NOTE 11 – NOTES PAYABLE


Bank acceptance notes:	December 31,
	2019		2018
Due September 5, 2020	$	1,147,756	$	—
Due August 30, 2020		3,443,266		—
Due July 15, 2020		1,434,695		—
Due July 12, 2020		1,434,695
Due March 14, 2020, subsequently repaid on due date		1,434,695		—
Due September 28, 2019, subsequently repaid on due date		—		726,903
Due September 28, 2019, subsequently repaid on due date		—		726,903
Due August 28, 2019, subsequently repaid on due date		—		2,326,088
Due August 28, 2019, subsequently repaid on due date		—		2,326,088
Due March 7, 2019, subsequently repaid on due date		—		828,669
Due March 6, 2019, subsequently repaid on due date		—		334,375
Due February 7,2019, subsequently repaid on due date		—		726,903
Due February 6,2019, subsequently repaid on due date		—		726,903
Total	$	8,895,107	$	8,722,832

The interest-free notes payable, ranging from six months to one year from the date of issuance, are secured by $6,025,718 and $4,070,655 restricted cash, as of December 31, 2019 and 2018, respectively.

The notes payable represented the amount of bank acceptance notes the Company’s suppliers received from the Company for its purchases of raw materials. These notes were issued by financial institutions, typically by banks, that entitle the Company’s suppliers to receive the full face amount from the bank or financial institution at maturity. The notes payable are interest-free and range from six months to one year from the date of issuance. These notes are subject to bank charges of 0.05% of the principal amount as commission on each issuance and were secured by $6.0 million and $4.1 million of restricted cash as of December 31, 2019 and 2018, respectively. The banks deduct the amount due from the accounts to pay the bill holders on the dates of maturity. If the funds in the accounts cannot cover the acceptance notes, the banks treat the shortfall as an overdue loan. The notes payable are commonly used in domestic China due to their enhanced credibility and the liquidity it provides to the bearer. The bearer always has the option to cash the bank acceptance notes before maturity at its issuing bank and receive a discounted amount in cash.