</td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255)"> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify">Furniture, fixture and equipment</td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify"> </td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: center">5 years</td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: justify"> </td> <td style="padding-right: 1.4pt; padding-left: 1.4pt; text-align: center">4 ~ 13%</td></tr> </table>   Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Land use right</td></tr></table>   All lands in the PRC are owned by the PRC government. Under applicable law, the PRC government, may sell the right to use the land for a specified period of time. Thus, the Company’s land purchases in the PRC are considered to be leaseholds and are   stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreement on a straight-line basis, which is 50 years and will expire in 2059.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Construction in progress</td></tr></table>   Construction in progress is stated at cost, which includes acquisition of land use rights, cost of construction, purchases of plant and equipment and other direct costs attributable to the construction of a manufacturing facility in Yinzhou District Industrial Park, Tieling City, Liaoning Province, PRC. Construction in progress is not depreciated until such time as the assets are completed and put into operational use. No capitalized interest is incurred during the period of construction.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Impairment of long-lived assets</td></tr></table>   In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Revenue recognition</td></tr></table>   On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605, Revenue Recognition. The adoption had no material impact on the Company’s consolidated financial statements and there was no adjustment to the beginning retained earnings on January 1, 2018.   Under ASC 606, revenue is recognized when control of the promised goods and services is transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods and services, net of value-added tax. The Company determines revenue recognition through the following steps:   <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Identify the contract with a customer;</td> </tr></table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Identify the performance obligations in the contract;</td> </tr></table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Determine the transaction price;</td> </tr></table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Allocate the transaction price to the performance obligations in the contract; and</td> </tr></table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left">ü</td><td style="text-align: justify">Recognize revenue when (or as) the entity satisfies a performance obligation.</td> </tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Cost of revenue</td></tr></table>   Cost of revenue consists primarily of material costs, direct labor, depreciation, and manufacturing overhead, which are directly attributable to the manufacture of products and the rendering of services or projects. Shipping and handling costs, associated with the distribution of finished products to customers, are borne by the customers.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Comprehensive income</td></tr></table>   ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying condensed consolidated statement of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Income taxes</td></tr></table>   Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.   ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.   For the three months ended March 31, 2019 and 2018, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2019, the Company did not have any significant unrecognized uncertain tax positions.   The Company conducts the majority of its businesses in the PRC and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Product warranty</td></tr></table>   Under the terms of the contracts, the Company offers its customers with a free product warranty on a case-by-case basis, depending upon the type of customers, nature and size of the infrastructure projects. Under such arrangements, a portion of the project contract balance (usually 5-10% of contract value) is withheld by customers from 12 to 24 months, until the product warranty has expired. The Company has not experienced any material returns or claims where it was under obligation to honor this standard warranty provision. As of March 31, 2019 and December 31, 2018, the Company reported a net reserve of $31,297 and $65,529 as retention receivable for the receivables withheld by its customers for product warranty, respectively.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Net loss per share</td></tr></table>   The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Foreign currencies translation</td></tr></table>   Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.   The reporting currency of the Company is the United States Dollar ("US$"). The Company's subsidiaries in the PRC maintain their books and records in their local currency, the Renminbi Yuan ("RMB"), which is the functional currency as being the primary currency of the economic environment in which these entities operate.   In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.   Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective period:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2019</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31, 2018</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify; padding-bottom: 4pt; text-indent: -5.65pt; padding-left: 5.65pt">Period-end RMB:US$1 exchange rate</td><td style="width: 1%; padding-bottom: 4pt"> </td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">6.7335</td><td style="width: 1%; padding-bottom: 4pt; text-align: left"> </td><td style="width: 1%; padding-bottom: 4pt"> </td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left"> </td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">6,2802</td><td style="width: 1%; padding-bottom: 4pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt; padding-left: 0in">Three month end average RMB:US$1 exchange rate</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">6.7468</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">6.3566</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Retirement plan costs</td></tr></table>   Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying consolidated statements of operation as the related employee service is provided.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Related parties</td></tr></table>   Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Segment reporting</td></tr></table>   ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the three months ended March 31, 2019 and 2018, the Company operates in one reportable operating segment in the PRC.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Fair value of financial instruments</td></tr></table>   The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and convertible promissory notes): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.   Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of its obligation under finance lease and short-term bank borrowing approximate the carrying amount.   The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 24px; text-align: justify"> </td> <td style="text-align: justify">Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 24px; text-align: justify"> </td> <td style="text-align: justify">Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 24px; text-align: justify"> </td> <td style="text-align: justify">Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.</td></tr> </table>   Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">●</td><td style="text-align: justify">Recent accounting pronouncements</td></tr></table>   In January 2017, the Financial Accounting Standard Board (“FASB”) issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.   In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company's adoption date of ASC 606. The Company does not believe that the adoption of ASU 2018-07 will have a material impact on the Company’s consolidated financial statements.   In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820), which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, including, among other changes, the consideration of costs and benefits when evaluating disclosure requirements. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting guidance will have on the Company’s financial statements and footnote disclosures.   Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 27pt">●</td><td style="text-align: justify">Accounts receivable and allowance for doubtful accounts</td></tr></table>   Accounts receivable are recorded at the invoiced amount, do not bear interest and are due within contractual payment terms, generally 30 to 90 days from shipment. Credit is granted based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days are reviewed individually for collectability. At the end of each period, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For those receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2019 and December 31, 2018, the allowance for doubtful accounts was $11,579,977 and $11,327,271, respectively.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"><td style="width: 27pt">●</td><td style="text-align: justify">Retention receivable and allowance for doubtful accounts  </td></tr></table>   Retention receivable is the amount withheld by a customer based upon 5-10% of the contract value, until a product warranty expires. The warranty period is usually 12 months. As of March 31, 2019 and December 31, 2018, the allowance for doubtful accounts was $962,381 and $942,376, respectively.

