Loans

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

LOANS

NOTE 9 – LOANS

Short-term loan of $150,515 represents balance due to Shanghai Jinshan Limin Micro Loan Co., Ltd., with annualized interest rate of 16%. This loan was borrowed on March 3, 2017 and due on March 2, 2018. The Company extended this loan twice until the end of June 2019 with the same terms and it was paid off as of December 31, 2019.

As of December 31, 2019, current portion of long-term loans amounted to $5,373,859 consisting of $4,294,707 due to Agricultural Bank of China, which is collateralized with land use rights and guaranteed by Mr. Lirong Wang, the CEO, and $1,079,152 due to Rushan City Rural Credit Union.

As of December 31, 2019, the long-term loan amount of $1,855,294 represents $1,591,261 owed to Rushan City Rural Credit Union and $264,033 owed to Ms. Hui Song. The amount owed to Ms. Hui Song is non-interest bearing, unsecured, and due after December 31, 2020.

As of December 31, 2018, the long-term loan amount of $3,454,543 represents $3,187,688 owed to Agricultural Bank of China and $266,855 owed to Ms. Hui Song. The amount owed to Ms. Hui Song is non-interest bearing, unsecured, and due after December 31, 2020.

Long-term loan and current portion of long-term loan consisted of the following: 

	December 31,		December 31,
	2019		2018
Loan payable to Agricultural Bank of China, annual interest rate of 5.70% + HIBOR, due by August 25, 2019.	$	4,294,707	$	4,362,748
Loan payable to Rushan City Rural Credit Union, annual interest 8.3125%, due by July 25, 2019.		1,079,152		1,090,687
Long-term loans and interest payable to individuals and entities without interest		1,855,294		3,454,543
		7,229,153		8,907,978
Less: Current portion of long-term loans payable		5,373,859		5,453,435
Total, net	$	1,855,294	$	3,454,543

As of December 31, 2019, the Company's future loan obligations according to the terms of the loan agreement are as follows:

Year 1	$	5,373,859
Year 2		1,855,294
Total	$	7,229,153

The Company recognized interest expenses of $452,470 and $421,054 for the years ended December 31, 2019 and 2018, respectively.

The Company has been in default with the loan payable to Agricultural Bank of China. The bank has taken legal action against the Company and on April 26, 2020, the bank has been awarded a judgment by the PRC courts for $4,359,925 (RMB 30,301,044). As of the date of the report, the judgment amount has not been settled to the bank. The loan was secured by land use rights and guarantee by the Company's CEO. There is substantial risk that the bank may foreclose on the land use rights of the Company to settle this outstanding balance.