EX-101.SCH 7 nfec-20190331.xsd XBRL SCHEMA FILE 00000001 - Document - Document and Entity Information link:presentationLink link:calculationLink link:definitionLink 00000002 - Statement - Condensed Consolidated Balance Sheets link:presentationLink link:calculationLink link:definitionLink 00000003 - Statement - Condensed Consolidated Balance Sheets (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 00000004 - Statement - Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) link:presentationLink link:calculationLink link:definitionLink 00000005 - Statement - Condensed Consolidated Statements of Cash Flows (Unaudited) link:presentationLink link:calculationLink link:definitionLink 00000006 - Disclosure - Organization and Business Background link:presentationLink link:calculationLink link:definitionLink 00000007 - Disclosure - Going Concern Uncertainties link:presentationLink link:calculationLink link:definitionLink 00000008 - Disclosure - Summary of Significant Accounting Policies link:presentationLink link:calculationLink link:definitionLink 00000009 - Disclosure - Accounts Receivable link:presentationLink link:calculationLink link:definitionLink 00000010 - Disclosure - Retention Receivable link:presentationLink link:calculationLink link:definitionLink 00000011 - Disclosure - Inventories link:presentationLink link:calculationLink link:definitionLink 00000012 - Disclosure - Property, Plant and Equipment link:presentationLink link:calculationLink link:definitionLink 00000013 - Disclosure - Land Use Right link:presentationLink link:calculationLink link:definitionLink 00000014 - Disclosure - Short-Term Bank Borrowings link:presentationLink link:calculationLink link:definitionLink 00000015 - Disclosure - Related Parties And Related Parties Transactions link:presentationLink link:calculationLink link:definitionLink 00000016 - Disclosure - Other Payables and Accrued Liabilities link:presentationLink link:calculationLink link:definitionLink 00000017 - Disclosure - Stockholders' Equity link:presentationLink link:calculationLink link:definitionLink 00000018 - Disclosure - Net Loss Per Share link:presentationLink link:calculationLink link:definitionLink 00000019 - Disclosure - Statutory Reserves link:presentationLink link:calculationLink link:definitionLink 00000020 - Disclosure - Concentrations of Risk link:presentationLink link:calculationLink link:definitionLink 00000021 - Disclosure - Subsequent Events link:presentationLink link:calculationLink link:definitionLink 00000022 - Disclosure - Summary of Significant Accounting Policies (Policies) link:presentationLink link:calculationLink link:definitionLink 00000023 - Disclosure - Organization and Business Background (Tables) link:presentationLink link:calculationLink link:definitionLink 00000024 - Disclosure - Summary of Significant Accounting Policies (Tables) link:presentationLink link:calculationLink link:definitionLink 00000025 - Disclosure - Accounts and Retention Receivable (Tables) link:presentationLink link:calculationLink link:definitionLink 00000026 - Disclosure - Retention Receivable (Tables) link:presentationLink link:calculationLink link:definitionLink 00000027 - Disclosure - Inventories (Tables) link:presentationLink link:calculationLink link:definitionLink 00000028 - Disclosure - Property, Plant and Equipment (Tables) link:presentationLink link:calculationLink link:definitionLink 00000029 - Disclosure - Land Use Right (Tables) link:presentationLink link:calculationLink link:definitionLink 00000030 - Disclosure - Short-Term Bank Borrowings (Tables) link:presentationLink link:calculationLink link:definitionLink 00000031 - Disclosure - Other Payables and Accrued Liabilities (Tables) link:presentationLink link:calculationLink link:definitionLink 00000032 - Disclosure - Net Loss Per Share (Tables) link:presentationLink link:calculationLink link:definitionLink 00000033 - Disclosure - Concentrations of Risk (Tables) link:presentationLink link:calculationLink link:definitionLink 00000034 - Disclosure - Organization and Business Background (Details) link:presentationLink link:calculationLink link:definitionLink 00000035 - Disclosure - Organization and Business Background (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000036 - Disclosure - Going Concern Uncertainties (Details) link:presentationLink link:calculationLink link:definitionLink 00000037 - Disclosure - Summary of Significant Accounting Policies (Details) link:presentationLink link:calculationLink link:definitionLink 00000038 - Disclosure - Summary of Significant Accounting Policies (Details 1) link:presentationLink link:calculationLink link:definitionLink 00000039 - Disclosure - Summary of Significant Accounting Policies (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000040 - Disclosure - Accounts Receivable (Details) link:presentationLink link:calculationLink link:definitionLink 00000041 - Disclosure - Accounts Receivable (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000042 - Disclosure - Retention Receivable (Details) link:presentationLink link:calculationLink link:definitionLink 00000043 - Disclosure - Inventories (Details) link:presentationLink link:calculationLink link:definitionLink 00000044 - Disclosure - Property, Plant and Equipment (Details) link:presentationLink link:calculationLink link:definitionLink 00000045 - Disclosure - Property, Plant and Equipment (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000046 - Disclosure - Land Use Right (Details) link:presentationLink link:calculationLink link:definitionLink 00000047 - Disclosure - Land Use Right (Details 1) link:presentationLink link:calculationLink link:definitionLink 00000048 - Disclosure - Land Use Right (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000049 - Disclosure - Short-Term Bank Borrowings (Details) link:presentationLink link:calculationLink link:definitionLink 00000050 - Disclosure - Short-Term Bank Borrowings (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000051 - Disclosure - Related Parties And Related Parties Transactions (Details) link:presentationLink link:calculationLink link:definitionLink 00000052 - Disclosure - Other Payables and Accrued Liabilities (Details) link:presentationLink link:calculationLink link:definitionLink 00000053 - Disclosure - Other Payables and Accrued Liabilities (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000054 - Disclosure - Stockholders’ Equity (Details) link:presentationLink link:calculationLink link:definitionLink 00000055 - Disclosure - Net Loss Per share (Details) link:presentationLink link:calculationLink link:definitionLink 00000056 - Disclosure - Statutory Reserves (Details) link:presentationLink link:calculationLink link:definitionLink 00000057 - Disclosure - Concentrations of Risk (Details) link:presentationLink link:calculationLink link:definitionLink 00000058 - Disclosure - Concentrations of Risk (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000059 - Disclosure - Subsequent Events (Details) link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 8 nfec-20190331_cal.xml XBRL CALCULATION FILE EX-101.DEF 9 nfec-20190331_def.xml XBRL DEFINITION FILE EX-101.LAB 10 nfec-20190331_lab.xml XBRL LABEL FILE Fair Value By Liability Class [Axis] Guarantee Type Related party [Member] Debt Instrument [Axis] Short Term Loan One [Member] Title of Individual [Axis] Mr. Yongquan Bi [Member] Ms. Li Hua Wang [Member] Mr. Haibo Gong [Member] Bainianye New Energy [Member] Financial Instrument [Axis] Purchase Agreement [Member] Subsequent Event Type [Axis] Subsequent Event [Member] Consolidated Entities [Axis] NF Energy Saving Investment Limited [Member] NF Energy Equipment Limited [Member] Liaoning Nengfa Weiye Energy Technology Co Ltd [Member] Liaoning Nengfa Tiefa Import Export Co ltd [Member] Range [Axis] Minimum [Member] Property Plant and Equipment By Type [Axis] Building [Member] Maximum [Member] Plant and Machinery [Member] Furniture Fixtures and Equipment [Member] Finite Lived Intangible Assets By Major Class [Axis] Use Rights [Member] Guarantee Type Related party One [Member] Mr. Gang Li [Member] Mr. Yongquan Bi [Member] Related Party Transaction [Axis] Mr. Yongjian Zhang [Member] Tieling Joint Stock [Member] Currency [Axis] RMB [Member] Customer [Axis] Customer A [Member] Customer B [Member] Customer C [Member] Customer D [Member] Customer E [Member] Customer F [Member] Customer Two [Member] Document and Entity Information [Abstract] Entity Registrant Name Entity Central Index Key Amendment Flag Current Fiscal Year End Date Document Type Document Period End Date Document Fiscal Year Focus Document Fiscal Period Focus Entity Current Reporting Status Entity Filer Category Entity Small Business Entity Shell Company Entity Emerging Growth Company Entity Ex Transition Period Entity Interactive Data Current Entity Incorporation State Country Code Entity File Number Entity Common Stock, Shares Outstanding Statement of Financial Position [Abstract] ASSETS CURRENT ASSETS Cash and cash equivalents Restricted cash Accounts receivable, net Retention receivable, net Amount due from related parties Inventories Prepayments and other receivables Total current assets NON-CURRENT ASSETS Property, plant and equipment, net Land use right, net Construction in progress Total non-current assets TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Short-term bank borrowings Accounts payable, trade Accounts payable, trade-related parties Amount due to related parties Taxes payable Other payables and accrued liabilities Total current liabilities TOTAL LIABILITIES COMMITMENTS AND CONTINGENCIES EQUITY Common stock, $0.001 par value; 50,000,000 shares authorized; 7,573,289 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively Additional paid-in capital Statutory reserves Accumulated deficit Accumulated other comprehensive income Total NF Energy Saving Corporation's equity NONCONTROLLING INTERESTS Total equity Total liabilities and equity Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] REVENUES Products Services Total revenues, net COST OF REVENUES Cost of products Cost of services Total cost of revenues GROSS PROFIT OPERATING EXPENSES: Sales and marketing General and administrative Total operating expenses INCOME (LOSS) FROM OPERATIONS OTHER INCOME (EXPENSE) Interest income Interest expense Other income (expense) Total other income (expense), net INCOME (LOSSES) BEFORE INCOME TAXES PROVISION FOR INCOME TAXES NET INCOME (LOSS) Less: net income attributable to noncontrolling interest NET INCOME(LOSS) ATTRIBUTABLE TO NF ENERGY SAVING CORPORATION COMPREHENSIVE INCOME(LOSS) NET INCOME(LOSS) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustment Total comprehensive income(loss) Less:comprehensive income(loss) attributable to non-controlling interests COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NF ENERGY SAVING CORPORATION WEIGHTED AVERAGE NUMBER OF COMMON SHARES Basic and diluted EARNINGS (LOSSES) PER SHARE Basic and diluted Statement of Cash Flows [Abstract] CASH FLOWS FROM OPERATING ACTIVITIES: Net loss Adjustments to reconcile net loss to cash provided by operating activities: Depreciation and amortization Write off property, plant and equipment Allowance for doubtful accounts Change in operating assets and liabilities Accounts and retention receivable Inventories Prepayments and other receivables Accounts payable, trade Other payables and accrued liabilities Taxes payable Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of share from placement Amount financed to related parties Proceeds from short-term bank borrowings Repayment on short-term bank borrowings Net cash used in financing activities EFFECT OF EXCHANGE RATE ON CASH INCREASE (DECREASE) IN CASH CASH, CASH EQUIVALENTS, RESTRICTED CASH, beginning of period CASH, CASH EQUIVALENTS, RESTRICTED CASH, end of period SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for income tax Cash paid for interest expense, net of capitalized interest Organization, Consolidation and Presentation of Financial Statements [Abstract] ORGANIZATION AND BUSINESS BACKGROUND Going Concern Uncertainties [Abstract] GOING CONCERN UNCERTAINTIES Accounting Policies [Abstract] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounts And Retention Receivable [Abstract] ACCOUNTS RECEIVABLE Notes to Financial Statements Retention Receivable Inventory, Net [Abstract] INVENTORIES Property, Plant and Equipment [Abstract] PROPERTY, PLANT AND EQUIPMENT Land Use Rights [Abstract] LAND USE RIGHT Debt Disclosure [Abstract] SHORT-TERM BANK BORROWINGS Related Party Transactions [Abstract] RELATED PARTIES AND RELATED PARTIES TRANSACTIONS Payables and Accruals [Abstract] OTHER PAYABLES AND ACCRUED LIABILITIES EX-101.PRE 11 nfec-20190331_pre.xml XBRL PRESENTATION FILE XML 12 R52.htm IDEA: XBRL DOCUMENT

Other Payables and Accrued Liabilities (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Disclosure Other Payables and Accrued Liabilities [Abstract]
Customer deposits	$ 322,206	$ 356,799
Accrued operating expenses	697,068	705,479
Payables with disputes	1,195,046	879,780
Other payable	180,392	103,008
Other payables and accrued liabilities	$ 2,394,712	$ 2,045,066

XML 13 R56.htm IDEA: XBRL DOCUMENT

Statutory Reserves (Details)	3 Months Ended
Statutory Reserves (Details)	Mar. 31, 2019
Statutory Reserves [Abstract]
Appropriation to statutory reserve, description	Appropriation to the statutory reserve should be at least 10% of the after-tax net income until the reserve is equal to 50% of the registered capital.

XML 14 R18.htm IDEA: XBRL DOCUMENT

Net Loss Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

NET LOSS PER SHARE

13.

NET LOSS PER SHARE

	For the three months ended March 31,
	2019			2018
Net loss attributable to common shareholders	$	(567,594	)	$	(499,699	)

Weighted average common shares outstanding – Basic and diluted		7,573,289			7,184,400

Net loss per share – Basic and diluted	$	(0.07	)	$	(0.07	)

XML 15 R10.htm IDEA: XBRL DOCUMENT

Retention Receivable	3 Months Ended
Retention Receivable	Mar. 31, 2019
Notes to Financial Statements
Retention Receivable

XML 16 R14.htm IDEA: XBRL DOCUMENT

Short-Term Bank Borrowings

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

SHORT-TERM BANK BORROWINGS

9.	SHORT-TERM BANK BORROWINGS

Short-term bank borrowings consist of the following:

	March 31, 2019		December 31, 2018
Equivalent to RMB 40,000,000 with a fixed interest rate at 6.09%, monthly payable, due March 18, 2019, which is guaranteed by its related parties and used buildings and land use rights as collateral.		-		5,816,961
Equivalent to RMB 40,000,000 with a fixed interest rate at 8.5%, monthly payable, due March 18, 2020, which is guaranteed by its related parties and used buildings and land use rights as collateral.		5,940,447		-
Total short-term bank borrowings	$	5,940,447	$	5,816,961

For the three months ended March 31, 2019 and 2018, the Company reported interest expenses of $89,976 and $88,676, respectively.

XML 17 R37.htm IDEA: XBRL DOCUMENT

Summary of Significant Accounting Policies (Details)	3 Months Ended
Summary of Significant Accounting Policies (Details)	Mar. 31, 2019
Building [Member]
Residual value	5.00%
Building [Member] \| Minimum [Member]
Expected useful lives	10 years
Building [Member] \| Maximum [Member]
Expected useful lives	30 years
Plant and Machinery [Member] \| Minimum [Member]
Expected useful lives	5 years
Residual value	4.00%
Plant and Machinery [Member] \| Maximum [Member]
Expected useful lives	14 years
Residual value	5.00%
Furniture Fixtures and Equipment [Member]
Expected useful lives	5 years
Furniture Fixtures and Equipment [Member] \| Minimum [Member]
Residual value	4.00%
Furniture Fixtures and Equipment [Member] \| Maximum [Member]
Residual value	13.00%

XML 18 R33.htm IDEA: XBRL DOCUMENT

Concentrations of Risk (Tables)

3 Months Ended

Mar. 31, 2019

Risks and Uncertainties [Abstract]

Schedule of revenues and its outstanding accounts receivable

	For the three months ended March 31, 2019					As of March 31, 2019
Customers	Revenues		Percentage of revenues			Accounts receivable
Customer A	$	88,737		15	%	$	-
Customer B		336,668		58	%		-
	$	425,505		73	%	$	-

	For the three months ended March 31, 2018					As of March 31, 2018
Customers	Revenues		Percentage of revenues			Accounts receivable
Customer C	$	37,664		26	%	$	-
Customer D		25,211		17	%		29,856
Customer E		26,432		18	%		22,810
Customer F		22,232		15	%		1,655
	$	111,539		76	%	$	54,321

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	7,573,289	7,573,289
Common stock, shares outstanding	7,573,289	7,573,289

Land Use Right (Details 1) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Land Use Right [Abstract]
2019	$ 45,878
2020	61,170
2021	61,170
2022	61,170
2023	61,170
Thereafter	2,207,024
Total:	$ 2,497,582	$ 2,460,668

Inventories (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 446,399	$ 519,341
Work-in-process	129,202	322,132
Finished goods	592,871	96,493
Total inventory	$ 1,168,472	$ 937,966

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 301,799	$ 17,860
Restricted cash	183,444	179,496
Accounts receivable, net	618,333	1,274,980
Retention receivable, net	31,297	65,529
Amount due from related parties	1,179,295	0
Inventories	1,168,472	937,966
Prepayments and other receivables	169,215	131,442
Total current assets	3,651,855	2,607,273
NON-CURRENT ASSETS
Property, plant and equipment, net	18,102,063	17,958,136
Land use right, net	2,497,582	2,460,668
Construction in progress		24,722
Total non-current assets	20,599,645	20,443,526
TOTAL ASSETS	24,251,500	23,050,799
CURRENT LIABILITIES
Short-term bank borrowings	5,940,447	5,816,961
Accounts payable, trade	2,766,527	2,782,182
Accounts payable, trade-related parties	414,994	416,547
Amount due to related parties	2,007,513	918,033
Taxes payable	1,064,176	1,086,589
Other payables and accrued liabilities	2,394,712	2,045,066
Total current liabilities	14,588,369	13,065,378
TOTAL LIABILITIES	14,588,369	13,065,378
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock, $0.001 par value; 50,000,000 shares authorized; 7,573,289 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively	7,573	7,573
Additional paid-in capital	12,555,325	12,555,325
Statutory reserves	2,227,634	2,227,634
Accumulated deficit	(7,010,696)	(6,443,102)
Accumulated other comprehensive income	2,020,229	1,788,302
Total NF Energy Saving Corporation's equity	9,800,065	10,135,732
NONCONTROLLING INTERESTS	(136,934)	(150,311)
Total equity	9,663,131	9,985,421
Total liabilities and equity	$ 24,251,500	$ 23,050,799

Land Use Right (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Land Use Rights [Abstract]
Land use right, at cost	$ 3,064,518	$ 3,000,815
Less: accumulated amortization	(566,936)	(540,147)
Land use right, net	$ 2,497,582	$ 2,460,668

Retention Receivable (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Notes to Financial Statements
Retention receivable, cost	$ 993,678	$ 1,007,905
Less: allowance for doubtful accounts	(962,381)	(942,376)
Retention receivable, net	$ 31,297	$ 65,529

Other Payables and Accrued Liabilities (Details Textual)	May 24, 2019 USD ($)	May 24, 2019 CNY (¥)	Apr. 22, 2019 CNY (¥)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Aug. 01, 2018 USD ($)	Aug. 01, 2018 CNY (¥)
Other Payables and Accrued Liabilities (Textual)
Payables with disputes				$ 1,195,046	$ 879,780
Dispute payable in approximation				$ 190,000	$ 870,000
Unpaid outstanding payable						$ 870,000
Subsequent Event [Member]
Other Payables and Accrued Liabilities (Textual)
Settlement amount from other parties	$ 190,000
RMB [Member]
Other Payables and Accrued Liabilities (Textual)
Unpaid outstanding payable \| ¥							¥ 6,000,000
RMB [Member] \| Subsequent Event [Member]
Other Payables and Accrued Liabilities (Textual)
Unpaid outstanding payable \| ¥			¥ 1,278,182
Settlement amount from other parties \| ¥		¥ 1,260,000

Concentrations of Risk (Details) - USD ($)	3 Months Ended
Concentrations of Risk (Details) - USD ($)	Mar. 31, 2019	Mar. 31, 2018
Concentration Risk [Line Items]
Revenues	$ 425,505	$ 111,539
Percentage of revenues	73.00%	76.00%
Accounts receivable		$ 54,321
Customer A [Member]
Concentration Risk [Line Items]
Revenues	$ 88,737
Percentage of revenues	15.00%
Accounts receivable
Customer B [Member]
Concentration Risk [Line Items]
Revenues	$ 336,668
Percentage of revenues	58.00%
Accounts receivable
Customer C [Member]
Concentration Risk [Line Items]
Revenues		$ 37,664
Percentage of revenues		26.00%
Accounts receivable
Customer D [Member]
Concentration Risk [Line Items]
Revenues		$ 25,211
Percentage of revenues		17.00%
Accounts receivable		$ 29,856
Customer E [Member]
Concentration Risk [Line Items]
Revenues		$ 26,432
Percentage of revenues		18.00%
Accounts receivable		$ 22,810
Customer F [Member]
Concentration Risk [Line Items]
Revenues		$ 22,232
Percentage of revenues		15.00%
Accounts receivable		$ 1,655

Going Concern Uncertainties (Details) - USD ($)	3 Months Ended
Going Concern Uncertainties (Details) - USD ($)	Mar. 31, 2019	Mar. 31, 2018
Going Concern Uncertainties (Textual)
Net loss	$ (567,594)	$ (499,699)
Accumulated deficit	7,010,696
Negative working capital	$ 10,936,514

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
REVENUES
Products	$ 557,239	$ 91,796
Services	21,473	55,283
Total revenues, net	578,712	147,079
COST OF REVENUES
Cost of products	419,541	78,531
Cost of services	11,135	37,111
Total cost of revenues	430,676	115,642
GROSS PROFIT	148,036	31,437
OPERATING EXPENSES:
Sales and marketing	37,873	8,940
General and administrative	483,643	439,190
Total operating expenses	521,516	448,130
INCOME (LOSS) FROM OPERATIONS	(373,480)	(416,693)
OTHER INCOME (EXPENSE)
Interest income	151	330
Interest expense	(118,719)	(88,676)
Other income (expense)	(50,400)
Total other income (expense), net	(168,968)	(88,346)
INCOME (LOSSES) BEFORE INCOME TAXES	(542,448)	(505,039)
PROVISION FOR INCOME TAXES
NET INCOME (LOSS)	(542,448)	(505,039)
Less: net income attributable to noncontrolling interest	25,146	(5,340)
NET INCOME(LOSS) ATTRIBUTABLE TO NF ENERGY SAVING CORPORATION	(567,594)	(499,699)
COMPREHENSIVE INCOME(LOSS)
NET INCOME(LOSS)	(542,448)	(505,039)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment	231,928	1,006,744
Total comprehensive income(loss)	(310,520)	501,705
Less:comprehensive income(loss) attributable to non-controlling interests	13,377	5,612
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NF ENERGY SAVING CORPORATION	$ (323,897)	$ 496,093
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
Basic and diluted	7,573,289	7,184,400
EARNINGS (LOSSES) PER SHARE
Basic and diluted	$ (0.07)	$ (0.07)

Property, Plant and Equipment (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Building	$ 20,075,648	$ 19,658,330
Plant and machinery	6,075,721	5,949,422
Furniture, fixture and equipment	25,291	24,765
Property, plant and equipment, gross	26,176,660	25,632,517
Less: accumulated depreciation	(8,074,597)	(7,674,381)
Property, plant and equipment, net	$ 18,102,063	$ 17,958,136

Accounts Receivable (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Accounts And Retention Receivable [Abstract]
Accounts receivable, cost	$ 12,198,310	$ 12,602,251
Less: allowance for doubtful accounts	(11,579,977)	(11,327,271)
Accounts receivable, net	$ 618,333	$ 1,274,980

Land Use Right (Details Textual) - USD ($)	3 Months Ended
Land Use Right (Details Textual) - USD ($)	Mar. 31, 2019	Mar. 31, 2018
Land Use Right [Abstract]
Amortization expense	$ 15,292	$ 16,231

Subsequent Events (Details) - Subsequent Event [Member]	Apr. 11, 2019	May 24, 2019 USD ($)	May 24, 2019 CNY (¥)	Apr. 22, 2019 CNY (¥)
Subsequent Event [Line Items]
Settlement amount from other parties \| $		$ 190,000
RMB [Member]
Subsequent Event [Line Items]
Outstanding payable				¥ 1,278,181.8
Settlement amount from other parties			¥ 1,260,000
Purchase Agreement [Member]
Subsequent Event [Line Items]
Stock purchase agreement, description	The Company entered into a stock purchase agreement (the “Agreement”) with Lasting Wisdom Holdings Limited, a company organized under the laws of the British Virgin Islands, Pukung Limited, a company organized under the laws of Hong Kong, Beijing Xin Rong Xin Industrial Development Co., Ltd., a company organized under the laws of the PRC, Boqi Zhengji Pharmacy Chain Co., Ltd. a company organized under the laws of the PRC (“Boqi Pharmacy”) and several additional individual sellers listed in the Agreement whereby the Company will purchase 100% of equity interests of Lasting Wisdom Holdings Limited (the “Shares”). In accordance with the Agreement, the total purchase price for the Shares is RMB 40 million plus 1.5 million shares of the Company’s common stock. The purchase price is subject to post-closing adjustments (contingent on fair market value of the acquired companies). On May 14, 2019, the Company issued 500,000 shares of its common stock to the shareholders of Lasting Wisdom Holdings Limited as security deposit and the closing of this acquisition is depending on the result of the final evaluation of the target company. As the date of this report, the acquisition is not finished yet. The Company plans to raise RMB 40,000,000 from private placement transactions in equity to pay off the cash portion of the purchase price.

Net Loss Per share (Details) - USD ($)	3 Months Ended
Net Loss Per share (Details) - USD ($)	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net loss attributable to common shareholders	$ (567,594)	$ (499,699)
Weighted average common shares outstanding - Basic and diluted	7,573,289	7,184,400
Net loss per share - Basic and diluted	$ (0.07)	$ (0.07)

Organization and Business Background (Details)	3 Months Ended
Organization and Business Background (Details)	Mar. 31, 2019
NF Energy Saving Investment Limited [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Place of incorporation and kind of legal entity	British Virgin Island, a limited liability company
Principal activities and place of operation	Investment holding
Effective interest held	100.00%
NF Energy Equipment Limited [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Place of incorporation and kind of legal entity	Hong Kong, a limited liability company
Principal activities and place of operation	Investment holding
Effective interest held	100.00%
Liaoning Nengfa Weiye Energy Technology Co. Ltd (“Nengfa Energy”) [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Place of incorporation and kind of legal entity	The PRC, a limited liability company
Principal activities and place of operation	Production of a variety of industrial valve components which are widely used in water supply and sewage system, coal and gas fields, power generation stations, petroleum and chemical industries in the PRC
Effective interest held	100.00%
Liaoning Nengfa Tiefa Import & Export Co.Ltd (“Nengfa Tiefa Import & Export”) [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Place of incorporation and kind of legal entity	The PRC, a limited liability company
Principal activities and place of operation	Development and production of hi-tech and automatic-intelligence valve products
Effective interest held	57.00%

Summary of Significant Accounting Policies (Details 1)	Mar. 31, 2019	Mar. 31, 2018
Accounting Policies [Abstract]
Period-end RMB:US$1 exchange rate	6.7335	6.2802
Three month end average RMB:US$1 exchange rate	6.7468	6.3566

Short-Term Bank Borrowings (Details Textual)	3 Months Ended		12 Months Ended
Short-Term Bank Borrowings (Details Textual)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Mar. 31, 2019 CNY (¥)
Short-term Debt [Line Items]
Interest expenses \| $	$ 89,976	$ 88,676
Guarantee Type Related party [Member] \| Short Term Loan One [Member]
Short-term Debt [Line Items]
Short-term bank borrowings			¥ 40,000,000
Effective interest rate, per annum			6.09%
Debt instrument, maturity date			Mar. 18, 2019
Guarantee Type Related party One [Member] \| Short Term Loan One [Member]
Short-term Debt [Line Items]
Short-term bank borrowings				¥ 40,000,000
Effective interest rate, per annum				8.50%
Debt instrument, maturity date	Mar. 18, 2020

Stockholders’ Equity (Details) - USD ($)	Mar. 12, 2018	Mar. 31, 2019	Dec. 31, 2018
Schedule of Capitalization, Equity [Line Items]
Common stock, par value		$ 0.001	$ 0.001
Common stock, shares authorized		50,000,000	50,000,000
Common stock, shares issued		7,573,289	7,573,289
Common stock, shares outstanding		7,573,289	7,573,289
Mr. Yongquan Bi [Member]
Schedule of Capitalization, Equity [Line Items]
Aggregate amount of consideration	$ 500,000
Price per share	$ 1.00
Shares of common stock	500,000

Concentrations of Risk (Details Textual) - Customers	3 Months Ended
Concentrations of Risk (Details Textual) - Customers	Mar. 31, 2019	Mar. 31, 2018
Concentrations of Risk (Textual)
Percentage of revenues	73.00%	76.00%
Customer Two [Member]
Concentrations of Risk (Textual)
Number of customers	2
Percentage of revenues	10.00%

Document and Entity Information	3 Months Ended
Document and Entity Information	Mar. 31, 2019 shares
Document and Entity Information [Abstract]
Entity Registrant Name	NF Energy Saving Corp
Entity Central Index Key	0001213660
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Interactive Data Current	No
Entity Incorporation State Country Code	DE
Entity File Number	000-50155
Entity Common Stock, Shares Outstanding	8,073,289

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (542,448)	$ (505,039)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	252,125	249,047
Write off property, plant and equipment
Allowance for doubtful accounts	16,344	0
Change in operating assets and liabilities
Accounts and retention receivable	705,703	2,007,657
Inventories	(205,366)	(912,536)
Prepayments and other receivables	(39,276)	(78,476)
Accounts payable, trade	(84,945)	(31,063)
Other payables and accrued liabilities	311,165	258,282
Taxes payable	(45,390)
Net cash provided by operating activities	367,912	987,872
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of share from placement		500,000
Amount financed to related parties	(105,060)	(431,682)
Proceeds from short-term bank borrowings	5,928,772	6,292,645
Repayment on short-term bank borrowings	(5,928,772)	(7,393,858)
Net cash used in financing activities	(105,060)	(1,032,895)
EFFECT OF EXCHANGE RATE ON CASH	25,035	10,943
INCREASE (DECREASE) IN CASH	287,887	(34,080)
CASH, CASH EQUIVALENTS, RESTRICTED CASH, beginning of period	197,356	282,154
CASH, CASH EQUIVALENTS, RESTRICTED CASH, end of period	485,243	248,074
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax
Cash paid for interest expense, net of capitalized interest	$ 88,264	$ 88,676

Short-Term Bank Borrowings (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Short-term Debt [Line Items]
Total short-term bank borrowings	$ 5,940,447	$ 5,816,961
Guarantee Type Related party [Member] \| Short Term Loan One [Member]
Short-term Debt [Line Items]
Total short-term bank borrowings		5,816,961
Guarantee Type Related party One [Member] \| Short Term Loan One [Member]
Short-term Debt [Line Items]
Total short-term bank borrowings	$ 5,940,447

Property, Plant and Equipment (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Property, Plant and Equipment (Textual)
Depreciation expense	$ 236,833	$ 232,816

Accounts Receivable (Details Textual) - USD ($)	3 Months Ended
Accounts Receivable (Details Textual) - USD ($)	Mar. 31, 2019	Mar. 31, 2018
Accounts Receivable (Textual)
Provision for doubtful accounts	$ 16,344	$ 0